Market research is any organized effort to gather information about target markets or customers. It is a very important component of business strategy. The term is commonly interchanged with marketing research; however, expert practitioners may wish to draw a distinction, in that marketing research is concerned specifically about marketing processes, while market research is concerned specifically with markets.
Market research is a key factor in maintaining competitiveness over competitors. Market research provides important information to identify and analyze the market need, market size and competition.
Market research, which includes social and opinion research, is the systematic gathering and interpretation of information about individuals or organizations using statistical and analytical methods and techniques of the applied social sciences to gain insight or support decision making.
- 1 History
- 2 Market research for business/planning
- 3 Influence from the Internet
- 4 Research and social media applications
- 5 Research and market sectors
- 6 Financial performance
- 7 See also
- 8 References
- 9 Other reading
- 10 External links
Market research began to be conceptualized and put into formal practice during the 1920s, as an offshoot of the advertising boom of the Golden Age of radio in the United States. Advertisers began to realize the significance of demographics revealed by sponsorship of different radio programs.
Market research for business/planning
Market research is a way of getting an overview of consumers' wants, needs and beliefs. It can also involve discovering how they act. The research can be used to determine how a product could be marketed. Peter Drucker believed market research to be the quintessence of marketing.
Factors that can be investigated through market research include
- Market information
Through Market information one can know the prices of different commodities in the market, as well as the supply and demand situation. Market researchers have a wider role than previously recognized by helping their clients to understand social, technical, and even legal aspects of markets.
- Market segmentation
Market segmentation is the division of the market or population into subgroups with similar motivations. It is widely used for segmenting on geographic differences, personality differences, demographic differences, technographic differences, use of product differences, psychographic differences and gender differences. For B2B segmentation firmographics is commonly used.
Market trends are the upward or downward movement of a market, during a period of time. Determining the market size may be more difficult if one is starting with a new innovation. In this case, you will have to derive the figures from the number of potential customers, or customer segments. [Ilar 1998]
SWOT is a written analysis of the Strengths, Weaknesses, Opportunities and Threats to a business entity. Not only should a SWOT be used in the creation stage of the company but could also be used throughout the life of the company. A SWOT may also be written up for the competition to understand how to develop the marketing and product mixes.
Another factor that can be measured is marketing effectiveness. This includes
- Customer analysis
- Choice modelling
- Competitor analysis
- Risk analysis
- Product research
- Advertising the research
- Marketing mix modeling
- Simulated Test Marketing
Influence from the Internet
The availability of research by way of the Internet has influenced a vast number of consumers using this media; for gaining knowledge relating to virtually every type of available product and service. It has been added to by the growth factor of emerging global markets, such as China, Indonesia and Russia, which is significantly exceeding that of the established and more advanced B2C E-Commerce markets. Various statistics show that the increasing demands of consumers are reflected not only in the wide and varied range of general Internet researching applications, but in online shopping research penetration.
This is stimulated by product-enhancing websites, graphics, and content designed to attract casual "surfing" shoppers, researching for their particular needs, competitive prices and quality. According to the Small Business Administration (SBA), a successful business is significantly contributed to by gaining knowledge about customers, competitors, and the associated industry. Market research creates not only this understanding, but is the process of data analysis regarding which products and services are in demand.
The convenience and easy accessibility of the Internet has created a global B2C E-commerce research facility, for a vast online shopping network that has motivated retail markets in developed countries. In 2010, between $400 billion and $600 billion in revenue was generated by this medium also, it is anticipated that in 2015, this online market will generate revenue between $700 billion and $950 billion. The influence of market research, irrespective of what form it takes, is an extremely powerful incentive for any type of consumer and their providers!
The UK Market Research Society (MRS) reports research has shown that on average, the three social media platforms primarily used by millenials, are LinkedIn, Facebook and YouTube. Social Media applications, according to T Systems, help generate the B2B E-commerce market and develop electronic business process efficiency. This application is a highly effective vehicle for market research, which combined with E-commerce, is now regarded as a separate, extremely profitable field of global business. While many B2B business models are being updated, the various advantages and benefits offered by Social Media platforms are being integrated within them.
Business intelligence organization have compiled a comprehensive report related to global online retail sales, defining continued growth patterns and trends in the industry. Headed "Global B2C E-Commerce and Online Payment Market 2014" the report perceives a decrease in overall growth rates in North America and Western Europe, as the expected growth in the online market sales, is absorbed into the emerging markets. It is forecast that the Asia-Pacific region will see the fastest growth in the B2C E-Commerce market and replace North America as the B2C E-Commerce sales region leader, within a few years. This effectively, offers a significant, motivational platform for new Internet services, to promote user market research-friendly applications.
