But, in reality there are several methods of research. In this post I will give a quick run-down of three methods and a quick guide on which to choose when.
In a small market when the incremental benefit/profit from the research findings for your organization may be limited, it is important to make the right choice. It is also important to know in advance how you are going to use the data and to make sure you have the resources to use the findings.
3 Basic Market Research methods
- quantitative research - mostly to measure in a numerical way. The result will be a score, a ranking. It will reflect issues such as frequency, (average) amount of usage, market share, preference.
- qualitative research - mostly to explore the breadth of opportunities, innovative ideas, possible service improvements, possible next trends. This can be done through questioning or observation (looking at how exactly customers use a product).
- desk (secondary research) - using existing data, public or private, local or international to extrapolate, draw inferences and make forecasts.
When to use quantitative research?
- when you already have some relevant specific information. For instance, if you already know what guests find important in a hotel (the core values), you can then measure how your hotel scores with regard to those core values.
- when you plan to do the same research regularly in the future. For instance, if you are going to invest in customer service training, you can measure over time if and how much this has improved service. Or, if you plan to increase your rates, you can measure, over time, how this affects your occupancy and guest satisfaction and perhaps that of your competitors.
- when producing a number, a score or a rank is important because "the boss" wants to see a number or the organizational culture expects to see a number. That's a quite valid reason.
When to use qualitative research?
- When you have no information at all. For instance, you have no idea how and based on what people choose a hotel, restaurant or car rental. Sometimes the reasons customers act the way they do are by no means obvious or rational.
- When you want some customer insight, feedback, suggestions, ideas with regard to innovative product or service improvements, branding, pricing.
- When you really want to understand the customer's deeper thought processes. Qualitative research is most often an interactive conversation, sometimes in a group. Ideas, reasons, perceptions and preconceptions can be challenged, probed, explained further, enhanced, struck down. As markets become more saturated, it is the deep understanding of the customer's motives that provide ideas as to how to target the customer better. Knowing this well and being the first to know, provides a competitive advantage.
When to use desk research?
- when you are in the orientation or initial phase of a new product or service idea. Often you have no information at all. And, since you are not sure whether the idea will fly, you may not want to make a large investment.
- When you know that a lot of data is already available, locally or internationally. You can always draw preliminary conclusions based on data that is not your own. The Internet is a tremendous help for you (and both a colleage and a competitor for us). An often overlooked source are market research agencies. They have insight into many industries based on previous work. Yes, MarkStra does too, especially with regard to (alcoholic) beverages, health care and pharmaceutics, banking and Caribbean markets in general.
- When, quite simply, you don't have the budget to collect your own primary data.