Marketing research is a systematic gathering, recording, and analysis of qualitative and quantitative data about issues relating to marketing products and services. The goal is to identify and assess how changing elements of the marketing mix impacts customer behavior.
This involves employing a data-driven marketing approach to specify the data required to address these issues, then designing a method for collecting the information and implementing the data collection process. After analyzing the collected data, the results and findings, including their implications, are forwarded to those empowered to act on them.
Market research, marketing research, and marketing are a sequence of business activities; sometimes these are handled informally.
The field of marketing research is much older than that of market research. Although both involve consumers, Marketing research is concerned specifically with marketing processes, such as advertising effectiveness and salesforce effectiveness, while market research is concerned specifically with markets and distribution. Two explanations given for confusing market research with marketing research are the similarity of the terms and the fact that market research is a subset of marketing research.Market Research is a subset of Marketing Research Further confusion exists because of major companies with expertise and practices in both areas.US Census data is both for Market research and for Marketing research:
Overview Marketing research is often partitioned into two sets of categorical pairs, either by target market:
Direct or Business-to-consumer (B2C) marketing research, and Business-to-business (B2B) marketing research.
Or, alternatively, by methodological approach:
Qualitative marketing research, and Quantitative marketing research.
Consumer marketing research is a form of applied sociology that concentrates on understanding the preferences, attitudes, and behaviors of consumers in a market-based economy, and it aims to understand the effects and comparative success of marketing campaigns.
Thus, marketing research may also be described as the systematic and objective identification, collection, analysis, and dissemination of information, for the purpose of assisting management in decision-making related to the identification and solution of problems and opportunities in marketing. The goal of market research is to obtain and provide management with viable information about the market (e.g., competitors), consumers, the product/service itself etc.
Role
The purpose of marketing research (MR) is to provide management with relevant, accurate, reliable, valid, and up-to-date market information.
The decisions made by marketing managers are complicated by interactions between the controllable marketing variables of product, pricing, promotion, and distribution. Further complications are added by uncontrollable environmental factors such as general economic conditions, technology, public policies and laws, political environment, competition, and social and cultural changes. Marketing research helps the marketing manager link the marketing variables with the environment and the consumers by providing relevant information. In the absence of relevant information, consumers' response to marketing programs cannot be predicted reliably or accurately.
History
Evidence for commercial research being gathered informally dates to the Medieval period. In 1380, the German textile manufacturer, Johann Fugger, travelled from Augsburg to Graben in order to gather information on the international textile industry. He exchanged detailed letters on trade conditions in relevant areas. Although, this type of information would have been termed "commercial intelligence" at the time, it created a precedent for the systemic collection of marketing information.Nair, S.E., Market Research: Text and Cases, 2nd ed., Himalaya Publishing House, 2014, p. 21 [www.himpub.com/documents/Chapter873.pdf Online:]
During the European age of discovery, industrial houses began to import exotic, luxury goods - calico cloth from India, porcelain, silk and tea from China, spices from India and South-East Asia and tobacco, sugar, rum and coffee from the New World.Braudel, F. and Reynold, S., The Wheels of Commerce: Civilization and Capitalism, 15th to 18th Century, Berkeley, CA, University of California Press, 1992 International traders began to demand information that could be used for marketing decisions. During this period, Daniel Defoe, a London merchant, published information on trade and economic resources of England and Scotland. Defoe was a prolific publisher and among his many publications are titles devoted to the state of trade including; Trade of Britain Stated, (1707); Trade of Scotland with France, (1713) and The Trade to India Critically and Calmly Considered, (1720) - all of which provided merchants and traders with important information on which to base business decisions.Backscheider, P.R., Daniel Defoe: His Life, Baltimore, Maryland, Johns Hopkins University Press, 1989
Until the late 18th century, European and North-American economies were characterised by local production and consumption. Produce, household goods, and tools were produced by local artisans or farmers, with exchange taking place in local markets or fairs. Under these conditions, the need for marketing information was minimal. However, the rise of mass production following the Industrial Revolution, combined with improved transportation systems in the early 19th century, led to the creation of national markets and ultimately stimulated the need for more detailed information about customers, competitors, distribution systems, and market communications.Tedlow, R.A., and Jones, G., The Rise and Fall of Mass Marketing, Routledge, N.Y., 1993, Chapter 2
By the 19th-century, manufacturers were exploring ways to understand the different market needs and behaviours of groups of consumers. A study of the German book trade found examples of both product differentiation and market segmentation as early as the 1820s.Fullerton, R.A., "Segmentation Strategies and Practices in the 19th-Century German Book Trade: A Case Study in the Development of a Major Marketing Technique", in Historical Perspectives in Consumer Research: National and International Perspectives, Jagdish N. Sheth and Chin Tiong Tan (eds), Singapore, Association for Consumer Research, pp 135-139 From the 1880s, German toy manufacturers were producing models of tin toys for specific geographic markets; London omnibuses and ambulances destined for the British market; French postal delivery vans for Continental Europe and American locomotives intended for sale in America.Pressland, David, Book of Penny Toys, Pei International, 1991; Cross, G., Kids' Stuff: Toys and the Changing World of American Childhood, Harvard University Press, 2009, pp 95-96 Such activities suggest that sufficient market information was collected to support detailed market segmentation.
