Market Research

Market research is a systematic process of collecting, recording and analyzing of data about customers, competitors and market places. The main purpose of market research is to explore more information about market and customer trends in order to make better business decisions.

Market research process

• Information need
• Define the research objective
• Design the research methodology
• Secondary research
• Primary research
• Tabulation and analysis
• Report writing and presentation
• marketing action

Information need

Information need is a source for initiating a marketing research project. Suppose a marketing manager who would like to launch a new brand of soap in the market. He wants to explore the market size in the given segments and to position the brand also in this market. It’s an information need that could be understood by conducting a consumer survey.

Define the research objective

Next step to define the objectives of the research study ie., nature of the research problem. For example, To determine the customer satisfaction of a new soap brand recently launched by ABC Company will be the research objective of the study.

Design the research methodology

Research methodology provides the framework to collect and analyze data. The different research designs will help the researcher to relate the research problem appropriately. There are three kinds of research designs

• Exploratory research
• Descriptive research
• Causal research

• Research method Primary and Secondary
• Sampling plan
• Questionnaire design
• Field work
• Analysis

Secondary research

Secondary research is a source of information widely available in the published data sources, newspapers, journals, periodicals, reports and Internet. The main disadvantage of this secondary research is unable to validate the reliability of the data.

Primary research

Primary research involves the collection of information with the research projects on hand from the reliable sources such as customers, suppliers, clients etc. The main disadvantage would be very expensive to collect primary data and advantages would be timely, focused in nature. There are different methods of collecting primary data such as

• Observation
• Experiments
• Surveys
• Consumer panels

Tabulation and analysis

Based on the collected data from the questionnaires, tabulation and analysis would be done to reveal the findings and recommendations for the research study undertaken by the company. There are basically two kinds of analyses in the market research study namely

• Simple tabulation
• Cross tabulation

Report writing and presentation

After the tabulation and analysis is completed, the next step is to prepare a presentation of the major findings and recommendations of the research study to the clients. A formal research report presentation comprises of the following heads:

• Executive summary
• Table of contents
• Introduction
• Research objectives
• Research methodology
• Sample design
• Field work
• Analysis
• Questionnaire design
• Analysis
• Findings
• Limitations
• Recommendations and action plan

Based on the research report, the clients will initiate suitable marketing actions and this is the only expected income of any research study.

Research methods

There are different research methods including:

Qualitative method is generally used for exploratory research purposes with less number of respondents. The examples including

• Focus group discussion
• In-depth interviews
• Projectivetechniques

Quantitative method is usually a data driven approach to infer conclusions out of the research study involving a large number of respondents. Few examples like

• Consumer surveys
• Questionnaires

Ethnographic study method is basically a qualitative approach. It involves the observations of customers social phenomena on using the product usage.

Experimental method is basically a quantitative approach involving test markets and simulation of a product usage /preferences/ behavioral patterns.

Applications of marketing research

There are two different applications of marketing research broadly:

Strategic applications includes demand forecasting, market segmentation, sales forecasting, positioning studies and target audience identification.

Tactical applications includes product testing, product tracking research, pricing research, promotional research, distribution and logistics research.

Snapshots of kinds of research studies that involve the tactical applications of marketingresearch are as follows:

• To determine the market potential of emergency roadside assistance car package
• To find out the effectiveness of the advertising campaign for a detergent brand
• To identify the consumer buying habits for white goods
• To find the customer satisfaction level among the users of a new branded PC
• To determine the brand awareness and brand loyalty for a cellular phone hand set

Types of marketing research techniques

• Test marketing
• Concept research
• Product research
• Pricing research
• Distribution research
• Advertising research
• Media research
• Segmentation research
• Positioning research
• Mystery shopping
• Online panel
• Customer satisfaction studies
• Ad tracking
• Brand equity

Lists of marketing research companies in United States

The leading marketing research companies in the United States are as follows:

• ACNielsen
• Consumer Insights Inc
• Decision Analyst
• Anderson Analytics
• Euro monitor international
• Forrester Research
• The Gallup Organization
• Gartner group
• Harris Interactive
• IMS Health
• J.D.Power and Associates
• Market Tools
• Market Probe International

Limitations

Usually,market research is very useful most of the time to take better business decisions but it is not always the best available source of information to make decisions . Market research works out well when combined with judgment, experience, intuition and expectations. Sometimes, market research is time consuming process also.

