Understanding the target market is crucial for businesses wishing to increase profits and remain competitive. Market research can help businesses to gain insight into the consumers’ minds. Chapter 1 of the present paper will answer questions regarding the definition, importance, and thinking process of market research. Chapter 2 will explore and compare qualitative and quantitative approaches to highlight their advantages and disadvantages. Chapter 3 will provide more insight into methodological tools that could be used in research. Finally, Chapter 4 will offer a personal view on qualitative and quantitative methodologies, showing why the former is more relevant and useful for contemporary businesses.
Definition of Market Research
The traditional definition of market research posits that it is the process of gathering and analysis of data about consumers’ preferences, needs, and opinions (Beall, 2010). In other words, market research involves the activities that enable companies to get into the minds of their target customers. These activities seek to collect information from customers, analyze it, and produce interpretations to help businesses achieve their goals. The subject of market research is broad in its scope, and its tools and techniques can be applied to gain most customer-related knowledge.
The Importance of Market Research
Market research is of crucial importance to all businesses, regardless of their structure, size, and business model, and there are two main reasons for that. First of all, the information gathered as part of market research helps to increase sales by improving products and marketing. As shown by Beall (2010), many companies use focus groups or interviews to gain feedback on their future advertisements or products before releasing them. In case the feedback is negative, companies can make changes and alterations until they are sure that the final product will be satisfying. This would enable companies to earn more profits and increase the market share while avoiding significant financial losses due to product failures.
Secondly, market research is essential for businesses to enhance customer service. As noted by Reilly (2018), businesses in developed countries currently operate in the experience economy, which means that customers value their experience with the company and the product above anything else. In this context, it is pivotal for businesses to strive to achieve high levels of customer satisfaction with the products and services they provide. Market research can assist companies in doing that by enabling them to evaluate the current levels of customer satisfaction, as well as the factors that impact it. Hence, information obtained from market research assists companies in providing more value to consumers, leading to higher profits, sales, and loyalty in return.
Market Research Thinking Process
To generate insights that will help the business, it is crucial to develop a market research thinking process. Beall (2010) notes that the key reason why companies fail to apply market research data successfully is the lack of a strategic approach to data collection, analysis, and interpretation. Based on the suggestions provided by Beall (2010), the thinking process in market research should involve the following steps:
- Determining the focus of market research. The research can focus on many subjects, including product features, customer satisfaction, brand awareness, and more. Hence, at this stage, companies should evaluate their critical strategic goal that could be achieved with information from market research. This step would help to ensure that market research contributes to the company’s current goals.
- Identifying strategic questions that need to be answered through market research. Once the goal is defined, the management needs to think about the information that is required to achieve the goal. This step of the thinking process would also be helpful because it aids in planning and designing market research.
- Choosing the research design and tools that could help to answer strategic questions. At this stage, companies should assess the options available to them, including research designs and methods of data collection and analysis. Beall (2010) explains that choosing the right research design is instrumental in producing useful insights through market research. As further chapters will show, different research designs and tools have advantages and disadvantages, and companies should choose the methods most relevant to their research questions.
- Planning market research. After the focus, questions, and methods were identified, the company needs to create a detailed plan that would guide all market research efforts. Without this plan, the research will lack structure, and implementing it correctly would be challenging.
- Collecting and analyzing data. This step is when the research is carried out by the chosen design and plan. During this step, managers need to think about any risks and challenges that might affect the reliability or scope of the results, and to act fast in case of any issues. The understanding of risks and methods of mitigation would enable managers to gather more meaningful data and ensure that the costs of market research stay close to planned figures.
- Interpreting data to produce meaningful insights. The final stage of the thinking process is to review the results of the research and draw conclusions, thus answering the strategic questions identified in the second step. It would be beneficial for a company to produce a report listing each question, results related to it, and the answer generated through research. This part of the thinking process is crucial because it ensures that the results of the research are meaningful and would thus contribute to the company’s growth, development, and strategy.
