Mastering Market Research for Manufacturers: Product to Strategy

Market research can sound like a daunting activity, but it’s vital to manufacturers. While the term might call to mind national surveys and paid focus groups, the reality is that market research can take on many forms. Regardless, competitor, consumer and industry research are all critical parts of the puzzle.

Whether or not your company has conducted market research in the past, the latest tools and best practices can help you execute your next round of exploration more effectively and efficiently. Because consumer buying habits have changed drastically over the last few years, now is a great time to kick off a new research project.

Who are your customers? Most manufacturers sell to a variety of customers, often in both B2B and D2C channels. For example, a building materials manufacturer may sell to distributors, DIYers, contractors, architects, builders, and/or interior designers. Of course, there’s so much more to know about the people you’re selling to.

Consumer research will help you understand the intricacies of your ideal customer. What qualifies an interior designer as an ideal client? Surely not all of them who hold the title match your target clientele. By exploring demographics and buying habits, consumer research will help you get laser-focused on your advertising and sales process.

A buyer persona is a profile of your ideal customer. Most manufacturers will need multiple personas. For instance, a DIYer and an interior designer would be two different personas for a building materials manufacturer. To avoid overwhelm, it’s best to focus on building two or three personas and expanding from there as needed.

Some of the questions you should try to answer through consumer research in order to construct a buyer persona include:

• Where does this person work? What is their role?

• What pain points are they facing that your product can solve?

• What alternative solutions are they considering?

• What does success look like for them?

• What platforms do they typically use to find vendors?

Manufacturers’ consumers can go to a number of outlets to purchase products these days, including straight to your website if you sell direct-to-consumer (D2C). A building materials manufacturer may find that their consumers are primarily purchasing products in local hardware stores or big chains like Home Depot.

In addition to knowing where your consumers are buying, you also need to know how. Are they going into the store where they can see displays? Are they shopping online for local inventory that they can pick up curbside? Are they placing orders online for delivery to their home? This information could change your product placement strategy.

Your competitors are chasing the same consumers that you are. Understanding their strengths, features, sales techniques and weaknesses will enable you to take a strategic approach to how you position your products and company. Competitor research will unlock the deep insights you’re missing.

One of the most important aspects to analyze in competitor research is the pricing strategies other manufacturers in your space are employing. This process requires you to identify a number of competitors and get their pricing information for various products. A simple spreadsheet is a powerful tool for this process.

The competition’s website, review sites and your own prospects may be able to tell you how much competitors are selling for in the instance that they aren’t listing product prices in a public catalog. Once you have all prices side-by-side, you can see how your competition stacks up.

If you are a low-end outlier next to your competitors, you may need to consider raising your prices. On the other hand, if your prices exceed your competitors, you may need to strengthen your positioning to justify that jump. If you’re right in the middle, there may be an opportunity to position your product as an upscale solution and raise the margin.

Ultimately, how you choose to apply the pricing information you discover is up to you. What matters is that you have the complete and accurate data necessary to make an informed decision.

While exploring competitors’ products to discover their pricing, it’s also worth plugging some important information about those offerings into your spreadsheet for further analysis.

Highlight the significance of what your competitors are selling and how they’re pushing their offers. What features do they highlight? Who do they seem to be speaking to? You can use this information to determine if your manufacturing products are being marketed in a unique way that answers a problem your competitors aren’t quite solving or highlighting well enough.

No industry is safe from digital transformation or the continued shifts that come along with changing consumer behavior. Even if you think you know your industry inside and out, detailed market research is sure to reveal something new and valuable. Your company may be the first one to discover an emerging trend or find a new way to leverage it, giving you a competitive edge.

Some manufacturers will ignore using market research to discover industry trends because they feel the trends are obvious when they start happening. In reality, trends only become obvious once many companies have started heading in that direction, and that means they’ve already lost out on the first-mover advantage.

Using market research can enable you to stay up-to-date on industry trends and jump on them early, allowing you to adapt and innovate. Beyond consumer behavior, you might start looking at how manufacturers are integrating AI into their back-end processes or how marketing automation is being utilized to strengthen customer relationships.

While you might not think of using market research to learn about new regulations, this is an extremely pertinent and valuable activity. Industry research can help you ensure compliance with changing regulations and avoid legal issues.

Even if you’re already aware of the regulatory changes happening, industry research can give you a peek at what’s to come. What regulations are being discussed? Which ones are evolving? Which ones are being clarified? You can know months ahead of your competitors, ensuring there are no last-minute notices that blindside your company or set you back on other projects.

Market research is a scalable activity that can be as drawn out or simplified as needed. Even if you’re a smaller manufacturer, you can find affordable and more hands-off ways to get through the valuable research you need to conduct.

When it comes to getting the best results, mixing many different techniques is recommended.

Interviews are a fantastic way to learn more about your target market. Whether you speak to current clients or find a way to meet with an example of your ideal prospect, interviews give you valuable time to ascertain direct answers and opinions that could transform the way you market your products.

Before setting out to conduct an interview, it’s important to outline the core information you hope to garner, including answers to specific questions that you’re having trouble answering through other forms of research or questions that you feel you need a more direct and personal response to.

You wouldn’t want to waste a second of valuable interview time answering basic demographic questions. However, you might use the start of the interview to gain more specific insights into the person’s role, responsibilities and core problems that you could help them solve.

For instance, a building materials manufacturer might interview contractors to determine what products they’re currently using and if they’re able to meet all client requests using those materials. Do they have clients asking for new styles, colors and features? How about a lower maintenance or more eco-friendly alternative? These answers will help you rethink your positioning.

Existing customers are a great source of information, but if you’re able to get in touch with prospects that represent your ideal client, that’s great as well. Most people are more than happy to provide their opinions, but incentivizing them for their time will truly make it worth their while and show that you value them.

