is market analysis and market research the same

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Market Analysis vs Market Research – Differences & Similarities

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Ever wondered if often interchangeably used terms, market research, and market analysis, don’t mean the same or that your intuitive understanding of them can be wrong? Either way, we will clue you in regarding it. 

Here’s what you need to know about market analysis, market research, and the differences and similarities between them.

Market Analysis vs Market Research – What’s the Difference?

Market research is a subset of market analysis that mainly examines the market potential and gathers feedback for particular business decisions. In comparison, market analysis is an overall market outlook that pursues forecasting and growth options.

What Is Market Analysis?

Market analysis is a detailed assessment that puts together various data, such as market forecasts and conditions. It comprises a SWOT analysis to know the strengths, weaknesses, opportunities, and threats to a business. 

It also includes competitive analysis and industry analysis. All this should be taken into account while considering mistakes to avoid when starting a business . 

Conducting a market analysis is the blueprint for any successful business, and business owners always refer to market analysis while writing a business plan . Mainly, market analysis gathers information from secondary research that scrutinizes the existing information.

Why Conduct Market Analysis?

Market analysis gives a holistic outlook, which is of momentous significance for any business. The reasons for conducting market analysis are listed below.

1. Get a Glimpse of the Competition

Prior to registering a business and launching products and services, it’s essential to know competitors, their market share, and brand value. The market analysis tells you all about it. 

You can price your products and services as well as designate a business location by reviewing the course of competitors. It also provides you with insights into the industry and start-up costs .

2. Proper Interpretation of Market Conditions

With a better understanding of the market conditions, mainly the demand side, market analysis affords more clarity to business decisions with precision. For instance, if the market analysis shows that the demand has decreased drastically, businesses won’t increase supply. 

3. Improved Goal Planning

It helps to set strategic goals. Strategic goals deal with the expansion and retention of the company. Market analysis is the first thing that is taken into account when leaving or entering the market, as it foresees the potential of customers into new markets.

4. Flexibility 

Business success is not all about running headfirst into the business goals as markets change with time. And with real-time knowledge of the ever-changing market, a business can revise its strategies.

5. Take Advantage of SWOT Analysis

Each business within a market has pros and cons. The trick is to use the pros effectively so that it outweighs the cons. You can run a SWOT analysis that will tell you about the strengths, weaknesses, opportunities, and threats your company is exposed to. You can enhance and overcome internal strengths and weaknesses, respectively. 

Location, methods, and costs hint at the opportunities and threats. For instance, if your production cost is relatively lower or your business targets new markets, it’ll count as an opportunity.

6. Run an Industry Analysis

Before starting a business , it’s crucial to have an industry analysis that would include growth statistics and potential in upcoming years. Market analysis touches on industry analysis in quite a detail. 

What Is Market Research?

Market research involves gathering feedback regarding product improvement and consumer perceptions, in which consumers usually fill out questionnaires or give interviews. It serves the purpose of improving customer satisfaction and developing brand loyalty by considering the preferences and needs of the customers. It also includes gathering real-time data on customer purchases, mainly through the internet. 

By and large, market research stands tall on the shoulder of primary research. Primary research comprises information gathered directly by the researchers.

Why Conduct Market Research?

While focusing on particular aspects of the market, market research is unparallel. The reasons for conducting market research are listed below.

1. Discover When Most Sales Take Place

Businesses sometimes research the peak hours and days on which most sales happen for a particular product. For this purpose, companies hire researchers that collect data from different stores.

2. Find Your Audience

It identifies potential customers while addressing questions such as who uses the particular product or service. As consumption is a function of income, it also digs into the potential customers’ income level and wealth status. It also explores factors like age, season, education, and marital status that determine consumption.

3. Conduct Targeted Market Campaigns

With perfect customer profiling, market research paves the way for starting effective market campaigns. A company can find platforms on which most customers exist, like different social media channels, such as Facebook and Instagram. 

Your company can run its marketing campaigns on these platforms to attract potential customers.

4. Collect Data From Current Customers

It gathers more data regarding existing customers. Researchers use questionnaires to reflect on products and services to further delve into consumer preferences. The goal is to improve what you or the competitors are offering to what consumers really want. 

It’s easier to ask existing customers, as they are already buying your product, and it’ll help in customer retention. Honest consumer responses help to understand the problems with your product or service. Putting in some effort would help your business to alleviate the consumers’ concerns and achieve an excellent customer experience.

5. Avoid Making Poor Decisions

Market research helps to mitigate risks related to business decisions by providing and assembling all the relevant information. It’s a top-notch tool to test the viability while launching a new product or service. It helps you to come up with a business idea like no other. 

For instance, if a food company wants to add a burger to its menu, it can check the burger’s viability and demand by offering it for free to its current and potential customers

6. Take Advantage of Unpopular Markets

It helps discover loosely grasped markets by competitors. You can flourish in such markets by only knowing the weak spots of the incumbent firms. You can hire researchers to identify where some customers are unsatisfied and why they are unsatisfied.

How Are Market Research & Analysis Different?

Now that you have some idea of market research and market analysis, we have discussed, in a nutshell, how these two are different.

• Market analysis is general and offers a holistic view of the market. It comprises market research, competitor analysis, industry analysis, and SWOT analysis. On the other hand, market research is more particularized, as it provides a focused market view dealing with resolving questions regarding consumer preference and behavior.
• In general, market research is less costly when compared with market analysis.
• Market analysis assists in strategic decision-making and forecasting market size with more clarity when compared to market research.
• Market analysis provides long-lasting insights, whereas market research usually covers trends that don’t last long.

Similarities Between Market Research and Market Analysis

In the market analysis versus market research debate, it goes without saying that both strengthen each other. Both work hand in hand and serve the same purpose of making a successful venture. 

Researchers conduct both market research and market analysis. In general, there are no specialized researchers for each task.

The approaches to conducting market research and market analysis are the same. Some recognized ways to conduct both tasks are face-to-face interviews, online questionnaires , phone, email, and focus group discussions.

Importance of Knowing the Difference

A proper understanding of the terms market analysis and market research is of paramount importance. For instance, you’ve instructions to hire a team to conduct a market analysis. Now you hire a team and ask them to conduct market research instead of asking them to conduct market analysis. 

The team may ask about the hypothesis around which they have to conduct research. It can probably set you off balance, and you may have to approach your superordinate or colleagues, which is embarrassing in the workplace.

Market Analysis vs Market Research – Bottom Line

Market research is a subset of market analysis that mainly examines the market potential and gathers feedback for particular decisions. On the other hand, market analysis is an overall outlook of a market that pursues forecasting and growth options.

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About the author

Dr. Gabriel O'Neill, Esq.

Dr. Gabriel O'Neill, Esq., a distinguished legal scholar with a business law degree and a Doctor of Juridical Science, is a leading expert in business registration and diverse business departments. Renowned for his academic excellence and practical insights, Dr. O'Neill guides businesses through legal complexities, offering invaluable expertise in compliance, corporate governance, and registration processes.

As an accomplished author, his forthcoming book is anticipated to be a comprehensive guide for navigating the dynamic intersection of law and business, providing clarity and practical wisdom for entrepreneurs and legal professionals alike. With a commitment to legal excellence, Dr. Gabriel O'Neill, Esq., is a trusted authority dedicated to empowering businesses within the ever-evolving legal landscape.

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Understanding the Difference Between Market Research and Market Analysis : Cognitive Market Research

Numerous people in the business and scientific areas are divided on the topic of market research vs. market analysis. Each of these ideas generates essential data and intelligence for firms and is required to keep a business running.

Market research and market analysis both enable firms to study sectors of their industry, forecast future trends, fine-tune their business procedures and efficiently lead companies to success. They both manage massive data issues occasionally. Both of these ideas also enable organizations to examine and meet industry requirements.

Despite the fact that these concepts are used frequently and provide similar economic advantages, they are not the same thing because they reflect different important variables, procedures, objectives, and approaches.

This will help you to understand the difference between market research and market analysis. 

What is Market Research? Market research is the practice of investigating a specific market's consumer base. It is intended to provide a comprehensive grasp of the target market in terms of both current and prospective clients. It employs primary, secondary, quantitative, and qualitative research approaches to do this.

Market research assists brands in determining:

• Consuming buying behavior: How do customers learn about companies? Why are there more consumers in online stores than in physical locations?
• Customer preferences: Do your customers want to pick it up or have it delivered? How many consumers have made mobile payments their preferred way of payment?
• Consumer sentiments: What is the average customer perception of the brand in comparison to other brands? Which of their values do customers cherish the most?

Why Perform Market Research? There are numerous reasons why market research is required. Here are a few examples:

• Obtain New Customers

It is expensive to acquire new consumers. It's no surprise that creating brand awareness, building credibility, and providing a great customer experience costs more than retaining a client. Does this imply that corporations must reduce their focus on client acquisition? Not if there are methods to cut costs.

Market research can assist you in increasing conversion rates and lowering the expense of customer acquisition.

• Enhance Customer Satisfaction

Consumer acquisition is challenging, but customer retention appears to be simple. The average retention rate is around 60%. But is it actually that simple to sell to current customers unless they are pleased with their earlier buys? Consumer satisfaction is what drives brand loyalty, advocacy, and a strong customer connection.

Through direct feedback, the attitudes of their colleagues, and present consumer trends, market research can help you better understand your consumers.

What is Market Analysis? Market analysis is the procedure of analyzing all the variables in a certain market and how they communicate to generate current and future circumstances. Its goal is to gain a clear picture of the environment in which a firm operates in order to determine the true size of the market, the status of the competition, and its growth direction.

The market analysis uses the insights collected through market research to achieve this ambitious goal. It examines business strategies, production processes, the technology used, collaborations that are being formed, and the resulting achievements.

Why Perform Market Analysis? Here are three primary reasons why you must conduct market analysis.

• Understand Product Demand

Product demand indicates whether or not there is an unfulfilled requirement in the market. Product market fit is the process of fine-tuning your offering to ensure that it fits that requirement, thereby making it the popular choice among competitors.

The market analysis explains why there is an unfulfilled requirement. Is this a lost opportunity? Or is someone attempting but failing? You must learn from this information in order to avoid making the same costly blunders.

• Build your Business Model

Pricing and costs are two major factors to consider when developing a solid business plan. Additional elements that you must consider are product category and target market. Most companies in a market economy must determine prices depending on the market instead of internal reasoning. And market analysis can provide you with the data you require to make these critical decisions.

• Explore New Possibilities

When it comes to hidden possibilities, the industry is filled with them. A hidden opportunity is similar to a market gap that seems untouched by others. It can also be a helpful feature that you never believed could be packed on top of your primary business. Furthermore, it is possible that your team's creativity will result in unexpected breakthroughs.

You must be inspired before you can pursue these hidden possibilities. And nothing compares to the strength of market intelligence.

The Major Difference Between Market Research and Market Analysis Considering that some market research programs may contain a market analysis and that market analysis includes market research, there is a significant overlap between market research and market analysis.

You can also perform a market analysis and market research to form a business strategy. Both of these insight-rich methodologies can be used to support a wide range of documents and reports. Depending on the information you collect, both of these can steer you in the right direction.

However, these two concepts are not similar and must not be confused.

The primary distinction between both is that market research focuses on acquiring customer-specific intelligence. Market analysis, on the contrary hand, takes a far broader view of a market, requiring greater resources to carry out all potential business predictions and explore every growth prospect.

Market research is far more precise and fine-tuned than market analysis. Market research is thus constrained by the demographic of studies, emotions, time, and various types of human interactions.

Market analysis compared to market research works by putting vast amounts of data into a large storage system. Market research is conducted by gathering precise data points required to answer specific research questions.

Market analysis frequently produces long-term results, whereas market research produces data that is valid for a few months to years, based on the demographic and subject of the study, considering that public opinion can change rapidly.

Finally, the market analysis aims to provide a comprehensive image of the majority of a market, whereas market research focuses on analyzing its client base and potential opportunities.

Author's Detail: Aparna Dutta /  LinkedIn Experience in Blog creation, Article Submission and Blog posting. I specialize in writing engaging blog posts for Market research and business insights. A person who believes in the principle of time and works towards perfection.

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Market Research vs. Market Analysis: Understanding the Difference

It’s easy to see why market research and analysis are often conflated. Both equip decision makers with crucial intelligence around the current state of the market, helping leaders analyze trends and predict future scenarios. And to do this, both incorporate big data technologies. But they’re not the same. Let’s find out how they differ!

The concepts of market research and analysis are as different as the individual body parts are to the body. While market research deals with a focused view of the market, answering questions around customer behavior, market analysis takes a contextualized view of the market, revealing action items and trend progression. Yes, we’ll explain further below.

What is Market Research?

Market research is the process of examining the consumer base of a particular market. It is designed to create a complete understanding of the target market in terms of both existing as well as potential customers. To accomplish this, it incorporates primary, secondary, quantitative, and qualitative research methodologies.

Market research helps brands sort out:

• Customer buying behavior: How do customers find out about us? Why are there more customers on our online stores than the physical premises
• Customer preferences: Do our customers prefer pick up or delivery? How many customers have adopted mobile transactions as a preferred mode of payment?
• Customer sentiments: What is the general consumer opinion about our brand vs. other brands? Which of our values do consumers appreciate most?

Why Conduct Market Research?

There are many reasons why you would need to conduct market research. Below are just a few:

1. Determine New Product Viability

A lot of new products are created each year, but many of them fail. We wager that a big reason for this is poor market fit. Harvard Business Review’s list of   five major factors   comes very close to affirming our claim. If that is the reason, market research (or lack thereof) is the primary cause. Companies are usually in too much hurry or too trusting of their unqualified intuition to conduct proper market research and determine the viability of a product to the target market.

If you want to increase your chances of success, market research is your friend.

2. Acquire New Customers

It costs to acquire new customers. Considering what it takes to create brand awareness, build credibility, and provide a winning customer experience, it’s no wonder that it costs, on average,   five times more   than customer retention. Does this mean businesses should shrink from customer acquisition? Not when there are ways to reduce this cost.

See, one of the main reasons why it costs so much is that businesses accomplish low conversion rates. Thus, the total cost of conversion divided by the number of new customers is high. Market research can help you boost your conversion rates and drive down the cost of customer acquisition.

3. Improve Customer Satisfaction

While customer acquisition is difficult, customer retention is apparently easy. The average rate of retention is   upwards of 60% . That’s three to 12 times the conversion rate. But is it really easy to sell to existing customers unless they are satisfied with their previous purchase(s)? Customer satisfaction is what fuels brand loyalty, advocacy, and a generally healthy customer relationship.

With market research, you can better understand your customers through their direct feedback, the sentiments of their peers, and the current consumer trends.

What is Market Analysis?

Market analysis is the process of examining all the variables in a particular market and how they interact to produce observed and future conditions. It is aimed at obtaining a clear look around the environment in which a business operates to uncover the true size of the market, state of competition, and growth trajectory.

To accomplish this lofty objective, market analysis applies the insights gathered from market research, and then some. It goes further to study the business models, production processes, technologies being used, partnerships being forged, and the resultant successes.

Some of the research problems in market analysis are:

• Market size: What is the current market growth rate? How much market share do each of the major players command?
• Market trends: What is the adoption of environmentally sustainable business practices in our industry? How can we improve our sales this holiday season compared to the previous five years?
• Market regulations: How has change in political leadership in Country X affected the industry? What are the barriers to entry facing our new consumer product line?

Market analysis in action :

BCG   is a consulting firm working with leading businesses across the globe. The firm helps them solve some of their most pressing challenges as well advise them on how to move on new opportunities. Because of its critical function in the success of these organizations, BCG is especially concerned with market analysis using advanced platforms.

We learned this from BCG’s Michael Wahlen when he gave a   LIVE presentation   on how his team uses Quid to uncover trends and opportunities in the market. In particular, Wahlen’s talk centered on how BCG advised its manufacturing client on the market trajectory by first uncovering a battalion of more than 2,500 emerging competitors.

Market analysis allowed Wahlen and his team to scrutinize the incoming companies based on their sub-sector, their innovations, and capital range. This made them understand the level of threat and advise the client accordingly.

Why Conduct Market Analysis?

Here are three good reasons to conduct market analysis:

1. Develop Your Business Model

Creating a strong   business model   involves two main considerations: Pricing and costs. There are other factors to consider such as product category and target market. However, they are secondary to the first two. In a market economy, the majority of businesses have to set prices based on the market rather than internal deliberation. And the information you need to make these crucial decisions can be obtained through market analysis.

2. Understand Product Demand

Product demand precedes product market fit, discussed above. Product demand is what tells you that there is an unmet need in the market. Product market fit is the fine tuning of your offering to make sure it meets that need; making it the preferred choice amidst the competition.

Market analysis shows you   why there is an unmet need. Is it a hidden opportunity? Or is someone trying and failing? You need to learn from this information to save yourself from experiencing the same expensive mistakes.

3. Discover Hidden Opportunities

Speaking of hidden opportunities, the market is full of them. A hidden opportunity would be something like a gap in the market that appears unexplored by others. It can also be a useful capability on top of your core business that you never thought could be packaged. Further, it may be the creativity of your team that produces new innovations you didn’t see coming.

Before you can explore these hidden opportunities, you need strong inspiration. And nothing comes close to the power of market intelligence.

Market research and analysis converge on some key points. But that’s only because market research is a part of the market analysis process. Other than that, they are distinct processes focused on different objectives, following different methods, and affected by different factors.

As a consumer and market intelligence platform, Quid is designed with both aspects of your business strategy in mind. It can reach across the web to gather all the relevant data needed while keeping you focused on your goals. It is built on cutting edge AI technology that enhances collection and analysis of all data formats, quantitative or qualitative. Further, it works seamlessly with other research tools, playing a true hybrid role in your market research and analysis ecosystem. And it all happens inside a single platform equipped with a powerful and intuitive dashboard that is easy to read and navigate.

And we didn’t even touch on the Intelligence Connector – for tool and insight integration! Be sure to   reach out for a demo   now and we will show you step by step how everything fits together on our platform to support your business and help you win again!

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The Complete Guide on Market Research vs Market Analysis

Market research versus market analysis. This is a topic of contention for many in the business and research worlds. Both of these concepts yield critical data and intelligence for businesses and both of them are necessary to sustain a business.

Both market research and market analysis empower businesses to analyze areas of their industry, predict future trends, hone their business practices and lead organizations effectively. They both deal with big data problems from time to time. Both of these concepts also allow businesses to assess industry expectations and meet them. 

However, although these terms are used interchangeably and offer similar business benefits, they are not the same thing, as each represents different key factors, processes, objectives and methodologies. 

We’ve taught you about the differences in market research vs. user research . This guide lays out market research vs. market analysis, allowing you to understand all of their key facets and differences, so that you can understand when and how to apply both. 

Understanding Market Research

Market research refers to a process that is far more specialized than market analysis, as it entails examining a specific market and its corresponding customers . It is usually bent on answering distinct questions regarding customer behavior along with all else that pertains to a target market , which is the group of consumers most likely to buy from a business.

Market research involves studying customers at an in-depth level , which therefore includes segmenting them into distinct groups and designating them with individual customer personas . This involves the practice of performing market segmentation , along with conducting secondary and primary market research techniques prior, during and after administering market segmentation. 

Aside from referring to and implementing primary and secondary resources, market research encompasses both quantitative market research and qualitative market research methods. 

Given that this kind of research is centered around customers, it examines a variety of customer traits and characteristics. They include the following: 

• Customer buying behavior
• Customer preferences
• Desires and needs
• Customer aversions
• Cultural trends
• Current events
• The industry at large
• Customer experience (CX)
• Views on the industry at large
• General feedback

Market research is a practice undertaken by business owners, researchers, analysts, marketing departments and even individuals. Essentially, market research is used to gather feedback and data directly from the customers, mainly to assess the viability of particular business decisions .

The Importance of Market Research 

Market research carries a great deal of importance, as it empowers all businesses with critical data that steers them towards making the right business decisions. 

Firstly, it’s important for startups and new businesses to conduct market research before launching their business or even innovating on a product . Although it is tempting to push a product to market, a lack of market research has grave consequences . 

It is difficult to acquire new customers for established businesses , as it costs five times more to acquire a customer than it does to retain an existing one . Additionally, selling to a new customer has a low success rate of 5-20%, while selling to an existing customer has a success rate of 60-70%. 

This environment exists for existing businesses. It is even more arduous for startups and yet-to-be registered businesses to gain a customer base. As such, these businesses must conduct market research. It grants them valuable knowledge about the particulars in their industry and most importantly, their target market.

Only when you understand your customers can you serve them properly. After all, you’re not just selling a product or service. Businesses of the present can only survive if they provide a strong experience for their customers . 73% of U.S. customers say that CX is a very important factor in their purchasing decision. 1 in 3 custumers will leave a company after just one bad experience . 

Clearly, customer experience is vastly important and i n order to create positive experiences that not only draw in but retain customers, you’ll need to understand your customers at a deep level. 

Market research makes this possible , as it allows you to learn everything about your target market , segment them into smaller, more distinct groups that you can dedicate to different campaigns and satisfy them continuously . 

Understanding Market Analysis

Market analysis is the process of examining a particular market, industry, niche or segment . It is carried out by way of quantitative and qualitative assessments of a market. 

This analysis relies on raw data that predominantly focuses on a market’s size and potential . As such, it involves studying a market by observing various factors that involve these two concepts. 

A market analysis involves observing the following aspects : market volume, value, its different customer segments and their customer buying behavior, economic conditions, regulations, the competition, barriers to entry and political, social and cultural trends, as they relate to the market. 

A market analysis uses current and historical data to forecast future market events and outcomes . This data includes information on the above topics of observation. Businesses use market analyses so that they can understand how their products and experiences may exist under a certain environment . 

This kind of analysis allows companies to plan ahead for the future in a strategic way, using data for decision-making . This is because it allows companies to get a plain understanding of the most important factors of their market. 

A market analysis is an all-encompassing practice of examining a market , therefore, it uses a wide range of sources. This involves using market research to provide key information on customers and other aspects of the market. By relying on a vast number of sources, a market analysis can assess and predict all of a business’s growth options , as well as its possible stumbling blocks and limitations.     

In short, a market analysis gives businesses a broader understanding of their market by relying on multiple means and sources of data that pertain to various aspects of the industry.   

The Importance of Market Analysis

The process of a market analysis is important, as it allows business owners to evaluate whether their product or service will satisfy their customers’ needs . This way, they don’t waste time on producing products, product updates and features that will perform poorly and generate few sales. 

A market analysis helps gain insights into the shifts occurring in the economy . This can include changes in regulations that directly or indirectly affect your business. It also helps you stay aware of market trends, which puts supply and demand in perspective . 

This helps you set reasonable prices that are commensurate with demand. It allows you to understand the desirable products and services along with those that drive little demand. These key aspects enable your business to become fully acquainted with the economy, along with the particular one of their industry.     

In addition, this kind of analysis is important in that it provides insights into your target market, the segment of the market most likely to be your customers . It does so, as it involves studying your demographics along with their behaviors, traits and expenditures. In this sense, market analysis is critical as it implements market research. 

Furthermore, a market analysis will help you plan the most promising strategy to market your product or service product . This is because when analyzing the key facts of your market, many marketing messages will come your way.

Even by casually browsing your competitors’ sites and social channels, you’ll discover various marketing techniques, from ads, to landing pages, webinars, promotions and much more. This will give you critical information on the kinds of marketing methods to test and try. 

Given that a market analysis touches on so many components of a market, it equips businesses with essential knowledge for making auspicious business decisions. This kind of knowledge allows you to complete a business plan, as it has its own section, showing prospective and plausible investors that you understand your market.

The results that your market analysis draws enables your company to identify both the opportunities and risks of your particular market. All in all, this kind of analysis sheds light on all the foundational aspects of a business, along with its main ongoing concerns. This kind of knowledge will inform and bolster all kinds of business endeavors.

The Key Differences Between Market Research and Market Analysis

There is considerable overlap between market research and market analysis , given that some market research projects may include a market analysis and especially since market analysis encompasses market research. 

Additionally, you can complete both a market analysis and market research for a business plan . You can use both of these insights-rich methods to support a wide array of different documents and reports. Both of these can point you to the appropriate action based on the data you collect. 

However, these two terms are not the same and should, therefore, not be confused with one another.  

The main differentiating factor between them is that market research is inclined on gathering customer-specific intelligence . Market analysis , on the other hand, seeks a far more expansive perspective of a market, thereby relying on more resources, to execute all the possible business forecasts and examine all growth options .  

Whereas market analysis is broad, market research is much more specific and fine-tuned. Market research is therefore restricted by the population of studies, emotions and time, as well as different kinds of human interaction.

In contrast with market research, market analysis works by depositing large quantities of data into a large storage framework. Market research works by collecting specific data points necessary for answering certain research concerns.  

Market analysis often yields results that last in the long-term, while the results of market research tend to be valid for several months to years, depending on the population and theme of the study, given that public opinion can change quickly. 

In conclusion, market analysis strives to render a clear picture of the majority of a market , while market research is focused on understanding its customer base and those possible prospects. 

Reinforcing All Your Research and Analysis Needs

Market analysis and market research are two exceedingly important processes of gaining information to bolster your business. Despite their similar nature and often conflation, they are two distinct practices and should not be mistaken for one another . 

However, in order to conduct market research and even garner intelligence for market analysis, your business ought to use a strong online survey platform . It can be used to study your customers on a deep level, along with what people perceive in your market. You can also send surveys to specific people with Link Distribution , allowing you to better understand your market by surveying key players. 

