What is Marketing Research?

The American Marketing Association defines marketing research as follows:

Marketing Research is the function links the consumer, customer, and public to the marketer through information – information used to identify and define marketing opportunities and problems; generate, refine and evaluate marketing actions; monitor marketing performance; and improve understanding of marketing as a process.

Marketing Research specifies the information required to address these issues; designs the method for collecting information; manages and implements the data collection process; analyzes the results; and communicates the findings and their implications.

What kinds of Research are undertaken?

Every five years the American Marketing Association surveys companies to identify the kinds of marketing research they undertake. In the most recent study 124 industrial companies and 143 consumer product companies reported the following usage of marketing research.

1. Practically every company (99 percent) used marketing research to measure market potentials, characteristics of their markets, and their share of markets.
2. More than 95 percent of the companies undertook marketing research to obtain information that could help them make short range and long range forecasts.
3. More than 90 percent of the companies used marketing research to evaluate new- product opportunities and acceptance, and to test existing products relative to competitors’ products.
4. Approximately three fourths of the consumer products companies and more than half of the industrial companies undertook some form of marketing research to help them make better advertising decisions.

A 1987 survey of 84 of the largest companies marketing products and services to consumers revealed how they made use of marketing research. Table below shows the percentage of companies that reported using marketing research for nine different applications.

The first three applications are concerned with identifying and developing new products. Two thirds or more of the companies reported using marketing research for all three of these applications. Almost all companies (95 percent) undertake some kind of new product evaluation or screening and 82 percent use consumers to test new products.

The fourth and fifth applications are concerned with test marketing new products, and slightly more than half of the companies reported using research for such purposes.

More than 90 percent of the companies reported using tracking studies (application 6) to measure month to month changes in a brand’s market share or usage rate. Such information is needed to evaluate the effectiveness of marketing activities and / or to call attention to the presence of a potential problem.

Most companies use research for the last three applications, which are concerned with testing advertising and evaluating marketing strategy. Both advertising copy and marketing strategies were research by more than 80 percent of the companies participating in the survey.


Percentage of Consumer Companies using Marketing Research for various Applications:

Application Percent of companies using
Marketing Research

New product screening or new concept
Evaluation 95
Product optimization or product design
Studies 65
Consumer product testing 82
Test marketing of new products in
Laboratories 54
In-store, test marketing of new products 51
Tracking studies to measure brand
acceptance or usage 92
Advertising pre-testing or copy testing 83
Advertising campaign testing 61
Basic marketing strategy studies 82