Market research – an organized effort to gather information about markets or customers – is an important component of business strategy. Market research helps you discover what people want, need or believe, see how they act, and see how other companies in the marketplace are responding to these wants and needs. In short, market research gives you the answers you need to make informed business decisions.
There are two types of market research: Primary and Secondary Research
- Primary Research is the collection of original data to meet a company’s own purposes, and it can either by qualitative or quantitative in nature. Qualitative research is usually done through focus groups or in-person interviews. It tends to be very open-ended, and is used to get an in-depth understanding of particular issues. Quantitative research aims to answer specific questions by surveying a statistically significant group of respondents. Primary research is designed to meet your organization’s needs, but it can be both expensive and time-consuming to complete.
- Secondary Research involves the summary, collation or synthesis of existing research that has been completed by someone else (such as the government, a trade group or a market research organization). In some cases, it is relatively easy to obtain, but it may not be specific enough to meet your needs.
Market research in action
To understand how all of this looks in practice, let’s take a look at a hypothetical/fictional example, an RV (recreational vehicle) manufacturer named Coss Brothers RV, Inc. The management team at Coss Brothers RV has two big questions that they want to answer before they create their going-forward business and marketing plans: Who are their potential customers, and what features do these people want in an RV? Because the RV industry has changed so much in the last few years, the Coss Brothers RV team can’t assume that the answers that were true in the past are still true now; fresh research is needed. Here is how they can use both primary and secondary market research to get the answers they need.
- Step 1: Utilize Secondary Research. To get demographic and geographic information about who their potential customers are, Coss Brothers RV can purchase nationwide data from a market research firm such as Nielson. This would save considerable time and money versus doing their own survey of consumers nationwide, and would yield information that could be a good starting point for developing their marketing plan and message.
- Step 2: Conduct Primary Research. Once the Coss Brothers RV team knows who their potential customers are, the next step is to find out what features these people want in an RV. To answer this question, they can use…
- Qualitative research – If management was not even sure which features might be the most popular ones, they could start with qualitative research, such as focus groups, to develop or narrow down the list.
- Quantitative research – While a survey can be conducted using an open-ended question, such as “What features are you looking for in an RV,” the Coss Brothers’ survey results will be easier to analyze if they provide a list of potential features. They can then either (a) ask respondents to rank these features in order of importance or (b) ask respondents to state their level of interest in each choice, such as “very interested” or “not at all interested.”
An important thing to keep in mind when designing primary research is that the goal is to help you make better business decisions. Always evaluate all potential survey questions in this light!
- More qualitative research – After completing the quantitative research, the Coss Brothers’ management team might want to create a prototype RV with the “winning” features, and then bring focus groups in to evaluate their reactions.
How can market research help your company?
If you need to gather information about your markets or customers, the market research experts at MacKenzie Corporation can help. Give us a call at 949-789-2960 to discuss the difference that market research can make in the decisions that you’re trying to make.
