Back to Resources >>

Understanding the Types of Marketing Research

Data drives marketing. Understanding consumer engagement, customer retention, and growth optimization through accurate, insightful marketing research drives business. Although much has changed in the move to online enterprise, marketing research is still conducted in the physical and digital world. To understand the impact of marketing data on organizational tactics, it helps to explore the research methods employed to gather this information. There are two fundamental types of marketing research: primary and secondary. While closely related in practice and used for myriad similar qualitative and quantitative purposes, the origin of primary and secondary data is vastly different. The divergence between these two types of marketing research mainly arises from source data.

Marketing Typerwriter

In primary marketing research, data is gathered from original studies performed by the organization (or an entity hired by the organization). Conducting primary research to test a new concept or gather customer insight is common. Studies typically include focus groups, in-person or phone interviews, and surveys.

Primary Research: Collecting New, Specific Information

Primary marketing research, also known as field research, is the firsthand gathering of new data from primary sources for a specific purpose related to the business conducting the analysis. Large corporations may have their in-house marketing department design and conduct primary research in the field to gather primary source data. However, the majority of primary marketing research is contracted out to third-party marketing agencies that conduct surveys, focus groups, and interviews on the company’s behalf.

Primary marketing research compared to secondary research involves new analysis, designed by a business for specific reasons, and is gathered directly from original data sources. Primary marketing research provides a much higher degree of control over the nature and amount of data collected, often resulting in keen insight companies can use to make smart business decisions. The best primary research results come from a well-defined research plan and can be of immense value, but are also very time-consuming to collect and come with a much higher price point than secondary research.

Primary Marketing Research Methods

Focus Groups

Focus groups, conducted correctly, produce a vast amount of valuable, qualitative primary source data from a specified target audience. Focus groups involve meeting with groups of rigorously selected individuals (most often 5 to 10) in person or virtually to learn their feelings or attitudes toward a specific topic such as a new product or an advertising concept. Trained facilitators guide participants through discussions that are carefully crafted to elicit honest, natural opinions and perspectives. The business or hired marketing research organization conducting the focus group must first establish a target audience for the research and then choose participants who are representative of several segments of this market. The goal is usually to produce a group of representative individuals within this target audience.

Properly conducted focus groups provide rich qualitative primary source data that is unlikely or impossible to collect from surveys or individual interviews that can be used to improve products, enhance services, or guide future initiatives. In a focus group, selected participants are asked specifically designed questions in an open, interactive group setting that often provides greater insight than a one-on-one interview. Face-to-face focus groups are often conducted at focus group facilities with rooms that have one-way glass, allowing company decision-makers to view the focus group discussion without disrupting the participants. This provides the observers additional insight into the responses.

Focus groups are an invaluable primary research tool for marketers and business leaders. These open forum conversations can generate novel ideas, resulting in sophisticated insight into consumer opinion and mentality. In recent years, online focus groups have become prominent with the development of interactive video conferencing technology. Respondents can remotely apply for participation, undergo screening, and participate at a prearranged time via video conference. Conducting focus groups online is more cost effective than in person because the need for a physical testing location is eliminated and time and travel expenses for the participants and facilitator are reduced.

Interviews

As a method of primary marketing research, interviews can take on a wide variety of forms, but most are simple one-on-one discussions to elicit qualitative source data from the individual rather than a group. Interviews can take place in person, over the phone, or over the Internet. Interviews provide a mix of qualitative and quantitative data from customers depending on the way the questions are crafted.

Surveys

Surveys are often conducted online, over the phone, or in person and can be used to further investigate the findings of focus groups or individual interview observations. Qualitative findings drawn by the researchers as a result of focus groups or interviews can be tested for accuracy with a much larger sample size within the target market through surveys. To develop well-crafted marketing strategies and business initiatives, the organization must understand if its ideas and determinations are valid across a large segment of its customer base, and surveys are an effective way to accomplish this.

User Groups

Distinct from the in-person focus group for market research, a user group is typically used to gather user experience (UX) data to provide insights for certain web designs. Additionally, user groups tend to be composed of individuals who share similar interest, goals, or concerns rather than a group of people from a larger, more diverse demographic. Furthermore, unlike moderated focus groups, these user groups often meet regularly to discuss their experiences with a particular software or product while researchers take note of their concerns or praise.

