Josh McKay

Internet Marketing

February 19, 2001

Issue Analysis: Primary Market Research on the Internet

 

Market research is an important part of any successful marketing strategy. In order for a company to be successful, it has to be able to understand it’s customers and be able to identify a target market. Market research is a vital step in a company’s attempts to identify and profitably serve its target market. Businesses that understand what their customers want and that are able to keep their customers satisfied will profit financially.

The introduction of the Internet revolution has had a huge impact on almost every aspect of society, especially the business world. The Internet has brought with it new strategies and marketing possibilities that many opportunity conscious businesses have quickly taken advantage of. In today’s competitive business environment, a competitive edge becomes important for success both in the short run and the long run. It is for this reason that it is important that businesses strive to do effective market research and also take advantage of new technologies, such as the Internet. The Internet has brought with it new methods businesses can use to compile primary information on their target markets. In their book, Marketing on the Internet, Judy Stauss and Raymond Frost identify at least four major methods of gathering primary data online These methods include performing online experiments, conducting online focus groups, using online observations, and Internet surveys.

The first major method of gathering primary data online is to set up an online experiment. This method is much like a traditional experiment, in that the researcher exposes subjects to certain circumstances or stimuli and then tests the responses of the subjects to what they were exposed to. This type of method is successful when a company is trying to find out how effective something is, such as testing the effectiveness of a company’s web site design.

The second major method of gathering primary data online is through the use of online focus groups. This method is also much like a traditional focus group, the main difference being that the participants are online and their geographic location is irrelevant to the study. This method is useful when a company wants to get an understanding of how people feel about certain products, company ads, or web site features.

The third major method of gathering primary data online is by conducting online observations. Many businesses use this method to track customer Internet usage within a company’s web site. Web site features such as hit counters, site trackers, cookies, etc. all observe and record consumer activity and help the business understand what aspects of the business web site are most popular, successful, attractive to the target market, etc. Almost every web site has some sort of mechanisms is place that monitor user activity, especially business sites. According to the article entitled “Report: Online Research Drives Offline Spending,” which is available at www.ecommercetimes.com, many companies are actually not doing a good enough job of observing users online. The article concludes that because of this, many companies are not realizing the ability of their web sites to drive sales in traditional channels. Of all four methods, this one is most associated with possible ethical problems, because it involves user privacy. Many people feel that online observations often violate personal privacy and that this method of primary data research needs to be regulated.

The last major method available to companies seeking to gather primary data online is through the use of Internet surveys. This method is the most widely used and widely available method. Many businesses and research organizations rely on this method to gather primary data on user trends, demographics changes, etc. One method of performing Internet surveys is through the use of emails. An Illinois based marketing consulting firm by the name of Agora recently did a study on “Generation E,” which is defined as, “that group defined not by age or social status, but by technology smarts, etc.” In the article written by Jason Compton entitled “Marketing to Generation E,” Agora and another company by the name of Marketfirst found that Generation E is very focused on brand recognition. They also found that the use of Email surveys and newsletters were both effective in establishing a successful branding strategy and getting feedback from these consumers. Many articles on user statistics and demographics such as those available at sites like www.knowthis.com, and www.cyberatlas.com, were written based on the results of both Internet and traditional surveys. For example, an article entitled “Net used for Financial Research,” which is available at www.cyberatlas.com, finds that over 15 million adults connected to the Internet in the US to research information on mortgage and equity loan rates, but only a third of those people actually applied for a loan online. This article was also based on an Internet survey.

In conclusion, the Internet has become a very important part of the business world today. As competition continues to grow, it has become very important for businesses to use every method available to them to understand consumers and their target markets. The ability to gather secondary and primary information through the Internet can give businesses the edge necessary to be both profitable and competitive in the long term. The future will make it more and more necessary for businesses to take advantage of everything the internet has to offer, especially when it comes to market research.