To do so, you ought to look into a strong online survey platform, the kind that operates via random device engagement (RDE) sampling, which reaches respondents in their natural digital environments , scaling back on survey bias . 

You should also opt for an online survey platform that implements artificial intelligence and machine learning to disqualify survey fraud and poor-quality data and offer a mobile-first design.

Such a platform will ensure you gain the most quality insights on your market and customers in a timely way.

Do you want to distribute your survey? Pollfish offers you access to millions of targeted consumers to get survey responses from $0.95 per complete. Launch your survey today.

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How to Do Market Research: The Complete Guide

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What are your customers’ needs? How does your product compare to the competition? What are the emerging trends and opportunities in your industry? If these questions keep you up at night, it’s time to conduct market research.

Market research plays a pivotal role in your ability to stay competitive and relevant, helping you anticipate shifts in consumer behavior and industry dynamics. It involves gathering these insights using a wide range of techniques, from surveys and interviews to data analysis and observational studies.

In this guide, we’ll explore why market research is crucial, the various types of market research, the methods used in data collection, and how to effectively conduct market research to drive informed decision-making and success.

What is market research?

Market research is the systematic process of gathering, analyzing and interpreting information about a specific market or industry. The purpose of market research is to offer valuable insight into the preferences and behaviors of your target audience, and anticipate shifts in market trends and the competitive landscape. This information helps you make data-driven decisions, develop effective strategies for your business, and maximize your chances of long-term growth.

Why is market research important? 

By understanding the significance of market research, you can make sure you’re asking the right questions and using the process to your advantage. Some of the benefits of market research include:

• Informed decision-making: Market research provides you with the data and insights you need to make smart decisions for your business. It helps you identify opportunities, assess risks and tailor your strategies to meet the demands of the market. Without market research, decisions are often based on assumptions or guesswork, leading to costly mistakes.
• Customer-centric approach: A cornerstone of market research involves developing a deep understanding of customer needs and preferences. This gives you valuable insights into your target audience, helping you develop products, services and marketing campaigns that resonate with your customers.
• Competitive advantage: By conducting market research, you’ll gain a competitive edge. You’ll be able to identify gaps in the market, analyze competitor strengths and weaknesses, and position your business strategically. This enables you to create unique value propositions, differentiate yourself from competitors, and seize opportunities that others may overlook.
• Risk mitigation: Market research helps you anticipate market shifts and potential challenges. By identifying threats early, you can proactively adjust their strategies to mitigate risks and respond effectively to changing circumstances. This proactive approach is particularly valuable in volatile industries.
• Resource optimization: Conducting market research allows organizations to allocate their time, money and resources more efficiently. It ensures that investments are made in areas with the highest potential return on investment, reducing wasted resources and improving overall business performance.
• Adaptation to market trends: Markets evolve rapidly, driven by technological advancements, cultural shifts and changing consumer attitudes. Market research ensures that you stay ahead of these trends and adapt your offerings accordingly so you can avoid becoming obsolete. 

As you can see, market research empowers businesses to make data-driven decisions, cater to customer needs, outperform competitors, mitigate risks, optimize resources and stay agile in a dynamic marketplace. These benefits make it a huge industry; the global market research services market is expected to grow from $76.37 billion in 2021 to $108.57 billion in 2026 . Now, let’s dig into the different types of market research that can help you achieve these benefits.

Types of market research 

• Qualitative research
• Quantitative research
• Exploratory research
• Descriptive research
• Causal research
• Cross-sectional research
• Longitudinal research

Despite its advantages, 23% of organizations don’t have a clear market research strategy. Part of developing a strategy involves choosing the right type of market research for your business goals. The most commonly used approaches include:

1. Qualitative research

Qualitative research focuses on understanding the underlying motivations, attitudes and perceptions of individuals or groups. It is typically conducted through techniques like in-depth interviews, focus groups and content analysis — methods we’ll discuss further in the sections below. Qualitative research provides rich, nuanced insights that can inform product development, marketing strategies and brand positioning.

2. Quantitative research

Quantitative research, in contrast to qualitative research, involves the collection and analysis of numerical data, often through surveys, experiments and structured questionnaires. This approach allows for statistical analysis and the measurement of trends, making it suitable for large-scale market studies and hypothesis testing. While it’s worthwhile using a mix of qualitative and quantitative research, most businesses prioritize the latter because it is scientific, measurable and easily replicated across different experiments.

3. Exploratory research

Whether you’re conducting qualitative or quantitative research or a mix of both, exploratory research is often the first step. Its primary goal is to help you understand a market or problem so you can gain insights and identify potential issues or opportunities. This type of market research is less structured and is typically conducted through open-ended interviews, focus groups or secondary data analysis. Exploratory research is valuable when entering new markets or exploring new product ideas.

4. Descriptive research

As its name implies, descriptive research seeks to describe a market, population or phenomenon in detail. It involves collecting and summarizing data to answer questions about audience demographics and behaviors, market size, and current trends. Surveys, observational studies and content analysis are common methods used in descriptive research. 

5. Causal research

Causal research aims to establish cause-and-effect relationships between variables. It investigates whether changes in one variable result in changes in another. Experimental designs, A/B testing and regression analysis are common causal research methods. This sheds light on how specific marketing strategies or product changes impact consumer behavior.

6. Cross-sectional research

Cross-sectional market research involves collecting data from a sample of the population at a single point in time. It is used to analyze differences, relationships or trends among various groups within a population. Cross-sectional studies are helpful for market segmentation, identifying target audiences and assessing market trends at a specific moment.

7. Longitudinal research

Longitudinal research, in contrast to cross-sectional research, collects data from the same subjects over an extended period. This allows for the analysis of trends, changes and developments over time. Longitudinal studies are useful for tracking long-term developments in consumer preferences, brand loyalty and market dynamics.

Each type of market research has its strengths and weaknesses, and the method you choose depends on your specific research goals and the depth of understanding you’re aiming to achieve. In the following sections, we’ll delve into primary and secondary research approaches and specific research methods.

Primary vs. secondary market research

Market research of all types can be broadly categorized into two main approaches: primary research and secondary research. By understanding the differences between these approaches, you can better determine the most appropriate research method for your specific goals.

Primary market research 

Primary research involves the collection of original data straight from the source. Typically, this involves communicating directly with your target audience — through surveys, interviews, focus groups and more — to gather information. Here are some key attributes of primary market research:

• Customized data: Primary research provides data that is tailored to your research needs. You design a custom research study and gather information specific to your goals.
• Up-to-date insights: Because primary research involves communicating with customers, the data you collect reflects the most current market conditions and consumer behaviors.
• Time-consuming and resource-intensive: Despite its advantages, primary research can be labor-intensive and costly, especially when dealing with large sample sizes or complex study designs. Whether you hire a market research consultant, agency or use an in-house team, primary research studies consume a large amount of resources and time.

Secondary market research 

Secondary research, on the other hand, involves analyzing data that has already been compiled by third-party sources, such as online research tools, databases, news sites, industry reports and academic studies.

Here are the main characteristics of secondary market research:

• Cost-effective: Secondary research is generally more cost-effective than primary research since it doesn’t require building a research plan from scratch. You and your team can look at databases, websites and publications on an ongoing basis, without needing to design a custom experiment or hire a consultant. 
• Leverages multiple sources: Data tools and software extract data from multiple places across the web, and then consolidate that information within a single platform. This means you’ll get a greater amount of data and a wider scope from secondary research.
• Quick to access: You can access a wide range of information rapidly — often in seconds — if you’re using online research tools and databases. Because of this, you can act on insights sooner, rather than taking the time to develop an experiment. 

So, when should you use primary vs. secondary research? In practice, many market research projects incorporate both primary and secondary research to take advantage of the strengths of each approach.

One rule of thumb is to focus on secondary research to obtain background information, market trends or industry benchmarks. It is especially valuable for conducting preliminary research, competitor analysis, or when time and budget constraints are tight. Then, if you still have knowledge gaps or need to answer specific questions unique to your business model, use primary research to create a custom experiment. 

Market research methods

• Surveys and questionnaires
• Focus groups
• Observational research
• Online research tools
• Experiments
• Content analysis
• Ethnographic research

How do primary and secondary research approaches translate into specific research methods? Let’s take a look at the different ways you can gather data: 

1. Surveys and questionnaires

Surveys and questionnaires are popular methods for collecting structured data from a large number of respondents. They involve a set of predetermined questions that participants answer. Surveys can be conducted through various channels, including online tools, telephone interviews and in-person or online questionnaires. They are useful for gathering quantitative data and assessing customer demographics, opinions, preferences and needs. On average, customer surveys have a 33% response rate , so keep that in mind as you consider your sample size.

2. Interviews

Interviews are in-depth conversations with individuals or groups to gather qualitative insights. They can be structured (with predefined questions) or unstructured (with open-ended discussions). Interviews are valuable for exploring complex topics, uncovering motivations and obtaining detailed feedback. 

3. Focus groups

The most common primary research methods are in-depth webcam interviews and focus groups. Focus groups are a small gathering of participants who discuss a specific topic or product under the guidance of a moderator. These discussions are valuable for primary market research because they reveal insights into consumer attitudes, perceptions and emotions. Focus groups are especially useful for idea generation, concept testing and understanding group dynamics within your target audience.

4. Observational research

Observational research involves observing and recording participant behavior in a natural setting. This method is particularly valuable when studying consumer behavior in physical spaces, such as retail stores or public places. In some types of observational research, participants are aware you’re watching them; in other cases, you discreetly watch consumers without their knowledge, as they use your product. Either way, observational research provides firsthand insights into how people interact with products or environments.

5. Online research tools

You and your team can do your own secondary market research using online tools. These tools include data prospecting platforms and databases, as well as online surveys, social media listening, web analytics and sentiment analysis platforms. They help you gather data from online sources, monitor industry trends, track competitors, understand consumer preferences and keep tabs on online behavior. We’ll talk more about choosing the right market research tools in the sections that follow.

6. Experiments

Market research experiments are controlled tests of variables to determine causal relationships. While experiments are often associated with scientific research, they are also used in market research to assess the impact of specific marketing strategies, product features, or pricing and packaging changes.

7. Content analysis

Content analysis involves the systematic examination of textual, visual or audio content to identify patterns, themes and trends. It’s commonly applied to customer reviews, social media posts and other forms of online content to analyze consumer opinions and sentiments.

8. Ethnographic research

Ethnographic research immerses researchers into the daily lives of consumers to understand their behavior and culture. This method is particularly valuable when studying niche markets or exploring the cultural context of consumer choices.

How to do market research

• Set clear objectives
• Identify your target audience
• Choose your research methods
• Use the right market research tools
• Collect data
• Analyze data 
• Interpret your findings
• Identify opportunities and challenges
• Make informed business decisions
• Monitor and adapt

Now that you have gained insights into the various market research methods at your disposal, let’s delve into the practical aspects of how to conduct market research effectively. Here’s a quick step-by-step overview, from defining objectives to monitoring market shifts.

1. Set clear objectives

When you set clear and specific goals, you’re essentially creating a compass to guide your research questions and methodology. Start by precisely defining what you want to achieve. Are you launching a new product and want to understand its viability in the market? Are you evaluating customer satisfaction with a product redesign? 

Start by creating SMART goals — objectives that are specific, measurable, achievable, relevant and time-bound. Not only will this clarify your research focus from the outset, but it will also help you track progress and benchmark your success throughout the process. 

You should also consult with key stakeholders and team members to ensure alignment on your research objectives before diving into data collecting. This will help you gain diverse perspectives and insights that will shape your research approach.

2. Identify your target audience

Next, you’ll need to pinpoint your target audience to determine who should be included in your research. Begin by creating detailed buyer personas or stakeholder profiles. Consider demographic factors like age, gender, income and location, but also delve into psychographics, such as interests, values and pain points.

The more specific your target audience, the more accurate and actionable your research will be. Additionally, segment your audience if your research objectives involve studying different groups, such as current customers and potential leads.

If you already have existing customers, you can also hold conversations with them to better understand your target market. From there, you can refine your buyer personas and tailor your research methods accordingly.

3. Choose your research methods

Selecting the right research methods is crucial for gathering high-quality data. Start by considering the nature of your research objectives. If you’re exploring consumer preferences, surveys and interviews can provide valuable insights. For in-depth understanding, focus groups or observational research might be suitable. Consider using a mix of quantitative and qualitative methods to gain a well-rounded perspective. 

You’ll also need to consider your budget. Think about what you can realistically achieve using the time and resources available to you. If you have a fairly generous budget, you may want to try a mix of primary and secondary research approaches. If you’re doing market research for a startup , on the other hand, chances are your budget is somewhat limited. If that’s the case, try addressing your goals with secondary research tools before investing time and effort in a primary research study. 

4. Use the right market research tools

Whether you’re conducting primary or secondary research, you’ll need to choose the right tools. These can help you do anything from sending surveys to customers to monitoring trends and analyzing data. Here are some examples of popular market research tools:

• Market research software: Crunchbase is a platform that provides best-in-class company data, making it valuable for market research on growing companies and industries. You can use Crunchbase to access trusted, first-party funding data, revenue data, news and firmographics, enabling you to monitor industry trends and understand customer needs.

• Survey and questionnaire tools: SurveyMonkey is a widely used online survey platform that allows you to create, distribute and analyze surveys. Google Forms is a free tool that lets you create surveys and collect responses through Google Drive.
• Data analysis software: Microsoft Excel and Google Sheets are useful for conducting statistical analyses. SPSS is a powerful statistical analysis software used for data processing, analysis and reporting.
• Social listening tools: Brandwatch is a social listening and analytics platform that helps you monitor social media conversations, track sentiment and analyze trends. Mention is a media monitoring tool that allows you to track mentions of your brand, competitors and keywords across various online sources.
• Data visualization platforms: Tableau is a data visualization tool that helps you create interactive and shareable dashboards and reports. Power BI by Microsoft is a business analytics tool for creating interactive visualizations and reports.

5. Collect data

There’s an infinite amount of data you could be collecting using these tools, so you’ll need to be intentional about going after the data that aligns with your research goals. Implement your chosen research methods, whether it’s distributing surveys, conducting interviews or pulling from secondary research platforms. Pay close attention to data quality and accuracy, and stick to a standardized process to streamline data capture and reduce errors. 

6. Analyze data

Once data is collected, you’ll need to analyze it systematically. Use statistical software or analysis tools to identify patterns, trends and correlations. For qualitative data, employ thematic analysis to extract common themes and insights. Visualize your findings with charts, graphs and tables to make complex data more understandable.

If you’re not proficient in data analysis, consider outsourcing or collaborating with a data analyst who can assist in processing and interpreting your data accurately.

7. Interpret your findings

Interpreting your market research findings involves understanding what the data means in the context of your objectives. Are there significant trends that uncover the answers to your initial research questions? Consider the implications of your findings on your business strategy. It’s essential to move beyond raw data and extract actionable insights that inform decision-making.

Hold a cross-functional meeting or workshop with relevant team members to collectively interpret the findings. Different perspectives can lead to more comprehensive insights and innovative solutions.

8. Identify opportunities and challenges

Use your research findings to identify potential growth opportunities and challenges within your market. What segments of your audience are underserved or overlooked? Are there emerging trends you can capitalize on? Conversely, what obstacles or competitors could hinder your progress?

Lay out this information in a clear and organized way by conducting a SWOT analysis, which stands for strengths, weaknesses, opportunities and threats. Jot down notes for each of these areas to provide a structured overview of gaps and hurdles in the market.

9. Make informed business decisions

Market research is only valuable if it leads to informed decisions for your company. Based on your insights, devise actionable strategies and initiatives that align with your research objectives. Whether it’s refining your product, targeting new customer segments or adjusting pricing, ensure your decisions are rooted in the data.

At this point, it’s also crucial to keep your team aligned and accountable. Create an action plan that outlines specific steps, responsibilities and timelines for implementing the recommendations derived from your research. 

10. Monitor and adapt

Market research isn’t a one-time activity; it’s an ongoing process. Continuously monitor market conditions, customer behaviors and industry trends. Set up mechanisms to collect real-time data and feedback. As you gather new information, be prepared to adapt your strategies and tactics accordingly. Regularly revisiting your research ensures your business remains agile and reflects changing market dynamics and consumer preferences.

Online market research sources

As you go through the steps above, you’ll want to turn to trusted, reputable sources to gather your data. Here’s a list to get you started:

• Crunchbase: As mentioned above, Crunchbase is an online platform with an extensive dataset, allowing you to access in-depth insights on market trends, consumer behavior and competitive analysis. You can also customize your search options to tailor your research to specific industries, geographic regions or customer personas.

• Academic databases: Academic databases, such as ProQuest and JSTOR , are treasure troves of scholarly research papers, studies and academic journals. They offer in-depth analyses of various subjects, including market trends, consumer preferences and industry-specific insights. Researchers can access a wealth of peer-reviewed publications to gain a deeper understanding of their research topics.
• Government and NGO databases: Government agencies, nongovernmental organizations and other institutions frequently maintain databases containing valuable economic, demographic and industry-related data. These sources offer credible statistics and reports on a wide range of topics, making them essential for market researchers. Examples include the U.S. Census Bureau , the Bureau of Labor Statistics and the Pew Research Center .
• Industry reports: Industry reports and market studies are comprehensive documents prepared by research firms, industry associations and consulting companies. They provide in-depth insights into specific markets, including market size, trends, competitive analysis and consumer behavior. You can find this information by looking at relevant industry association databases; examples include the American Marketing Association and the National Retail Federation .
• Social media and online communities: Social media platforms like LinkedIn or Twitter (X) , forums such as Reddit and Quora , and review platforms such as G2 can provide real-time insights into consumer sentiment, opinions and trends. 

Market research examples

At this point, you have market research tools and data sources — but how do you act on the data you gather? Let’s go over some real-world examples that illustrate the practical application of market research across various industries. These examples showcase how market research can lead to smart decision-making and successful business decisions.

Example 1: Apple’s iPhone launch

Apple ’s iconic iPhone launch in 2007 serves as a prime example of market research driving product innovation in tech. Before the iPhone’s release, Apple conducted extensive market research to understand consumer preferences, pain points and unmet needs in the mobile phone industry. This research led to the development of a touchscreen smartphone with a user-friendly interface, addressing consumer demands for a more intuitive and versatile device. The result was a revolutionary product that disrupted the market and redefined the smartphone industry.

Example 2: McDonald’s global expansion

McDonald’s successful global expansion strategy demonstrates the importance of market research when expanding into new territories. Before entering a new market, McDonald’s conducts thorough research to understand local tastes, preferences and cultural nuances. This research informs menu customization, marketing strategies and store design. For instance, in India, McDonald’s offers a menu tailored to local preferences, including vegetarian options. This market-specific approach has enabled McDonald’s to adapt and thrive in diverse global markets.

Example 3: Organic and sustainable farming

The shift toward organic and sustainable farming practices in the food industry is driven by market research that indicates increased consumer demand for healthier and environmentally friendly food options. As a result, food producers and retailers invest in sustainable sourcing and organic product lines — such as with these sustainable seafood startups — to align with this shift in consumer values. 

The bottom line? Market research has multiple use cases and is a critical practice for any industry. Whether it’s launching groundbreaking products, entering new markets or responding to changing consumer preferences, you can use market research to shape successful strategies and outcomes.

Market research templates

You finally have a strong understanding of how to do market research and apply it in the real world. Before we wrap up, here are some market research templates that you can use as a starting point for your projects:

• Smartsheet competitive analysis templates : These spreadsheets can serve as a framework for gathering information about the competitive landscape and obtaining valuable lessons to apply to your business strategy.
• SurveyMonkey product survey template : Customize the questions on this survey based on what you want to learn from your target customers.
• HubSpot templates : HubSpot offers a wide range of free templates you can use for market research, business planning and more.
• SCORE templates : SCORE is a nonprofit organization that provides templates for business plans, market analysis and financial projections.
• SBA.gov : The U.S. Small Business Administration offers templates for every aspect of your business, including market research, and is particularly valuable for new startups. 

Strengthen your business with market research

When conducted effectively, market research is like a guiding star. Equipped with the right tools and techniques, you can uncover valuable insights, stay competitive, foster innovation and navigate the complexities of your industry.

Throughout this guide, we’ve discussed the definition of market research, different research methods, and how to conduct it effectively. We’ve also explored various types of market research and shared practical insights and templates for getting started. 

Now, it’s time to start the research process. Trust in data, listen to the market and make informed decisions that guide your company toward lasting success.

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What Is Market Research?

• How It Works
• Primary vs. Secondary
• How to Conduct Research

The Bottom Line

• Marketing Essentials

How to Do Market Research, Types, and Example

Joules Garcia / Investopedia

Market research examines consumer behavior and trends in the economy to help a business develop and fine-tune its business idea and strategy. It helps a business understand its target market by gathering and analyzing data.

Market research is the process of evaluating the viability of a new service or product through research conducted directly with potential customers. It allows a company to define its target market and get opinions and other feedback from consumers about their interest in a product or service.

Research may be conducted in-house or by a third party that specializes in market research. It can be done through surveys and focus groups, among other ways. Test subjects are usually compensated with product samples or a small stipend for their time.

Key Takeaways

• Companies conduct market research before introducing new products to determine their appeal to potential customers.
• Tools include focus groups, telephone interviews, and questionnaires.
• The results of market research inform the final design of the product and determine how it will be positioned in the marketplace.
• Market research usually combines primary information, gathered directly from consumers, and secondary information, which is data available from external sources.

Market Research

How market research works.

Market research is used to determine the viability of a new product or service. The results may be used to revise the product design and fine-tune the strategy for introducing it to the public. This can include information gathered for the purpose of determining market segmentation . It also informs product differentiation , which is used to tailor advertising.

A business engages in various tasks to complete the market research process. It gathers information based on the market sector being targeted by the product. This information is then analyzed and relevant data points are interpreted to draw conclusions about how the product may be optimally designed and marketed to the market segment for which it is intended.

It is a critical component in the research and development (R&D) phase of a new product or service introduction. Market research can be conducted in many different ways, including surveys, product testing, interviews, and focus groups.

Market research is a critical tool that companies use to understand what consumers want, develop products that those consumers will use, and maintain a competitive advantage over other companies in their industry.

Primary Market Research vs. Secondary Market Research

Market research usually consists of a combination of:

• Primary research, gathered by the company or by an outside company that it hires
• Secondary research, which draws on external sources of data

Primary Market Research

Primary research generally falls into two categories: exploratory and specific research.

• Exploratory research is less structured and functions via open-ended questions. The questions may be posed in a focus group setting, telephone interviews, or questionnaires. It results in questions or issues that the company needs to address about a product that it has under development.
• Specific research delves more deeply into the problems or issues identified in exploratory research.

Secondary Market Research

All market research is informed by the findings of other researchers about the needs and wants of consumers. Today, much of this research can be found online.

Secondary research can include population information from government census data , trade association research reports , polling results, and research from other businesses operating in the same market sector.

History of Market Research

Formal market research began in Germany during the 1920s. In the United States, it soon took off with the advent of the Golden Age of Radio.

Companies that created advertisements for this new entertainment medium began to look at the demographics of the audiences who listened to each of the radio plays, music programs, and comedy skits that were presented.

They had once tried to reach the widest possible audience by placing their messages on billboards or in the most popular magazines. With radio programming, they had the chance to target rural or urban consumers, teenagers or families, and judge the results by the sales numbers that followed.

Types of Market Research

Face-to-face interviews.

From their earliest days, market research companies would interview people on the street about the newspapers and magazines that they read regularly and ask whether they recalled any of the ads or brands that were published in them. Data collected from these interviews were compared to the circulation of the publication to determine the effectiveness of those ads.

Market research and surveys were adapted from these early techniques.

To get a strong understanding of your market, it’s essential to understand demand, market size, economic indicators, location, market saturation, and pricing.

Focus Groups

A focus group is a small number of representative consumers chosen to try a product or watch an advertisement.

Afterward, the group is asked for feedback on their perceptions of the product, the company’s brand, or competing products. The company then takes that information and makes decisions about what to do with the product or service, whether that's releasing it, making changes, or abandoning it altogether.

Phone Research

The man-on-the-street interview technique soon gave way to the telephone interview. A telephone interviewer could collect information in a more efficient and cost-effective fashion.

Telephone research was a preferred tactic of market researchers for many years. It has become much more difficult in recent years as landline phone service dwindles and is replaced by less accessible mobile phones.

Survey Research

As an alternative to focus groups, surveys represent a cost-effective way to determine consumer attitudes without having to interview anyone in person. Consumers are sent surveys in the mail, usually with a coupon or voucher to incentivize participation. These surveys help determine how consumers feel about the product, brand, and price point.

Online Market Research

With people spending more time online, market research activities have shifted online as well. Data collection still uses a survey-style form. But instead of companies actively seeking participants by finding them on the street or cold calling them on the phone, people can choose to sign up, take surveys, and offer opinions when they have time.

This makes the process far less intrusive and less rushed, since people can participate on their own time and of their own volition.

How to Conduct Market Research

The first step to effective market research is to determine the goals of the study. Each study should seek to answer a clear, well-defined problem. For example, a company might seek to identify consumer preferences, brand recognition, or the comparative effectiveness of different types of ad campaigns.

After that, the next step is to determine who will be included in the research. Market research is an expensive process, and a company cannot waste resources collecting unnecessary data. The firm should decide in advance which types of consumers will be included in the research, and how the data will be collected. They should also account for the probability of statistical errors or sampling bias .

