Market Research is a specilaised area and exists mainly in dedicated market research agencies. Companies do conduct market research but it is relatively rare to have someone dedicated to this role, although some companies may take competitive analysis seriously enough to dedicate someone to it.
Market research is a process of gathering and analysing information about markets and customers. It always incorporates some form of data collection which is collected directly from a respondent whether secondary research (often referred to as desk research) or primary research. The purpose of any market research project is to increase understanding of the subject.
Firms tend to collate information on:
- Competitive Intelligence
- Market Intelligence
- Trends & innovation
- Product innovation
The market research characteristics could be:
- The geographical location: local, regional, national, European or international market
- The type of product/service: a product group (i.e. cosmetics), a type of product (i.e. perfume), a branch of the product type (women’s perfume) or a specified product (a particular brand of perfume)
- Chronological/time-oriented: past, present or future market
- The buyers’ profile: sex, age, socio-economical classification, level of education, etc.
- The intermediates or the end user profiles: stockists, retailers, wholesalers, manufacturers, mothers, children, etc.
Market Research Agencies work directly for companies as well as producing reports of their own that are available to purchase. There are a number of roles that are offered within market research agencies. These will include the actual market researcher, the report writer, the freelance journalist, sales & marketing and also the shopper. The later is a role that monitors retail outlets and product activity, purchasing and reporting on certain launches.
Market Research Methods
Basically there are two types of research: ‘Primary’ and ‘Secondary’. The latter involves using information that is readily available, for example by utilising reference materials. ‘Primary research’ on the other hand is where you conduct your own bespoke piece of market research. All of the available methodologies either collect quantitative or qualitative information.
Quantitative research is numerically oriented, requires significant attention to the measurement of market phenomena and often involves statistical analysis. For example, a bank might ask its customers to rate its overall service as excellent, good, poor or very poor. This will provide quantitative information that can be analysed statistically. The main rule with quantitative research is that every respondent is asked the same series of questions. The approach is very structured and normally involves large numbers of interviews/questionnaires.
Qualitative research provides an understanding of how or why things are as they are. For example, a Market Researcher may stop a consumer who has purchased a particular type of bread and ask him or her why that type of bread was chosen. Unlike quantitative research there are no fixed set of questions but, instead, a topic guide is used to explore various issues in an in-depth manner. The discussion between the interviewer and the respondent is largely determined by the respondents' own thoughts and feelings. Research of this sort is mostly done face-to-face. One of the best-known techniques are focus groups. These are usually made up of 6 to 8 targeted respondents, a research moderator whose role is to ask the required questions, draw out answers, and encourage discussion, and an observation area usually behind one way mirrors, with video and/or audio taping facilities.
After compiling the data, Market Researchers evaluate it and make conclusions and recommendations to their client or employer based upon their findings. They provide an organisation's management with information needed to make decisions on the promotion, distribution, design, and pricing of products or services – information that meets the initial research objectives.