A Guide For Understanding CPG Market Research.

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Understanding CPG Market Research

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Market research is a concept that brands are aware of, but few understand. The fact remains CPG market research is key to a brand’s success.

CPG market research is the central element of your brand’s packaging; the secret sauce determines what the packaging will look like, who we are designing it for, and how users interact with it. The ability to perform exhaustive, effective market research is crucial to working with a design agency. While any business can work with a manufacturer to develop basic prototypes, the research makes the difference in how users respond and how effective the packaging is.

Understandably, our clients are always curious about the process! Broadly, CPG market research falls into one of four categories:

  1. Exploratory
  2. Primary
  3. Secondary
  4. Evaluative

Below, we’ll run through each style to better understand what goes into the typical market research process. But first, we will discuss market research for consumer packaged goods, why it’s essential, and what metrics you should research. 

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What is CPG market research?

CPG market research asks consumers questions about interests or preferences, evaluates products and designs, and monitors their behaviors during purchase. Market research for consumer packaged goods can be as simple as creating a survey or as comprehensive as monitoring consumer activity throughout a store or online site. Brands of consumer packaged goods can be researched in-house or by a consumer testing agency.

Why CPG Market Research is Essential

Market research for consumer packaged goods provides enhanced year-over-year revenues to the business or prevents them from making a big mistake. That’s the straightforward answer to why market research is vital for our CPG clients. However, the underlying reasons may resonate more and cause you to take market analysis and consumer testing more seriously. Here are three of the many reasons;

  1. Market research data will give insights into the right retail partners and how you can best serve them.
  2. The data will help you determine the overall market size and whether you should enter as a broad or niche product.
  3. Research enables you to understand whether your brand differentiation impacts product sales.

While we were a guest for the On-Brand interview, Nick Westergaard put it perfectly with this statement. “Performing market research is like eating vegetables. Brands know it is good for them, but don’t do it.” 

We couldn’t agree more with this statement. But unlike vegetables, brands only have to stomach the investment; an agency like ours will do the rest. 

What Should You Perform Research On?

Many CPG brands research for discovery rather than having specific goals in mind. While brand discovery is essential, you must also account for the key levers determining a CPG brand’s success. A short list of testing metrics includes;

  1. Brand Perception
  2. Brand Recall 
  3. Brand Resonance
  4. Demographics
  5. Consumer Interests
  6. Consumer Preferences
  7. Buyer’s Journey 
  8. Purchase Drivers
  9. Purchase Intent
  10. Product Experience

These CPG branding data sets are necessary for concept testing for future sales, marketing, and advertising campaigns.

Exploratory CPG Market Research

The most general type of CPG market research is called exploratory or generative. Exploratory is research at its most basic, answering broad questions about the brand’s goals and target market:

  • Who is the packaging for?
  • What are the brand’s goals? 
  • What problem is the product solving?

Compared to the more specific types listed below, it’s hard to call this “research.” These are fundamental questions that every brand should have answers to before they begin their packaging design process. Nevertheless, the questions need answers-and-these answers to form a foundation for all future research efforts.

We can perform exploratory research by assessing the brand’s persona, established marketing goals, and existing product lines. It can also involve in-depth assessments, such as customer interviews and one-on-one discussions. Brands should research early in the design process to provide insights and data that we will refine in later research stages.

The problem: it gets you on the field with little chance of winning the game. Exploratory research for consumer packaged goods develops consumer insights that we must further test for validation and accuracy. 

Read More: CPG Insights

CPG surveys create conversations but are not the most impactful of the CPG product testing methods. Even regarding brand equity, what someone says vs. what they do leads to entirely different results. 

The Solution: Take your testing from being on the field to being in the game with the proper primary research.

Primary CPG Market Research

Here’s where things get good. Primary research involves going directly to the source (the customer) and soliciting their feedback. This form of market data is a better way to plan marketing strategies and get confirmation about whether your ideas will work. We perform most primary research through direct communication with customers:

  • One-on-one interviews with guided questions.
  • Conversational interviews with an informal, laid-back style.
  • Field trials with informed consumers who can help shape the product. 
  • Ethnographic interviews focus on watching (eye tracking) customers interact with products.
  • Focus groups that a moderator directs and asks specific questions to elicit data.
  • Diary reviews, where consumers track their activities over time and report data.
  • Contextual inquiries, where customers answer selected questions and are then observed.

