Types of Market Research: Exploratory, Descriptive and Causal

Whether you’re an entrepreneur, product owner marketing manager, or PhD, market research is a important process that involves gathering, analyzing, and interpreting information about a specific market, target audience, or industry. It helps businesses understand consumer behaviors, preferences, and trends, providing valuable insights to make informed decisions about product development, marketing strategies, and overall business growth.

By conducting thorough market research, companies can identify opportunities for innovation, assess the competitiveness of the market, mitigate risks, and stay ahead of the competition. Ultimately, market research plays a key role in helping organizations meet the needs of their customers effectively and achieve sustainable success in the ever-evolving business landscape.

This post is the first in a series of three articles where I unpack with the world of market research (MR), from the various MR types and methodologies, all the way through to a market research framework that you can leverage to collect better, more actionable data.

In this article, I’ll be unpacking the three types of market research.

Exploratory Research

This type of research is carried out at an early stage and help syou (the researcher) explore a phenomena or topic to better scope and define a business problem or opportunity.

For example, say you’re an entrepreneur with a great idea for a new product. However, you don’t know a lot about your target customers or how they might use the product. This context and stage is very conducive to carrying out exploratory research.

Here are some key characteristics of exploratory research:

• This type of research is usually less structured. This also means the findings are more qualitative in nature and to some degree, less quantifiable.

• There’s a great focus on observation at this stage. Ethnography is a common modality used to conduct epxloratory research, where you may simply insert yourself within a community or environment where you can observe and learn more about the behaviour of the people within it.

• Exploratory research helps clarify the scope and nature of a business problem or opportunity. As a result, this often leads to identifying new questions to be answered (which can lead to forms of descriptive research, such as a survey)

Descriptive Research

Unlike exploratory research, descriptive research is structured and describes or defines a particular phenomenon or topic to the research participants. A simple example of this is a survey. With a survey you will define a target audience and screen for their behaviour in the survey. Furthermore, the questions you ask will be structured in nature (e.g. single-select, multi-select, rating scales, etc), and will describe a phenomenon, topic or concept to the respondents. Take the following survey question as an example:

Which of the following factors, if any, are most important to you when you’re in the market to purchase a pair of running shoes?

- Price
- Design
- Durability
- Brand name
- Weight
- Colours
- Comfort
- Something else not listed

The question above poses a very specific proposition, which is what features or attributes are important when purchasing a pair of running shoes. Furthermore, the response list (i.e. price, design, etc) provides the respondent with a set of attributes to choose from. Exploratory research, in contrast, would not go into this level of detail. In fact, if you’re not very familiar with the running shoes sector, you may conduct exploratory research first as a way to come up with the list of attributes shown.

Here are some key characteristics of descriptive research:

• The research design, and thus results, are more structured. This means that the research outcomes and data will be more quantifiable.

• Descriptive research tends to be more quantitative in nature. However, this doesn’t mean that qualitative methods like interviews or focus groups can’t be descriptive. The way in which you run an interview or focus group can fall on a scale, from less structured and informal to more structured and formal. And so, qual methods can be both exploratory and descriptive.

• With descriptive research there is a greater focus on data analysis and to some degree statistics (e.g. using p-values, z-scores, etc)

• The results of descriptive research are generally more actionable. Again, this isn’t to say that exploratory research isn’t actionable, though it does tend to lead to more questions. In contrast, descriptive studies will usually give you the insight you need to take action.

Causal Research

Finally, we have causal research. This type of market research is experimental in nature and can be used to provide statistical validation of a hypothesis and/or test the strengths of a relationship between variables.

Causal is also descriptive by nature, but it’s unique from descriptive research because it will involves experimental design that will help to prove or disprove a hypothesis.

An example of causal research is an A/B or multivariate test. With A/B testing, you’re conducting research to statistically validate whether one approach (e.g. product variant, design, copy, etc) will outperform another.

Causal research can also get a lot more complicated as compared to exploratory and descriptive, and usually requires some education or training in the field of quant research design and statistics.

Here are some key characteristics of causal research:

• Casual research is used to test a hypothesis, validate an idea or test the strength of a relationship (i.e correlation). When it comes to hypothesis testing, you establish a null hypothesis (which claims your intervention had no effect) and alternative hypothesis (which claims your intervention had an effect). Then the outcomes of your causal study will determine with your reject the null or alternative hypothesis.

• Causal research is almost exclusively focused on quantitative data (but there are some excpetions where causal can be done with qualitative methods).

• The results of a causal study are statistically robust and directly actionable (e.g. choose product design A over design B). That being said, there are still plenty of limitations or ways that the data from causal research can lead you astray (e.g. systematic bias, false positive, etc).

Conclusion

So these are the three types of market research, and hopefully by now you have a sense as to when and why you may need to carry out exploratory, descriptive or causal research.

But if you’d like to learn more, I go into much greater detail, with case studies and downloadable resources of all the core research types and methodologies in my online course, The Complete Market Research Bootcamp, available on Udemy. Click the link below to enroll.