Business research methods: A comprehensive overview

Business research is the process of gathering and analyzing different types of information to make informed business decisions. 

If you undertake business research correctly, it has multiple benefits, such as:

• Improving organizational operations

• Identifying trends

• Developing new products and services

• Forecasting potential outcomes

This research can include studying competitor performance, examining consumer preferences, analyzing market trends, and identifying industry gaps.  

Let’s learn more about business research methods and the steps for a successful research process.

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In today's fast-paced, data-driven world, we need to rely on more than just intuition and guesswork. Companies need a well-planned business research strategy to uncover invaluable insights into consumer preferences, market trends, and emerging opportunities.

Business research allows companies to:

Identify market opportunities

Researching industry trends and market segments enables businesses to discover untapped markets and new opportunities to expand sales.

Analyze customer behavior

Understanding customers’ motivations, perceptions, and behaviors is essential. Companies can create targeted marketing strategies and products that meet consumer needs while improving customer satisfaction.

Stay ahead of competitors

Competitive analysis can reveal what your competitors are doing well and where they are struggling. With this information, businesses can adjust their strategies to remain competitive.

Optimize operations

Business research can help companies optimize their operations and improve efficiency. Analyzing data on processes and workflows lets businesses identify areas of improvement, streamline operations, and reduce costs.

Overall, investing in business research is essential for companies wanting to remain competitive and relevant. The right research strategy helps businesses uncover insights to drive growth and improve their bottom line.

Business research has two main methods: Qualitative research and quantitative research.

Qualitative research methods

Qualitative research involves exploring and understanding a topic through non-numerical data. 

This research type is particularly useful for exploring complex, multifaceted issues that may be difficult to quantify. 

It can provide insights into customer needs and preferences and identify trends and patterns. 

Researchers often use qualitative research in the early stages of a project to explore the problem and develop a deeper understanding. 

It provides a foundation for quantitative research and can determine what researchers need to ask to answer the research question.

Qualitative research methods include: 

• Focus groups

• Interviews

• Case studies

• Ethnographic research

• Website visitor profiling

They focus on understanding people’s attitudes, behaviors, and motivations.

Quantitative research methods

Quantitative research uses numerical data to test a hypothesis or solve a research question. 

Researchers can capture quantitative data from: 

• Surveys

• Face-to-face interviews

• Telephone interviews

• Online polls

People often view quantitative data as more objective since it’s statistical and less subjective than qualitative data.

Quantitative research uses collections of data and measures, manipulates, and compares the information to get insight. 

Which type of business research is best?

While quantitative and qualitative research methods both have their benefits, they also come with a few drawbacks:

Qualitative research cons include:

• Typically small sample size, making it harder to generalize

• Time-consuming

• Expensive

Quantitative research disadvantages include:

• Not capturing the depth or nuance of the topic

• Minimal understanding of beliefs, opinions, or behavior behind consumer decisions

• Researchers must interpret the data correctly for accurate observations

Businesses need to consider which method suits their research goals and resources best. Carefully selecting a method ensures valuable insights for more informed decisions to meet your business goals.

As you start planning your business research strategy, it's important to consider which research methods you want to use. 

Let’s look at five research techniques, including when you should use them:

1. Surveys

Surveys are a common method in business research. They effectively collect data from a large group by asking them to complete a questionnaire. 

Surveys are best for gathering information about a specific population's: 

• Age

• Gender

• Salary

• Attitudes

• Preferences

• Behaviors

• Experiences

You can conduct specific types of surveys, each with varying purposes and methodologies. 

Types of surveys:

Customer satisfaction surveys

These surveys measure customer satisfaction with a product or service. 

The questions may focus on the customer's product experience or the overall customer experience. 

Market research surveys

These surveys gather information on a specific market, including: 

• Consumer preferences

• Consumer behavior

• Competitor analysis

• Market trends

Employee satisfaction surveys

These surveys gauge the level of satisfaction and engagement of employees within an organization. 

They may include questions on: 

• Compensation

• Work-life balance

• Job security

• Career development

Brand awareness surveys

These surveys determine the level of awareness and recognition of a brand within a specific market. This type of survey can also measure brand loyalty and reputation.

