What is Consumer Research?
Consumer Research is the process and tools used to study consumer behavior. Marketers carry out consumer research regularly to know what benefits consumer seek by using a product or service.
The various forms of consumer research include an in-depth interview, focus group, or the survey of the consumer base.
Table of Contents
- 1 What is Consumer Research?
- 2 Developing Research Objectives
- 3 Collecting Secondary Data
- 4 Designing Primary Research
- 5 Customer Satisfaction Measurement
- 6 Marketing Management Topics
Primary research is defined as new research especially designed and collected for the purpose of a current research problem.
There are two types of primary research:
- Qualitative research
- Quantitative research.
Qualitative research includes focus group, in-depth interview and projective methods. Whereas quantitative research includes observational research, experimentation and survey research.
Developing Research Objectives
One of the most difficult stages of consumer research is to define the research problem and objectives of the research to be carried out.
For example: for mobile handset consumers, a marketer may look for following questions:
- How many segments are there for the market under consideration and how it can be segmented?
- How many consumer love to purchase mobile handset using online platforms?
- Consumer attitude and experience towards the product of company.
- What is the satisfaction level of consumers of competitors?
- What consumer is looking for in a mobile handset which is not available in the market?
These are the few set of questions marketers wants the answers for. Whatever the question/s, researcher should come to a point of agreement to decide the specific purpose and objective of the research to be carried out.
A clearly stated objective of research helps researchers to avoid the costly error and helps to collect the required information only.
Collecting Secondary Data
The second step of consumer research is to look for the secondary data. Secondary data is defined as the information already existing, collected for some other research purpose in the past.
Looking for secondary data helps researchers to check whether the research questions in hand could be answered partially or fully with the existing information. It helps researchers to avoid pursue any research objectives those could be achieved by using secondary data.
There are many sources of secondary data. Those sources can be categorized into two:
Internal secondary data
It is the information available within the company. For example information collected during sales audit, past customer service calls, letter of enquiry from the customers, and so on. Internal secondary dataIt is the information available within the company.
For example information collected during sales audit, past customer service calls, letter of enquiry from the customers, and so on.
For instance companies use internal secondary data to calculate customer lifetime value for different segments. Customer life time value includes: customer acquisition cost, profit generated, handling cost of customer, and expected time period of the relationship.
External secondary data
It is defined as the information available outside from the organization. These sources of secondary information may be free or paid.
For example Census data from the government can be accessed by the firms at free of cost and help in understanding the demographics of the consumer in a given territory. There are various forms of external secondary data.
Government Secondary data
Government of every country collects lots of data to understand the growth rate of population, citizen’s income, and industry wise growth and to seek other information to project the expected growth of economy, planning the various social programs.
Generally government secondary data is available either free or at a very nominal cost. Hence companies can use that information for understanding the select consumer behavior topics.
Periodicals and articles available
Periodicals and articles contain lots of business related data. Those can be accessed by using internet.
Some of the example these types of data bases are: ProQuest, Ebscohost, and LexisNexis. These data bases provide access to many news paper articles and business journals. This material is available in public as well as in private libraries.
Syndicated commercial research services
There are many research agencies those collects information about the consumers and sale it at a price.
For example: Neilsen’s MyBest Segments provides useful information related to the consumer segments.
Designing Primary Research
After considering the secondary data, the research process can go in two directions:
The direction of research is well directed by the objectives of the research. For example: if company wants to know the best form of positioning to target segment, a qualitative study is undertaken. Alternatively, if researcher wants to get some quantitative data from the consumer base, quantitative research can be done.
The merits and demerits of using qualitative and quantitative research are discussed in following sections.
It is assumed that consumers do not make decision rationally always for evaluating the goods and services and select the best that provide highest utility at lowest cost. Central idea of qualitative consumer research is that consumer is not always aware about the choices they made and even if they know, they don’t want to share.
Dr. Ernest Dichter first started uncovering the buying motivation of consumers by using Freudian psychoanalytic theory. With the time many qualitative research approaches were used by the marketers to understand consumer behaviour.
Most of the qualitative research method does have roots in psychology and clinical research. In a qualitative study, usually, sample size is small and findings cannot be generalized on the larger population. Nevertheless, this form of consumer research contributes extensively to understand the initial direction of further quantitative research.
In designing and implementing an appropriate qualitative research strategy, A researcher must consider the following points
- Purpose of the study
- Types of interview to suit the purpose of study
- Types of data instruments for securing the needed information
A depth interview is generally refereed as one to one interview between a single respondent and highly trained researcher. These types of interview take place in a professionally set up interviewing room. Depth interview provide useful insights about the new product development, positioning and re-positioning of the brands.
A focus group or discussion group consists of 8 to 10 participants gathered to focus or explore a particular product or product category under the observation of a moderator/researcher/analyst.
During a focus group generally participants are encouraged to express their feeling about and service concepts, or new marketing and advertising campaigns. Analysis of the responses collected during a focus group is a big task and require specific skills.
Researchers use quantitative research to know the acceptance of a product, as well as to know the impact of recent marketing campaign. In other case, objectives are to equip researchers in identifying consumer’s level of satisfaction with a product, service, distributors, and retailer.
