“Decision research” correlates directly with better business performance

Abstract

Purpose

Proceeding from the widely accepted but relatively untested premise that the gathering of intelligence via market research is central to business success, this paper reports a study investigating the extent to which the type of research carried out influences the level of business performance.

Design/methodology/approach

Just over 6,000 market research projects conducted by a sample of 68 companies in New Zealand were classified as mainly “decision” or “background research” the companies allocated to one of three categories according to the mix of those types in their total research programme, and their business performance rated on four criteria. Firm size and the market research budget were taken into account as potential confounding variables. ANOVA, MANOVA and factor analysis were applied to data gathered from responses to a questionnaire developed by Diamantopoulos and Souchon, appropriately modified to the specific conditions of this study.

Findings

Companies carrying out mostly “decision research” rated themselves as performing generally better than those placing more emphasis on “background research” regardless of the size of the firm or the its market research budget. They scored highly on return‐on‐assets, return‐on‐sales and sales growth, and exhibited positive overall performance. The initial finding was strongly reinforced by factor analysis, 98 per cent of the variation in business performance being explained by the categorisation of a company's research as dominantly “decision” “background” or “mixed”.

Practical implications

The evidence for the positive effect of “decision research” on business performance suggests deliberate repositioning of market research strategy towards “decision research” rather than the “background research” which is generally in favour. This will require a major shift in the marketing management mindset with respect to marketing intelligence.

Originality/value

This is the first study to show a direct correlation between type of market research conducted and better business performance. It offers an improved conceptual framework for marketing intelligence and planning.

Citation

Ganeshasundaram, R. and Henley, N. (2007), "“Decision research” correlates directly with better business performance", Marketing Intelligence & Planning, Vol. 25 No. 1, pp. 45-65. https://doi.org/10.1108/02634500710722399