Welcome back. Have you ever wondered what motivates an organization or individual to consider market research? There are various motivations behind market research inquiries. We will cover those in this lesson. After we're done, you'll be able to discuss why someone might request market research and explain pros and cons of conducting research in-house or contracting it out. You'll also be able to describe situations in which market research should not be done. Let's get started. To me, market research is fun. It's a puzzle or mystery that needs to be solved. It's an opportunity to help someone in need. When a person or business is considering market research, it usually means something important is happening within an organization. It indicates that there is a high level of uncertainty. Employees or internal stakeholders either don't have the answer, or are not confident about the direction, or have biases. External forces and changes contribute to even more uncertainty. So, whoever makes a market research inquiry is on a quest for answers. Gathering useful and accurate information can be the key to break gridlock in an organization or department. Information is the key to unlocking the mystery and helping to solve an organization's problem. However, there are a lot of challenges and steps to getting to the answer needed to solve the business problem. There also could be many various answers. Market research often doesn't lead to a definitive answer. With that said, there are many considerations as to how to get the research done. It can be done internally or externally by choosing a trained market research person or organization. Why might they go outside for market research? Your organization may lack market research expertise. Surprisingly, despite being in an information world, market research has been a luxury position. Until recently, there just weren't many market researchers out there. That's changed. Many colleges and universities are now offering degrees in business analytics, big data, data mining, predictive analytics, applied statistics and computational mathematics. Even when a company has their own skilled staff, it sometimes makes sense to go outside in order to get a more objective viewpoint or approach. A market researcher may have less bias or be more objective than internal stakeholders might be. There are also good reasons to have internal staff conduct market research. Internal research can be a good option when there is expertise internally. There are also a lot of good tools out there that have helped non-market researchers conduct some market research. Here are some reasons or considerations for internal staff to do research. You should consider internal market research when; speed is an issue and staff requires little or no orientation on the issues or background, when bias or objectivity are less of an issue, when the organization has sufficient expertise internally thus making research potentially less expensive and quicker, but this is not always the case. And lastly, when internal research groups have additional information and insights on the organization. In such cases, internal research would have a high potential to deepen those insights and provide actionable recommendations. Deciding when to do market research or when not to do it deserves consideration, as well. While some may consider market research to be novel or magical, it has its place in the decision-making process. This also means that there are times where it just doesn't work. So, under what scenarios can it work? Market research can work when information is lacking that can be accurately collected to advance decision-making given its constraints, when market, economic or internal situations arise, well, having up-to-date insightful information will help advance decision making. In both cases I've emphasized keywords and phrases such as accurately, constraints and up-to-date. For example, accurately implies that it is possible to collect the sought after information that accurate information is available, but not all situations or experiments can be measured. One famous case was New Coke. That launch became renown as one of the most failed product launches of the past century. In the 1980s, the Coca-Cola Company was convinced that the taste of their new formula could better compete against Pepsi's slightly sweeter taste. The researchers spent millions on market research, they were certain that it couldn't lose. The taste tests were conclusive indicating that New Coke would be a winner. However, researchers and company executives failed to measure the impact of brand loyalty or what Classic Coke had on the taste. In this case, it wasn't a matter of resources, rather failure resulted from the inability to measure what couldn't be measured. There are also times when market research should not be done. Market research should not be used to manipulate a situation or unfairly influence a decision. For example, I worked with a politician who was young in his political career. The campaign manager wanted me to conduct a random sample of voters. However, the campaign wanted to use very loaded questions about his opponent. That would have been a misuse of market research. There are times when market research can work and therefore should be chosen. There are other times when market research should not be used as in the case of the politicians, people wanting to use market research to sway the media. Decision makers should carefully consider the appropriate use of market research in their organization's situation. As we wrap up, I hope you can now discuss various motivations behind the market research inquiry, explain why it may or may not be good to do market research internally or use an outside source. You should also be able to describe situations in which market research should not be done. This understanding of distinguishing when to use market research and the various options regarding how to approach it are part of becoming a market research professional who can advise her clients well.
