Evidence for commercial research being gathered informally dates to the Medieval period. In , the German textile manufacturer, Johann Fugger , travelled from Augsburg to Graben in order to gather information on the international textile industry. He exchanged detailed letters on trade conditions in relevant areas. Although, this type of information would have been termed "commercial intelligence" at the time, it created a precedent for the systemic collection of marketing information.
During the European age of discovery, industrial houses began to import exotic, luxury goods - calico cloth from India, porcelain, silk and tea from China, spices from India and South-East Asia and tobacco, sugar, rum and coffee from the New World. During this period, Daniel Defoe , a London merchant, published information on trade and economic resources of England and Scotland. Defoe was a prolific publisher and among his many publications are titles devoted to the state of trade including; Trade of Britain Stated, ; Trade of Scotland with France, and The Trade to India Critically and Calmly Considered, - all of which provided merchants and traders with important information on which to base business decisions.
Until the late 18th-century, European and North-American economies were characteristed by local production and consumption. Produce, household goods and tools were produced by local artisans or farmers with exchange taking place in local markets or fairs. Under these conditions, the need for marketing information was minimail. However, the rise of mass-production following the industrial revolution, combined with improved transportation systems of the early 19th-century, led to the creation of national markets and ultimately, stimulated the need for more detailed information about customers, competitors, distribution systems and market communications.
By the 19th-century, manufacturers were exploring ways to understand the different market needs and behaviours of groups of consumers.
A study of the German book trade found examples of both product differentiation and market segmentation as early as the s. In , Amercian advertising agency, N. Between and , George B Waldron, working at Mahin's Advertising Agency in the United States used tax registers, city directories and census data to show advertisers the proportion of educated vs illiterate consumers and the earning capacity of different occupations in a very early example of simple market segmentation.
Parlin published a number of studies of various product-markets including agriculture ; consumer goods c. In Paul Cherington improved on primitive forms of demographic market segmentation when he developed the 'ABCD' household typology; the first socio-demographic segmentation tool.
In the first three decades of the 20th-century, advertising agencies and marketing departments developed the basic techniques used in quantitative and qualitative research - survey methods, questionnaires, gallup polls etc.
Duncan of the University of Chicago. Adequate knowledge of consumer preferences was a key to survival in the face of increasingly competitive markets. The advent of commercial radio in the s, and television in the s, led a number of market research companies to develop the means to measure audience size and audience composition. In , Arthur Nielsen founded market research company, A C Nielsen and over next decade pioneered the measurement of radio audiences.
He subsequently applied his methods to the measurement of television audiences. Around the same time, Daniel Starch developed measures for testing advertising copy effectiveness in print media newspapers and magazines , and these subsequently became known as Starch scores and are still used today. During, the s and s, many of the data collection methods, probability sampling methods, survey methods, questionnaire design and key metrics were developed.
By the s, Ernest Dichter was pioneering the focus group method of qualitative research. For this, he is often described as the 'father of market research. These methods eventually lead to the development of motivational research.
By the s, the first courses on marketing research were taught in universities and colleges. Brown became one of the popular textbooks during this period. Marketers, such as Paul Green, were instrumental in developing techniques such as conjoint analysis and multidimensional scaling , both of which are used in positioning maps, market segmentation, choice analysis and other marketing applications.
Web analytics were born out of the need to track the behavior of site visitors and, as the popularity of e-commerce and web advertising grew, businesses demanded details on the information created by new practices in web data collection, such as click-through and exit rates. As the Internet boomed, websites became larger and more complex and the possibility of two-way communication between businesses and their consumers became a reality.
Provided with the capacity to interact with online customers, Researchers were able to collect large amounts of data that were previously unavailable, further propelling the marketing research industry. In the new millennium, as the Internet continued to develop and websites became more interactive, data collection and analysis became more commonplace for those marketing research firms whose clients had a web presence. Retail outlets were appearing online and the previous need for bricks-and-mortar stores was diminishing at a greater pace than online competition was growing.
