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What is market research? It is important to define clearly what we mean by market research, because this term generally encompasses many types…
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It is important to define clearly what we mean by market research, because this term generally encompasses many very different types of studies. Some studies are primarily descriptive and cover very broad global sectors, while others focus on a country, a region or even a very small geographical area such as a city. There are also more forward-looking studies that start with very broad figures and emphasise the dynamics of markets, their growth and short- or long-term forecasts.
These studies are generally divided into several categories: studies that track a market, often called “market monitoring”, quantitative studies and qualitative studies.
Market monitoring makes it possible to understand and track a market’s size and development, identify the main players, compare companies in terms of market share, growth and profitability, and understand competitors’ positioning, their offerings and their target customers.
The aim is to measure and anticipate the major trends in a market, its growth in volume and value, its geographical distribution worldwide, by major region and by country. It also involves defining a market’s structure by type of consumer, age group, gender, socioeconomic category and income level. The term used in English-speaking countries for this type of study is benchmarking.
This type of study generally provides an overall view of a market.
Another major category of studies, known as quantitative studies, involves analysing data. Statistics underpin the interpretation of data collected either through surveys using questionnaires sent to representative samples of consumers or through telephone surveys. Increasingly, data is obtained by processing “big data” collected on social media and across the web more generally. These consumer studies aim to understand consumer behaviour, identify major consumption trends and guide the development of new product offerings.
Finally, qualitative customer studies based on interviews with a representative sample of consumers brought together in groups, or on individual interviews, pursue the same objectives as quantitative studies. They help to understand and measure how satisfied customers are with a product or service, so that it can be improved and differentiated from competitors’ products.
A great many public and private organisations conduct market research.
Public authorities (ministries, government agencies and regions) need a clear understanding of how their country’s main economic segments work to help them introduce the most appropriate economic policies.
The many export promotion organisations, such as economic development offices abroad and chambers of commerce, conduct or commission numerous studies of the markets targeted by French companies’ exports. These are either very general studies, often available free of charge, or targeted studies, which usually carry a fee. Prices are much lower than those charged by research firms.
The role of trade federations and professional associations is to inform their members about developments in their own market, so they conduct market research very regularly using data collected from their members.
Universities and business schools have their students carry out market research as part of their courses to prepare them for working life. These studies are generally conducted by the students themselves or by student-run consulting firms.
Finally, corporate marketing departments and strategy consulting firms and marketing consultancies are probably the biggest users of market research for their own needs. Once conducted in-house, these studies are increasingly outsourced to research firms, where professionals specialising in this work use their own methodologies to produce higher-quality studies at a lower cost.
Many public bodies and professional organisations have a remit to publish market statistics. These studies and information were previously produced by specialist units within these organisations’ documentation departments. Over the past several years, however, this work has become more professional and more complex, particularly with the emergence of the internet. Gathering information available on the web, sorting it and verifying it requires complex skills that not all these organisations can master. Many now outsource the production of these studies to specialist firms whose staff include economists, statisticians and web specialists.
The main buyers of market research remain businesses, bankers, lawyers, chartered accountants and consultants.
When drawing up their marketing and product plans, companies’ marketing directors and managers need to understand the potential of their target market and establish a strategy.
To save time and gain credibility, they support their internal figures with figures and analyses from independent experts.
The management teams of SMEs, and entrepreneurs buy studies when they want to:
Finally, business consulting firms need figures to prepare for meetings with prospective clients, and they need them very quickly. They need to know and understand the prospect’s business environment in order to propose an assignment that adds value.
Many sources are available for conducting market research. Most can be found online. The challenge is not so much finding sources as validating, cross-checking and interpreting them.
Determining a market’s size is not always easy. The press often publishes headlines about market size without defining the exact scope, or provides broad global or national figures with little detail. In many cases, the figures reported are unusable. For a figure to be meaningful, it needs to be compared with other figures and validated by several sources. The work of market research firms consists in particular of determining the size of markets or market segments through research and data collection, but above all through comparison, analysis and reflection by professional analysts.
Sources of information needed to conduct market research include international economic observatories and international organisations, the UN, the customs authorities of different countries, and international or national professional associations, which collect information from their members.
Public authorities also collect a very large amount of data that companies are required to provide through paper questionnaires and, increasingly, over the internet. This data is processed, and much of it is published on the websites of the bodies concerned. A very important source for the collection and dissemination of information is the Banque de France, for which this is also one of its responsibilities.
Trade federations, professional associations and chambers of commerce have a duty to inform their members about developments in their own market, so they conduct market research very regularly using data collected from their members.
The business press naturally provides a great deal of market data, but this information generally comes from other sources, which are usually cited. It is always preferable to refer to the original sources of information rather than reuse information reported by newspapers.
Very detailed and relevant sources, which are often surprisingly underused, include the annual reports of companies listed on stock exchanges around the world. Stock market regulations generally require companies to publish not only their accounts but also very detailed information on the markets in which they operate and on their competitors. Using these sources requires a great deal of reading and research through very long, detailed reports.
The prices offered by market research publishers vary enormously. It is not uncommon to find studies with the same title at very different prices, ranging from around €100 to several thousand euros. These differences, which are not always easy to explain, probably account for potential buyers’ reluctance to spend several thousand euros on a product whose contents they struggle to understand.
To overcome this obstacle, most market research publishers make the study’s outline available to read directly and free of charge, and even allow customers to read the opening chapters of the study’s introduction directly online.
Many buyers spend several thousand euros and feel cheated. Having bought once, they become very reluctant to purchase other studies, and these practices greatly limit the size of the market research market.
This also explains why well-established companies with strong name recognition are few in number.
The situation is different in English-speaking countries, where people are more accustomed to paying specialist institutes to conduct market research.
The large companies, banks and major consulting firms have internal departments that charge the company’s various entities for their services. This approach to producing studies in-house generally yields good-quality studies, but their hidden cost is very high, as they have to be carried out by highly skilled managers whose hourly cost is very high. These departments generally cannot charge the full cost of their studies, as it would appear too expensive. They therefore increasingly turn to specialist firms.
Adding up the time spent researching information sources, reading and analysing the information, and putting it into a presentable form, the work takes between 8 and 20 days, representing a full cost of several thousand euros.
Major market research firms charge between €1,000 and €5,000 for studies in their catalogue, which they update every 1 or two years. They also produce customised studies, preparing quotes for each one based on the time expected to complete it.
In recent years, a new kind of market research firm has emerged in the French market. Businesscoot is the first French publisher of low-cost market research, founded in 2015 by Aymar Monnoyeur, aged 33, the former head of digitalisation at a major French company.
More than 1,000 studies are available online immediately or within 5 working days at a price of €89 excluding VAT. A digitalised production process and a highly innovative methodology make it possible to produce studies of a quality comparable to those produced by traditional research firms at an extremely low price. Businesscoot also produces customised studies at a similarly competitive price (€400)