Monday, August 8, 2011

Market vs Marketing Research

I know. Who knew there was even a difference, right? Let's break it down into the most simple of distinctions: Market research is an organized effort to garner information about markets and/or customers while marketing research is about the processes you use to identify and define marketing problems and opportunities, e.g. how changing elements of the marketing mix impacts customer behavior.

Market research is an important component of business strategy, and usually takes place before planning the marketing mix. There are many ways to conduct market research but most fall into five basic methods: surveys, focus groups, personal interviews, observation and field trials. The method you choose will depend on what type of information you're looking for and how big your budget is.

Surveys are probably the least expensive method, but the response rate varies hugely: in-person will, of course, net you 100%; phone surveys approximately 50%; online surveys depend on the target; and mail surveys...well...single digits. Focus groups and personal interviews are similar in style; focus groups generally require a couple of hours and at least three to five groups to be effective while personal interviews usually need about an hour. Neither method is considered quantitatively reliable because it's too small a sample, but both give great information on customer attitude and insight. Observation and field trials give you the most objective information as they take place in more of a real world setting.

Marketing research can be broken down two different ways: by market or by methodology. Most often, you will see it broken down by market: Consumer marketing research (B2C) and Business- to-Business (B2B) Marketing research. When broken down by methodology, you will see it discussed as quantitative and qualitative. I prefer to break down by market because I find that both quantitative and qualitative are valuable in the end, and provide much better information when used together.

Although quantitative gives you a great picture of all the numbers, helps you locate the outliers, quantify trends, get hard numbers on likes and dislikes, it doesn't help you understand the customer. It also has a number of potential chances for error that could gum up the entire works. There are five groups of errors and within each type are 5-10 specific types of errors. Nothing gets a customer, whether they are internal or external, going quite like an open-ended question. It's also a very effective method of gaining support and buy-in. People love to know that you think what they have to say is important.

So...there are your basic differences between the two types of research. Next time around, I'll go into B2B vs. B2C marketing. I'll bet you think they're both the same since it's all marketing to people.


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