Market research is a process used to solve problems between the company and its markets by searching and analyzing information. So, when we refer to research as a process, we mean that a series of steps must be followed systematically to collect information, analyze it and make decisions about how we will act. For this reason, companies must continually carry out market research processes since this allows them to know how to respond to changes in tastes, preferences, and the behavior of the market in general.
Types of Market Research
Then in marketing, market research can be divide into two categories:
1. Academic Research
Academic research is also called scientific research because it is carry out to obtain information on topics of metaphysical interest for the entire society related to marketing.
Therefore, this implies that it is not limited to the problems that a single company can face. In other words, it analyzes issues of general interest and seeks to find long-term solutions.
2. Professional Research
In contrast, professional research is typically conduct by a company’s marketing, consulting, or market research department.
Above all, it is use to solve specific problems of a particular company. Usually, they can problems that require a short-term solution; for that reason, it is called practical research.
Steps of a Market Research
The steps to conducting marketing research can be summarize as follows:
1. Statement of the Problem
Now the statement of the problem is one of the fundamental steps to doing good market research since if it is not clearly define what it is that we want to solve or investigate, the study can be a total failure.
For example, if a product’s market share is declining, the problem can be define by asking the question: Why is product X losing market share?
2. Preliminary Investigation
Preliminary research is also exploratory research where answers can sought with the data available within the company or with the people who work or have contact with it.
Then, moving on to the problem definition question: Why is product X losing market share? Some answers could be the high price of the product, the loss of quality, and the lack of innovation.
3. Formulation of Hypotheses
A hypothesis is the provisional explanation of a problem through the relationship of variables, one dependent and one independent the answers obtained in the preliminary investigation help to formulate the hypotheses.
A hypothesis of the previous case could be formulate as follows:
- “The cause of the low share of product X is its high price.”
- The dependent variable is low participation, and the independent variable is its high price.
The hypotheses are the basis on which the entire subject of the investigation must revolve because they must be verified or rejected at the end of this process.
History of Market Research
Although questionnaires began to be use in the 19th century, market research did not have a formal beginning until the 20th century, between 1910 and 1920.
The most representative milestone of the beginning of market research was when in 1911. Charles Carlin of Curtis Publishing Group founded a market research department for the first time. It served to encourage other companies to do the same.
In the following decades, more market research tools were implement, such as new sampling techniques and quantitative and qualitative analysis instruments. Finally, with the arrival of the Internet, the possibility of massively collecting and analyzing data opens up, giving greater complexity to these studies.
Market Research Example
An example of market research can be when a company wants to launch a new product. Specifically, a soft drink with a unique flavor.
First, the company must pose the problem of estimating the market’s response to the new soft drink. As it is a new product, there are no previous studies. Then, a hypothesis is formulate, for example, that the new glass will have good reception. Particularly among the young Mexican public, due to its flavor and reasonable price.
To demonstrate the hypothesis, focus groups and other research instruments are use to collect data. Then, the results will also analyzed to determine if the hypothesis is correct and if the product could succeed in the Mexican market.
To conclude, we can say that market research is significant for any company since as long as you get to know your consumers and market better, you will be able to develop products that better satisfy the needs of your consumers.
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