In 1895, American advertising agency, N. H. Ayer & Son, used telegraph to contact publishers and state officials throughout the country about grain production, in an effort to construct an advertising schedule for client, Nichols-Shephard company, an agricultural machinery company in what many scholars believe is the first application of marketing research to solve a marketing/ advertising problem)Lockley, L.K., "Notes on the History of Marketing Research,' Journal of Marketing, vol. 14, no. 5, 1950, pp. 733-736 Online: Also note that some sources provide an earlier date of 1879 for this event; See for instance: Kenneth E. Clow, Karen E. James, Essentials of Marketing Research: Putting Research Into Practice, p. 10 [but the first cited source is more likely to be reliable because journal articles are peer-reviewed, while text-books do not undergo rigorous reviewing and as a consequence are more error-prone
Between 1902 and 1910, George B Waldron, working at Mahin's Advertising Agency in the United States used tax registers, city directories and census data to show advertisers the proportion of educated vs illiterate consumers and the earning capacity of different occupations in a very early example of simple market segmentation.Jones, G.D.B. and Tadajewski, M. (eds), The Routledge Companion to Marketing History, Oxon, Routledge, 2016, p. 66Lockley, L.C., "Notes on the History of Marketing Research", Journal of Marketing, Vol. 14, No. 5, 1950, pp. 733–736 In 1911 Charles Coolidge Parlin was appointed as the Manager of the Commercial Research Division of the Advertising Department of the Curtis Publishing Company, thereby establishing the first in-house market research department - an event that has been described as marking the beginnings of organised marketing research.Nair, S., Market Research: Text and Cases, 2nd ed., Himalaya Publishing House, 2014 His aim was to turn market research into a science. Parlin published a number of studies of various product-markets including agriculture (1911); consumer goods (c.1911); department store lines (1912) a five-volume study of automobiles (1914).Boorstin, J. D., Charles Coolidge Parlin, in: The Americans: The Democratic Experience, Random House, 1974, [e-book edition], n.p.
In 1924 Paul Cherington improved on primitive forms of demographic market segmentation when he developed the 'ABCD' household typology; the first socio-demographic segmentation tool.Lockley, L.C., "Notes on the History of Marketing Research", Journal of Marketing, vol. 14, no. 5, 1950, p. 71 By the 1930s, market researchers such as Ernest Dichter recognised that demographics alone were insufficient to explain different marketing behaviours and began exploring the use of lifestyles, attitudes, values, beliefs and culture to segment markets.Wilson B. S. and Levy, J., "A History of the Concept of Branding: Practice and Theory", Journal of Historical Research in Marketing, vol. 4, no. 3, 2012, pp. 347-368; DOI:10.1108/17557501211252934
In the first three decades of the 20th century, advertising agencies and marketing departments developed the basic techniques used in quantitative and qualitative research – survey methods, questionnaires, gallup polls etc. As early as 1901, Walter B Scott was undertaking experimental research for the Agate Club of Chicago.Lockley, L.C., "Notes on the History of Marketing Research," Journal of Marketing, vol. 14, no. 5, 1950, pp. 733-736 Online: In 1910, George B Waldron was carrying out qualitative research for Mahins Advertising Agency. In 1919, the first book on commercial research was published, Commercial Research: An Outline of Working Principles by Professor C.S. Duncan of the University of Chicago.Petty, R.D., "A History of Brand Identity Protection and Brand Marketing," in: D.G. Brian Jones, Mark Tadajewski (eds), The Routledge Companion to Marketing History, Oxon, Routledge, 2016, p. 108
Adequate knowledge of consumer preferences was a key to survival in the face of increasingly competitive markets.Bakker, F., "Building Knowledge about the Consumer: The Emergence of Market Research in the Motion Picture Industry," Business History, vol. 45, no. 1, 2003, pp 101-127 By the 1920s, advertising agencies, such as J Walter Thompson (JWT), were conducting research on the how and why consumers used brands, so that they could recommend appropriate advertising copy to manufacturers.