A person holds their coffee while conducting market research on their laptop.

Having individual biases is a universal part of the human experience. Everyone has different life experiences and cultural backgrounds that impact how they view the world.

In the field of market research, however, biases can have impacts on the results of the research process and on the consumer. Inaccurate, skewed results can cause a business to make decisions based on incomplete information, costing money and time. These same, incorrect assumptions can also affect the experience of customers who are exposed to the company’s marketing efforts.

Bias can impact market research when research results are skewed due to skipped steps or missing information because of a researcher’s unacknowledged biases. To produce results that are trusted and accurate, it’s important to understand the different types of biases you have and the impact of those biases when you’re assessing market demand.

What Are the Types of Bias?

There are several types of biases that can impact your assessment of market demand. Each type of bias can skew research results in a different way.

Understanding these types of biases can help you identify them in yourself and avoid future problems with market assessments. Avoiding these biases is crucial to conducting the research necessary for the success of your product or service.

Confirmation Bias

Confirmation bias occurs when a market researcher uses the responses of consumers to confirm a belief or hypothesis they already have.

For example, imagine you are talking with consumers to determine if your product is providing the desired results. The consumers say that the product is providing some of the desired results, thus confirming what you wanted to believe. As a result, you begin to ignore additional comments about the issues consumers are having with the product. This can lead to the product performing poorly in the market.

To combat confirmation bias, ask yourself:

  • What did the participants actually say in response to my questions?
  • Is there anything I am ignoring or overlooking?
  • What outside resources and research can I use to provide support for my findings?

By asking yourself these questions, you will be able to approach your research with a more critical and less biased mindset.

Expectancy Bias

Expectancy bias, also known as observer-expectancy bias, happens when the researcher is subconsciously affecting the participant or consumer in their market research.

This bias is heavily tied to confirmation bias, so if you have identified that confirmation bias is a problem in your market demand research, take a look at expectancy bias as well.

To avoid expectancy bias, observe the facial expressions and body language you use during in-person research. If you are conducting research remotely through surveys and social media, identify places where your wording may be pushing responders to a specific answer. Your goal should be to limit the impact you are having on your participants’ responses.

Implicit Bias

According to the American Psychological Association, implicit bias is an unconscious attitude that a person holds towards a group. Many people are not aware of their implicit biases, and these biases can eventually grow and become more obvious and external.

When assessing market demand for your business or product, try to be aware of the prejudices you may have against certain demographics that can be influencing your results. This can be negative opinions towards a certain age group or geographic location, among others.

For example, if you’re releasing a new product, and you’re only marketing it to a younger audience, consider how an implicit bias might have affected that decision. Perhaps you decided, consciously or subconsciously, that the product wasn’t meant for an older demographic, and your bias impacted the market research you conducted.

Identifying your implicit biases can help you see the ways you’re limiting the marketing strategy for your products and services. This can help you to reach more customers and find new target markets that you hadn’t considered before.

Recall Bias

Recall bias comes from the differences in participant groups’ abilities to recall information. Some groups may exaggerate their experiences, others may diminish their experiences.

One way to reduce this bias is to get consumer replies in the moment. Providing opportunities for consumers to assess products and provide feedback soon after purchase can reduce the discrepancies in their recall.

How To Assess Market Demand Without Bias

Before making any major business decision, it is important to conduct thorough research that is free from bias.

Bias is everywhere, and oftentimes, it’s not immediately apparent. However, there are tools and techniques that businesses can use to reduce bias and conduct unbiased assessments of the market for specific products and services.

Conduct a SWOT Analysis

A SWOT analysis is a technique for assessing the strengths, weaknesses, opportunities, and threats present in a business.

The goal of a SWOT analysis is to provide fact-based information and help business owners look at their company from a new perspective. A SWOT analysis provides information from inside the company, including the strengths and weaknesses that are currently present and need to be addressed. It also looks at external factors that can impact the business’s future.

You can do a SWOT analysis on a scrap sheet of paper, during a staff meeting, or through a third-party agency. No matter the scale of your SWOT analysis, it will have the same key focuses and steps:

  • Strengths: What does your company do well and how do those strengths help you stand out from the competition?
  • Weaknesses: What skills gaps exist within your team? What biases are present in the way your team operates and the way you lead?
  • Opportunities: How do customers perceive your business? What changes do you see in the market that could lead to potential growth?
  • Threats: Are you facing any problems from competitors? Are there any biases within your company that can cause problems if not addressed?

By asking yourself these questions, you can develop a better understanding of your business and the underlying biases that exist within it.

Study Market Trends

There are a variety of market trends a business can study when assessing how a product or service will do in the market. A business owner can keep track of these trends in many ways, including:

  • Identify the top franchises that offer the product or service. How do these franchises market their services? How do their methods compare to yours?
  • Keeping an eye on influencers who work with similar products and services. What are these influencers saying about these products and how do their followers respond?
  • Reading industry-specific magazines and publications. What are leaders in your industry saying about changes in the market?

Staying up to date with the information available in your industry and identifying the fastest growing businesses in your industry can help you to better understand how your products and services fit into the existing market.

Perform a Competitor Analysis

One way to limit bias in your market research is to look at your competitors. Performing a competitor analysis allows you to see the strategies being employed and the products and services being offered by your competitors.

An important part of performing a competitor analysis is choosing which companies to research. Finding successful franchises in your industry, best-selling products and services, and direct competitors in your niche or geographic location are all helpful places to start.

Begin by looking at how your competitors are marketing their products. Who is their target market and how does it differ from yours? What social media platforms and hashtags are they using? By analyzing your competitors’ strengths, weaknesses, and marketing strategies, you can develop better strategies for your own business.

Incorporate Information From New Sources

If you’re constantly reading the same publications and talking to the same people, you may be confirming your biases. You can combat bias in your market assessments by gathering information from a diverse group of people and resources. If you want to further eliminate bias, you can contract the services of a consultant to provide an outside perspective and limit the impact of bias.

Outside of looking at diverse external sources, you can also speak with employees within your company and gather input about possible biases that exist in your organization. Speaking with a diverse group of employees can help you to better understand possible weaknesses in the workplace and the research process that need to be addressed. These conversations can take place in a group workshop setting, through surveys, or individually with the help of a human resources professional.

Every person has biases, but there are ways you can identify your biases and conduct effective, fact-based research. By analyzing biases that exist within your business and taking advantage of the resources available to you, you can conduct a market analysis that will help your products and services thrive.

Posted on Thursday May 4, 2023 by FranchiseOpportunities.com Staff to Franchise Business Resources