Research plan document on a desk

Market Research vs. User Research

Researching your audience is key to successful marketing, but one of the most common mistakes companies make is not knowing the difference between market research and user research. These terms are often used interchangeably but there are some very important differences between the two that make them distinct activities. It’s easy to see why people are confused – both phrases include the word “research” and their purpose is to learn more about a target group of people. They also use some of the same research methods and terminology, but their goals and outcomes are different and can’t replace each other. So what is the difference and should companies really invest in both? The short answer is “yes,” you need to conduct both types of research if you want your business to succeed.

Market Research

Market research involves gathering information about target audiences, markets, or competitors in a very organized and scientific manner. These findings help to make major business decisions like whether or not to launch a new product, the messaging to use in marketing campaigns, and the position and branding of a product. By understanding customer needs and spotting trends, market research is able to reduce a company’s risk in the marketplace. Some common questions that market research tries to answer are:

  • Who are your customers?
  • What are their interests?
  • How can your brand/product can fit into their lives?
  • What feedback do they have about your brand/product?
  • Who is the competition?

Market research takes a long time to gather because it is in-depth and tends to include a large pool of data. It is typically carried out at the beginning of a project so the findings can be used during a decision-making process.

User Research

Instead of looking at the big picture like market research does, user research involves looking at the details to find out how users engage with a particular product. While user research is done on tangible goods, this article is specifically about user research for digital platforms like websites or apps.

The goal of user research is to understand the user’s behavior while using a website or app. By knowing how users engage with the content, functionality, and information architecture, a company can gives users a better experience (making them happier) while also increasing conversions. It’s a win-win. User research tries to answer:

  • What user groups are using the product (website, app, etc)?
  • What are their specific needs while using the product?
  • How do users engage with the product?
  • What content should be available and where should it be found?
  • What are the users’ desired outcomes and expectations?
  • How can we make tasks easier to complete?
  • Are there any triggers or blockers to converting users?

Everything from what content goes on a page and how particular functionality works, to the color of a button and the word choice on a call-to-action can, and should, be researched. No detail, large or small should ever be left to assumptions, and there are a lot of quick and easy exercises to get the answers you’re looking for. Because of this, user research can be done frequently and throughout a project.

Let's compare the two even more

Wants vs. Needs: Market research finds out what people want, user research finds out what people need. For example, a men’s clothing manufacturer may do market research and discover that customers want a new kind of coat that goes down to the knees and has a hood, and that they want it in three colors. User research will determine what they need to see on a site before they make that purchase. For example, the website may need to show what colors are available in the index page before users are willing to click into the product page, and a combination of photos showing the coat from the front, side and back could result in increased conversions.

Big picture vs. Small details: Market research focuses on giving direction to business decisions while user research focuses on the details that can help improve a user’s experience with those decisions. For example, a car company might do market research to learn more about what people expect from electric cars. They learn that the main deterrent that people have when considering these cars is how accessible charging stations will be. That helps them make a business decision to partner with a gas station company to install charging stations in each location. User research will help them to determine how the charging port door is configured on the car, or what the instructions at the charging station should say to help users understand what they should do.

Infrequent vs. Regular: Since market research influences major business decisions, it needs to provide hard data, which is time consuming and expensive to gather. It’s no surprise then that market research isn’t done very frequently. On the other hand, user research can be set up and finished in less than a week. In fact, 85% of usability problems are discovered with only 5-7 users. Rather than hard data, user researchers try to establish generalizations and take it from there. To make up for the fact that user research is so quick, it is expected to happen often and iteratively. 

“Elaborate usability tests are a waste of resources. The best results come from testing no more than 5 users and running as many small tests as you can afford.”
– Jakob Nielsen (Nielsen Norman Group)

Market research and user research shouldn’t compete with each other, they should complement each other. Ideally market research would be used to define an audience and guide business decisions, while user research helps to make those decisions successful. Here’s an example that brings it all together:

Illustration of a baker in a bakery

There once was a baker named Sandy who wanted to open up a bakery in town. She knew the competition was fierce and wanted her bakery to stand out and she thought her pies, muffins, cookies, and cakes would be a hit with customers. She decided to do some market research to determine what customers would want from a bakery. After conducting some interviews, competitor research and street surveys, Sandy discovered that the traditional bakery market was saturated and people weren’t interested in another standard bakery. Customers were willing to go to a new bakery, even travel outside their neighborhood, but only if it offered something different.

She also discovered that customers wanted baked goods they could give as gifts, which meant they needed to be unique and look as good as they tasted. So Sandy decided to open a bakery that would do just that, and it would sell pie cakes! What’s a pie cake you ask? It’s a tasty fusion of two of our most-beloved baked treats: a pie and a cake. A cake filling is baked into a pie crust and covered with traditional pie toppings. This would offer her customers what they wanted – something new and delicious.

When Sandy opened the bakery she was a success. Her research had paid off and she’d been able to fill a demand that she didn’t know existed. Soon after she opened her bakery, Sandy’s customers started asking if she had a website where they could buy her treats online so they could send pie cakes to their family outside the city. She launched the site to meet this demand but unfortunately sales weren’t that great and she couldn’t figure out why. Her customers loved her products and the traffic to the website was steady. Sandy decided to go to a digital agency for their help to get more sales online. They recommended user testing.  

After some observations and interviews, they realized that people weren’t buying pie cakes from her website because the “buy” buttons weren’t prominent enough. In fact, many visitors didn’t even realize they could buy from the website because it took four clicks to get to the buy button. The agency added buy buttons in more visible areas of the site and ran A/B tests until they found the color and wording that converted the most visitors. Once the buttons were added, sales increased on Sandy’s website. Thanks to market research she knew what her customers wanted, and thanks to user research she could help them get her products easier.


About the author
Veronica Bagnole
Veronica Bagnole

Veronica has worked in digital marketing for 10 years and has held positions in digital agencies in the US and Great Britain. She has an MA in Globalization & Communication and spent 3 years in the Peace Corps.​

Related articles