What is market research?

Market research is used in multiple contexts. Are you aware of the various facets of market research?

Read this article to know more about market research.

This article will be useful for marketers, market research enthusiast, those looking to increase their awareness about this topic

Introduction

Market research is a term that is used very loosely.

The role of the marketer has become complex.

The marketer is required to:

1. Have the right product, at the right place, at the right price, promotion, etc.
2. Serve the right ad, at the right time, on the right channel to move consumers down the sales funnel.

In order to do so, the marketer requires information about product/category trends, understand competition, pricing at the marketplace, media mix, advertising and promotion activities, etc.

Such information can be gathered by internal sources or external sources.

Internal sources are the Insights team, sales team, people associated with the marketing/sales team, etc.

External sources are seeking the services of an agency to conduct market research or a field survey.

So, let’s understand the context of market research, based upon what we have discussed.

The marketer needs to:

1. Define the business objectives
2. Define market research objectives
3. The target audience for the market research
4. Define the market research methodology
5. Have appropriate research instruments to gather information.
6. Depute internal or external resources to gather information and record the same.
7. Process the information
8. Analyze information
9. Report finding to meet the market research objectives.

The marketer cannot undertake these activities by themselves.

They may have some market research professionals in their company to take care of the market intelligence activities.

However, for the research instruments and survey activities, external agencies are engaged.

Market Research – Definition

ESOMAR International Code on Market, Opinion and Social Research and Data Analytics define market research as:

Research which includes all forms of market, opinion, and social research, and data analytics, is the systematic gathering and interpretation of information about individuals and organizations.

It uses the statistical and analytical methods and techniques of the applied social, behavioral, and data sciences to generate insights and support decision-making by providers of goods and services, governments, non-profit organizations, and the general public.

Let’s understand the elements of the definition:

1. All forms of market

This includes:

• 1. Point of sale (retailer/dealer) and
  2. Trade channel members (dealers/wholesale, etc)
  3. Importers/Exporters
  4. Business to customer marketplace
  5. Business to business marketplace
  6. Other influencers in the purchase decision making
  7. Online marketplace
  8. It also includes the geographic spread of the market

2. Opinion

From External stakeholders:

• 1. Product/service users & non-users
  2. Trade channel members – retailer, dealers, wholesalers, importers/exporters
  3. Investors
  4. Potential employees

• From Internal stakeholders: Employees of the company
• About:
  1. Product
  2. Service
  3. Brand
  4. Advertisement
  5. Experience with Company employee/ Call center experience /Agent, etc

3. Social research

1. Examines a society’s attitudes, assumptions, beliefs, trends, stratification, and rules.
2. Major topics – Health & Nutrition, Population, Family Welfare and Planning, Youth, Education, Women empowerment, Sexual & reproductive health, Rural development, etc.

4. Data Analytics

1. Data collected in market research are of various forms – Audio recordings, video recording, open-ended responses (verbatim), pre-coded, etc.
2. The data need to be analyzed further for linkages with other information
3. Thereafter, data can be transformed into reports, dashboards, etc.

5. Systematic gathering

1. In market research, we generally conduct a survey among a sample of the population (Except for census – where every household is to be selected for the survey)
2. There are various methodologies to arrive at the sample which is representative of the population
3. At the field level, in order to have consistency in data capture certain protocols developed.
4. The interviewers are required to follow a protocol for systematic data collection.

In an online survey, there are challenges to have a spread across geographies – especially, lower town class and rural population.

There are processes defined for the online surveys also. These pertain to serving the links to relevant town class, target audience, data validation for inconsistent responses, etc.

6. Interpretation of information

1. All the efforts regarding the data gathering should culminate in a report which addresses the client market research objectives.
2. The report which provides data analysis, insights and actionable gives a direction to the business team on the way forward.

7. Individuals and organizations

1. Individual pertains to individual responses – primarily based upon personal opinion. In some instances, may pertain to household or kid (for whom parents decide)
2. Within organizations, you meet people. But at an organization level, there are some rules/guidelines bases on which decision-making happens. So, though the individual responds, they primarily provide information in the context of an organization.

8. Statistical and analytical methods and techniques

1. Quantitative market research makes utilizes various statistical and analytical methods to analyze the data.
2. Descriptive analytics summarizes data to explain what has happened or is happening. A descriptive analysis is most commonly presented in a report that uses visual aids such as charts and graphs to make the analysis accessible to a wide range of stakeholders
3. Diagnostic analytics looks at what has happened to try to determine the root cause of those events using mathematical functions such as probabilities, likelihoods, and the distribution of outcomes. This information tends to be displayed in a business dashboard, which is a software application that provides multiple data visualizations in a single screen and offers filters so users can drill down into specific data sets of interest.
4. Predictive analytics typically combines statistical models and machine learning algorithms to predict the likelihood of various outcomes, such as whether consumers will like a new flavor of sports drink or how much healthcare costs will increase.
5. Statistical and analytical methods and techniques enable providing valuable insights and provide a direction for decision making/hypothesis.

What is the role of marketing research?

The marketing system comprises of the following:

1. Macro-environmental factors
2. Marketing variables
3. Microenvironmental factors

Economy, Technology, competitors, legal & political, and social & demographic are aspects related to macro-environmental factors.

Marketing variables pertain to product, price, promotion, distribution, etc. These are somewhat controllable variables in the hands of the marketer.

Microenvironmental pertain to Consumers, Employees, shareholder suppliers, etc. These are influenced by Family, Peer group, opinion leaders, etc

Market research looks to:

1. Understand macro-environmental factors which impact business.
2. Evaluate marketing mix variables
3. Understand consumer behavior, satisfaction, loyalty, opinion, preferences, etc.
4. Factors that influence decision making, etc

Market research is about understanding various elements in the market.

These may relate to:

1. Product – improvement in existing product, new product evaluation, etc
2. Customers – product/service category users and non-users
3. Grievance related
4. Competition – understanding the various manufactures/suppliers
5. Channel through which companies reach the customers – these are dealers/retailers/intermediaries/partners, etc
6. Service – delivery, post-sales related, etc
7. Advertising – What can catch the attention of the target audience? Is the Ad persuasive to lead to purchase?
8. Promotion – Which of the promotions is working for the brand? How can you leverage it? Which of the promotions is working for competition? Any new ways of product promotion?

Summary

Market research enables a marketer in many ways.

At a broader level:

1. Understand the customer, evaluate new products, provide feedback for products used, perception on brands, understand the decision-making process, etc
2. Which of the Ad is likely to create a better impact? Which is likely to result in a purchase?
3. Which is the right channel to move consumers down the sales funnel?
4. What is competitors’ pricing strategy in the marketplace?
5. Are the retailers/dealers recommending your brand?

Overall, enabling marketers to meet the objectives of the marketing funnel.

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