Marketing Research

     In order to achieve profitable customer relationships, marketers have to learn what their customers need and want. There are multiple ways of finding out this information using market research.

Exploratory Research is used to gather preliminary information that will help define a certain problem and offer suggestions to fixing it.

Descriptive Research is done to describe things such as how customers feel or what the opportunities are in a certain market 

Causal Research is used to figure out things like cause-and-effect relationships. 

For example, if I needed a way to lower expenses in my company, I would probably begin by doing some exploratory research to help define what the problem is and find what options I have to eliminate the problem. After doing this research, I may realize that the problem is that I pay my employees too much, and cutting their salaries might be an effective way of cutting expenses and saving the company money. Before just cutting salaries though, I would want to know how my employees will respond so I'm not left being the only person in the company. I will therefore do causal research to find out how people usually react to salary cutbacks in similar situations as mine, and then make a decision based on the results of this research.

What I am doing can essentially be divided into four different steps, which can best be seen by this chart:

While doing this research, I can gather different types of information. Primary data is information that is gathered specifically for the purpose of what I doing the research for. This includes things like surveys which are done now specifically for getting new information. Secondary data on the other hand, is information that already exists because it was collected for some other purpose. This includes information which can be found anywhere such as books and the web. In fact, there are commercial online databases which contain loads of information always available for use.

When doing primary research, the researcher has to make sure that the data he is collecting is relevant and accurate. There are a few different approaches for gathering primary data:
Observational Research- Attaining information by watching people and how they act in specific situations. An example of how this is used is when the Cleret, the famous, smartly designed squeegee was created. In 1989, an entrepreneur hired ZIBA, a major product design consultancy in the U.S., to design this tool used to scrub bathtubs, into a  tool which will be easy to use. ZIBA sent out a team of designers to literally shadow and watch how people cleaned bathtubs, studying the movements and gestures of the scrubbers. The observed to gather information, making use of observational research. They designed this squeegee based on this research, which not only ended up in the Smithsonian's permanent design collection, but also received an award for being the best-designed new consumer product.
Ethnographic Research- A type of observational research which sends observers to watch how people act in their natural environments. Nokia used this type of research to study the behaviors of consumers in foreign countries in how they use their cell phones. What's great about this type of research is that it produces true, honest information, as those being observed don't always realize they are providing the company with information.
Survey Research- Getting information by asking people questions about how they feel or what they know about something. This research approach is the most widely used method for gathering primary data. Many car rentals ask customers how their experience was with the car they rented and if they would rent again. This information is very valuable to the company, because it provides direct feedback from their customers. However, people can potentially lie or make up answers, or just ignore the survey altogether. That is a key difference between the value of surveys and ethnographic research.
Experimental Research- Gathering information by selecting groups and giving them different things, controlling the factors and checking for different results. This last main type of primary research is mostly used for gathering causal information. A restaurant might do this by charging different prices for the same sandwich in two different cities, and then seeing how the sales compare at the end of a month.

These are all ways of gathering primary data and using it to help create and maintain more profitable customer relationships. Companies use the information received to improve their products or services so that they are liked and desired more by customers.
The various ways of contacting the people you wish to interview are pretty straightforward: mail, telephone, personal interviewing, group interviewing (focus groups), online research, online focus groups, sampling,  questionnaires, and mechanical instruments.
Just to clarify: A focus group is pretty much when a small group of people (6-12) is selected to get together to talk about and express their feelings about a certain product or service. The interviewer's job is to focus the topics and questions, making sure to cover the important issues at hand. Sampling is when part of a population is selected for market research, which will represent the entire population or even the whole world.  (Probability sampling is a percentage or a calculable chance of something occurring, whereas non-probability sampling is just a random chance of something occurring). Questionnaires are the most common instrument used. They are very flexible in terms of the scope of questions that can be asked. Mechanical instruments include things like people meters, which are used for things like seeing how many people watch a certain channel on TV, all the way down to checkout scanners used by retailers to record purchases by consumers. 

The Marketing Environment

     As the environment is always changing, companies have to constantly be watching and adapting to it. If they fail to do this, they will fall behind and be left behind. A great example of a company that had this problem is Xerox. Xerox dominated the photocopy industry which it created, so much to the point that "xerox" actually became the term used for copying ("Could you xerox that for me?"). However, within an 18 month period, Xerox lost $38 billion in market value. Why? Because Xerox failed to adapt to the changing environment. Technology was transforming everything into digital, but Xerox wasn't keeping up.
    Eventually Xerox made its way back up and is once again growing and profitable, after making many changes in the company. But the point is that no matter how profitable and successful your company may be currently, if you fail to adapt to the environment, your company will be lost.
      The marketing environment consists of everything that affects a company's ability to maintain profitable relationships with consumers. It is comprised of the microenvironment and macroenvironment.
Microenvironment- The company itself, suppliers, marketing intermediaries, competitors, publics, and customers. All of these groups of people directly affects a company's relationship with its customers one way or another.

Macroenvironment- The macroenvironment is comprised of many factors:

1. Demographic- These are factors of human population such as age, gender, density, location, race, and occupation. Knowing the details and demographic factors of your customers is more than beneficial to your company; it is crucial. 
2. Economic- The financial situation around your company.
3. Natural- The natural resources or natural environment.
4. Technological- The forces that create new technologies, also creating new products and markets.
5. Political- Laws that prevent or only allow certain things.
6. Cultural- The values, behaviors, and perceptions of a certain society.

Each of these forces impacts the way a company performs. Take technology for example: The United States is clearly a lot more technologically advanced than so many other countries, as the U.S spends an enormous amount of money on researching the latest technologies. In 2009, the total spent on Research and Development (R&D) by the U.S. reached $367 billion. This not only impacts business in America, but has an effect on any business doing business in America. They have to know that there are major technological differences than from what they may be used to, and have to understand how to adapt to them.