The market research process

When bringing a new product or service to the market the main question is whether there really is a market for it. In addition to finding out if there is a place in the market for the product or service there needs to be consideration whether it works as such or if it needs fine-tuning to better match supply with demand. Both of these questions can be answered by performing a market research. (Conducting Market Research 2015) The term market research can be understood in different ways; it can be the process of gain-ing insight into the market, a function in an organization, or the outcomes of research, for instance a database or report (Mooi & Sarstedt 2011). The focus on this work will be on the process of gaining insight into the market. In conducting a market research pro-cess two types of information will be gathered: primary and secondary data. Information that derives straight from the potential customers belongs to primary research, which can be gathered in several different ways. Secondary research involves bringing togeth-er statistics, reports and othtogeth-er data from sources outside the customtogeth-er such as difftogeth-erent organizations like government agencies. (Conducting Market Research 2015)

The market research process with its different stages is represented in Figure 14.

Figure 14. The market research process (adapted from Mooi & Sarstedt 2011)

In order to execute a successful market research good planning is necessary. Planning of a market research process starts with identifying the problem and ends up in presenting the outcomes and reflecting what to do with the results. (Mooi & Sarstedt 2011)

4.1.1 Problem identification and formulation

The market research process starts off with identifying and formulating the problem into an understandable form. Identifying the problem is essential but identifying the right problem is a challenge. To identify the correct problem marketing symptoms or oppor-tunities must be identified before. A marketing symptom is a problem that an organiza-tion faces, for example increasing product complaints, declining market shares, or com-plications of a new product to attract customers. Sometimes there is no real problem at hand but rather a marketing opportunity. These opportunities could be exploring new emerging markets or possible benefits offered by new products or product channels.

After the problem has been identified and formulated the research design can be deter-mined. (Mooi & Sarstedt 2011)

4.1.2 Research design

The research design has a close link to the identification and formulation of a problem.

When facing a research problem that has not been researched before exploratory tions are used since little is known about the issue being researched. Exploratory ques-tions are best answered with exploratory research design. This initial research such as interviewing possible customers helps identify opportunities and pitfalls, which ease to determine and refine the research problem. It also helps to distinguish the difference between what is nice to know and what is important to know, in other words to set pri-orities and pass impractical ideas. Exploratory research can be performed in many ways including interviews, focus groups, projective tests, observational studies and ethnogra-phies. (Mooi & Sarstedt 2011)

Once a clearer picture of the issue has been acquired exploratory research changes in to descriptive research in order to describe the research problem. It usually builds up on the information previously adopted in the exploratory research. Descriptive research is all about describing the subject at stake either by focusing on a single variable (e.g.

market share) or multiple variables (e.g. market share related to demography) simulta-neously. It can be used for several purposes including describing customers or competi-tors. For example, how large is the asset management business worldwide? What do competitors of GE Healthcare have to offer in asset tracking? What is the current situa-tion of our customers regarding these products? Descriptive research is also commonly used to segment markets and measure performance. Segmentation is necessary when companies are not able to connect with all customers individually. Measuring

perfor-mance, for instance tracking sales of a certain product, is a regular procedure in organi-zations. (Mooi & Sarstedt 2011)

After a more complete picture of the issues related to the problem is identified it is pos-sible to examine how key variables are linked. This is done by causal research. Causal research is less often used in market research compared to exploratory or descriptive research. Examples of causal research include performing either laboratory or field ex-periments. Figure 15 represents how the nature of research design changes as you move through the funnel from exploratory research design to causal research design. (Mooi &

Sarstedt 2011)

Figure 15. The steps of determining the research design (adapted from Mooi & Sar-stedt 2011)

After the research design has been determined the next step is to design the sample and method of data collection. (Mooi & Sarstedt 2011)

4.1.3 Sample and data collection design

When the research design has been solved the design of the sample and method for col-lecting data must be decided. Deciding whether to perform a primary research or use existing data (secondary) is the key question. Collecting data is straightforward but it can involve difficulties when planning it. What questions should be asked in a survey?

How to get enough out of interviewing situations? Who to target in the customer organ-ization? From how many customers information is gathered? (Mooi & Sarstedt 2011) Different methods of how data can be collected are discussed more in chapter 4.4.2.

4.1.4 Data collection and analysis

After making the decision on how the information will be obtained it is time to collect the data. Collecting data means putting the design and method of data collection into operation. Not only is collecting data about gathering the information wanted but it also involves recording and organizing it. The way the data is collected should be related to how the data will be used and analyzed. Nevertheless, despite which method is used to collect data recording the data should be concurrent with collecting it or as soon as pos-sible afterwards. After the data has been collected it must be analyzed. Data analysis is the interpretation of the data collected in order to find patterns, trends, similarities etc.

and figuring out what these patterns possibly mean. (Mooi & Sarstedt 2011)

4.1.5 Interpretation, discussion and follow-up

The second last phase of the market research process is to interpret, discuss and present the findings. Based on the results of the research researchers should be able to answer questions and present future actions based on the data. One could think that this would be the last phase and in fact market researchers often stop after this stage. However, doing a follow-up on the findings is as important. Sometimes further research is neces-sary in order to implement the market research findings. This would be necesneces-sary for example when market conditions have changed during the market research process. Fol-low-ups on previous market researches may also be a way of entering new deals to con-duct more research. (Mooi & Sarstedt 2011)