Emerging technologies – Market research

In recent years, online marketing research is very popular among the consumers and the research companies. Using email or through website, they will give responses to the questions asked. The main advantages of doing research on the Internet would be

• Interactive approach in which customers has the ability to design their products or packaging on their own imagination
• Response speed will be very fast
• Analysis and report making could be done at the earliest using statistical software available in the market

The main disadvantages would be the privacy and security issues on the data stored and represented.

There are three methods of doing online surveys:

• Email surveys
• HTML surveys
• Interactive surveys

Email surveys are one of the fastest and easiest methods among other online survey methods. Questionnaires are attached via email for getting speedy responses from the target audience.

The complex questionnaires are framed using programming language with graphics and sound options in it. To create these kind of surveys processing time will be higher and the same been sent via email to the target audience for proper responses to be collected.

The survey questionnaires are programmed and sent to the customer’s email for responses. This can be easily downloadable in the customer’s PC for answering those questions been sent to them. The cost of programming and processing time are really at a higher scale.

In general, sampling would be the Herculean task in conducting online surveys. All the Internet users would be the target audience for conducting research studies. Non –Internet users won’t be representing the sampling at all. Qualitative surveys also possible on the Internet in the form of voice chatting that look like focus group discussions. A web camera would be the best possible solution to capture facial and emotional responses of the target audience.

Data Warehousing and Data Mining

Data Warehousing and Data Mining are the emerging technologies in the marketing research space. Data warehousing and data mining will capture huge volumes of data on a regular basis from different sources and been stored for analysis in a virtual warehouse for future course of action. Few examples are as follows:

• Credit card companies
• Banking and Financial Institutions
• Retailing companies
• Cellular service providers etc.,

The data stored in the virtual warehouse will be used to support business decisions and marketing actions such as promotions, bonus, rewards, gift vouchers, loyalty programs, referral business etc., All these data will be used as a part of Customer Relationship Management (CRM) initiatives of the company in the future. Few techniques been used to analyze the data mined from warehouses such as

• Correlation analysis
• Factor analysis
• ANOVA (Analysis of variance)
• Discriminant analysis
• Cluster analysis
• Regression analysis etc.,

The above analysis would be performed using high-end statistical software such as SPSS, Minitab, SAS etc., to predict customer’s preferences and behavioral patterns.

Case Study – Starbucks market segmentation study

Starbucks is the leading retailer in the specialty coffee segment in the world with more than 9,500 retail outlets wide spread across North America, Latin America, Europe and Middle East. The company is committed for high quality coffee to all of its customer segments through out the world.

The Challenge
• Inefficient to predict actual sales revenues promptly
• Inability to predict the brand image/impact of a new retail outlet in the catchment’s area
• No prediction about store renovations, business decisions and profit
The solution

Starbucks has implemented web-based segmentation analysis software in turn helped them

• To develop a predictive modeling tool,
• Enhancing the process flow and store operations and
• Improving sales forecasting
The results

The web-based segmentation analysis has integrated market-planning function of its retail store operation that laid foundation for store’s future growth and opportunity.

Thus, market research plays a pivotal role in providing the requisite customer information to take effective business decisions. It can be done by the marketers either in-house research or outsourcing to a professional research companies operating in the market place. The researchers should follow the certain norms and ethics while conducting the research study. Primary research in general is more useful and also very expensive than secondary research. Now a days, online marketing surveys are very popular complementing the traditional approach of marketing research to speed up the responses time and also using high-end technologies to determine the preferences and tastes of the customers. Based on these research findings, a suitable marketing action plan will be initiated by the companies to delight the customers in using their products and services.