Companies sometimes assume that what works in their home country will work in another country. They take the same product, same advertising campaign, even the same brand names and packaging, and with virtually no chance to try to market it the same way in another country. The result in many cases is failure. Why? Well, the assumption that one approach works everywhere fails to consider differences that exist between countries and cultures. While many companies who sell internationally are successful following a standardized marketing strategy it is a mistake to assume this approach will work without sufficient research that addresses this question. In this section resources are provided to assist companies in their global marketing efforts.
In many ways the foundation of marketing rests with marketing research since nearly all tactical decisions require some amount of research. However, research does not have to be elaborate to be effective. Sometimes small efforts, such as doing a quick search on the Internet, will provide the needed information.
The knowledge gained from research helps marketers make more informed decisions. Market research does this by giving marketers a picture of what is occurring (or likely to occur) and offering alternatives from which choices can be made. For instance, good research may suggest multiple options for introducing new products or entering new markets. In most cases marketing decisions prove less risky (though they are never risk free!) when the marketer can select from more than one option.
However, as sophisticated as research is today, marketers are cautioned not to use marketing research as the only tool for making marketing decisions. It may prove costly for the results of marketing studies to be the lone reason why decisions are made. Rather, smart marketing decisions require the use of knowledge gained from many areas, including management’s own judgment of what is best. But being cautious with how research is used should not diminish the need for conducting research that aids marketing decisions. As noted, research should help support decisions in all key marketing areas.
This tutorial includes the following topics:
1. Marketing Research
2. Doing Market Research Right
3. Reasons to Undertake
4. Types: Primary Quantitative
5. Types: Primary Qualitative
6. Types: Secondary Research
Note that we use the terms “marketing research” and “market research” interchangeably. Many feel there is a distinct difference with “marketing research” covering a broader array of research efforts associated with marketing decisions while “market research” is specific to understanding nuances of a particular market. For the purpose of this tutorial we treat these as the same.While undertaking research is important for gaining knowledge and aids marketing decision-making, marketers must understand its limitations. Almost all types of research, whether it is for business, medical science, government, etc., contain the risk that results may be wrong. There are many reasons why errors occur (a full discussion being beyond the scope of this tutorial), however, one key reason can be traced to the controls in place (or not) when data collection occurs. If research is collected without the necessary controls to insure it is done correctly, relying on results to make decisions could prove problematic if not disastrous. Thousands of examples exist of firms using faulty research to make decisions, including many dot-com companies that failed between 1999 and 2002.
Since many research studies are really only snapshots of something that is bigger, making sure research is done right is critical. For instance, many companies survey a small percentage of their customers (called a sample) to see how satisfied they are with the company’s efforts. But, unless the company only has a few customers, the chances of surveying everyone (called a census) is unlikely, and even if they could talk to everyone there is still a chance the information is not totally accurate (e.g., customers may make errors when they fill out the survey).
Seeking a high-level of relevant results requires instituting strict controls on how the information is collected. Many of these controls use a scientific approach meaning a research project becomes highly structured and is not very flexible once a study is underway. For instance, for research involving a sample of a large population of customers, certain controls must be in place to define how many are in the sample as well as how the research is carried out (e.g., research design should be the same for all).
As you might expect the trade-off for getting more relevant results is the increase in cost and time needed to carryout the research. So a big decision for marketers, when it comes to doing research, is to determine the balance between relevancy of the information obtained and the costs involved to carry out the research.
Good market research is produced when results of the research are strong indicators of what is happening now or might happen in the future. This means the results are relevant to a situation. Being relevant does not mean it is 100% correct (remember there is always risk). Instead, being relevant means the probability is high that the research results reflect what is actually happening or what will happen.
Reasons to Undertake Market Research
There are numerous reasons why marketers seek to conduct research but, in general, these fall into three categories.
Describe What is Happening (Descriptive Research)
The focus of descriptive research is to provide an accurate description and/or explanation for something that is occurring. For example, what age group is buying a particular brand, what is a product’s market share in a specific geographic region, how many competitors does a company face, etc. This type of research is by far the most popular form of market research. But to be considered useful it must be conducted correctly, which means the marketer must adhere to a strict set of research requirements to capture relevant results.
Examine Something That is Mostly Unknown (Exploratory Research)
The exploratory approach attempts to discover general information about some topic that is not well understood by the marketer. For instance, a marketer knows about a new Internet technology for marketing a product but the marketer doesn’t know much about the technology. When gaining insight on an issue is the primary goal, exploratory research is used. The basic difference between exploratory and descriptive research is in the research design. Exploratory research follows a format that is less structured and more flexible than descriptive research. This approach works well when the marketer doesn’t have an understanding of the topic or the topic is new, and it is hard to pinpoint the research direction. The downside, however, is the results may not be as useful in aiding a marketing decision. So why use it? In addition to offering the marketer basic information on a topic, exploratory research may also provide direction for a more formal research effort. For instance, exploratory research may indicate who the key decision makers are in a particular market thus enabling a more structured descriptive study to be targeted to this group.
See How Something Affects Something Else (Causal Research)
In this form of research the marketer tries to determine if one variable affects another variable. In essence, the marketer is conducting an experiment. To be effective the design of causal research is highly structured and controlled so that other factors do not affect those being studied. Marketers use this approach to test marketing scenarios such as what might happen to product sales if changes are made to a product’s design. If causal research is performed well the marketer may be able to use results to forecast what might happen if the changes are made.
Primary Research
When a marketer conducts research to collect original data it is referred to as primary marketing research. This process involves designing a research plan, collecting information, inputting the data, and producing and analyzing results. Since there is a great deal of marketer involvement, primary research is often very expensive to undertake and do well. But with the marketer controlling the process, the results may be much more relevant to his/her situation and, consequently, more useful.
