Marketing Research: Definition, Process, and Significance

Introduction of Marketing Research

Market research and marketing research are often confused. 'Market' research is simply research into a specific market. It is a very narrow concept. 'Marketing' research is much broader. It not only includes 'market' research, but also areas such as research into new products, or modes of distribution such as via the Internet. Here are a couple of definitions:

Marketing Research is systematic problem analysis, model building and fact finding for the purpose of important decision making and control in the marketing of goods and services. Marketing Research is a well-planned, systematic process which implies that it needs planning at all the stages. It uses scientific method. It is an objective process as it attempts to provide accurate authentic information.

 

Define Marketing Research

Marketing Research is sometimes defined as the application of scientific method in the solution of marketing problems. 

Marketing Research plays a very significant role in identifying the needs of customers and meeting them in best possible way. The main task of Marketing Research is systematic gathering and analysis of information.

"Marketing research is the function that links the consumer, customer, and public to the marketer through information used to identify and define marketing opportunities and problems; generate, refine, and evaluate marketing actions; monitor marketing performance; and improve understanding of marketing as a process. Marketing research specifies the information required to address these issues, designs the methods for collecting information, manages and implements the data collection process, analyses, and communicates the findings and their implications."

The Marketing research Process 

Marketing research is gathered using a systematic approach.

1. Define the problem. Never conduct research for things that you would 'like' to know. Make sure that you really 'need' to know something. The problem then becomes the focus of the research. For example, why are sales falling in New Zealand?
2. How will you collect the data that you will analyze to solve your problem? Do we conduct a telephone survey, or do we arrange a focus group? The methods of data collection will be discussed in more detail later.
3. Select a sampling method. Do we us a random sample, stratified sample, or cluster sample?
4. How will we analyze any data collected? What software will we use? What degree of accuracy is required?
5. Decide upon a budget and a timeframe.
6. Go back and speak to the managers or clients requesting the research. Make sure that you agree on the problem! If you gain approval, then move on to step seven.
7. Go ahead and collect the data.
8. Conduct the analysis of the data.
9. Check for errors. It is not uncommon to find errors in sampling, data collection method, or analytic mistakes.
10. Write your final report. This will contain charts, tables, and diagrams that will communicate the results of the research, and hopefully lead to a solution to your problem. Watch out for errors in interpretation.

Why conduct market research?

If you're planning to start a business, or looking for finance, then the people you approach for help will want to see some evidence of market research. Starting a business always involves some degree of risk; good market research will help you reduce that risk. If you are already in business, market research continues to be very important, and should be an integral part of your daily business operation. 

Market research allows you to identify threats and opportunities in the market place and provides the information on which you can make informed decisions. The more accurate the information - the better the decision. Market research therefore reduces the risk involved in making these decisions. It also reduces the risk of not being able to make decisions because you did not have the information at hand (for example, a change in the market that catches you by surprise).

Market research helps you to:

1. Identify new products or services.
2. Spot or anticipate market trends or changes.
3. Determine if customers are satisfied, and if not, what is wrong.
4. Keep one step ahead of your competitors.
5. Spot trends or warning signals in your own business.
6. Decide which advertising medium works best for your business.
7. Keep up to date with new technology in your industry.
8. Tell you if a new idea is likely to be viable or not, and so on.

Use of the Marketing Research?

Marketing Research is of use to the following:

1. Producers –
• To know about his product potential in the market vis-à-vis the total product
• New Products
• Various brands
• Pricing
• Market Structures and selection of product strategy, etc.
2. Business and Government - Marketing Research helps businesses and government in focusing attention on the complex nature of problems faced by them. For example: Determination of Gross National Product; Expenditure levels and budgeting and the economic policies of Government
3. Market Research Agencies - Marketing Research is being used extensively by professionals to help conducting various studies in Marketing Research. Most prominent agencies being: - Linta India Ltd; British Market Research Bureau (BMRB); Hindustan Thompson Associate Ltd; eSurveysPro.com; MARG
4. Managers

Types of market research 

Market research is usually categorized into two kinds: primary research and secondary research. In turn, the information you gather is of two types: qualitative market research information comes from actually talking to people, asking for feedback and/or opinions, while quantitative information comes from compiling figures and numbers in the form of meaningful charts, statistics, graphs and tables.

1. Primary research - Whenever you talk to customers or competitors, you're collecting primary market research information. In most cases this will be in the form of qualitative information. This is usually the most valuable market research information for your business.
2. Secondary research - This involves research conducted by other people or organisations, but whose results you may be able to use yourself. It may not be as accurate as primary research as it wasn't carried out with your specific problem in mind. However, it can be a cost-effective way of gathering information about the marketplace and general trends in your industry. Sources of secondary research include:
• Libraries
• Yellow Pages
• Internet search engines
• Trade or industry organizations
• Research results published in the media
• Chambers of Commerce
• City or regional councils
• Private research companies
• Government departments and agencies such as Statistics New Zealand, New Zealand Trade & Enterprise and the Ministry of Commerce.

FAQ's

What is market research?

In its basic form, market research is simply an information gathering exercise to determine the viability of something. For example, if you have a business plan in mind, it could be the viability of the business that is, determining the size of the market and asking: "Is there enough customers for me?" Rather than making decisions based on just your own 'gut feeling', market research leads to more informed and therefore better decision making. The good news is that it's usually perfectly possible to conduct your own market research. In fact, if you're already in a small business, you're inevitably undertaking some informal market research. When you talk to customers, or listen to the radio, or TV, or read magazines and newspapers, this is all research. All good entrepreneurs are constantly listening to the sounds of the marketplace. Some do it automatically; others learn how to do it as they proceed.

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