What are the 4 types of market research?
- 1.1 Identification of Situation
- 1.2 Formulating a Market Research Plan
- 1.3 Collection of Data and Information
- 1.4 Evaluation of Data
- 1.5 Reporting the Results
- 2.1 Primary Research
- 2.2 Methods of Primary Research
- 2.3 Secondary Research
- 2.4 Sources of Secondary Research
There are various types of market research but to simplify it has been divided by services that include Syndicated market research, Customized market research, and consulting services. In a further bifurcation types of market research can be defined as Primary research and Secondary research.
Market research is at the core of business strategies, as it helps gain an in-depth understanding of the industry, competitors, customers, or even the entire economy. It uncovers the quantitative as well as qualitative aspects of the factors that may have a direct or indirect impact on one’s business, and provide a better understanding of the competitive landscape. The market research also facilitates the assessment of the target audience, along with their requirements, preferences, and problems, so that businesses can cater to the needs of the customers.
The process of data collection, analysis, and drawing of inferences to answer business-related questions has traditionally been time-consuming and expensive. Today, however, the industry is growing at a rapid pace, driven by the emergence of convenient and easily accessible tools, leading to better and informed decision-making. This article outlines a brief guide on how market research is conducted, followed by its classification.
A Brief Guide to Market Research
There exist no predefined market research techniques, as the process depends mainly on the research objectives and the industry under study. However, in this section, we briefly discuss certain market research types and have provided a simplified step-wise approach to understand market research techniques. Let us explore five basic types of market research as follows:
Identification of Situation
Identifying the situation, problem, opportunity, or business questions that need to be answered through the research, is the first and foremost step of the process. Knowing one’s objective of conducting market research on a particular area gives one a better idea of the type of data to be collected. It also ensures focus on the problem at hand during the entire research. This step is a preliminary plan for the rest of the analysis.
Formulating a Market Research Plan
The next step in the research market process is to determine the methods which can be used to answer the research questions framed in step 1. This involves identifying various sources from which relevant information or data can be collected, and the strategies that can be used for gathering additional data.
Collection of Data and Information
This step involves gathering both quantitative and qualitative data that is relevant to the market, industry or research questions. Collecting data or information can sometimes lead to the need of adjusting strategies formed in the previous step or implementing new strategies, possibly due to issues that previously went unnoticed. This is a normal practice in the market research process, as long as the strategies are relevant to the problem at hand.
Evaluation of Data
After collecting the data, the next step is to perform a comprehensive analysis and look for trends or patterns in the findings. This step also involves determining the external factors that can influence the business or market under study.
Reporting the Results
The final step in market research is writing a detailed report which consists of the introduction of the market or the research questions framed, the findings of the research, and finally a conclusion. Creating a clear and comprehensible report is essential as the findings may be factored into business decision-making. Additional charts, graphs, and/or graphical content can also be created for a better understanding of the results.
Classification of Market Research
Now that we have a framework for the process of conducting market research, we move on to its classification. Market research types are generally classified as:
- Primary Research
- Secondary Research
The distinguishing factor between primary research and secondary research is the manner in which data and information is collected. We explain each of the two forms in detail.
Primary research is one of the types of market research that involves collecting original, first-hand data specifically for the purpose of a research project. This form of research is often undertaken with the aim of producing new knowledge and answering questions that have not been answered in the past. The originality of data is the prime difference between primary and secondary research. To obtain true and relevant information of the market, businesses often choose to engage in primary research, or outsource the same to a specialist.
Methods of Primary Research
While studying primary research, it is important to gain insights on primary market research types. Several methods can be used to perform primary research. The choice of method can vary depending on the industry for which research is being conducted. The most commonly adopted methods are listed below:
Field Survey –
A survey is a set of open and closed-ended questions asked to individuals. This form of collecting data can be less flexible in comparison with other methods, such as interviews. However, this method can be useful while collecting responses from a large population. The mode of the survey can be offline or online, depending on a number of factors, though online surveys have lately gained popularity due to the automated collection of responses and generation of reports.
The offline mode of the survey has its cost and benefits. Some of the pros include a better response rate, wider reach, and flexibility to the surveyor to modify certain questions. Some cons associated with offline surveys are high costs in terms of time and money and chances of biased responses.
Face to Face Interview –
This method is more feasible and convenient as compared to other methods of primary research if the information has to be collected from a small group of people. Particularly, interviews can be conducted to gather information from industry experts and veterans, who are more likely to provide a true picture of the market. Interviews can be carried out online or in-person, and offer more flexibility to the interviewee and interviewer in terms of information exchanged.
Other primary market research types include Focus groups, Mystery shopping surveys, kiosk surveys, Online surveys, and others.
Secondary research is another type of market research method. This type of market research involves summarizing or combining data and literature that has been organized and published in the past by others. Researchers use data and information from primary sources while conducting the secondary research. Data can easily be accessed and downloaded at no monetary costs from government and educational resources. Secondary research has further been made easier with the increasing adoption of the Internet in past decades.
Sources of Secondary Research
There exist various sources to obtain facts and information to facilitate secondary research. Some of these sources are listed as follows:
Government Statistics –
Data related to a country’s economy, demography, geography and different sectors can be collected from reports published by the government of the country. These reports and data can be accessed freely by researchers.
International Organizations –
Data and information related to a variety of variables can be obtained from international organizations such as the World Bank, International Monetary Fund, World Health Organization, International Labour Organization, among others.
Most industries in an economy have associations to protect and represent their interests. These associations, too, publish in-depth reports of their respective industries, which can be used for secondary research.
Company’s Internal Sources:
Facts and details about a specific company can be found in its annual reports or accounting statements, which are often published on its websites.
Several websites provide quality data or information on a specific industry or market of interest to the researcher. However, such sources are often paid. Some examples include statista.com and researchgate.com.
Other Types of Market Research
Market research can also be categorized on the basis of the scope of the study. We briefly explain 3 main types of market research:
Competitive Analysis –
The market research process can be conducted to assess the market share occupied by the competitors of the business, along with their strengths, weaknesses, past and probable future strategies. Such research is undertaken in order to compare the products offered by a business with those of its competitors and stay ahead in the market.
Industry Analysis –
A study of the industry may be undertaken to gain insights into the overall industry performance, the market share occupied by major players, the size of the market, and major developments in the industry. Information and findings revealed through such research can help existing businesses to make informed decisions and new entrants to gauge the market before establishing their business.
Economic Analysis –
Having a broader scope than the other two types of market research listed above, economic analysis involves evaluating micro as well as macroeconomic variables that influence the economy as a whole. Factors considered under this research can have an indirect but significant impact on businesses.
Which Form of Market Research to Adopt? – Concluding Remarks
Both types of market research, primary and secondary, are often combined by researchers in order to arrive at the most accurate outcomes at the end of a systematic investigation. Generally, market research starts with the secondary form to determine the scope of the study, followed by the primary form to collect data specific to the research questions.
It is advised to understand the benefits and costs associated with primary and secondary research before opting for any of the two. Moreover, the objective of the investigation should be considered as the fundamental determinator for choosing primary or secondary research.