Market research

Last updated

Market research is an organized effort to gather information about target markets and customers: know about them, starting with who they are. [1] It is an important component of business strategy [2] and a major factor in maintaining competitiveness. Market research helps to identify and analyze the needs of the market, the market size and the competition. Its techniques encompass both qualitative techniques such as focus groups, in-depth interviews, and ethnography, as well as quantitative techniques such as customer surveys, and analysis of secondary data.

Contents

It includes social and opinion research, and is the systematic gathering and interpretation of information about individuals or organizations using statistical and analytical methods and techniques of the applied social sciences to gain insight or support decision making. [3]

Market research, marketing research, and marketing are a sequence of business activities; [4] [5] sometimes these are handled informally. [6]

The field of marketing research is much older than that of market research. [7] Although both involve consumers, Marketing research is concerned specifically about marketing processes, such as advertising effectiveness and salesforce effectiveness, while market research is concerned specifically with markets and distribution. [8] Two explanations given for confusing Market research with Marketing research are the similarity of the terms and also that Market Research is a subset of Marketing Research. [9] [10] [11] Further confusion exists because of major companies with expertise and practices in both areas. [12]

History

Although market research started to be conceptualized and put into formal practice during the 1930s as an offshoot of the advertising boom of the Golden Age of radio in the United States, this was based on 1920s work by Daniel Starch. Starch "developed a theory that advertising had to be seen, read, believed, remembered, and most importantly, acted upon, in order to be considered effective." [13] Advertisers realized the significance of demographics by the patterns in which they sponsored different radio programs.[ citation needed ]

The Gallup Organization helped invent the public opinion poll; today, "Market research is a way of paying for it." [14]

Market research for business/planning

Market research is a way of getting an overview of consumers' wants, needs and beliefs. It can also involve discovering how they act. The research can be used to determine how a product could be marketed. Peter Drucker believed [15] market research to be the quintessence of marketing. Market research is a way that producers and the marketplace study the consumer and gather information about the consumers' needs. There are two major types of market research: primary research, which is sub-divided into quantitative and qualitative research, and secondary research.

Factors that can be investigated through market research include:

Another factor that can be measured is marketing effectiveness. This includes:

Data collection

"Rigorous sampling methodologies combined with high-quality data collection" is what the magazine Advertising Age considers the backbone of market research. [18] Data collection can be done by observing customer behavior through in-situ studies or by processing e.g. log files, by interviewing customers, potential customers, stakeholders, or a sample of the general population. The data can be quantitative in nature (counting sales, clicks, eye-tracking) or qualitative (surveys, questionnaires, interviews, feedback). Aggregating, visualizing, and turning data into actionable insights is one of the major challenges of market research and today, text analytics affords market researches methods to process large amounts of qualitative information and turn it into quantitative data, which is easier to visualize and use for formalized decision making. [19]

Data collection can use larger audience samples than the few hundred or thousand typically used in market research. [20] Also required is the (at least passive) [21] cooperation of those being surveyed; [22] trust [23] is also helpful. [24] Translation is an essential comprehension tool for global consumers and is not a simple act of replacing words in one language with words in another. [25]

Some data collection is incentivized: a simple form is when those on the road contribute to traffic reporting of which they are consumers. More complex is the relationship of consumer-to-business (C2B), which sometimes introduces reliability problems. [26] Other data collection is to know more about the market, [27] which is the purpose of market research. [28]

International influence from the Internet

The international growth of available research both from and via the Internet [13] has influenced a vast number of consumers and those from whom they make purchases. [29] Although emerging global markets, such as China, Indonesia and Russia are still smaller than the US in B2B e-commerce, their internet-fueled growth factor is stimulated by product-enhancing websites, graphics, and content designed to attract corporate and consumer/B2C shoppers. Estimates for 2010 show between US$400 billion and $600 billion in revenue was generated by this medium.

A report titled "Global B2C E-Commerce and Online Payment Market 2014" indicated a decrease in overall growth rates in North America and Western Europe, even as absolute growth numbers rose.

The UK Market Research Society (MRS) listed the top social media platforms primarily used by millennials are LinkedIn, Facebook, YouTube and Instagram.

