the-importance-of-marketing-research

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Marketing research and decision-making

Marketing research is the process of finding out information about the market in which a business operates by collecting, presenting and analysing information about customers, competitors and market trends

Reason	What it involves	Example
Check the firm’s current market position	Analyse market size, rivals, prices and customer share to see where the business stands	UK clothing brand Superdry used market‑share data to spot falling youth appeal before relaunching its latest range
Set suitable marketing objectives	Facts (e.g. spending patterns) help managers fix clear, realistic targets for sales, share or loyalty	Research on streaming habits led Spotify to aim for double‑digit subscriber growth in the UK
Choose the right strategies and tactics	Data from marketing research can pinpoint which product, price, place or promotional mix will work best	Customer‑location studies led Domino’s Pizza UK to focus new stores within a 10‑minute delivery zone
Measure success of marketing activities	Post‑promotional campaign sales figures, web analytics or customer feedback show if the plan hit the target and what to improve	After a new app launch, Costa Coffee tracked order and loyalty‑scan data to judge the ad campaign’s impact

Effective research can help a business understand customer needs and wants
- They can then ensure that the products, as well as the price and location at which they are sold, closely match what customers want to buy

Insight	Example
What do they want?	Cadbury tracked Facebook groups and YouTube comments where thousands of fans begged for the old Wispa bar Seeing a clear demand, Cadbury relaunched Wispa in 2008 — and sold 20m bars in the first seven weeks
How much will they pay?	A 2023 UK study found that Netflix subscribers would still stay if fees rose a little, showing that price elasticity was very low
How does promotional activity affect them?	Aldi measured weekly sales and social media sentiment during its 2023 “Kevin the Carrot” Christmas advertising campaign The data showed a sharp jump in festive food sales and a gain in market share, proving that the cartoon character drives shoppers into stores
Where will they buy the product?	Office for National Statistics (ONS) data shows online now makes up around 26% of UK retail sales Grocers such as Morrisons have adjusted by adding more home‑delivery slots.
When will they want products	Starbucks tracks autumn demand data and now launches its Pumpkin Spice Latte in late August because sales jump immediately
Why do they choose products?	A 2023 UK survey found 82% of shoppers will pay more for eco-friendly packaging, steering brands towards greener materials
What influences their buying choices?	A 2023 UK report by Traakr found that social media influencers now sway buying choices for half of 18–34-year-olds

Overall, effective marketing research can increase the competitiveness of a business
- Good marketing research helps a business spot customer needs before its rivals and target its products and adverts exactly where they will work best, so competitors find it harder to lure shoppers away

Marketing research data can be quantitative or qualitative
- Quantitative data is based on numbers
  - It could include financial reports (e.g. sales, costs), market data (e.g. markets share) or summaries of data gained from primary research (e.g. on a scale of 1–10, rate our customer service)
- Qualitative data gathers descriptions or explanations
  - These can be based on conversations, discussions, impressions and emotional feelings and are usually gathered through primary research

Limitations of quantitative data	Limitations of qualitative data
Numerical data may be out-of-date, especially in dynamic markets Data analysis and interpretation is a complex skill that is likely to be lacking in smaller businesses Looking at a small amount of data and then extrapolating results can provide wrong assumptions on which to base decisions Numerical data does not provide reasons for outcomes, e.g. data may reveal sales volumes are falling but not the reason for the decline	Bias may mean that analysts can interpret responses in a particular way Respondents may lack awareness or language skills to explain preferences accurately Respondents in focus groups may be influenced by the responses of others or not provide accurate information Qualitative data is difficult to present in graphs and charts, so it may not be easily understood

Limitations of quantitative data

Limitations of qualitative data

Numerical data may be out-of-date, especially in dynamic markets
Data analysis and interpretation is a complex skill that is likely to be lacking in smaller businesses
Looking at a small amount of data and then extrapolating results can provide wrong assumptions on which to base decisions
Numerical data does not provide reasons for outcomes, e.g. data may reveal sales volumes are falling but not the reason for the decline

Bias may mean that analysts can interpret responses in a particular way
Respondents may lack awareness or language skills to explain preferences accurately
Respondents in focus groups may be influenced by the responses of others or not provide accurate information
Qualitative data is difficult to present in graphs and charts, so it may not be easily understood