Posted in Marketing and Strategy Terms, Total Reads: 450

Definition: Observation

Observation refers to a method of research or data collection where in the subject or situation of interest is observed without any interference and the relevant behaviour and actions are carefully recorded. Such a method is often used to understand a process, behaviour of a target segment, the trends etc. in the absence of external influences. The idea is to identify the characteristics without providing any reference or forcing any assumptions. The company could be looking at- What do people do in a purchase situation? What events lead to the final consumption decision?

Observation can be either human or mechanical. In order to identify the more attractive shelf space in department stores or supermarkets, a company might commission hidden cameras to be fitted. To evaluate the effectiveness of Visual merchandising or display at an apparel store, an observer can note the number of passers-by, the number of people who stop to take a look at the display, the number of people who enter the store or ask for the price of something on display, the number of consumers who decide to buy. Sometimes observers may pose as customers (mystery shoppers) to evaluate the sales executives.

The major advantage of this method of business research is that there’s not much chance of inaccurate or biased information. It is not dependent on willingness and ability of respondents to answer questions about the product/service. However, there are limitations to this method. It requires more patience and trained observers. Observation method is often very costly.



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