Market Research vs. UX Research: A Comprehensive Guide (2023)

In the fast-paced digital age, understanding your audience is more critical than ever. Recent statistics reveal that companies identified as CX leaders were 3x more likely to exceed their top business goals. However, why is this number so significant? Market and UX research—though distinct in their methods and objectives—come together to form a holistic view of what a customer truly desires. 

In this comprehensive guide, we promise to illuminate the intricate synergy and differentiate between market and UX research, arming you with the knowledge to make strategic decisions that resonate. 

What is Market Research?

Market research is the process of evaluating the viability of a new product or service through profound research conducted with potential clients. To eliminate most of the doubt that your business idea will succeed, market research should be at its core. It provides first-hand opinions from those who will be using the product or service, giving you insights into the demand and need.

Market research focuses on understanding the dynamics, preferences, and behavior of a given market or customer segment. Market researchers collect data to determine the potential demand for a product or service, analyze current market trends, and identify potential competitors. This is crucial for businesses to make informed decisions about their offerings and target the right audience effectively.

What is UX Research?

UX research, or user experience research, delves into understanding users' needs, behaviors, experiences, and motivations. It's about ensuring the products or services resonate with the users. UX researchers employ various UX research methods and tools to get insights, forming the backbone of the UX design and research process. It is done by observing your users, conducting interviews, running usability tests, and more. The tools and methods used depend on the project and what exactly you want to find out. 

UX research is all about gathering feedback and data from real people in relation to a particular service or product. Usually, it is done with your already existing customers or with your target audience. For example, if you are designing a dating app for single parents to find love, then you should focus your research on single parents who own a smartphone. However, if you are updating the design of an eCommerce website, the research will be on using real customers.

Market Research vs. UX Research - What's the Difference?

There is no doubt that there's an intersection between market and UX research because they are both crucial in understanding audiences and ensuring the product or service is a success. However, they serve distinct objectives.

Market research is centered around understanding the broader market. It is mainly about business needs: determining product viability, competitive analysis, and segment targeting. The ultimate goal is to make informed business decisions, such as entering a new market, launching a product or service, or targeting a specific audience segment. Market research seeks to understand the purchasing habits of users. For this, information such as demographics and attitudinal needs to be gathered. Also, it aims to address whether there is actually a need for that product or service in the market, who will be the buyers, and how to reach them. 

UX research, on the other hand, hones in on the user, aiming to improve the user experience. It delves into the specifics of how users interact with a product or service. So, there is no better way for you to understand users' needs, pain points, motivations, and overall experience than through UX research. Unlike market research, its primary focus is to enhance and optimize the user's experience with a product or service, ensuring it's intuitive, user-friendly, and meets user needs. UX researchers employ various qualitative and quantitative methods, from data analytics to moderated interviews and usability testing, to identify ways in which people are using a product and their pain points. Using the data, the product is molded through iterative testing to meet the user's expectations. 

Think of it this way: market research tells you what people might buy, while UX research tells you how they'd like to use it.

When to Carry Out Research?

Both types of research are essential at different stages. In the initial phases of product development, market research can guide you on product feasibility. As you move to design and prototype, UX research and strategy become vital to ensure the product aligns with user expectations and needs. However, it is not standard for every company, as people can decide to incorporate UX or market research at any stage of their development cycle.

Now, let's dive into when these different research types are used. 

Most often, at least a rudimentary prototype needs to be available for UX research to take place. However, this is not written in stone, as some companies can even do UX research without having a product. But how can that be? Well, different UX research methods can be applied at certain product development stages. So, as soon as the following questions come up, market research needs to be done: 

• How do individuals engage with the product daily, and what aspects do they find pleasing or bothersome?
• How do the product's features influence the user's efficiency in task completion?
• How might users react to a redesign of the product or service, and what are the primary concerns to be aware of?
• Which demographic interacts with the product in a unique manner or holds distinct expectations compared to others?
• What existing solutions and behaviors reveal opportunities for new product development?

In contrast, market research almost always precedes a product launch or major update. Also, one of the core purposes of market research is to make key business decisions, which is why it should be done when the following questions need to be answered:

• Which demographics and market segments have the highest sales potential?
• How does an advertising campaign influence the audience's perception of the brand and their buying intentions?
• What are the target audience's sentiments towards the brand's core mission?

Market research is often more prevalent in the initial and strategic phases of product development. In contrast, UX research is continuous, becoming especially crucial as the product moves from concept to design and post-launch stages. Ideally, they should overlap, with insights from one informing the other to ensure a product that's both market-ready and user-friendly.

