Market Research: When to do what?
Contemplating market research before careful consideration of what you really want to understand leads to research that doesn’t answer the question at hand, an unfortunate (and expensive!) mistake. The type of research done should be dependent on the information you are seeking; the method of getting this information can vary depending on the nature of the survey population, client budget, ease of administration and the like. By definition, a research type refers to the purpose of the research, whereas a research method is the mechanism for undertaking the research. Market research consists of mainly three types – exploratory, descriptive and explanatory – all of which are appropriate for differing purposes and situations.
If you have little knowledge of the topic or research problem at hand, you should first employ exploratory research. Rather than proceeding with a pre-determined idea of what the question or problem is, a researcher will use exploratory research to scope the current situation and better define the problem. Methods such as in-depth interviews and focus groups are appropriate for exploratory research because they allow for open exploration of various topics and themes. Done well, exploratory research can provide guidance for identifying a more specific research problem or hypothesis. For example, if a store owner has no idea why sales are down, exploratory research can shed light on what some of these reasons are and lead to a hypothesis about the reason/s for declining sales. Exploratory research should not be used to make generalisable conclusions, meaning it tends to be the first step in market research.
If you already have a “good idea” of the research question you want to address, descriptive research can be employed to measure and describe the population. The researcher will attempt to answer a pre-determined research question by measuring relevant variables and looking for patterns or trends in the data. Descriptive research methods are usually quantitative, involving analysis of averages, distribution, frequencies and correlations. Descriptive research is sufficient if the research question can be answered through description of the population, such as if a store owner just wants to know a customer’s rating of their store’s range. Descriptive research can only imply the nature of relationships within the data, so if you want an understanding why and how variables relate, a third step of research is required.
Explanatory research is used if you need to know about cause and effect relationships in your data. It goes beyond describing the characteristics of a population to explaining the nature of relationships within it; that is, explaining why things are the way they are. For example, explanatory research is required if a store owner wants robust information about why customer’s spend more or less in their store. Explanatory research requires quantitative data for regression analyses as this is the only rigorous way to explain the relationship between two variables. In marketing, explanatory research is typically done through survey.
The type of market research required really depends on what you already know and what you want to find out. All three stages of research are not always required; for example, if enough is already known about the topic in question to develop a clear research question and the cause of relationships within the data is not of interest, descriptive research alone is sufficient. A lot of time, money and effort will be saved if you carefully consider what you already know and what you want to know as this will enable selection of the appropriate research type/s. Only then can market research be effective through providing answers to the questions you want answered.
All too often, clients are ill advised by their external research providers in understanding the type, nature and scope of research to be undertaken. Or, not to proceed with research! Research for the sake of research is pointless. Instead, research should and needs to be viewed as a tool to generate an understanding of the client business problem and/or opportunity. Working with the client to determine a cost-effective market research approach is preferred, and will go a long way to cement a true partnership with the client.
Taking the market research outcomes further and working with the client to understand their meaning and impact on the client’s business draws a distinction between a ‘good research provider” and an “outstanding” provider. Many research providers simply lack the strategic skills to interpret the data generated. Instead, they rely on a list of “recommendations” which are invariably geared around undertaking further research. The strategic insight in this approach appears to be lacking.