Market research is an organized effort to gather information about target markets and customers. It involves understanding who they are and what they need. It is an important component of business strategy and a major factor in maintaining competitiveness. Market research helps identify and analyze market needs, market size and the competition. Its techniques encompass both qualitative techniques such as focus groups, in-depth interviews, and ethnography, as well as quantitative techniques such as customer surveys, and analysis of secondary data. It includes social and opinion research, and is the systematic gathering and interpretation of information about individuals or organizations using statistical and analytical methods and techniques of the applied social sciences to gain insight or support decision making. Market research, marketing research, and marketing are a sequence of business activities; sometimes these are handled informally. The field of marketing research is much older than that of market research. Although both involve consumers, Marketing research is concerned specifically about marketing processes, such as advertising effectiveness and salesforce effectiveness, while market research is concerned specifically with markets and distribution. Two explanations given for confusing Market research with Marketing research are the similarity of the terms and also that Market Research is a subset of Marketing Research. Further confusion exists because of major companies with expertise and practices in both areas.
History Although market research started to be conceptualized and put into formal practice during the 1930s as an offshoot of the advertising boom of the Golden Age of radio in the United States, this was based on 1920s work by Daniel Starch. Starch "developed a theory that advertising had to be seen, read, believed, remembered, and most importantly, acted upon, in order to be considered effective." Advertisers realized the significance of demographics by the patterns in which they sponsored different radio programs. The Gallup Organization helped invent the public opinion poll; today, "Market research is a way of paying for it." In the 1940's the first idea for qualitative research was born through the work of Paul Lazarsfeld and his Focus interviews in an effort to test reactions to anti-Nazi radio broadcasts on behalf of the Office of War Information. Ernest Dichter was the first in the 1950s to coin was is today viewed as motivational consumer research to uncover deep-underlying product values through in-depth consumer interviews. In the 1960's Predictive statistical techniques were born through the work of Marketing Professor Paul Green who invented conjoint analysis. In 1974, Jerry Yoram Wind launched the two-step market segmentation model, based on macro-and micro-segmentation, which is still routinely used today. The Dot.com boom of the 90's changed the market research methods and approaches substantially, with online surveys bypassing face-to-face interviews and phone-interviews as the dominant methodology. The subsequent web analytics and e-Commerce era allowed businesses to begin tracking consumer behavior and transactions online.
Industry Size and growth perspective Today, the global market research industry generates $150 billion (revenue by the end of 2025), with a projected annual growth of around 8.4%. The leading revenue-generating Markets are the US with $48 billion in market research turnover, the UK with $9.1 billion and China with $2.88 billion.
Data collection
"Rigorous sampling methodologies combined with high-quality data collection" is what the magazine Advertising Age considers the backbone of market research. Data collection can be done by observing customer behavior through in-situ studies or by processing e.g. log files, by interviewing customers, potential customers, stakeholders, or a sample of the general population. The data can be quantitative in nature (counting sales, clicks, eye-tracking) or qualitative (surveys, questionnaires, interviews, feedback). Aggregating, visualizing, and turning data into actionable insights is one of the major challenges of market research and today, text analytics affords market researches methods to process large amounts of qualitative information and turn it into quantitative data, which is easier to visualize and use for formalized decision making. Data collection can use larger audience samples than the few hundred or thousand typically used in market research. Also required is the (at least passive) cooperation of those being surveyed; trust is also helpful. Translation is an essential comprehension tool for global consumers and is not a simple act of replacing words in one language with words in another. Some data collection is incentivized: a simple form is when those on the road contribute to traffic reporting of which they are consumers. More complex is the relationship of consumer-to-business (C2B), which sometimes introduces reliability problems. Other data collection is to know more about the market, which is the purpose of market research.
Market research methods and approaches Market Research generally breaks down into 8 core specializations , subdivided into quantitative and qualitative methods to help drive strategic decision-making:
… excerpt ends here. Continue reading the full article.
