Why should I commission market research?

Managers are always making decisions based on their experience, the facts known to them internally and their intuition. Perhaps the way forward is obvious, or the size of the decision doesn’t merit a huge spend on fact finding. Maybe action is required today and there is no time for formalised research even though it would be welcome.

There is nothing wrong with intuition and "common" sense and it is a natural part of decision making in business. However, where the decisions require large financial resources and where the costs of failure are high, there is a need for decision making based on robust and reliable data. The purpose of market research is to reduce business risk whether you are looking to enter a new market, build your position in a market, create a new brand, find out how satisfied customers or employees are, target markets more efficiently, develop a new product, or test the effectiveness of an advertising campaign.

Market research is therefore the systematic collection, analysis and interpretation of information relevant to marketing decisions. Common information requirements met through market research are listed below although this is by no means exhaustive and can of course be classified in different ways.

Information That Can Be Obtained Through Market Research

Label	Types Of Information	Methods Used
Market Size & Structure	The value of the market in currency value and units sold each year The historical trends in size of the market The key consuming segments of the market The competition and their shares The route to market	Published market research reports Desk research Market surveys aimed at calculating consumption and brands purchased
Use Of & Attitude To Products	Awareness of suppliers Attitudes to suppliers Attitudes to products Volume and frequency of purchases	Quantitative surveys carried out by telephone, mail/internet, face-to-face interviews Focus groups
Customer Satisfaction	Ratings of customers (and sometimes potential customers) to show what they think is important in influencing their buying decision and how satisfied they are with their supplier on each issue	Quantitative surveys carried out by telephone, mail/internet, face-to-face interviews
Promotion Effectiveness	Key messages for campaigns Effectiveness of adverts and promotions	Focus groups Face-to-face interviewing Pre and post quantitative surveys
Brand Impact	Awareness of brands Values attached to brands The influence of brands in the purchasing decision	Focus groups Telephone interviewing Face-to-face interviewing
Pricing Effectiveness	Optimum prices Price values attached to features of the offer	Market research in test markets Trade-off analysis using conjoint techniques
Product Tests	Likelihood of purchasing different products Attitudes to products	Hall tests Focus groups Quantitative research
Segmentation	Opportunities for segmentation based on demographics, behaviour or needs	Quantitative surveys with factor and cluster analysis