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Market Research

To undertake marketing effectively, businesses need information. Information about customer wants, market demand, competitors, distribution channels etc. Marketeers often complain that they lack enough marketing information or the right kind, or have too much of the wrong kind. The solution is an effective marketing information system.
The information needed by marketing managers comes from three main sources:
(1) Internal company information (e.g. sales, orders, customer profiles, stocks, customer service reports etc)
(2) Marketing intelligence: this can be information gathered from many sources, including suppliers, customers, distributors. Marketing intelligence is a catch-all term to include all the everyday information about developments in the market that helps a business prepare and adjust its marketing plans. It is possible to buy intelligence information from outside suppliers (e.g. Mintel, Dun & Bradstreet, Mori) who set up data gathering systems to support commercial intelligence products that can be profitably sold to all players in a market.
(3) Market research:
Management cannot always wait for information to arrive in bits and pieces from internal sources. Also, sources of market intelligence cannot always be relied upon to provide relevant or up-to-date information (particularly for smaller or niche market segments). In such circumstances, businesses often need to undertake specific studies to support their marketing strategy - this is market research.

Approaches to Conducting Market Research

Depending on the situation facing a company, particularly the resources allocated to marketing research, there are four main ways of carrying out market research:
(1) Do it yourself - personally
This is often the case in smaller businesses. Here, the marketing staff do the research themeselves. Sample sizes tend to be small - which may be appropriate if there are a relatively small number of customers.
(2) Do it yourself - using a marketing research department
By employing a marketing research manager, a business may benefit from specialist research skills.
(3) Do it yourself - using a fieldwork agency
Often the design of a piece of market research can be completed using internal resources - particularly if the business employs a marketing specialist with knowledge of research techniques. However, the scope of the research (for example, interviewing a large sample of consumers in various locations) may be beyond the resources of a business. In this case, the fieldwork can be carried out by a marketing research agency.
(4) Use the full services of a marketing research agency
Where resources permit a business can invest in the full range of skills offered by marketing research agencies. A complete service would include:
Preparation of the market research proposal (survey design, costs, timetable, method of feedback)
Conduct exploratory research
Design the research questionnaire
Select the sample
Choose the survey method (e.g. telephone, postal, face-to-face)
Conduct the interviewing
Analyse and interpret the results
Prepare a report
Make a presentation

There are thousands of market research agencies in the UK alone who provide such services.
Types of Marketing Research
The main distinction between the different types of market research is between "ad-hoc" and "continuous" research:
Ad-hoc Market Research:
Ad-hoc research studies focus on specific marketing problems. They collect data at one point in time from one sample of respondents. Good examples of ad-hoc studies include:
Product usage surveys
New product concept tests (where consumers are asked to trial new brands, product prototypes etc)
Advertising development (how does the sample of consumers respond to a specific advertising campaign? Most TV adverts are researched in this way)
Corporate image surveys (often quite enlightening)
Customer satisfaction surveys (these can often turn into continuous research)

Continuus Research:
Continuous studies interview the same sample of people, repeatedly. The major types of continuous research are:
Consumer panels: formed by recruiting large numbers of households who provide information on their buying over time. Research agency AC Neisen has one of the largest consumer panels in the world, continuously interviewing 125,000 households in 18 countries. The main competitor for AC Nielsen is TNS which runs panels in 20 countries.
Retail Audits: By gaining the cooperation of retail outlets, sales of brands can be measured (using barcoded sales data) to track changes in brand loyalty, market share and effectiveness of different retail formats.
Television Viewership / Radio Listening Panels: these panels aim to measure viewership or listening minute by minute. This data is critical information for broadcasters to determine their programme strategy (what kinds of programmes to produce and when to broadcast them) as well as for advertisers (who is watching, listening, and when?). In the UK, the main source of such data is produced by the Broadcasters' Audience Research Board ("BARB").


E-mail Steve Margetts