The Hidden Mechanics of Market Research
When I saw the topics in our coursework for this week and read the term market research, I had a vague conceptual idea of what it meant, and I still didn’t fully grasp how much depth there was to discover behind the curtain. This week’s material was fascinating, and it opened my eyes to the tremendous potential that this field holds for companies that need a better understanding of their market audience. The U.S. Small Business Administration defines market research as any research process that “blends consumer behavior and economic trends to confirm and improve your business idea” (Market Research and Competitive Analysis, n.d.). Their perspective is nuanced due to their specific background in small business. Thus this definition may not apply to established companies with no new or revolutionary business idea but instead, have a working business that needs to get better. One could argue that the second scenario requires a new business idea to improve an older business; however, let’s assume that this definition needs supplementation. I would like to include a secondary explanation from Investopedia. Market research is “the process of determining the viability of a new service or product through research conducted directly with potential customers. Market research allows a company to discover the target market and get opinions and other feedback from consumers about their interest in the product or service” (Twin, 2020). That is a well-rounded explanation of the subject and sets up the question in this discussion nicely.
The benefits of market research
The benefits of market research are myriad. As Twin (2020) explains, market research gives insight into how the cohorts within a company’s users or customers will receive any new modifications to products or services currently offered. It also can gauge how well these same cohorts will receive new products. I cannot imagine a scenario, and have not read anything that provided sufficient evidence for the existence of a scenario, that would be an adequate justification for the concerns that this week’s article stated about the impending value-loss of data analytics applied to marketing. It seems to me that there is no end to the benefits of market research and especially from a data-centric perspective. Still, some feel that market research is close to tapering off regarding how effective data science has been at showing real increases in the revenue generated by marketing efforts in various industries (Mela & Moorman, 2018). I would be interested in round-tabling this topic with deep neural network experts, big data engineers, and A.I. developers before forming a definite opinion one way or the other. It seems that we tend to have these sorts of commentaries about technology up to the day when the next big thing comes out. It may be true that what is being done currently is not working, but to claim that data is the reason may be biased in itself. The author does an excellent job of providing solutions to the issues, and they seem like solid action items. What may be necessary to prevent data analysis’s failing usefulness in these right-brain style fields like marketing is instituting more aggressive training of data analysts or scouting for future data analysts that have the capacity to communicate at a high level with people in social settings. Mela & Moorman touch on this, and I would have liked to see them go a bit deeper into the logistics of what that cross-training would look like at scale.
The risks of market research
Other than the purported impending end to data analytics’ viability in marketing analytics, which is more of a risk to marketing research than of marketing research, there are real risks that market research poses. Whenever companies work with data related to people and segments of populations, there is a risk of biases influencing results. This is not necessarily due to any malice on the part of the researchers or even on those being researched. Many times it could simply be a byproduct of the process. As we learned in the qualitative research course this week, there are two kinds of marketing research: quantitative and qualitative. When working in a qualitative mode, the results will be far more subjective and more likely to exhibit biases (Ladd, 2016).
Potential problem areas of market research
The problem areas of market research are exemplified by the risks above; however, other problems that could result in this process include everything from falsification of results by those with a personal interest in seeing companies fail to accidentally letting ones personal ideas cloud the choice of research subjects and influence the design of the screener. If researchers are not careful to hire talent, they run the risk of getting subpar results. The acquisition of a superior moderator is a nonnegotiable for qualitative market research, and it can make or break the entire effort (Ladd, 2016).
References
Ladd, C. (2016). Elements of a Qualitative Research Project. https://www.linkedin.com/learning/marketing-foundations-qualitative-research/quiz/urn:li:learningApiAssessment:4591039
Mela, C. F., & Moorman, C. (2018). Why Marketing Analytics Hasn’t Lived Up to Its Promise. Harvard Business Review. https://hbr.org/2018/05/why-marketing-analytics-hasnt-lived-up-to-its-promise
Twin, A. (2020). What Market Research Tells Companies About New Products and Services. Investopedia. https://www.investopedia.com/terms/m/market-research.asp
Us.s Small Business Administration. (2020). Market research and competitive analysis. Market Research and Competitive Analysis. https://www.sba.gov/business-guide/plan-your-business/market-research-competitive-analysis
