Market Research is the systematic process of collecting, analyzing and interpreting quantitative and qualitative information about a product or a service to be offered for sale in the market.
The American Marketing Association defines marketing research as follows;
“Marketing research is the function which links the consumer, customer, and public to the marketer through information-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 method for collecting information; manages and implements the data collection process; analyses the results; and communicate the findings and their implications.”
Importance of Market Research
Directly launching a product or service in the market is not a good idea always. It is imperative to test waters and research beforehand to know whether your product/service will be appealing to customers/market. Several traits of modern business encourage use of marketing research by business houses. A well conducted market research offers you the following benefits:
- Identifying Opportunities and Threats
Marketing research helps in identifying and exploiting new opportunities for new and existing products. It provides an insight of the market and market share, competitors, customer expectations and satisfaction levels.
- Decision making
Market research offers relevant and up to date information assisting in managerial decisions like introduction of new product, abandonment of existing product, technological changes, market situation, customer needs and wants.
- Stay Focused
Marketing research helps you in identifying target customers and utilize your time effectively on them.
- Optimum Mix of 4P’s
Marketing research aids in deciding the best mix of 4Ps of marketing, Place, Price, Product and Promotion.
Types of Market Research
Market Research is broadly classified into two types:
- Exploratory Research
- Conclusive Research
Exploratory research is generally used in case where there is no or little information about the research problem. Exploratory research seeks to discover new relationships by digging in the research problem to gain insights about the problem. Exploratory research can be further sub-divided as:
- Search of secondary data
- Survey of knowledgeable persons
- Case study
Conclusive research is designed to assist executives in taking a final decision, i.e., deciding on one choice among various alternatives available. This type of research is meant to provide information that enables management to take final decisions. Conclusive research can be further sub-divided as:
- Descriptive research
- Case study
- Statistical study
Process of Marketing Research
The marketing research is a seven-step process involving a detailed study of the project to be undertaken. Obviously, it is not a necessity that all market researches will follow the following listed steps, however, this is a generalised pattern followed:
- Specifying research objectives
The first step involves finding answers to questions such as: “What is the purpose of this study?” or “What are the objectives of the research?” Clear and concrete answers to such questions helps the researcher in setting out well defined objectives of the research. Such questions can be answered best by manager as she/he has a good idea of what is expected out of a market research.
- Preparing a List of Needed Information
After the research objectives have been defined in a satisfactory statement, the next step is to prepare a list of information that is required in achieving these objectives. In this, the manager and researcher should prepare a list collectively and then attempt to evaluate its usefulness.
- Designing the Data Collection Project
After fulfilling the above two steps the researcher needs to determine whether the information needed is already available or needs to conduct a primary research (collection from original base). The information could also be available through secondary sources like government publications, newspapers, magazines, periodicals, etc. However, such sources should be checked for authenticity and reliability. If the information is not available through secondary sources, the researcher will be required to collect data in the field and hencethe need for designing data collection project arises.
- Selecting a Sample Type
Marketing research projects involve information about a large population, however, it is impractical to gather data from entire population. Due to the impracticality, a sample is selected. In this case it becomes imperative to choose a sample that represents the population.
- Determining Sample Size
The researcher must decide on the size of the sample. Size of the sample depends on problem at hand, budget, time and accuracy needed in results. Various questions that need to be answered include: What is the target population? What criteria should be used to select various units that would make up the sample?
Fieldwork involves selecting, training, directing and controlling the members of the field force. Organization and carrying of field work are vital to final conclusions of the research as the field work involves substantial part of the research budget.
- Analysis and Reporting of Findings
The reporting of research findings represents the final step in the marketing research process. After all the primary research is done and data is sourced from all secondary sources, the completed data forms must be processed in a way that will yield the results for which the project was designed. All quantitative data must be tabulated and presented through graphs, pie-charts, diagrams. to meet the objectives identified in step 1. A research report is prepared which is dependent on the nature of the research project and the audience to which is addressed to.
After the understanding of the above 7 steps, it can be said clearly that these steps are interrelated. The marketing researcher must be objective and should place emphasis on accuracy of results. A biased research report can land a business into failure, leading to its closure.
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