Market Research Process | Steps in Market Research

This article discusses detailed Marketing Research Process. There are 4 Main Steps in Market Research and these steps give the final results to us.

1. Define the Problem and Research Objectives

Finding out the problem for which the research is to be conducted is the first decision that every firm has to take.

Adequately defining the problem is important because a lot of scarce resources will be wasted if it is too vague and an exact conclusion cannot be drawn if it is too narrow.

To define any problem appropriately, every firm needs to have clear answers to 2 questions:

What is to be researched (content and scope)?

Why to do the research (decisions to be made)?

2. Developing Research Plan

This step includes gathering information relevant to the research objective.

The researcher can collect data related to the research objective from the primary source or the secondary source or both. Primary source or first-hand data includes data that doesn’t exist in any books or research reports. Secondary data or second-hand includes data available in books, journals, reports, etc.

Secondary data is readily available in books, magazines, reports, online, etc.

In order to get Primary Data the following research can be conducted:

Observational Research

One way of collecting information is by observing what goes on in the markets. Another way is by having friendly conversations with the customers about their purchasing experience.

Ethnographic Research

This is another form of observation research where the researcher studies the individual in real-life situations rather than under any market setup or lab. The purpose of this research is to know how people live (their lifestyle), how they use the product, what they do to earn a livelihood, how they use the goods and services, their personal and professional needs, etc.

Focus Group Research

It is a form of discussion where six to ten people discuss the topic given by a moderator. A person that conducts group discussions and is skilled in group dynamics is a Moderator. He keeps the discussion on the topic in order to get relevant information from the group members.

Survey Research

These are the descriptive researches conducted to know how much the customers know about the product, their preferences and satisfaction level. Questionnaires are the best way to conduct surveys.

Behavioural Data

The customer’s purchase at the store tells us about his behaviour and the choice of products. Thus, it provides more accurate information about the customer by observing rather than the planned answers given during surveys.

Experimental Research

It is done to find out the cause and effect relationship. The change in customers’ behaviour due to change in product is studied in this research.

The sampling unit i.e. Who to survey?

The sample size i.e. Units of the population to be surveyed

The sampling procedure i.e. How to choose the respondents?

3. Information Collection & Analysing Information

Information Collection

  • It is one of the most expensive methods of marketing research, where at this stage, the researcher has to adopt the methods to collect information.
  • It may be difficult because of the respondents biasedness, unwillingness to answer, or not being at home.

Analysing Information

  • After collecting information, the next step is to organize the available information so that analysis can be obtained.
  • Statistical techniques are applied in order to perform analysis like computing averages and measures of dispersion.
  • Advanced decision models are also used to analyse the data.

4. Present the findings & Decision making

Present the Findings

After compiling and analysing, all the findings and the research are finally shown to the top level management viz. Managing Director, CEO, or Board of Directors to make decisions about marketing in line with the research.

Decision Making

The top level management decides to either rely on the findings or discard the findings as unsuitable.

Facts about Market Research

From US $46 billion in 2017, the market research sector slightly increased to US $47 billion in 2018.

CompanyTurnover (USD bn)
Nielsen
6.5
IQVIA
5.5
Kantar3.4
Gartner3.1
Ipsos
2.1
Gfk
1.6
IRI
1.2
Dynata
0.509
Westat
0.506
Intage
0.489

50% of the global market research turnover is accounted to the top 10 market research companies in comparison to the 49.6% in 2017, while generating total revenue of US $23.77 bn.

Example – Coca Cola

After being accused of playing down the role of sugary drinks in obesity, the soda giant’s promised to be transparent.

This lead Coca-Cola to disclose that they spent almost $120 million to fund scientific research as well as health and fitness programs in the U.S. between 2010-2015.

Coke says it spent $21.8 million of the total for third-party scientific research on health-related issues. Another $96.8 million was spent in health and well-being partnerships over the past five years.

Example – Lego [Ethnographic Research]

Under Jørgen Vig Knudstorp tenure, LEGO Group’s turnover increases 600% from $6.3 billion to $37.9 billion in 2016. The yearly income went from a loss to a notable profit.

In December 2016, Knudstrop was to step down as CEO of Lego and take the position of chairman of the group.

By improving processes, cutting costs and managing cash flow he turned the company around. Then came stabilization. “But after that, we knew there’d be the third phase of organic growth,” he says.

Deep ethnographic studies, of how kids around the worlds really play was carried out which the company had never done before. This accomplished what a modern Lego should be. Today, Lego knows as much about that subject as any organization on Earth. The Future Lab (along with a similar group that preceded it).

“There’s the famous quote that if you want to understand how animals live, you don’t go to the zoo, you go to the jungle,” Knudstorp says. “The Future Lab has really pioneered that within Lego, and it hasn’t been a theoretical exercise. It’s been a real design-thinking approach to innovation, which we’ve learned an awful lot from.”

Did you know?

The range of brands looking to deep dive into consumer minds is growing.

  • Ford hired its own cultural anthropologist.
  • Toyota sends people on drive-along to see how motorists use the features of the cars.
  • The North Face goes on hike-alongs with explorers to help it refine where pockets in its clothing should go.
  • After observing through ethnography, that people spent more time cleaning their mop than cleaning their floors, P&G famously came up with the Swiffer mop.