Analysis of conducting market research online

Market research is a vital element of marketing. Firms rely on collecting information from customers, competitors, and contemporary economic conditions to analyse potential markets and plan effective campaigns (O’Brien 2004). With the development of advanced technology, the Internet is now closely connected and inseparable from business. Various companies devote themselves to conducting online market research to understand the condition of current markets to apply appropriate marketing strategies to promote their products. To be compared with traditional market research, online market research provides more advantages than traditional ones; for example, the Internet has reduced obstacles such as time and distance that exist between firms and customers (Krishnamurthy 2003). Online market research has broken new ground of research and offered opportunities and limitations to marketers. This paper will outline the background of market research and the relationship between the Internet and market research. Afterwards, the merits and drawbacks of online market research are identified. The opportunities and limitations for the marketers to conduct online market research will also be discussed. In addition, the pizza company, Domino’s, will be analysed to discuss its chances and restrictions of adopting online market research by applying the theories provided in the paper. The recommendations will also be given to suggest the methods Domino’s can adopt to conquer the limitations.

2.Background

2.1.Market Research

Market research has been identified as an important joint of marketing. Callingham (2004) describes that market research can be used as a method to gain agreements of consumers on the market structure and involve deeply in supporting the corporation internal knowledge. Through market research, the organisations are able to acquire the data of customers and competitors to design their products, develop marketing strategies, and efficiently segment the market. To test the market, the insights discovered from well-designed surveys can be used to inform the companies about real information of their marketing opportunities, tendencies, and intimidations (Fairlie 1993). Therefore, questions in surveys must be developed carefully to gain valuable data that benefit product positioning and marketing to meet customers’ requirements in the market. Callingham (2004) also illustrates market research that makes the most potent contribution to decision making in the firm can influence the climate and entire thinking of a company. It can be noted that market research is vital to assist firms to position themselves in the market, adjust marketing strategies, plan product pricing, and observe customer purchasing behaviors.

2.2. Online Market Research

The rapid developments of technology enables people connect with the world immediately through the Internet. Diversified factors that companies should pay attention to the Internet include lower price to manage the websites and connect with stakeholders, more clear information than traditional communication manners, and less time to deal with issues (McGarvey& Campanelli 2005). The widespread usage of the Internet provides a platform for marketers to promote their products, build connection with consumers closely, detect consumer perceptions and attitudes promptly, and so forth. According to O’Brien (2004), traditional market research methodologies comprise telephone, mail, fax, face-to-face, and focus groups; however, these methods seem inefficient when compared with online market research. Traditional market research is time-consuming and costly; for instance, it can take few days to send questionnaire by mail to the customers and the company also has to manage the surveys for another period of time. Krishnamurthy (2003) indicates categories of online market research can be divided into two dimensions, including qualitative and quantitative research. Qualitative research infers investigating customers’ deep insights with open-ended questions such as online focus groups interviews and search log analysis, while quantitative research focus on market interference through analysing large scale of information such as online surveys through pop-ups and emails or clickstream analysis. Fitzgerald (2009) argues that online market research which is also an important part for business-to-business marketing to generate real-time information to gain latest data. Firms like Domino’s are able to manage its order and deal with the relationship with suppliers. In terms of competitors, marketers also are able to attain information through online surveys, and prepare tactics to parallel them. Nevertheless, online market research that increasingly adopted by marketers is essential for firms to operate their businesses.

3.Opportunity and Advantages of conducting market research online

Marketers now are able to take advantage of online progressing technology to develop advanced market research; nevertheless, they also might elaborate undiscovered fields of the market in the immense Web world. Dann& Dann (2001) signify that the significant advantage of operating research online is that small business also can be successful by accessing qualitative data to support its decision-making. A variety of potential chances that companies can make good to conduct online market research use are explored and discussed in the following paragraphs. The pizza company, Domino’s, will be associated with the theories to illustrate its potential chances with online market research.

3.1.Closer connection with customers

The Internet has differentiated the field of market research. Companies can reach their customers fast and effortlessly through online market research that is considered as an inexpensive way to gain information that firms desire to direct their futures. According to Miniwatts Marketing Group (2010), the total number of Internet users of the world has risen to 19.6 billion, which represents 444% growth to be compared with 3.6 billion in 2000. This evidence shows that firms are able to contact with more customers online than the past decade. Marketers are able to obtain large amount of data from online methodologies to assist themselves with more accurate directions to market their products. Traditional manners of research have suffered from substantial decrease in response rates since the 1950s (Cook, Heath, and Thompson 2000). The Internet broadens the range of market research for that the audience can browse websites anytime, so marketers are able to receive real-time data to learn customers’ latest requirements of products. It is arduous to contact office workers or students who cannot be reached through traditional surveys due to time conflict, and now these people can be approached through the Internet (Krishnamurthy 2004). Therefore, firms can design different market orientation for those who are newly discovered groups of customers through online research. Domino’s can acquire more information of work professionals to know their preferred styles of pizzas and their office hours to plan proper marketing strategies that suit office workers’ life routines to broaden this segmentation, so Domino’s might have new idea of marketing project for businessmen to carry out.