Test Markets

A test market is a group of individuals used in primary marketing research to represent a larger target audience. A test market can be understood as a customer microcosm, a manageable sample size for extrapolating reliable consumer data to a larger target group or mass market. This extrapolation is typically feasible because of certain characteristics shared by the test market and larger target audience. However, lack of exposure to mainstream media consumption can also be a driving factor in test market research. An audience that hasn’t been exposed to any particular biases that may have been created by advertising campaigns will provide impartial feedback that can be used to gauge a clearer understanding of consumer response in the mass market.

Secondary Research: Extrapolating Insight from Existing Data

As previously discussed, business entities will conduct primary marketing research to gather specific, highly targeted information. However, secondary research can provide valuable insight much faster at a dramatically lower cost since it is pulled from pre-existing data. Companies can extrapolate data for their own business from research entities collecting industry data.

Sources of Secondary Marketing Research

Competitor Benchmarks

Competitor benchmarks are arguably the most valuable, practical, and widely used source of secondary marketing research data in the world today. At its core, benchmarking measures specific growth metrics or key performance indicators and compares them to other businesses in the industry. Benchmarking is fundamentally a core principle of business.

The process of establishing competitor benchmarks involves measuring similar performance criteria against the success of similar-sized businesses within the same industry, which can be conducted in myriad ways. Businesses can purchase professionally amalgamated financial benchmarking data as their source of information, then compare metrics such as operating costs, sales, and profit margins against a determined industry standard. Fiscal benchmarks can be determined without formally buying any data whatsoever, as many of these figures are public knowledge. A business can examine the finances of similar companies in their field through publications issued by industry association organizations. Competitor benchmarks are very useful, allowing companies to identify ways to reduce cost, increase efficiency, and improve allocation of operational resources.

Sales Data

Since internal sales data is often easily accessible to researchers, it provides an important self-evaluation tool for the organization and market research. Not only can sales data help you assess profitability of an organization’s product or services, but it can also help to segment customers, discover trends, and compare competitive sales data when available. Because sales numbers are already accessible and relevant, it can provide useful data for any future marketing endeavor.

Government Publications and Statistics

There are countless legal publications, government-created data sources, and statistics published by the state that can serve as useful secondary data for business. The United States census can provide precise national demographic data. Patents are filed with the government every day and can act as previews of industry trends and future innovation. Additionally, statistics from organizations like Data.gov, the World Bank, and the Pew Research Center can provide valuable secondary data.

Commercial Data

Internal sales numbers are self-generated, and government publications are publicly accessible, but organizations can also purchase commercial data from established market research corporations like industry leaders Mintel and IBISWorld. These organizations specialize in generating accurate data for secondary market research purposes and offer a wide variety of insight for private use. Commonly known as “intelligence solutions,” these data can include precise market demographics, tactical insights related to B2B operations, and industry-specific data that can be used to guide upcoming initiatives.

Secondary marketing research involves organizations using existing source data and can be a great starting point. Businesses often opt for an exploration of less expensive secondary data to form new ideas before exploring primary marketing research options. Organizations commonly choose to utilize primary research methods only after conducting their own secondary research. This means a business can determine what exists before embarking on its exploration into the perspective of customers while working to ensure optimal profits and sustainability.

Learn More

If you’re a working professional who’s ready to develop the critical thinking skills and practical managerial expertise that drive the world’s top companies, the online MBA program from the prestigious Pepperdine University Graziadio School of Business and Management is a great way to get started. Discover a values-centered, collaborative, and experience-driven online MBA program designed for working professionals.

Sources

http://blog.clientheartbeat.com/competitive-benchmarking-101/http://blog.clientheartbeat.com/competitive-benchmarking-101/

http://smallbusiness.chron.com/types-marketing-research-examples-21474.html

http://businesscasestudies.co.uk/barclays/discovering-customer-needs-through-research/types-of-market-research.html#axzz4CGGlh3Cw

http://www.worldbank.org/

https://www.data.gov

http://www.pewresearch.org