The Evolution of Market Research: A Historical Perspective!

Feb 28, 2024 - 5 min read
The Evolution of Market Research: A Historical Perspective!

Market research is the Jenga of the business world. Each piece of information about consumers' needs, expectations, and behaviors can be thought of as a block in this delicate game. Strategies are shaped based on this information. If the blocks are not placed correctly, the whole structure can collapse. However, if each piece is masterfully positioned, businesses can establish a solid foundation, ensuring sustainable growth and competitive advantage. Let's explore together how this strategic game has evolved from the past to the present.

Exciting, let's get started!

What is Market Research?

Market research is the process of collecting and evaluating information on the market segment targeted by the brand. It plays a critical role in strengthening the brand's position in the market and in effectively guiding its strategies. Effective market research enables brands to offer products and services that are more suitable for their target audiences, personalize their marketing messages, and improve the customer experience.

Understanding the dynamic structure of the market allows brands to make forecasts about the future and shape their strategic planning in this direction. In today's world, where consumer trends and market conditions are constantly changing, market research assists brands in adapting quickly and effectively to these changes.

Market research methods can be categorized into two main types: quantitative and qualitative. Quantitative research analyzes large data sets through methods like surveys, while qualitative research seeks to understand the motivations and attitudes behind consumer behaviors through focus groups, in-depth interviews, and observations.

In conclusion, market research is a strategic tool that enables brands to adapt to the continuously changing consumer needs, gain a competitive advantage, and achieve long-term success in the market.

Market research helps answer questions like:

  1. What are the demographic characteristics of the target audience?
  2. What are their interests and purchasing habits?
  3. What do they think about my business or industry?
  4. Which problems of this group can I help solve?
  5. How can I best connect with them?

A Powerful Tool for Market Research

At this point, one of the effective tools you can use to strengthen and make your market research efficient is Kimola Cognitive

Kimola Cognitive is a machine learning platform designed to analyze customer reviews, conversational data, survey responses and social media data. It is user-friendly for non-technical professionals, allowing them to easily analyze text data and classify data automatically, without any training. Now, let's take a closer look at how this strategic and dynamic process of market research has evolved over time and how it has revolutionized the business world.

If you want to enhance your business performance and strengthen your market research with Kimola Cognitive, start for free.

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The Historical Journey of Market Research

This journey stretches from the simple trade observations of ancient times to the complex data analysis techniques of the modern world. From the travels of Johan Fugger in the 15th century to gather information about the textile market, to the systematic studies conducted using surveys and focus groups in the early 20th century, and to the endless possibilities offered by digital technologies and big data today, market research has revolutionized decision-making processes in the business world.

1. The Secret Hero of Trade (1380)

The initial steps of market research are based on the international travels of Johan Fugger, known as the Indiana Jones of the Textile Market. Fugger made these journeys with the aim of collecting valuable information about the textile industry, thus performing some of the first uses of commercial intelligence.

2. The Golden Age of Luxury Sales (1500-1600)

Imagine a Chamber of Secrets, but filled with luxury items! Sellers, targeting affluent customers, created secret chambers, showcasing the earliest examples of customer segmentation and personalized marketing.

3. Spice Routes and Luxury Goods (1600-1700)

Envision the world as a freshly unveiled treasure map and merchants as its pirates. The Age of Exploration in Europe sparked a global treasure hunt for luxury goods. Precious commodities like silk, tea, and spices were the spoils brought back by merchants from newly discovered territories. This era signifies when market research transformed into a global adventure. Merchants gathered information on these luxury items to gauge the market pulse.

4. From Fairs to Markets (1700-1800)

In the 18th century, fairs were the social networks before the advent of Instagram. People gathered to explore the latest fashion items, while sellers collected marketing insights directly from consumers.

5. Product Distribution in the Toy Market (1820)

Toy markets showcasing London buses and ambulances for the British market, French postal trucks for the European continent, and American locomotives for the USA... The distribution of products in the toy market indicates that producers and merchants at the time designed special products for different market segments, showing sensitivity to local consumer needs and cultural preferences.

6. The First Practices of Market Research (1895)

An American advertising agency, using the telegraph to gather information about the grain market, essentially created a 19th-century version of a WhatsApp group. This represents one of the earliest instances of remote information collection.

7. The Academic Journey of Market Research (1919)

The First Book on Commercial Research! This book was akin to the Anna Karenina of market research. Professor C.S. established the academic foundation for the field, marking market research as a discipline that deserved serious consideration.