Research and market sectors

Regarding details for worldwide corporate market research, "most of them are never written about because they are the consumer research done by the country's manufacturers." [30] Also less written about is tailored translation approaches based on the expertise or resources available in the local country. [25] To mitigate implicit and unconscious bias in market research design, researchers have suggested conducting bias testing via interviewer-moderated technology-aided, unmoderated methods. [31]

Market research data has loss prevention aspects; that less than 60 percent of all proposed modifications and new products are deemed failures. [30] When information about the market is difficult to acquire, and the cost of "going ahead with the decision" to offer the product or service is affordable, the research cost may be more profitably used "to ensure that the new line got the advertising send-off it needed to have the best chances of succeeding." [32]

As measured in revenue, USA based Amazon is the worldwide E-Commerce leader.

Market research for the film industry

The film industry is an example where the importance of testing film content and marketing material involves:

  1. Concept testing, which evaluates reactions to a film idea and is fairly rare;
  2. Positioning studios, which analyze a script for marketing opportunities;
  3. Focus groups, which probe viewers' opinions about a film in small groups prior to release;
  4. Test screenings, which involve the previewing of films prior to theatrical release;
  5. Tracking studies, which gauge (often by telephone polling) an audience's awareness of a film on a weekly basis prior to and during theatrical release;
  6. Advertising testing, which measures responses to marketing materials such as trailers and television advertisements;
  7. Exit surveys, that measure audience reactions after seeing the film in the cinema. [33]

Insights industry

Market research is an industry that overlaps with and is often referred to as the "insights" industry. [34] However, the distinctive methods and techniques of market research not always correspond to the digital-first approach of insights vendors. The emergence of insights focusing on data analytics rather than fieldwork is competing with market research for managerial attention and funding. Current research with market research practitioners shows two pressing concerns for the industry: online data commoditization and the increasing distance between market researchers and top management within client organizations. Both concerns boil down to the risk they perceived of market research becoming a legacy activity of the marketing department rather than the cornerstone of business strategy. [34]

Market research aims to produce so-called "actionable knowledge" that firms find useful in their operations: [35]

  1. Framing managerial anomalies: an anomaly is a puzzle or a perplexing situation that the market research report is meant to solve.
  2. Loading instruments with meanings: translate observations of commonplace social practices into the marketing ontology.
  3. Signposting prescriptions: guide an intended reading to reduce interpretive flexibility.

Small businesses and nonprofits

Small organizations and non-profits can derive needed information by observing the environment of their location. Small scale surveys and focus groups are low cost ways to gather information from potential and existing customers and donors. While secondary data (statistics, demographics, etc.) is available to the public in libraries or on the internet, primary sources, done well, can be quite valuable: talking for an hour each, to twelve people, two apiece from six potential clients, can "get inside their minds.. get a feel for their needs, wants and pain. You can't get that from a questionnaire." [36]

See also

Related Research Articles

Customer relationship management (CRM) is a process in which a business or other organization administers its interactions with customers, typically using data analysis to study large amounts of information.

<span class="mw-page-title-main">Marketing</span> Study and process of exploring, creating, and delivering value to customers

Marketing is the act of satisfying and retaining customers. It is one of the primary components of business management and commerce.

Marketing research is the systematic gathering, recording, and analysis of qualitative and quantitative data about issues relating to marketing products and services. The goal is to identify and assess how changing elements of the marketing mix impacts customer behavior.

Positioning refers to the place that a brand occupies in the minds of the customers and how it is distinguished from the products of the competitors. It is different from the concept of brand awareness. In order to position products or brands, companies may emphasize the distinguishing features of their brand or they may try to create a suitable image through the marketing mix. Once a brand has achieved a strong position, it can become difficult to reposition it. To effectively position a brand and create a lasting brand memory, brands need to be able to connect to consumers in an authentic way, creating a brand persona usually helps build this sort of connection.

In marketing, market segmentation is the process of dividing a broad consumer or business market, normally consisting of existing and potential customers, into sub-groups of consumers based on shared characteristics.

Marketing strategy is an organization's promotional efforts to allocate its resources across a wide range of platforms and channels to increase its sales and achieve sustainable competitive advantage within its corresponding market.

<span class="mw-page-title-main">Consumer behaviour</span> Study of individuals, groups, or organisations and all the activities associated with consuming

Consumer behaviour is the study of individuals, groups, or organisations and all the activities associated with the purchase, use and disposal of goods and services. Consumer behaviour consists of how the consumer's emotions, attitudes, and preferences affect buying behaviour. Consumer behaviour emerged in the 1940–1950s as a distinct sub-discipline of marketing, but has become an interdisciplinary social science that blends elements from psychology, sociology, social anthropology, anthropology, ethnography, ethnology, marketing, and economics.

