George Kusaba is our new intern at Bex Brands. He’s done a great job working with us on social media strategies and research. Since one of his passions is market research, we invited him to be a guest blogger on bexbrands.com. His article gives a a quick overview of the process and also adds some interesting insights. Thanks George! br>
What is Market Research?
By George Kusaba
In creating a successful business, market research can be an important part of creating knowledge about the consumer. Market research allows businesses to tap into their consumer base by understanding their needs, identifying new trends, and finding where products are most likely to sell. It also allows businesses to establish fair market prices for products, discover how to overcome obstacles into the industry, and identify market trends. Typically, these results are achieved by using qualitative and quantitative modes of research. The debate between qualitative and quantitative modes of market research is not a new one, but it is important to have a basic understanding of each before we think of starting our own successful business.
To begin, let’s take a look at some aspects of qualitative methods. Qualitative research involves analyzing data with words, with examples such as interviews, pictures, and videos. It is primarily concerned with why a consumer makes a choice, rather than the choice itself. Some examples of how they achieve this is through personal interviews and focus groups. A focus group is an interview, conducted by a trained moderator among a small group of respondents. The interview is conducted in a natural setting where respondents are free to give views from any aspect. Focus groups allow companies developing, packaging, naming, or testing a new product, to discuss and view the new product before it is made available to the public. Therefore, qualitative research is important for potential market acceptance.
Now let’s take a quick look at Quantitative research. It looks at data in a more objective way. Quantitative research involves creating hypotheses and theories. Once created, through methods of experimentation, researchers separate information into numerical categories and are able to identify different variables and relationships between the market and consumers. Some examples of Quantitative research involve phone surveys or online surveys. Once the surveys are conducted and received, a group of researchers analyze the numbers of how many individuals chose one product over another and formulate conclusions to their hypothesis based on their numbers. Therefore, quantitative research relies on having an objective understanding of the market, in which the importance lies in finding the consensus or norm of a product.
Now since we have a basic understanding of each, it is important to compare the two. Qualitative research allows businesses to understand trends by personalizing themselves with the consumer, but this process can become time extensive as well as expensive. The results also may vary greatly based on the manner the interviews are conducted or how the interviewers may vary their answers according to what they decide to listen to and what information they block. In comparison, quantitative research allows a more accurate and precise answer due to controlled observations, such as mass surveys and laboratory experiments, but it doesn’t take into account the many different cultures and experiences of the individuals buying the products. For example, merely reading a book about someone and judging your results based on analysis of the book is different from actually getting to really know that person in real life.
It is easy to see why many companies often use one or both of these methods for success of their companies, but what happens when a company uses both types of market research, and there is still nothing to show for it? It is true that market research can help with the success of a company, but sometimes it can be expensive and useless. For example, in 1996 most CEOs of large banks dismissed the Internet as irrelevant in terms of future profitability. Market research strongly confirmed their skepticism and the overwhelming majority of customers said they weren’t interested in using the Internet to run their bank accounts. The survey results were misleading to say the least and two years later many account holders began buying goods and services over the internet and changing their minds sooner than expected. At this point it was already almost too late to recover from the failed results of their research and this shows that market research is not always the answer in running a successful business. Therefore, in conclusion, it is up to the business owner in regards to personal finance and the business approach they feel most comfortable with in creating a successful business. In other words, market research isn’t for everyone and although potentially very successful, can also be utterly and wastefully useless.