Market research vs user research

Whether you’re in product design or business development, you’ve probably come across discussions on market research vs user research. These two approaches are often pitted against each other in product development, just like the debate on qualitative vs quantitative research.

Questions about the roles and applications of both market and user research often arise, like:  

• What are their differences and where do their similarities lie? 

• When are you supposed to do market research? 

• What is user research really for?  

• Who should do what? 

Unanswered questions like this can cause conflicts within teams, leading to disagreements over methodologies and project ownership. What's more, it could lead to the perception of one approach as superior, which could harm team dynamics and slow progress. 

Keep reading as we unpack the subtle differences (and similarities, too!) between market research and user research. We'll also delve into their methodologies, applications, and examples on how to strike the right balance between the two. 

Distinguishing between market research and user research

Let's start by understanding what market research and user research mean.  

What exactly is market research? 

Market research is a way for businesses to learn about what people want, what other companies are doing, and what new things are being released. By asking questions and looking at data, market researchers help businesses figure out what's popular and what might be a good idea to do next.

For instance, a tech company planning to launch a new smartphone can use market research to determine the pricing strategy and market positioning for its new product.

Market research aims to answer the following questions:

• Who are our target customers?

• What are their needs, preferences, and pain points?

• What is the current market size and growth potential?

• Who are our competitors and what are their strengths and weaknesses?

• How are customers responding to our existing products or services?

Further reading: Market research vs market validation

How about user research? 

User research is a way of learning what people want and need when they use a product or service. In the same example above, if a tech company is making a new smartphone, user researchers would talk to people and ask them questions to find out what they like and don't like about their current phones, what features they want, and what problems they have when using them. This helps the company make a better phone that people will like and find useful.

User researchers often want answers to the following questions:

• How do users interact with our product or service?

• What are their pain points and frustrations?

• What are their expectations and unmet needs?

• How can we improve the usability and user experience of our product?

• How can we design user-centered products?

Further reading: Questions I explore the most as a user researcher

In summary, market research helps businesses understand what people want and what their competitors are doing. In contrast, user research helps businesses learn what people need and want when using a product or service. 

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A quick note on UX research vs user research

Businesses often use the terms UX research and user research interchangeably, but they're actually two different things that work together.

For starters, UX research has a bigger-picture focus. It looks at how people feel about a product or service. It helps you identify problems with your product and service and gain insights on how easy it is to use, how accessible it is, and how well it meets people's needs.

User research, on the other hand, has a narrower focus. It aims to understand how people behave when they use a product or service. The goal is to gather insights to guide design decisions and improve the overall user experience.

How market research and user research overlap

Market research and user research have different goals, but they also have similarities. Some of these similarities are outlined below.

1. Understanding of human behavior

While market research zooms out to scrutinize market trends and industry landscapes, and user research zooms in to understand individual behaviors and preferences, their common denominator is the human element. Both types of research are trying to understand how people think and make choices.

2. Data collection methods 

Another similarity between market research and user research is how both approaches employ a combination of qualitative and quantitative data to understand users and the market.

3. Informed decision-making

Finally, both types of research play a crucial role in providing insights for informed decisions and strategic decision-making. 

What's the difference between market research and user research? 

Now that you're aware of the similarities between the two, let's take a closer look at how they're different from each other in terms of:

• Scope and focus

• Timeline and scale

• Impact and application

• Segmentation

Scope and focus

• Market research: Broader in scope and looks at the bigger picture. It dives into market trends, competitor landscapes, and industry dynamics. Market researchers have this guiding question: What do people want? 

• User research: Narrower in focus and focuses on individual user experiences, needs, and preferences. The question, "What is useful and helpful to people?", is the northern star for user researchers. 

Timeline and scale

• Market research: May take longer because it involves collecting data on a larger scale. 

• User research: Can yield faster results, making it suitable for agile development cycles, focusing on the details of product features and interfaces.

Impact and application

• Market research: Helps businesses position themselves strategically and gain a competitive advantage.

• User research: Makes sure that the product is tailored to the users' needs and satisfaction.

Segmentation 

• Market research: Usually employs segmentation by nature, like categorizing the market based on inherent attributes such as demographics, geography, or psychographics. For instance, a luxury watch company might segment its market by age, income, and gender. 

• User research: Typically uses segmentation by behavior, such as categorizing users based on how they interact with a product or service. For a mobile app, this could mean distinguishing between frequent, occasional, and disengaged users.