Qualitative and Quantitative Research
Definition of Qualitative Research
Qualitative research is defined as the process of collecting non-numerical data of high quality and depth to better understand a particular phenomenon (Harrison et al. 2016). This means that qualitative research studies use limited sample sizes, and analyze the small number of responses in greater detail than other types of research. The goal of qualitative research studies, regardless of their focus, is to generate meaning, and thus, it can be useful to companies seeking to understand customers’ behaviors better.
Definition of Quantitative Research
Quantitative research is identified as the collection of “data based on large samples that allow measurement and statistical analysis” (Harrison et al. 2016). The focus on quantity in quantitative research is justified by the need for generalization. The conclusions achieved based on results from a large, representative sample can be generalized to the rest of the population. In market research, this feature of quantitative studies is essential to identify common trends, opinions, needs, and concerns of consumers.
Comparing the Advantages and Disadvantages of Qualitative and Quantitative Research
The advantages and disadvantages of both research designs are the direct results of their distinguishing features. In qualitative research, the main limitation is the sample size. When gathering information from a small number of participants, researchers cannot argue that those not included in the study will have the same concerns (Harrison et al. 2016). Quantitative research, on the other hand, seeks to ensure that conclusions drawn from its results can be generalized. However, in quantitative research, the scope and level of detail provided by responses are limited, which is a critical drawback (Choy 2014). Quantitative designs include simple data that can be operationalized, such as yes or no answers. This type of data fails to explain participants’ thought processes, and thus lacks depth. In contrast, qualitative research focuses on the quality of results rather than their quantity, and therefore, participants are encouraged to provide as much information as they want. This helps to generate understanding and appreciation of attitudes, behaviors, and thoughts of participants. Finally, the two designs differ in their complexity, which affects implementation. Choy (2014) notes that qualitative information is much harder to analyze, whereas quantitative research usually applies IT tools to data analysis which makes the process quicker and easier for researchers.
Research Methodology Technical Tools
To collect and analyze information, researchers use a variety of technical tools depending on research questions and the resources available. Interviews help to produce structured answers to research questions because they involve a set of pre-planned questions. Interviews are usually recorded and then analyzed for common themes (Schmidt 2010). Based on the items included, interviews can be used to explore the participants’ opinions on any subject, which is why they are essential to market research. Focus groups are designed for discussion; they usually involve between 5-10 people who belong to the target customer group (Harrison et al. 2016). During focus groups, participants are asked questions so that they can reflect on each others’ answers. Such discussions enable researchers to understand consumers’ thought processes and reasoning, as well as to identify differences in opinions and views that exist in the target market (Harrison et al. 2016).
Surveys are also widely used in research because they are easy for participants to complete and can include a lot of questions, thus increasing the scope of data collected. Surveys are designed based on research questions and goals and can take the form of multiple-choice questions, yes or no answers, or statements to be rated (Harrison et al. 2016). The use of surveys is beneficial because it produces definitive answers to research questions about the target audience.
Lastly, observations are used in both qualitative and quantitative research designs. This tool involves observing participants’ behaviors without interacting with them (Goffin et al. 2015). Observations can help to highlight common behaviors among consumers, thus enabling researchers to understand the target market better. In quantitative studies, observations usually target a large number of people for short periods. One example is studying the share of customers with children who would stop by an ice cream shop at a large mall. In qualitative studies, subjects can be followed for several days or even weeks, and thus, their daily behaviors can be observed.
The previous chapters aimed to show the importance of market research and the potential of qualitative and quantitative methods to answer companies’ strategic questions. Based on their advantages and disadvantages, it is evident that qualitative and quantitative research designs have very different uses in market research. Qualitative research would be particularly useful in cases where a company needs to understand complex thought processes. For example, if a new ad is about to be released, qualitative research using focus groups could help to predict consumers’ reactions to it (Harrison et al. 2016). Quantitative research would be helpful when companies need to identify and observe general trends that have an impact on the business. For instance, quantitative data can assist in examining customer satisfaction with service or brand awareness levels. I prefer the qualitative approach because it is more relevant to businesses operating in the contemporary environment, where customers’ experiences are the key to success.