Addressing Your Top Objections to UX Research

Many argue against investing in UX research due to budget constraints or time. However, overlooking the UX research process can be costly in the long run. Mistakes that could've been avoided through proper research can lead to redesigns, customer churn, or worse, product failure. And Lazarev has been in the industry long enough to see many clients make this mistake. That is why we can't start the design process without doing UX research. Here are some of the most common objections people have to performing UX research:

UX research is too expensive

It is no news that startups work on a tight budget and jump at every opportunity to cut expenses. So, they turn to avoid any process that seems unnecessary, and unfortunately, UX research, more often than not, becomes one of the scapegoats. This occurs because every entrepreneur thinks their idea is the best and will be an instant hit in the market. It is only after launching that they get a reality check because people are not using their product, or there is significant churn. The truth is that the decision to skip UX research can come back to haunt you, as the business will need to spend double in terms of time and money. 

While there's an upfront cost to UX research, the long-term savings are considerable. Identifying and resolving issues early in the process is much cheaper than fixing them post-launch. Additionally, a product aligned with user needs can lead to increased customer satisfaction and retention, which translates to higher revenue. Note that every dollar invested in UX brings $100 in return. This is an average figure, but it's an ROI of an impressive 9,900%.

We don't have the time for research

This misconception is often grouped in the same category as the previous. Time-to-market is a huge determining factor for the success of a product or service. That is one of the reasons why some startups may choose to skip UX research as they want to beat their competitors to the market. Yes, UX research can stretch the initial phase of product development because it requires time to understand users; needs and motivations.

However, investing time in UX research can actually accelerate product development. By understanding user needs and pain points early, teams can avoid unnecessary iterations and rework.

We already know what our users want

It is true that before an entrepreneur embarks on a project, they have already done lots of research regarding their potential customers. However, in most cases, this research can be biased, or they often turn to A/B testing and analytics to define their user personas. While there is nothing wrong with this, it does not provide 360 information on the user. Knowing what the users want is not enough to keep them. You need to dig deeper and find out the motivations behind their choices, and that will be the key to offering them relevant solutions.

Counter: Assumptions can be dangerous. Without solid data, you might be designing for a user that doesn't exist. UX research offers evidence-based insights that ensure you're on the right track.

For instance, we're currently working on our SaaS product, Upfeed. It's a smart RSS reader for freelancers and agencies that work on freelance platforms. Upfeed empowers users to monitor, filter, and get a list of automatically prioritized job opportunities. 

And here's a thing — we created this tool based on our own needs thinking our target audience faced identical challenges. That's when we sidetracked the whole project — our team prioritized the wrong features over those that brought actual value. And the biggest failure was that the product solved a problem irrelevant to our potential users. 

So we had to go back to the drawing board and redo a major part of the user flow. But that time, UX research was a priority — our team ran user interviews and moderated usability tests. And you know what? It all paid off with information and insights that helped us discover our target audience's needs, see how they interacted with the product and what we had to improve. 

UX research is your go-to tool for fishing objective information about your target audience and their needs from the sea of preconceived assumptions.

We can rely on market research

As we have already seen above, market research provides different insights used to make overall business decisions. It does not give you information on how customers will interact with the product and their experience. People often confuse the capabilities of market and UX research and often use the terms interchangeably. It is understandable why someone may think doing just one of them will suffice. 

While market research provides valuable insights into the broader market dynamics, UX research delves deep into user interactions with your specific product. Both are essential but serve different purposes.

Choosing Between Market Research and UX Research

Choosing between market and UX research isn't always a matter of one over the other. Rather, they complement each other. Both types offer distinct insights, and depending on your objectives, one might be more appropriate at a given moment. Here is a guide to help you decide:

Define your objectives

For strategic business insights: For those trying to understand their market size, demand, competition, or demographic segments, market research is the route to go. It provides a macro view of the business environment. In this case, market research will help you estimate what amount of profit you may be making. 

For User-Centric Product Insights: If your focus is on the user experience, understanding pain points, motivations, and the user journey with your product, then UX research is more appropriate. Using UX research, you will get a micro view centered on user interactions.

Consider Your Product Stage

Conceptualization & Ideation: At this stage, market research can help validate if there's a potential demand for your product idea and if it's commercially viable. It gives you a reality check on how valuable your product will be. 

Design & Development: As you design and refine your product, UX research is crucial to ensure it's user-friendly and meets the needs and expectations of its end-users. You do not want to design a product that users find difficult to use. Even if the idea is great, people would rather look for alternatives than continue using your product.

Assess Resources and Time

Short-Term vs. Long-Term: Market research often offers quicker, broader insights suitable for immediate strategies. UX research, while it can be longer, provides in-depth insights that can shape product design and refinement over time.

Understand the Nature of Your Data

Quantitative vs. Qualitative: Market research often leans towards quantitative data, providing statistical insights about the market. UX research, especially with methods like interviews and usability tests, offers rich qualitative insights into user behaviors and feelings.