3.2.Business Internationalisation

The Internet has offered a worldwide platform for people to use. Combined with traditional market research techniques, online market research not only authorizes companies to accumulate investigated marketing resources with superior quality and quantity but also globalise the firms with world-wide information (Dann& Dann 2001). Firms can adjust their marketing strategies for different countries by acknowledging the requirements of consumers all around the world through the Internet. Customers from various locations and areas can be reached easily with online technology (Krishnamurthy 2004). Marketers then are able to expand their market globally by analysing the possibility of running business in the area from online local participants’ perspectives. Domino’s, as the same note, can operate online research before being actually introduced to the market in other countries. Domino’s may comprehend whether it is feasible to develop in the country by the results of research that might vary with cultures and lifestyles. Taking Domino’s in Australia as an example, it could examine if the citizens accept the Australian flavor of “Aussies” by posting questionnaires on its website. For other countries such Japan, Domino’s also can investigate the level people would like to purchase its new culture-based-flavor pizzas. Hence, Domino’s can follow the pattern to discover the potential markets and products in other countries.

3.3.Diversity of research methods

There are more multiform methodologies of online research provided in virtue of the development and popularity of the Internet. Most used methods such as online surveys, online focus group bulletin, search log analysis, and clickstream analysis are widely used by marketers as online research methods (Krishnamurthy 2003). Marketers do not have to confine market research to traditional manners; instead, a variety of choices provided through the Internet can be selected as firms can identify the ones that are suitable to apply. Dann& Dann (2001) imply that click tracking is a specific means to track users’ movement while surfing the website. Domino’s can accumulate customers’ “most-clicks topping” to bring up ideas of their purchasing patterns through online order system. The business has chances to develop new products through analysis, then introduce them on its website to explore the possible popularity of the product and launch depending on customers’ reactions. Smith’s, the brand of potato chips has also held similar motion that authorizes consumers to create new flavour and launch through voting (www.smiths.com.au). Another broadly-used manner to allocate people in surveys is pop-ups. Supre, an Australian girls’ apparel clothing brand, also offers pop-up for online surveys on its website (www.supre.com.au). In the same manner, Domino’s is recommended to use pop-up on its website to increase the number of participants by attention. Diverse methods of online market research assist quantitative research with great amount of data; therefore, marketers might proceed with a business plan more accurately.

3.4.Personalised Research

The online techniques have enriched the visual presentation of surveys, including extensive stimuli potential of using colors, sounds, and graphics; flexible forms of questionnaires, and greater delight in participation of research (Adam& McDonald 2003). Online surveys can be visually abundant by designing the advanced websites with colorful pictures and characters, games, and animations. M&M, the chocolate producer in America has held an activity on its website in 2010 called “voting for your favorite character” by showing the images of various characters (http://www.mms.com/us/vote/). This online voting event has gained 3.4 million votes. Vivid surveys seem a new trend for marketers to develop a variety of market research that can attract more participants. Domino’s can develop similar style of surveys of providing images of pizza with different flavors or enable customers to create their own flavors with a variety of materials; in this way Domino’s can check the percentages of materials clicked to know customers’ favorites and allow participants to vote for the top flavor. With such activity, Domino’s can obtain data of customers and invent new products with customers’ favorites. Games, also a great motivation, can be used as a disguise form of market research. Domino’s can permit the users to select their favorite-flavor pizza as the character in the game to measure their preferences, and the game can be designed to relate to popular events such FiFa Worldcup or Christmas to attract more diverse customer base. An assortment of form of research might gain more customers’ attention. Conducting such lively research also increase the willingness of customers to take the survey.

3.5.Cooperation with popular virtue communities

Many corporations already cooperated with famous websites and search engines such as Yahoo and Google (www.google.com). Those online digital companies assist several firms with their advertisements of online surveys on the main Web pages or pop-ups (Krishnamurthy 2003). Online virtual communities also can offer similar opportunities to collaborate with firms that would like post their links or advertising to appeal to online population to participate in their research. As the users of virtual communities including Facebook, Myspace, Twitter, and so forth have increased recently, marketers can take advantages to reach the audience. For example, Facebook filters users’ data to locate their interests and personalise the attached advertisements. These communities also permit users to click “like” button to imply their beliefs through simple actions. Domino’s has the chance to expose its research information to its targeted customer groups by age, occupation, or favorite food, which the virtual communities will automatically filter these audiences through internal system. In addition, Domino’s can have competition of creative video for various pizzas in order to get more customers involved by this type of promotion. Therefore, Domino’s not only collect customers’ opinions through the activity but the comments from the website of YouTube where the audience possibly uploads these videos (www.youtube.com). Nevertheless, cooperation with online communities and websites increases the possibility to contact with ideal consumers who are willing to take part in research.

