Market research refers to studying and analyzing the market scenario in connection with a product or service. It involves gathering and recording information regarding specific products and services.
It is imperative for any business to keep it in tune with the competition. Such inquiries gives the managers an insight into target selection, potential customers, and identifying and planning for fulfilling customer needs.
Survey is the most common research tool and if done properly, almost accurate marketing conclusions can be made. A questionnaire which is concise and to the point and covers the aspects which require to be analyzed will do the trick. Then analysis of a sample group representing your target market is all you need to do.
To get better results, a larger sample is preferable. In surveys too there are types - you have one-on-one surveys. These are done typically where you can find a lot of people at one place, like a mall. In such a survey, you get an instant feedback.
Another type of survey is a telephone survey. Although costlier than the mail, it is cheaper than the one-on-one survey. But the glitch here is that these days with constant telemarketing, people are becoming increasingly averse to such calls.
On the other hand, if you want to get responses from a large number of people, mail or online survey is an effective way. However, they generate the minimum amount of response. These are quantitative market research methods.
With detailed personal interviews, one has credible conclusions than surveys. These interviews have open-ended questions and are normally recorded.
Even if these might not be statistically reliable perhaps, they are excellent to gain interesting and valuable insights in customer attitudes. You can conclude many things about new products or services. These are qualitative research methods.
Observation is another market research methodology. Sometimes, what people say and do is drastically different. So, observing potential customers or the already existing customers in action and recording that, is one of the best ways to get a clear picture of the habits of the customers and their shopping patterns.
This method is called focus groups. Focus groups fall in the quantitative method of market research. As far as focus groups are concerned, a moderator employs a scripted series of questions or topics. This is with an objective of initiating a discussion in a group of people.
For this method to get credible results, minimum 3 groups are necessary. Videotaping facilities and observation room is also required to carry out this activity.
Keep the product in a few, selected stores and then observe the response of the customer in real life during the buying and selling process. This is a huge indicator of what all improvements or alterations are needed in the product or service.
If accurate results are desired, eventually a combination of 2 or 3 of these methods can take business entrepreneurs close to what is the actual customer behavior. Therefore, relying on a single method might not be a good idea.