Before the experience economy, the development of market research was mostly tied to quantitative methods. Harrison et al. (2016) explain that the first attempts at market research back in the 1820s aimed to increase understanding of people’s political preferences. However, this approach did not necessarily produce data that could be applied strategically. For this reason, by the beginning of the 20th century, businesses began to apply qualitative research to achieve greater profitability by testing potential customers’ responses to advertisements (Harrison et al. 2016). After the 1950s, the subject matter of market research shifted again to include attitudinal research (Harrison et al. 2016). Companies began to evaluate customers’ attitudes to different product features and their preferences using interviews. Incorporating this knowledge into product development proved to be effective.
The growth of the service industry in the following decades created the necessity to take into account not just customers’ opinions, but also their experiences, thus supporting the need for qualitative market research. As a result, customer satisfaction with products and services became the focus of many qualitative studies (Harrison et al. 2016). All of the changes listed above contributed to the development of qualitative research, and they also highlight its relevance to modern businesses. In other words, the rise in the popularity of qualitative techniques in market research over the years proves that they are crucial for understanding customers.
Moreover, looking at the definition of market research makes it clear that the qualitative approach is more beneficial. The primary objective of market research is to understand consumers better, and the potential of qualitative research in this area is unparalleled. Qualitative research methods allow gaining insight into how consumers make their decisions, which is the key to influencing their thought processes and achieving higher financial performance. Thus, qualitative research is pivotal to creating marketing strategies that would increase the company’s performance. Quantitative research does not have the same potential because it offers limited insight into consumers’ preferences and attitudes. Using quantitative data alone makes it impossible to judge if the proposed marketing strategy will be useful or suggest ways of improving it for maximum impact.
Apart from marketing, qualitative research also benefits product development. According to Harrison et al. (2016), market research can be useful at various stages of product development, from idea generation to testing. For example, if a company is planning to launch a new product but is unsure of what features to include, it could take into account suggestions from existing customers. After a product has been developed, a company can use research to find out if customers are satisfied with it or have ideas for improvement. Qualitative research techniques, such as focus groups, would produce excellent results in both of these cases, thus supporting innovation, growth, and development.
All in all, while quantitative research may be used to gain more information about the target market, the conclusions that can be drawn for qualitative studies have more significant practical implications for businesses. They can help companies to design new products, create marketing campaigns, and achieve greater satisfaction with products or services. Therefore, I prefer qualitative research due to the potential for its application in various areas of business.
- Beall, AE 2010, Strategic market research: a guide to conducting research that drives businesses, iUniverse, New York, NY.
- Choy, LT 2014, ‘The strengths and weaknesses of research methodology: comparison and complimentary between qualitative and quantitative approaches’, IOSR Journal of Humanities and Social Science, vol. 19, no. 4, pp. 99-104.
- Goffin, K, Varnes, CJ, van der Hoven, C & Koners, U 2012, ‘Beyond the voice of the customer: ethnographic market research’, Research-Technology Management, vol. 55, no. 4, pp. 45-53.
- Harrison, M, Cupman, J, Hague, P & Truman, O 2016, Market research in practice: an introduction to gaining greater market insight, 3rd ed, Kogan Page Publishers, Philadelphia, PA.
- Reilly, C 2018, ‘Experience economy: it’s no longer about the product’, Forbes. Web.
- Schmidt, M 2010, ‘Quantification of transcripts from depth interviews, open ended responses and focus groups: challenges, accomplishments, new applications and perspectives for market research’, International Journal of Market Research, vol. 52, no. 4, pp. 483-509.