Market Research: The case for it and some basic terminology

There is little doubt in most circles that market research is important, especially in today’s digital world. The fact that ongoing change is now an absolute and what we know today may very well not be true tomorrow makes the need for market research – and ongoing market research – more compelling than ever before. The fact that it is easier and less expensive to undertake today than ever before is also a bonus.

The very real fear exists that if we move forward without the whole picture, we might make a mistake and fail. The reality is that not moving forward because of this fear of incomplete information may cost us a very real opportunity.
Special thank you to Market Research Latin America for the graphic.

While we think we need to know everything going in, the reality is that we really cannot know everything going in. Consumer behavior on digital is different than how they react out in the world. Consumer behavior on mobile is different than it is on laptops. Our targeted audience segments may react very differently than those of our closest competitor. Our brand may have distinct expectations that are unique to our organization. And so it goes… The reality is that we can take our best guess, start and then move forward and continue testing.

What digital brings to the fold is the ability to collect data and to test less expensively than ever before. One thing that is true is that for market research to be effective, you need to understand your organization and its goals and objectives, as well as the industry, competition and possible customers. Often opportunities may exist, but they do not fit with your organization culturally or from a skill set level. That is where I will start next time, as well as working through other issues related to market research.

But before doing that, I would like to lay down some groundwork for those of you who may be new to the process or in the early stages. One of the things that often puzzles newbies to market research if the difference between primary and secondary research, and the difference between quantitative and qualitative research. I try to explain and highlight (briefly) the differences below.

Difference between primary and secondary market research

Primary market research can be carried out individually or as a business, with the aim of collecting unique data that can be used to improve products, services and overall functionality. Secondary market research relies on information that’s already available from a variety of sources.

What does this really mean? The British Library Business and IP Centre ( ) provides the following thoughts on primary research:

  • Monitoring the effectiveness of sales
  • Ascertaining the quality of services provided by competitors
  • Understanding the channels of communication used by competitors
  • Assess the active competition within the market

The key is that primary research (in a business setting) is geared to understanding some aspect of your organization, your competition or your target audience. It is usually commissioned by your organization and is not generally available to the public and specifically your competition.

Secondary market research covers the following:

  • Published company reports data
  • Existing surveys and studies
  • Newspaper reports
  • Government data

Secondary research is research that is publicly available to anyone (or at least to all members in a membership organization) and is either free in some cases, or for purchase as a report.

Both are important, and in an ideal world, we would want to use a mix of both. We expect that the secondary research will have been conducted appropriately, will be accurate and will get us started on thoughts around what we may need to research further that specifically impacts us. Our primary research should be geared to specifically answer questions that we have that will help us build better strategies and implementation plans that help us to succeed.

Difference between qualitative and quantitative

Both quantitative and qualitative has their distinct strengths and their distinct weaknesses. The quantitative tells us the “how” and the “what” but cannot always get us to the “why”. We often need qualitative input for that. The reverse is also true. Qualitative data can give us depth and richness, but by itself, we cannot really tell how pervasive that truth is. Often, it is because the sample size is smaller since qualitative data is more difficult to collect, takes more time and is harder to analyze.

Quantitative surveys and other research tools can deliver statistics and a numerical point of view in a short space of time, but it’s also difficult to understand the bigger picture of your target marketplace. Quantitative can be very scalable and will provide size, purchase history, total expenditures, sales by channel partner and a number of other metrics, but it often does not tell you “why” people might like your brand, “why” your product might be compelling and how the brand can best be positioned.

Qualitative business research methods such as focus groups and interviews (done well) can take longer but can provide you with some of the “why” or as we sometimes call them, the “aha moments”. These methods can often provide great information about product attributes, the mind set of your target market, the best price points and how the product should be delivered to the customer.

In one study I was involved in, we had a focus group that was specifically oriented to discussing the packaging of the product. The product was specifically purchased and appreciated by women, although men might also enjoy the product. Both men and women we had in the focus group indicated that the current packaging was too “masculine”: the colors were too bold; the design was too sharp. Through a series of reiterations, we developed a packaging (same product) that appealed more to women and sales immediately rose in existing channels, and it opened two additional sales channels we had not previously been able to crack.

But a skilled moderator or interviewer is needed here, as these qualitative efforts can be easily swayed and/or manipulated, are very influenced by who is participating and rarely provide overall scope and size of the opportunity. These last points are often quantitative in nature.

As I mentioned above, in the ideal world, you would like to combine both. However, most organizations tend to start with the quantitative approach because the data is either there already (secondary) or is easier to gather. They will then in perhaps several rounds of qualitative and then possibly going back to quantitative again. In the best case scenario, these two will feed each other and should be conducted on an ongoing basis. The exception is that we will often start out with qualitative (most likely personal interviews) when we have no idea as to where we should be headed, such as entering a new market or undertaking a rebranding effort.

In upcoming articles, I will address how market research can be used to fuel growth, and how we can use market research to test hypotheses.

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