Consumer research

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Consumer psychology

Key concepts

Advertising Brand names Brand preferences Brand loyalty Consumer attitudes Consumer behavior Buyer decision making Consumer education Consumer protection Consumer research Consumer satisfaction Consumer surveys Consumer theory Customer service Customer relationship management Family and consumer science Market research Marketing strategy Marketing management Product design Product Price Promotion Retail Market research Quality of services

other aspects

Advertising Behavioral finance Branding Direct marketing Electronic commerce Shopping centres Product placement Public relations Publicity Personal Sales Sales promotion Supply and demand

Consumer marketing research (US English) or market research (British English) is a form of applied sociology that concentrates on understanding the behaviours, whims and preferences, of consumers in a market-based economy, and aims to understand the effects and comparative success of marketing campaigns. The field of consumer marketing research as a statistical science was pioneered by Arthur Nielsen with the founding of the ACNielsen Company in 1923 and later the A.C. Nielsen Center for Marketing Research.

In addition to marketing research, other forms of business research include:

• Market research (US English; in Britain market research is used for "marketing research" as well) broader in scope and examines all aspects of a business environment. It asks questions about competitors, market structure, government regulations, economic trends, technological advances, and numerous other factors that make up the business environment (see environmental scanning). Sometimes the term refers more particularly to the financial analysis of companies, industries, or sectors. In this case, financial analysts usually carry out the research and provide the results to investment advisors and potential investors.

• Product research - This looks at what products can be produced with available technology, and what new product innovations near-future technology can develop (see new product development).

• Advertising research - is a specialized form of marketing research conducted to improve the efficacy of advertising. Copy testing, also known as "pre-testing," is a form of customized research that predicts in-market performance of an ad before it airs, by analyzing audience levels of attention, brand linkage, motivation, entertainment, and communication, as well as breaking down the ad’s flow of attention and flow of emotion. Pre-testing is also used on ads still in rough (ripomatic or animatic) form. (Young, pg. 213)

Research is the scholarly or scientific practice of gathering existing or new information in order to enhance one's knowledge of a specific area. Research has many categories, from medicine to literature. Marketing research, or market research, is a form of business research and is generally divided into two categories: consumer market research and business-to-business (B2B) market research, which was previously known as industrial marketing research. Consumer marketing research studies the buying habits of individual people while business-to-business marketing research investigates the markets for products sold by one business to another.

Types of marketing research

Marketing research techniques come in many forms, including:

• Ad Tracking – periodic or continuous in-market research to monitor a brand’s performance using measures such as brand awareness, brand preference, and product usage. (Young, 2005)

• Advertising Research – used to predict copy testing or track the efficacy of advertisements for any medium, measured by the ad’s ability to get attention, communicate the message, build the brand’s image, and motivate the consumer to purchase the product or service. (Young, 2005)

• Brand equity research - how favorably do consumers view the brand?

• Brand name testing - what do consumers feel about the names of the products?

• Commercial eye tracking research - examine advertisements, package designs, websites, etc by analyzing visual behavior of the consumer

• Concept testing - to test the acceptance of a concept by target consumers

• Coolhunting - to make observations and predictions in changes of new or existing cultural trends in areas such as fashion, music, films, television, youth culture and lifestyle

• Buyer decision processes research - to determine what motivates people to buy and what decision-making process they use

• Copy testing – predicts in-market performance of an ad before it airs by analyzing audience levels of attention, brand linkage, motivation, entertainment, and communication, as well as breaking down the ad’s flow of attention and flow of emotion. (Young, p 213)

• Customer satisfaction studies - exit interviews or surveys that determine a customer's level of satisfaction with the quality of the transaction

• Demand estimation - to determine the approximate level of demand for the product

• Distribution channel audits - to assess distributors’ and retailers’ attitudes toward a product, brand, or company

• Internet strategic intelligence - searching for customer opinions in the Internet: chats, forums, web pages, blogs... where people express freely about their experiences with products, becoming strong "opinion formers"

• Marketing effectiveness and analytics - Building models and measuring results to determine the effectiveness of individual marketing activities.

• Mystery shopping - An employee or representative of the market research firm anonymously contacts a salesperson and indicates he or she is shopping for a product. The shopper then records the entire experience. This method is often used for quality control or for researching competitors' products.

• Positioning research - how does the target market see the brand relative to competitors? - what does the brand stand for?

• Price elasticity testing - to determine how sensitive customers are to price changes

• Sales forecasting - to determine the expected level of sales given the level of demand. With respect to other factors like Advertising expenditure, sales promotion etc.

• Segmentation research - to determine the demographic, psychographic, and behavioural characteristics of potential buyers

• Online panel - a group of individual who accepted to respond to marketing research online

• Store audit - to measure the sales of a product or product line at a statistically selected store sample in order to determine market share, or to determine whether a retail store provides adequate service

• Test marketing - a small-scale product launch used to determine the likely acceptance of the product when it is introduced into a wider market

• Viral Marketing Research - refers to marketing research designed to estimate the probability that specific communications will be transmitted throughout an individuals Social Network. Estimates of Social Networking Potential (SNP) are combined with estimates of selling effectiveness to estimate ROI on specific combinations of messages and media.

All of these forms of marketing research can be classified as either problem-identification research or as problem-solving research.

A company collects primary research by gathering original data. Secondary research is conducted on data published previously and usually by someone else. Secondary research costs far less than primary research, but seldom comes in a form that exactly meets the needs of the researcher.

A similar distinction exists between exploratory research and conclusive research. Exploratory research provides insights into and comprehension of an issue or situation. It should draw definitive conclusions only with extreme caution. Conclusive research draws conclusions: the results of the study can be generalized to the whole population.

