Marketing research covers many facets of learning about the business, evaluating results, exploring opportunities and solving problems.
The ultimate purpose of marketing research is to make more effective decisions. Marketing research should be viewed as a key strategy to build competitive advantage.
There are three types of marketing research: Exploratory, descriptive and causal.
Exploratory covers learning about opportunities, problems, customer needs and strategies. Descriptive is where facts describe the situation.
For example, a descriptive marketing research project would identify the size of the market and market shares of competitors. Another type of descriptive marketing research would identify the average customer purchase volume.
Causal marketing research defines the concept of “if X then Y.” For example, the firm runs a promotion on a sample of the customer base to evaluate if the spend provides a positive return-on-investment to scale the promotion to the market.
Secondary data is available through internal sources, Google searches, previous research, databases and websites. There are syndicated marketing research sources that provide data for business use. Secondary data was produced for purposes other than specific to the firm marketing research. Secondary data is fast and often free. However, secondary data might be inaccurate, poorly formatted for the specific business, outdated and if purchased, expensive.
Marketing research often starts with secondary internal data that is available. Sales data, point-of-sale data, promotion spends, customer data, website analytics, social media analytics or email data all provide information that can be used to improve decision-making. Internal data is free and available. However, it could take time to compile and analyze.
External secondary data includes Google searches, trade association information, industry publications, academic research, syndicated market research, government sources (Census, NAICS) and proprietary data bases such as Statista. This data might be free or be very costly, depending on the source.
Primary data is developed from specific research activities to answer a project-specific questions. Surveys, observations, focus groups, personal interviews and A/B tests are primary research tools. The advantage of primary data is that it answers a specific research question. The problems with primary research are cost, time, bias and poor research methodology.
Businesses should use exploratory, descriptive and causal marketing research to acquire information to enhance the decision-making process. Marketing research using secondary and primary data has the potential to build competitive advantage when used effectively.
An effective marketing research strategy has the potential to improve business results.