If you sell consumer packaged goods, you exist in a world that tends to be high-volume and low-margin. CPG companies stay afloat by capturing as wide a swath of the market as possible. To do so, they rely on CPG market research for insights into consumer needs and competitor strategies.
What is CPG market research?
CPG market research is a technique consumer packaged goods companies use to understand consumer behavior. It involves gathering and analyzing data on subjects like customer preferences, shopping habits, and brand perception. CPG companies often combine multiple research techniques to develop a comprehensive understanding of their target audience.
Analyzing this data helps CPG companies make informed decisions. Insights gleaned from market research can help businesses optimize product development efforts, packaging design, and marketing strategies. Conducting research helps businesses gain a competitive edge and stay relevant in a fast-paced CPG industry.
Types of CPG market research
CPG companies have access to a range of research methods. The most effective type of research depends on the company’s goal, development stage, and product. Consumer packaged goods market research methods fall into two broad categories:
- Primary research. This method involves data collection and original research conducted via surveys, customer interviews, focus groups, and ecommerce analytics tools.
- Secondary research. Secondary research focuses on analyzing data from third-party sources, such as industry reports from dedicated research organizations.
CPG data falls into one of these two categories:
- Quantitative data. Quantitative data is numerical and structured. Think sales records, financial details, and numerical surveys.
- Qualitative data. Qualitative data is non-numerical. This type of information can come from customer service reports, direct observations, and consumer interactions.
CPG market research methods
- Focus groups
- Brand equity surveys
- Product testing
- Social listening
- Customer interviews
- Syndicated research
Both large and small CPG companies alike rely on market research to gather actionable insights and refine their operational strategies. CPG companies may conduct research to test ideas prior to launch, evaluate product performance, or develop ideas for new marketing campaigns. These are some of the research methodologies businesses use to gather data:
Focus groups
CPG companies use focus groups to gain detailed, qualitative insights into consumer behaviors and preferences. Conducting a focus group involves assembling and interviewing a small collection of customers representing your target market. A brand representative guides the customers through a series of product or market-related discussion questions.
Viewers of the hit AMC drama Mad Men may be familiar with this method. The enigmatic advertising executive Don Draper often gained audience insights by observing focus groups through a two-way mirror.
Brand equity surveys
Brand equity surveys focus on gathering information about brand perception. CPG companies can use these surveys to measure brand awareness, customer loyalty, perceived quality, and brand associations by helping to identify consumer pain points and highlight opportunities for growth.
Product testing
You can test products by providing a selection of them to a group of target customers. CPG brands use product testing to solicit consumer feedback—it can provide meaningful insights into perceived quality and item performance.
Key metrics vary depending on the industry. In the food and beverage segment, for example, brands may ask customers to evaluate taste and texture. You can conduct product testing in focus groups, through surveys, or with blind comparison tests, where consumers evaluate competitor goods alongside a brand’s other items.
In a brick-and-mortar environment, you can also try out shelf testing. This process involves displaying products alongside competitor offerings and observing consumer behavior. Watching how customers interact with product displays provides valuable insights into product visibility, shelf placement strategy, and competitor performance.
Social listening
Social listening is the practice of monitoring conversations on social media platforms about your products. CPG brands can use social listening to understand customer sentiment, observe consumer trends, and monitor competitors. This secondary research technique can yield both qualitative and quantitative data.
Customer interviews
Customer interviews revolve around engaging select members of your target audience in short conversations about your products. Interviewers may ask a set of predetermined questions or let the conversation unfold organically. Customer interviews can provide detailed qualitative data.
Syndicated research
Third-party market research companies such as Nielsen and Gartner conduct broad market research and assemble reports on various industries. CPG companies can buy relevant studies to conduct syndicated research.
These reports often contain a thorough market analysis and consumer insights. Details may include market size information, a competitive landscape analysis, and a consumer demographics report. Purchasing a CPG market research study is a way to access large quantities of data without dedicating internal resources to research.
CPG market research examples
Successful Shopify merchants use CPG market research to shape their product and marketing strategy. Consider these examples to see how research strategies are integrated into business plans:
Tatbrow
Entrepreneur Razvan Romanescu is the founder of Underlining, a holding company operating several beauty brands, including Tatbrow, an eyebrow pencil. On an episode of the Shopify Masters podcast, he explained how analyzing market trends influenced his product positioning strategy.
“You always have to have a unique selling point or a differentiator,” Razvan says. To determine how to set Tatbrow apart, he started with market research. “We looked at microblading, which is a medical procedure to tattoo your eyebrow a certain color. There was a lot of virality coming out around it. People having horror stories, the pain, and since it’s semi-permanent, people would get their eyebrows dyed and it’ll be the wrong color.”
After assessing the competitive market, Razvan determined there was a clear opportunity to introduce an accessible microblading alternative. The Tatbrow team considered customer needs and current pain points. By positioning his product as a practical alternative to an existing trend, Razan was able to gain a competitive edge and capture consumer attention.
SURI
Gyve Safavi and Mark Rushmore are the co-founders of SURI, a sustainable electric toothbrush company. The pair stopped by the Shopify Masters podcast to share how they used research to assess the market landscape and validate their idea.
The toothbrush industry is highly competitive. After conducting research, Gyve learned that a few well-established brands controlled most of the sector. “I tried to capture a lot of that research early on,” he says. “We found that there were probably just two main brands that dominated most of the share in most developed markets.”
Running surveys and conducting interviews helped the team gain a better understanding of market dynamics. “The first thing Mark and I did was we ran a lot of surveys,” Gyve says. “Then we did in-person interviews with people. What we found was, people weren’t in love with the brands they were using. Half the time they couldn’t name it.” Although competition was high, brand loyalty was low. This research revealed an opportunity for product innovation.
CPG market research FAQ
What does CPG stand for?
CPG stands for “consumer packaged goods.” Examples of CPG products include cosmetics, food and beverage items, and over-the-counter medication. CPG items are products that consumers use and replace frequently.
What are examples of CPG products?
The consumer packaged goods industry includes food and beverage products, cosmetics, household supplies, and over-the-counter medication. CPG products are typically consumable—they’re items that customers regularly use and replace.
How do you conduct CPG market research?
CPG companies typically use a combination of primary and secondary research methods to gain market insights. Conducting CPG market research involves setting goals, gathering data, and analyzing information to understand consumer preferences, identify trends, and spot areas of opportunity.
