The Concept of Market Research
Market research is defined as a process of systematic gathering, recording and analyzing data about customers, competitors and the market. Using a scientific analysis, marketers turn the obtained data into valuable knowledge that helps them to create a business plan, launch a new product/service or fine tune the existing one, expand into new markets, investigate market characteristics and even learn more about potential customers. Market research is also useful in learning of market segmentation, to determine the portion of the population capable to buy certain product or service, based on age, gender, location and income level. The market research consists of two main categories: primary and secondary research. Both categories have a number of activities and methods.
Primary Research
We can describe a primary marketing research as a technique of collecting original data. Such process requires a great deal of marketer involvement. It is expensive, but more useful because it provides more control over the research process and the results are more relevant to a particular situation. There are two types of the primary research - quantitative, that uses statistical analysis, and qualitative ("touchy-feely" research).
Quantitative research comes in many forms but the most popular forms are: surveys, tracking, and experiments.
There are several ways to conduct a survey, the most common are to use telephone, mail, website or personal interviews. In addition, these days, the surveys can be organized through wireless devices, such as PDAs and cellphones. A marketer can carry out interviews personally or can hire someone who specializes in interviews. The surveys are formed from questionnaires, which can be structured or unstructured. The structured questionnaires include multiple choice questions, sometimes questions supplied with answer ranking scale. Unstructured questionnaires have open-ended questions where respondents answer in their own words.
The tracking is a method to monitor the behavior of customers as they engage in regular purchases or information gathering activities. For instance, websites track customer visits and point-of-purchase scanners track purchases.
Marketers use experiments to observer how the manipulation of one marketing variable affects on another. It includes product testing, benchmarking, advertising design, setting price points, and creating packaging. Experiments are very expensive form of market research. However, using the recent technologies, we can achieve similar results with the computer simulations as with experiments at a much lower cost.
The qualitative research method excludes the statistical analysis, but, if it is done well enough, it can offer very good information. There are three options for arranging qualitative research: individual interviews, focus groups and observational research. If we want to know more about how customers make purchase decisions, we can sit and talk with customers using one-on-one interviews. However, such a method is time consuming and expensive. So, instead we can try to employ a focus group approach, where we invite a group of customers for a particular discussion and brainstorming. The cost still exists because the participants in most cases have to be paid. The online version of focus group method that takes advantage of video conferencing, instant messaging or web forums can drastically reduce such cost. In addition to the described methods, we can watch our customers as they perform the activities as shopping or using a product or service. This method is called observation research.
Secondary Research
The secondary research process provides marketers the access to previously collected information that can be found in marketing research reports, consulting firm white papers, magazine articles, newspapers, informal contacts, omnibus surveys, previously gathered marketing research, census data, public record, etc. There are many sources of secondary research. Among the most popular sources are: libraries, electronic databases and Internet. In contrast to primary research, the secondary research is less expensive and easier. Yet, this approach has limitations. The existing information may be outdated, or not relevant to researcher's objectives. Thus, it is used sometimes in the preliminary stages of market research to determine what is known already and what other thing need to be learn. In other words, the secondary research lays the groundwork and primary research helps fill in the gaps. By using both types of market research, business owners get a well-rounded view of their market and have the information they need to make important business decisions. Still, in some cases, employing only secondary research techniques could be enough for conducting sufficient market research.
Conclusion
Market research examines all aspects of a business environment and asks questions about quality of service, customers' needs, market structure, competitors, and numerous other factors that can be used to improve and promote new products or services to the market. The primary research is referred as a method for collecting original information for a specific purpose. It can be done either through surveys, interviews or observations. The secondary research process refers to information that already exists somewhere and has been collected for some other purpose. It is usually faster and less expensive to obtain than primary research. Indeed, gathering secondary research may be as simple as making a trip to a local library or business information center or browsing the Internet. We can apply both methods, or use one of them in completing our market research.
By Alisher Muhammadiev
(May 12th, 2006)
References
1. Business.gov. Market Research.
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http://www.business.gov/
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3. AllBusiness. Secondary vs. Primary Market Research.
Retrieved May 12, 2006, from
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4. Marketing Teacher. Secondary - Marketing Research.
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http://www.marketingteacher.com/
5. Fred L.F., Charles R.S., & Richard E.H. (2004). Business and Integrative Approach (3rd ed.).
NewYork: McGraw-Hill/Irwin.
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