In general there are two basic types of primary research methods – quantitative and qualitative.
Quantitative Research
Information gathered using quantitative means are often open to evaluation using statistical analysis. While this tutorial does not cover statistical techniques, it should be understood that data collected following a structured and well-controlled scientific research design can yield numerical values that can be analyzed using statistics. Such analysis may prove very relevant and even results from a small number of collection points may be used in determining characteristics of a larger group (e.g., sample a small group of customers).
Quantitative research comes in many forms but the most popular forms are surveys, tracking, and experiments.
Surveys – This method captures respondent information through the input of responses to a research instrument, such as a questionnaire. Information can be input either by the respondents themselves (e.g., complete online survey ) or the researcher can input the data (e.g. phone survey). The main methods for distributing surveys are via postal mail, phone, website or in person. However, newer technologies are creating additional delivery options including through wireless devices, such as PDAs and cellphones.
Tracking – With tracking research marketers are able to monitor the behavior of customers as they engage in regular purchase or information gathering activities. Possibly the most well known example of tracking research is used by websites as they track customer visits. But tracking research also has offline applications, especially when point-of-purchase scanners are employed, such as tracking product purchases at grocery stores and automated collections on toll roads. This method of research is expected to grow significantly as more devices are introduced that provide means for tracking. However, some customers may see tracking devices as intrusive and many privacy advocates have raised concerns about certain tracking methods especially if these are not disclosed to customers.
Experiments – Marketers often undertake experiments to gage how the manipulation of one marketing variable will affect another (causal research). For example, a market researcher for a retail chain may want to study what the effect on sales would be if a point-of-purchase display is moved to different locations in a store. The use of causal research has applications for many marketing decision areas including product testing, advertising design, setting price points, and creating packaging. Unfortunately, performing highly controlled experiments can be quite costly. Some researchers have found the use of computer simulations can work nearly as well as experiments and may be less expensive, though the number of applications of simulation for marketing decisions is still fairly limited.
Qualitative Research
Sometimes referred to as “touchy-feely” research, qualitative research gathers information that requires researchers to interpret the information being gathered, most often without the benefit of statistical support. If the researcher is well-trained in interpreting respondents’ comments and activities, this form of research can offer very good information. However, it may not hold the same level of relevancy as quantitative research due to the lack of scientific controls that are often associated with this data collection method. For example, a researcher may want to know more about how customers make purchase decisions. One way to do this is to sit and talk with customers using one-on-one interviews. However, if the interview process allows the researcher to vary what questions are asked (i.e., not all respondents are asked the same questions), then this type of research may lack controls needed to follow a scientific approach. An additional drawback of qualitative research is that it can be a time consuming and expensive undertaking and, consequently, only a very small portion of the total population generally participate in the research. Due to the lack of strong controls in the research design (i.e., not as well structured, fewer participants), using results to estimate characteristics of a larger group is more difficult. This is not to say qualitative research is not useful, it is very useful if its limitations are understood and it is widely employed for marketing research.
Qualitative Research options include individual interviews, focus groups and observational research
Individual Interviews – Talking to someone one-on-one allows a researcher to cover more ground than may be covered if a respondent was completing a survey. The reason lies with the researcher’s ability to dig deeper into a respondent’s comments to find out additional details that may not have emerged from initial responses. Unfortunately, individual interviewing can be quite expensive and may be intimidating to some who are not comfortable sharing details with a researcher.
Focus Groups – To overcome the drawbacks associated with individual interviews, marketers can turn to focus groups. Under this research format, a group of respondents (generally numbering 8-12) are guided through discussion by a moderator. The power of focus groups as a research tool rests with the environment created by the interaction of the participants. In well-run sessions, members of the group are stimulated to respond by the comments and the support of others in the group. In this way, the depth of information offered by a respondent may be much greater than that obtained through individual interviews. However, focus groups can be very expensive to conduct especially if participants must be paid (often the case in B-to-B research). To help reduce costs, online options for focus groups have emerged. While there are many positive aspects to online focus groups, the fact that respondents are not physically present diminishes the benefits gained by group dynamics. However, as technology improves, in particular video conferencing, the online focus group could become a major research option.
Observational Research – Watching customers as they perform activities can be a very useful research method, especially when customers are observed in a natural setting (e.g., shopping in a retail store, using products at home). In fact, an emerging research technique called ethnographic research has researchers following customers as they shop, work, and relax at home in order to see how they make decisions, use products and more.By far the most widely used research method is collecting data through secondary research. This process involves collecting data from either the originator or a distributor of primary research. In other words, accessing information that others have already gathered. In most cases this means finding information from third-party sources such as marketing research reports, consulting firm white papers, magazine articles, and other sources. But in actuality any information previously gathered, whether from sources external to the marketer or from internal sources, such as accessing material from previous market research carried out by the marketer, fall under the heading of secondary research.
Compared to primary research there are several advantages to the secondary approach, including ease of access and generally lower cost for acquiring the information. But there are also major disadvantages that may limit the usefulness of the research including the fact the information may not be exactly what the marketer needs, results may be out-of-date, or the research design poorly constructed.
Sources for secondary research are quite extensive. In years past accessing good secondary research required marketers to visit a library or spend large sums of money accessing proprietary electronic databases. However, the Internet has changed how secondary research is accessed by offering convenience, accessibility to a large array of information sources, and generally low cost. In fact, the Weblinks Collection offered by KnowThis.com points to over 1000 secondary research sources. As a starting point anyone looking for secondary research should look to our tutorial Finding Information for Market Research.