Market Research - Importance, Goals and Methods
Marketing managers have to make decisions about products, pricing, promotional tactics and distribution channels in a complex environment. General economic conditions, technology, extent and strength of competition and political conditions can affect the market for their products. And the behavior of their consumers is influenced by numerous factors. It is continuing market research that helps marketing managers take sound decisions in such an environment.Information Provided by Market Research
Market research should provide marketing managers a clear picture of the market, including:
Customer information, such as their locations, age, gender, buying behavior and motivationsCompetitor information, such as their identity, marketing network, customer focus and scale of operationsProduct information, such as how customers talk about it, and likely impact of technology developmentsIndustry information, such as volumes of demand and supply, trend of sales, seasonal demand patternsCompetitive opportunities, such as under-served consumer segments and unmet consumer needsMarket Research Approach and Methods
The acronym 'DECIDE' outlines the approach of market research:
D - Define the marketing problem or opportunity being researched and the specific research objectives and constraints
E - Enumerate the controllable and uncontrollable factors that affect marketing decision making
C - Collect relevant information based on the above scenario
I - Identify the best alternative on the basis of chosen success criteria
D - Develop (and implement) a marketing plan
E - Evaluate the decisions against results, and also look at the decision-making process
There are a number of tools and options for carrying out market research. Firstly, market research can be primary 'field' research or secondary 'desk' research.
Primary research can be qualitative market research intended to bring out customer motivations, views, opinions and beliefs. Qualitative research is done using depth interviews, focus groups and projective techniques. Primary market research can also be quantitative research done through surveys, field tests and observations.
Primary research yields new, up to date, relevant and specific information. However, it is expensive and time consuming, and requires considerable expertise.
Secondary market research is done using published resources related to the industry and product. Numerous resources such as government and industry publications, news from the press, Internet and competitor publicity materials are available for desk research. Though easier and less expensive to get, secondary research information can be old, not specific enough or even be biased.
Market research can also be advertising research where the focus is on measuring the efficacy of advertisement copy. This is done by changing some elements of the copy and measuring the resulting change in response.
Market research seeks to identify customer needs and views, and to analyze their buying behavior. It also looks at competition in the market, trends in the industry and business environment. Information is gathered from published resources or through field research.