Market research is the study of market conditions to identify patterns. It is a process that allows firms to extract information from past events or data, analyze this information for insights, and develop strategies for future development.
Marketers have an important role in carrying out market research. A company’s success may depend on the accuracy of their understanding of consumers’ needs, wants and behaviors. Market research is very broad with many different disciplines involved including survey design creation, sampling methods and data analysis techniques being just some examples. These disciplines are all important in carrying out a successful market research study and they lay the groundwork for understanding and interpreting the results of a study.
Market research is used to identify current and future trends, opportunities, and threats in specific markets or industries. It can also be used to understand customers’ needs, wants, lifestyles or behaviors. In business management it is often referred to as market intelligence.
Market research may utilize a variety of techniques from traditional polling, focus groups to new techniques such as neuro-marketing from neuroscience. Market research is conducted by both private companies and public agencies.
Steps for carrying out Market Research
- Identification and Defining the Problem/Opportunity
- Statement of Research Objectives
- Design the Research
- Planning/Designing the Sample Collection method
- Data Collection
- Data Processing and Analysis
- Formulating Conclusion, Preparing and Presenting the Report.
Types of market research
Organizations use research to determine the best way to develop their products, services, and operations. Research can be carried out by outside agencies with various levels of involvement. The purpose of research can be for market segmentation, market size estimation, revenue forecasting, competitor analysis or any other task that helps with the development of strategies or product development. Research projects can usually be divided into two main types: financial and non-financial.
Financial Market Research is used to examine the financial status of a company or project. Typically this begins by forecasting future cash inflows and outflows. To perform a complete analysis, contact with stakeholders is necessary. The importance of financial research is highlighted in analyst reports, corporate documents and financial disclosures. Revenue forecasting and cost estimation are among the most common applications of financial market research. Financial Market Research aims to value equity or project cash flows by incorporating information such as:
Non-financial market research provides information regarding the marketing environment and competitors which can be useful for making strategic decisions. Non-financial marketing research concentrates on the developmental process of a product or service rather than their financing and financing techniques and reports focus on marketing activities. It is concerned with the performance of particular products within the market in order to enhance business performance in terms of customer satisfaction and profitability. Non-financial market research is concerned with analyzing the marketing objectives and business environment in order to make informed decisions about marketing and operations.
Market Research vs Marketing Research
The term market research is often used interchangeably with marketing research, but marketing research, as a distinct discipline, attempts to look at consumers’ perceptions of products and services. This is done through opinion polls, ethnographic studies and content analysis. Marketing also relies on consumer opinion surveys which use different methods to investigate consumer behaviour and attitudes towards brands or products.
Marketing research focuses on the consumer’s perception of products, brands or services. This includes research carried out by companies to determine the best way to reach their target consumers, product development and advertising campaigns. Consumers are often surveyed in order for companies to learn about their buying habits and opinions on different types of media. For example, a company might conduct a survey to find out if consumers are more likely to purchase a product that is placed in a wholesome environment with children playing nearby or in an adult only environment without children present.
How is a Market Research Conducted?
Market research requires a mix of statistical and analytical skills. Marketers must learn how to process and analyze data, forecast trends in consumer behavior, interpret results to determine what actions should be taken by management, and report results. Researchers need to collect data through sampling procedures, survey designs, experiments or observational techniques. Data analysis is typically performed using quantitative (numerical) or qualitative approaches (non-numerical).
To conduct the research, there are two basic types: qualitative and quantitative. Qualitative can be done in person (through focus groups), and by phone (with open-ended questions). Quantitative surveys can be done via mail or online (by asking multiple choice questions).
In order to have a successful market research study, there are three key factors to take into account: the problem being researched, the results of other studies on this topic, and finally what you want your company to do with these findings.
The goal of the market research study is to find data (and trend data) that will tell you how well your product/service performs in the marketplace.
To conduct the research, there are two types of surveys that can be used: quantitative and qualitative.
A quantitative survey is one that has multiple choice questions; it is then biased towards the number of correct answers. This method provides a limited degree of insight into consumers’ feelings, attitudes, and opinions. Quantitative surveys are considered to be objective since there are no subjective elements involved in them. They do not require the respondent to have any bias towards being interviewed or being asked certain questions. In order to use a quantitative survey, the researcher is required to list the questions by importance.
Qualitative surveys are more costly to conduct since they require more time and effort. This method provides a greater degree of insight, and requires the respondent to have a bias towards being interviewed or being asked certain questions. In order to use a qualitative survey, researchers need to listen to what the respondents are saying and then try and draw conclusions from it. A qualitative market research study can provide you with information that can’t be obtained from a quantitative study.
Qualitative research is based on face-to-face interviews with people who represent your target market. These interviews are often referred to as focus groups since they focus on a particular topic within the market. Information is gathered with these interviews by asking open-ended questions that aim to get consumers talking about certain aspects of the topic. The focus of the discussion is usually more on feelings and attitudes rather than factual data.
After all of the data has been collected, there are two more steps before you can make any conclusions. First, you must identify your audience; what type of people were interviewed? Once you know this, you can find out if there was any misrepresentation of the group (i.e., one person dominates or all opinions are uniform).. Once you have identified the group, you can determine whether there are any main ideas that are coming out of the interviews.
There are many different reasons that help to determine what type of market research study is appropriate for your company. These include:
Ultimately, the goal of the market research must be to obtain useful information. Thus, is important to identify the audience and be sure they are representative of who will use the product/service to be offered.