Francis Bacon, a renowned essayist, famously said, “Knowledge is Power”. It is equally applicable in almost all spheres of life and whatever we do, the knowledge that we have or gain about the job is what makes all the difference. Working without proper knowledge of the particular subject is like shooting in the dark and nobody wants their sincere and genuine efforts to go in vain.
Before starting your own business or company, it is imperative to have a basic understanding of the market forces in general but to carve out a space for yourself in the market what is even more important is the in-depth knowledge of the particular niche of the market you are venturing into with your company. Now, it is not possible for every businessman or woman to do the mammoth task of doing the study and research all by himself or herself, and here comes into the picture what we call a Market Research Company.
A Marketing Research Company is a firm that is hired by an aspiring or even as an existing company to provide the company with all the data regarding the current status of demand and supply of the particular product or service that the hiring company is producing and the consumer behavior relating to the product or service. The research is basically done to examine whether the target market is ready for the product or service and to predict the response of the customers to the proposed product or service. Along with providing the data they also analyze all the information and provide insight as to what would be the most appropriate step towards the growth of the company.
Although most of the research that a marketing research company does is usually commissioned by another company for different purposes the market research company also does some research to remain updated about the ebbs and flows of the market. This research is then sold to a befitting company requiring that particular information. Hence, a market research company has and continues to gain knowledge and information relating to different market forces and their effect on a particular niche in the market and the businesses operating in that niche.
The market research undertook by the market research company can be either quantitative or qualitative or both. Quantitative research includes numerical values, its analysis, and a numerical output or result. It is objective and easily calculable. For example, when we ask a customer to rate the service and food and a restaurant from 1 to 10 (with 1 representing poor and 10 representing excellent), the result is easily calculable after taking the average of 10 or 50 such reviews. However, qualitative research involves words, expressions, and symbols. It becomes subjective and may vary from person to person. For example, if we talk to a person coming out of a restaurant about the service and food, he would describe his experience in his own words. This makes it a little tedious to record and analyze such data. Nevertheless, both modes of research and equally important and the result is the most accurate and effective if we combine both.
On the basis of the sources of data that are used by the Market Research Company for conducting their research and drawing conclusions, the research can be classified into two categories- Primary Market Research and Secondary Market Research.
Primary Market Research
In Primary Market Research, the data is collected directly from the customers and the consumers using the product or service. It is achieved through getting in touch with the customers or consumers and asking them about their experience and opinion. The research can be both qualitative and quantitative and can be used to gather the information that both exploratory and specific. Here, exploratory research refers to asking subjective and open-ended questions in order to get an insight into what the hidden issues and problems are that have yet not been explored by the company. Whereas, in specific research, people are asked specific or objective questions and these questions intend to solve the issues explored during the exploratory research.
The primary market research uses various tools to collect data. For example, Focus groups which is a bunch of people who answer questions sent to them online, and their responses are recorded and later analyzed. The other method is a One-to-One Interview in which questions are asked directly in person. Another method is ethnographic research which involves the researcher physically go to the people in their natural habitat and get their feedback, experience, and opinion on a particular product or service.
Secondary Market Research
In Secondary Market Research, the data is not collected directly by the researchers firsthand. In fact, the data is collected from reliable secondary sources like the government, media, commercial organizations, and nongovernment surveys. Secondary Market Research uses the following sources –
Public Sources like libraries contain government official documents, census, and various surveys that are available for free to the researchers. Commercial Sources are obviously not available for free and cost a considerable amount but they are reliable and have extensive information in a variety of areas. They include newspapers, magazines, and journals. Educational Institutions are underrated but extremely prolific and reliable sources of data in any area. The researches in any business school or university are included in this kind of source.
A marketing research company studies the behavior of people who play the role of a buyer, seller, and consumer and analyses their attitudes, inclination, preferences, habits, buying tendency, and purchasing power. Additionally, their research also includes the study of different aspects of the designing, pricing, advertisement, promotion, and distribution of the product or service in question. They provide the needed and sought opinion and advice after examining all important aspects involved in the particular niche market. They also study the competitors and the leading firms in order to understand how the demand and supply of the market actually work best in the favor of the producer.