The Boston Matrix

Data-driven decisions are the backbone of successful business operations. Data can inform the day-to-day decisions we must make, and guide the long-term trajectory a business wants to take. There are two main types of data of which we can collect: quantitative and qualitative. This post will explore the differences between the two, how we can gather the data and evaluate the usefulness of each method, concluding if one is more effective than another.

What is data and why do we collect it?

“Data is a collection of discrete values that convey information, describing quantity, quality, fact, statistics, other basic units of meaning, or simply sequences of symbols that may be further interpreted.” – Wikipedia.

We can use data for just about anything! In business, data can used to do two things: provide evidence for / against a certain decision, and then provide information on the success of the decision that was made. This post will primarily focus on quantitative and qualitative data and its importance for market research.

Market research

Market research involves gathering, presenting and analysing information about marketing and consumption of goods and services. Products that are well researched have a higher chance of success and good research decreases the amount of risk involved.

What can market research be used for?

Identify customers needs and wants:

Businesses need to know what product is desirable in order to sell them. In this respect, data will most likely be qualitative in order to be as comprehensive as possible.

Quantify the likely demand for a product:

Quantitative data is primarily collected in order to quantify demand. It ensures that producing the product would be commercially viable. The result of this could save the business money if the research conducted provides an inadequate result. When demand is quantified, a business can start to organise resources and make production schedules.

Provide an insight into consumer behaviour:

Businesses might be more successful if they can identify and understand patterns of consumer behaviour. Holiday companies, for example, need to know when consumers are going on holidays, how much they spend on holidays and what methods they use to book holidays. A mixture of quantitative and qualitative data may be useful here.

Defining quantitative and qualitative data

I’ve referenced the term numerous times now (heck, it’s even in the title), but a simple definition hasn’t been given.

A quantitative approach involves the collection of data that can be measured. Usually this means the collection of statistical data such as sales figures and market share.

A qualitative approach involves the collection of data about attitudes, beliefs and intentions. The information collected through qualitative research is open to a high degree of interpretation. This means that there are often disagreements within businesses about the significance and importance of qualitative research data.

What are the limitations to market research and the effects on data?

While market research and the data it provides is extremely important for businesses, there are some limitations that can have an effect on the usefulness and integrity of the data collected.

Human behaviour plays a role in affecting data collected. Some people may lie or try to impress the interviewer / surveyor, consciously or subconsciously, which can distort the data.

Sampling and bias are also concerns for businesses. Results may differ from the sample than the total population (this is known as sample discrepancy)

Primary market research does require carefully constructed questions that are not leading or confusing in order to achieve the highest quality results, which can be hard to achieve.

Is quantitative data more useful than qualitative data?

Ultimately, it varies depending on the objectives of the business. I will preface my conclusion by saying I have not studied any academic papers, which may provide a more specific answer. On the whole, quantitative data can be used and applied to a wider range of queries the business may have, and is more directly comparable to other results. Businesses most likely leverage quantitative data more often than qualitative data in most decisions, and value it to a greater extent.

However, for market research, qualitative data can be useful in pinpointing customers needs and wants. In a wider discourse, it may also be useful when no previous data is available to compare and inform a decision, or when a decision needs to be made quickly in order to capitalise on a movement or shift.