Market Research
An Introductory Guide To Market Research?
Market research is a type of business research that provides information 'about' the market to 'target' the market. These researches equip management with better understanding of market to drive market driven business. Management explores the information in context of background to take crucial business decisions.
Primary Research, also known as field research or original research, can be classified as Qualitative and Quantitative.
Qualitative Market Research - It investigates the market characteristics through in-depth research. Information is obtained from a small group of respondents through personal interaction. This employs methods like depth interview and focus group interactions. Depth interviews are generally one on one interview where the interviewer personally records respondents' views and opinions. It may require presenting in person or may be done telephonically or online. One on one interview may provide rich depth of information depending on the interviewer's skill to probe. It is time-consuming and requires skilled personnel (interviewer), and is thus expensive. Focus groups method is an interactive discussion carried out in a group of 8 -12 participants. Topic is floated and a moderator is designated to encourage free flow of ideas. It is inexpensive and faster compared to depth interviews. Telephonic conferences and Internet technology are also being utilized nowadays to make focus groups faster, cheaper, and more convenient.
Quantitative Market Research - It investigates the market characteristics through sample population responses. Sample size is big and information is generated in the form of responses to predefined set of questions. A validated questionnaire is sent to a big group of respondents. Scales are developed to interpret the responses. Statistical techniques are employed to generalize the information from the sample group to general population. This is called Generalization. Such survey method is fast and inexpensive but reliability needs to be confirmed. Chances of error include bias in sample selection, bias in questionnaire formulation or correctness of statistical techniques employed.
Secondary Research simply compiles the available information from various sources and uses it for its own needs. It has the advantage of being very cheap and fast. However, information obtained may not be relevant and specific to a product and cannot be validated.
These market-oriented researches generate information in three major categories -
Market Structure - It includes information about customers. Customer size, their location, their purchasing capacity and requirements are studied.
Market Segmentation - Segmentation defines specific subgroup within the large population group. Groups with similar motivations are studied to compare opinions and behavior.
Market Trends - Turbulence in the market at a given point and demand supply trends over a longer duration are studied. It also provides information about competitors, related products and pricing trends.
Utilizing market research as a business tool is essential for every business organization to survive and succeed in this competitive economy.