What is Marketing Research?
The process of gathering, analyzing and interpreting information about a market, about a product or service to be offered for sale in that market, and about the past, present and potential customers for the product or service; research into the characteristics, spending habits, location and needs of your business's target market, the industry as a whole, and the particular competitors you face .
Why is it important?
Marketing Research is very essential if you are planning to launch a new product, trying to re-launch a failed product, or trying to attract new customers. It helps you know the exact behaviour of your customers with your product, the number of customers using it, the prospects of getting new buyers, and what changes will occur if you change something regarding your product, be it the marketing or design of the product. Marketers use marketing research to find answers to various questions related to market dynamics, business environment and consumer behaviour. Market research provides relevant data to help solve marketing challenges that a business will most likely face--an integral part of the business planning process. In fact, strategies such as market segmentation (identifying specific groups within a market) and product differentiation (creating an identity for a product or service that separates it from those of the competitors) are impossible to develop without market research.
What does it involve?
Market research involves two types of data:
- Primary information. This is research you compile yourself or hire someone to gather for you. When conducting primary research, you can gather two basic types of information: exploratory or specific. Exploratory research is open-ended, helps you define a specific problem, and usually involves detailed, unstructured interviews in which lengthy answers are solicited from a small group of respondents. Specific research, on the other hand, is precise in scope and is used to solve a problem that exploratory research has identified. Interviews are structured and formal in approach.
- Secondary information. This type of research is already compiled and organized for you. Examples of secondary information include reports and studies by government agencies, trade associations or other businesses within your industry. Most of the research you gather will most likely be secondary.
Types of Marketing research:
Based on the objectives of the research, it is of 3 types:
Exploratory research is used in cases where the marketer has little or no understanding about the research problem due to lack of proper information. For example, a marketer has heard about social media marketing techniques which are employed by their competitors with great success but he is not familiar with using these for his products/services. He needs to use exploratory market research to gain/discover insights about this situation. Thus when the goal of the marketer is to precisely formulate problems, clear concepts, gain insights, eliminate impractical ideas and form hypotheses then exploratory research is used.
Exploratory research follows and unstructured format and makes use of qualitative techniques, secondary research and experts opinions. For example, the marketer from the previous case can use books, syndicated research, case studies, focus groups, expert interviews and survey techniques to conduct exploratory research.
The results of exploratory research can’t be used for marketing decisions in most cases at least not directly. Then the question arises why to do exploratory research in the first place? Well the answer is the core goal of exploratory research is to equip marketers with enough information to facilitate marketers plan a format research design correctly. For example by conducting exploratory research the marketer can find out that the competition is using popular social media channels like Facebook, Twitter, LinkedIn and YouTube to reach target consumers effectively and successfully engaging customers with the brand directly. Now with this information he can plan a formal research design to test his hypothesis.
Descriptive research is used to find accurate answers of questions like:
- Who are users of my products / services?
- How they are using my products / services?
- What proportion of population uses my products / services?
- What is the future demand for my products / services?
- Who are all my competitors?
Thus descriptive research is used to explain, monitor and test hypotheses created by marketers to help them find accurate answers. Due to this reason descriptive research is rigid, well structure and well planned and uses quantitative techniques like questionnaires, structured interviews, data analysis etc.
Causal research is used by marketers to find cause and effect relationship of variables. It is also sometimes referred as “If.. Then…” method. In this type of research, the marketer tries to understand the effects of manipulating independent variable on other dependent variable. Causal research uses field and laboratory experimentation techniques to achieve its goals. This research is used by marketers mainly to predict and test hypotheses. Let’s take some test cases where causal research can be used:
- What will happen to sale of my product if I change the packaging of the product?
- What will happen to sale of my product if I change the design of the product?
- What will happen to sale of my product if I change the advertising?
By Piyush Barskar