The next step is to collect the data and analyze the results. If the two previous steps have been completed accurately, this should be straightforward. The researchers will collect the results of their study, keeping track of the ages, gender, and other relevant data of each respondent. This is then analyzed in a marketing report that explains the results of their research.

The last step is for company executives to use their market research to make business decisions. Depending on the results of their research, they may choose to target a different group of consumers, or they may change their price point or some product features.

The results of these changes may eventually be measured in further market research, and the process will begin all over again.

Benefits of Market Research

Market research is essential for developing brand loyalty and customer satisfaction. Since it is unlikely for a product to appeal equally to every consumer, a strong market research program can help identify the key demographics and market segments that are most likely to use a given product.

Market research is also important for developing a company’s advertising efforts. For example, if a company’s market research determines that its consumers are more likely to use Facebook than X (formerly Twitter), it can then target its advertisements to one platform instead of another. Or, if they determine that their target market is value-sensitive rather than price-sensitive, they can work on improving the product rather than reducing their prices.

Market research only works when subjects are honest and open to participating.

Example of Market Research

Many companies use market research to test new products or get information from consumers about what kinds of products or services they need and don’t currently have.

For example, a company that’s considering starting a business might conduct market research to test the viability of its product or service. If the market research confirms consumer interest, the business can proceed confidently with its business plan . If not, the company can use the results of the market research to make adjustments to the product to bring it in line with customer desires.

What Are the Main Types of Market Research?

The main types of market research are primary research and secondary research. Primary research includes focus groups, polls, and surveys. Secondary research includes academic articles, infographics, and white papers.

Qualitative research gives insights into how customers feel and think. Quantitative research uses data and statistics such as website views, social media engagement, and subscriber numbers.

What Is Online Market Research?

Online market research uses the same strategies and techniques as traditional primary and secondary market research, but it is conducted on the Internet. Potential customers may be asked to participate in a survey or give feedback on a product. The responses may help the researchers create a profile of the likely customer for a new product.

What Are Paid Market Research Surveys?

Paid market research involves rewarding individuals who agree to participate in a study. They may be offered a small payment for their time or a discount coupon in return for filling out a questionnaire or participating in a focus group.

What Is a Market Study?

A market study is an analysis of consumer demand for a product or service. It looks at all of the factors that influence demand for a product or service. These include the product’s price, location, competition, and substitutes as well as general economic factors that could influence the new product’s adoption, for better or worse.

Market research is a key component of a company’s research and development (R&D) stage. It helps companies understand in advance the viability of a new product that they have in development and to see how it might perform in the real world.

Britannica Money. “ Market Research .”

U.S. Small Business Administration. “ Market Research and Competitive Analysis .”

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Market Research And Market Analysis: What’s The Difference?

Did you know the global market research and analysis sector is expected to be worth $95.49 Billion by 2027 – a 3.3% CAGR!

Furthermore, those that conduct market research on a frequent basis are significantly more likely to report an increase in revenue than those who use it occasionally.

Meanwhile, market analysis is used by some of the world’s biggest companies, including Amazon, Apple and Netflix.

If you’re coming to the sector fresh, or simply keen to ensure your organisation’s strategy is correct, this article is a great place to start. We’ll take a closer look at the difference between two of the sector’s biggest components: market research and market analysis.

Sometimes confused with one another, we’ll define both and break down the differences in simple terms. We’ll also look at the practical uses of each tactic in strengthening your market position.

What Is Market Research?

Market research is the collection, analysis and interpretation of data and information about a specific market, industry or target audience. It involves defining clear objectives, selecting suitable data collection methods and interrogating data to unveil hidden insights that inform decision-making.

Market research helps companies make smarter decisions, anticipate market trends and stay ahead of the competition. It’s a tailored approach that empowers businesses to navigate challenges, shape strategies and identify opportunities for growth.

Components Of Market Research

Market research comprises several vital components, each contributing to a comprehensive understanding of the market landscape:

1) Data collection methods

Effective market research begins with choosing the right data collection methods. Surveys, interviews, focus groups and observations are some common techniques employed to gather valuable information. The choice depends on factors such as research objectives, budget and target audience.

2) Data analysis techniques

Once data is collected, it requires meticulous analysis. Statistical tools, software and qualitative analysis methods are used to extract meaningful insights from raw data. This process involves identifying trends, patterns and correlations.

3) Market segmentation

Businesses often serve diverse customer groups. Market research helps in segmenting these groups based on demographics, behaviours, preferences and needs. This segmentation is crucial for tailoring marketing strategies and product development efforts.

4) Competitor analysis

Understanding the competitive landscape is essential. Market research involves evaluating competitors’ strengths, weaknesses, strategies and market positioning. This knowledge aids in identifying opportunities and formulating effective strategies.

5) Market trends and forecasting

Keeping an eye on market trends is paramount. Market research helps in tracking changes in consumer preferences, technological advancements and economic shifts. Forecasting future trends enables businesses to adapt and stay relevant.

6) Consumer behaviour insights

Delving into consumer behaviour provides invaluable insights. Market research uncovers consumer preferences, pain points and buying behaviours. This information guides product development and marketing efforts.

The Benefits Of Market Research

Market research isn’t just a data collection exercise. It’s a strategic tool that offers a multitude of benefits .

A) Informed Decision-Making

Market research provides the insights for making informed decisions. Whether you’re a small business owner trying to enter a new market or an entrepreneur launching a product, understanding your target audience and market conditions is vital. Market research equips you with data-driven decision-making capabilities.

B) Risk mitigation

It acts as a safeguard against potential risks. By uncovering market dynamics and consumer preferences, businesses can proactively identify and address challenges. Whether it’s adapting to changing consumer trends or responding to competitive threats, market research minimises uncertainties.

C) Product development

Market research informs the product development process. It validates ideas, identifies essential features and ensures alignment with customer expectations. This prevents costly missteps and drives innovation.

D) Customer-centric approach

In today’s customer-centric landscape, understanding your audience is paramount. Market research provides insights into consumer preferences, needs and pain points.

Armed with this knowledge, businesses can tailor products, services and marketing strategies to resonate with their target audience, fostering lasting customer relationships.

E) Cost-efficiency

While it may seem like an additional expense, market research can save money in the long run. By focusing resources on strategies and products with proven market demand, businesses reduce the risk of investing in ventures that might not yield returns.

F) Competitive edge

To succeed in any market, you need to understand your competitors. Market research unveils competitors’ strengths and weaknesses, enabling you to devise strategies that exploit opportunities and mitigate threats. This helps position your business effectively in a crowded marketplace.

G) Growth opportunities

It identifies growth opportunities, both within existing markets and in new ones. Market research helps assess market entry barriers, cultural nuances of different regions and potential niches to target. This empowers businesses to make informed expansion decisions, avoiding costly misjudgments.

H) Brand positioning

In a competitive marketplace, brand positioning is crucial. Market research helps identify your Unique Selling Proposition (USP) and how your brand is perceived by consumers. It guides the crafting of a compelling brand image and messaging that resonates with your target audience, helping you carve out a distinct identity.

What Is Market Analysis?

Market analysis is often seen as a counterpart to market research. It involves a comprehensive assessment of your market, including consumers, market dynamics, trends and conditions. It aims to provide a broader perspective on a market’s landscape, going beyond the data collected in market research .

While market research focuses on gathering specific data about customers, competitors and market trends, market analysis zooms out to view the market as a whole. It doesn’t stop at collecting data. Interprets and contextualises this information, drawing insights that can shape strategic decisions.

Crucial Components Of Market Analysis

To conduct an effective market analysis, it’s essential to understand the key components that make up this comprehensive process. These components provide the foundation for a deep understanding of the market’s dynamics and help businesses make informed decisions.

1) Industry overview

Start by examining the industry in which your business operates. This involves assessing the industry’s current status, its historical development and its projected growth. Consider factors like the industry’s size, major players and the competitive landscape.

2) Market size and growth

Determining the size of your target market is a fundamental step in market analysis. This involves quantifying the total market size and identifying different market segments. Additionally, it’s crucial to assess the market’s growth potential, including its historical growth rates and future projections.

3) Market trends

Market trends are critical indicators of a market’s health and direction. Analyse the current trends affecting your industry and market and keep an eye on emerging patterns. This information can help you anticipate changes and adapt your strategies accordingly.

4) Competitive landscape

A thorough analysis of your competitors is vital. Identify your main competitors, assess their strengths and weaknesses and understand their market share. This knowledge allows you to position your business effectively and develop strategies to gain a competitive edge.

5) Customer profiles

Create detailed customer personas to gain insights into your target audience. Understand their demographics, preferences, needs and buying behaviours. This knowledge enables you to tailor your products, services and marketing efforts to meet their specific requirements.

6) Regulatory factors

Consider any regulations, policies or legal aspects that may impact your industry or market. Staying compliant with relevant laws and regulations is crucial for long-term business sustainability.

7) Economic conditions

Assess the broader economic conditions that could influence your market. Factors like inflation rates, interest rates and overall consumer spending patterns can affect your business’s performance.

8) SWOT analysis

Conduct a SWOT analysis to evaluate your business’s internal strengths and weaknesses, as well as external opportunities and threats in the market. This analysis provides a clear picture of your competitive position.

9) Market entry strategies

Based on the insights gathered through market analysis, you can develop effective market entry strategies. Determine whether you should enter a new market, expand within your current market, or diversify into related markets.

10) Risk assessment

Identify potential risks and challenges specific to your market. This includes factors like changing consumer preferences, economic downturns, or unexpected shifts in market dynamics. By anticipating these risks, you can develop mitigation strategies.

Unlocking The Power Of Market Analysis

Market analysis is more than just a set of data and statistics. It’s a powerful tool that businesses, consultants and marketing professionals use to shape strategies and drive success. Here, we’ll delve into why this analytical approach is indispensable in the world of business.

A) Informed decisions 

Market analysis provides the foundation for informed decision-making. By thoroughly understanding your market’s dynamics, trends and competitive landscape, you can make strategic choices that align with your business goals. This leads to more effective resource allocation and a higher likelihood of success.

B) Targeted marketing 

Marketing professionals leverage market analysis to create targeted marketing campaigns. With insights into customer demographics, preferences and behaviours, they can tailor marketing messages and channels for maximum impact. This results in better engagement and conversion rates.

C) Competitive edge

In today’s competitive business environment, gaining an edge is paramount. Market analysis helps businesses identify opportunities to stand out. By assessing the strengths and weaknesses of competitors, you can develop strategies that exploit gaps in the market or differentiate your offerings effectively.

D) Risk mitigation

Understanding potential risks is essential for any business. Market analysis enables you to anticipate challenges and develop mitigation strategies. Whether it’s changing market trends, regulatory shifts or economic uncertainties, you’ll be better prepared to navigate these obstacles.

E) Market expansion

For businesses looking to expand into new markets or regions, market analysis is a vital compass. It provides insights into market entry barriers, cultural nuances and opportunities. Armed with this information, you can tailor your expansion strategies for success.

F) Product development

In product development, market analysis guides innovation. By identifying customer needs, preferences, and pain points, you can create products that resonate with your target audience. This reduces the risk of launching products that miss the mark.

G) Investment decisions 

Investors and stakeholders rely on market analysis when evaluating business opportunities. A thorough analysis of the market’s potential and risks informs their investment decisions. Consequently, businesses that can present well-researched market analyses often attract more investors.

H) Adaptation to change

Market dynamics are ever-evolving. Market analysis equips businesses with the agility to adapt to change. Whether it’s responding to shifting consumer preferences or adapting to new technologies, a data-driven approach ensures that you can stay relevant in a dynamic marketplace.

I) Sustainable growth

Market analysis isn’t just about short-term gains. It’s also about sustainable growth. By continually assessing market conditions, consumer feedback and competitive landscapes, businesses can make data-driven decisions. This approach not only drives immediate growth but also ensures long-term, stable expansion.

J) Holistic business understanding

Market analysis offers a holistic view of your business environment. It combines data from various sources and perspectives, helping you connect the dots and see the bigger picture. This comprehensive understanding is invaluable for strategic planning.

Market Research And Market Analysis – The Differences 

Distinguishing between market research and market analysis is crucial. These two approaches share common ground but serve distinct purposes. 

As we’ve covered, market research offers insights into customer preferences, behaviours and trends usually involving surveys and interviews to understand your potential customers better. In contrast, market analysis takes a more encompassing view, evaluating the overall market conditions, including factors like competition, industry trends and economic influences. 

Market research in action

Market research often involves collecting data directly from customers, competitors and various sources in the market. For example, if you’re a small business owner planning to launch a new product, you might conduct market research to identify your target audience’s needs and preferences. You could gather feedback through surveys or online reviews to refine your product based on customer input.

Market analysis in action

Market analysis, on the other hand, often focuses on examining existing data and trends to derive insights. It can involve studying market reports, industry trends or economic indicators to make informed decisions. Suppose you’re a marketing professional developing a strategy for entering a new market. You might perform market analysis by reviewing competitor performance, market growth rates and consumer spending patterns. This data-driven approach helps you formulate a strategy based on market conditions.

Concluding Thoughts

In the evolving landscape of business, the choice between market research and market analysis isn’t one-size-fits-all. It depends on your objectives, available resources and the stage of development you’re in. In many cases, combining both approaches can provide a comprehensive view, allowing you to adapt and make informed decisions effectively.

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Market Research vs. Market Analysis: What’s the Difference?

Market Analysis vs. Market Research: The Definitions

Market analysis is the process of examining a particular sector, industry, market or niche . Through it, historical and current facts are used to forecast potential outcomes. Raw data underscoring a market’s size and potential (including its number of competitors; the social and political trends affecting it; the availability of sales and distribution channels within it; and the prices of products already in it) enable companies to plan strategically for the future. Thus, businesses use market analyses to better understand how their products and practices might exist within a certain environment.

Market research , however, is the much more specialized process of examining a specific market, along with the customers in it , with the intent of answering one or more distinct questions. While some market research projects might include a market analysis, all of them include customer-specific intelligence. In short, businesses use market research to better understand their customers (or those they hope to make their customers).

Market Analysis vs. Market Research: A Quick Comparison

Market analysis is general in nature, amassing large amounts of cold-hard facts and figures with multiple impersonal (and oftentimes) automated retrieval techniques. Market research, on the other hand, is specific, constrained by time, audience, emotions and opinions and dependent on human interaction and interpretation.

Whereas market analysis inputs vast amounts of data points into a large storage framework, market research collects only the data points needed to answer the research question(s).

Whereas market analysis provides longer-lasting insights, market research results are valid for just a few years.

Whereas market analysis renders quantitative and not qualitative data, market research can offer both.

The way data is collected and stored directly impacts how it is analyzed and reported. Contact our team at Communications for Research (CFR) if you need help figuring out whether you need a market analysis or a full-blown market research project. Choosing one over the other is too important a task to approach without having the necessary facts regarding the limitations and advantages of each.

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Market Analysis

Valid business information and market data as the basis of market intelligence. Laying the foundations for decisions that result in a successful corporate strategy.

Use powerful knowledge to get on the right trace

For any business, knowledge is power. Even the best idea is condemned to failure if a prior  market analysis  doesn’t confirm its prospects of success. A corporate decision must be well-founded and market-oriented, and it must reach the company’s target market.

Market Research: Market Analysis and Market Monitoring

Market research comprises marketing analysis and market monitoring. It results in a market forecast that estimates future market development. The difference between the two components is as follows

Market analysis  assesses the current market situation at a particular point in time, with the aim of identifying the structure of the market share and the market potential.

Market monitoring  is a continuous process that goes into far more depth. Market changes and fluctuations are noted, as are new trends. Market monitoring can be viewed as a series of continuous marketing analysis.

In order to minimize corporate risk, market research should be as comprehensive as possible. An inaccurate market assessment for big or small business can result in heavy investment and consequently heavy losses if the actual sales potential is too low.

When performing your market analysis, it is therefore important to identify the market potential statistics as accurately as possible.

Market Potential

What is the theoretically possible market size? Is there a strong market dynamic for sufficient growth? The market potential of a product or service is the quantity that can be purchased by a particular target group in a particular period. Determining market potential should involve three steps.

Identifying Trends

Identifying the phase in the product life cycle

Calculating the market potential

1. identify trends.

By  robust research process  to determine trends that have great impact on the market potential. Product Reviews For example, they can provide new ideas; changes in the market share can bring market opportunities and risks. In the implementation of your idea, should also be paid to the search volume on the Internet. The more popular a product is on the Internet, the higher you can set the planned sales volume. A high search volume on the internet thus gives you hints on current trends. For example, if the search volume for underwater cameras increases, a mobile phone or a watch with underwater photo function could be a promising new trend. In addition, it is not only crucial to know which trends move your target group, but also at what time these movements take place. Seasonal fluctuations should be included in your market analysis section.

2. Determine the phase in the product life cycle

In which phase of the software/product life cycle is your offer? In the introduction, the growth, the maturity, the saturation or the degeneration? According to the phase, the market potential for your product or service increases or decreases. The closer you get to the degeneration phase, the more important it will be to spot new trends so  your competitors  do not overtake you.

3. Calculate the market potential

To calculate the market potential, you need to know two key outputs: the number of potential customers and their average needs. The demand can be predicted by the trend research mentioned above. Because a high search volume is evidence of high popularity and thus of a potentially high sales volume. The number of potential customers, multiplied by their needs per year, gives the market potential.

Competition Analysis

• Industrial relations and state regulation: The state constantly exerts influence on the market share – for example via legal barriers, price maintenance and constraints on imports or exports. If you plan to expand your business dealings internationally, thorough research on the basis of  country information  is therefore important.
• Rivalry between providers: The degree of rivalry can vary widely – from predatory competition to market-sharing agreements. Strong rivalry between providers makes it more difficult to enter the market and to remain competitive.
• Potential new providers: Are the entry barriers high or low in your market? A thorough market analysis also assesses how many competitors are likely to enter the market in future.
• Substitute products: How high is the risk of substitute products? Substitute products are alternative products from other markets that fulfill the same purpose for customers. For example, margarine is a substitute product for butter.
• Customers: How much negotiating power do your customers have and what is their buying behaviour?
• Suppliers: How much negotiating power do your suppliers have or how easy would it be to switch suppliers?

Competitor Analysis

Your competition analysis is ultimately about your direct competition. You can analyse this in three stages:

Identify direct competition

Compare offerings

Analyse strengths and weaknesses

Market Intelligence

The insights gained from your market and competition analysis are part of your market intelligence.

Comprehensive market intelligence involves having  all the relevant information about the market  that a company needs to ensure sound decision-making. When you have achieved this, you have understood your market, the competition and your customers and can forecast future needs and developments.

Market intelligence is part of business intelligence and it forms the basis for a successful marketing and corporate strategy.

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Frequently asked questions.

Answers to some popular questions

Market analysis assesses the current market situation at a particular point in time, with the aim of identifying the structure of the market and the market potential. 

Market Analysis helps companies understand the economic, strategic, demographic and customer spending trends. With this information they can make more informed decisions for the benefit of the business.

• Market Research
• Economic Trends
• Partners and Vendors
• Customer Demographics
• Buying Behavior
• Products in the Market
• Pricing Strategies
• Marketing Strategies
• Competition

Industry analysis comprises of studying the industry trends, major players or competitors, pricing, partners and vendors and the part industry is playing in fulfilling the needs of the customers. On the other hand, Market Analysis includes Market Research, Demographics, Potential Customers, Buying Behavior etc. 

Get in touch

E-Mail: [email protected] Telephone number: +31 (0)20 485 3456

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• → Market research: What it is, how to u...

Market research: What it is, how to use it, + examples

Market research allows you to categorize your target audience to better understand your consumers. Learn more about how to do market research here.

Latest posts on Tips

Typeform    |    05.2024

Typeform    |    04.2024

So, you’ve got the next billion-dollar idea that’ll blow the top off your profit margins. You just know you’re onto a winner! Time to throw a huge budget (or your life savings) at this idea, right? 

Not so fast! You're not likely to get very far in the marketplace if you only rely on your gut instincts.

How can you know if your idea even has a chance of surviving in the cutthroat marketplace? 

The answer: market research. A realistic prediction, based on data , of your chances of success. Basically, it’s a way to find out the market viability of your idea.

If you’re new to market research, don’t be intimidated. This guide will take you from basic concepts through to advanced techniques. Plus, our in-house experts will walk you through real-life examples of how we do it here at Typeform.

What is market research and why does it matter?

Market research is the process of collecting information about your target market and customers so you can:

Learn who your customers are

Find out what they want and/or need

Gauge potential market size

Discover trends in your industry

Get wise about what your competitors are up to

Determine how you can stand out

This way, you’ll better understand how to serve your customers, prioritize, and get higher returns on your own marketing and product development efforts. Market research is an essential part of any business’s strategy, whatever the size of your company.

There are many ways to approach market research, and at Typeform, we’ve developed our own spin on it, thanks to continuous testing and the insights we get from being a market research tool ourselves ( forms and surveys).

Uncertainty is an inevitable part of business—however, it’s still possible to reduce some of the uncertainty.

This is where market research is your best ally. Nothing is guaranteed, but making an informed decision based on comprehensive research beats a stab in the dark. Market research helps reduce the thickness of that fog to see what your options are and which direction you might want to take.

Convinced you shouldn’t be sleeping on market research? Great—let’s dive deeper.

Types of market research

Finding what works best for you is a must for useful and actionable market research. We don’t believe in a cut-and-paste approach for all businesses and markets, nor in one definitive “right” way to do things. However, there are some basic principles that apply across the board. Here are a few types of market research.

Secondary and primary research 

Secondary market research delves into information that you don’t create yourself. It’s data that’s already out there, which you can buy or access for free, and is great for benchmarking. 

Examples of secondary research:

Industry reports

Census data

Research paper

Articles in journals or newspapers

Primary market research involves collecting information yourself—this may be more expensive and time-consuming than secondary research, but it’s a better investment in the long run. Focus on your own target audience and gather information directly relevant to your goals. 

Examples of primary research:

Interviews (face-to-face or over the phone)

Focus groups

User testing

Quantitative and Qualitative

Ahh, the classic quantitative vs. qualitative dichotomy.

Quantitative market research gathers data that's numerical, descriptive, and structured. You can draw statistics from quantitative research. It involves more of the “what” questions and can be done at scale.

This type of market research is usually carried out through surveys and questionnaires and can be internal or external. Internal quantitative research examines your current customers, while external can help you identify new customers and see the actual distribution of the whole market. External is more likely to be objective, as your own customers already know you and will have formed opinions.

Examples of quantitative questions:

“Where do you live?”

“How much do you spend on electricity per month, on average?”

“Do you use this product?”

“How often do you go to the gym?”

“On a scale of 1–10, how satisfied are you with our service?”

Qualitative market research involves more of the “how” and “why” questions. It’s done at a much smaller scale, is less structured and more exploratory, aiming for insight rather than certainty. It helps you find out how customers feel about your product, their opinions and preferences—in other words, things that can't be quantified.

Examples of qualitative questions:

“Why did you choose product A over product B?”

“How does this image make you feel?”

“What do you feel is missing from this service?

“Describe the last time you purchased something online.”

“What are your favorite brands for dog grooming products?”

Usually, this type of market research is done through surveys with open-ended questions or interviews. A small number of interviews are conducted, which are then projected to apply to a larger population. 

Quantitative and qualitative research don’t need to be seen as opposite or distinct techniques. It can be an “and” instead of an “either-or.”

Market research for product development and marketing efforts

Market research tends to inform two main areas in a business: product development and marketing efforts. Whether it’s creating a new product or a new set of features, at Typeform, we always start from the end. 

Who’s going to use this? 

Who will buy it? 

How do I justify engineers spending time on this? 

Market research is one of the most important tools to answer these questions. Nobody wants to invest time, money, and effort into making something that no one wants or needs. Market research allows you to assess the market size, its opportunities, and your competitors. This is also where user research and market research inform one another.

Segmenting the market is one of the main activities in market research, as it gives you your target audience(s). How else will you know who is buying from you already, who to market to, and which marketing messages work best?

Competitor analysis , another cornerstone of market research, helps you craft your positioning. In simple terms: How you're different from your competitors and why should buyers pick you?

How to conduct market research

So you can probably see by now how varied market research is. The way we do our own market research here at Typeform has evolved over the years through testing and experimentation. After much trial and error, we finally landed on the approach that works best for us.

Set your goals

Before we even think about launching market research of any scale, we make sure to have a clear objective in mind. 

Are you trying to enhance a particular metric (such as customer numbers or customer satisfaction level), gauge potential market size, or something else?

Define your objective(s) first, then move on to the next step.

Define your audience 

Whatever your approach, the next thing you should always have at the front of your mind is your customer.

Still, focusing on the customer can mean different things to different people.

Focus on jobs, not personas

Brace yourself, because we’re about to say something controversial: don’t focus on buyer personas.

This flies in the face of what most other market research guides will tell you: Research your audience to create buyer personas and frame your offering around them.

Not that buyer personas aren't important—they are. And at Typeform, we definitely use them, but we also follow the “Jobs To Be Done (JTBD)” model. This is the backbone for how we conceptualize everything, from our marketing messaging to our product development. It informs how we see our customers and how we segment them.

How many people in your business speak directly to customers? The bigger your organization, the smaller this number is likely to be, and the further removed the customer becomes from the decision-making. The job creates a consistent framework for everyone to work with and remains close to the customer’s needs.

As you identify needs that intersect, you can begin to find unique differentiators for your product. 

At the end of the day, your customers don’t care about you or your product or its features. They care about the job or jobs they are trying to get done, and if you provide the best solution, they'll pay you for it. If you don’t, they'll move on to your competition faster than you can say, “job to be done.”

