Marketing Research

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MARKETING RESEARCH

MARKETING RESEARCH evolved as the U.S. economy shifted from a production-driven one to a market-driven one. As the American production of goods and services, plus imports, was beginning to satiate American demand, marketers needed to learn how to tailor their products to the needs and likes of an increasingly discerning public. This tailoring resulted in increased market demand and, for successful companies, increased market share.

Formal marketing research was initiated in 1911 when the Curtis Publishing Company appointed its first director of commercial research. Early practitioners were inspired by the efforts of Frederick W. Taylor, famous for his time and motion studies, and others to employ disciplines of "scientific management" to improve business processes and thereby improve results. Marketing research has evolved into an industry consisting of large and small firms worldwide as well as dedicated market research departments in all large and many small companies. Expenditures for marketing research in the United States exceeded $1 billion in 2000.

The American Marketing Association defines marketing research as "the function that links the consumer, customer, and public to the marketer through … information used to identify and define marketing opportunities and problems; generate, refine, and evaluate marketing actions; monitor marketing performance; and improve understanding of marketing as a process." Marketing research "specifies the information required to address these issues, designs the method for collecting information, manages and implements the data collection process, analyzes the results, and communicates the findings and their implications."

Marketing research consists of gaining consumer input and data. It is the lifeline between companies and customers, and it allows the application of scientific methods to gain knowledge about consumers, buyers, competitors, markets, and marketing.

In general terms, marketing research is either primary research or secondary research. Primary research is either qualitative or quantitative. Qualitative research explores, defines, and describes. It involves in-depth studies of limited samples of people. Use of focus groups is a popular tool of qualitative research. In this format, participants are prescreened to assure that they match the sociodemographic profile of the brand or company performing the research (that is, they are either customers or potential target customers). Once screened, groups of eight to twelve customers participate in a group discussion, with a company-hired moderator, to discuss the topic at hand: new products, reaction to advertising or packaging, or assessment of goods or services. Use of one-on-one interviews is another popular tool of qualitative research. Often these are conducted in shopping malls (mall intercepts), where shoppers are approached, screened to match a predetermined sociodemographic profile, and escorted to a facility for a thirty-minute to one-hour interview.

Quantitative research measures, estimates, and quantifies. It generally involves polling of a broad sample of people. This choice is necessary when statistically significant results are required. Large companies and well-known packaged-goods brands use this type of research when they want to be certain that consumer opinions are representative of the population at large. In the last decade especially, political opinion polls have become popular for U.S. presidents and others to assure that they are taking the public's point of view into consideration in policymaking and that they remain popular among their constituents.

Specific research objectives may require a mix of qualitative and quantitative research. Examples include awareness and attitude surveys, brand image surveys, advertising tracking, promotion testing, media mix evaluation, new products research, marketing optimization research, and customer loyalty evaluation.

Secondary research entails gathering information from already published data and sources. Some applications for secondary research include competitive intelligence (where one company wants to monitor its competitors, their spending, their new product introductions, their staffing, or their financial performance) and trend assessment. As an example, Albing International Marketing, a global home furnishings consultancy, used secondary research data to prepare a market study, Windows on the Millennium—Across the Threshold to the New Century (2001), which cited ten key trends expected to shape and impact the home furnishings industry in the subsequent decade. The trends were listed under the following headings: Home and Family, Leisure, The Aging Population, The Ethnic Influence, The Spiritual Search, Information and Technology, The Environment, The Wealth Effect, Globalization and Nationalism, and The Value Mentality.

New methodologies and new technologies are continually being adopted by the marketing research industry. New research techniques provide deeper insight into buyer behavior, even using predictive models of how their behavior will change under alternative scenarios. The computer has been integrated into nearly every phase of research, from computer-assisted telephone and personal interviews to disk-by-mail data collection to Internet sampling. The Internet has become the key portal for gathering secondary research. In addition to access to public library databases, several sites exist exclusively to sell market research reports on a broad variety of subjects (for example, Profound, Factiva, Market Research.com). It is only a matter of Time until Web-based survey research becomes an industry norm.