Neuromarketing is a commercial marketing communication field that applies neuropsychology to market research, studying consumers' sensorimotor, cognitive, and affective responses to marketing stimuli. The potential benefits to marketers include more efficient and effective marketing campaigns and strategies, fewer product and campaign failures, and ultimately the manipulation of the real needs and wants of people to suit the needs and wants of marketing interests.

Psychographics is defined as "market research or statistics classifying population groups according to psychological variables" The term psychographics is derived from the words “psychological” and “demographics” Two common approaches to psychographics include analysis of consumers' activities, interests, and opinions, and values and lifestyles (VALS).

In marketing, segmenting, targeting and positioning (STP) is a framework that implements market segmentation. Market segmentation is a process, in which groups of buyers within a market are divided and profiled according to a range of variables, which determine the market characteristics and tendencies. The S-T-P framework implements market segmentation in three steps:

The target audience is the intended audience or readership of a publication, advertisement, or other message catered specifically to the previously intended audience. In marketing and advertising, the target audience is a particular group of consumer within the predetermined target market, identified as the targets or recipients for a particular advertisement or message.

A market analysis studies the attractiveness and the dynamics of a special market within a special industry. It is part of the industry analysis and thus in turn of the global environmental analysis. Through all of these analyses the strengths, weaknesses, opportunities and threats (SWOT) of a company can be identified. Finally, with the help of a SWOT analysis, adequate business strategies of a company will be defined. The market analysis is also known as a documented investigation of a market that is used to inform a firm's planning activities, particularly around decisions of inventory, purchase, work force expansion/contraction, facility expansion, purchases of capital equipment, promotional activities, and many other aspects of a company.

The following outline is provided as an overview of and topical guide to marketing:

<span class="mw-page-title-main">Digital marketing</span> Marketing of products or services using digital technologies or digital tools

Digital marketing is the component of marketing that uses the Internet and online-based digital technologies such as desktop computers, mobile phones, and other digital media and platforms to promote products and services. Its development during the 1990s and 2000s changed the way brands and businesses use technology for marketing. As digital platforms became increasingly incorporated into marketing plans and everyday life, and as people increasingly used digital devices instead of visiting physical shops, digital marketing campaigns have become prevalent, employing combinations of search engine optimization (SEO), search engine marketing (SEM), content marketing, influencer marketing, content automation, campaign marketing, data-driven marketing, e-commerce marketing, social media marketing, social media optimization, e-mail direct marketing, display advertising, e-books, and optical disks and games have become commonplace. Digital marketing extends to non-Internet channels that provide digital media, such as television, mobile phones, callbacks, and on-hold mobile ringtones. The extension to non-Internet channels differentiates digital marketing from online marketing.

Micromarketing was first referred to in the UK marketing press in November 1988 in respect of the application of geodemographics to consumer marketing. The subject of micromarketing was developed further in an article in February 1990, which emphasised understanding markets at the local level, and also the personalisation of messages to individual consumers in the context direct marketing. Micromarketing has come to refer to marketing strategies which are variously customised to either local markets, to different market segments, or to the individual customer.

A target market, also known as serviceable obtainable market (SOM), is a group of customers within a business's serviceable available market at which a business aims its marketing efforts and resources. A target market is a subset of the total market for a product or service.

'Shopper marketing' is "a discipline that focuses on the customer experience and the customer journey."It focuses on the consumer's path to purchasing a product, from first being aware of the product, to consideration and through to the purchase of it. It separates itself from retail marketing which focuses on engaging the customer in-store only.

Marketing automation refers to software platforms and technologies designed for marketing departments and organizations automate repetitive tasks and consolidate multi-channel interactions, tracking and web analytics, lead scoring, campaign management and reporting into one system. It often integrates with customer relationship management (CRM) and customer data platform (CDP) software.

Psychographic segmentation has been used in marketing research as a form of market segmentation which divides consumers into sub-groups based on shared psychological characteristics, including subconscious or conscious beliefs, motivations, and priorities to explain and predict consumer behavior. Developed in the 1970s, it applies behavioral and social sciences to explore to understand consumers’ decision-making processes, consumer attitudes, values, personalities, lifestyles, and communication preferences. It complements demographic and socioeconomic segmentation, and enables marketers to target audiences with messaging to market brands, products or services. Some consider lifestyle segmentation to be interchangeable with psychographic segmentation, marketing experts argue that lifestyle relates specifically to overt behaviors while psychographics relate to consumers' cognitive style, which is based on their "patterns of thinking, feeling and perceiving".