With so many online channels for consumers to make purchases, companies needed newer and more compelling methods, in combination with messages that resonated more effectively, to capture the attention of the average consumer. Having access to web data did not automatically provide companies with the rationale behind the behavior of users visiting their sites, which provoked the marketing research industry to develop new and better ways of tracking, collecting and interpreting information.
This led to the development of various tools like online focus groups and pop-up or website intercept surveys. These types of services allowed companies to dig deeper into the motivations of consumers, augmenting their insights and utilizing this data to drive market share. As information around the world became more accessible, increased competition led companies to demand more of market researchers.
It was no longer sufficient to follow trends in web behavior or track sales data; companies now needed access to consumer behavior throughout the entire purchase process.
This meant the Marketing Research Industry, again, needed to adapt to the rapidly changing needs of the marketplace, and to the demands of companies looking for a competitive edge. Today, marketing research has adapted to innovations in technology and the corresponding ease with which information is available.
This demand is driving marketing researchers to develop new platforms for interactive, two-way communication between their firms and consumers. Mobile devices such as Smart Phones are the best example of an emerging platform that enables businesses to connect with their customers throughout the entire buying process. As personal mobile devices become more capable and widespread, the marketing research industry will look to further capitalize on this trend.
Mobile devices present the perfect channel for research firms to retrieve immediate impressions from buyers and to provide their clients with a holistic view of the consumers within their target markets, and beyond. Now, more than ever, innovation is the key to success for Marketing Researchers. Marketing Research Clients are beginning to demand highly personalized and specifically-focused products from the marketing research firms; big data is great for identifying general market segments, but is less capable of identifying key factors of niche markets, which now defines the competitive edge companies are looking for in this mobile-digital age.
First, marketing research is systematic. Thus systematic planning is required at all the stages of the marketing research process. The procedures followed at each stage are methodologically sound, well documented, and, as much as possible, planned in advance. Marketing research uses the scientific method in that data are collected and analyzed to test prior notions or hypotheses.
Experts in marketing research have shown that studies featuring multiple and often competing hypotheses yield more meaningful results than those featuring only one dominant hypothesis. Marketing research is objective. It attempts to provide accurate information that reflects a true state of affairs. It should be conducted impartially. While research is always influenced by the researcher's research philosophy, it should be free from the personal or political biases of the researcher or the management.
Research which is motivated by personal or political gain involves a breach of professional standards. Such research is deliberately biased so as to result in predetermined findings. The objective nature of marketing research underscores the importance of ethical considerations. Also, researchers should always be objective with regard to the selection of information to be featured in reference texts because such literature should offer a comprehensive view on marketing.
Research has shown, however, that many marketing textbooks do not feature important principles in marketing research.
Organizations engage in marketing research for two reasons: This distinction serves as a basis for classifying marketing research into problem identification research and problem solving research.
Problem identification research is undertaken to help identify problems which are, perhaps, not apparent on the surface and yet exist or are likely to arise in the future like company image, market characteristics, sales analysis, short-range forecasting, long range forecasting, and business trends research. Research of this type provides information about the marketing environment and helps diagnose a problem.
For example, the findings of problem solving research are used in making decisions which will solve specific marketing problems. The Stanford Research Institute , on the other hand, conducts an annual survey of consumers that is used to classify persons into homogeneous groups for segmentation purposes. Standardized services are research studies conducted for different client firms but in a standard way. For example, procedures for measuring advertising effectiveness have been standardized so that the results can be compared across studies and evaluative norms can be established.
The Starch Readership Survey is the most widely used service for evaluating print advertisements; another well-known service is the Gallup and Robinson Magazine Impact Studies.
These services are also sold on a syndicated basis. All of these forms of marketing research can be classified as either problem-identification research or as problem-solving research.