4.Limitation of conducting market research online

Despite of the advantages offered by the Internet, there are still assorted restrictions for marketers to take into consideration when they arrange business campaigns. Some issues that marketer have to take notice of while proposing online market research will be elaborated below. The limitations that Domino’s might encounter and some recommendations will also be illustrated.

4.1.Creditability of the data

In spite of the growth of Internet users in 2010, Miniwatts Marketing Group (2010) also shows that the world population has increased to 68.4 billions, so the Internet penetration only takes up 28.4% of total population. It can be noted that the Internet users can be small portion of actual customers for companies. The data that marketers collect through online market research does not embrace extensive range of customers. Dann& Dann (2001) indicate that most of the online users are generally financially secure and intelligent. Hence, it can be an enormous difficulty for marketers to measure the market because they are not able to access the offline audience; that is, the targeted market that companies aim at might be middle-class people and have ignored others that could be the main resource of their customers. For instance, people from lower social class without computer equipments can also afford to purchase live essentials such as ice cream, so marketers may have trouble collecting information from this group through online market research. Domino’s might have difficulty to explore some market segmentation since the Internet possibly neglects one part of its vital customers.

The quality of the data acquired through online market research will also be suspected because participants might propose incorrect or unsuitable responses (Krishnamurthy 2003). The data companies accumulate might be not credible, so it is risky to reply on it. To conquer this problem, marketers try to attach new technique that participants have to fill in accurate data in each column for successfully submitting to prevent people from giving incorrect or meaningless responses. Therefore, this precaution might also decrease inclination of customers to partake in research. Nadilo (1998) notes that little evidence can verify the connection between website browsing and actual purchasing behaviours. The research using clickstream might be not reliable for marketers. Moreover, the issue of the depth of online research is necessary to be considered. Traditional method of face-to-face interview enables marketers to conduct in-depths research and gain more qualitative figures than online surveys. Despite of use of Skype or MSN messenger to have in-depth online interview with customers to aid qualitative research, the costs of hiring interviewees and the willingness of participants to join should be taken into consideration. Above all, the quality of data online research generates is another obstacle for firms.

4.2.Degree of customer cooperation

Although marketers have diverse opportunities to conduct market research online, they cannot assure the willingness of customers to participate in research. Several concerns of customers toward online market research consist of privacy and security because people are reluctant to reveal their personal information (Dann& Dann 2001). To gain customers’ trust becomes the barrier that firms have to overcome. Campanelli& McGarvey (2005) suggest that one way to solve this problem is to save customer databases to the computer with the Internet connection. Besides, firms have to guarantee and promise the safety of online research and adopt stronger data-protection system to protect their customers.

Another issue is the reluctance of customers to participate in research. Krishnamurthy (2004) demonstrates that pop-ups ads are identified as the manner that customers detest; conversely, they are still widely used. The dislikeful pop-ups will reduce the quantity of data and result in misjudgment of segmenting markets. Furthermore, Nadilo (1998) notes that surveys sent by emails are the way most marketers prefer to conduct online research whilst these emails are usually neglected as “spam”. It becomes a tough task to contact with customers if they cannot even access the emails. Hence, multiple research methods are supposed to be considered. Domino’s can still collect customers’ data with traditional questionnaires and integrate various research manners to gather information intensively. In addition, coupons are always good alternative to catch the attention of customers (Peter& Olson 2000). Incentives thus can be used to encourage the audience to participate in research. Domino’s can also impart coupons to achieve the ideal participation of the audience. All the factors mentioned above affect the level that customers cooperate in research. It can be assumed that marketers confront several hardships to conduct market research through the Internet.

5.Conclusion

Market research is an important tool to ensure customer satisfaction, analyse the target market and assist implementation of marketing strategy. The Internet has differentiated the field of market research, providing a fast and cost-effective path to reach the customers. With the progress of online technology, marketers are able to operate market research through the Internet with a variety of opportunities including enhancement of intimacy with customers, business internationalisation, diversity of online manners, vividness of research, and cooperation with online community. Hence, firms are capable of reaching their customers extensively and acquire more quantitative and qualitative data so that companies can refer to adjust their decision-making. Besides, various online researches are also another way to expose the company to the audience and possibly strengthen brand image through successful campaign. On the other hand, marketers have to mull over the limitations of undertaking online market research- the creditability of online data and the degree of consumer cooperation. It can be hazardous for firms to implement marketing strategies if the data is not trustable and incorrect. Companies should be aware of the potential risk of online market research and cautiously deal with it. Traditional research methodologies also can back up online methods if necessary. Domino’s, by the same token, can develop creative online research according to the existed online methodologies and beware of the danger it might confront.