What is Marketing Research?

Businesses of all sizes are constantly seeking information about their
customers, their competitors, and the market environment in which they
operate. Marketing research is basically the gathering of this data.
However, all "gathering of information" does not qualify as marketing
research.

     The American Marketing Association defines marketing research as the
"systematic and objective approach to gathering marketing information which
-- when processed, analyzed and interpreted -- will help identify problems
and opportunities that allow for better-informed, lower-risk decisions."

     The key to this definition is that the information is gathered,
processed, analyzed and interpreted in a systematic and objective fashion.
Marketing research stresses how the information is obtained and evaluated
as much as what is actually gathered.

     At first thought, it might not seem too difficult to obtain marketing
information. For example, the owner of a video store might ask some
customers whether they would rent more movies if the price was reduced by
$1.00. Using this feedback, the owner might decide to reduce the price,
increase the number of rentals and, overall, make more money.
Unfortunately, the people queried may not be typical of all customers. Even
if the owner was lucky enough to talk to a representative sample, how does
he or she know that the customers are telling the truth or that they will,
in fact, rent more movies? This instance of collecting marketing
information lacks the objectivity and uniformity necessary to be classified
as marketing research. The owner in this case may, in fact, lose money by
acting upon it.