It is also used to know the unmet need of consumers or look for the betterment of the existing product. The broad categories of quantitative research are experimentation, survey techniques, and observation.
The finding of quantitative research is descriptive and empirical. The sample size of quantitative research larger in comparison to qualitative research. If a sample is selected wisely and appropriately, the finding can be generalized to the larger population under consideration. But it requires high statistical skills in a researcher to appropriately analyze the data collected.
Observational research is an important research tool because marketer recognize that often the best way to gain an in depth understanding of the relationship between people and product by watching them in the process of buying or using the product. Companies require observers to track the behavior of consumers.
For this purpose, companies use trained observers or mechanical or electronic devices. Usage of electronic financial transaction and retailing has enabled the firms to track and observe the consumers buying behaviour.
Experimental research generally known as causal research are carried out to know the cause and effect relationship among the various factors under consideration. It is possible to check the change in the sale of product at various point of the pricing.
A simple example of causal research is when we change on variable and keep others at constant. A controlled experiment ensures that any difference in the outcome is due to the independent variables under consideration not due to the external ones.
A major application of causal research is test marketing. Sometimes marketers feel after conducting a focus group and in-depth interview, and survey research, companies first want to test the product/ service and marketing communication program from the target customers.
When researcher wants to know about purchase preferences and consumption experiences of consumer, they can do it by email, in person, by telephone or by online. Each method of contact has certain merits and demerits; hence researcher must select wisely the method of contact.
Following are the ways of contacting respondents in quantitative survey research:
- Personal interview surveys: Face to face with respondent
- Telephonic interview surveys: One to one telephone contact
- Mail/ email surveys: Sending questionnaire directly to respondent’s home or email inbox.
- online survey: Contacting respondent using company website or link
Quantitative research data collection instruments
Research instruments are prepared to systemize that similar questions are asked to every respondents in similar order. Data collection instruments include questionnaires, personal inventories, and attitude scale. Mostly each research instrument is pre tested for its reliability and validity before conducting a full scale survey.
Questionnaire includes the questions asked related to the research objectives.
There are two types of questions asked in a questionnaire:
- Open-ended question
- Close-ended question.
Open-ended questions require answer in the respondent’s own words, for example: essay type questions.
Close-ended questions require respondent to check appropriate answer from the list of options. Similarly, researchers uses attitude scales in the quantitative study. The most frequently used attitude scale is likert scale, semantic scale, behavior intention scale, and rank order.
Customer Satisfaction Measurement
Customer satisfaction measurement is a type of consumer research to measure the satisfaction with relevant attributes of the product or service, and relative importance of each attribute by using qualitative and quantitative measures and verities of contact method.
Usually, researchers uses five point semantic differential scale, ranging from “very dissatisfied to very satisfied.
Customer satisfaction is a function of the gap between what customer expected from the product before purchase and what customer actually getting.
It is not economical and possible to obtain information from each and every people of the population or universe under consideration, marketers use sampling of the population.
A sample is a subset of the population that is used to analyze the characteristics of the population. Therefore a sample should represent the entire population. A sample not representing the entire population may give results those are not of any use.
Hence researchers need to develop a proper sampling plan. A sampling plan should address three questions:
- Whom to survey (Sampling unit)?
- How many to survey (Sample size)?
- How to select respondents (Sampling procedure)?
Deciding the sampling unit require the proper definition of the population. For example: company want to analyze customer satisfaction of online banking of any bank, then online banking user of the bank will be its population. Size of sample is directly related to the budget of the research and confidence that marketer want have in the finding of research.
Larger the sample, more the chances that sample size would represent the entire population.
Sampling procedure has two type of sampling:
- Probability sampling
- Non probability sampling.
In probability sampling each member of the universe has equal chance of being selected whereas in non probability sampling, the population under study the number of respondents are selected based on the researchers judgment.
Types of probability sampling:
- Simple random sampling: Every person in the population has an equal chance of being selected.
- Systematic random sampling: A member of the population is selected at random and then every nth person is selected.
- Stratified random sampling: The population is divided into mutually exclusive groups (age), and random samples are drawn.
- Cluster sampling: Population is divided into mutually exclusive groups (such as blocks), and then the sample is taken.
Types of non probability sampling:
- Convenience sampling: Most accessible members of population are selected.
- Judgment sampling: Researcher uses his/her judgment to select the members from population those can provide the accurate information.
- Quota sampling: The researcher interview a prescribed number of people in each of several categories (100 men and 100 women).
After successful sampling, the next step is data collection. In a qualitative survey, there is a requirement of the highly trained social scientist to collect data. In a quantitative study, field staff is recruited that specializes in conducting field based data collection.
Data is collected by using research instruments which are reviewed on a regular basis to ensure that research responses are clear, complete and legible.
Data analysis and research report findings
Responses are analyzed by the moderator/ researchers in the qualitative study. In quantitative study, researcher supervise the analysis; open ended questions are coded and quantified, then all the responses are tabulated and analyzed using sophisticated analytical software.
In both type of study, research report include executive summary of findings and recommendations for marketing actions.
The body of research report include introduction of the research problem, full description of methodology used, findings, and managerial implications of the findings. Research report also includes the recommendation to the reader based on the findings and current position of the company.
Marketing Management Topics
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