Market Research

Market Research as defined by the MRS is the collection and analysis of data from a sample or census of individuals or organisations relating to their characteristics, behaviour, attitudes, opinions and possessions. Market research includes all forms of market, opinion and social research such as consumer and industrial surveys, psychological investigations, qualitative interviews and group discussions, observational, ethnographic and panel studies.

There are a number of different market research definitions which are weighted to either address the process of conducting the actual research, which can either by sourced from primary or secondary sources, or to address the analysis and manipulation of the data or information gathered. There are two major schools of market research analysis techniques once the information is sourced and gathered; quantitative or qualitative analysis. In fact, a well-designed and planned market research programme will have to ensure that the research design and approach of collating the information is tailored specifically towards the aims of the project and the overall research analysis techniques to be adopted as part of the project. It is advisable that a full market research project is planned and scoped individually to meet the requirements of the outcome and this is also reflected in the way market research companies should cost these projects.

A fundamental misunderstanding about market research is that because there are specific methodologies eg focus groups, interviews etc, research can be purchased on some kind of "methodology menu" with unit costs decreasing due to increased volume. This is profoundly the wrong approach to research procurement or design. This only applies to very limited and generally lower level research approaches such as buying questions on an omnibus. A better approach to cost and design market research programmes is to break out the key parts of the research process eg. Project management, data capture, analysis and reporting plus direct out of pockets expenses. For example the direct costs of qualitative methodologies are:

There are a wide variety of reasons why companies invest in market research, not only to quantify the total market, but also to define customer attitudes and also help you define market segments. Market research information can collate the present the following information including:

• Market share analysis of your competitors
• Competitor benchmarking
• Market potential: new market potential
• Market potential: existing market potential
• Product development
• Sales analysis
• Forecasting analysis
• Market characteristics
• Image and brand research
• Client research
• Market segmentation
• New technologies
• External drivers and market auditing
• Distribution and Pricing

Market research information and analysis is used by companies across a wide range of different functions and some of the same information reported upon can also be used in different ways by different departments. There is a large cross-over within companies for the same market research information which is often overlooked by companies. Market research data and analysis feeds into the following types of corporate functions:

• Financial department - financial planning and auditing
• Marketing department - marketing plans, product, pricing, promotional activity
• Sales department - forecasting, sales planning, customer segmentation, client information
• Procurement department - forecasting pricing trends, supplier audits, forecast buying demand
• Director / Board level - strategy development, competitor analysis, organisational structure etc
• Tendering department - competitor analysis, pricing, understanding the client business & people, technology and product development

Companies conducting research are most often investing in these programmes to help identify problems that often not clearly apparent on the surface yet exist or are likely to arise in the future. Examples of problem identification research include market potential, market share, brand or company image, market characteristics, sales analysis, short-range forecasting, long-range forecasting and business trends research. Once a problem or opportunity has been identified, problem solving research is undertaken to arrive at a solution. The following table shows the different types of issues that can be addressed by problem-solving research.

Figure 1: Market Research Classification

The United Kingdom market research industry is the second largest research market in the world with the United States representing the largest. Despite being the second largest in terms of revenues generated, the United Kingdom is regarded as leading the way in the development of creative and innovative research approaches. The Office of National Statistics estimates that the UK turnover of the 3,143 companies involved in market research and opinion polling totalled £3.4 billion in 2010. The market research sector in the United Kingdom is large although compared to other marketing communications sectors the revenues generated are relatively small. For instance, the advertising market in the United Kingdom is approximately five times larger than the UK market research industry.

As a result of the relatively small revenues generated by market research services in the United Kingdom, the industry is dominated by SMEs. Based on the MRS 2010 league tables, which details the largest suppliers of market research, analysis, intelligence ranked by individual company, once outside the top fifteen companies, all other suppliers are SMEs and there is a considerable number of small and micro business suppliers.