Are markets more than groups of target customers?
Marketers often think of markets as a synonym of the demand side, and hire market researchers to discover what consumers want. Nevertheless, perhaps market researchers do more than that. I researched market researchers in a method called ethnography to find out what market research really does. My research demonstrates that market researchers offer much more valuable work than previously thought because they present diverse aspects of markets which are difficult for firms to access.
Market researchers bring to their clients representations of very complex systems. After all, a market is a term we use for all kind of people buying and selling all kind of stuff in very diverse circumstances. Market researchers go well beyond the needs or wants of customers.
In practice-based markets the market is a routine, such as breakfast. Cereal A would not compete against Cereal B; but instead, cereal and milk compete against scrambled eggs, toasts, or simply no breakfast at all. Agencies become experts in specific practices, such as commuting for example. The agency advice a wide set of clients including industry, government and others.
Other agencies keep their clients informed using industry insiders pressure groups, lobbyists and, of course, competitors. Because it is difficult to divide financial markets into supply and demand, one agency followed brokers to understand emotions at the trade floor to predict volatility in stock markets. Some agencies work with those who are neither consumers nor producers. Physicians, in the pharmaceutical market neither sell nor buy anything, but play an important part.
Clients commissioning research also influence how markets are understood. Some companies impose structures of markets which only make sense for insiders. For instance, comparing the United States against Rest of the World would only make sense for practical reasons; perhaps the corporation has a VP for United States and a VP for Rest of the world, but then the market reflects that structure. A country-market is limited by national boundaries, and not by needs or wants of customers.
Companies think of their markets in terms of their own production. Markets are a reflection of the products sold, such as the market of expensive phones and cheap phones. Evidently, companies like Kodak and Olivetti should have reconsidered that their markets is a synonym of what they produce. Kodak was bound by films in cameras, and Olivetti produced typewriters.
My research demonstrates that market research does not discover markets but interpret them to their clients. Market research, therefore, is even more valuable for strategic business model design. Perhaps market researchers can return consulting top management by understanding their practice in terms of general business strategy.
You can download the full paper clicking the image at the right or at the journal Marketing Theory