Internal & External Market Research Suppliers & Services

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  • 0:04 Market Research
  • 0:38 The Internal Option
  • 1:51 Hiring an Outside Firm
  • 2:57 The Role of Specialty Firms
  • 3:59 Deciding Which Firm to Use
  • 4:31 Lesson Summary
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Lesson Transcript
Instructor: David Whitsett

David has taught computer applications, computer fundamentals, computer networking, and marketing at the college level. He has a MBA in marketing.

When it comes to marketing research, companies can do the work themselves or look for external help. In this lesson, we'll examine both approaches and discuss the decision process companies go through in choosing the best path.

Market Research

Every business can benefit by knowing what their customers need or want. Market research is essentially getting customer feedback on a new market or new product before the actual launch, and effective market research can prevent low sales and dissatisfied clients.

The primary methods for doing marketing research are surveys, focus groups, interviews, observation, and field experiments. The question is, who does the market research? Should you use internal resources or hire an external firm?

The Internal Option

If you're a large enough company to have an internal marketing department, perhaps you can do your own research. There are plenty of online tools to help companies conduct surveys, run polls, and build virtual communities to solicit feedback. Let's take a look at the advantages and disadvantages of doing it yourself.

When it comes to the advantages, there are a few things to keep in mind. An in-house team can coordinate more closely with product engineers to get advice about possible features. Using your own staff may be less expensive that an external source and expenses can be tightly monitored. You can also dictate the pace of the internal term since they're under your roof.

There are some things to keep in mind when it comes to the disadvantages as well. The internal team may be biased by ''group think'' and may not be as objective as a neutral external firm. Internal teams may not have access to sophisticated toolkits and specialized knowledge that an external team may have developed working with a range of clients. Inside firms may be less able to do research across a large geographic area, whereby external firms may specialize in global market research.

Hiring an Outside Firm

There are several kinds of market research firms and which type you hire will depend on your budget and particular needs.

Like the name implies, a full service firm will design and implement a complete project for you from the ground up. Everything is fully customized for you and you own the resulting data, but this is also the highest cost option.

A syndicated marketing research company conducts its own studies and then makes the data available for purchase to anyone. A company can use data from a syndicate when the company is in an exploratory phase and needs general information about market conditions in a particular segment or geography.

Online marketing research firms use the Internet to collect data. They can do surveys, conduct panel discussions, and build custom reports showing the results of their work.

Lastly, social media marketing research firms listen to what's happening on sites, like Facebook and Twitter, and provide reporting on trends, what's happening with your competition, and customer sentiments.

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