 So how does this all relate to market research?

Rather than framing your market research efforts on creating buyer personas and targeting them, frame them around jobs your customers are trying to get done. There'll be some natural overlap with personas, but you need not be wed to them.

Market segmentation

Market segmentation is the act of dividing a target market into groups (or segments). This lets you tailor your efforts to each segment, whether that be your marketing strategy or deciding on features for your product.

The four most common methods: 

Demographics: age, gender, ethnicity, income, industry, job

Psychographic: lifestyle, values, personality traits, interests

Geographic: country, region, city, town

Behavioral: spending habits, internet browsing habits

Depending on your situation, any of these might be useful focus points, and all of them no doubt provide valuable insight.

The benefits of segmentation include:

A better experience for customers: A better understanding of your customers can only really be a win-win. You’ll be able to tailor each part of your customer experience, from marketing message to product experience, based on their segment.

More targeted marketing: In other words, this means better use of your marketing resources. Rather than casting the net wide and crossing your fingers that you haven’t just thrown a lot of time and money away, your segments let you focus your efforts where they’re likely to have the most return.

Improved product development: Knowing the real demands of your target audience will allow for product development that they'll actually appreciate (read: pay for).

Developing a market research strategy

Now that you’re convinced of the importance of market research and how it can help your business, you’re probably pumped to get started. Having even a basic plan can be the difference between a piece of research that has a real and lasting impact on your business and gathering some interesting insights that are forgotten in two weeks. 

Always start with the question: Why? What’s the purpose of the research? 

Your objective shouldn’t be “to do some research,” nor should you select a method first, whether that be a JTBD-based questionnaire, customer interviews, etc. 

Make sure you’re always starting with a question you want to answer and adapt the method to the question.

Examples of questions to think about:

“How can we increase conversions?”

“Why are people churning after two months?”

“What is the appetite for this product?”

“Which product features are most useful to our customers?”

“In which region(s) should we focus our next marketing campaign?"

Let this always be front and center as you go about planning and executing your research.

Market research tips 

Do preliminary research: Have a basic understanding of the industry and the landscape you’ll be investigating. It doesn't have to be extremely in-depth, but it’s important to have a foundation. This ensures you ask the right questions, know what to assess, and can get a more accurate vision of the market.

Align with potential stakeholders: There may be others in your organization who could benefit from the data you're about to gather. It may be worthwhile checking around to see how you could maximize your research efforts. Even just one extra question on your survey might provide essential data for someone else.

Use the right tools for your market research purposes: Make sure that whichever tools you use are fit for purpose. As technology develops, market research automation becomes more important. Using the right tools won't only save you lots of time and energy; it's also essential for correct and high-quality data.

Market research questions

The questions you ask depend on your objectives. You should write market research questions that are purposeful and will help strengthen your relationship with your customers.

You should also consider running a test first, depending on the scale of your research. Sending your survey to a smaller population and analyzing the first few responses will let you check that you’re getting useful responses that are answering your research questions.

Sometimes, until we start getting results, we’re unaware that a question is ineffective. This may be because the question uses terminology not understood by the target audience. 

For example, you may ask, “What SaaS tools do you currently use?” If you get responses like “iPhone 11” and “desktop computer,” then you know you need to adapt your questions better to your audience! 

Here at Typeform, we sometimes send out test emails to smaller populations (around 10% of the target audience) for this purpose and adjust our surveys if necessary.

How many responses to collect for market research

400 is the magic number.

Well, no, in fact, there is no magic number, sorry.

Generally speaking, 400 is the standard recommended sample size—this just means the number of people who responded to your market research survey. 

But this number can vary greatly depending on your total population (i.e., all the people that this research will apply to) and the way you segment them. 

But there’s a mathematical explanation for the popularity of 400: With 400 responses, your margin of error is 5%. 

For example, say you got 400 customer responses to your market research survey. 80% of your respondents answered “yes” to the question, “Would you buy from us again?” That means there’s a 95% chance that in your total population of customers, around 80% would buy from you again.

Don’t forget that to reach your target sample size, you'll need to reach out to many more people! If sending out surveys by email, open rates tend to hover around 15-25% . The percentage of people who then go on to complete a survey will be even lower. 

To increase your chances of survey opens and completions, offering an incentive is never a bad idea. Prize draws or discounts on your product have worked well for us. And, of course, the experience of answering a market research survey is paramount for completions—make sure your form is user-friendly with a smooth and beautiful interface. 

Try to aim for a sample that'll be a good approximation of your overall population. There’s a risk of bias , depending on the channel through which your research survey is shared. For example, if you share it on social media, you might get a younger average age of respondents, which may not be accurately representative of your total population of customers.

Sample market research template

Below is a sample market research template for planning a piece of primary market data.

A brief summary of why this research was started:

What led to this research being done/requested? 

What needs to be validated or explored?

What's been done prior to this research? E.g., competitive analysis, brainstorming, previous research

What insights will this research generate? 

How will these insights be used?

Business/product objectives

We can't emphasize enough the importance of having a clear goal in mind. What metric(s) are you trying to enhance? E.g., more conversions, less churn. This helps people understand the bigger picture of this research.

State what decisions are going to be made or impacted based on the research. As a general rule, if you’re not prepared to make changes, don’t run the research.

Research objectives 

State the high-level objectives for this research. Try to keep it specific, actionable, and two to three points max. 

Research questions 

Provide a list of market research questions you plan to answer during this research (these questions are not the interview questions). 

Participant criteria 

List the primary characteristics of the people you'll recruit for the research, like:

Job(s) to be done

Also decide on the minimum and maximum number of participants you'll need for your study.

Taking action on market research insights

Remember, data isn't reality—however, market research can give you a pretty decent view of reality.

Data can also be unpredictable. Missing a small detail can skew ‌results significantly, so try to be as methodical and meticulous as you can.

Put our market research survey template to the test with customizable questions and design. Take your questionnaire to the next level with over 1 million photos, videos, and icons, or upload your own. Build your ultimate market research survey today with the help of Typeform.

Useful tools for market research

Demographic survey questionnaire template

User persona survey template

Competitor research tool for the SaaS industry

Margin of error calculator for sample size

Google Sheets

About the author

We're Typeform - a team on a mission to transform data collection by bringing you refreshingly different forms.

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Market Research: What It Is, Why It Matters, and How To Get It Right

What is market research?

What is market research used for? How important is it? And, how do you choose the right type of research for your business?

Sit back, take five, and I’ll explain the different types of research , what tools are best for the job, and how you can leverage them to grow your business and master your market .

Market research definition:

Market research means to systematically collect and analyze data about a target market or defined segment. It’s a multivariate process that uncovers key facts and insights to inform decisions.

Whether you’re launching a new product , looking for ways to expand a business, or seeking out efficiencies in an existing company, market research is a highly effective way to flesh-out ideas, innovate, and grow. 

Advantages of market research

Market research helps you identify your greatest strengths, threats, and opportunities. It can help you find your way when markets become tough to predict and find efficient ways to grow your business .

• Reduce costs
• Define detailed customer personas
• Make data-driven decisions
• Find new opportunities for growth
• Unpack competitor’s successes
• Develop an informed content marketing strategy
• Identify trends
• Inform market analysis
• Discover the best marketing channels to use
• Find the best ways to communicate with customers
• Benchmark performance against rivals

Online market research can help the whole business at any stage of its life. When practiced consistently and systematically, you can realize its many benefits.

Why is market research important?

Market research helps you identify your greatest threats. And it also gives you a clear picture of opportunities you can capitalize on for greater returns on your business investments, or ROI.

Understanding your specific market on different levels and from different perspectives helps you reach well-informed, data-informed decisions . The process can involve multiple phases. But, if you follow a systematic approach using a market research template , your efforts will pay off.

To skip ahead and start right now, download our free pack of market research templates.

Different types of market research

Market research is a questions and answers game. Once you’ve asked the important questions, you’ll need to choose the right type of research to get your answers. There are four core types of research, each of which can be applied to help you solve a problem or gather insights to inform key decisions.

Primary market research

Primary market research is the first-hand collection of data. It’s data that’s not available to others, and can be obtained in a number of ways. Here are the most common.

• Web Metrics Use analytics software that provides traffic and engagement metrics to understand how audiences behave.
• Observation To observe how users behave and navigate your site, you can install software that records visits and creates heatmaps. Such tools are useful for qualitative research regarding your UX/UI and at the same time, quantify the findings.
• Customer surveys Survey questionnaires and polls can be distributed to any number of customers through email, SMS, your site, or social media. They let you collect both qualitative and quantitative data from respondents using open-ended questions.
• Focus groups You select a small number of people for a group discussion. A moderator leads the session with questions and records the conclusions. This is also a form of qualitative research, and you would use it to get in-depth information.
• Face-to-face interviews Another qualitative assessment method is one-on-one interviews. Consumers representative of your target audience or a segment of it are selected to answer questions about a specific research topic.
• Phone calls To involve a larger number of people and get more answers, you can conduct surveys over the phone. These interviews would be less specific and include fewer questions.

Helpful: A complete guide to doing primary market research

Secondary market research

Secondary research is second-hand data that has already been produced. It’s available to all who wish to consume it. Using this type of data is preferred by those who wish to keep costs low, as it can be quicker and freely available.

• Government reports and census data Annual, quarterly, and other periodic industry reports are a rich data source to tap into. Government organizations publish statistics in areas of trade, ecommerce, and finance.
• Academic papers and educational resources University research is a source of high-quality information. This is useful for in-depth background information on a broad scale.
• Online articles and case studies, public and commercial sources Industry-specific publications can be a valuable source of information for market segmentation, providing you with data and insights on market trends or a specific market segment or niche.

Further reading: A complete guide to doing desk research

Qualitative market research

Qualitative market research is one of the best ways to understand how people think or feel about a brand, product, or service. It takes more time to plan and analyze the results than other market research types. However, with tools like market research surveys , there are quick and effective ways to do it.

As some of the methods are outlined in the primary and secondary research sections, I’ve included a short list of qualitative research methods below.

• Focus groups
• Case study or whitepaper 
• Online forums
• Biometrics 
• Ethnography

Helpful: Read the complete guide to qualitative research and 83 qualitative research questions & examples

Quantitative market research

Quantitative market research is all about numbers. It collects numerical data to help answer specific research questions . The information collected can be easily quantified and analyzed to establish trends, insights, and patterns.

With this type of research, you’ve got three core data collection methods. However, you’ve also got to consider the design of the research, which can impact which method is used.

What is market research used for?

The applications for market research are virtually limitless. Market research can help you unravel the most complex of business challenges to reach data-driven decisions , and when used consistently, it can help you navigate turbulent times, fuel growth, and support your success . Here are just a few examples of what market research is used for, with a few real-world examples thrown in for good measure.

1. Company research

Market research allows you to shine a spotlight on any business and unpack its wins and losses for your own gain. Let’s say you are doing market research for a business plan ; you’ll likely want to evaluate the successes of others in your industry. Doing systematic company research is a proven way to inform a SWOT analysis .

Doing industry analysis can show you who your industry leaders are , along with any emerging players showing exponential growth.

Let’s say I want to find out which companies to research, I would use Similarweb Digital Research Intelligence to analyze an industry. Here, I can see who my top companies to watch are instantly. It also shows me other companies showing rapid growth in my market.

Read More: How to Research a Company: The Ultimate Guide

2. Competitive benchmarking

Most of your relevant data will come from your competition. If you plan to offer something that’s new for you but already exists in the market, learn from other’s mistakes and successes. If your goal is to evaluate and optimize, collect competitors’ data, and compare it to yours. See what works for them, find their weak spots, and improve on them.

What market research gives you here, is the ability to systematically compare each of your rivals. And, it’s not as complex as it sounds either. Simply choose a type of competitive analysis frameworks to use, complete the template for each; then compare the results to uncover relevant insights.

Read More: The Why and How of Competitive Benchmarking

3. Trendspotting

Another objective for market researchers is to forecast upcoming trends. Data collection over time helps you understand the dynamics of the market. Some markets have strong seasonal fluctuations. Increased shopping during December is an obvious example, but often these shifts are not always evident unless you measure and analyze them specifically.

With the data from your historical market research, you can evaluate their impact and the likelihood you will keep seeing these trends. Based on that, you can make predictions about future developments.

4. Audience analysis

Who will find your product most useful and why? 

Examining the size of your audience and the existing demand for your product or services is crucial. Understanding  your target audience allows you to build your product offering and marketing strategy more efficiently. You also want to learn first-hand where people buy this type of product and how much they are willing to spend so that you can estimate your reachable market share .

Here’s a quick example of how we use Similarweb to do effective audience analysis . You can unpack key audience demographics for any site you choose. And get up-to-date stats about gender, age, location, interests, browsing habits, and more.

5. Market segmentation

There are lots of ways to segment a market. Doing this well can deliver higher conversions, reduce costs, redefine marketing strategies, and help you connect with customers on a more personal level. Market research can help you do most types of market segmentation, the most widely adopted of all is demographic segmentation. Here, you look for shared but specific characteristics of a target audience.

Using Similarweb, I can view audience demographics for a website, and compare it side-by-side with rival sites. In this example, I am looking at hotel booking sites to try and spot any difference between the respective audiences of each.

Helpful: Read our complete guide to market segmentation

6. Marketing strategy

Market research can also help you reach the right decision regarding where to advertise or market your business. After analyzing the data, you’ll know which marketing channels are most effective with your target audience. You can also use research to look at the specific keywords and ad creatives that are generating the best responses and ROI.

Similarweb Digital Research Intelligence makes this type of research effortless. Within the marketing channels tab, you can analyze an entire industry or hone in on a specific site of interest. View the various channels across social media, email, direct, organic search, paid search, and display ads to see which channels convert and where the highest channel traffic comes from.

7. Customer experience

Market research is your best way to get information that isn’t naturally visible but that may significantly affect your business. Just think, the fact that your users don’t complain doesn’t necessarily mean they are all delighted with what you offer.

While some customers tend to keep their criticism to themselves, others will be vocal and leave reviews online. Market research is a powerful tool to help inform improvements to services and products alike. Asking for feedback, listening to it, and looking at the feedback left for rivals in your market can uncover telling insights that can shape service offerings, marketing campaigns, and new feature development.

To see what people use market research for and view real-world instances of research in action, head over to our market research examples page.

Tools for market research

When we look at what market research is, the answer is always rooted in data . Over 100 years ago, vehicle manufacturers undertook extensive research to help them develop different models to suit various segments of society. Fast-forward 100 years, and we find similar applications still exist. However, what’s changed are the tools being used and, more importantly, the accessibility of those tools to a far broader audience .

There are more market intelligence tools in existence today than ever before. Here’s a quick summary of a few you can use to collect information for your market research.

• Google Trends Google Trends is a valuable resource for quantitative research data about market tendencies and user behavior.

• Similarweb Research Intelligence Get the freshest digital intelligence from a platform that shows the insights that count. With the ability to analyze an entire market in an instant and unpick competitors’ wins and losses online, you can count on it to help you perform quick and effective market research.
• Hotjar The digital tool lets you observe and record user behavior on your website. It also creates heatmaps of your pages so you can analyze how visitors navigate.
• SurveyMonkey Create your own online survey with this free tool. SurveyMonkey provides templates for questionnaires and lets you distribute them through your various channels, then collect and interpret results.
• YouGov This platform offers its users daily with thousands of data points and statistics on consumer attitudes, opinions, and behavior.
• Pew Research Center This non-profit organization conducts and publishes public opinion polling, demographic research, content analysis, and other data-driven social science research.
• Living Facts The site provides current statistics about the American population, including demographics, social and health issues, opinions, and more.

Read this post to see what market research tools are hot right now.

Wrapping up: what is market research

Market research is insight. It gives you information to fuel key decisions in your business. Without it, companies must navigate their market uncertainly and make key decisions based on instinct or outdated data.

Similarweb transforms the way companies do market research . There’s no expensive outlay for prolonged research reports that take an age to produce. The data is the freshest there is; it’s credible and shows traffic trends and comparable performance like no other.

Try using it to answer your next big market research question.

Stop Guessing, Start Analyzing

Get actionable insights for market research here

What are the benefits of market research?

Effective market research helps businesses understand and improve their position while also identifying potential threats and opportunities, while also spotting emerging trends .

What is the main purpose of market research?

The main benefit of market research is insight. It can give you access to the data you need to make decisions in your business. Before you invest money or time in any venture, use market research to inform your decision.  

What’s the difference between primary and secondary market research?

Primary research is research you conduct on your own that uses numbers and metrics, and secondary research is research that was done by someone else with a qualitative focus.

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Difference Between Market Research and Market Analysis [Detailed] It is common (and generally pardonable) to not identify the difference between Market Research and Market Analysis. However, it will be inappropriate to consider them as the same. Let us comprehend the differences between the two.

I recently wrote an article on How to Become a Market Research Analyst . After that, I had a lot of people writing in, asking me about something which I thought was quite an intuitive follow-up question. People often asked me – W hat is the difference between Market Research and Market Analysis .

I realized that many people don’t know it. And maybe you might not know it too right now! Or you might have an inaccurate assumption of the difference.

Upon recognizing a plausible confusion among the two concepts, I put in a conscious effort in researching the internet about it. I found out that people often use these terms interchangeably. Which isn’t correct, by the way.

It is common (and generally pardonable) to use these two terms interchangeably. However, for when someone, maybe your new boss, tells you particularly to do Market Research and you end up doing a Market Analysis, it just won’t be appropriate.

Therefore, it is extremely important for you to know this difference to deliver the right results for your company in your projects.

So, What is the Difference?

If I were to give you a high-level view of the difference, I would say this.

The difference between Market Research and Market Analysis is that Market Research is more like a subset of Market Analysis . Market Analysis is a much broader exercise of analyzing the market, which could include your own company, competitors, the business context and the customers.

However, Market Research is usually, extremely focused in its nature and directed usually at testing a hypothesis or getting to know the customers.

Also Read:  Complete Guide to become a Market Research Analyst

What is Market Analysis?

Market Analysis is the exercise of observing and exploring a market or an industry.

The implicit objective is to understand or to model how the market works with the objective of knowing about the market potential, the competitors, the customers, and other stakeholders.

For market analysis, you sort of put together historical data across parameters to gather a sense of the market and to forecast what could happen in the times to come.

However, it will be wrong to say that Market Analysis is purely a secondary research affair. You could actively seek new data and do primary research on the market stakeholders.

Market Analysis is often (inaccurately) known as Industry Analysis. And this video, I am sure, will clear your doubts.

Few important elements to consider while doing market analysis for an industry are –

• Key industry numbers like market size, growth, profitability, and market shares
• Business Models applied, which are working and which aren’t
• Segments and segmental mix, changes in segments in an industry
• Expected market growth
• Metrics to measure industry performance (both financial and operational)
• Competition and the basis on which it happens
• Challenges / problems faced by the industry and components
• Expected performance of various elements associated with the industry

What is Market Research?

Market Research, on the other hand, is specific to a particular target market and to the customers. A market research is conducted with a particular question in mind.

Market Research begins with one or multiple research questions in mind. The research is conducted in order to get a quantifiable answer to the question.

In most of the cases, a Market Research solves the purpose of testing a hypothesis . Most of you who have learned statistics would have learned about hypothesis testing.

For Example , suppose a Marketing Manager needs to decide whether to launch a new product or not. He plans to conduct research to find out the product acceptance.

As I mentioned, it is good to have a quantifiable output to research, he plans to calculate a product acceptance rate and proposes that

Now, he could create a hypothesis that the product acceptance rate is below 30%. If after the survey, the statistical test suggests that the product acceptance rate is significantly higher than 30% then the null hypothesis will be rejected.

Also Read:  How to do Insightful Secondary Market Research

And therefore, the product will be launched. This small example from the field of statistics will help you understand how laser sharp in terms of the focus is a market research exercise.

The market research exercise involves various exploratory research in order to collect enough data to establish the hypothesis. The data can be collected through primary or secondary data sources, meaning data collected through some research or survey technique, or through pre-recorded information.

What isn't the Difference?

Students and practitioners often confuse the difference between market research and market analysis to be the same as the difference between primary research and secondary research.

The fact is, these two are not the same things.

Market Research, by its nature of being more closely associated with the customers, is thought to be the same as primary research. You would remember primary research is the method of collecting first-hand information by means of questionnaires, interviews or focus group discussions.

At the same time, Market Analysis is often thought of to be the same as secondary research. This is because Market Analysis is perceived to be a passive study with the help of the available data.

Both of the assumptions about Market Research and Market Analysis are incorrect .

Primary and secondary research is by no means a parameter for the difference between Market Research and Market Analysis.

The truth about this myth is what we will discuss next.

Market Research requires secondary research to take into account the context of the target market.

Similarly, Market Analysis involves a lot of primary research i.e. first-hand information collection from the various stakeholders in the industry.

Also Read:  Secondary Market Research Tools and Techniques

In fact, here’s an example from my experience of doing a Market Analysis for a business process outsourcing company. For the Market Analysis for the pharmacovigilance market, I had to eventually interact with the academicians and industry people involved in the pharmacovigilance automation process.

This is a classic example of employing primary research techniques in Market Analysis. I did it to bring out a concrete analysis of what is the current picture of the industry and of the competitors.

Also Read:  Primary Research: Questionnaire Design Process

You must have cleared all your doubts about the difference between Market Research and Market Analysis. Often confused to be the same thing, my aim here was to explain the core conceptual differences (facilitated by examples) and to debunk a few myths about what they do not mean.

I hope the detailed infographic highlighting the differences between Market Research and Market Analysis will serve the purpose. You can download it from below.

You could read further about the different types of primary market research studies in one of my previous articles.

Suggested Posts:  Learn R for Market Research as Analyst

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About the Author: Darpan Saxena

um hey i just wanna know about the salary difference too.. m at a learning stage and obviously it bothers me..

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Market research vs. marketing research — What’s the difference?

Have you ever wondered whether there's a difference between market research and marketing research? Although these two terms are often used interchangeably, they have some qualities that differentiate them.

The four Ps of marketing

To understand the difference between market research and marketing research, you first have to understand the ‘ marketing mix ’, otherwise known as the Four Ps of Marketing :

• Product (goods or service)
• Price (how much the customer pays)
• Place (where the product is marketed)
• Promotion (advertising and PR)

These are the four essential key factors involved in marketing goods or services. They all need to function optimally together for those goods or services to be a success in the marketplace.

What is market research?

Market research studies a target market. It collects data about that marketplace and the consumers within it.

It deals with only one P of Marketing – Place . Place in this context means a specific market or segment .

Market research gathers, analyzes and interprets data about:

• that specific market
• a product, service or developing concept to be offered for sale in that market
• customers (present, past and future) for that product, service or concept

Market research delves into a variety of the target market’s areas: needs, wants, spending habits and characteristics. It can also make comparisons with the competition and industry standards. Market research is the first port of call for a business to assess how viable new goods or service are for their target market. In the process, it can often reveal new target markets and customer wants and needs.

A typical market research process is as follows:

• An issue gets identified
• Decide who will conduct the research (in-house or an external agency)
• Choose appropriate market research techniques
• Gather data
• Organize, interpret and analyze data
• Report back findings

What is marketing research?

Marketing research is much broader. It deals with all four Ps of Marketing – including Place. It covers diverse areas, some of which market research wouldn’t touch, and others where it would only touch lightly:

• New product research
• Product development
• Advertising research
• Customer research
• Distribution methods
• Public relations

In essence, marketing research covers the conception, development, placement and evolution of a product or service, its growing audience and its branding – all the way from brand awareness to, we hope, brand equity .

Market research, because it emphasizes Place, is an integral part of marketing research. We could sum it up like this: market research is a subset of marketing research.

A typical marketing research process is as follows:

• Identify an issue, discuss alternatives and set out research objectives
• Develop a research program
• Gather information
• Organize and analyze information and data
• Present findings
• Make a decision based on the research

Free ebook: Guide to Modern Agile Research

The differences between marketing research and market research

Although market research informs marketing research, the table below compares the considerable differences between them.

The similarities between marketing research and market research

• crucial for a business’s success.
• research projects, and as such produce valuable data.
• useful for quantitative and qualitative tools and techniques such as surveys, focus groups, questionnaires and interviews to gather information
• effective for making decisions regarding type and quality of products and services offered to customers, suitable locations for the business, the best advertising, and the most efficient distribution channels and networks.

We offer research services for both marketing research and its subset, market research. Run any customer, brand, or product research project with confidence.

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Market Research: The Definitive Guide (2023 Update)

February 2, 2022

Starting a business is a challenging endeavor that requires time, money, and continuous learning. In our blogs, we cover how to start a business with brief overviews. In our hub, we aim to provide you with everything you need to go through each step. Our first step is conducting market research.

Throughout the steps, we’ll provide insights from Paul Akers, the owner of FastCap, and a Lean Expert who has created hundreds of products for woodworkers and cabinet makers.

There are four basic steps to conducting market research:

• Understand “what is marketing research and which type is right for my business?
• Perform market research.
• Analyze the data.
• Use the research to make decisions.

We’ll start by exploring some of the concepts involved in market research analysis to help you perform it yourself.

Step 1: What is market research in business?

Market research is the process of gathering information about target customers to better understand their views about a product or service. The primary ways of classifying market research are:

• The method of the collection
• Common types of market research

Let’s look at each.

The method of collection

Market research normally uses six methods of collection when looking for answers:

Primary market research

Secondary market research.

• Qualitative research

Quantitative research

Exploratory research.