Data-driven marketing is a process used by marketers to gain insights and identify trends about consumers and how they behave — what they buy, the effectiveness of ads, and how they browse. Modern solutions rely on big data strategies and collect information about consumer interactions and engagements to generate predictions about future behaviors. This kind of analysis involves understanding the data that is already present, the data that can be acquired, and how to organize, analyze, and apply that data to better marketing efforts. The intended goal is generally to enhance and personalize the customer experience. The market research allows for a comprehensive study of preferences.

References

  1. ↑ Campbell Robertson (August 1, 2006). "Nielsen Brings a New Marketing Strategy to Broadway". The New York Times . Archived from the original on July 24, 2020. Retrieved July 23, 2020.
  2. ↑ McQuarrie, Edward (2005). The market research toolbox: a concise guide for beginners (2nd ed.). SAGE. ISBN   978-1-4129-1319-5. Archived from the original on August 28, 2022. Retrieved November 16, 2020.
  3. ↑ International Code on Market and Social Research (PDF) (4 ed.). ICC/ESOMAR Amsterdam, the Netherlands. 2008. Archived from the original (PDF) on September 3, 2018. Retrieved December 29, 2009.
  4. ↑ "Commercial Item Handbook" (PDF). Archived from the original (PDF) on October 6, 2021. Retrieved August 2, 2020. market research is a business operation
  5. ↑ Alex Burke. "What Is Formulated Marketing?". Hearst Newspapers. Archived from the original on September 23, 2020. Retrieved August 2, 2020. Marketing is a business process that ..
  6. ↑ Susan J. Hart; John R. Webb; Marian V. Jones (1994). "Export Marketing Research and the Effect of Export Experience in Industrial SMEs". International Marketing Review. 11 (6): 18. CiteSeerX   10.1.1.461.857 . doi:10.1108/02651339410072980. Archived from the original on August 28, 2022. Retrieved August 28, 2022. Size of firm seems to be related to the use of informal market research
  7. ↑ Lockley, Lawrence C. (1950). "Notes on the History of Marketing Research". Journal of Marketing. 14 (5): 733–736. doi:10.2307/1246952. JSTOR   1246952. Archived from the original on August 16, 2020. Retrieved July 23, 2020.
  8. ↑ McDonald, Malcolm (2007). Marketing Plans (6th ed.). Oxford, England: Butterworth-Heinemann. ISBN   978-0-7506-8386-9. Archived from the original on August 28, 2022. Retrieved November 16, 2020.
  9. ↑ "Market Research END-TO-END Benefits". September 6, 2014. Archived from the original on August 21, 2021. Retrieved July 23, 2020. Because Market Research is a subset of Marketing Research, it is easy to see why the two terms are often confused.
  10. ↑ Claessens, Maximilian (January 9, 2018). "Difference between Market Research and Marketing Research". Archived from the original on July 22, 2020. Retrieved July 23, 2020.
  11. ↑ "Difference Between Market & Marketing Research". September 24, 2019. Archived from the original on July 23, 2020. Retrieved July 23, 2020. Market Research is a subset of Marketing Research
  12. ↑ "NAPCS Product List for NAICS 54191: Marketing Research" (PDF). United States Census. Archived from the original (PDF) on June 17, 2012. data collection services for marketing research and public opinion surveys, by methods other than ... data collection services provided as part of a market research services package that includes
  13. 1 2 Kuba Kierlanczyk (February 4, 2016). "A Brief History of Market Research". Kelton Global. Archived from the original on July 23, 2020. Retrieved July 23, 2020.
  14. ↑ Lisa Belkin (March 6, 1990). "Gallup Shifts Emphasis Toward Market Studies". The New York Times . Archived from the original on July 24, 2020. Retrieved July 24, 2020.
  15. ↑ Drucker, Peter F. (1974). Management: Tasks, Responsibilities, Practices . Australia: Harper & Row. pp.  64–65. ISBN   0-06-011092-9. There will always, one can assume, be need for some selling. But the aim of marketing is to make selling superfluous. The aim of marketing is to know and understand the customer so well that the product or service fits him and sells itself. Ideally, marketing should result in a customer who is ready to buy. All that should be needed then is to make the product or service available...
  16. ↑ Diaz Ruiz, C. A. (2013). "Assembling Market Representations". Marketing Theory. 13 (3): 245–261. doi:10.1177/1470593113487744. S2CID   220080576.
