Market research is the process through which certain information is collected from the market in order to be analyzed and, based on that analysis, make decisions and design strategies.
The reasons for market research are diverse and can range from research to determine the feasibility of starting a new business or introduce a new product to market until an investigation to find the cause and solution of a problem or check market hypothesis.
Also, the depth of market research is also varied and can range from a somewhat informal inquiry involving some informal interviews make up a formal and expensive investigation of several months involving market conduct different tests.
Depending on the reason and depth, market research can be classified into three types:
- Exploratory research : a little informal survey that allows for quick conclusions and is usually performed as a preview to a full investigation. An example of exploratory research is one that allows to know the tastes and preferences of consumers.
- Descriptive research : more formal investigation as above, is usually performed to analyze an opportunity or solve a problem. An example of a descriptive study is designed to show the demand that would have a new product, or acceptance would have a new service.
- Causal research : formal investigation that seeks to market test a hypothesis. An example of a causal research is to identify whether a reduction of 10% of the price of a product would produce enough sales to offset this reduction.
The usual practice is to conduct an exploratory research first and then, based on its results, make a descriptive or causal research.
The process of marketing research
The process of market research is the process by which market research is conducted, from the determination of the need for research and the establishment of the objectives thereof, to the analysis of the collected information and decision making.
Let’s look at each of the steps in the process of marketing research:
1. Determination of the need for research
The first step consists of determining the need for research; that is, the reason why it is necessary to perform it.
The reasons for market research are diverse and come whenever required to collect certain information from the market to be analyzed and, based on that analysis, make decisions and design strategies.
Among the main reasons for market research they are:
- finding an idea or business opportunity.
- know the feasibility of starting a new business or introduce a new product to market.
- measure the effectiveness of an advertising campaign.
- measure customer satisfaction.
- find the cause and solution of a problem.
- market test a hypothesis.
In general, the need for market research arises from an opportunity or a problem that has arisen;for example, if identified the opportunity to introduce a new product to market, there may be a need to conduct an investigation to determine the feasibility of this idea.Or, for example, if you have had a decrease in sales, there might be a need for an investigation to find the cause and solution of the problem.
2. Establishment of the research objectives
Once we have determined the need for research, it is necessary to establish the objectives of the same.
The objectives of market research arise from the need for it;for example, a research whose need is to know the feasibility of starting a new business, could be aimed to know the situation in which industry or sector in which the business is located, meet the acceptance that could have the product or service offered, predict future demand, and know the main strategies, strengths and weaknesses of future competition.
3. Identification of information collecting
Once we have determined the need for and objectives of the research, we proceed to identify the information that will be needed and therefore collect.
The information to be collected should be to allow, once analyzed, meet the need and objectives of the research; for example, if the need for research is to find a business idea, to collect information it could be made up of unmet consumer needs, new tastes and preferences, new trends, consumer trends, niches of underserved markets, etc.
Or, for example, if one of the targets of an investigation is to know the feasibility of exporting a product to a foreign country, the information collected could be shaped by treaties or trade agreements with that country, tariffs, economic situation in that country, the supply and demand of existing products, etc.
4. Determination of the information sources
Once you have identified the information to be collected, we proceed to determine the sources from which it will obtain such information.
The sources of information are usually classified into two types:
- Primary sources : information sources providing “hands” for the current investigation. Examples of primary sources include consumers, customers, competitors, employees of the company, records of the company, etc.
- Secondary sources : sources that provide information that has been collected and used for purposes of current research. Examples of secondary sources include databases, enterprise, government agencies, books, newspapers, magazines, etc.
For example, if the information to be collected is designed to show the feasibility of starting a new business, the primary sources could be made up of consumers who are the target audience (which, for example, they would carry out surveys ), competition and other entrepreneurs. While secondary sources may be formed by publications and statistics on the economic sector of the business.
5. Selection and development of techniques for data collection
Once you have determined the information to be collected and the sources from which it will obtain such information, it proceeds to select and develop data collection techniques to be used.
The survey consists of a verbal or written question to them makes people from which you want to obtain the information necessary for the investigation.
When designing a survey, you should ask questions that allow to obtain the information needed for research; for example, if the information that is required is to allow finding an idea or business opportunity, some of the questions that could be formulated in the survey are:
- What product or service would like to exist in the market?
- What business considers to be the most profitable today?
- You consider what business could succeed in the near future?
- What business would?
Or, for example, if the information required will is designed to show the feasibility of introducing a new product to market, some of the questions that could be made in the survey are:
- Would you be willing to try this new product?
- What is the first thing that is fixed when purchasing similar products?
- What are their favorite designs or models are?
- What characteristics would change them or add?
- How much would you be willing to pay for this product?
The observation technique
The observation technique is to observe people, phenomena, facts, cases, objects, actions, situations, etc., of which it is desired to obtain the information necessary for the investigation.
For example, if the information required is enabling better meet future competition, you could use the observation technique by visiting their premises to observe the care provided to the client, its processes and its main products, or to purchase some of their products to be analyzed better.
The market test
The market test or experimental technique is to ensure direct knowledge of the response of people to a particular product, service, idea, advertising, etc. to obtain the information necessary for the investigation.
For example, if the information required is designed to show the welcome could have a new product, it could do a market test that consists of riding a small tasting booth where given to try the new product, and printing or public reaction to it before releasing it to the market is observed.
The focus group
The focus group or focus group is to bring together a small group of people in order to interview them and generate a discussion around a product, service, idea, advertising, etc. to obtain the information necessary for the investigation.
For example, if the information required is designed to show acceptance could have a new product, you could do a focus group and convene a group of people to prove or examine the new product, and provide their impressions, opinions and suggestions about this.
6. Collection of information
Once you have determined the information to be collected, the sources from which it will get, and the techniques or methods used to collect it, we proceed to enforce the collection of information.
For example, if as a technique for collecting information is to be used the survey, having designed the questionnaire obtained a representative sample of the public survey, particularly where they take place, when it will start and how long the survey, and named and He trained interviewers, proceed to coordinate and direct the survey.
Or, for example, as a technique for collecting information to obtain competitive information will be used the technique of observation, after having given the information to be collected by visiting their premises, it should be made to these, You need to purchase your products or services, and take note of the information requested.
7. Analysis of information
Once you have collected the required information, proceed to having counted, process, analyze and draw conclusions.
For example, after using the survey to collect information necessary to know the acceptance that could have a new product, and after having counted, tabulated and analyzed the data, it is concluded that the product does have a good acceptance as consumers are willing to buy it, but as long as it is of very good quality and is accompanied by a good customer service.
Or, for example, after using the observation technique to collect information necessary to know the possible cause and solution of a decline in sales, it is concluded that, unlike what happens in the competition, Staff does not offer a good customer, and that the solution would be to train them on the subject.
8. Decision making or designing strategies
Finally, once it has analyzed the information collected, we proceed to make decisions or design strategies based on the analysis and conclusions.
For example, after analyzing the information collected and have concluded that launching a new product to market is likely also to have known more about the tastes and preferences of consumers, the decision to launch take the new product market, and proceeds to design and produce the same, paying special attention to features that satisfy these tastes and preferences.
Or, for example, after analyzing the information collected and have concluded that the cause of the decline in sales is bad customer service from the staff, it is necessary to provide it with further training in that customer service is concerned, and to improve the selection process of the same.