With a plethora of products to choose from on a shelf or online, it is vital to understand how consumers will make their purchasing decisions.
Luckily, there are several consumer packaged goods (CPG) market research options perfect for identifying these buyer habits and preferences.
From what label design is most attractive to what price point is best, market research provides CPG brands with valuable insights that set their products apart from competitors.
In this ultimate guide, our CPG market research company shares six types of market research perfect for consumer-facing brands and their benefits.
Article Contents
- What is CPG market research?
- Value of conducting CPG market research
- Market research options for CPG brands
- CPG market research example
- What is the cost of CPG market research?
Interested in working with our market research firm that specializes in consumer packaged goods? Get a quote by completing an online contact form or emailing [email protected].
CPG market research involves different methodologies to test and analyze consumer attitudes when searching for or purchasing products, whether it be in-person or online.
Common consumer packaged goods market research options include brand equity surveys, customer segmentation, eCommerce user experience, and shelf testing, among others.
With 49% of consumers open to trying new products, CPG market research will provide your brand with unique buyer insights that you can leverage to drive new business.
Value of Conducting CPG Market Research
Market research is valuable for CPG companies as it can provide insights into various aspects of consumer behavior.
It can reveal how your target audience shops, which packaging designs are most appealing, and how satisfied customers are with your product.
Although this may seem like a simple explanation, the underlying reasons why market research is so essential for our CPG clients are even more compelling and can cause you to take consumer analysis more seriously.
Here are three of the many reasons why consumer packaged goods market research is beneficial:
1. Increase CPG sales
Consumer packaged goods market research can boost your business's revenue and save you from making significant mistakes.
By understanding your target audience, their preferences, and their purchasing habits, you can optimize your products and create marketing strategies to better meet their needs.
2. Remain competitive
In the CPG industry, your business has numerous competitors who may occupy the same shelf space or search result pages as your company.
To gain a competitive advantage, it is crucial to cater to your audience's specific needs and provide them with delightful products. CPG market research can assist you in identifying these unique needs and devising strategies to fulfill them.
And even so, the market is ever-evolving and consumer preferences are constantly changing. Therefore, it is important to regularly monitor and address these changes to remain competitive.
3. Create data-driven marketing campaigns
Market research provides valuable data that you can use to create effective marketing campaigns and tailor your marketing messages to resonate with your target audience.
For instance, you might learn a food's health benefits are most enticing to your target shoppers. With this insight, it would benefit your brand to include icons such as "GMO free" or "High in fiber" on the product's label.
Recommended Reading: 9 Examples of Data-Driven Marketing Strategies
Market Research Options for CPG Brands
Your CPG market research options are endless. At a very high level, retail brands can execute customer surveys, food and beverage focus groups, and in-store research.
Though, the various methodologies our CPG market research firm suggests below are a little more in-depth and focus on 2023 market research trends.
Of course, these are not your only options, and which you may move forward with is dependent on your main goals, timeline, and budget.
1. Brand equity surveys among general consumers
A brand equity survey helps identify whether target customers know your products exist.
If they do know they exist, what do they think of them? If they are unaware of your product, what competitors are they currently buying from?
A CPG brand equity study specifically addresses topics such as:
- Brand awareness
- Perception
- Word associations
- Self-reported attribution
- Comparisons to competitors
Outside of understanding these critical KPIs, another major advantage to measuring brand equity is using the initial survey results as CPG benchmarks.
Then, in 6 to 12 months, conduct another iteration of the study to see how changes to marketing tactics or product design impacted awareness, perception, and CPG net promoter score benchmarks.
2. Mobile ethnography with shoppers
Some of the biggest challenges in the CPG industry are low brand loyalty and the abundance of competitors in the market.
To overcome these barriers, retailers need to understand the decision-making that goes into selecting a product.
Therefore, another CPG market research methodology worth consideration is mobile ethnography.
With a smartphone as the medium, consumers can complete activities in-store or at home like submitting videos or photoresponses that offer multiple layers of insights.
It allows brands to learn from consumers via their own words and actions.
Watch this video by our CPG market research company to learn more about mobile ethnography.
Example #1: In-store mobile ethnography
An egg producer would like to understand the top factors of choice when consumers purchase eggs.
To measure this, a research participant must go to their local grocery store and video log themselves finding the dairy aisle and choosing a brand of eggs.
The shopper must answer why they chose this brand of eggs over the others.
- Is it because of the price?
- Is it because they saw an advertisement for the egg brand?
- Is it because they had a coupon?
- Is it because the eggs were not cracked?
- Is it because the eggs were healthier?
The video documentation will give a real-life look into their normal shopping habits and how the egg brand can remarket itself as the top choice.
