Designers, developers, and managers are often at each other’s crossheads during product development over choosing between market and user research. It’s clear that there’s a difference between market research and user research, but the areas of this difference and the overlaps may be hazy for some.
A lack of clear understanding between the two and their usage is often confusing when you are supposed to conduct market research over user research. Our discussion today will revolve around user research vs market research and ensure you don’t get confused ever again.
Understanding market research and user research
Let’s start by knowing user research vs market research means and definitions.
User research
User research refers to a way of learning what your target audience wants and needs with reference to using a product or service you aim to build. For instance, an organization aiming to build a new accounting software will want to talk to people who need such software and ask around what they like and don’t like about the software they are using at present.
So, knowing things like the ideal features users want, what problems they want to solve, the reason behind using software, etc., is essential. To know all this you’ll need to ask the right questions that will become the base for your quantitative and qualitative research.
- How do you use the product or software?
- What’s stopping you from choosing one of the existing software available?
- What are your expectations from accounting software?
Market research
Market research is about gathering and analysing information about an industry to understand its current structure and future potential with reference to what you are selling or promoting.
Businesses use this information to make informed decisions and build business strategies for product development, pricing, and marketing.
The research process to understand the market includes finding out;
- Market size to know the potential customer numbers.
- The number and size of competitor businesses who are building similar products and solutions.
- Customer demographics which include knowing their age, gender, income, job profile, likes, dislikes, etc.
- Buying behaviour to understand what influences their buying decisions. This includes how things like price, quality, and reputation affect what and how a customer buys products.
Summing it up, market research is when businesses understand what their target audience wants and what their competitors are doing. User research, on the other hand, is about understanding the customer’s needs specifically about using a product or service.
Difference between market research and user research
Here are the key areas of difference in user research vs market research and how they influence decision-making.
Scope of research and analysis
Market research focuses on understanding a broad picture and obtaining high-level information about the industry and market. For this, researchers employ quantitative research methods focusing on numbers and conduct studies on large representative samples, which they later generalize for the entire population.
Given the large sampling size of market research, there’s an acceptable margin of error, which means the results you get should account for mistakes. Through effective research, you can understand market trends and focus on customers’ attitudinal data, like knowing about their concrete behaviours in a certain context.
User research or UX research is not at all about the market size, trends, segments, demographics, etc. The entire focus is on a user’s behaviour and motivations, attempting to understand their decision-making process while aiming to solve everyday problems when using a product.
Research from this perspective provides a direction on how to design a product and to what extent a user’s needs are met. User research has smaller sample sizes, but it deals with highly specific data revolving around how people use a product.
Scale and timeline of research
Market research is a lengthy process. Given the scale of research you have to conduct and the sample size, it’s easier to make mistakes. With everything connected with this process, like collecting data on a larger scale, analysis, generalizing it, etc. you will need time and a set of specialised tools.
But the difference we see in UX research vs market research in this context is that you can yield faster results in the former. Hence, the results generated can be easily used for agile development processes and implement fast iteration cycles.
So, where your focus remains on larger areas and data collection with market research, user research focuses on finding key details to build customer-centric product features and interfaces.
Impact and application of research
With effective market research, businesses can position themselves strategically enough to gain a competitive advantage. Research helps here by helping businesses understand their target market, competitors, and industry trends.
Knowing all this makes a company’s position via-a-vis market trends and competition clear so that they can manoeuvre the marketing campaigns and their approach to make the biggest impact.
At the same time, market research helps you identify gas in the industry so that you can leverage the opportunities and threats while positioning your brand’s uniqueness and tailor your offerings accordingly.
User research ensures the products you build are customized to your user’s needs while aiming to achieve customer satisfaction. The research methods are used to identify your customer’s needs, preferences, and behavior and prevent the development of products that fail to resonate with the market.
Moreover, the research process here is meant to understand the customer’s pain points, frustrations, and desires, which helps businesses create intuitive products that are required to build a loyal customer base.
Customer segmentation and categorisation
Another set of differences between market research and user research is how we segment the information in each. Even if the information you obtain is from the same source and about the same customer, its segmentation is different in both cases.
Here’s how it goes down. Market research segmentation is based on the market’s inherent attributes. So, you must consider things like demographics, geography, psychographics, etc. For instance, a premium wallet brand can segment the market by age, income, and gender.
On the other hand, user research segmentation includes categories like behaviour, aspirations, pain points, etc. This sort of information helps understand how users interact with a product or service, which you can use to segment users according to their potential to convert.
Research methods employed for user and market research
Interestingly, the research methods we use for market and user research are similar, including;
- Surveys
- Focus groups
- 1:1 interviews
- Data analysis and analytics
- Competitive research
Even though the methods are the same, the context and their application are different, which ultimately depends on your research goals. A bit confusing, right?
Well, here’s what we mean.
In market research, your focus is on determining how marketable your product is and whether it’s viable for your business. But in user research, you will use the same methods to understand your user behaviour and define the most suitable value proposition for your users.
In addition to the standard research methods, professionals on both sides can also participate in social listening and analyse sales data for a better product development strategy. Even though social listening and sales analysis are mostly suited for market research, UX researchers can also use them to understand a customer’s interaction with the product.
Still, there are some research methods exclusive to user research vs market research.
User research | Market research |
Focus groups: It’s when research engages with different diverse participants to understand their perceptions, opinions, and attitudes. | Surveys: Professionals create a list of questions according to the survey goals and share them with the target audience to gauge their opinions and habits. |
Data analytics: Researchers analyse quantitative data like sales, social media metrics, and website analytics to gauge brand competency and market presence. | Interviews: Designated interviewers speak directly with respondents, facilitating personal communication and interactions leading to better clarification. |
UX research vs market research, when to use each method?
Everything you have understood about the difference between market research and user research comes down to choosing the right method at the right time.
Market research is generally done before product ideation. However, you can also use it before a major update to refresh market demand, competition, and overall market viability.
Go for user research when you have a concept of an idea or an actual product ready for testing. You can use several methods throughout the product development lifecycle to gain information from users and align your development process accordingly.
To sum it up
It’s a hyper-competitive world out there, and knowing the difference between market research and user research is important. The right analysis is crucial to build products that will get your customer’s attention, response, and conversion.
This means for better results, you need to integrate user research with market research and obtain a comprehensive understanding. When you are ready to dive into detailed user research, check out UserQ. Our research and testing solutions are built to help you obtain localised and authentic information from a pre-vetted localised user base.
Get in touch to know more.
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