• Specific Research

Primary research is the original research conducted directly by an organization. It is used to find out what customers are interested in. It can be done through questionnaires, interviews, or videos. Primary market research is used for understanding the underlying needs and desires of consumers.

Primary market research helps us to understand the needs, wants, and behaviors of potential buyers. It is the basis for the buyers’ persona. It helps us to formulate marketing strategies that can be used to meet those needs and wants.

Secondary market research is a process of finding information about a product or service through other sources. This includes looking up other companies that are in the same market as your company and finding out what they are doing.

A company should conduct secondary market research to find out if the product or service has been done before, which will help them figure out how they can differentiate their product from competitors.

Secondary research can be used to gain information about competitors, pricing, distribution channels, etc. It also helps the company save time by not having to conduct primary research that has already been performed.

Researching competitors before you start your business is not only crucial for success but essential for survival in the business world where everyone is trying to get ahead.

What is the difference between qualitative and quantitative research?

One is focused on themes while the other is focused on information that can be processed numerically. Let’s look at each.

Qualitative Research

Qualitative research is focused on finding themes that run through interviews and surveys. This type of research is more focused on opinions and is more art than statistical analysis, but in some cases, you can turn this type of research into data that can use statistical analysis.

For instance, a question like the one below converts a qualitative data point into a quantitative data point, making it easier to compare how happy someone was with their food.

You might perform qualitative research along with market validation after you have created a prototype of a new product.

This research is focused on information that can be easily processed with statistical analysis software. For instance, median household income would be easy to statistically calculate if you gather the data for the target customers’ income. Market research analysts love this kind of data because it is easier to process.

Exploratory research is market research that looks for a better understanding. For instance, you may have come to this site doing exploratory research about how to do market research for a startup. After you’ve gained broader information about marketing research methods, you might move on to more specific research.

Specific research

Specific research is when market researchers are looking to answer a very specific question using market data. This research might include searching for a specific concept or item. For example, the lowest cost statistical software for a company that will have ten users of the software. You might also want to research the history of a business location before deciding to sign a lease because some shopping centers have high turnover.

To find the answer, you’ll probably want to go with Google Workspace because Forms, Sheets, and other useful business tools are included in the same package as your email. Google is the primary email provider for small and medium-sized businesses.

Market research may include a combination of primary and secondary data, quantitative and qualitative data, exploratory and specific research. Now that you understand the market research definition, let’s look at the common market research methods and what questions they are trying to answer.

Common types of market research methods

Most companies will perform 13 types of market research:

• Literature reviews

Focus Groups

Observation, customer utilization research.

• Buyer Persona Research

Market Segmentation Research

Pricing research, competitive analysis research, customer satisfaction and loyalty research, brand awareness research, campaign research.

In each of these, market researchers attempt to answer different questions. Let’s discuss each.

Literature Reviews

One of the leanest ways to do market research is a literature review. With your laptop or cell phone, you can easily find vast amounts of data about your market through sources like:

• Statista – Provides graphs that are easy to process for most economic subjects
• Competitors’ research – Your competitors have probably already done the research. Find it so you don’t have to duplicate the effort.
• Industry trade organizations – Companies
• Think with Google – Helps marketers gather information using Google’s extensive database of consumer behaviors
• Census Bureau – The U.S. Census Bureau is a government agency that collects data on a variety of subjects including a full count of the U.S. population every decade.

After you’ve gathered everything available through market research, it’s time to create some surveys.

Surveys are the most common type of market research because they are so easy to conduct and are low-cost. With software like Google Forms and Facebook, you can easily create a survey, distribute it, and analyze the data on your own.

When creating a survey, it is important to be aware of some best principles including:

• Use a variety of style questions: scaled, multiple-choice, and open-ended questions are typically used with success.
• Avoid biased questions that lead the survey participants to a preferred answer. They will harm the validity of your research.
• Be respectful of the participants’ time. Unless you are paying them, try to keep the survey to 10 questions or less. If you are paying them, $50-$100 per hour is typically what market research firms will pay for longer surveys.
• Make sure to gather demographic data and contact information for follow-up.
• Practice proper sampling methods. In most cases, you won’t need more than 1,000 survey participants, but you can use the table below to establish how many people to include in your survey.

You can normally gather the data you need through this method for under $5 per survey participant, making it one of the most effective and lean methods of gathering market research.

Another great tool is a market research interview. They follow the same principles of surveys but have the benefit of the ability to ask follow-up questions. Using these with select survey participants who gave meaningful input might be useful.

Interviews are much more labor and capital intensive than surveys, so only use them for follow-up questions for your target market.

Keep reading to learn about focus groups.

A focus group brings 5-10 people together to discuss a product or service with a moderator. These will typically run $4K-$10K per group, and they are not conducive to being conducted by novices because of the challenges involving focus groups dynamics.

If you are going to use this type of research, we’d suggest hiring a professional market research firm to assist you in the recruiting and managing of a focus group. If you are trying to run lean market research, you should skip focus groups entirely.

Keep reading to learn about observations as a market research tool.

Observation can be an extremely powerful market research tool. Using observation, you can learn how people actually interact with your product and service, but it doesn’t allow you to actually communicate with them.

Observation is particularly powerful for software products because tools like Google Analytics and Crazy Egg help you see how people interact with the software. This makes it easier to fix areas where customers stop interacting with the application.

You can perform market research through observation in different ways. The primary ways of conducting market research through observation are covert observation and overt observation.

Covert observation is collecting market research data without the participants’ knowledge. This type of data collection can be achieved through analytics software on the web or using security cameras in stores where people can test your product.

Overt observation is when the participants are aware of the marketing research and provide feedback to questions. When you conduct market research about a product or service this way you will get more information about potential customers’ opinions, but it may be influenced by their awareness that you are conducting market research.

Effective market research can gain actionable insights from both methods. Overt observation is better when you know who your potential customers are and you want to establish whether they like your business idea, while covert observation is helpful for establishing who naturally gravitates to a product or service.

You’ll want to take notes any time someone performs a desired or undesired action. If the participant is aware of the market research analysts, you’ll also want to ask them what influenced the decision.

Cautionary Tale: During the early stages of FastCap, Paul would gain actionable insights from conventions, but he stopped conducting research at such events because he found them costly to collect data. He also found that competitors would try to steal his ideas.

To truly make the most out of this tool, you’ll need to combine it with other research methods like surveys to gain user input after the observation.

Customer utilization research is focused on how your current customers use your products or services. Marketing professionals will normally use customer surveys to perform this exploratory research. The following questions are questions that an online survey might include:

• How often do you use our product or service?
• What do you like most about our product or service?
• With 1 being highly dissatisfied and 5 being highly satisfied how would you rank our product?
• What do you like least about our product or service?
• With 1 being highly dissatisfied and 5 being highly satisfied how would you rank our customer service?
• Have you tried any of the competitors’ products? If so, which ones? How does our product compare to theirs?
• What features would you like added to our product?
• With 1 being highly dissatisfied and 5 being highly satisfied how would you rank our pricing?

You can replace “product” with “services” in any of the questions above. In addition, it would make sense to include the name of the specific product or service they bought instead of the word product or service.

These questions will help you establish what real customers think of your products and services. This type of market research data provides insight into aspects including competitive advantage and creating buyer personas for potential clients based on the data collected.

FastCap has an interesting take on this type of market research. They actually offer tradesmen a 2-5% royalty for product suggestions that they decide to take to market.

Buyer Persona: Identify Your Target Market

A user persona is a character that represents your target market. A user persona will include aspects including:

• Demographics – age, gender, location, marital status, number of kids (if applicable to your product)
• Financial Information – Employment status, job title, household income, homeowner status
• Behaviors and Interests – Hobbies, products they like, buying habits, where they get information about products and services
• Market size and market trends

You can create similar personas for B2B businesses using stats like:

• Number of employees
• Age of company
• Titles of decision-makers
• Market size

If you are using analytic tools, they collect most of this information. You can add a form to check out or that opens when the user is leaving the site to ask questions about:

• Who are they? In FastCap’s case, they would be carpenters and cabinet makers.
• What are they trying to achieve? They don’t want exposed screw holes in their cabinets.
• What is the main obstacle? The products on the market are ugly, difficult to use, and expensive.

What if you find that your buyer persona is too broad to use to identify potential clients? We’ll discuss how to address that next

A small business might need to do market segmentation research if all their clients don’t fit neatly into a single user persona. For instance, FastCap would have at least three market segments that they might want to prepare marketing materials for:

• Distributors that will be selling their products to carpenters
• Tradespeople who will be using their products
• Coffee shops that buy caps for drinks so people don’t burn themselves (it’s an ancillary use for a FastCap that he decided to market to restaurants with To-Go cups)

As you can guess, each market segment would have characteristics that make them different, and you wouldn’t want to market to them all the same. You’d use market segmentation research to identify what those key characteristics are and create a user persona for each.

The term pricing research is refers to establishing a fair price. Pricing research should be done before you open a business or launch a new product because it can impact whether the business is worth starting.

To understand the benefits of pricing research I should discuss pricing strategies first. Businesses normally use either the value-added method or the cost of doing business.

The value-added method charges a price that is based on the value that is provided to a client. An example of this pricing is how Tesla prices solar roofs. They determine the price using the cost of a comparable roof plus the net present value of 30 years of energy in the target market.

The cost of doing business is calculated by adding up all your expenses (including taxes) and adding the amount of profit you want to make, then dividing by the number of units you want to sell.

Both of these pricing strategies have issues though. In the value-added method, how do you determine the value that is added? In the cost of doing business method, what is the maximum your target market can sustain? Both of these are answered by researching comparable products.

While there may not be something identical on the market, there is always something that serves a similar purpose. For instance, when portable MP3 players were created, the cost of the MP3 player plus downloading songs should have been compared to the cost of a portable CD player plus the cost of all the CDs.

Competitive analysis research is focused on developing a thorough understanding of the market and identifying how you want to differentiate yourself in a market of comparable competitors. This type of research will be included in a business plan . You’ll want to focus on aspects of the industry including:

• Identify competitors and the products they offer. This can be done through their websites.
• Analyze sales trends. You can use industry resources and company quarterly reports.
• Research how economic indicators impact the industry. For instance, consumer staples tend to do better during a recession, while consumer discretionary products tend to do better as an expansionary cycle matures.
• Understand the impact government agencies have on the industry.
• Has the industry reached market saturation? If 9 out of 10 people have already purchased the product you are selling, you are probably late to the game. Before you spend money in an industry that is at capacity, you should review the following bullet point.
• What is the job outlook for the industry? The Bureau of Labor Statistics (BLS) creates an occupational outlook handbook for every industry. You want to be aware of the growth prospects. If both of the last two bullet points are going in the wrong direction stay clear.

The document you create from this research should be detail-oriented, contain lots of external links to prove sources, and show analytical skills that show an understanding of the industry. This research and the communication skills used to present it are often deciding factors when applying for loans.

Customer satisfaction and loyalty research are focused on building relationships that increase the lifetime value of your existing customers. With big data and rewards programs becoming more affordable, small business owners can now offer similar types of rewards to what people see at major chains.

You’ll want to use the market research process to establish the answer to questions like:

• Should I use a point system or a number-of-purchases reward system?
• How big of a reward should I offer for repeat customers?
• Should I offer referral bonuses? If so, how much is meaningful?
• What are my competitors doing?

To answer these questions, you’ll need to establish:

• How often your average customer buys your product or services. You can find this in Customer Relationship Management (CRM) software. Alternatively, you can sort receipts by credit card if you don’t already have an app or loyalty program that people sign up for.
• If you have a CRM, establish what percent of customers interact with your business daily, weekly, monthly, or irregularly. Also, calculate the first two bullet points for each group to see if different promotions make sense.
• How much your average customer spends on each trip. Calculate revenue or number of receipts.

For example, you might target people differently by offering daily customers a free upgrade every $50 spent, while weekly customers you might want to offer every 5th visit they get a free product. In both scenarios, this can reward customer loyalty and encourage more spending in the future by slightly shifting their habits.

Let’s look at how to understand brand awareness.

Brand awareness research is focused on establishing what your target audience knows about your business, how they perceive it and giving you input on improving brand awareness.

Facebook has a feature for brands running ads that is really useful for establishing brand awareness called Brand Survey Tests . It is currently an experimental stage, but here’s how it works:

• Divides target market into two groups, one that is shown ads and one that is not shown ads.
• Collects data on both groups’ clicks, purchases, and other actions with your company
• Required: “Do you recall seeing an ad for [page name] online or on a mobile device in the last two days?”
• “Have you heard of [page name]?”
•  “How would you describe your overall opinion of [page name]?”
• “Are you familiar with [Page name]?”
• “Will you recommend [page name] to a friend?”
• Provides an analysis of what the market research process found.

This can be a great tool for understanding if people recognize your brand name .

Campaign research is focused on reviewing past business strategies to promote your products and services so that you can establish what worked, what didn’t, and why. In today’s marketing boom, people often forget the importance of including lessons learned when closing a project.

During this process, you’ll want to look at questions like:

• Did we reach enough people to be a representative sample? Typically, over 500 will be enough to count as a representative sample,
• What was the return on investment?
• Where did people drop out of the sales funnel?
• Did the campaign have a favorable reception?
• Should we try to duplicate the content in future campaigns?
• What should we avoid in future campaigns?

Now that you know about some of the types of market research techniques, keep reading to learn why market research is so important.

Why is market research important?

Because market research is the act of investigating consumer preferences as well as economic, social, and statistical data, it helps to better understand the customer and guides business decisions in the areas of:

• Customer insights – Market research can be used to gain insight into how customers behave, what they like and dislike about products, and what they think about different marketing strategies.
• Marketing strategy development – Market research can be used to develop a marketing strategy by identifying the needs of the market, target audience, and competitors in the industry.
• Product development – Market research is key for product development because it helps companies discover what customers want to buy or use next. It also helps companies see how their product will fare against other similar products on the market today or in the future.
• Product pricing considerations – Market research helps companies determine prices for their products by understanding expenses to continue production.

Now that you understand why market research matters so much to businesses, let’s take a look at how to conduct market research.

Step 2: Conduct market research

As you begin to get a handle on your goals and the questions you need to answer, it’s time to do the market research. At UpFlip, we are fans of Lean methodologies , so we figured we’d give you an introduction to lean market research.

• Put together the list of questions you are trying to answer based on the previous sections. Structure them in a way that answers can be analyzed easily.
• Seek out data that is already available and document the findings that impact you under each question.
• Establish the minimum number of online surveys or observations needed for a statistically accurate sample using our calculator.
• Find participants and gather data. When possible use software for collecting data.
• Proceed to analyze data.
• Implement business strategies.

Using these strategies will make it easier to do effective market research quicker and at a lower cost. No need for costly market research analysts.

If you’d like to learn more about how one of the United State’s most successful Lean practitioners approaches market research check out our interview with Paul below.

Keep reading to learn about analyzing the results

Step 3: Analyze the results

Market research analysts look for trends in data gathered from market research. The analysis involves both statistics and looking for patterns. To make it easier to analyze data, it is helpful to use software while gathering the data. If you don’t, you’ll have to input it into a spreadsheet manually.

The first step is to clean up data. This means fixing misspellings and other improper collection like zip codes where state names should be. Next, remove obvious deviations from the sample. (If someone says they buy your products 100 times per day, that’s probably not right.)

After that, you can do data analysis using functions like:

• Mean – sum divided by the number of surveys
• Median – (Number of surveys+1)/2
• Mode – Most common answer
• These can also use conditional statements such as “IF male and Under 45 mean”

With some forms of data, you might find visualization easier, so we are providing some market research examples of visualization of data. Let’s look at some common visualization methods.

The flow model is simply a visual representation of how interactions occur. Check out the behavioral flow for website visitors in Google Analytics. This model can be useful for establishing where issues occur and how processes work.

Affinity Diagram

An affinity diagram is used to group people, businesses, or other items together by a common feature. For instance, you might group by male and female, profession, or age. This can make it easier to tell whether one group tends to prefer your product or service more than another group does.

If you want to learn how to do this in Microsoft Excel, check out the video below.

Lucidcharts is another software you can use for affinity diagrams.

Customer Journey Map

A customer journey map is a visual representation of the path people take from being unaware of your product to becoming a paying customer, and eventually a potential advocate. Customer journeys are typically broken into five steps in the process:

• Awareness – The customer knows about the product
• Consideration – When the customer starts researching the product
• Purchase – The customer buys the product
• Retention –Keeping the customer happy, repeating purchases
• Advocacy – When the customer goes from being a satisfied customer to singing your praises to others.

The stages can vary for different groups of people, but awareness is typically a matter of advertising. This can be in the form of an online ad, a coming soon sign when preparing to open up a location, or even current customers (or influencers) advocating for your brand.

Consideration begins when the customer starts researching your company. This phase might  be:

• Short : Searching “gas stations near me” and immediately going to get gas
• Long : Spending hours researching the best shoe, best price, and best place to buy it.

The point of understanding a journey map is to be able to understand how many points of reference a person has before buying your product. Then you can use that to speed up the awareness and consideration phases while encouraging advocacy by your long-term customers.

Now that you understand “what is market research?” how to perform the market research, and how to analyze the research, there’s only one thing left…

Step 4: Use the info for decision making

The final and most important part of performing your own market research is converting the research into business practices to improve revenue. Depending on what you find in the research, this step may include:

• Adding new user personas and marketing campaigns
• Narrowing your target audience
• Discontinuing marketing campaigns
• Investing in software to increase customer loyalty or lifetime value
• Documenting the planned strategies for a business plan
• Rejecting the business idea completely

Thank you for reading!

Wherever the research leads you, UpFlip is here to help you run a better business. We use your feedback to create content that helps you build a better business. Which sections of this did you find beneficial and which would you like to learn more about?

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We’ll discuss the top franchises under $100K to help you understand the services they offer, the initial investment involved, and other considerations you need to look at before you get a $100K franchise.

First, we’ll look at our picks for top franchises under $100K, then review cleaning franchises, service businesses, food franchises, and other franchises.

[su_note note_color="#dbeafc"] Read about all your options, or click any link to jump to a specific section, where you’ll learn about companies that are a good fit for your initial investment in a business franchise.

#1. Wise Coatings

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Upflip has partnered with specific companies that are committed to providing new business owners with the franchise tools they need to become profitable franchises. The best franchises we’ve interacted with, and our top recommendations, are:

• Wise Coatings
• Brown’s Pressure Washing
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We’ll discuss these first.

Brandon Vaughn used just $15,000 to start Wise Coatings . The majority of the initial investment went to marketing and learning how to work with the unique concrete floor coating materials. There are currently eight franchises and 140 applicants (and growing). Wise Coatings helps its franchisees navigate the marketing and systems needed to run the business right. This franchise opportunity requires:

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Check out our interview with Brandon below.

Neel Parekh started MaidThis just over 10 years ago, and now the company is making over $166,000 a month . It currently has 17 franchisees and is making a name for itself by helping small business owners start their own remote cleaning companies.

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Learn more about starting a remote cleaning business franchise below.

Carmelo started Spray-Net because he realized the residential painting space needed modernization to speed up the house painting process. Today, Spray-Net has 40 franchisees and owns patents on its processes so nobody else can offer them.

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Learn more about starting a painting franchise in our exclusive interview.

A pressure washing franchise is among the easiest to operate. You don’t need any special skills or a big team, and the initial investment is low.

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Learn more about EverLine Coatings in our interview below.

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The main benefit of franchise business models is having a well-known and established brand reputation to build from.

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In-home care for seniors is increasingly in demand. The home care solutions and services you’ll offer with a HomeWell Care franchise set you up for big growth potential, and it’s among the top franchises for entrepreneurs with healthcare experience.

The minimum investment in a HomeWell franchise is only $5,000, so this is also one of the best franchise opportunities for people with limited financial resources.

• Franchise Fee: Up to $49,500 • Total Investment: $52,400-$230,800 • Royalty Fee: 5%-10% • Space Needed: 500-1,000 square feet • Employees: Can run as a solopreneur or with a small team • Territories: Available in 47 states, exclusive territories and site selection support available • Franchising Funding Assistance: Third-party financing available, 20% discount for veterans

#13. Signal Security

Signal is a world-class security brand with a reputation for excellence. It’s among the best franchises under $100K for veterans and law enforcement professionals and is Entrepreneur’s #1 security franchise brand.

• Franchise Fee: $50,000-$200,000 • Total Investment: $57,450-$273,150 • Royalty Fee: 4% • Space Needed: None (can be run from home) • Employees: Average of 2-4 per location • Territories: Available worldwide • Franchising Funding Assistance: In-house and third-party financing available

#14. Cinnabon

Cinnabon is the only food or, more specifically, bakery franchise under $100K with global brand recognition. It also has a relatively low minimum investment for a food franchise, and franchisees get complete training and marketing support.

• Franchise Fee: $5,500-$30,500 • Total Investment: $60,300-$621,400 • Royalty Fee: 6% • Space Needed: 600 square feet on average • Employees: 5+ • Territories: Exclusive territories available in the U.S. and around the world • Franchising Funding Assistance: Third-party financing available

#15. Carvel

This iconic ice cream franchise has been around for more than 80 years, and that staying power is part of what puts it among the top franchises in the food industry.

Franchisees get complete support in multiple facets of their businesses, from menu development to cost optimization, as well as access to a top-notch in-house marketing team.

• Franchise Fee: $10,500-$30,500 • Total Investment: $67,875-$536,400 • Royalty Fee: $2.88/gallon • Space Needed: 100-1,600 square feet • Employees: 2-6 • Territories: Exclusive territories available • Franchising Funding Assistance: Third-party financing available

#16. Champs Chicken

With its low minimum investment and no franchise fee, Champs Chicken is one of the best businesses in the food industry for entrepreneurs with limited financial resources.

They also offer excellent franchisee support, with continual training and a strong investment in the growth of their owners.

• Franchise Fee: $0 • Total Investment: $9,000-$349,000 • Royalty Fee: None • Space Needed: Varies depending on format • Employees: Minimum of 2 • Territories: Available in 11 U.S. states • Franchising Funding Assistance: Third-party financing available

Investing in any of the following franchises could be a great way to start a successful business, whether you want a brick-and-mortar store in your community, a mobile business , or a lucrative creative outlet.

#17. The UPS Store

Buying a UPS Store franchise gives you the power of a recognized brand with a track record of franchise success. The extensive ongoing support and training are what consistently make UPS one of the top franchises to own and manage.

• Franchise Fee: $9,950-$29,950 • Total Investment: $101,819-$476,993 • Royalty Fee: 5% • Space Needed: 800-1,800 square feet • Employees: 3-5 • Territories: Over 5,000 locations available worldwide • Franchising Funding Assistance: In-house financing for all franchisees as well as 10% off for veterans

#18. Cornwell Quality Tools

Cornwell Quality Tools has been a leading name in high-quality, professional equipment for over 100 years, and it is the best franchise to own in the mobile tool and repair industry.

Additionally, it’s a very accessible franchise business, with relatively low up-front costs, excellent training, and strong franchisee support. It’s one of the few all-mobile franchise opportunities, which is one reason it requires such a low initial investment.

• Franchise Fee: $0 • Total Investment: $54,525-$298,825 • Royalty Fee: 7% • Space Needed: None (mobile franchise) • Employees: Can be run as a solopreneur • Territories: Available in 48 states • Franchising Funding Assistance: In-house financing for equipment and startup costs

#19. Minuteman Press

Minuteman Press is the #1 printing and marketing franchise business. It’s among the best franchise opportunities in any industry, offering franchisees multiple revenue streams and local support.

As a full-service marketing provider, you can establish strong recurring revenue streams quickly with a Minuteman Press franchise. There’s a reason it’s one of the companies highlighted by Entrepreneur ’s franchise list, appearing among their top franchises for 20 years in a row.

• Franchise Fee: $32,500-$48,500 • Total Investment: $78,241-$219,529 • Royalty Fee: Up to 6% • Space Needed: 1,000 square feet • Employees: 3 • Territories: Available in all 50 states • Franchising Funding Assistance: Third-party financing available

#20. Big Frog

For aspiring entrepreneurs who want to get into the custom clothing sector , Big Frog is one of the best franchises to open.

• Franchise Fee: $39,500-$60,000 • Total Investment: $180,750-$235,700 • Royalty Fee: 6% • Space Needed: Under 1,200 square feet • Employees: 2-4 required per location • Territories: Available markets in 47 U.S. states and Canada • Franchising Funding Assistance: Veteran discount and third-party financing

You can make great money with this established brand. Since becoming a Big Frog franchisee in 2008, Sanford Booth has consistently made more than $40,000 a month. Hear his story in this interview:

#21. YESCO Sign & Lighting Service

First founded in 1920, YESCO is a family-run company that builds custom signs in addition to providing sign and lighting repair and maintenance services.

You can start a franchise for $100K or less without needing a brick-and-mortar space for the repair side of the business.

• Franchise Fee: $50,000 • Total Investment: $65,000-$389,200 • Royalty Fee: 6% • Space Needed: None (can be run from home) • Employees: 3 • Territories: Available in 39 states and Canada, exclusive territories available • Franchising Funding Assistance: 10% veteran discount and in-house financing available for equipment and franchise fee

#22. Duct Doctor

With over 30 years as a leader in the duct cleaning services market, investing in a Duct Doctor franchise gives you access to their well-known brand and strong marketing and advertising program.

The company also provides extensive training and ongoing support, so you don’t need any special educational background or skills to get started as a franchisee. Another benefit is the growth potential, with ample opportunities to expand beyond your initial market.

