Companies use data to gain information that provides insight for future decisions. It can be an arduous and lengthy process, sometimes confusing even the most seasoned research professional. It’s even further complicated by the fact that there are several ways to go about getting data with terms to describe each that are often used interchangeably. Case in point: market research vs. market analysis. While both practices provide valuable data-derived insights, each is a separate exercise in data collection. Choosing one over the other can have profound effects on the type of data gleaned, as well as how and when that data can be used. Take a look at the key differences between market research and market analysis:
Market Analysis vs. Market Research: The Definitions
Market analysis is the process of examining a particular sector, industry, market or niche. Through it, historical and current facts are used to forecast potential outcomes. Raw data underscoring a market’s size and potential (including its number of competitors; the social and political trends affecting it; the availability of sales and distribution channels within it; and the prices of products already in it) enable companies to plan strategically for the future. Thus, businesses use market analyses to better understand how their products and practices might exist within a certain environment.
Market research, however, is the much more specialized process of examining a specific market, along with the customers in it, with the intent of answering one or more distinct questions. While some market research projects might include a market analysis, all of them include customer-specific intelligence. In short, businesses use market research to better understand their customers (or those they hope to make their customers).
Market Analysis vs. Market Research: A Quick Comparison
Market analysis is general in nature, amassing large amounts of cold-hard facts and figures with multiple impersonal (and oftentimes) automated retrieval techniques. Market research, on the other hand, is specific, constrained by time, audience, emotions and opinions and dependent on human interaction and interpretation.
Whereas market analysis inputs vast amounts of data points into a large storage framework, market research collects only the data points needed to answer the research question(s).
Whereas market analysis provides longer-lasting insights, market research results are valid for just a few years.
Whereas market analysis renders quantitative and not qualitative data, market research can offer both.
The way data is collected and stored directly impacts how it is analyzed and reported. Contact our team at Communications for Research (CFR) if you need help figuring out whether you need a market analysis or a full-blown market research project. Choosing one over the other is too important a task to approach without having the necessary facts regarding the limitations and advantages of each.