Some Interesting Facts About The Marketing Research Industry
Source: IBISWorld

PRODUCTS AND SERVICE SEGMENTATION

Product/Services Share:
Quantitative research – telephone interviews – 37.0%
Qualitative research – 25.0%
Quantitative research – face to face interviews – 22.0%
Desk research/other – internet etc. – 11.0%
Quantitative research – other – 5.0%

Qualitative Research

• It is estimated by IBISWorld that about 25% of industry revenue is derived from providing qualitative research services and an additional two thirds results from the use of various quantitative research methods.
• The process for product testing can involve both qualitative and quantitative research and can include test marketing in a suitable regional center. It usually also involves research into the effectiveness of advertising and promotion in terms of sales performance.
• Qualitative research can be undertaken through a combination of personal interviews and include using focus or panel groups, as well as, face to face and telephone interviews. During the 1970s and early 1980s, focus and panel groups were used extensively for product testing, and as a means of trying to ascertain why customers did, or did not, buy certain products/services. It was also used to test their thoughts and responses to certain products/services and ideas. In the mid-1980s, the popularity of focus groups declined, as sales data compiled from product bar codes read by optical scanners became more readily available. However, this mass of data still needs to be analyzed, to gain any competitive edge. In this regard, focus groups still play a vital role by bringing together a group of people to discuss products/services and the advantages and disadvantages of the product. Usually moderators or `facilitators’ ensure that one or two individuals do not dominate the focus group and to gauge participant reactions. At times, the paid participants are viewed by the organizer and client through a one-way mirror. These sessions are quite often video/audio taped. Industry sources contend that increasing use will be made of focus groups now, as they provide valuable insights into emotional responses that cannot be obtained from statistical analysis. Focus groups can also be used to refine and define advertising campaigns.

Quantitative Research

• Recently, quantitative research has also changed significantly with the application of new technology and through the linking of various data bases. This has led to increased sophistication in the market research techniques used.
• Changes have also resulted due to concern within this industry of negative feedback due to respondent fatigue from being over-researched by the more traditional forms of quantitative market research, which range from household mail back questionnaires as well as door-to-door, shopping center and, particularly, telephone interviews.
• Problems have also arisen with qualitative research in the selection and finding of suitable and appropriate people to participate in group discussions. There is also the minor problem of the over-willingness of some people to participate in as many group discussions as possible.
• Significant levels of non-participation in sample market research surveys leads to the increasing possibility of statistical biases being introduced, reducing the validity of the results.

Computer Simulation Testing

• Some companies may offer a computer simulation test marketing of new product development and releases, which may be offered to partly take over or as a substitute for the usual product testing in a particular representative geographic market or town/city. The modeling offers a cheaper, faster and possibly more accurate method of product testing. It also involves more security in that the company does not have to expose its new product release intentions to its competitors through the traditional test market product release. Details, such as how a product will be launched (i.e. amount of advertising expenditure, in which media it will be spent and in what proportion, over what period of time, as well sales promotions and support) are fed into a computer model which already holds information on the attitude of consumers to similar products in various markets, sales trends and competitive marketing strategies. It also takes into account how competitors are likely to react (i.e. price-cutting, increased distribution etc.). This information is used to calculate the potential market share of the product. Some on-the-spot market research is then undertaken, via door to door or telephone surveys, the results of which are also entered into the computer model. • Some market research companies have developed a consumer choice and reaction model using neural networks to mimic the human decision making process.

Data Warehousing

• Data warehousing and the use of data mining processes to find causal linkages in what would seem like unrelated data has also emerged as an analytical technique.
Internet Self Selection Surveys
• Recently, the use of the Internet for self selection and self completion of questionnaires has increased and is a very cost effective way to achieve some research results/outcomes.
Customer Satisfaction Surveys
• There has also recently been a growth in on-going customer satisfaction surveys