How Do Companies Use Qualitative Data?

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A focus group is one business technique to collect qualitative data.
A focus group is one business technique to collect qualitative data. (Image: Comstock Images/Comstock/Getty Images)

Qualitative data could be a body of text or narrative, non-numerical, information. A company can analyze qualitative data to identify connections between categories of information. It can also be used to uncover trends based on variations in consumer behavior, such as spending patterns. Data interpretation shapes business goals and objectives, and serves as a key resource for directing marketing efforts.

Market Research

With market research, a company may test a hypothesis related to a particular business product or service. For instance, a beverage company developing a new fruit beverage would research similar products in the market, as well as data related to consumer tastes related to the fruit. Proving or disproving a proposition may be possible through collection and review of qualitative data. Methods to collect information include formal and informal interviews, participant observations and case studies.

Opinions

Qualitative data collection provides an opportunity to review and evaluate divergent opinions about products and services. Companies use opinion polls to gain an assortment of insights about customer demands and values. Surveys and focus groups are also two common qualitative data collection techniques to gather opinions from target markets. Compared with quantitative data studies, which are generally numerical-based, qualitative data calls for descriptive feedback from participants.

Decision-Making

Business executives and managers consider relevant qualitative data when deciding between or among business choices. Relevant qualitative data can also reveal unique dissensions and disagreements that may serve the basis for developing effective alternatives that the company had not considered. The size of the data set is one of several factors to consider when assessing the reliability of qualitative data. Relying on qualitative inputs that are too small to represent majority opinions can translate into hasty changes that lead to bad results.

Benchmarking

There are a wide variety of qualitative data resources. This includes annual business reports, government reports and trade publications, all of which can serve the basis for understanding competitive positions and identifying industry benchmark standards. However, over-generalization can be a pitfall in analyzing qualitative data. Information about competitor operations is primarily used to ensure that a company's performances and processes meet industry standards.

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