Companies use data analytics, surveys, focus groups and other research methods to gauge consumer sentiment and measure market conditions. In addition, they use performance metrics to make production, distribution and sales decisions.
When correctly interpreted, accurate research results can pay off in competitive advantages, higher profits, lower costs and reduced risks.
On the other hand, organizations that bungle their research can suffer reputational damage, loss of customer loyalty and tens of millions of wasted dollars. Among the biggest research flubs of all time are:
- New Coke. Coca-Cola Co. market researchers conducted more than 200,000 taste tests, which confirmed internal beliefs that customers preferred New Coke to its classic formulation. What the research did not measure, though, was consumer sentiment when told they would not have a choice. It was New Coke or no Coke. The company spent $30 million on New Coke, and it bombed. Three months later, it revived the old, familiar recipe as Coca-Cola Classic.
- 2012 London Olympics. The London Olympic Committee hired a design firm to create the games’ logo; it wanted a symbol that resonated with a young demographic of 11- to 20-year-olds. While that market segment was incredibly enthusiastic about the Olympics coming to England, it hated the logo. Most complained that the design was outdated and reflected nothing about the host city, the United Kingdom or British culture.
- Kodak. The photography company’s research in the 1980s noticed a change emerging in its market — digital photography — but the company ignored what research showed. It did take a run at making a digital camera but abandoned the idea because it would not support sales of two core products: film and photographic paper. In 1996, Kodak controlled two-thirds of the global photography market. Six years later, it filed for Chapter 11 bankruptcy.
“Even some of the world’s strongest brands, such as Coca-Cola, Pepsi, Coors, and McDonald’s, have fallen victim to incomplete or poorly thought-out market research. Other companies, such as Kodak, did a lot of things right but failed to acknowledge the reality of the research,” according to TraQline.
What Are Different Business Research Methodologies?
In addition to market analyses, businesses use research processes to analyze finances, brand messaging, product performance, risk management, competition, consumer demand and distribution.
Those research methodologies — including qualitative and quantitative and primary and secondary methodologies — are incorporated in the Master of Business Administration with a Concentration in Strategic Communication offered online by Southeastern Oklahoma State University.
Fundamental practices are covered in its Research Methods course:
- Quantitative research typically involves statistical analytics, surveys and literature.
- Qualitative research is less data-intense than qualitative methods and includes interviews, case studies and demographic, ethnographic and psychographic research.
- Primary research involves collecting new data through surveys, interviews and observations, among other techniques.
- Secondary research comprises sifting through existing information to develop new insights and understandings.
“Such information allows the business to strategize and create more effective marketing plans that resonate with the target audience,” Voxco, a business research agency, says.
How Does Research Help Define the Target Customer?
When doing business research, some tools and methods help you establish the market for your products and services.
A good first step in market research is considering your ideal customer. This can involve a quantitative process of compiling information on that customer’s persona based on data points such as age, marital status, income and social status. Market research can also involve a qualitative process conducting consumer interviews and focus groups. For example, if you are selling a weight loss program that guarantees results in six weeks, your qualitative data might suggest you target middle-aged, recently divorced men considering online dating. Qualitative data can help you uncover reasons and behaviors for a particular target market.
Surveys on social media platforms and online analytics can help better understand the demand for your product. Your research might suggest that your prime demographic is younger men or women. One way to find out would be sponsoring a link on a fitness Facebook page or dating website that goes to a survey.
“Determining the quality of your leads seeks to find the how and why behind the purchase,” according to Chron, an online business publication.
Learn more about Southeastern Oklahoma State University’s online Master of Business Administration with a Concentration in Strategic Communication program.