Exploratory research is conducted to explore a problem to get some basic idea about the solution at the preliminary stages of research. It may serve as the input to conclusive research. Exploratory research information is collected by focus group interviews, reviewing literature or books, discussing with experts, etc. This is unstructured and qualitative in nature. If a secondary source of data is unable to serve the purpose, a convenience sample of small size can be collected. Conclusive research is conducted to draw some conclusion about the problem. It is essentially, structured and quantitative research, and the output of this research is the input to management information systems (MIS).

Exploratory research is also conducted to simplify the findings of the conclusive or descriptive research, if the findings are very hard to interpret for the marketing manager.

Marketing research methods

Methodologically, marketing research uses the following types of research designs:

Based on questioning:

• Qualitative marketing research - generally used for exploratory purposes - small number of respondents - not generalizable to the whole population - statistical significance and confidence not calculated - examples include focus groups, in-depth interviews, and projective techniques
• Quantitative marketing research - generally used to draw conclusions - tests a specific hypothesis - uses random sampling techniques so as to infer from the sample to the population - involves a large number of respondents - examples include surveys and questionnaires

Based on observations:

• Ethnographic studies -, by nature qualitative, the researcher observes social phenomena in their natural setting - observations can occur cross-sectionally (observations made at one time) or longitudinally (observations occur over several time-periods) - examples include product-use analysis and computer cookie traces
• Experimental techniques -, by nature quantitative, the researcher creates a quasi-artificial environment to try to control spurious factors, then manipulates at least one of the variables - examples include purchase laboratories and test markets

Researchers often use more than one research design. They may start with secondary research to get background information, then conduct a focus group (qualitative research design) to explore the issues. Finally they might do a full nation-wide survey (quantitative research design) in order to devise specific recommendations for the client.

Business to business market research

Business to business (B2B) research is inevitably more complicated than consumer research. The researchers need to know what type of multi-faceted approach will answer the objectives, since seldom is it possible to find the answers using just one method. Finding the right respondents is crucial in B2B research since they are often busy, and may not want to participate. Encouraging them to “open up” is yet another skill required of the B2B researcher. Last, but not least, most business research leads to strategic decisions and this means that the business researcher must have expertise in developing strategies that are strongly rooted in the research findings and acceptable to the client.

There are four key factors that make B2B market research special and different to consumer markets:

• The decision making unit is far more complex in B2B markets than in consumer markets
• B2B products and their applications are more complex than consumer products
• B2B marketers address a much smaller number of customers who are very much larger in their consumption of products than is the case in consumer markets
• Personal relationships are of critical importance in B2B markets.

Most of B2B market research today is done online, using online panels.

Marketing Research in Small Business and Nonprofit Organizations

Marketing research does not only occur in huge corporations with many employees and a large budget. Marketing information can be derived by observing the environment of their location and the competitions location. Small scale surveys and focus groups are low cost ways to gather information from potential and existing customers. Most secondary data (statistics, demographics, etc.) is available to the public in libraries or on the internet and can be easily accessed by a small business owner.

International Marketing Research

International Marketing Research follows the same path as domestic research, but there are a few more problems that may arise. Customers in international markets may have very different customs, cultures, and expectations from the same company. In this case, secondary information must be collected from each separate country and then combined, or compared. This is time consuming and can be confusing. International Marketing Research relies more on primary data rather than secondary information. Gathering the primary data can be hindered by language, literacy and access to technology.

Commonly used marketing research terms

Market research techniques resemble those used in political polling and social science research. Meta-analysis (also called the Schmidt-Hunter technique) refers to a statistical method of combining data from multiple studies or from several types of studies. Conceptualization means the process of converting vague mental images into definable concepts. Operationalization is the process of converting concepts into specific observable behaviors that a researcher can measure. Precision refers to the exactness of any given measure. Reliability refers to the likelihood that a given operationalized construct will yield the same results if re-measured. Validity refers to the extent to which a measure provides data that captures the meaning of the operationalized construct as defined in the study. It asks, “Are we measuring what we intended to measure?”

Applied research sets out to prove a specific hypothesis of value to the clients paying for the research. For example, a cigarette company might commission research that attempts to show that cigarettes are good for one's health. Many researchers have ethical misgivings about doing applied research.

Sugging (or selling under the guise of market research) forms a sales technique in which sales people pretend to conduct marketing research, but with the real purpose of obtaining buyer motivation and buyer decision-making information to be used in a subsequent sales call.

Frugging comprises the practice of soliciting funds under the pretense of being a research organization.

See also

• A/B testing
• Advertising Research
• Brand names
• Brand preferences
• Commercial eye tracking
• Consumer attitudes
• Consumer behavior
• Consumer satisfaction
• Consumer surveys
• Experimental techniques
• Industry or market research
• Knowledge management
• Mail surveys
• Marketing
• Observational techniques
• Product design
• Propaganda
• Quantitative marketing research
• Qualitative marketing research
• Telephone surveys

References

• Bradley, Nigel Marketing Research. Tools and Techniques.Oxford University Press, Oxford, 2007 ISBN-10: 0-19-928196-3 ISBN-13: 978-0-19-928196-1
• Marder, Eric The Laws of Choice -- Predicting Customer Behavior (The Free Press division of Simon and Schuster, 1997. ISBN 0-684-83545-2
• Young, Charles E, The Advertising Handbook, Ideas in Flight, Seattle, WA, April 2005. ISBN 0-9765574-0-1
• Kotler, Philip and Armstrong, Gary Principles of Marketing Pearson, Prentice Hall, New Jersey, 2007 ISBN13 978-0-13-239002-6, ISBN10 0-13-239002-7