Competitive Edge

Differentiating Factor: If you're looking for insights that could give you a competitive advantage in terms of product positioning or market strategy, market research can be key. For a competitive edge in user satisfaction and product usability, UX research is essential.

The ideal scenario for many businesses, especially those in the tech and consumer product sectors, is to integrate both market and UX research. This holistic approach ensures that while the product meets market demand, it also provides an optimal user experience. However, if constraints demand a choice, aligning the research method with your immediate objectives is the best strategy.

Applications and Goals: Understanding the Objectives

As we have mentioned countless times, the application and goals of market and UX research often overlap. Businesses that can understand the objectives of each find themselves leaders in their respective industries. 

Once you have understood the objectives, it is important to start every research endeavor with a clear UX research plan. Tools like UX research templates and UX research plan examples can help in structuring the research. Always remember the goal is to gather insights, whether about the market or the user, that inform better decision-making. Let's delve into their respective applications and goals:

Market research applications

• Market Assessment: It evaluates the size and potential of a particular market segment or industry.
• Competitive Analysis: Examines competitors' strengths, weaknesses, opportunities, and threats.
• Product Positioning: Determines how a product should be presented to target the desired audience.
• Customer Segmentation: Identifies specific segments within the larger market based on shared characteristics.
• Price Elasticity: Assesses how sensitive consumers are to price changes.

Market research goals

• Business Strategy: Inform decisions related to entering new markets, mergers, or expansions.
• Risk Reduction: Minimize financial risks by validating product concepts before large investments.
• Targeting: Ensure advertising and promotional efforts are directed at the right audience.
• Forecasting: Predict future market trends and consumer behaviors to stay ahead.

UX research applications

• Usability Testing: Evaluates how easy and intuitive a product is to use.
• User Interviews: Gathers qualitative insights about user needs, motivations, and pain points.
• Surveys: Collects data about users' opinions and behaviors at scale.
• Journey Mapping: Visualizes the user's end-to-end experience with a product or service.
• A/B Testing: Compares two or more product versions to determine which performs better in terms of user engagement.

UX research goals

• Product Refinement: Ensure the product design and functionalities align with user needs and expectations.
• User Satisfaction: Maximize user satisfaction, leading to higher retention and referrals.
• Reduced Redundancy: Minimize costly design iterations and feature developments that don't resonate with users.
• Informed Design: Equip designers and developers with actionable insights that guide product development.

Understanding the objectives of both ensures that a company can strategically navigate the business landscape while crafting products that resonate deeply with its users. In a well-integrated approach, market insights inform UX strategies and user insights feed back into broader business strategies, creating a cycle of informed decision-making.

Market Research vs. UX Research Methods

Market and UX research serve different but complementary purposes. Both are essential for a well-rounded understanding of a product or service in its market, but they use varying methodologies.

There are various methods used in both domains. Qualitative UX research methods include interviews or usability testing. Market research might utilize surveys, focus groups, or observational studies. The chosen method should align with the research's objectives. Here is a comparison of their methods:

Market Research Methods

Surveys: Standardized questionnaires given to a large sample size to extract statistical data on consumer behaviors, preferences, and demographics.

Focus Groups: Moderated discussions with a select group of individuals to gather qualitative insights on feelings, perceptions, and opinions about a product, concept, or ad campaign.

Field Trials: Testing products or services in their natural environment, usually over an extended period.

Observational Research: Directly observing customers in a real or simulated environment to understand behavior.

Brand Awareness Studies: Measuring the percentage of the target audience familiar with and positive about a brand.

Market Segmentation: Analyzing and categorizing the market into distinct segments based on shared characteristics.

SWOT Analysis: Evaluating strengths, weaknesses, opportunities, and threats within the market context.

UX Research Methods

Usability Testing: Direct observation of real users as they interact with a product, app, or website to identify usability issues and areas of improvement.

User Interviews: Detailed conversations with users or stakeholders to understand their needs, preferences, and experiences.

Ethnographic Studies: Immersive research where researchers study users in their natural environment to deeply understand user behavior and context.

Heatmaps: Visual representations of where users click, scroll, and hover on a web page, helping in understanding user behavior.

Card Sorting: Participants organize topics or tasks into categories, assisting in structuring information architecture or content.

Prototyping and Wireframing: Creating early-stage representations of a product to gather feedback and iterate before development.

Task Analysis: Evaluating the steps users take to complete a task identifying potential bottlenecks or complexities.

Note that methods like Surveys, Focus groups, and Field studies can also be used in UX research. 