Primary research is conducted from scratch. It is original and collected to solve the problem in hand. Secondary research already exists since it has been collected for other purposes. It is conducted on data published previously and usually by someone else. Secondary research costs far less than primary research, but seldom comes in a form that exactly meets the needs of the researcher. A similar distinction exists between exploratory research and conclusive research.
Exploratory research provides insights into and comprehension of an issue or situation. It should draw definitive conclusions only with extreme caution. Conclusive research draws conclusions: Exploratory research is conducted to explore a problem to get some basic idea about the solution at the preliminary stages of research. It may serve as the input to conclusive research. Exploratory research information is collected by focus group interviews, reviewing literature or books, discussing with experts, etc.
This is unstructured and qualitative in nature. If a secondary source of data is unable to serve the purpose, a convenience sample of small size can be collected.
Conclusive research is conducted to draw some conclusion about the problem. It is essentially, structured and quantitative research, and the output of this research is the input to management information systems MIS. Exploratory research is also conducted to simplify the findings of the conclusive or descriptive research, if the findings are very hard to interpret for the marketing managers.
Methodologically, marketing research uses the following types of research designs: Researchers often use more than one research design. Data is easily compared. The research will probe and develop points of interest. The Internet can be used in a number of ways to collect primary data. Visitors to sites can be asked to complete electronic questionnaires. However responses will increase if an incentive is offered such as a free newsletter, or free membership.
Other important data is collected when visitors sign up for membership. In many countries, the mail survey is the most appropriate way to gather primary data. Lists are collated, or purchased, and a predesigned questionnaire is mailed to a sample of respondents. However, a second mailing to prompt or remind respondents tends to improve response rates. Mail surveys are less popular with the advent of technologies such as the Internet and telephones, especially call centers.
Companies will set up mystery shopping campaigns on an organizations behalf. Often used in banking, retailing, travel, cafes and restaurants, and many other customer focused organizations, mystery shoppers will enter, posing as real customers. They collect data on customer service and the customer experience. Findings are reported back to the commissioning organization.
There are many issues surrounding the ethics of such an approach to research. Focus groups are made up from a number of selected respondents based together in the same room.
Highly experienced researchers work with the focus group to gather in depth qualitative feedback. Groups tend to be made up from 10 to 18 participants. Discussion, opinion, and beliefs are encouraged, and the research will probe into specific areas that are of interest to the company commissioning the research. Projective techniques are borrowed from the field of psychology. They will generate highly subjective qualitative data. There are many examples of such approaches including: Products are displayed in a mall of shopping center.
Potential customers are asked to visit the store and their purchase behavior is observed. Observers will contemplate how the product is handled, how the packing is read, how much time the consumer spends with the product, and so on.
The research is far cheaper, and commit less time and effort than conducting your own research. We have given a general introduction to marketing research. Marketing research is a huge topic area and has many processes, procedures, and terminologies that build upon the points above.
Primary market research is tailored to a company’s particular needs and is conducted either by you or by a company that you pay to conduct the research for you. Focus groups, surveys, field tests, interviews, and observation are examples of primary market research.
If you're starting a new business, launching a new product, or opening a new location for your large or small business, market research is essential for your success. There are two core forms of research: primary research and secondary research. When conducting primary market research, you can gather two basic types of information: exploratory or specific. Exploratory research is open-ended, helps you define a specific problem, and.
In this article, we will deep dive into the topic of Market Research Techniques. We will start with 1) an introduction to market research, explore then 2) primary and 3) secondary market research, as well as finish with 4) the mistakes to avoid when doing market research. MARKET RESEARCH: AN INTRODUCTION Market Research is a term that is used to refer to a process of gathering or . In a nutshell, primary research is original research conducted by you (or someone you hire) to collect data specifically for your current objective. You might conduct a survey, run an interview or a focus group, observe behavior, or do an experiment. You are going to be the person who obtains this raw data directly and it will be collected specifically for your current research need.