8. Charles Coolidge Parlin and the Market Research

Charles Coolidge Parlin was the James Bond of market research, but his weapons were surveys and data. By establishing the first in-house market research department, he initiated a revolution in the business world.

9. The Psychology of the Market

In 1924, demographic segmentation opened a new chapter in market research. However, Ernest Dichter, the Freud of market research, demonstrated that people could be identified not just by age and income, but also by their attitudes and beliefs.

10. The Power of Surveys and Focus Groups

George Gallup and Paul Lazarsfeld, using surveys and focus groups, unearthed the real thoughts and feelings of the public, much like the rock stars of market research. Gallup revolutionized election predictions with statistical survey sampling and public polling methods, making these processes the most reliable ways to gauge societal sentiment. Meanwhile, Lazarsfeld, by analyzing responses to radio broadcasts, showcased the power of qualitative data. These approaches opened the door to a deeper understanding of consumer emotions and thoughts in market research.

11. Modern Market Research Techniques

With the advancement of technology, innovations such as Ernst Dichter's motivational research and conjoint analysis have allowed for a more detailed understanding of consumer preferences. Metrics like NPS (Net Promoter Score) have become critical in assessing customer satisfaction and brand loyalty.

How to Turn Customer Reviews into a Market Research?

Analyzing customer reviews with AI, such as what Kimola Cognitive offers, represents a significant evolution in market research methodologies. This innovative approach harnesses the power of artificial intelligence to extract valuable insights from vast amounts of unstructured data, revolutionizing the way businesses understand customer feedback. Here's how Kimola Cognitive and similar tools are shaping the landscape of market research:

Market research has come a long way from its origins of directly asking questions to individuals. In its early days, surveys, focus groups, and interviews were the primary methods used to gather insights into consumer preferences. However, today, we've witnessed a paradigm shift where businesses no longer rely on asking questions but instead collect data from digital channels such as Yelp, Amazon, Google Maps, Trustpilot, TripAdvisor, and more.

Big Data Handling: Traditional market research methods often struggled to handle the sheer volume of customer feedback available online. Kimola Cognitive leverages AI algorithms to sift through massive datasets of customer reviews from various sources, including social media, review platforms, and forums. This enables businesses to tap into a wealth of unstructured data that was previously challenging to analyze comprehensively.

Natural Language Processing (NLP): One of the key features of Kimola Cognitive is its advanced NLP capabilities. By employing sophisticated algorithms, the platform can understand the nuances of human language, including sentiment analysis, semantic meaning, and context. This allows businesses to gain deeper insights into customer opinions, preferences, and pain points expressed in their reviews.

Sentiment Analysis: Understanding the sentiment behind customer reviews is crucial for businesses looking to gauge customer satisfaction and identify areas for improvement. Kimola Cognitive automatically categorizes reviews based on sentiment, distinguishing between positive, negative, and neutral feedback. This helps businesses prioritize issues that require immediate attention and capitalize on strengths highlighted by satisfied customers.

Trend Identification: By analyzing large volumes of customer reviews over time, Kimola Cognitive can identify emerging trends and patterns in consumer behavior. Businesses can leverage this information to anticipate market shifts, adapt their strategies accordingly, and stay ahead of the competition.

Actionable Insights: Perhaps the most valuable aspect of Kimola Cognitive is its ability to generate actionable insights from customer reviews. By pinpointing recurring themes, keywords, and phrases within reviews, businesses can make informed decisions about product development, marketing campaigns, and customer service initiatives.

Personalized Recommendations: AI-powered market research platforms like Kimola Cognitive can also provide personalized recommendations based on customer feedback. By understanding individual preferences and purchase history, businesses can tailor their offerings to meet the unique needs of their target audience, fostering stronger customer relationships and driving brand loyalty.

The integration of AI into market research processes, exemplified by tools like Kimola Cognitive, has transformed the way businesses collect, analyze, and leverage customer feedback. By harnessing the power of big data, NLP, sentiment analysis, and trend identification, businesses can gain deeper insights into consumer behavior, enhance decision-making, and ultimately drive sustainable growth in today's competitive marketplace.

In Conclusion

And here we are, at the end of the historical journey of market research. This journey, from simple trade observations to today's complex data analysis techniques, has been an incredible adventure. From a historical perspective, we see that market research is not just a tool for brands but a necessity. To adapt quickly and effectively to constantly changing consumer needs, gain a competitive advantage, and achieve long-term success in the market, market research plays a vital role.

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