Researchers conduct surveys in different ways, including online, by phone, or in person. 

Online surveys are becoming increasingly popular due to their convenience and the ability to gather data quickly.

2. Interviews

Interviews are another valuable method in business research. 

Unlike surveys, interviews involve talking to people one-on-one to gather in-depth information. Interviews are best to understand someone's perspectives, motivations, or experiences. 

For example, if a company wants to understand why its customers prefer a certain product or service, it can use interviews to ask follow-up questions to gain more insights. 

Interviews can be structured or unstructured depending on the researcher's objectives. 

In a structured interview, the interviewer has a predetermined set of questions to ask all respondents. This method ensures that everyone answers the same questions, making it easier to compare and analyze their responses. 

An unstructured interview is where the interviewer does not have a set of predetermined questions but lets the conversation flow naturally. This type of interview is more flexible and allows for unexpected insights to arise. 

Whether a researcher wants to understand consumer behavior or develop new business strategies, interviews can provide valuable data to inform decisions.

3. Observation

Observation is an excellent method to see how people interact with products, services, or physical spaces.

It allows researchers to observe real-life scenarios and collect accurate data about: 

• Business processes

• Employee behavior

• Customer interactions

• Overall business operations

It's particularly useful in situations where traditional survey or interview methods may not be effective. 

Researchers can use several types of observation for business research, including: 

• Naturalistic observation

• Controlled observation

• Participant observation

• Non-participant observation

Naturalistic observation involves observing behavior in a natural setting without manipulating the situation. This can gain insight into customer interactions and the decision-making process.

Controlled observation consists of manipulating a scenario and observing how people react. This can be useful for testing new products, services, or processes in a controlled environment.

Participant observation involves the researcher participating in the situation they are observing. This can help the researcher better understand the motivations and behaviors of those they’re observing.

Non-participant observation occurs while the researcher remains outside the situation and simply observes the actions. This approach can be helpful when it’s not possible or ethical for the researcher to participate directly.

Observation understands the human aspect of consumer behavior and how it influences decision-making.

4. Testing

Testing involves conducting experiments to gather quantitative data about a specific product or service. It's best to measure the impact of changes or improvements to a product or service. 

Testing can involve different techniques like: 

• A/B testing: Evaluating two versions of a product or service

• Usability testing: Seeing how users interact with a product to evaluate its ease of use

• Performance testing: Checking the performance of a product under various conditions

Each type of testing is for a specific reason and with a specific goal in mind. 

For example, usability testing ensures a product or service is user-friendly, while A/B testing identifies which version is more effective or preferred. Performance testing ensures a product can handle the demands of heavy use.

5. Focus groups

Focus groups are a popular method of business research to gain in-depth insights into consumer behavior, attitudes, and perceptions toward products and services. 

A focus group typically consists of people that share similar characteristics. They come together to discuss and provide feedback on a specific topic. 

Focus groups are best suited for situations where businesses want to understand their target audience’s needs and wants. This can be useful when:

• Launching a new product

• Testing a new advertising campaign

• Evaluating the effectiveness of an existing marketing strategy

Focus groups provide a unique opportunity to get real-time feedback on ideas and products, allowing businesses to fine-tune their offerings to meet customer demands.  

Understanding each research technique helps you design a strategy to collect the most relevant data for your business needs.

Steps of a business research process

Now you know the types of business research and its purpose, let’s look at the seven steps to successfully undertake it:

1. Identify the research problem 

The first step in conducting research is to define the problem or issue to address. This may involve surveying customers, analyzing market data, or interviewing key stakeholders. 

For example, if you own a fashion brand and your sales have dropped significantly, you may want to know why.

2. Conduct a review

Before starting research, check what researchers have already discovered in your organization, industry, or field. 

Conducting a review can involve reading relevant articles or research papers and gathering secondary or desk research data. 

This review process helps you better understand your research topic and may provide some insights into your research problem and fine-tune the next stage of your research.

3. Develop research questions and objectives

At this stage, you will develop specific research questions to achieve your objectives. 

Research objectives are the goals you aim to achieve by conducting the research. 

In our fashion brand example, one research question might be: "How do current fashion trends affect our sales?"