It is widely recognised in today's business environment that information is a commodity more valuable than time or even money. Businesses that fully understand the benefits of intelligence gathering will be the ones that thrive as they create and sustain a vital competitive edge.
Information comes from the data a business generates, collects through its normal transactions or has access to from external sources. But data becomes information, and ultimately knowledge, but only when it is properly interpreted and understood.
Businesses that conduct market research improve their competitive position through more informed decision-making. Strategies may be fine-tuned, ensuring the deployment of appropriate tactics to achieve objectives. For example, Toyota became one of the world's most successful motor manufacturers by concentrating its research solely on its customers on the basis that, firstly, they are more likely to buy a new Toyota; and second, they are uniquely placed to know the good and the bad features of the cars they are driving.
Any business that has not considered research or has no plans for an information process strategy risks finding future trading conditions difficult. Marketing research in its widest sense informs planning and decision-making at every level of an organisation. It's the key to discovering why people buy things and provides the ability to probe deeply into people's beliefs, awareness, intentions, needs, attitudes, ideas, aspirations, motivations and self-image.
A better understanding of customers facilitates:
Information you acquire from the marketing research process contributes to your marketing in four vital ways by:
There are two main methods of gathering business information – secondary and primary research – and two fundamentally different types of business information – qualitative and quantitative research. Secondary research should always be instigated before primary research. We use secondary research to glean information from a company's own records and published sources. Primary research – usually interviews, surveys, focus groups, questionnaires and on-going panels – is designed to answer specific questions and tackle particular problems or opportunities.
Which methodology to employ must be given serious consideration. The effect of the research medium on the possible outcome needs to be taken into account alongside likely response rates and the costs involved. Options include:
Qualitative research answers "why" and "how" questions and uses methods such as group discussions and in-depth interviews and investigates attitudes, beliefs and motivations. Quantitative research answers the "how many" questions, and is more likely to use postal surveys, panels, and telephone and face-to-face interviews.
Perhaps the most common mistake businesses make with market research is simply not bothering to do any at all. For those convinced of its value, here are some of the most common pitfalls:
Above all, remember, all marketing decisions (if not all decisions) should be based upon experience, instinct and facts. With the insurance sector making increasing use of customer relationship management programmes and loyalty schemes, understanding of customer and prospect behaviour is at a premium. That's why research plays such a vital role in today's marketing mix.