What is marketing research?

Marketing research is "the process or set of processes that links the producers, customers, and end
users 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."[1]

It is the systematic gathering, recording, and analysis of qualitative and quantitative data about issues
relating to marketing products and services. The goal of marketing research is to identify and assess how
changing elements of the marketing mix impacts customer behavior. The term is commonly
interchanged with market research; however, expert practitioners may wish to draw a distinction, in
that market research is concerned specifically with markets, while marketing research is concerned
specifically about marketing processes.[2]

What is the purpose of marketing research?

Research guides your business's marketing plan and the four Ps of marketing: product, price, place and
promotion. This research gives you the information to determine the essential details of each crucial
variable. For example, a customer survey can reveal how you can improve your product, and what price
customers are willing to pay for it. Sales research helps determine where to place your product --
geographically as well as the merits of an online strategy. Demographic research details habits of your
customers, including where they get their information so you can make smart advertising buys to
promote your product.

What are some common misconceptions about marketing research?

3 Common Misconceptions About Market Research

Over the years, we have heard many false misconceptions about market research. However, three
themes consistently stick out: 1) Anyone can conduct market research 2) Focus groups are always the
best methodology 3 )Research is not worth the money. Below you will learn why these misleading
statements are not still always the case.

1. Anyone Can Conduct Market Research

In today’s digital world, there are many free and inexpensive online tools. As a result, companies may
feel it is a cost-saving to conduct research in-house over hiring a market research company. Cost-saving
becomes a common pitfall that many businesses conclude and is potentially quite dangerous. Above all,
a poor research strategy leads to poor results. As a result, it could even possibly provide the wrong
marketing strategy.

Market research professional’s number one job is to reduce the number of errors in their quantitative,
qualitative, and secondary data. In addition, these experts have years of training and know how to avoid
mistakes. In addition, common errors include improper research design, inferior data collection
methods, small sample size & design, and improper use of statistic procedures.

Furthermore, a third party conducting the research compared to an internal employee avoids any
research biases. A person who is close to an issue or the everyday inner workings of a company may not
have an impartial view when conducting the market research resulting in skewed findings.

2. Focus Groups Are Always the Best Methodology

Many of our clients love focus groups, and we often lead this qualitative research methodology. It
provides an approach that favors the most in-depth, revealing, and personal responses. Another
misconception about Market Research is that focus groups are the only way to go. However, this
exploratory method is often costly and not necessarily the best approach to answer every research
need. Given that this method only interviews a limited number of participants, the research is
directional.

There are online tools that can help you with a host of online research strategies. It’s essential to
question a large number of participants, get statistical results, and introduce qualitative methods to
garner in-depth insights. These online exercises are great to test brand concepts, messaging, print and
digital ads, TV commercials, and radio ads. Online research comes in at a faster rate and costs
significantly less money than focus group research.

3. Research is not worth the money

Often companies focus on execution needs such as a new website, media buys, or commercials.
Companies cut their budgets for strategies based on research. As a result, the marketing or business
strategy can become compromised and based on only assumptions. While in the short-term, it may have
saved a few thousand dollars, in the long-term, your business may not be effectively reaching your
target audience. Prioritizing the short term will result in potential lost profits.
If there is a specific budget you need to work with, be honest with your research vendor. There are often
cost-effective methodologies to help answer your business objectives. The best thing you can do is work
on a thoughtful and reasonable strategy without cutting corners. And trust us: your brand will benefit
because of it.

Is marketing research Worth the expense?

What are the benefits of market research for professional services firms? Is it worth the cost? And does
it really matter?

These are some of the questions we get from our clients when we recommend researching their current
clients and target markets. While on some level we all know that market research is a good thing, these
are legitimate questions. What exactly are the costs and benefits of market research?

Why Market Research?

Let’s start with why your professional services firm should consider using market research in the first
place. There are a number of occasions where market research is appropriate. Here are some of the
most typical situations where you’d use it:

When your firm is launching a new service

When you’re looking to select verticals to concentrate on and specialize in

When you’re developing your organizational strategy

When your firm is seeing a diminishing market share

When your industry environment is changing

When your firm needs to accelerate growth

The Benefits of Market Research

While there are many intangible benefits of market research on your current and prospective clients,
such as better targeting and a more accurate understanding of how your firm is viewed, there is a much
more tangible and direct measure of benefits. In a study of high growth professional services firms, we
found that professional services firms that do systematic, structured research on their target client
groups are more profitable and grow faster.