Example #2: At-home mobile ethnography
A mobile ethnography study is not just limited to in-store purchases. Video recording and mobile diaries can take place in the participant’s home while the product is in use.
This approach to in-home usage testing offers a great perspective on how consumers are utilizing a product, food, or beverage in their most natural environments.
CPG companies can also observe valuable behaviors such as:
- What time of day it is used
- What rooms is it used in
- Who in the household uses it
- How they feel while using it
The results from this kind of CPG market research study may have direct implications for your new product concept or marketing strategies.
Remember, we are people selling to people. Market research can help find the marketing and advertising message that is most relatable to your target audience.
Recommended Reading: How to Succeed in Fast-Moving Consumer Goods (FMCG) Through Data and Analytics
Another type of market research to consider is customer segmentation. This technique is a critical aspect of market research, particularly in the consumer-packaged goods industry.
Customer segmentation involves dividing customers into groups based on common characteristics such as demographics, psychographics, geographics, behavior, needs, or hobbies.
By doing so, you can better understand your customers' preferences, behaviors, and motivations and tailor your marketing and product development efforts accordingly.
It also enables you to target specific customer groups with personalized messaging and promotions, resulting in increased sales and customer loyalty.
Why is customer segmentation important in the CPG industry?
In the CPG industry, customer segmentation is crucial for several reasons.
Firstly, retail products are typically purchased frequently and have a high customer turnover rate. In fact, almost 35% of CPG customers will walk away after a single bad experience
Therefore, understanding customer needs and preferences is essential to ensure repeat purchases and long-term customer loyalty.
Secondly, the consumer packaged goods market is highly competitive, with numerous brands competing for customers' attention and wallets.
Effective customer segmentation can help companies differentiate themselves from their competitors.
Lastly, customer segmentation can help CPG companies identify and target new customer groups they may not have previously considered. This CPG businesses to expand their customer base and increase sales.
To conduct customer segmentation in the CPG industry, you need to follow a few key steps:
- Identify the segmentation criteria: Determine which criteria you’ll use to segment your customers. Common criteria include demographics (e.g., age, gender, income), psychographics (e.g., values, interests, lifestyle), behavior (e.g., frequency of purchase, brand loyalty), customer satisfaction (e.g., promoters, passives, detractors), and needs (e.g., functional, emotional).
- Collect data: You need to collect data on your customers to determine which criteria you’ll use for segmentation. Our recommendation is to complete this with an online survey agency.
- Analyze data: Analyze the data you have collected to identify customer segments. You can do this through statistical analysis, data visualization, or other analytical methods.
- Develop customer profiles: You need to develop profiles for each customer segment based on their characteristics. This includes information such as demographics, behaviors, needs, and preferences.
- Develop marketing strategies: Develop marketing strategies tailored to each customer segment. This includes messaging, promotions, and product development that align with each segment's unique characteristics.
To learn more about customer segmentation as a market research option, read our blog post: How to Conduct Customer Segmentation in 6 Easy Steps.
What is an example of a customer segment in retail?
Our CPG market research company recently conducted a survey with grocery shoppers across the country. With the results, we divided common customer groups into seven segments.
Here is an example of a customer segment.
Download the Grocery Shopping Consumer Segmentation report for more insights into the study.
4. eCommerce user experience interviews
For many retail brands, websites and apps are major components of the consumer experience.
Therefore, eCommerce user experience (UX) research is perfect for CPG brands that want to dive deep into how participants use a platform and what their thoughts are in real time.
In a typical UX interview, a consumer is asked to navigate and complete tasks on a website or application while being recorded.
💡 Pro tip: You will get the most out of this research if both the participant’s screen and device camera are recording the interview.
Findings from website user experience interviews will shed light on the ease of use of a platform better than any other form of research.
You can identify issues regarding descriptions, titles, navigation tabs, images, links, and buttons that are often too specific to be mentioned in a survey or focus group.
This research is critical for CPG companies that prioritize online customer engagement and e-commerce.
You do not want to have any doubt that your platform functions and meets consumer needs as intended.
5. Shelf testing and eye-tracking
Where and how your product appears on a shelf is critical to its success.
Things such as shelf design, product design, and product position all impact the customer’s purchasing decision.
For context, research shows that most consumers believe the middle shelf - or the shelf closest to their eye level - is the best placement for products in a store.
Therefore, CPG market research such as in-store or in-person shelf testing can provide you with answers regarding whether your product is positioned in the right place and capturing the attention of consumers.
How does CPG shelf testing work?
A qualitative recruiting company will source, screen, and schedule participants reflective of your desired target market.
