THE THEORY OF MARKET RESEARCH
In the 1920s, market research started tentatively by getting people to predict the outcome of elections. It was one way to understand people’s voice.
Let us see how successful that effort was.
In 1936, the electoral race between Roosevelt and Landon took place. The polls in the Literary Digest magazine had predicted that Landon would win the election. The insights were gained by sampling nearly 2 million people whose names were collected from telephone registries and car dealership stores.
Of course, in the 1920s, market research was not so advanced or trustworthy.
Out of 2 million wealthy people, who voted in the Literary Magazine’s poll, many disapproved of Roosevelt.
The stats were based on the sampling frame of a considerable size of the population, but none of them were from the poor or working or middle class.
This is the reason why data went wrong because Roosevelt won.
Not only this, by strategically using the data of the rich people’s mindset, and to therefore subtly encourage people to vote for Landon, it was evident that the 1936 polling was biased.
The roots of market research have been found in the statistical blunders of 1936 polls, which have been a significant component of study on how ‘not to sample.’
The ‘Now’ Scenario
Nowadays, the theory of market research is integrated with understanding consumer choice.
Sometimes market research helps you build a model for the future, giving rise to disruptive innovation in companies like Google.
In start-ups, market research is used side by side to adjust the product as per the consumer desires. Majority of entrepreneurs take the middle ground by balancing creativity and analytic rigor with practical on-ground realities of their customers.
E.g. Avnish, with co-founders, launched an online jewelry store even when e-commerce had not taken off in India. Today Caratlane is the biggest online jewelry company in India, recently opened the 6th store in Bangalore and 39th in the country. This is a clear example of a start-up using on-ground market research with the correct target audience to arrive at a viable business model.
However, there are many cases of poor application of Market Research tactics as well. Gauging the online activity of the consumer can hardly be considered market research.
Technology has changed the ways of analyzing market realities, but the buck does not stop with digital tools.
As market research experts, we need to be able to avoid mistakes like surveying only the people we know, using only secondary research or only using online websites to conduct our research.
Technological tools may help you with market research because they are far less intrusive and far less rushed. But relying only on them to figure out the correct ground reality is flawed.
Get professional help to assist you in performing more in-depth market research. It will pay off in the long run!
Aishwarya Khanna works in Alchemy Corporate Communications ,Content writter