Research and market sectors
The primary online sale providers in B2C E-Commerce, worldwide, includes the USA based Amazon.com Inc. which remains the E-Commerce revenues, global leader. The growth leaders in the world top ten are two online companies from China, both of which conducted Initial Public Offering (IPO) this year; Alibaba Group Holding Ltd. and JD Inc. Another company from the top ten is Cnova N.V., a recently formed E-Commerce subsidiary of the French Group Casino, with various store retailers developing and expanding their E-Commerce facilities worldwide. It is a further indication of how consumers are increasingly being attracted to the opportunities of online researching and expanding their awareness of what is available to them.
Service providers; for example those related to finance, foreign market trade and investment promote a variety of information and research opportunities to online users. In addition, they provide comprehensive and competitive strategies with market research tools, designed to promote worldwide business opportunities for entrepreneurs and established providers. General access, to accurate and supported market research facilities, is a critical aspect of business development and success today. The Marketing Research Association was founded in 1957 and is recognized as one of the leading and prominent associations in the opinion and marketing research profession. It serves the purpose of providing insights and intelligence that helps businesses make decisions regarding the provision of products and services to consumers and industries.
This organization knowledge of market conditions and competition is gained by researching relevant sectors, which provide advantages for entry into new and established industries. It enables effective strategies to be implemented; the assessment of global environments in the service sectors, as well as foreign market trade and investment barriers! Research, is utilized for promoting export opportunities and inward investment, helping determine how to execute competitive strategies, focus on objective policies and strengthen global opportunities. It is a medium that influences, administrates and enforces agreements, preferences, leveling trading environments and competitiveness in the international marketplace.
The retail industry aspect of online market research, is being transformed worldwide by M-Commerce with its mobile audience, rapidly increasing as the volume and varieties of products purchased on the mobile medium, increases. Researches conducted in the markets of North America and Europe, revealed that the M-Commerce penetration on the total online retail trade, had attained 10%, or more. It was also shown that in emerging markets, smart-phone and tablet penetration is fast increasing and contributing significantly to online shopping growth.
Top 10 U.S. Market Research Organizations 2013
From the The 2014 AMA Gold Top 50 Report:
|Rank||Company||W.W Research Revenue in 2013
|1||Nielsen Holdings N.V. - Nielsen Holdings N.V., Arbitron Inc.||6,054.0|
|2||Kantar Group - TNS, Millward Brown, etc.||3,363.7|
|3||IMS Health Inc.||2,544.0|
|6||Information Resources Inc.||845.1|
|9||The NPD Group Inc.||287.7|
Top 10 U.K Market Research Organizations 2013
From the Market Research Society UK Research & Insight Industry League Tables
|Rank||Company||Turnover in 2013 (million GBP)|
|7||IMS Health Group||93.231|
|9||Wood Mackenzie Research & Consulting||85.120|
Global market research turnover in 2014
From the ESOMAR Global Market Research Report 2014
|Rank||Continent||Sales in 2013
- Industry or market research
- Mystery shopping
- Quantitative marketing research
- Qualitative marketing research
- Nielsen Company
- Markelytics Solutions
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- McDonald, Malcolm (2007), Marketing Plans (6th ed.), Oxford, England: Butterworth-Heinemann, ISBN 978-0-7506-8386-9
- ICC/ESOMAR (2008), International Code on Market and Social Research. ICC/ESOMAR Amsterdam, the Netherlands, 4th ed. http://www.esomar.org/uploads/pdf/professional-standards/ICCESOMAR_Code_English_.pdf
- Drucker, Peter F. (1974). Management: Tasks, Responsibilities, Practices. Australia: Harper & Row. p. 864. ISBN 0-06-011092-9.
There will always, one can assume, be need for some selling. But the aim of marketing is to make selling superfluous. The aim of marketing is to know and understand the customer so well that the product or service fits him and sells itself. Ideally, marketing should result in a customer who is ready to buy. All that should be needed then is to make the product or service available...
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- [ The 2014 AMA Gold Top 50 Report - http://publications.ama.org/Marketing_News/MN-jun14/offline/download.pdf]
- International Institute of Market Research and Analytics (IIMRA)