What Is the Meaning of Market Survey?

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Organizations use market surveys to gain knowledge about their customers.
Organizations use market surveys to gain knowledge about their customers. (Image: thinking person image by amlet from Fotolia.com)

A market survey is a tool used to gather information about existing or potential customers in a certain market or population. Researchers select a sample of customers from the population. The information from the survey is then used to assess attitudes and beliefs, and in turn predict market behavior, such as buying intentions.

Survey Design

The survey design process incorporates a set of objectives based on what an organization would like to know about its market--for example, to identify customers who would pay extra for a new feature. The objectives dictate the best format to use and what questions ask. The target population can be a new market, or it might include existing customers.

Existing customers are easier to interview than potential customers, since they are tracked easily. Existing customers are more likely to respond to complex questionnaires since they are invested in the product.

Tracking down potential customers requires the use of secondary research, such as demographics, to determine whom to interview and how to reach the respondents. Lower response rates are factored into the survey design.

Techniques

Interviewer-led surveys include telephone and face-to-face interviews. These methods require trained interviewers who ask questions in an unbiased manner. Response rates are generally higher and interviewers can clarify questions.

Self-administered surveys include mail-in and online questionnaires. Respondents complete a questionnaire without the assistance of an interviewer. They are not subject to interviewer bias. However, the researcher has less control over who responds, and response rates tend to be lower than with interviewer-led techniques. Questions require clear instructions.

Types of Questions

Questionnaires can include fixed-alternative or open-ended questions or a combination of them. Fixed-alternative questions work well for simple responses. They are easy to administer and analyze. However, researchers need to know the responses in advance. Researchers can include an “other” choice, with a “please specify,” to capture responses that are not pre-determined.

Open-ended questions are used when researchers do not have knowledge of the potential responses. These types of questions are exploratory and provide deeper information than fixed-alternative questions. But they are more difficult to administer and to analyze.

Sample size

Researchers need to survey a sample that is large enough to allow them to generalize the information across a population. Statistical analysis provides the tools to estimate required samples. A larger sample size is advisable it there is an expectation of a low response rate.

Responses

Randomly selecting respondents increases the likelihood that the sample characteristics will be representative of the intended market. Not everyone who is surveyed will respond, but researchers try to maximize response rates by designing questionnaires that are easy to understand.

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