If we imagine a Venn diagram with three circles representing product, user, and business, market research usually focuses on the intersection between business and user. On the other hand, user research is mostly centered on the intersection between user and product.

Market research vs user research methods

While market research and user research share some similarities in their overarching goals of understanding user behavior and preferences, they often employ different methods tailored to their specific objectives.

In market research, researchers are more likely to use the following research methods:

• Surveys and questionnaires: Collecting quantitative data about market trends, consumer preferences, and buying behavior.

• Competitor analysis: Examining competitors' products, pricing strategies, and market share.

• Focus groups: Engaging with diverse participants to discuss perceptions, opinions, and attitudes.

• Data analytics: Analyzing quantitative data from sales figures, website analytics, and social media metrics.

Meanwhile, user research often takes the following research methods into account:

• Usability testing: Observing users as they interact with a product to identify pain points, usability issues, and areas for improvement.

• User interviews: Conduct in-depth interviews to gain qualitative insights into users' motivations and preferences.

• Card sorting: Organize information architecture based on how users categorize and prioritize content.

• Prototype testing: Develop interactive prototypes to gather feedback on design concepts before full implementation.

Can the methods for different types of research overlap? Yes, they can! Here are some examples in which market research and user research methods can benefit from each other:

• Conducting usability testing not only to evaluate a product's design, but also to compare it with competitor products to understand their strengths and weaknesses.

• A focus group discussion that covers both general market perceptions of a product category as well as specific user reactions to prototypes or design concepts.

• Running a competitor analysis by analyzing user reviews of competitors' mobile apps and identifying common complaints and preferences to help inform UX improvements.

• Interviewing potential customers to gather insights into market trends and talking to existing users to understand their experiences with a product.

Choosing between market research and user research

Deciding between market research and user research depends on the specific goals, objectives, and stage of product development.

Here are key questions to consider to help you and your team decide. 

1. What is the goal of your research?

• Choose market research to understand the overall market, competitors, and customer needs.

• Go for user research to understand how users interact with your product or service, identify pain points, and improve the user experience.

2. What stage of development is your product or service in?

• Pick market research if product development is in the early stages or when you are trying to validate a new product or service idea.

• Choose user research if development is in the later stages or when you're refining your product or service and need to make sure it's meeting user needs.

3. What type of information do you need?

• Market research is ideal if you primarily want to extract quantitative data, such as market size, trends, and competitor analysis.

• User research is more valuable if you want to gain qualitative data, such as user behavior, attitudes, and motivations.

4. What decisions need to be made? 

• Market research helps with strategic decisions like market entry, pricing strategies, and competitive positioning.

• User research informs design decisions, feature prioritization, and improvements to meet user expectations.

As you can see, conducting market and user research can help you fully understand your customers and market. Here are some specific examples of when you would use each type of research together:

• You’re developing a new product or service. You perform market research to understand the overall market size, trends, and competitor landscape. You would then use user research to understand your target customers' needs and pain points.

• You’re trying to improve an existing product or service. You would use user research to identify pain points and areas for improvement. Afterward, you turn to market research to validate your findings and make sure that your changes align with market trends.

• You’re launching a new marketing campaign. You start with market research to understand your target audience and their motivations. Once you have the information you're looking for, you employ user research methods to test your campaign materials and assess if they resonate with your audience.

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Market research vs user research: Two sides of the same coin

Market research and user research, often perceived as distinct entities, are two sides of the same coin, each playing a crucial role in shaping successful products. 

Market research provides a macroscopic view of the industry landscape, competitor dynamics, and overall market trends, enabling strategic decision-making. On the other hand, user research delves into the microcosm of individual user experiences, behaviors, and needs, making sure that a product resonates with its intended audience. 

Choosing between these two approaches isn't an either-or proposition. Instead, market researchers and user researchers should work together to develop a product that stands out from its competitors while addressing the specific needs of its users. 

Use Lyssna for your market research and user research needs

Are you looking for a platform you can use for both market research and user research? 

Lyssna is the perfect research toolbox you're looking for. Conduct research studies, recruit participants, and analyze data all in one place. Get started with a free plan.

Not ready to commit yet? No problem! You can watch this research video guide on conducting market research and validating designs through Lyssna. 

Kai has been creating content for healthcare, design, and SaaS brands for over a decade. She also manages content (like a digital librarian of sorts). Hiking in nature, lap swimming, books, tea, and cats are some of her favorite things. Check out her digital nook or connect with her on LinkedIn.