Market Research
Sep 12th, 2008 by Scott Hebert
This post involves a fictional company called It’s Popcorn Time! (IPT). IPT manufactures snacks and treats for the local Philadelphia area.
Market research applies the scientific method to marketing principles. The marketing research process seeks to define a problem, collect data, and derive a solution. It is the job of marketing managers to guide the research process from a high-level. Although they may not be involved directly in the research process, they must be able to guide the researchers and derive conclusions from the data (Perreault, Cannon, & McCarthy, 2008).
The first step in market research is defining the problem. In the case of IPT, the financial advisor has asked that market research be done to ensure the company’s message will be well received before she will agree to release any funds. The market research should identify key statistics about the market such as gender, age, income, and snack preferences. This information will help identify market segments. In addition to this statistical information, it will be helpful to gather taste information. For example, do customers prefer chocolate over vanilla? Together this information will give IPT an excellent idea of the market, their market position, and what needs to be done to differentiate themselves from the competition (Perreault, Cannon, & McCarthy, 2008).
To gather the statistical information, quantitative research methods are necessary. Quantitative methods are excellent for gathering information that doesn’t need clarification or explanation. Examples of this kind of information are statistical data like gender, age, and income. Since IPT already has a strong presence in Pennsylvania, it should be a simple matter to make customer surveys available at their retail locations. These locations also offer an excellent opportunity for interviewers to perform face-to-face interviews (Perreault et al., 2008).
Although some preferential information can be gathered via quantitative methods, a qualitative approach is often a better way to gather this kind of data. Qualitative methods rely on open-ended responses from interviewees. This method often requires a greater time investment from the respondent. Focus groups are the most common form of qualitative research. Focus groups can be conducted relatively inexpensively and have the benefit of allowing respondents to fully explore and explain their answers (Perreault et al., 2008).
These methods are not without their pitfalls, of course. Although customer surveys are relatively inexpensive to produce and tabulate, they rely on respondents to complete them at their own pace. Therefore, they tend to have a low response rate and require a wider distribution to achieve the necessary results. Face-to-face interviews of customers at retail locations might have a better take rate than impersonal surveys, but the presence of the interviewer might influence the respondent due to fear or embarrassment. Finally, focus groups encourage discourse between the participants but may be dominated by one or two outgoing individuals. Additionally, small focus groups tend to not be truly representative of the market as a whole. As such, they should be used to get ideas about the market that can be tested with quantitative research (Perreault et al., 2008).
Market research is not a simple task. It requires the cooperation of marketing managers and researchers to properly identify problems and decide on data collection methods. No research method is without its pitfalls. Therefore a combined marketing research approach is necessary to ensure that the most useful information is gathered (Perreault, Cannon, & McCarthy, 2008).
Perreault, Jr., W. D., Cannon, J. P., & McCarthy, E. J. (2008). Essentials of marketing: A marketing strategy planning approach, 11th ed. New York: McGraw-Hill Irwin.