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Writer's pictureAgnes Sopel

Market research - the fundamental concepts


There is a considerate confusion and debate over the term of "market research". However, generally it is considered as research into customer wants and needs. It is performed in order to support marketing decisions. In short, it is concerned with a disciplined collection and analysis of data to help us understand customers needs.


The ability to measure marketing performance has a positive impact on the business profitability, stock market valuation and performance.

The first question that every marketer will have to ask themselves before performing any market research is whether the information collected will be worth more than the process and cost of gathering it. Marketing research can present substantial costs both in terms of money and time to the organisation. Sometimes a project also can be started without doing any research at all. In general however, it would not be wise to undertake a larger commitment before carrying out any market research beforehand. A vast majority of new products fail and it is because customers think it will not be worth the money. A good marketing research would reduce a risk of this happening.


Types of research




There are different type of research we can carry out: customer research, promotion research, product research, distribution research, sales research or/ and marketing environment research.


Customer research would be looking at the market segments. It can provide geographical information about the customer, their physiologic needs, interests and hobbies. It also take into consideration into what customer believes and spends their money on as well as trends in the market.


Promotion research would be perform to gain information about a success of a promotion. It is also important here to ensure research is performed on the type of media used for most successful promotion in the efforts of meeting its objectives.


Product research would identify a need for a new product or an existing one.


Distribution research would be perform to identify the best distribution channels.


Sales research is performed to help sales management in order to determine the most effective sales tactics and strategies, and


Marketing environment research examines the aspects on micro- and macro-environments. Generally it is to ensure the organisation is aware the changes affecting the business and able to respond to them effectively.


Very often, internal company information will provide a very useful data. But the data is worth nothing if it is not supported with thoughtful and critical evaluation.


Marketing information systems are often set up to provide a systematic flow of data into the organisation with automatic evaluation of the data. New technologies and computerised system allows on effective and correct data collection these days. Computers reduce the cost element in gathering the information. They can record every purchase in the organisation so the correct stock can be determined and maintained, the computer system can often also automatically analyse the trends.


The process



Marketing research aim to collect data and process it to usable information available for management to make informed decisions. But the first step of the market research process would be to define the problem and set objectives. I have published previously an article about managing market information where SMART objectives setting has been discussed.

Only after the goals have been set the process of collecting data can begin. In the previous article I have also mentioned the difference between the primary and secondary research that need to be considered.


The general marketing process therefore will consist the following steps:


  1. Problem recognition

  2. Setting objectives

  3. Secondary research

  4. Primary research design

  5. Primary research execution

  6. Analyse results

  7. Present the findings


It is always cheaper and quicker to perform secondary research first. Sometimes the necessary information have already been published and are fully available. And even if the secondary research information are not fully complete, we will need to only fill the gaps rather than gather all the information from scratch.

After the secondary research was performed than it is possible to perform primary research. The design of primary research here will involve determining the gaps, deciding who needs to be approached to obtain the information and the methods of the information being collected.



Types of research



There are two main types of research: quantitative and quantitative.


Qualitative research will involve the feeling people have towards the product or service. This type is generally more time-consuming and the sample sizes to perform it would be much smaller. This type of research will generally try to answer questions 'why'. Based on that quantitative research can be perfumed to find out the dimension of the problem.

Until recently the analysis of qualitative data was purely dependent on the skills of the person who evaluates it. However with the computer advancements it is possible now to find respondents words and phrases, finding the context in which the phrases have been used. Today, there is many different computer programs available for analysis of qualitative surveys. The presentation of the data in this method should not be numeric. It is also not appropriate to allocate percentages, but generally the data is presented in the form of a matrix or network. The primary goal of the qualitative data presentation would be to ensure it can be something usable by the managers.


Quantitative research deals with numbers. Surveys are very popular for obtaining quantitative data. With surveys however it is important to ensure the right questions are asked and that these are asked in the right way. Questions need to be short and should not be leading the respondent to the answer we want to hear. The answer should be capable of analysis and preferably by the computer. Questions should be no too personal and aim to achieve overall marketing objectives set and be relevant.

Pilot questionnaires also become more popular. Pilot questionnaire will be when designed questions are trialled on a small group of respondents and than analysed. Often this process will highlights errors with a chance to correct them before releasing the survey to other participants. There is many different types of surveys: postal surveys, face-to-face interviews, telephone surveys, feedback cards, panels, forms and online surveys.

If several errors are detected at the pilot stage it also may be reasonable piloting at a second stage. We don't want to run surveys only to find out there is a great amount of ambiguity in it and the information become not usable. At times this would sabotage the entire project.

Quantitative data analysis follows the editing, tabulating and interpreting. However putting the data into tables should be considered at the design stage


Sampling



Sampling means choosing who to ask. Very often it is not necessary to ask everybody, but it is important to ask enough of the right people to ensure that the data we collect is of any value. For some surveys less than 100 respondents would be enough to draw up valuable conclusions.

There are different types of sampling methods: 1. probability sample, 2. quota sample and 3. stratified sample.

For the probability sample a random person has a probability to be included in the sample. Quota sample is done when an analysis of possible respondents is undertaken. This method has an advantage of providing clearer cross-section of opinion. Stratified sample is similar to quota sample with the difference that a broader part of population is specified and than random section of it is interviewed.


The results from taking a sample that is not representative of the population we will to study. It is east to fall into trap of thinking that the sample is representative, but in fact it has only been drawn from a small population.


Interviews



Interviews can be very insightful of the correct questions are asked. There is always a temptation by the interviewer to lead the participant towards a certain answer. Therefore correctly designed questions, such as: 'In your opinion...', 'What do you think" will open the total judgement to the respondent.

Problems with the interview can appear when the interviewer wants to help the respondent to answer the question. This is because they want to go through the process without any questions. At times as well, when the interview becomes a negative experience the interviewer may simply skip some questions to avoid confrontation.


Before an interpretation of the results is done, there is often some element of editing and tabling of the information and data.



Market research is the starting point of the marketing planning, since it provides the information to support the decision-making. Without good information system the marketing planning and strategies have little chance to success. We have to ensure that we design our research the way, that it will be aiming to achieve the overall project objectives and plan carefully of the methods used when designing it.






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