• Franchise Fee: $25,000 • Total Investment: $44,100-$201,500 • Royalty Fee: 5%-8% • Space Needed: None (can be home-based) • Employees: 2 • Territories: Worldwide exclusive territories available and option to operate multiple units • Franchising Funding Assistance: Third-party financing available

We use a variety of factors to select the companies we recommend to a potential franchisee. Some of the factors include:

• Initial investment
• Franchisee support
• Profit margins
• Limited competition
• Search engine optimization

Initial Investment

Potential business owners are looking for “Franchise $100K” opportunities, and for this list, we took that specific number into consideration. We use the franchise fee or the total initial investment to judge the franchise up-front costs.

In scenarios where the initial costs are more than that amount, there are other factors that we use when comparing the companies, for example…

Franchisee Support

While costs are important to a franchise business, the main benefit of a franchise is the ability to book clients faster. You don’t have to spend countless hours researching the best strategies to operate your business if the franchise has good business systems.

When it comes to our top five picks, we have personally interacted with the business owners and established that the costs, profit margins, and approaches to finding clients are worth the investment.

Profit Margins

We look for business owners who have created highly automated business structures because the more automation a business uses, the fewer costs (as a percentage of revenue) they have to find and support clients.

Higher profit margins lead to faster business growth and increased personal wealth, which you can then invest in other businesses like rental properties.

Limited Competition

A business that takes a novel approach tends to have less competition, higher revenue, and an easier time finding clients. Combining highly automated business processes with high-demand local businesses reduces the time to recoup costs.

Search Engine Optimization

Every business today needs to take search engine optimization into account. We have to include certain businesses in some blogs (including this one!) because readers (like you!) expect to see them.

Dog Wizard is the only franchise in this blog that our primary SEO tool, SurferSEO, expected us to include. All others were chosen because of our research or personal experience with how the business owner operates their franchising company.

Which franchise under $100K is most appealing to you?

Everyone considers franchise opportunities differently. Some people care most about the initial investment, while others are most concerned with ongoing support. That’s why it is important to do your own research before making the minimum investment in any of the best franchises under $100K.

Which franchise under $100K is most appealing to you? Let us know in the comments.

How to Get a Business Loan (in 4 Easy Steps)

• Write a business plan.
• Evaluate your business eligibility.
• Look for the best business loans.
• Apply for a business loan .

How to Get a Business Loan: Write a Business Plan

Getting a Small Business Loan Requirements

• Age of the business
• Business credit score
• Personal credit score
• Business revenue

SIC or NAICS code

• Speed of approval

Age of Business

• Small Business Administration (SBA) 504 Loans : Requires at least two years based on tax returns .
• Startup Loans : Will normally require both collateral and personal guarantee, but are available for businesses that are just starting. SBA backed microloans are the lender of last resort.
• Shopify Loans : As little as four months based on our interview with a Shopify business owner who got her first Shopify loan in her fourth month in business.

Business Credit Score

Personal credit score.

• Payment Guaranty : You are responsible for paying the loan even if the business goes under.
• Performance Guaranty : You are responsible for completing the work that the loan was for even if the business goes under. This is common for construction projects.

Business Revenue

• Standard Industrial Classification (SIC) : Ten 1-digit Divisions, ninety-nine 2-digit Major Groups, and numerous 4-digit Industry Groups. View OSHA’s SIC manual . These are only for businesses formed before 1997. They are also only used in the U.S.
• North American Industrial Classification System (NAICS) : This system came out of NAFTA and is used in Mexico, Canada, and the U.S. The NAIC has 20 Sectors that are broken down into smaller parts based on the pic below. It is updated every five years. You can find your NAICS code on Census.gov .
• 48–49 : Transportation and Warehousing. Thin profit margins, high costs.
• 42 : Wholesale Trade. Susceptible to recessions.
• 44–45 : Retail Trade. High failure, likely to be hit by recessions. 
• 56: Administrative, support, waste management, and remediation services. These have thin profit margins.
• 11 : Agriculture or forest products. These have lots of regulations.
• 812320 : Dry cleaners.
• 623110 : Healthcare (nursing homes, assisted living facilities, etc.). High regulations and costs impact the risks of business loans to this sector.
• 721110–721120: Hotels or motels (without casino ends in 10, with casino ends in 20). Recessions hit this sector hard.
• 561510 : Travel agencies. Seasonality and recessions both hit this sector hard.
• 485320: Limousine services w/ driver (except shuttle services) (except taxis). Highly discretionary purchase so recessions hit it harder than others. 
• 485999: Airport limousine services (i.e., shuttle). Recessions hit it hard due to a small market.
• 532111 :  Limousine rental without driver. Recessions hit it hard because of small market
• 722511 and 722513 : Restaurants. (Dine-in is 722511 and carryout is 722513.) They have high rates of failure.
• 492110 : Courier services. Recessions tend to hit them harder.

Speed of Approval

How hard is it to get a business loan.

• 48% of employers had lower revenue than the previous year.
• 33% of employers let employees go.
• 59% of businesses described themselves as in fair or poor financial conditions.
• 60% of employers are struggling with supply chain issues and retaining employees.
• 52% took out debt.
• 34% of small businesses sought funding, down from 40–45% pre-pandemic.
• 11% received all the funding they requested, while 59% have unmet financial needs or a shortfall of funding, and 31% didn’t need funding.

How to Get a Small Business Loan: Compare Options

• How much money you need .
• The loan options available.
• The lenders who provide each loan option.

How much of a business loan can I get?

• Amounts under $50K : Go for online lenders, merchant cash advances, business credit cards, or a microloan.
• $50K–$500K: Almost everywhere lends these values.
• $500K–$5M : You’ll want SBA 7(a) or SBA 504 loans 
• $5M+ : Traditional bank loans are the most likely place to qualify.

What kind of business loans are there?

• Startup Business Loans

Unsecured Loans

Secured loans, traditional loans.

• Merchant Cash Advances

Term Loans  

Lines of credit.

• Personal Loans  

Home Refinance, Second Mortgages

• OnDeck : Offers term loans up to 24 months and lines of credit to businesses. Your business needs to be open for more than a year, make more than $100K revenue, and have a 600+ FICO credit score.
• Kabbage : Offers commercial credit lines if you have a 640 FICO credit score, over $3,000 per month in revenue, and more than a year in business.
• BlueVine : Offers commercial credit lines for business owners with 6+ months in business, and $10,000 monthly revenue.

• Bank of America Loans : Get a line of credit for businesses with more than $250K revenue and 2 years in business. This Bank of America Small Business loan runs a promotional offer occasionally that can be as much as six months reduced interest rate and  25% savings on fees.
• National Funding : With only 6 months in business, a 575 credit score, and an equipment quote from a vendor, you can get an equipment loan from National Funding for up to $150,000. 
• Funding Circle : Get $ 25,000 to $500,000 term loans from Funding Circle with term lengths from 6 months to 7 years. The application process is quick and painless, with most approvals within three days.
• Bank account
• Credit cards
• Payment processing
• Corporate consulting
• Initial public offerings
• Mergers and acquisitions 

Merchant Cash Advances (MCAs)

Invoice Factoring

Small Business Administration Loans

Sba 7a loans.

SBA 504 loans

• Increase jobs in an area both during and after construction.
• Reduce the affordable housing shortage.
• Increase economic activity.
• Reduce personal expenditures on gasoline in new neighborhoods.

SBA Disaster (SBAD) Loans

• Physical Damage Loans : These loans are for repairs and can be up to 20% more than the estimated repair after a disaster. Both homeowners and businesses can apply for these.
• Mitigation Assistance Loans : When you are repairing a first home or business property after a disaster, you can apply for mitigation assistance to prevent damage next time .
• Economic Injury Disaster Loans (EIDL) : If your business lost money because of a disaster, you may apply for an EIDL .
• Military Reservist Loans : For businesses that lose essential employees because they were called in to serve in the military or reserves, this can be a great help.

Personal Loans

How to Get a Startup Business Loan

• Gather personal and business bank statements.
• Maintain copies of your business licenses, EIN, and business formation.
• Find an SBA lender near you.
• Apply for an SBA microloan.
• Minimum credit score requirement : Assume a 650 FICO score
• Loan term : Three years or less (can be up to six years)
• Loan amount : $16,000 (Anything over $10,000 has a lower maximum interest rate, and $16,318 is the average approval.)

How to Get a Business Loan with Bad Credit

• Kiva : No interest crowdfunding loans of up to $15,000 that don’t ask for credit scores. Kiva requires between 5 and 35 people in your social network to contribute before they will allow you to list. Unfortunately, they aren’t available in Nevada and one other state.
• Portfolio backed line of credit: Also called security backed lines of credit (SBLOC), Pledge Loans, Insurance BLOC. These are basically backing your loans with assets that aren’t your house. They will be valued at lower than the market rate, but you can keep your assets and get funding this way.
• Self : Pay $25–$150 per month for 24 months. After the term is complete, you get back all but the $9 per month fee (rate may change). Self reports to all three agencies and offer additional services to help build your personal credit score.

How to Get a Loan to Start a Business

• SBA Microloans : Up to $50,000 through SBA approved lenders might be offered.
• Personal Loans : You can get a personal loan to start a business.
• Rollover Business Startup : Start a corporation, create a 401K, rollover 401K from another company, and buy your corporation’s stock with the 401K. Now you have funding.
• Friends and Family Loans : Borrow money from your family.

How to Get a Loan

• a DUNS number
• Six months of operations for an online lender and two years for SBA backed loans
• A business plan
• All your documents ready to go (Check each lender's requirements on their website.)

How to Apply for a Small Business Loan

• Gather the information in the previous section.
• Go to the website or bank to apply. 
• Answer every question.
• Provide all documentation to the lender.
• Get a response if it is an instant approval or rejection.
• Be told you will be contacted if they need more information
• Wait for the lender to send the information to the SBA.
• Answer any follow up requests.
• Receive notice of approval or denial.
• Receive notification of approval and a funding date.
• Receive notice of rejection and how to request your business credit report.

Build Your Business

31 Low-Cost Business Ideas With High-Profit (2024)

Starting a business doesn’t have to break the bank. Many small business owners start low-cost business ideas with high profit and become extraordinarily successful. 

We’ve talked to hundreds of small business owners to find out the recipe they used to turn small business ideas into a profitable business model. 

My personal favorite interview was with the candle business owner, who’s a phenomenal success story! She lost her job in the pandemic and turned $500 into $150K within 3 months.

[su_note note_color="#dbeafc"]

We share some of the most successful small business ideas with you. Just click on the category you like to find out more.

7 High-Margin Businesses That Are Cheap to Start

6 easy start-up businesses to own your own business today, 10 online business ideas with high profit margins and low startup costs.

 Make sure to read them all to find a low-cost business idea you’ll love.

Authors Note

Many businesses that are cheap to start have low average profit margins. This is because people will attempt to start them and not put in the time or money to market them and implement useful business systems. These business owners earn a negative profit margin, which brings down the average profit margin. We rank these businesses based on what business owners make when they dedicate themselves to implementing industry best practices.

#1. Cleaning business 

Average Annual Revenue: $74,880 Average Profit Margins: 6.7% Startup Costs: $1K-$30K Time To Revenue: 1-6 months Annual Market Growth Rate: 1.2% Best for: system-focused and detail-oriented entrepreneurs with strong customer service skills

A cleaning business is one of the most profitable business ideas that you can start from your home with just a few hundred dollars. All you need is basic equipment like a vacuum, broom, and mop, and standard household cleaners—things that most people already have. While 6.7% doesn't sound like a lot, many of the costs are items like your salary and home office expenses, which help with your cost of living.

If you have more cash available, you can invest in marketing to grow your customer base faster. That was part of Chris Mondragon’s $5,000 startup budget for Queen Bee Cleaning. Today, his cleaning business averages $1.5 million a year in revenue.

Chris shares his business model and how to get started step-by-step in his 7-figure Cleaning Business Blueprint . He also shares some of those insights in this YouTube interview:

[su_youtube url="https://www.youtube.com/watch?v=YcYIYdqegGA"]

#2. Vending business

Average Annual Revenue: $182,100 Average Profit Margins: 4.3% Startup Costs: $2K-$10K Time To Revenue: 3+ months Annual Market Growth Rate: 0.5% Best for: organized entrepreneurs with strong sales skills, people with machine repair skills

Vending business operators earned more than $10 billion in revenue in 2022, a market increase of 3.8% compared to 2021. That growth is projected to continue, making it one of the top profitable business ideas for entrepreneurs looking for a flexible schedule and passive income potential. 

The cost to start a small business in vending depends on a few factors. The cheapest way to start is by buying a few used machines and finding high-traffic places to put them. If you have a larger budget, you can save yourself some time and work by purchasing an existing route.

While the average profit margin is only 4.3%, you can make up to 30% profit margins . Find out how Adam Hill of Hill Vending built a $60,000-a-month vending business in The Vending Bootcamp . He also talked to UpFlip about how to start such a business the right way in this YouTube interview:

[su_youtube url="https://www.youtube.com/watch?v=-s_Y-O1nosw"]

Another nice thing about vending is that it doesn’t require any previous knowledge or a large time commitment. You can make good money in vending with just a few hours invested each week, making it a great low-cost business to start as a side hustle. 

#3. Consulting business

Average Annual Revenue: $363,049 Average Profit Margins: 6.4% Startup Costs: $1K-$3.5M Time To Revenue: 6-18 months Annual Market Growth Rate: 2.2% Best for: excellent communicators with strong problem solving and analytical skills, people with in-demand industry expertise

Consulting can be a very profitable business idea, and you don’t need to invest much to start a successful business. The main thing you need is expertise, either in a specific industry or in key areas like leadership, technology, or business systems and management. 

Ryan Gromfin turned his experience managing 5-star restaurants into a $35,000-a-month restaurant consulting business. Hear how he did it here:

The most challenging part of starting your own business as a consultant is building your brand and reputation. Leveraging your professional network can help grow your consulting business faster. You can also build authority online through your social media accounts or by sharing knowledge on a blog, podcast, or YouTube channel. 

#4. Event planning business

Average Annual Revenue: $34,380 Average Profit Margins: 12.2% Startup Costs: $500-$5K Time To Revenue: 3+ months Annual Market Growth Rate: 1% Best for: extroverts and outgoing entrepreneurs, people with strong organization, networking, and creative problem-solving skills

Planning events can be stressful and time-consuming, even when it’s something fun and exciting like a wedding or a kid’s birthday party. That’s why people often pay professionals to do the planning for them, and what makes this a great business idea for skilled planners and multitaskers who can rise to that challenge. 

Event planning is a low-overhead business and a cheap business to start from home. The client is the one who pays for the space and supplies, and there’s no need for expensive equipment or complicated licensing to get started.

What you will need are connections, both with other businesses in your area and with people who will book your services. That’s why an event planning business is a good business idea for people with experience in hospitality, tourism, and food service who already have a professional network they can build on. You can still start a profitable business without this background, but it will likely take longer to grow your client base and revenue. 

#5. Floor coating business

Average Annual Revenue: $1,291,480 Average Profit Margins: 2.8% Startup Costs: $100K-$3.5M Time To Revenue: 6-18 months Annual Market Growth Rate: -0.1% Best for: system and detail-oriented entrepreneurs who like working with their hands

Epoxy floor coating is a popular way for businesses and homeowners to protect their floors in spaces like garages, basements, warehouses, or factories. 

It’s also a $2.3 billion industry with a projected CAGR of 5.5% through 2030. This growth and revenue potential puts it among the top new business opportunities for entrepreneurs with backgrounds in construction and similar areas.

While the startup expenses are higher for a floor coating business than some on this list, it still deserves a place among low-cost business ideas. You can expect to spend around $5,000-$8,000 for the equipment and initial inventory, plus another $1,000-$2,000 for your license, permits, and insurance. 

Once you’re up and running, you can expect to see margins of 38-45% on the revenue you make. You can learn more about starting an epoxy business in this interview with Wise Coatings founder Brandon Vaughn:

[su_youtube url="https://www.youtube.com/watch?v=q6mghjqijuU"]

#6. Wedding photography business

Average Annual Revenue: $50K Average Profit Margins: 7.3% Startup Costs: $1K-$10K Time To Revenue: 1-6 months Annual Market Growth Rate: 0.3% Best for: photographers, videographers, visual artists, and designers with strong communication and customer service skills

Though it took a big hit during the height of the pandemic, the wedding industry has bounced back in a huge way. The number of weddings in the U.S. spiked to 2.47 million in 2022 and is expected to remain above 2 million a year through 2025. That makes this the ideal time to start a profitable small business as a wedding photographer.

If you’re starting from scratch, you will need to budget around $3,000-$5,000 for equipment. The basic supplies you’ll need and their average cost are below:

• Professional camera ($1,000-$2,000)
• Camera lenses ($1,000-$1,500)
• Lights and backdrops ($500-$1,000)
• Memory cards and storage drives ($100-$150)
• Tripod and other accessories ($200-$250)
• Photoshop or other editing software ($20-$25 per month)

If you already have high-quality photography equipment, though, it’s a very low-cost business to start. 

Connecting with event planners, caterers, and other small business owners in the wedding industry is the best way to start building your client list as a wedding photographer. It’s also smart to make your own website where you can showcase your past work. You can find more advice on starting a photography business in this how-to post on the UpFlip blog. 

#7. House painting business

Average Annual Revenue: $76,857 Average Profit Margins: 7.2% Startup Costs: $1K-$100K Time To Revenue: 6-18 months Annual Market Growth Rate: -2% Best for: contractors and construction workers, painters and visual artists, detail-oriented entrepreneurs with customer service skills who like working outdoors

Unlike other jobs in the home construction and repair business, you don’t need specialized training or certifications to start a painting business. 

In fact, all you really need is basic equipment like a ladder and some brushes. As you grow, you can invest your earnings into more sophisticated equipment like scaffolding or paint sprayers. 

You can make even more with a painting business if you have specialized skills like painting murals or using trendy painting techniques and styles. There’s a big demand for basic painting services too, though, in both the residential and commercial sectors. 

The variety of customers available is what puts painting among the most lucrative businesses to start. The industry grew at a CAGR of 4.1% from 2018-2021 and is expected to grow another 5.8% through 2030.

You can learn more about how to start a painting business by listening to this interview with Arizona Painting Company owner Doug Caris. He’s grown the business to more than $2 million in monthly revenue since he bought it in 2014:

#8. Mobile detailing business

Average Annual Revenue: $241,230 Average Profit Margins: 16.1% Startup Costs: $1K-$100K Time To Revenue: 1-6 months Annual Market Growth Rate: 1.8% Best for: car lovers and cleaning experts, detail-oriented entrepreneurs with good customer service skills

Like other cleaning businesses, a mobile detailing or car wash business has a low barrier to entry. It doesn’t require any specialized knowledge or prior experience. It’s also a low-cost start-up business, and you can get all the tools and supplies you’ll need to start for around $500-$1,000.

You can make good money with a car wash business, too. The industry has fairly high profit margins, especially if you operate as a solopreneur. To give one example, GoDetail averages 60% profit on their $900,000-a-year revenue. Hear how they started in this video:

[su_youtube url="https://www.youtube.com/watch?v=riTWH_MG6Uc&list=PLaU6uY9Yy7XkECNQPPT_LNAxEghhffqv7&index=3"]

#9. Personal training business

Average Annual Revenue: $16,867 Average Profit Margins: 10.9% Startup Costs: $500-$5K Time To Revenue: 1-6 months Annual Market Growth Rate: 0.6% Best for: athletes, fitness experts, strong motivators and communicators

Being a personal trainer is a lucrative business idea for athletes, fitness instructors, and people who love going to the gym. Your knowledge of health and exercise is the main value you bring clients, and it’s an easy start-up business if you already have this expertise.

Just look at how Bedros Keuilian used his passion and expertise in fitness to build several successful franchises and a business coaching company to help motivate others to unlock their true potential.

[su_youtube url="https://www.youtube.com/watch?v=gXdFpkfXvGA&ab_channel=UpFlip"]

One reason a personal trainer is a low-investment business is that you don’t need a physical space or your own equipment. You can start off working with clients in gyms, community centers, or their own homes.

Some states do require a personal training business owner to have certification through an organization like NASM or ISSA , which costs between $500 and $2,000 depending on the program. It’s also smart to get liability insurance, which will cost around $200-$300 a year on average. 

Those are low costs compared to many profitable business ideas, though, and the ongoing costs of running a personal trainer business are minimal.  

#10. Landscaping and lawn care 

Average Annual Revenue: $272,790 Average Profit Margins: 8.7% Startup Costs: $1K-$100K Time To Revenue: 1-3 months Annual Market Growth Rate: 8.1% Best for: entrepreneurs with high physical stamina, attention to detail, and customer service skills

Landscaping is among the best small business ideas for people who love being outside. Lawn care has a low barrier to entry because you don’t need specialized training or equipment to get started, just a lawn mower and a few other basic garden tools you can get at any home improvement store. 

The downside of working in lawn care is that it can be a physically demanding job that sometimes means working in unpleasant weather. For some people, though, the chance to work outdoors is a pro, so it all depends on what you want from your employment. 

As far as what you can make, a landscaping or lawn care business owner can easily earn $10,000 or more a month. Trevor Kokenge started Plan-It Vision with $300 out of his apartment, and now he makes around $22,000 a month with 30% margins . Hear his story in this interview:

[su_youtube url="https://www.youtube.com/watch?v=mQdsCmVFPGI&list=PLaU6uY9Yy7Xk_AjUgCgvs6gxYuSFNHBJW&index=4"]

#11. Pet sitting business

Average Annual Revenue: $34,380 Average Profit Margins: 16% Startup Costs: $500-$5K Time To Revenue: 3+ months Annual Market Growth Rate: 1.7% Best for: animal owners and experts who are flexible, patient, empathetic, and strong communicators

Similar to dog walking, a pet sitting business is among the best small business ideas for animal lovers to start with little money. The only expenses to start your own business as a pet sitter are the license and branding materials like your own website or listings on sites like Craigslist and Yelp.

Being able to care for a range of different animal species expands your potential for pet sitting clients. While dogs and cats are the most common, you can charge a premium to watch exotic pets like birds, reptiles, or tropical fish that have unique, specific care requirements. 

#12. Pressure washing business

Average Annual Revenue: $64K Average Profit Margins: 8.8% Startup Costs: $200-$5K Time To Revenue: 3+ months Annual Market Growth Rate: 0.9% Best for: people with a sharp eye for details and strong customer service skills

Pressure washing is another top option for people who like physical work seeking low-cost business ideas to start. Just invest a few hundred dollars into a professional power washer, and you can start cleaning people’s homes, sidewalks, and driveways. 

Chase Lilie started his power washing business, Wizard Wash, with $3,000 as a teenager. In his first year, he grew to $12,000 a month with margins up to 60% —and that’s just the beginning. Hear how Chase did it in this interview:

[su_youtube url="https://www.youtube.com/watch?v=MNzuP6V0UhA"]

#13. T-Shirt printing business

Average Annual Revenue: $147K Average Profit Margins: 3.2% Startup Costs: $1K-$200K, depending on size Time To Revenue: 30-90 days Annual Market Growth Rate: 3.3% Best for: graphic designers and creative entrepreneurs, people with strong customer service and marketing skills

Custom apparel is a huge market. It’s already a $3.2 billion industry, and it’s expected to grow by another $1.8 billion by 2027 . That’s because lots of people need these services, from individuals and community groups to sports teams, small businesses, and corporate clients creating marketing and branding promotions. 

You can start a custom apparel business for just a few hundred dollars if you do it as a print-on-demand online store. A brick-and-mortar location has higher start-up costs but also opens up the potential for more revenue, so it all depends on your growth goals and budget.

Sanford Booth makes around $500,000 a year with his t-shirt printing business, and that’s a very achievable revenue in this industry. Hear how he got started in this interview:

[su_youtube url="https://www.youtube.com/watch?v=BmYCYMAsQ8Y"]

#14. Affiliate marketing business

Average Annual Revenue: $60K-$160K Average Profit Margins: 8% Startup Costs: $100-$2K Time To Revenue: 1-3 months Annual Market Growth Rate: 10.5% Best for: influencers, bloggers, entrepreneurs with a large online presence and digital marketing skills

Affiliate marketing is among the top low-cost business ideas with high profit and the potential to earn passive income. As an affiliate marketer, you promote other people’s products and services, earning a commission whenever a customer buys through you. 

Being an affiliate marketer is a great way to earn money working anywhere, anytime. That makes it ideal for travelers and digital nomads, and it has low ongoing costs since you don’t need to worry about inventory, shipping, or other costs associated with eCommerce businesses.

It’s also a profitable online business for people who are active on social media platforms or otherwise have a large online presence. Matt Diggity earns around $400,000 a month from affiliate marketing. Listen to this podcast interview to hear his advice on how to succeed in this space:

#15. Social media marketing or digital marketing business

Average Annual Revenue: $817K Average Profit Margins: 6.9% Startup Costs: $100-$10K Time To Revenue: 1-6 months Annual Market Growth Rate: 1.3% Best for: advertising, branding, and marketing experts, creative problem-solvers and content creators

Social media marketing is the best way for small business owners to engage with customers. Not every business owner has the time or skills to get the full value out of their social media accounts, though.

That’s what makes being a social media manager such a lucrative business idea. With a digital marketing firm, you can earn money from your knowledge of social media platforms while helping other businesses expand their brand and business. 

