What is market research?

what is MR 3

Market research (or marketing research if you prefer) is what you do when you want to understand customers in order to make better business decisions if there isn’t a faster/cheaper/better way.

At first glance that might sound like a slightly amusing aphorism. But, when you consider it a little deeper, it highlights a number of the problems and opportunities that confront market research.

Understand customers
At its heart, market research is about understanding customers. This includes current customers, past customers, customers of other brands, and potential customers. It means finding out things like: what people want, what people might want, what people would pay for things, how people see the world, and many more customer related questions. It sometimes even means working with customers to create ideas, as well as to evaluate and shape them.

Better business decisions
Market research draws on academic and social research, but its purpose is to help businesses make better business decisions. An organisation might be a commercial enterprise, a government, or a not for profit organisation, but in each case market research is used to help it make better business decisions, even when the definition of business is contextual.

When there isn’t a faster, cheaper, or better way.
This part of the definition highlights two key points:

  1. There are ways of finding out about customers that are not market research.
  2. Market research is not a requirement of every decision. It has no automatic right to be involved, it is used when it is the best solution.

Market research can be defined as the application of a set of methods (qualitative and quantitative) applied to a standard specified by custom and practice (as recorded by industry bodies, textbooks, and in some cases legal regulations).

The alternatives to market research include some forms of marketing (e.g. A/B marketing, some agile marketing, test marketing), it can include data sourced from non-market research methods (such as data mining in ways that might be legal but not in line with market research ethics), it can include crowdfunding (want to know whether a concept is a good idea, try and fund it and see), business models that evolve without research (such as the Threadless.com model of doing business).

The threats and the opportunities
Once we accept that market research is what people do when there isn’t a cheaper/faster/better answer we can start to plan for the future.

Nothing is likely to be needed for ever. At one time the stock and positioning of products in stores was determined by people visiting the stores with clipboard (market research), now it is automated and not market research. At one time the visitors to websites were investigated mostly via pop-up surveys (market research), now this process is automated.

Since nothing lasts for ever, market research needs to keep innovating and finding new opportunities, just as Maurice Millward and Gordon Brown did when they invented brand/ad tracking. The growth in crowdsourcing and co-creation are a good example of market researchers developing new strings to their bows, as are initiatives to involve market researchers in nudge campaigns, the growth in research communities, and moves to more formally identify the ROI of social media marketing campaigns.

Market research needs to focus on providing options that are cheaper/ faster/better than the alternatives. In many cases this will mean focusing on what is meant by better. Market research needs to explain why a questionnaire written by a market researcher is more likely to support better decisions than one a client writes for themselves. Market research needs to explain why the discussion plan created by a market researcher, and why the analysis they produce, is better than that a client (or an untrained competitor) produce themselves.

Because market researchers often think market research is needed they often fail to make the point that in many cases the alternatives are not good enough. Market research needs to be cheaper and faster in the future, but it also needs to promote the case for better, and it needs to ensure that it what it delivers is better.

IMHO, one of the key steps the industry needs to do is develop more training, more education, and more certification. So that what is produced as market research is good and to help the buyers and users of market research who provides the better solutions.

Want to know more about market research? Check out the Festival of NewMR, an online resource of webinars and videos.