What Is Consumer Research?

Consumer research, sometimes known as market research, is the investigation into the driving forces behind customer behavior, consumer psychology and purchase patterns. Consumer research falls under marketing activities, as well as in higher education under business psychology or sociology. Consumer research is focused on obtaining objective information through statistical sampling to help businesses craft products and advertising that increase sales and profitability.

Function

Consumer research functions as the foundation of many marketing departments. The information gathered through consumer research helps provide feedback on products, marketing campaigns and future products or services. Marketing executives rely on the results of timely and effective consumer research to make both day-to-day and long-term strategy decisions. The results of consumer research also help to determine the most effective use of advertising and marketing dollars in a budget.

Methodology

The methodology of consumer research is systematic in its approach and quantitative in nature. The most basic consumer research uses statistical sampling for accuracy. The most common method used in consumer research is surveys. Surveys can be targeted to specific customer segments or can be more global in focus, depending on the information needs of the business. Other common methods used are focus groups, customer interviews and customer-facing employee interviews.

Types

Consumer research can take different forms such as ad tracking, brand research, consumer satisfaction research, segmentation research, marketing effectiveness research, purchase patterns, consumer needs and concept testing. All types of consumer research attempt to draw conclusions from customer behavior and use the knowledge to help improve marketing activities. For example, segmentation research could indicate that a specific age group makes more purchases of a particular line of products. Targeted marketing campaigns could in turn enhance sales to this age group.

Results

The results of consumer research can indicate potential problems, highlight needed changes, help determine new products and services and help develop advertising strategies. At times, the results of customer research can be ambiguous, and additional targeted research may be necessary. In higher education, research results are aimed more at understanding large patterns of consumer behavior, and the results are general in nature.

Considerations

Companies must consider the trade-off between customer research and the economic benefit to the company. For some businesses, customer research can be accomplished through ongoing dialogue with customers. Other businesses may need larger consumer research expenditures to understand their customer's behavior. Marketing departments can make these decisions mathematically through return on investment (ROI) analysis. ROI analysis shows the amount of profit returned for marketing expenditures and can help justify spending.