Not only is there a high demand for social media management services, and the potential for high profit margins, but a digital marketing firm is among the best low-investment business ideas. You can run it easily from home and don’t need any specialized tools or equipment. All you need is to attract clients and you can start making money online from your skills. 

Jason from Socialistics shared his advice on how to start a social media marketing firm in an interview with UpFlip. Check out his interview if you want to learn how he makes $500,000 a year from providing social media management services: 

[su_youtube url="https://www.youtube.com/watch?v=kb1czTEK8f8"]

#16. Dropshipping business

Average Annual Revenue: $36K-$50K Average Profit Margins: 5% Startup Costs: $150-$500 Time To Revenue: 1-3 months Annual Market Growth Rate: 25% Best for: systems- and strategy-oriented entrepreneurs; people seeking flexibility and passive income; people with strong sales and marketing skills

If you’re looking for the best business to start with little money, dropshipping is a great choice. All you need to start is to set up an online store—no need to worry about inventory, shipping, or the other expenses and hassles of selling products. 

Building a customer base is often the most challenging part of starting a dropshipping business. The most lucrative businesses in this niche are run by people who excel at digital marketing, though you can also learn those skills as you grow if you don’t have them from the start. 

Heather Johnson started her online business as a dropshipper as a side hustle when her hours were cut during the pandemic. She quickly grew it into her full-time business. Find out how she did it in this interview:

#17. Offer online tutoring services

Average Annual Revenue: $18,170 Average Profit Margins: 13.10% Startup Costs: $100-$1K Time To Revenue: 1-3 months Annual Market Growth Rate: 8.5% Best for: educators, teachers, tutors, people with in-demand skills or knowledge who are effective communicators

If you’re skilled at explaining complex concepts and are looking for low-cost start-up businesses, a tutoring business can be a great choice. While the average rate for an online tutor is around $20 an hour, that includes student and part-time tutors. Those who have expertise in advanced subject areas can earn $50 or more per hour for their time and knowledge. 

Not only is being a tutor a low-cost business idea, but it’s also incredibly easy to get started. You don’t even need to create your own website to run with this successful business idea. Just set up a profile on one of the tutoring websites that already exists. Some of the most popular include:

• Preply - For teaching academic subjects and exam prep
• Wyzant - For subject matter experts in a range of topics
• TutorMe - For those with a college degree in their speciality area
• TakeLessons - For teaching either academic subjects or creative skills

#18. Online course business

Average Annual Revenue: $30K-$50K Average Profit Margins: 13.10% Startup Costs: $100-$1K Time To Revenue: 1-6 months Annual Market Growth Rate: 8.5% Best for: teachers, writers, people with in-demand or niche skill sets, those seeking flexibility and passive income

Making and selling online courses can be a successful business idea on its own. It’s also an excellent way to add an extra income stream to another business model, like a podcast, YouTube channel, or other online business. 

If you make the online course yourself, the startup costs are minimal. Course hosting platforms like Teachable and Coursify.me have free plan options and make it easy to upload and sell your online courses to students. 

The flip side of this is that making an online course can be a big time investment. Once it’s finished and uploaded, though, it’s mostly passive, save whatever time you put into marketing and promoting it. 

Jacques Hopkins is living proof that online courses are a lucrative business idea. He makes an average revenue of $40,000 a month with 50% profit margins from his online course business. Hear how he did it in this interview:

#19. Search engine optimization (SEO) consulting business

Average Annual Revenue: $415,840 Average Profit Margins: 7.3% Startup Costs: $500-$5K Time To Revenue: 1-3 months Annual Market Growth Rate: 4.6% Best for: content writers, digital marketing experts, people with strong data analysis and critical thinking skills

Experienced SEO consultants charge an average rate of $100-$150 per hour . That’s $200,000-$300,000 a year if you work full-time as a solo entrepreneur, and the profit potential jumps up even more if you start an agency. 

What really makes being a search engine optimization consultant one of the best online business ideas is the high demand for these services. SEO services were a $46.7 billion industry in 2021 and are expected to grow at a CAGR of 17.6% through 2030. 

You don’t need deep pockets to start this kind of business, either. You can start off using free tools and expand your systems as you grow. All told, that puts an SEO agency among the top low-cost business ideas with high profit potential. 

#20. Start your own online store

Average Annual Revenue: $60K-$120K Average Profit Margins: 5-15% Startup Costs: $100-$10K Time To Revenue: 30-90 days Annual Market Growth Rate: -9.3% Best for: creative and crafty entrepreneurs, people with strong sales, marketing, and customer service skills

Opening your own online store is among the best online businesses because of the variety of people who can thrive with this business model. 

You can sell pretty much anything in an online store, from hand-crafted goods like jewelry or home decor to collectibles and vintage clothes you buy in thrift stores.

Regardless of what you sell, your costs will be much lower with an online store than with a brick-and-mortar retail space. You’ll also enjoy the flexibility of working when and how much you choose, and you can earn money faster since you can start selling as soon as you have your initial inventory.

The exact startup costs for an online store depend on what you sell. Vlad Kuksenko only spent about $500 to start TagPup. Two years later, he was earning $60,000 a month with 50% margins. Hear his advice in this interview:

[su_youtube url="https://www.youtube.com/watch?v=7b_58Bppsb4"]

#21. Start an SaaS software business

Average Annual Revenue: $400K-$1M+ Average Profit Margins: 14.5% Startup Costs: $100-$50K, depending on size and scope Time To Revenue: 3 months to 2 years Annual Market Growth Rate: 3.1% Best for: programmers and developers with communication, customer service, and digital marketing skills

Helping people solve a problem is always a great way to earn money with a business. Starting a software-as-a-service (SaaS) company lets you do that on a global scale. It’s also one of the top businesses with low startup costs if you have the developer skills to build the software yourself. 

The average revenue of publicly-traded SaaS companies is $190,000-$210,000 per employee per year, so there’s certainly high potential for profit in this sector. 

Workello founder Nick Jordan is living proof of how profitable an SaaS company can be. He pivoted his content agency into an SaaS business model in 2022 and is now bringing in a revenue of over $70,000 a month. Find out how he grew his business in this podcast interview:

#22. Website design or development

Average Annual Revenue: $239K+ Average Profit Margins: 5.3% Startup Costs: $100-$1K Time To Revenue: 1-3 months Annual Market Growth Rate: 1.4% Best for: graphic designers, programmers and developers, SEO and digital marketing pros

In this day and age, a website is a must-have for small businesses and entrepreneurs in just about every industry. Not all of them have the skills or time to create and maintain their own online presence, though. If you do have those skills, you can start a very profitable business designing websites for them. 

Web design is an easy business to run from home as a solo entrepreneur and ideal for people who want to work on their own schedule. It also doesn’t cost much to start. In fact, you can start for free as a freelancer by creating a profile on a marketplace like Upwork or Toptal .

Having a portfolio of work to show potential clients will help you land those crucial first clients and start growing your business. Making your own website is a good start, or you can talk to friends and family who need a website (or an upgrade to their current one) to flesh out your portfolio with more examples of your work. 

#23. Sell stock photography

Average Annual Revenue: $50K Average Profit Margins: 7.3% Startup Costs: $1K-$10K Time To Revenue: 1-6 months Annual Market Growth Rate: 0.3% Best for: photographers and visual artists looking for a flexible schedule and passive income stream

The only expense to start a business selling stock images is the camera you’ll use to take the photos. If you already have that, you can start making money right away for no extra investment. 

It’s also incredibly easy to start a stock photography business. Just take the pictures, upload them to a stock photo platform, and let the revenue start coming in. Each time someone buys one of your images, you’ll get royalties that can range from 15–50% depending on the site and image. 

Many stock photo platforms also don’t require exclusive rights to images, meaning you can have them on multiple platforms at the same time to maximize your earning potential. 

Here are some of the top platforms for selling stock photos:

• iStockPhoto - 15-45% royalties depending on image popularity
• Alamy - 50% royalties for each image
• Shutterstock - up to 30% royalties
• Dreamstime - 25-45% royalties for non-exclusive images

10 More Low-Cost Businesses to Start 

#24. Car wrapping business

Average Annual Revenue: $241,230 Average Profit Margins: 16.1% Startup Costs: $1K-$100K Time To Revenue: 1-6 months Annual Market Growth Rate: 1.8% Best for: gearheads and car lovers, visual artists and graphic designers

There are a few reasons someone might get their car wrapped. For people who own luxury cars, it’s a way to protect their paint or quickly add graphics like racing stripes. Business owners and corporate clients often instead use car wrapping as a form of branding and marketing. 

That diversity of potential customers is what makes car wrapping a profitable business idea. You can expand your revenue streams if you also throw services like ceramic coating or detailing into the mix. 

Learning to wrap a car can take a bit of practice, but the tools are easily accessible and affordable, and you don’t need training or a specialized license to run this kind of business. 

While most new car wrapping businesses have an initial budget of around $2,000-$5,000, you can start one for less if you need to. Fred Roman spent about a hundred bucks to start WrapCo, and he’s grown it to a revenue of around $70,000 a month. Find out how he did it in this interview: 

[su_youtube url="https://www.youtube.com/watch?v=LM1wFesfapQ"]

#25. Test prep business

Average Annual Revenue: $389,500 Average Profit Margins: 8.3% Startup Costs: $500-$5K Time To Revenue: 1-3 months Annual Market Growth Rate: 2.0% Best for: teachers, tutors, excellent motivators and communicators

A test prep business is similar to working as a tutor but with a more specific focus: helping students prepare for tests like the SAT, ACT, GED, or similar standardized exams. 

The consistent demand for these services is what puts it among the best low-overhead business ideas for educators. More than 1.7 million high schoolers took the SAT in 2022, for instance, many of whom used test prep services to get ready for their test. 

High school-level standardized tests aren’t the only exams students need to prepare for, either. If you have the right knowledge and skills, you can also help people prepare for college-level exams, like the GRE or LSAT. 

Experienced test prep tutors can charge anywhere from $30-$100 per hour depending on the test and where they’re located, so there’s definitely a high profit potential in this industry. 

#26. Handyman business

Average Annual Revenue: $204,700 Average Profit Margins: 5.4% Startup Costs: $500-$5K Time To Revenue: 3+ months Annual Market Growth Rate: 0.7% Best for: builders, makers, construction workers, mechanics, and repair experts

Homeowners know that a good handyman is hard to find. There’s a consistent demand for reliable, qualified handymen across the United States, and the market is growing. Handyman salaries have gone up 11% over the last 5 years and the industry’s expected to grow at a CAGR of 6% through 2028. 

Best of all, the revenue you earn as a handyman is mostly profit. You get paid for the time you spend on the job and can bill the client for any required parts or supplies. 

Caleb Ingraham makes around $1,000 a day as a handyman—and he could make more if he had a team. He’s consistently booked up about 6 weeks in advance. See how he built his business in this interview: 

[su_youtube url="https://www.youtube.com/watch?v=leUta_q_MPQ"]

#27. Life coaching business

Average Annual Revenue: $63,400 Average Profit Margins: 10.5% Startup Costs: $500-$5K Time To Revenue: 1-3 months Annual Market Growth Rate: 1.5% Best for: empathetic entrepreneurs with strong motivation and communication skills

If you’re the person your friends and family always turn to for advice, then being a life coach is among the top low-cost business ideas with high profit potential. 

The average life coach makes between $500 and $1,500 per client per month, and the overhead costs are minimal, especially if you meet with clients in their home or via online appointments. 

Like with other kinds of consulting, the challenge with starting a life coaching business is convincing clients that you’re worth the investment. Getting certified as a life coach can go a long way toward building this trust. Some of the top programs include the following:

• Institute for Professional Excellence in Coaching - Comprehensive 7-9 month program, total cost of $13,395
• Certified Life Coach Institute - Online accreditation in 3 days for $995 
• Integrative Wellness Academy - Earn an advanced master certification in 6 months for $2,499 

#28. Candle making business

Average Annual Revenue: $60K-$120K Average Profit Margins: 5-15% Startup Costs: $100-$10K Time To Revenue: 30-90 days Annual Market Growth Rate: -9.3% Best for: makers, artists, and crafty entrepreneurs

Candles are a consumable product, which means customers will keep coming back for more if they like what you do. They’re also very affordable and easy to make right in your home.

Jazmin Richards started making candles as a hobby. When she decided to turn it into a business, she spent around $100 on Instagram ads and quickly grew a following, making more than $300,000 in revenue in her first 18 months. She explains how she built her business in this interview:

[su_youtube url="https://www.youtube.com/watch?v=UzZ5aTbiLh0"]

As far as where to sell your candles, you don’t need your own retail space. You can open an online store, get booths at farmers markets and art festivals, or talk to local stores about carrying your candles on their shelves. 

#29. Tax preparation services 

Average Annual Revenue: $1.57M Average Profit Margins: 18% Startup Costs: $500-$5K Time To Revenue: 1-3 months (not including time training as a CPA) Annual Market Growth Rate: 1.7% Best for: accountants, finance and legal experts and professionals, people with strong math skills and a sharp eye for details

Lots of people feel instant stress and anxiety at the thought of filing taxes. That’s why Americans spend more than $14 billion on tax preparation in an average year. A good portion of that is for simple returns with a 1040 that anyone can learn to file without needing special training. 

While you do need to be certified to become a tax preparation professional, it’s a very simple process. You can get a preparer tax identification number (PTIN) online for about $30, and most people can complete the application in about 15 minutes. 

If you want to file more complicated taxes for self-employed people or businesses, the IRS offers virtual tax workshops that can give you the skills and knowledge you need. 

#30. Offer mobile notary services

Average Annual Revenue: $552,900 Average Profit Margins: 9.4% Startup Costs: $500-$5K Time To Revenue: 1-3 months Annual Market Growth Rate: -0.5% Best for: legal and administrative professionals, people with strong customer service skills and a sharp eye for detail

A notary public’s role is to make oaths, contracts, and other legal documents official by confirming the identity of the signers. You may be surprised by how much you can earn as a notary. Roughly 66% of full-time mobile notaries earn $4,000 or more a month , and the overhead costs are minimal. 

Each state has its own process for becoming a notary public. Normally, it involves attending a few hours of classes and paying a small licensing fee. This can often be done online, making the process of getting started even easier. 

#31. Childcare business

Average Annual Revenue: $143,110 Average Profit Margins: 9.3%-51.7% Startup Costs: $0-$1K Time To Revenue: 1-3 months Annual Market Growth Rate: . 9% Best for: parents, teachers, nurses, and healthcare pros; empathetic and organized entrepreneurs who are strong multitaskers

During the pandemic, 19.6% of working-age adults had to leave the workforce because they couldn’t find child care. While schools have since reopened, this illustrated the need for childcare services in the United States. 

That’s part of the reason for the childcare industry’s recent growth. The industry is valued at over $60 billion in 2022, and that’s expected to grow at a CAGR of 4.18% through 2030.

The cost to start a daycare, nanny service, or other childcare business varies, but they tend to be cheap businesses to start, especially if you start it from your home. Combine that with most of the revenue is your own personal salary and business expenses related to your home, 

Home-based daycare centers also often don’t need to obtain the same licenses and certifications as other childcare businesses. Check your state’s laws and requirements to see what’s required to legally operate in your region. 

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• Data library

2024 Housing Market Forecast and Predictions: Housing Affordability Finally Begins to Turnaround

As we look ahead to 2024 , we see a mix of continuity and change in both the housing market and economy. Against a backdrop of modest economic growth, slightly higher unemployment, and easing inflation longer term interest rates including mortgage rates begin a slow retreat. The shift from climbing to falling mortgage rates improves housing affordability, but saps some of the urgency home shoppers had previously sensed. Less frenzied housing demand and plenty of rental home options keep home sales relatively stable at low levels in 2024, helping home prices to adjust slightly lower even as the number of for-sale homes continues to dwindle. 

Realtor.com ® 2024 Forecast for Key Housing Indicators

Home Prices Dip, Improving Affordability

Home prices grew at a double-digit annual clip for the better part of two years spanning the second half of 2020 through 2022, a notable burst following a growing streak that spanned back to 2012. As mortgage rates climbed, home price growth flatlined, actually declining on an annual basis in early 2023 before an early-year dip in mortgage rates spurred enough buyer demand to reignite competition for still-limited inventory. Home prices began to climb again, and while they did not reach a new monthly peak, on average for the year we expect that the 2023 median home price will slightly exceed the 2022 annual median.

Nevertheless, even during the brief period when prices eased, using a mortgage to buy a home remained expensive. Since May 2022, purchasing the typical for-sale home listing at the prevailing rate for a 30-year fixed-rate mortgage with a 20% down payment meant forking over a quarter or more of the typical household paycheck. In fact, in October 2023, it required 39% of the typical household income and this share is expected to average 36.7% for the full calendar year in 2023. This figure has typically ranged around 21%, so it is well above historical average. We expect that the return to pricing in line with financing costs will begin in 2024, and home prices, mortgage rates, and income growth will each contribute to the improvement. Home prices are expected to ease slightly, dropping less than 2% for the year on average. Combined with lower mortgage rates and income growth this will improve the home purchase mortgage payment share relative to median income to an average 34.9% in 2024, with the share slipping under 30% by the end of the year.

Home Sales Barely Budge Above 2023’s Likely Record Low

After soaring during the pandemic, existing home sales were weighed down in the latter half of 2022 as mortgage rates took off, climbing from just over 3% at the start of the year to a peak of more than 7% in the fourth quarter. The reprieve in mortgage rates in early 2023, when they dipped to around 6%, brought some life to home sales, but the renewed climb of mortgage rates has again exerted significant pressure on home sales that is exacerbated by the fact that a greater than usual number of households bought homes over the past few years, and despite stories of pandemic purchase regret , for the most part, these homeowners continue to be happy in their homes. 

This is consistent with what visitors to Realtor.com report when asked why they are not planning to sell their homes. The number one reason homeowners aren’t trying to sell is that they just don’t need to; concern about losing an existing low-rate mortgage is the top financial concern cited. Our current projection is for 2023 home sales to tally just over 4 million, a dip of 19% over the 2022 5 million total. 

With many of the same forces at play heading into 2024, the housing chill will continue, with sales expected to remain essentially unchanged at just over 4 million. Although mortgage rates are expected to ease throughout the course of the year, the continuation of high costs will mean that existing homeowners will have a very high threshold for deciding to move, with many likely choosing to stay in place.  Moves of necessity–for job changes, family situation changes, and downsizing to a more affordable market–are likely to drive home sales in 2024. 

Shoppers Find Even Fewer Existing Homes For Sale

Even before the pandemic, housing inventory was on a long, slow downward trajectory. Insufficient building meant that the supply of houses did not keep up with household formation and left little slack in the housing market. Both homeowner and rental vacancy remain below historic averages . In contrast with the existing home market, which remains sluggish, builders have been catching up, with construction remaining near pre-pandemic highs for single-family and hitting record levels for multi-family . 

Despite this, the lack of excess capacity in housing has been painfully obvious in the for-sale home market. The number of existing homes on the market has dwindled. With home sales activity to continue at a relatively low pace, the number of unsold homes on the market is also expected to remain low.  Although mortgage rates are expected to begin to ease, they are expected to exceed 6.5% for the calendar year. This means that the lock-in effect, in which the gap between market mortgage rates and the mortgage rates existing homeowners enjoy on their outstanding mortgage, will remain a factor. Roughly two-thirds of outstanding mortgages have a rate under 4% and more than 90% have a rate less than 6%.

Rental Supply Outpaces Demand to Drive Mild Further Decline in Rents

After almost a full year of double-digit rent growth between mid-2021 and mid-2022, the rental market has finally cooled down, as evidenced by the year-over-year decline that started in May 2023 . In 2024, we expect the rental market will closely resemble the dynamics witnessed in 2023, as the tug of war between supply and demand results in a mild annual decline of -0.2% in the median asking rent.

New multi-family supply will continue to be a key element shaping the 2024 rental market.  In the third quarter of 2023, the annual pace of newly completed multi-family homes stood at 385,000 units. Although absorption rates remained elevated in the second quarter, especially at lower price points, the rental vacancy rate ticked up to 6.6% in the third quarter. This uptick in rental vacancy suggests the recent supply has outpaced demand, but context is important. After recent gains, the rental vacancy rate is on par with its level right before the onset of the pandemic in early 2020, still below its 7.2% average from the 2013 to 2019 period.  Looking ahead, the strong construction pipeline– which hit a record high for units under construction this summer –is expected to continue fueling rental supply growth in 2024 pushing rental vacancy back toward its long-run average. 

While the surge in new multi-family supply gives renters options, the sheer number of renters will minimize the potential price impact. The median asking rent in 2024 is expected to drop only slightly below its 2023 level. Renting is expected to continue to be a more budget friendly option than buying in the vast majority of markets, even though home prices and mortgage rates are both expected to dip, helping pull the purchase market down slightly from record unaffordability. 

Young adult renters who lack the benefit of historically high home equity to tap into for a home purchase will continue to find the housing market challenging. Specifically, as many Millennials age past first-time home buying age and more Gen Z approach these years, the current housing landscape is likely to keep these households in the rental market for a longer period as they work to save up more money for the growing down payment needed to buy a first home. This trend is expected to sustain robust demand for rental properties. Consequently, we anticipate that rental markets favored by young adults , a list which includes a mix of affordable areas and tech-heavy job markets in the South, Midwest, and West, will be rental markets to watch in 2024.

Key Wildcards:

• Wildcard 1: Mortgage Rates With both mortgage rates and home prices expected to turn the corner in 2024, record high unaffordability will become a thing of the past, though as noted above, the return to normal won’t be accomplished within the year. This prediction hinges on the expectation that inflation will continue to subside, enabling the recent declines in longer-term interest rates to continue. If inflation were to instead see a surprise resurgence, this aspect of the forecast would change, and home sales could slip lower instead of steadying.
• Wildcard 2: Geopolitics In our forecast for 2023 , we cited the risk of geopolitical instability on trade and energy costs as something to watch. In addition to Russia’s ongoing war in Ukraine, instability in the Middle East has not only had a catastrophic human toll, both conflicts have the potential to impact the economic outlook in ways that cannot be fully anticipated. 
• Wildcard 3: Domestic Politics: 2024 Elections In 2020, amid the upheaval of pandemic-era adaptations, many Americans were on the move. We noted that Realtor.com traffic patterns indicated that home shoppers in very traditionally ‘blue’ or Democratic areas were tending to look for homes in markets where voters have more typically voted ‘red’ or Republican. While consumers also reported preferring to live in locations where their political views align with the majority , few actually reported wanting to move for this reason alone. 

Housing Perspectives:

What will the market be like for homebuyers, especially first-time homebuyers.

First-time homebuyers will continue to face a challenging housing market in 2024, but there are some green shoots. The record-high share of income required to purchase the median priced home is expected to begin to decline as mortgage rates ease, home prices soften, and incomes grow. In 2023 we expect that for the year as a whole, the monthly cost of financing the typical for-sale home will average more than $2,240, a nearly 20% increase over the mortgage payment in 2022, and roughly double the typical payment for buyers in 2020. This amounted to a whopping nearly 37% of the typical household income. In 2024 as modest price declines take hold and mortgage rates dip, the typical purchase cost is expected to slip just under $2,200 which would amount to nearly 35% of income. While far higher than historically average, this is a significant first step in a buyer-friendly direction.

How can homebuyers prepare? 

Homebuyers can prepare for this year’s housing market by getting financially ready. Buyers can use a home affordability calculator , like this one at Realtor.com to translate their income and savings into a home price range. And shoppers can pressure test the results by using a mortgage calculator to consider different down payment, price, and loan scenarios to see how their monthly costs would be impacted. Working with a lender can help potential buyers explore different loan products such as FHA or VA loans that may offer lower mortgage interest rates or more flexible credit criteria. 

Although prices are anticipated to fall in 2024, housing costs remain high, and a down payment can be a big obstacle for buyers. Recent research shows that the typical down payment on a home reached a record high of $30,000 .  To make it easier to cobble together a down payment, shoppers can access information about down payment assistance options at Realtor.com/fairhousing and in the monthly payment section of home listing pages. Furthermore, home shoppers can explore loan products geared toward helping families access homeownership by enabling down payments as low as 3.5% in the case of FHA loans and 0% in the case of VA loans .

What will the market be like for home sellers?

Home sellers are likely to face more competition from builders than from other sellers in 2024. Because builders are continuing to maintain supply and increasingly adapting to market conditions, they are increasingly focused on lower-priced homes and willing to make price adjustments when needed. As a result, potential sellers will want to consider the landscape for new construction housing in their markets and any implications for pricing and marketing before listing their home for sale.

What will the market be like for renters?

In 2024, renting is expected to continue to be a more cost-effective option than buying in the short term even though we anticipate the advantage for renting to diminish as home prices and mortgage rates decline. 

However, for those considering the pursuit of long-term equity through homeownership, it’s essential to not only stay alert about market trends but also to carefully consider the intended duration of residence in their next home. When home prices rise rapidly, like they did during the pandemic, the higher cost of purchasing a home may break even with the cost of renting in as little as 3 years. Generally, it takes longer to reach the breakeven point, typically within a 5 to 7-year timeframe. Importantly, when home prices are falling and rents are also declining, as is expected to be the case in 2024, it can take longer to recoup some of the higher costs of buying a home. Individuals using Realtor.com’s Rent vs. Buy Calculator can thoroughly evaluate the costs and benefits associated with renting versus buying over time and how many years current market trends suggest it will take before buying is the better financial decision. This comprehensive tool can provide insights tailored to a household’s specific rent versus buying decision and empowers consumers to consider not only the optimal choice for the current month but also how the trade-offs evolve over several years.