How large should your research budget be?

1. Consider your overall budget to determine the right market research allocation.

Before you can set a market research budget, it is important to nail down a firm overall project budget.
Once this is set, you should allocate an appropriate percentage of that budget to market research. The
next three factors discussed will help you determine what that percentage will be, but, keep in mind, the
decided percentage should be a reasonable portion of the overall budget. This can go both ways. For
example, if your overall project budget is $250,000, do not expect to get the answers you need out of a
single $5,000 report; on the other hand, you don't necessarily need to fork out $100K either.

2. Research what is available before making any final decisions.

One size doesn't always fit all. However, if you're one of the one sizes that does fit, than you are
definitely in luck! There are massive amounts of syndicated research out there on all kinds of topics,
from general market overviews to some of the most detailed analyses. One of the best things you can do
to help set a realistic budget (and to keep within that budget) is to research inventory of already
published information before you consider commissioning someone to create custom research. Much of
the time, you will be able to answer many, or all, of your questions with a syndicated report and, in turn,
save a large portion of your budget in the long run, as published information is often up to 1/10th the
cost of a custom project.

3. If you must go custom, prepare your budget accordingly.

So, what do you do if syndicated reports don't answer all of your questions? This is extremely important
to consider when determining your budget. If you need to commission custom research, you will need
to be prepared to adjust your budget accordingly (and your time line as well), as custom projects can
cost anywhere from $5,000-$50,000, and are completed after you request it, making the process much
more time consuming.

While the expenditures are greater, the benefits can be more substantial as well. Custom reports are
designed to provide the specific answers to your questions, so the intelligence you receive is as
extensive and detailed as you need. However, out of respect for your budget, consider this solution as a
last resort, otherwise, you will be looking at an average budget of $30,000-$50,000 and at least a two-
month time line from the initial project layout.
4. Understand what costs to expect and what information that gets you.

Market research is a big investment, both in terms of time and money. It's not something you want to
dive into blindly. That's why it is so important to educate yourself on realistic expectations for what a
report in your price range can give you. This knowledge will help you land the right market research
report for your needs and budget. Below is a detailed guide to the expected cost vs. information gained
in a published report:

What topics are addressed through marketing research studies?

Common Types of Market Research

By “types of research” I don’t necessarily mean how you’re collecting data. Instead I mean the
procedures and methodology used to analyze the data collected.

These procedures include market segmentation, product testing, advertising testing, key driver analysis
for satisfaction and loyalty, usability testing, awareness and usage research, and pricing research (using
techniques such as conjoint analysis), among others.

Market Segmentation

When conducting market segmentation studies we’re generally asking survey questions aimed at
capturing needs, values, attitudes, behaviors and demographics. A B2B company might also want to
investigate firmographic data such as company size, revenues, and product category that are relevant to
the industry in question.

Marketing can’t effectively speak to every type of person or business at the same time, so one of the
main goals of market segmentation is to allow for more efficient and effective marketing tactics.

Without market segmentation companies are shooting in the dark and wasting valuable bullets. They
may hit a customer by accident, but they would miss a lot of others.

Product Testing
A detailed understanding of how your product meets (or doesn’t meet) your customer’s needs is crucial
both to product development and marketing, so these types of market research studies need to be
conducted throughout a product’s life.

Ultimately you should be able to make informed “go” or “not go” decisions about new features and
products before launch, and thus save capital, time and effort.

Successful product testing should:

Give insight into product/service viability by investigating competing and substitute alternatives along
side customers’ willingness to embrace new products/services.

Determine competitive advantage as well as possible threats from similar products/services.

Identify the products with the highest revenue potential.

Clarify what improvements should be prioritized before a product launch (or re-launch).

Pinpoint which product features (both existing and potential) are most important to your target
audience.

Help produce marketing messages to change or enhance existing perceptions about your
products/services.

What topics are addressed through marketing research studies?

Common Types of Market Research

By “types of research” I don’t necessarily mean how you’re collecting data. Instead I mean the
procedures and methodology used to analyze the data collected.

