Market research vs user research: what’s the difference?

If you are busy building or growing a business, you will come across people, posts and opinions about the importance of conducting research. Some mentors recommend prioritizing market research, while others tell you to stick to user research. But which one wins in the battle of market research vs user research?

What should you do as a small business owner or solopreneur in a world full of confusing and conflicting advice? You do not have the luxury of chasing a path only to realize it is not for you later. 

Which one out of market research and user research will give you better outcomes? In fact, what is the difference between market research and user research? This article will clear some air and help you prioritize your research efforts.

Market Research — Macro-level Insights about Your Audience. 

You would have already started market research at some point in your entrepreneurial journey. It is all about understanding your target audience and finding how they will react to your product or offer.

Market research focuses on understanding customer attitudes, behaviour and preferences to find untapped opportunities. It involves analyzing market trends, competitors, customer needs, and product pricing. In other words, it gives a bird’s eye view of the market, helps refine your product positioning, make informed decisions, and more. 

When it is all about your customers — their likes, dislikes, and preferences, you know why market research is important

Market research is about gathering data about your potential customers through market surveys, sentiment analysis, and many innovative research trends. 

It is majorly focused on understanding the high-level overview of what people expect from a business and how they would respond to their product or service.

User Research — Qualitative Insights Based on Individual Behavior.  

User research differs from market research and comes later in the research hierarchy, generally after the product’s first version is live. 

It is the process of understanding how users interact with an existing product – like a website, mobile app, or landing page. User research studies how users interact with different elements, why they interact (or not) and what happens after they do something. It records individual behaviors and experiences rather than macro-level data. 

User research typically involves observation and one-on-one user interaction through PMF surveys, interviews and experiments. Primarily useful for product teams, user research helps make the product more valuable and value-oriented for end-users. Also, it helps identify any problems or obstacles impacting the growth of the user base. 

Market Research vs. User Research.

Both market research and user research have their use cases and applications. While market research helps you understand overall market trends, user research enables you to analyze user behavior. 

You can use market research for marketing, pricing, and product positioning strategy decision-making. On the other hand, user research becomes helpful in driving decisions related to product development, user experience, and design.

Market Research User Research
Useful forMarketingProduct Development
ScopeQuantitative Qualitative
GoalFind what the audience wantsDiscover what adds value to people’s life
FocusLarge-scale, macro-level insights based on broad patternsPersonalized insights based on individual behavior

Difference #1: Scope & Scale 

Market research is used to understand how the overall market works. So, naturally, there is more focus on generating quantitative data about how customers view your product and brand and how market conditions impact demand. 

The scope and scalability of market research are broad and require gathering data from a large sample size, which means high costs. 

Learn how to conduct market research at scale with a limited budget

On the other hand, user research is qualitative and studies individual behaviour or centres around personalized feedback. It observes individualistic behaviour, understanding what frustrates users and how they deal with their problems. All this information helps design products tailored to specific user needs and motivations.

Difference #2: Focus & Goals 

Market research is all about understanding the audience and the market at large. It aims to find answers to questions about the broad parameters — what is in trend, who are the competitors, what are the pain points, and if there are any opportunity gaps in the industry. The focus of market research questions is on market understanding and what people want. 

On the other hand, user research is inclined specifically to user behaviour — how users interact with the product, user pain points and problems, and missing design features that cater to user needs. User research focuses on what can be most valuable to people. 

While market research can unearth large-scale insights, intrinsic user research is required to take a product idea to success, like in the case of wheeled suitcases. 

girl-dragging-suitcase - trolley- market research

While luggage companies realized that people needed an easy-to-carry (or small) suitcase in the mid-20th century when travel increased through market research, only deep user research helped them understand how users used suitcases while travelling, leading to the addition of wheels on suitcases. 

Source: Conde Nast

Difference #3: Reporting, Observation & Analysis 

The way insights are analyzed, reported, and categorized differ too. Market research aims to find broad insights and categorizes similar audiences into a single persona; user research reports every single user insight individually. 

For example, if you sell jeans, both male and female audiences might be interested in your product. But on further observation and rounds of market research surveys, you find that one likes jeans for fit and comfort, while the other wants them because they require less upkeep – washing and maintenance. 

Your market research data will categorize both in a single persona. But behavioral user analysis tells that the motivations to buy jeans differ totally. So, you should have different positioning and even a separate line of products for men and women. 

Analytics plays a vital role in how effective your market and user research is. So, remember to pay special attention to how you should observe and report insights. 

A tool like GapScout can help you analyze customer sentiment from product reviews, thus, powering both your market and user research efforts on autopilot and saving you hours every week. 

When to Conduct User Research vs Market Research? 

While both are important in your growth journey, and one should adopt an agile research process, you need to learn to shift gears based on your stage. 

Focus more on market research in the early stages of the product development lifecycle and user research later when you have some users and aim to achieve a product market fit. Here are a few pointers to remember: 

  • Market research helps you understand the overall market and customer needs. So, always use it to make informed decisions regarding your offer, pricing, positioning, and marketing strategy. 
  •  User research is best used to optimize an existing product. So, use it to optimize an existing product, achieve product-market fit, and guide your product development and design cycle. 

User Research and Market Research are Better Together.  

Everything you do — the decisions you make, the tools you use, the plans you create, is done to grow your business. You want to make informed decisions for scaling faster, and the best way to do so is to combine market research with user research. 

User research and market research provide complementary insights that you can use to drive product development, pricing, marketing, positioning and more. Here is what you should do to get the best of both worlds: 

  • Find the Overlap: Look for commonalities between user research and market research. For example, you need both market and user data to see if your offers are converting against your competitors and then use conversion optimization tips for the website. This will help you identify opportunities and areas of improvement that both can address.
  • Make Connections: Make connections between user research and market research to speed up product development. See where you can take advantage of more profound insights from the industry and your users. Market research can aid your product strategy, pricing, and positioning, while user research can help make decisions regarding product features, user experience, and design.
  • Put it all Together:  Combine market research and user research insights to make informed decisions about your product and understand what drives user behavior. By understanding both markets and users, you can design products that align with user needs and meet market demands.

Use AI tech to power your research.

Between market research vs user research, you need to prioritize and the best way is to improve your understanding of your audience and users. What if we tell you a better way to speed up the process? 

You can use artificial intelligence to start market research as a first step using online reviews. Our tool helps you scan all online reviews from real customers across the internet and gives you data-backed insights on where you should spend most of your time and energy. 

Use the insights to drive decision-making or refine your product market fit surveys, user research surveys, and more. 

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Anmol Sachdeva
Anmol Sachdeva
Anmol is an independent content marketing consultant who loves to write actionable pieces on small business growth, marketing automation, market research, and growth as a solopreneur. Reach out on Twitter.

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