Create a list using your current customer base and ask your sales team to provide a short list of pre-qualified prospects. Calling directly and simply asking if they have a few minutes to answer questions often works wonders. If you serve a large group of local customers, you can also schedule them to drop in or meet at a local conference room.

To get the most out of every interview, follow these best practices:

• Ensure you have an appropriate sample size

• Formulate open-ended questions and avoid leading people to answers

• When asking a person to choose between two products, try to avoid identifying which product your company produces to ensure an unbiased response

• Ask questions in the context of a real-world use case that your clients can relate to

• Ask follow-up questions to delve deeper into responses

• Make sure the interviewer is friendly, knowledgeable and understands how to solicit information in an effective manner

If you don’t have many participants willing to do interviews, surveys are a great way to garner responses from a much larger audience. Surveys can be conducted in person, but it’s very efficient to create a digital survey and send it out to the masses.

Like interviews, surveys need to ask relevant, specific and unbiased questions. However, instead of open-ended responses, you’d ask respondents to rank their opinion/level of agreement on a scale or choose from a few different answers. The key is to make your survey as quick to complete as possible.

Distributing your survey to current customers is a wise thing to do, but you might also consider incentivizing responses from the general public by sharing your survey online and even working with a surveyor to get it sent directly to ideal prospects. If you’re going to share the survey online, ask qualifying questions at the start to ensure the validity of the answers.

It’s very likely that your company already has a trove of customer data waiting to be tapped into, you just need to learn how to extract and analyze it. If you have a customer relationship management (CRM) system, this is a good place to start. Web analytics, ecommerce sales data and social media may also prove valuable.

Web analytics, for example, can reveal conversion challenges that prospects are silently facing. Your site has an overall conversion rate, but a particular path (like downloading a white paper) may have a far higher conversion rate, so you may need to rethink your strategy. That white paper might be answering a key objection that you aren’t effectively addressing elsewhere.

Customer satisfaction metrics are also important to measure. You can gather customer feedback by asking about their experience at the end of support calls, sending out surveys to your email list, and having your customer success team regularly check-in with active clients to see what they’re working on. Oftentimes, service/support teams have the most insight into client challenges, complaints, and suggestions, but not enough opportunity to share that feedback with the product and sales teams.

At least once a year, market leaders issue detailed reports for various industries. For instance, Venveo and The Farnsworth Group, annually release a report for building materials manufacturers. If you can obtain a report from a reliable and relevant source, it can help you jumpstart the market research process.

Usually, market reports will answer a number of questions that you outlined. It’s up to you whether you want to explore those questions further through your own research (like interviews and surveys) or focus on the ones still not answered. Your decision will likely depend on your budget and timeline for completing your market research.

Whereas interviews are one-to-one conversations that can happen over the phone, focus groups involve finding a handful of people and getting them into a room together where they can interact. Effective focus groups may involve people of similar demographics, but hopefully with very different opinions and insights.

Screening for focus groups is a make-or-break activity as you need to get people who will speak their minds and not just agree with everyone else. A building materials manufacturer, for example, may gather a group of architects into a room to represent a specific buyer persona, but these people will come from different companies and backgrounds.

In addition to getting the right people to join your focus group, also stress the importance of finding the right person to lead it. They’ll need to have a specific goal in mind for the focus group and present information in a non-leading, open-ended manner so that you can derive the information you need.

Once you have collected all of the findings from your research, the next step is to review them and see what insights you can uncover.

The data you collect may come in many forms ranging from audio recordings to written responses to 1-10 ratings. Find ways to compile the data in a uniform manner and then employ both manual review and automated tools in order to identify patterns, trends and key insights.

A few tools and techniques to explore include:

• The Census Bureau

• Make My Persona

• Tableau

• Paperform

• Statista

These platforms provide tools that can enrich your existing data and help you prepare for detailed analysis.

After going through all the trouble to conduct market research, the last thing you want to do is leave those findings in a proverbial drawer and forget about them. You set out to answer specific questions, now those answers need to be applied in your decision-making processes.

Market research is bound to reveal specific features or use cases that your team hasn’t deeply considered, allowing you to innovate existing products and develop new ones in the future. While you might not be ready to act on this feedback just yet, make note of it for future exploration.

With new information available, you should be able to refine your marketing and communication strategies. Buyer personas should be updated, along with sales and marketing techniques (channels, audiences, etc.).

Additionally, you may have your copywriter rewrite content based on your new positioning strategy. Pricing strategies may also need to be reviewed. Ensure that you compile a list of actionable steps to take over the coming months as new insights are revealed through analysis.

A deeper understanding of customer needs and expectations will empower your company to take a more active role in enhancing the customer experience. Sometimes, the improvements you make can be as simple as addressing client concerns over lead times or communicating better when orders will actually be delivered.

In many cases, customer experiences can be enhanced not only through changing how you reach customers but in your backend systems (like for ordering, logistics and tracking). You may also learn that customers would greatly appreciate simple additions, like catalogs or swatches that they can show to clients.

Whether market research reveals upcoming regulatory changes, new trends or shifts in consumer behavior, don’t trend the process as an event — adopt market research as an ongoing activity. You should strive to continuously make new discoveries and adapt based on the information you find.

Any changes you make in response to market research should also be thoroughly evaluated, with goals and benchmarks to ensure you’re seeing the improvements you set out to achieve. Incorporating feedback loops can also keep your company on the right track, even with rapid advancements.

Market research doesn’t have to be daunting or even all that complicated. By taking ownership of the exploration process and seeking out as much information as you can, you’ll position your company to stay on the cutting edge of a changing industry.

But if you want experts to guide you on your market research journey, why not talk to the experts at Venveo? Contact our team, and we can discuss strategies to help get you on the right track.