These procedures include market segmentation, product testing, advertising testing, key driver analysis
for satisfaction and loyalty, usability testing, awareness and usage research, and pricing research (using
techniques such as conjoint analysis), among others.

Market Segmentation
When conducting market segmentation studies we’re generally asking survey questions aimed at
capturing needs, values, attitudes, behaviors and demographics. A B2B company might also want to
investigate firmographic data such as company size, revenues, and product category that are relevant to
the industry in question.

Marketing can’t effectively speak to every type of person or business at the same time, so one of the
main goals of market segmentation is to allow for more efficient and effective marketing tactics.

Without market segmentation companies are shooting in the dark and wasting valuable bullets. They
may hit a customer by accident, but they would miss a lot of others.

Product Testing

A detailed understanding of how your product meets (or doesn’t meet) your customer’s needs is crucial
both to product development and marketing, so these types of market research studies need to be
conducted throughout a product’s life.

Ultimately you should be able to make informed “go” or “not go” decisions about new features and
products before launch, and thus save capital, time and effort.

Successful product testing should:

Give insight into product/service viability by investigating competing and substitute alternatives along
side customers’ willingness to embrace new products/services.

Determine competitive advantage as well as possible threats from similar products/services.

Identify the products with the highest revenue potential.

Clarify what improvements should be prioritized before a product launch (or re-launch).

Pinpoint which product features (both existing and potential) are most important to your target
audience.

Help produce marketing messages to change or enhance existing perceptions about your
products/services.
What are the two basic types of marketing research?

There are two main types of marketing research: Quantitative and qualitative. Quantitative research
usually includes phone, mail, Internet or in-person interviews. Market researchers may do interviews in
person if they are speaking with doctors, executives or other professionals that are hard to reach
through phone surveys. These professionals usually have gatekeepers like secretaries, who relentlessly
screen their bosses’ calls. Quantitative research is usually conducted in large numbers. In other words,
the marketing research agency conducts hundreds of surveys so they can attain a representative
sample. A representative sample is one that is statistically valid. The results can be projected with some
degree of certainty across the general population.

Qualitative research is usually conducted before quantitative research. Qualitative research is conducted
among smaller groups of people. It is more exploratory in nature. The information may be used to
narrow the number of concepts a company has for specific products. For example, a restaurant may
have four meal arrangements they are considering for one menu item. They can’t conduct phone
surveys with all these meals because it would be too expensive. Instead, a qualitative project
management company will first narrow the meals down to the most viable concept. And that is the one
people select through qualitative research.

There are two main types of qualitative research: Focus groups and one-on-ones. Both of these
qualitative research methods are usually conducted in focus group facilities. A moderator, or
professional interviewer, usually conducts sessions for both of these qualitative research methods. In a
focus group, people are questioned as a group. In one-on-ones, the moderator speaks with one person
at a time. In both cases, managers from the client company usually observe the respondents behind a
one-way mirror.

The moderator uses a discussion guide during both types of interviews. The qualitative project
management team usually works with the moderator in developing the discussion guide. The guide is
basically a detailed questionnaire. It provides the moderator with specific instructions on what to ask,
how to ask it and the amount of time that should be spent on each question.

Focus groups usually consist of 8 to 12 people. The moderator will usually start out by describing the
concept of a product or food item, including the dimensions, flavors, styles and price. Sometimes,
samples of the product are shown. And people may even get to taste food items. However, concepts for
more technical products may be limited to just the idea. Therefore, the moderators job is to determine
the interest level among the group. Moderators often use scales to measure interest. For example, a
rating of 5 may indicate a person is “Very Interested” in the product.
Qualitative project management companies usually have moderators run one-on-ones in similar fashion.
Software company employees, for example, may actually watch each participant use its software.
Managers may watch to see if people have any difficulties using the software. Companies try to iron out
all problems with qualitative interviews. That way they eliminate most of the minutiae when it comes
time to do the quantitative interviews.

What is the process for quantitative studies?

Quantitative methods emphasize objective measurements and the statistical, mathematical, or

numerical analysis of data collected through polls, questionnaires, and surveys, or by manipulating pre-
existing statistical data using computational techniques. Quantitative research focuses on gathering
numerical data and generalizing it across groups of people or to explain a particular phenomenon.

Where can i get help with marketing research?