  17. ↑ Carol Vogel (December 20, 1992). "Dear Museumgoer: What Do You Think?". The New York Times . Archived from the original on July 24, 2020. Retrieved July 24, 2020.
  18. ↑ John McDonough; Karen Egolf (2015). The Advertising Age Encyclopedia of Advertising.
  19. ↑ Espinoza, Fredrik; Hamfors, Ola; Karlgren, Jussi; Olsson, Fredrik; Hamberg, Lars; Sahlgren, Magnus (2018). "Analysis of Open Answers to Survey Questions through Interactive Clustering and Theme Extraction". Proceedings of the 2018 Conference on Human Information Interaction&Retrieval - CHIIR '18. pp. 317–320. doi:10.1145/3176349.3176892. ISBN   9781450349253. S2CID   3619476. Archived from the original on August 28, 2022. Retrieved February 21, 2022.
  20. ↑ "When Data Science and Traditional Market Research Collide". MarketCast. November 24, 2020. Archived from the original on December 4, 2021. Retrieved August 28, 2022.
  21. ↑ Natasha Singer (November 2, 2019). "The Government Protects Our Food and Cars. Why Not Our Data?". The New York Times . Archived from the original on July 26, 2020. Retrieved July 26, 2020. because Congress has never established an agency to
  22. ↑ Stuart Elliott (August 23, 1993). "The latest in market research: videogenic self-analyzing shoppers". The New York Times . Archived from the original on July 26, 2020. Retrieved July 26, 2020.
  23. ↑ Shira Ovide (July 21, 2020). "Beware the 'But China' Excuses". The New York Times . Archived from the original on July 26, 2020. Retrieved July 26, 2020. it's hard to know when to believe them.
  24. ↑ Sandy Parakilas (November 19, 2017). "We Can't Trust Facebook to Regulate Itself". The New York Times . Archived from the original on August 11, 2020. Retrieved July 26, 2020. prioritized data collection over user protection and regulatory compliance
  25. 1 2 Sha, Mandy; Lai, Jennie (April 7, 2016). "A case study of improving and evaluating consumer survey translation". Translation & Interpreting. 8 (1): 86–100. doi: 10.12807/ti.108201.2016.a06 . ISSN   1836-9324.
  26. ↑ Sapna Maheshwari (November 28, 2019). "When Is a Star Not Always a Star? When It's an Online Review". The New York Times . Archived from the original on July 17, 2020. Retrieved July 26, 2020. Customer reviews are incredibly important in e-commerce, but they can be unreliable or downright dishonest.
  27. ↑ "How Uber Uses Psychological Tricks to Push Its Drivers' Buttons". The New York Times . April 2, 2017. Archived from the original on August 9, 2020. Retrieved July 26, 2020. Faster pickup times mean more idle drivers ... armies of underemployed people looking for extra hours
  28. ↑ Karen Weise (December 19, 2019). "Prime Power: How Amazon Squeezes the Businesses Behind Its Store". The New York Times . Archived from the original on December 19, 2019. Retrieved July 26, 2020.
  29. ↑ Eric Pfanner (June 22, 2008). "Market research is getting a makeover". The New York Times . Archived from the original on July 23, 2020. Retrieved July 23, 2020.
  30. 1 2 Philip H. Dougherty (November 16, 1975). "Market Research Is Now a National Pastime". The New York Times . Archived from the original on July 23, 2020. Retrieved July 23, 2020.
  31. ↑ Geisen, Emily; Sha, Mandy; Roper, Farren (2024). Bias testing in market research: A framework to enable inclusive research design (published January 3, 2024). ISBN   979-8862902785.
  32. ↑ Alan R. Andreasen (July 1983). "Cost-Conscious Marketing Research". Harvard Business Review .
  33. ↑ Drake, Philip (2008). McDonald & Wasko (ed.). Distribution and Marketing in Contemporary Hollywood. Malden, MA: Blackwell Publishing. pp.  63–82. ISBN   978-1-4051-3388-3.
  34. 1 2 Diaz Ruiz, Carlos A. (March 20, 2022). "The Insights Industry: Towards a Performativity Turn in Market Research". International Journal of Market Research. 64 (2): 169–186. doi:10.1177/14707853211039191. S2CID   238711288. Archived from the original on June 20, 2022. Retrieved June 20, 2022.
  35. ↑ Diaz Ruiz, Carlos; Holmlund, Maria (October 1, 2017). "Actionable marketing knowledge: A close reading of representation, knowledge and action in market research". Industrial Marketing Management. 66: 172–180. doi:10.1016/j.indmarman.2017.08.005 – via ScienceDirect.
  36. ↑ Graham Kenny (January 17, 2019). "Customer Surveys Are No Substitute for Actually Talking to Customers". Harvard Business Review .

PD-icon.svg This article incorporates public domain material from websites or documents of the Small Business Administration .

This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.