Market research and marketing research are misleadingly-similar terms that describe distinctly separate concepts. "Market" research is, very simply, research into a specific market. It is a very narrow concept. "Marketing" research, on the other hand, are much broader. Narrow-scope “market” research is but one specific element of a comprehensive “marketing” research process, which also entails research into areas such as new products and modes of distribution (via the Internet, for example). According to the American Marketing Association, marketing research is the systematic gathering, recording, and analyzing of data about problems relating to the marketing of goods and services.
To be effective, marketing research activities must be thoroughly planned and systematically executed. Process-critical steps include:
1. Problem definition. Never conduct research for things that you would like to know. Make sure that you really need to know something. The problem then becomes the focus of the research. For example, why are sales falling in the Midwest market?
2. Data collection method. How will you collect data that you will analyze to solve your problem? Do you conduct a telephone or an online survey; arrange a focus group or one-on-one interviews?
3. Sampling method. Do you use a random or stratified sample? In a random sample, you would select subjects randomly from a single large pool. In a stratified random sample, you would divide this large pool of subjects into several groups (strata) and then randomly select subjects from within each group.
4. Data analysis. How will you analyze any data collected? What software will you use? What degree of accuracy is required?
5. Budget and Timeframe. Decide upon what resources you can allocate for this project. Go back to the managers or clients requesting the research. Make sure that you agree on the problem definition, the budget and timeframe.
6. Data collection. Go ahead and collect the data. Basic source of data could be either secondary or primary. Secondary data is data that has been collected by someone else for other purposes. Primary data is the data that you collect yourself from scratch.
7. Data analysis. Conduct the analysis of the data. Types of statistical survey data analysis that might be performed are simple frequency distributions, crosstab analysis, multiple regression, cluster analysis, factor analysis, perceptual mapping, structural equation modeling and data mining.
8. Check for errors. It is not uncommon to find errors in sampling, data collection method, or analytic mistakes.
9. Reporting and presentation. Write the final report. It may contain charts, tables and diagrams that will communicate the results of the research, and hopefully lead to a solution to your problem. Watch out for errors in interpretation. Any critical information and knowledge that comes from your market research investment will be limited by how your market research reports are presented to decision makers.
Perhaps the most important aspect of a truly value-added marketing research process is EXECUTION. All of the data and analysis in the world is for naught if the organization fails to act upon information. The only thing worse than not doing market research at all is spending money on it and not utilizing the results.