7.3. Types of Market Research
Marketing research can be ad hoc or ongoing. Ad hoc marketing research refers to situations where the identification of a research problem leads to a specific information requirement.
Ongoing marketing research, as the name implies, provides more of a monitoring function, resulting in a flow of information about the market place and the company’s performance in it.
There are many forms of marketing research to consider, which break down into four basic types:
Internal marketing research This is based on an analysis of company data gained from information such as sales trends, changes in the elements of marketing – price, for example – and advertising levels. Advances in database management have greatly enhanced the speed and accuracy with which complex data analyses can be produced, enabling marketers to develop strategies that are more timely and customer-specific.
External marketing research This is conducted within the market and the wider competitive environment in which the company operates. Compared to internal marketing research, it generally accounts for the majority of total market research expenditure. External information gathering should always be seen as a complement to internal information and not as an alternative.
Reactive marketing research As the term implies, this is information about the market place and the customers who inhabit it. It can involve the asking of questions, such as in a survey or during an interview, or it can involve experiments.
- Questionnaires Questionnaires are the favoured means of data gathering. They are a flexible instrument and can be administered by an interviewer or by the interviewees themselves. However, before embarking on this method of marketing research, it is useful to be aware of the pitfalls that can result from the use of a questionnaire that has not been pre-planned and checked carefully. Loaded questions can have a distorting effect, as can ambiguous phrases. Even the order of the questions may upset the final result. The errors in the final population estimates from a questionnaire administered to a sample are called bias or systematic error of the estimates. In other words, the true characteristics of the population – for example, relative preferences between several types of industrial compressor – may be different from the estimate produced by the sample survey. This bias may result from the way in which the sample was chosen, or from the means by which the survey data were collected. Such pitfalls can be reduced by designing the questionnaire carefully and then pilot testing it. In other words, give the survey a trial run on a subgroup of the intended sample to isolate any problems, ambiguities or omissions that may arise in responses.
- Group discussions Group discussions may be a more appropriate way to gather market information, as they attempt to draw insights for marketing action from smaller-scale, more detailed studies. Such studies are intended to provide qualitative cues, rather than quantitative conclusions. In such circumstances a group discussion is a loosely structured format where the leader – often a trained psychologist – attempts to draw from the group their feelings about the subject under discussion. The group is chosen to be representative of the population in which the researcher is interested, although, naturally, any conclusions emerging from the discussions can only form the basis of qualitative generalizations about that population. Such interviews need not be conducted in groups. They can be equally effective in pairs or alone with the interviewer.
- Single interviews Single interviews are an alternative way of deriving information. Sometimes they are extended or in-depth interviews, and have the advantage that both the interviewer and interviewee can explore certain lines of discussion more rigorously if this is perceived to be of mutual benefit, whereas a group discussion must always maintain a degree of structure if it is to be meaningful. Such a form of single in-depth interview will be used more often when information regarding specialized markets is required in industrial marketing research.
- Experiments Experiments are another type of reactive marketing research. Marketing experiments can help us to gain a better understanding of how marketing processes work.
Market experimentation need not necessarily involve the setting up of large-scale experimental designs such as the one just discussed. Sometimes, laboratory-type situations can be used to test marketing stimuli. Often, advertisements will be pre-tested in such laboratory conditions. Samples of the target audience for an advertisement will be exposed to the advertisement and their reactions to the sample sought. Eye cameras, polygraphs and tachistoscopes are just some of the devices that have been used successfully to record physical reactions to marketing stimuli. While the theory of experimentation in the marketing context is sound enough, there are a number of drawbacks to its operation in practice. It is very often difficult to set up experimental situations that are microcosms of the total market. There is always the problem of controlling all the variables in the experiment – such as, for example, the actions of competitors – and, of course, the cost of setting up and maintaining market experiments can be prohibitive.
Non-reactive marketing research These methods are based on interpretation of observed phenomena or extant data. By definition, they do not rely upon data derived directly from respondents. the main forms of non-reactive marketing research are following -
- Desk research: Desk research should, in fact, be the starting point of any marketing research programme. Desk research involves the use of existing information to determine the extent of prior knowledge about the subject being studied.
- Observation: Observation can be a very effective marketing research technique. How people behave in the real world and how they react to stimuli can often be discovered best of all through watching and interpreting their reactions. Some observational methods, such as a camera in a supermarket, do not involve the direct participation of the researcher, and this can be a limiting factor. Often, the areas of activity in which we are most interested may only occur infrequently and the observation must be sustained over a period in order to capture a single activity. Participant observation ‘Participant’ observation, a phrase borrowed from Anthropology, involves the observer attempting to become a part of the activity that is under observation. This form of marketing research is very limited in its scope, although one British research organization, Mass Observation, did some early pioneering work in this area in a number of studies, a famous example being a major study of consumer behaviour in public houses.
- Retail audit: Retail audit is used widely as a secondary source of observation data. This has been developed and perfected as a technique over a period of time and, properly controlled, it can be a very accurate source of marketing information on brand shares, market size, distribution coverage and sales trends.
- The consumer panel The consumer panel is another similar source of data. This is a sample group of consumers in a particular product field who record in a diary their purchases and consumption over a period of time. This technique has been used in industrial as well as consumer markets, and can provide continuous data on patterns of usage as well as other data such as media habits
Primary and secondary research
It is also important to understand the difference between primary and secondary research. Collecting information directly from individual respondents is known as primary research. Primary research may be: qualitative, answering the question ‘Why do customers buy what they buy?’; quantitative, investigating ‘Who, what, where and how many?’; or quali-quant – a combination of both. In contrast, secondary, or desk, research involves scanning available information sources to see what has already been published. Because secondary data is often out of date, insufficiently detailed or not analysed from a perspective relevant to the research concerned, it should never be used in isolation.
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