Page 3: The market research process
Market research is the collection and analysis of information about a business”s markets. This can cover features such as market trends, customer behaviour and opinions and the business strategies of competitors. Its purpose is to help a business decide its marketing mix. This is sometimes known as the four Ps:
Types of research
There are different types of market research. One important classification is between primary research and secondary research.
- Primary research involves commissioning new research. It involves collecting information directly from customers (and potential customers).
- Secondary research draws on existing information on the market. It involves compiling information from government statistics, sales data, reports by industry analysts and articles in the trade and business press. This is also known as “desk research”.
There are advantages and disadvantages to each approach:
Another important difference in market research is between quantitative and qualitative research. Quantitative research generates numerical information, such as data on the size of the market and the percentage of customers satisfied with a particular product. Qualitative research provides explanations for customers” opinions and behaviour. It provides information on why people like or dislike a product.
Ways of obtaining information
first direct used a variety of primary research methods as it prepared to relaunch its brand. This was a staged process. It sought customers” opinions on its current products and services. Then, as it considered changing its service proposition its product range and marketing mix it tested new ideas with groups of customers and potential customers. Testing gives direct feedback on how customers will respond before launching a service, as well as providing guidance on the most appropriate proposition.
The bank used focus groups and in-depth interviews to gain an understanding of consumer responses to the proposition at each development stage. This was followed by quantitative research to provide representative findings. This involved online questionnaire surveys of large groups of both customers and potential customers.
The focus groups provided qualitative information about customer perceptions and expectations. For example, customers wanted first direct to provide a fair banking service, with a transparent set of charges.
The surveys also provided first direct with quantitative data about its products. For example, it found that 96% of customers felt that credit interest was not an important factor in choosing to bank with first direct. In fact, almost 70% did not know the interest rate on their current account.