Modern market research, as we know it today, began in the 1930s with the presidential elections in the USA. The magazine "Literary Digest" had written in the election that the Republican challenger Alfred Landon was ahead. The magazine had conducted a broad-based survey of the population.
The prediction was wrong and cast a shadow over the prestigious publication. The incumbent President Franklin D. Roosevelt remained in office. The then young "American Institute of Public Opinion" had predicted the actual final result by a few percentage points through the social researcher George Gallup, who was later regarded as the founder of market research. And with far less effort than a poll.
Gallup did not launch a mass survey, but instead used a new method. They only surveyed a few tens of thousands of people, but selected them very precisely according to age, gender, education and profession. This panel corresponded to a realistic average of the American population and the result was therefore more precise than the random survey of tens of thousands of people. Today, Gallup is still one of the leading opinion research institutes in the USA and works for institutions and companies.
Representative instead of mass
The magazine's misjudgement during the presidential election and the new Gallup method fundamentally changed market research. The representative sample was regarded as the new standard and put an end to straw polls.
After the Second World War, market research was no longer just about political predictions; companies also wanted to find out more about their customers and consumers. The economic miracle made companies curious and they wanted to find out how they could boost consumption and consumption. University teaching also began to focus increasingly on market and opinion research.
Social media changes the playing field
These written and oral interviews were eventually replaced by the telephone, which until then had been considered representative and was used as the main instrument of market research until the 1990s. At the end of the nineties, online surveys were used for the first time. Social and market researchers quickly began to adopt this new communication technology because it was cheaper and involved less effort. With the advent of Facebook and the like, the playing field changed again. Market researchers no longer had to ask everything from scratch in their research; instead, people expressed their own consumer habits or political views on social media.
But even there, there were distortions - due to duplicate or fake accounts, for example. Nevertheless, social media still makes a significant contribution to market research today. Online market tests of new products are also popular. Customers can comment on a new product online for the first time and before it is launched, allowing the company to avoid a potential flop that fails to meet customer needs and to adjust the product if necessary. Can the company convince consumers? How big is the potential in the market? And what is the optimum price?
Bridge between companies and consumers
The main aim of market research is to get in touch with consumers and identify their needs - in order to create demand for a new product. There are five key elements that market research uses to achieve this:
- Suggestion: Initial impetus for marketing budgets
- Forecast: How will the market, retailers and consumers change?
- Evaluation: Alternatives are shown to avoid uncertainties
- Control: Market research and marketing work hand in hand
- Selection: Information from the offer and the product is determined
Market research is primarily conducted to gain time and make the right decisions. It is also about justifying marketing expenditure by means of market research and using it as an argument for budget items. Increasingly, market research results are also being used as a tool for consumer habits and for PR campaigns by companies. Through market research, a company can make a statement about consumer habits and use this as an argument for the use of products.
Market research for the consumer
Today's consumers are critical and want to form their own opinions about products. They are therefore quicker than before to see through marketing's attempts to seduce them and are looking for purpose, sustainability and traceability in consumer products. Market research must therefore increasingly assume that consumers are informed and therefore self-confident and mature.
This consumer society is pushing market research to its limits. The mechanization of market research is a key factor here: online surveys have increased significantly and led to the population being flooded with such surveys. This, in turn, has led to a declining willingness to participate in such online surveys for years. Those who conduct them must offer users added value and give them the feeling that they can actively participate in the development and launch of a new product.
With the omnipresence of social media and the new possibilities of Web 3.0, consumers have a greater need than ever for direct communication. Their consumer behavior can no longer only be evaluated by means of market research, but consumers give direct feedback on online platforms and social media and seek direct exchange with companies. Influencers today represent the purchasing and consumption habits of many and give companies the opportunity to communicate directly with their target group.
Customers express themselves on social media
Due to changes in data protection laws, market researchers must approach customers directly and inform them that their data will be used for market research or advertising purposes. Online users can decide for themselves whether they want this or not. The creation of clearly defined samples is therefore essential in order to limit the group of respondents.
Surveys conducted by such panels are also gladly rewarded today. However, the importance of online surveys in the market research portfolio will continue to increase in the future, allowing more data to be collected on consumer behavior. This will be at the expense of telephone surveys or direct feedback on the company.
For market research agencies, this more direct contact means that they need to be active on social media platforms and present on various channels. In future, market research will have to enter into much more direct dialog with users and offer them the opportunity to express their opinions on various channels.
Clear trends can be identified for the future of market research:
- Crowd research: If you approach a large crowd online, you save costs and get a broad opinion from a wide range of users.
- Social listening: The reach of social media is increasing and shows the opinions of consumers through comments and likes. This data is also increasingly being analyzed using artificial intelligence.
- Natural language processes can read and decipher language and evaluate it using AI. This can reduce the time-consuming reading of social media evaluations or rating portals.
- Emotive research is one of the biggest trends in market research at the moment. It aims to find out how people feel about a product using facial recognition. Test subjects are brought into direct contact with the product and exposed to a user environment.
- Qualitative online research was subject to a certain amount of skepticism for a long time. However, the coronavirus pandemic and the resulting lockdowns have prevented personal contact with a focus group and there was no choice but to conduct qualitative research online. This has led to a rethink about quality and value.
- Online communities make it possible to research a constant number of consumers over a longer period of time. Behavior can be analyzed with engagement tools and the test subjects can be tied to the research by means of tracking.
- Thanks to new online tools, consumers can now navigate their way through a market research process independently and take it into their own hands thanks to user-friendly instruments. This independent conduct of market research surveys by users means that a larger number of surveys can be carried out.
The possibilities of online market research will be even more sophisticated in the future and will be able to evaluate user behavior directly and in real time. Users can be surveyed directly, but their activities on social media can also be analyzed in the background. Easy-to-navigate tools will also allow more usability tests of new products to be carried out online in future.
This enables cost-effective and timely market research that can have a direct impact on the development of new products. This mix will enable online market research projects to be even more powerful and accurate in the coming years.
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