In theory, it is advisable to perform all these various types of research to better understand the value of your product and user experience. However, in real life, this can be severely restricted due to funds. A good way to decide which of the methods to use is to start by considering your goals 

Implementing UX and Market Research

Collaboration is key. UX researchers should be in tune with market researchers and vice versa. Their combined insights can lead to a product that's not only in demand but also offers an outstanding user experience. As we have seen above, there is a huge overlap between UX and market research. So, it will not make sense to completely separate them. In fact, doing so will result in double expenditure and inefficient workflow. Talking about inefficiency, the customers' journey becomes disjointed when you allocate one part of the research process to designers and the other to marketers. 

As UX and market research evolve, an even bigger overlap is inevitable. It opens the door to a better understanding of the reason why customers interact and stick with a particular product or brand. Once you hack these secrets, it becomes easier to know exactly where to invest and why you are succeeding.

Why You Should Never Skip UX Research

User research isn't just a checkbox. It's fundamental for ensuring a product's success. Products designed without user input risk misaligning user needs, leading to poor adoption and negative feedback. We have seen many companies rise, and neglecting UX research was among the precipitating factors. Neglecting UX research can have far-reaching consequences for businesses, products, and services. Here are some of the reasons why you should think twice before skipping UX research:

Understand your users

Without UX research, there is no way to know what your users actually want. So, businesses turn to make assumptions. However, these assumptions can be off the mark by miles, leading to products that don't align with user needs or solve any real problems.

Financial implications

Poor user experience often results in lost sales or users abandoning your platform. Correcting issues post-launch is typically more costly than addressing them during the design phase through proper UX research. 

Brand reputation

A product with poor usability can harm your brand's reputation, and honestly, you don't want that. Your brand name is your identity. If the brand has a poor reputation among users, your business is in jeopardy. Furthermore, your competitors will use every opportunity to make themselves look better using your flaws. Users are more vocal than ever before, and negative reviews or word-of-mouth can deter potential customers. 

Increased Support Costs

Products that aren't user-friendly lead to increased customer support inquiries. This not only raises costs but can also frustrate users further.

Longer Time to Market

Without understanding the user's needs from the onset, iterations and redesigns can delay product launches. This is a problem because you are not making any profits when the product is out of the market. Also, your competitors are using this time to solidify their presence.

Lower User Satisfaction

If users find it hard to navigate or achieve their goals using your product, their overall satisfaction diminishes, affecting retention rates. This also ties in with low profit because people are not using your product or service. 

Missed Opportunities

UX research can uncover user needs that weren't initially evident, leading to innovative features or products that cater to these needs. This is actually one of the reasons why in-depth UX research is done. Uncovering these needs and solving them puts them in the category of pioneers, and users will always trust your brand. 

Inefficient Resource Allocation

Without clear insights from UX research, teams might spend time and resources on features that don't resonate with users while neglecting more impactful ones.

Competitive Disadvantage

In today's digital age, user experience is a significant differentiator. Neglecting UX research can put you at a disadvantage compared to competitors who prioritize their users' experiences.

Reduced ROI

The return on investment (ROI) is often higher for products that cater to user needs and provide a seamless experience. Neglecting UX research can lead to a decreased ROI as users abandon the product or platform in search of better alternatives. For example one of our clients - Bluwalk came to us with a rough MVP of their product and we had to conduct in-depth research and revitalize its UX/UI design. For those who don’t know, Bluwalk is an app that helps people enter the gig economy. It connects users with companies that offer transport and delivery services. Long story short, after careful research we discovered some issues like long site load times, buttons missing links and filters that didn’t work, which were contributing factors to their reduced ROI. Once we worked our magic, the new version doubled its conversion rate from 9% to 20%. 

Legal and Accessibility Issues

Proper UX research includes understanding the diverse needs of all users, including those with disabilities. Neglecting this can lead to accessibility issues, potentially resulting in legal repercussions.

Conclusion

After everything has been said and done, market research and UX research are the two crucial steps that can't be overlooked in the product development lifecycle. Together, they form a symphony of insights, where one informs you about the 'who' and 'what,' while the other tells you 'why' and 'how.' With the ever-evolving demands of consumers and the fast-paced nature of technology, skimping on either form of research is akin to setting sail without a compass. Businesses that understand the intrinsic value of both market and UX research are the ones that steer clear of unseen icebergs and navigate successfully toward the horizon of success.

To truly captivate your audience, your product must resonate with them on every level. It should meet a market need, yes, but it should also deliver an experience so intuitive and delightful that it becomes irreplaceable in the eyes of your users. This is where the expertise of Lavarev comes into play.

Call to Action

Don't leave your product's fate to chance. Leverage the power of detailed insights and strategic foresight with Lavarev. We specialize in bridging the gap between market research and UX research, offering a comprehensive suite of services illuminating every corner of the consumer landscape. Whether through meticulously crafted UX research templates or cutting-edge market analysis, Lavarev is your partner in creating products that don't just exist but thrive.

Contact Lazarev today, and let's transform insights into action. Your journey toward an unmatched user experience begins here.