Naturally, primary research is the preferred method of data collection. Nothing beats hearing the customer’s perspective from their mouth, and there’s no better way to learn which strategies will motivate them to purchase.

The problem: Even in primary research, there is a dangerous level of subjectivity and personal biases. Inconsistencies occur when consumers know they’re being asked questions for a reason or being watched while making purchases. Most primary research disturbs a consumer’s natural flow when deciding which products to purchase. 

If you’ve ever taken a personality test, you understand this. You try your best to answer the questions without beliefs disagreeing with the truth, but it’s simply unavoidable. 

The Solution: Testing in a way that removes the consumer’s ability to decide based on what others will think about their purchase. 

In this SmashBrand case study, consumer testing for 7-Eleven proved essential to our packaging design process. In this packaging refresh, we could help 7-Eleven see a 63% increase in purchase intent and an 18% improvement in perceived SKU differentiation.

7-11 Private Label Packaging Design

The result: Lower purchase friction and better sales performance. 

Secondary CPG Market Research

Secondary research involves researching secondary sources, such as

  • Online articles
  • Magazines, books, and periodicals
  • Company databases
  • Government or university research portals

This type of research can be more challenging because of the sheer number of available resources. Limiting your research is hard, and many of the sources you find will be outdated or outright inaccurate. Companies need to take extra care in this process to vet their sources and gather data from only the best possible sources.

Despite its drawbacks, secondary research has its uses. It’s a great way to validate the data gathered from primary research, and it’s helpful to find statistics, studies, and industry research that support design choices. You won’t find most of this data through the other research options we’ve mentioned. As such, secondary research isn’t inferior to primary research by any means; it’s a complementary method that provides much-needed context to design decisions.

Evaluative CPG Market Research

Finally, we have evaluative research. This method lets customers evaluate a prototype throughout each iteration of the design process. Here, we review each option as the design progresses to determine whether it aligns with the goals identified in the above research. Usability studies are a great example.

We can break down this method into two subsets of research data: Summative and formative.

Formative data involve a customer’s perceptions of each idea in a design prototype – for example, the material used in your packaging or how it sits on the shelf. We collected formative data across each iteration to ensure that each design decision contributes to the product’s overall goals.

Summative data takes a broader look at the design and determines whether the product achieves its overall goals. It’s outcome-oriented, with customers assessing the entire design, how it makes them feel, and whether it accomplishes its objectives.

Creating a Strategy for Comprehensive CPG Market Research

These four research styles form the basis of CPG market research. Of course, the specifics vary across companies, and no two brands will require the same analysis. Smaller companies with less established designs, for example, focus more on primary research and the individual opinions of their core market. More prominent brands often base their decisions on secondary research, broad CPG industry trends, and the views of carefully chosen focus groups.

There’s no one-size-fits-all solution. What matters is that companies work with agencies that have the experience required to perform research effectively and put those insights into action.

The Relationship Between Packaging Design & Consumer Testing

Consumer goods brands understand the need for marketing research yet limit their investment in product development, marketing, and advertising. Unfortunately, they are missing the largest needle-moving consideration: packaging design. Packaging design is the most crucial factor for creating purchase intent, and without testing, you can’t be sure you have the most impactful presentation. 

Package design testing provides consumer insight right at the nearest point of purchase. Any CPG brand looking to play ball against category leaders must have a packaging design that consumers prefer over its shelf competitors.

CPG Packaging Design & Consumer Testing Agency

Are you a CPG brand entering a new retailer or looking to capture more market share? We can help. SmashBrand is a packaging design agency that tests consumer behavior in an undisturbing way. 

Working with our team is like working with CPG strategists, a design firm, and multiple CPG market research companies. We can help you create and succeed in a new product launch or packaging refresh. Book a time to discuss your project with our team. 

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