As a rule, it is generally expensive to collect primary data. That is why firms with smaller budgets generally resort to accessing secondary data and extrapolating conclusions from them.

Observation

Observation is best to use when trying to answer questions involving how a market behaves. Thus, observation works for situations such as the following:

• identifying which section of a supermarket a shopper typically visits first;
• finding out how much toothpaste a consumer applies to his toothbrush per use; and
• determining how long a type of customer typically stays in a quick-service food outlet.

When questions are pertaining to how consumers actually behave, direct observation can offer deeper insights about finer behavioral details that the consumers themselves may not be aware of or may not be able to properly elucidate if they were being subjected to more popular research methods such as in-depth interviews or surveys.

Market research firm Mustard has put online a number of videos that document its observation research into shopper behavior. Their method involves having a camera follow a shopper as he or she does grocery shopping, after which the shoppers then sit down to view the footage and to directly explain what was going on in their minds. Among the findings (that would otherwise not be discoverable via other research methods): shoppers consider loose-leaf vegetables as “fresher” while those in plastic shrink-wrap are not as fresh, shoppers do not even look at the prices when they are set on purchasing a particular brand, and that colors of packaging can influence the choice of what products to get. (Mustard 2010)

Survey Research

Survey research is best to use when trying to determine a market’s opinions, perceptions, and basic demographic data. Surveys are best for situations such as the following:

• identifying discrete factual data such as the person’s age, gender, level of education, place of residence, occupation, hobbies, etc.;
• knowing a person’s opinions about a particular product; and
• determining a person’s likes and dislikes.

Note that while it is also possible to use a survey to ask questions such as “Which section of a supermarket do you visit first?”; “How much toothpaste do you apply per use?”; or “How long do you typically stay in a fast food outlet?” consumers simply resort to guessing. Therefore, the proof is in their actual behavior. In other words, observation is still best for these types of issues.

Surveys are the principal vehicle for conducting quantitative studies. In other Words, if you are after statistically significant findings, then a well-designed survey with answers that lend themselves well to data processing (such as via the use of multiple choice reRDonses or numerical responses) may be the most practical recourse.

A word of caution: when asking consumers about what their preferences are, take their responses with a grain of salt. This is because consumers do not often really know what they want or are prone to respond with the answers that they feel are acceptable rather than how they really feel.

A major ketchup maker kept getting complaints about its bottle, so it made a survey. Most of the people interviewed said they would prefer another type that the company was considering. When the company went to the expense of bringing out this other bottle in test markets, it was overwhelmingly rejected in favor of the old bottle, even by people who had favored it in interviews. (Packard 2007) Focus groups are useful for gathering strong opinions and beliefs from a given target market.

Focus Groups

Focus groups are actually a subset of survey research except that, unlike surveys which tend to be composed of individual opinions, focus groups are composed of a set of people (belonging to the same target market) who are placed together in a closed, controlled environment to discuss a product or issue with a moderator. The idea here is that by getting the group to discuss and critique their own opinions, the resulting answers to questions would more reliably reflect their reality as compared, to answers obtained via surveys or interviews.

The downside, however, is that focus groups tend to reinforce any commonalities in the group’s opinions, leading to “sensationalized” findings. Moderators of focus groups should therefore be skilled in analyzing the entire process in order to weed out questionable findings and extract information properly. To this extent, a key critique about focus group studies is that its output and quality is too dependent on the skills of the moderator.

Experimental Research

Experimental research is a means of answering a hypothesis through the use of an experiment. While the bulk of Philippine market research efforts typically gravitates toward the use of surveys and field interviews, experiments are an under-appreciated method for validating issues of causality.

Example

Situation: in the 1950s, Nescafe was struggling to sell instant coffee because the American market refused to buy and instead preferred to brew their coffee.

Hypothesis: Housewives were afraid that . they would be perceived differently if they bought instant coffee.

Experiment: A sampling of housewives was shown two almost identical shopping lists. Among the items on list #1 was brewed coffee (Control). But on list #2, it was instant coffee (Experiment). The respondents were then asked to describe the type of person who made each list.

Result: The person who made list #1 was perceived by the respondents to be a typical industrious, loving housewife. But the person who made list #2 was perceived to be lazy.

Interpretation: Women resisted buying instant coffee because they were afraid that they would be perceived as being lazy if they did so. This was a particularly poignant insight given that, back in the 1950s, American women were expected to be dutiful and industrious housewive’s. (Steinman 2009)

Solution: Nestle launched an ad campaign emphasizing that housewives should buy instant coffee because the time saved by not having to brew coffee means more quality time for their families. The subtext of this message was that it was perfectly acceptable to buy instant coffee because you love your family. It worked. Instant coffee sales zoomed from then on.