The Definition of Marketing Research in Consumer Products

Marketing research is about information: how to gather, analyze and apply various types of data that will help a company avoid mistakes and take advantage of opportunities. Research is critical for marketers of consumer products because it offers insight into what their customers want and feedback about how well their marketing is working.

Significance

• In the absence of marketing research data, decision makers can only guess at the potential of their many alternatives in creating, promoting, pricing and distributing a product. This uncertainty can mean not only risks but unnecessary expenditures.

  When developing a new breakfast cereal, for example, marketers would benefit from a customer survey showing that competitive brands are perceived as unhealthy. This data would encourage them to choose a high-fiber, low-fat recipe instead of spending money to test the sweet, rich ingredients used in other brands.

Functions

• Marketing research can help a company not only to move in the right direction, but also to correct mistakes and solidify customer relationships. If the sales of a shampoo decline, for instance, the reasons could be as varied as an overly high price, an unpleasant smell or an unconvincing advertising campaign. Data would be needed to determine which factor is at fault. To build long-term customer satisfaction, a firm must conduct ongoing assessment of what its target market needs and wants. With that informational foundation, marketers can identify the most promising ways to fine-tune their tactics.

Types

• One type of marketing research is based on secondary data. This is information collected for purposes unrelated to the immediate issue, but helpful in generating initial ideas and insights. Much useful secondary data is generated internally, such as sales analysis, product tests, stockholder reports and inventory tracking. Other secondary data comes from external sources like the government and trade associations. The second type of marketing research is based on primary data. This is original information gathered specifically to answer the question at hand about a product and how to market it.

Considerations

• The biggest challenges in marketing research involve collection of primary data. Key, upfront decisions must be made about what information is needed and how to obtain it. For example, marketers may need feedback from customers about how a product currently looks, tastes or functions. They could get this information by conducting one-on-one interviews, focus groups or telephone surveys. Alternatively, marketers might be concerned about how people would react to a hypothetical price increase. In-store experiments, where the price is raised in one sales region but not in another, could provide an effective measure of this response.

Potential

• New technologies offer the promise of increasingly accurate, insightful and cost-efficient marketing research for consumer products. In particular, the Internet offers instant access to an enormous range of secondary data. It is also helping firms create online customer communities that provide continual feedback in real time. Another recent development is the growing number of data aggregators. These specialized marketing research vendors offer affordable access to comprehensive databases too complex or expensive for individual firms to compile.