Then, during the shelf testing, eye-tracking software is used to see what products participants viewed, when they viewed them, and for how long.
Participants wear special eyeglasses that track and analyze their eye movements.
More specifically, eye tracking market research can measure a variety of metrics including changes in direction, attention, focus, presence, and pupil size!
Also, remote and webcam-based eye-tracking systems are available for virtual shelf testing services.
Although living in a post-pandemic world, some participants may still feel more comfortable in a virtual environment. New technologies allow for virtual shelf tests to be conducted in 2D and 3D!
Benefits of eye-tracking market research for CPG brands include:
- Collecting exclusive details: Eye-tracking technology can gather hard-to-obtain information such as gaze points and fixations. These events occur quickly and may seem insignificant but they can tell you so much about your product.
- Reliable observations: The saying “the eyes don’t lie” remains true in market research. You can accurately measure some consumer behaviors simply by tracking where their eyes go.
- Consumer perspective: Seeing the store shelf from the consumer’s point of view is a tremendous advantage. By placing yourself in the eyes of the consumer, you’ll have a greater understanding of how to make your product stand out.
CPG shelf testing best practices include:
- Always over-recruit. Be sure to recruit more than your initial target number of participants. Respondents may cancel late so you want to make sure your study can go on with a specific number of participants.
- Offer a reward. Providing an incentive can be very effective if you experience difficulties in recruiting participants. This can include a cash stipend or a gift card.
- Shelf-testing and eye-tracking services are affordable for all businesses. Research what technology and services make the most sense for your company and see what price range is appropriate.
Focus groups are an effective CPG market research option if you want to see how several aspects of your product are perceived by target buyers.
You can gather reactions on a variety of things including product names, logos, size, taste, and price.
Additionally, focus groups can be conducted in person or online.
Depending on your project objectives and budget, online focus groups may be a better option. They reduce costs because there is no need to rent a facility or provide food and beverage for focus group participants.
CPG Market Research Example: Pepsi
Below is a real-world example of how PepsiCo, a multinational food and beverage corporation, is using data and analytics to gain consumer insights and drive innovation in its product offerings.
PepsiCo collects data from various sources like grocery store cash registers, e-commerce portals, focus groups, and ad concept testing surveys.
- The insights team conducts focus groups to determine whether the company should proceed with particular commercials.
- PepsiCo conducts surveys among customers to provide reliable information about popular and unpopular products.
The soda brand has many insights teams, and each team uses market research to figure out who its customers are and what they want. This data is then sent to other groups within the company to make better, more informed decisions.
For instance, in a market that prioritizes health consciousness, it is crucial for PepsiCo to monitor consumer sentiment trends as they influence actual product research and development.
As a result, they made the decision to remove aspartame from Diet Pepsi products.
How Much Does CPG Market Research Cost?
Top consumer goods brands like PepsiCo have access to dedicated teams responsible for their in-house market research.
But, contrary to popular belief, you don’t need to share the same budget as top consumer packaged goods companies to reap the same benefits of data-driven decision-making.
The cost of third-party CGP market research varies. It depends on the type of methodology, your target audience demographics, the length of the study, and other factors.
Generally, you'll want to budget for anywhere between $5,000 to $40,000.
A CPG market research company, like Drive Research, can easily navigate your brand through consumers’ everchanging desires, expectations, and needs.
Better yet, our market research company can work with your budget to recommend what is the best approach.
Having a partner who specializes in insights and consumer behavior analysis means your team quickly adjusts to market trends, while still focusing on your everyday tasks.
Final Thoughts
CPG market research is critical to remaining competitive in the market.
Brand equity surveys, mobile ethnography, user experience interviews, shelf testing and eye tracking, focus groups, and customer segmentation are among the top market research options for CPG brands.
CPG market research provides valuable insights into consumer behavior, which can help...
- Increase sales
- Create effective marketing campaigns
- Stay on top of industry trends
By investing in market research, you can better understand your consumers and optimize your products and marketing strategies to meet their needs.
The CPG market research options discussed in this guide will help your brand or product say one step ahead of the always-changing expectations and specifications of consumers.
Contact Our CPG Market Research Firm
At Drive Research, we conduct quantitative and qualitative CPG market research to better understand consumer tendencies and preferences.
With consumer decision-making at a constant state of evolution, market research is more valuable than ever for consumer packaged goods (CPG) brands.
Contact us to design a custom market research study with consumers to obtain all of these insights and benchmarks for your team. Simply fill out the form below or email [email protected].
Justin Eisenhauer
As a Research Assistant, Justin works directly with all team members on client projects. His intrigue in market research formed during his time at Marist College, where he studied business and entrepreneurship.
Learn more about Justin, here.