Local Market Predictions:

All real estate is local and while the national trends are instructive, what matters most is what’s expected in your local market. 

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Global Smartphone Market Grows 6% YoY in Q1 2024; Revenue Reaches Highest Level in a First Quarter

• / May 3, 2024
• / Team Counterpoint
• The global smartphone market grew by 6% YoY to reach 296.9 million unit shipments in Q1 2024.
• Samsung dethroned Apple to become the top smartphone player globally, accounting for 20% shipment share.
• Apple’s shipments declined 13% YoY, however, the brand’s ASP grew to a record first quarter high driven by improved performance of the Pro models.
• Among the top five OEMs, Xiaomi grew the fastest, registering 34% YoY shipment growth.
• Global smartphone revenues also grew 7% YoY and reached highest-ever for a first quarter.

London, New Delhi, Hong Kong, Seoul, Beijing, Denver, Buenos Aires – May 3, 2024

Global smartphone shipments increased 6% YoY in the first quarter of 2024, according to the latest research from Counterpoint’s Market Monitor service. The growth is mostly attributed to the strong performance in key regions such as Europe, Middle East and Africa (MEA) and Caribbean and Latin America (CALA).

Commenting on overall market dynamics, Senior Analyst Prachir Singh said, “Smartphone shipments grew during the first quarter as emerging markets continued their strong momentum, while Europe , especially Central and Eastern Europe, grew the most compared to a difficult Q1 2023. Consumer demand in these markets has been growing gradually and the inventory levels have improved. MEA was the fastest growing region due to the strong shipments of TECNO, Xiaomi and HONOR . China also grew YoY owing to strong Lunar New Year sales and Huawei’s comeback. The India market also saw growth thanks to exiting 2023 with healthy inventory levels. The mature markets of North America and Japan declined relative to the same period in 2023.”

Global smartphone revenues grew by 7% YoY in Q1 2024 and reached the highest-ever in a first calendar quarter. The >$800 price segment was the fastest growing, registering double-digit growth and accounting for 18% of smartphone shipments in Q1 2024, up by 2pp compared to Q1 2023. Apple led the smartphone market revenues with a 43% share, although its revenues declined by 11% YoY. Samsung’s revenues grew 2% YoY, propelled by its increasing ASP while shipments remained flat. Among the top five OEMs, Xiaomi’s revenue growth was the fastest due to strong performance in its key markets. Revenues for the market beyond the top five OEMs also grew significantly, driven by increasing revenues from Huawei, HONOR and Transsion brands.

Commenting on Apple’s performance, Research Director Jeff Fieldhack said, “Tough competition in China, record low upgrades in the US and a difficult compare from last year due to iPhone 14 Pro’s supply shifting to Q1 2023 all weighed on iPhone performance. However, there were upsides as well. An improved product mix with 15 Pro’s performing better than its predecessors, and an increasing footprint in emerging markets, helped Apple in arresting some of the declines. Emerging markets especially provide long term growth opportunities. We also expect the inclusion of GenAI later this year to contribute to iPhone upgrades.”

Samsung re-captured the top spot and led global smartphone shipments during the quarter, driven by the early refresh of the Galaxy-A-series and strong performance of the Galaxy S24 series. Samsung reached its highest-ever ASP during the quarter as well. Among the biggest smartphone brands from China, Xiaomi and vivo registered growth. While Xiaomi registered growth in almost all its key markets, vivo posted strong performance in emerging markets of Asia Pacific including India. Huawei , HONOR and Transsion were the other key brands that gained during the quarter. Huawei made huge gains in China and won share from the leading brands. HONOR gained in CALA and MEA, in addition to having a strong share in China. The Transsion brands, TECNO, itel and Infinix, performed strongly in APAC, Eastern Europe, India and the MEA. OPPO* experienced a shipment decline due to stiff competition in key markets like China. The brand also prioritized value over shipments, with a shift to pushing higher ASP devices in emerging markets.

Commenting on the near-term outlook, Research Director Tarun Pathak said, “Growth is expected to be slow but steady in the near term. However, revenues are expected to grow faster as the ongoing premiumization trend is likely to persist, especially with the rise of newer form factors and capabilities such as foldables and GenAI . More than 10 OEMs have launched over 30 GenAI-capable smartphones so far. We estimate that GenAI’s share of overall smartphone shipments will reach 11% by 2024.”

*OPPO includes OnePlus since Q3 2021

Note: Pricing analysis is based on wholesale prices.

Feel free to reach us at [email protected] for questions regarding our latest research and insights.

Counterpoint Technology Market Research is a global research firm specializing in products in the TMT (technology, media and telecom) industry. It services major technology and financial firms with a mix of monthly reports, customized projects and detailed analyses of the mobile and technology markets. Its key analysts are seasoned experts in the high-tech

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Carbon removals: How to scale a new gigaton industry

The Intergovernmental Panel on Climate Change (IPCC) has made it clear that CO 2 removal (CDR) is a critical tool for achieving net zero by 2050 1 “Summary for policymakers,” in Climate Change 2022: Mitigation of Climate Change , IPCC, 2022. because they could enable businesses to neutralize residual carbon emissions once all emission reductions efforts have been exhausted. Thus, by 2050, CDR competency could be a core part of management responsibilities across all sectors.

This report provides an analysis of the market potential for CDR, the investment requirements, and market trends. It also identifies which actions are the most likely to lower barriers to scaling CDR and delineates potential advantages for first movers in different stakeholder groups.

CDR’s role in reaching net zero

About the authors.

This report is a collaborative effort by Peter Mannion , Emma Parry , Mark Patel , Erik Ringvold, and Jonathan Scott, representing views from McKinsey Sustainability and McKinsey’s Global Energy and Materials Practices.

Reducing emissions remains the primary, most effective, and preferred response to climate change. But decarbonization alone could prove insufficient to reduce the residual “hard to abate” emissions that may persist in the medium term. Once decarbonization options have been expended, CDR could play a vital role in neutralizing residual emissions; therefore, most scenarios aligned with the Paris Agreement project substantial CDR capacities. Estimates from the Smith School of Enterprise and the Environment’s The state of carbon dioxide removal report, for example, show that six to ten gigatons of CO 2 in annual CDR capacity would likely be needed by 2050 for most Paris-aligned net-zero pathways. 2 Climatic need estimates drawn from Stephen M. Smith et al., The state of carbon dioxide removal , 2023. This capacity could not be delivered quickly, however, so efforts would need to begin as soon as possible to ensure 2050 scenarios are achievable. 3 For more, see Oliver Geden et al., “Near-term deployment of novel carbon removal to facilitate longer-term deployment,” Joule , November 15, 2023. Some estimates require an additional 0.8 to 2.9 metric gigatons of CO 2 per year of removals capacity by 2030—three to ten times more than the volumes currently estimated to be onstream by that date. 4 Estimated volumes reflect direct air capture and storage (DACS) and bioenergy with carbon capture and storage (BECCS) announced projects from public announcements. DACS includes an assumption of 30 metric megatons of CO2 (MtCO2) annual capacity phased in by 2030 from 1PointFive’s 75 Mt target, while BECCS includes all projects announced as net negative. Projected removals capacities from other CDR solutions were modeled using McKinsey’s Global Carbon Credits Model under a business-as-usual scenario. Biotic feedback loops could also further accelerate the most severe effects of climate change, consequently increasing the speed at which CDR would need to be scaled.

Given CDR’s potential importance to achieving net-zero commitments, removals could become a routine consideration for businesses across sectors. For companies to claim they have reached net zero under the Science Based Targets initiative’s (SBTi’s) Corporate Net-Zero Standard, for example, after they have exhausted decarbonization actions, they must neutralize any residual emissions. 5 SBTi Corporate Net-Zero Standard , SBTi, April 2023. CDR can be especially pertinent for sectors with “hard-to-abate” emissions—those emissions that are technologically or economically prohibitive to reduce.

Closing the removals gap to achieve net zero would require a range of CDR solutions comprising both nature-based removals (NBR) and technology-based removals (TBR). NBR removes carbon by restoring, enhancing, or actively managing ecosystems. Because they tend to cost less per metric ton of CO 2 removed than emergent TBR, NBR could offer a more cost-effective path to increasing near-term CDR capacity. NBR could also play a role in removals over the long term, to ensure flexibility and balance in removals capacity. However, TBR generally delivers more “durable” removals by storing CO 2 permanently with minimal risk of rerelease into the atmosphere. 6 Kaya Axelsson et al., “The meaning of net zero and how to get it right,” Nature Climate Change , 2022, Volume 15. And durable solutions are generally preferable to ensure removals efforts remain effective in the long term, so increasing volumes of such solutions would be needed. Accelerating the scale-up of durable TBR would require near-term investment and innovation to reduce their relatively higher cost.

Understanding ten CDR solutions

To further explore the range of methods to capture and store CO 2 , jump to individual CDR solutions for both nature-based and technology-based removals below (Exhibit 1).

1. Wetland and peatland restoration

Restoring terrestrial wetlands and peatlands to absorb and store more CO 2

Permanence, years <100

Cost 2023, $ per ton CO 2 15–40

Potential benefits Increase biodiversity; improve water quality; reduce flood risks; eco-tourism

Potential challenges Release of some greenhouse gases via restoration; uncertain permanence level; long-term monitoring and management

2. Cropland, grassland, and agroforestry

Improving cropland- and grassland-management practices to enhance CO 2 uptake from soils, and agroforestry to remove CO 2 from the atmosphere

Cost 2023, $ per ton CO 2 10–30

Potential benefits Increase biodiversity; enhance soil fertility and water retention; agricultural productivity

Potential challenges Quantifying and monitoring carbon sequestration

3. Reforestation and afforestation

Tree planting in deforested or never-forested land to remove atmospheric CO 2

Permanence, years <1,000

Cost 2023, $ per ton CO 2 10–40

Potential benefits Increase biodiversity and ecosystem resilience; eco-tourism

Potential challenges Increased demand for land; release of sequestered CO 2 1 The release of carbon back into the atmosphere (also known as reversal) can be caused by factors affecting tree growth, including pests and diseases, and weather events. ; risks of monoculture tree planting 2 Compared with natural forests, monoculture tree planting can increase the vulnerability of forests to, for example, pests and diseases and natural disasters.

4. Blue carbon management

Enhancing carbon uptake and storage of CO 2 in ocean and coastal ecosystems (eg, restoring mangroves, seagrasses, and tidal marshes; cultivating micro- and macroalgae)

Cost 2023, $ per ton CO 2 25–250

Potential benefits Improve marine ecosystems; enhance coastal resilience

Potential challenges Monitoring, reporting, and verification (MRV) for coastal and ocean ecosystems; regulatory uncertainty in international waters

5. Biochar and bio-oil

Produced from biomass, biochar is spread to improve soil quality, and bio-oil is injected underground

Cost 2023, $ per ton CO 2 90–220

Potential benefits Enhanced soil fertility and water retention; uses for biomass residues from agricultural processes

Potential challenges Increased demand for biomass feedstock and land; uncertain degree of soil permanence

6. Ocean alkalinity enhancement

Adding alkaline substances to the ocean enhances its ability to absorb CO₂ from the atmosphere, accelerating the natural process

Permanence, years >1,000

Cost 2023, $ per ton CO 2 Uncertain

Potential benefits Counter ocean acidification

Potential challenges Effects on marine ecosystems from alkaline; MRV for ocean ecosystems; regulatory uncertainty in international waters

7. Enhanced weathering

Rocks and minerals are broken down to increase surface area, speeding up processes that enable them to store carbon from the atmosphere

Cost 2023, $ per ton CO 2 120–800

Potential benefits Improve agricultural productivity

Potential challenges Environmental and social effects; effects of trace metals in local ecosystem

8. Bioenergy with carbon capture and storage

Sustainably sourced biomass to produce biofuels, electricity, heat, pulp; CO₂ emissions from these processes are captured and stored

Cost 2023, $ per ton CO 2 60–270

Potential benefits Additional revenue streams from generating coproducts (eg, electricity); retrofit to power plants

Potential challenges Increased demand for biomass feedstock and land

9. Direct ocean capture

Acid derived from ocean electrodialysis is used to chemically extract CO 2 from surface water; CO 2   then placed in long-term storage

Potential benefits Counter ocean acidification; use in coproducts (eg, sustainable aviation fuels)

Potential challenges Low technological readiness level at scale; MRV for open ocean ecosystems; high energy usage

10. Direct air capture and storage

Air passes through solid or liquid chemical filter that binds to CO 2 , removing it from the air; concentrated CO 2 from filter is stored in underground geological formations

Cost 2023, $ per ton CO 2 500–1,000

Potential benefits Use in coproducts (eg, sustainable aviation fuels); deploy across diverse geographies

Potential challenges High water and energy usage

The CDR market: Trillion-dollar potential

A CDR industry capable of delivering gigaton-scale removals at net-zero levels could be worth up to $1.2 trillion by 2050. This industry would require input and support from a range of players—including investors, suppliers, buyers, traders, and other intermediaries—with substantial potential value pools estimated for each (Exhibit 2). These are long-term business opportunities that would require early action to build removal volumes to scale by 2050.

This report recognizes a strong degree of uncertainty in the future of the CO 2 removal (CDR) industry in terms of the volume of removals needed to address climatic needs, the mix of solutions that could be used to deliver these volumes, and the range of returns players across the value chain will be expected to deliver. Here we present the range of possible scenarios, with market sizes ranging from $300 billion to $1.2 trillion.

The data opposite, for example, shows the results of a scenario that requires lower rollout of CDR (due to faster decarbonization efforts, for example), with a higher share of nature-based removals (NBR) in the overall mix of removal solutions. Such a scenario could deliver a CDR industry of around $300 billion, with heavier weighting toward NBR. Note that NBR revenue shares remain comparatively lower than technology-based removals (TBR) because of the lower prices of NBR credits compared with TBR.

In comparison, a scenario that requires higher rollout of CO 2 removal (CDR), combined with a higher use of technology-based removals (TBR) in the mix of removals, would create a significantly more expensive CDR industry worth up to $1.2 trillion. Because of higher-priced TBR options, market revenues would also be significantly more skewed toward TBR solutions in this scenario.

Investment would be needed to support innovation to drive down costs and to support project development. Analysis in this report estimates the cumulative investment in CDR required to deliver net zero in 2050 at $6 trillion to $16 trillion (Exhibit 3). The investment need would depend on the volume of removals needed as well as the range of available CDR solutions. Estimates based on the current trajectory for investment, however, suggest investment could fall considerably short of these levels. In fact, the gap between estimated investment and what is estimated to be needed by 2030 to put CDR on track to meet 2050 targets is between $400 billion and $1.6 trillion.

Market trends: Reducing costs through CDR innovation

The CDR market is currently trading at high prices and small volumes, particularly for emerging TBR. High prices for more durable CDR solutions are likely driven by small capacities and high costs of production. Innovation is key to fostering the higher volumes and lower prices needed to deliver CDR at scale. With continued demand, investment, and innovation, TBR costs are estimated to decline by at least 30 percent and up to 60 percent through 2035 and continue to drop through 2050, albeit more slowly as the industry scales (Exhibit 4). Costs for solutions that currently carry higher costs are estimated to decline fastest, though this scenario relies on the assumption that the required levels of investment and innovation can be achieved. NBR costs, on the other hand, may rise over time as land resources become constrained. NBR costs could rise by 20 to 60 percent through 2035, and 15 to 40 percent between 2035 and 2050. 7 Cost estimates derived from McKinsey TRAILS and Nature Analytics models for nature-based removals, and technology-specific cost models developed through literature review and McKinsey expert insights.

Lowering barriers to scaling CDR

Scaling CDR to deliver net-zero removal volumes is a challenging endeavor, fraught with complexity and nuance. Indeed, the risks and challenges facing the industry have been documented at length, 8 Several sources have documented CDR market risks and challenges, including Pathways to commercial liftoff: Carbon management , US Department of Energy, April 2023; Freya Chay et al., Barriers to scaling the long-duration carbon dioxide removal industry , CarbonPlan, July 2022; The case for negative emissions , Coalition for Negative Emissions, June 2021; “Barriers to negative-emissions technologies,” One Earth , August 21, 2020, Volume 3, Number 2; Danny Cullenward et al., “Addressing critical challenges in carbon dioxide removal,” ClimateWorks Foundation, December 10, 2020. and they include a need for stronger buyer incentives; improved transparency of standards, practices, and services; clear public-sector signals; innovation to unlock lower-cost solutions; and, of course, increased removals capacity. This report explores actions stakeholders across the CDR value chain could take to fulfill these needs.

Existing and developing policy measures and public funding have the potential to accelerate investment, along with enhanced project-level economics that reduce costs and improve future revenue streams. Governments, philanthropists, and nongovernmental organizations could work with the private sector to spur innovation—for example by addressing how CDR is incorporated into environmental, social, and governance (ESG) and carbon-accounting frameworks as well as how CDR could be integrated into cap-and-trade or carbon tax systems. Governments and philanthropists could also consider directly funding early-stage technology development or designing innovative financing arrangements that may help catalyze further private investment.

Early-mover advantages in the CDR industry

Although the challenges for scaling investment and innovation are not inconsiderable, tangible, long-term benefits are potentially available to those who engage in critical near-term efforts to scale the CDR industry. Indeed, the analysis in this report indicates that there may be strategic and competitive advantages available to early movers prepared to address these challenges together with other stakeholders.

Investors that engage early could gain valuable experience in spotting new opportunities and assessing their potential ahead of investors who wait for the market to grow before they engage. And CDR projects can have long lead times to start delivering removals—some TBR can take up to six to eight years to begin removing their first volumes of CO 2 . 9 Angus Gillespie and Alex Townsend, “Scaling up the CCS market to deliver net-zero emissions,” Global CCS Institute, April 2020. Early alliances and support for growth enterprises could help investors reserve the right to play as the industry matures and scales. Early investors could also fortify their reputations as climate leaders by being at the forefront of creating an essential net-zero industry, potentially realizing $20 billion to $80 billion in CDR market revenues by 2050, according to the value pools analysis in this report.

Suppliers (CDR project developers that generate carbon credits based on capture and storage activities) could earn 73 to 82 percent of estimated CDR market revenues—$250 billion to $900 billion—by 2050. Because they carry out physical removal activities (such as carbon capture, transport, and storage) while other market players enable their efforts, suppliers could capture the largest share of industry revenues. When demand scales—for example, if CDR is recognized in carbon trading systems—suppliers will need to be able to respond rapidly to meet it. Because of what could be largely unrivaled access to technology, talent, and capital resources, established suppliers could have a significant advantage in expanding programs quickly and successfully. Early movers could be positioned to develop approaches to move down the learning curve sooner than those who engage later, thereby reducing early movers’ costs.

Early buyers that sign future offtake agreements with suppliers could gain confidence that they will have a reliable future removals supply, even in the event of increased demand. If companies were required to purchase CDR to offset emissions—for example, following changes to regulations or guidelines on carbon offsets—then demand for CDR credits could rise sharply. Companies that made public net-zero commitments may require access to CDR urgently as they approach their stated deadlines. Early buyers may be more likely to secure a supply of reliable, high-quality CDR credits that could prove essential for hard-to-abate sectors to neutralize residual emissions and meet net-zero targets. In addition, a well-considered ESG strategy underpinned by CDR could support business aims such as talent recruitment and green premiums.

Marketplaces and intermediaries

As seen in other markets, as volumes grow for CDR, trading for removal volumes could coalesce around a small number of major marketplaces in a “winner takes all” dynamic. This dynamic would result from reduced intermediation costs and increased liquidity of the industry operating through a small number of marketplaces. Market intermediaries could earn 9 to 14 percent of estimated CDR market revenues—$40 billion to $140 billion—by 2050, according to the value pools analysis in this report. Marketplaces could aim to attract new and future buyers by moving early to establish a solid reputation for technical expertise, quality assurance, pricing knowledge, and the ability to diversify. Meanwhile, early-moving standards setters that develop high-integrity methodologies for the major CDR technologies could inform the core standard around which the voluntary carbon market for removals operates.

Governments

Governments that move early to support the CDR industry could shore up their domestic removal capacity to align their nationally determined contribution commitments with the Paris Agreement, satisfy other green commitments, and secure national supplies. CDR could be a global opportunity. A variety of CDR solutions means countries could utilize those solutions best suited to their particular geographies: for example, countries with access to low-cost renewable energy could enjoy cost advantages using energy-intensive CDR such as direct air capture. Likewise, countries with significant land-based natural assets could potentially benefit from expanded NBR; and coastal and island states could find emerging blue-carbon solutions afford them advantages. In addition, supporting CDR could provide governments with opportunities to promote skill development and job creation, thereby helping to facilitate a just transition to renewable energy sources.

Based on our analysis, CDR capabilities may become a core strategic concern for governments, investors, and businesses alike. This report offers analysis of the market potential for CDR, potential actions to scale CDR rapidly, and opportunities for near- and long-term advantages for early-moving CDR stakeholders. By reflecting on the analysis and data presented here, business leaders can gain a foundational understanding of CDR and how it may factor into their organizations’ net-zero strategies and overall goals. Bold actions taken today can scale CDR capacity to meet global net-zero requirements.

Peter Mannion  is a partner in McKinsey’s Dublin office;  Emma Parry  is a partner in the London office, where Jonathan Scott is a knowledge expert; Mark Patel  is a senior partner in the Bay Area office; and  Erik Ringvold is an associate partner in the Zurich office.

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2024 Apple iPad Pro Estimated to Ship Between 4.5 to 5 Million Units, Says TrendForce

Apple’s recent product launch in May introduced a lineup of new tablets featuring advanced AMOLED screens. Notably, the Pro version boasts a dual-layer tandem structure designed to address the longstanding challenges of screen burn-in and lifespan that are common with AMOLED displays. The absence of a backlight module has facilitated the thinnest tables to date, Says TrendForce .

However, these advancements come with a price increase; the next-generation iPad Pro will be priced $200 higher than its predecessor. Furthermore, the introduction of a 13-inch iPad Air could potentially dilute consumer interest, affecting demand for other models. As a result, TrendForce estimates the combined shipment of the 11-inch and 13-inch AMOLED iPad Pro models will only reach between 4.5 to 5 million units in 2024.

Despite lower shipment volumes for the AMOLED iPad Pro compared to previous iterations, the adoption of AMOLED panels signifies a major milestone in the development of medium-sized panels. The total shipment of AMOLED tablets is projected to hit around 9 million units in 2024, accounting for about 7% of the tablet market.

AMOLED’s Key Role in IT Production Expansion

AMOLED screens have long been celebrated for their high contrast and vivid colors. Yet, performance and lifespan issues, especially with larger IT product sizes, have raised concerns about increased power consumption. To address these challenges, efforts have been made to enhance AMOLED's performance and durability: Firstly, the development of new materials, particularly blue light-emitting materials. Traditionally, blue light-emitting has been limited by low efficiency and stability, which has restricted further advancements in AMOLED applications. With new material developments and the upcoming commercialization of blue phosphorescent materials, there is a significant potential for enhancing overall performance.

Secondly, the integration of low-temperature polycrystalline oxide (LTPO) technology into TFT displays has effectively controlled leakage currents and met dynamic refresh rate demands, achieving a power consumption reduction of 15–20%. Additionally, employing tandem technology, which layers multiple light-emitting elements, halves the required current density for achieving the same brightness compared to single-layer devices, thereby at least doubling their lifespan.

Thirdly, to reduce costs and increase AMOLED market penetration, panel manufacturers are planning higher-generation production lines for more economical scale-ups. As capacities start rolling out post-2026 with improved yields, further expansion into IT applications is expected.

Tandem Technology’s Expanding Role in Application Penetration

TrendForce notes that tandem technology offers a vital interim solution to enhance performance and longevity until material efficiency breakthroughs are achieved. In addition to RGB AMOLED's tandem configuration, WOLED achieves white light by vertically stacking blue, yellow, and green AMOLED light sources. Similarly, QD OLED technology layers a blue AMOLED beneath quantum dot materials that emit red and green light, substantially boosting photoelectric conversion efficiency and brightness.

These enhancements make tandem technology suitable for a wider range of applications beyond just smartphones and television displays. It's also being applied in head-mounted displays and automotive smart screens, providing consumers with a superior and more varied viewing experience. However, the manufacturing process for tandem AMOLED is complex, requiring precise control over the layering of different materials to maintain uniform optical and luminous properties. As production scales up to the G8.7 generation, optimizing costs and improving yields will pose significant challenges.

Large-Generation Capacity Layout for Future Market Penetration

Leaders in large-generation AMOLED panel line layout, such as Samsung and BOE, are planning to use thinner glass substrates combined with thin-film encapsulation to lighten the weight. Evaporation equipment from Tokki and Sunic is expected to help achieve a substantial production scale by 2026–2027 to meet brand demands for AMOLED displays in tablets and laptops. Supply chain partners like DNP and Poongwon Precision are also moving towards mass production of large-generation FMM.

Moreover, developments like Visionox’s mass production plans for ViP photolithography pixels and CSOT’s progress on improving yields on the G5.5 IJP-OLED line are noteworthy trends within the non-FMM camp. TrendForce believes that the next few years will be critical in enhancing the penetration rate of AMOLED products in the IT sector, with ongoing technological advancements propelling AMOLED displays towards more sophisticated, higher-value product directions.

For more information on reports and market data from TrendForce’s Department of  Display Research, please click here, or email the Sales Department at  [email protected]

For additional insights from TrendForce analysts on the latest tech industry news, trends, and forecasts, please visit  https://www.trendforce.com/news/

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