Deductive and Inductive Market Research

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Market research is grounded in the branch of philosophy known as logic. There are two logical reasoning approaches that are basic components of research design. These approaches are known as deduction and induction.

Deductive Research

Deductive reasoning is a top-down approach that drills down from the general to the specific. In empirical research, that means that a market researcher begins a study by considering theories that have been developed in conjunction with a topic of interest.

This approach lets a market researcher think about research that has already been conducted and develop an idea about extending—or adding to—that theoretical foundation.

This new hypothesis will then be tested by the market researcher in the process of conducting a new study. Specific data that has been collected and analyzed in the new study will form the basis of the test of the hypothesis. It is important to note that a hypothesis that is not confirmed does not mean it has not been proven false.

Deductive Research Steps

The following are the eight steps of deductive research:

  • General (Literature Search and Theories)
  • Topic of Interest
  • Theory-related Idea
  • Hypothesis
  • Data Collection
  • Data Analysis and Hypothesis Testing
  • Confirmation of the Hypothesis, or Not
  • Dissemination of the Findings

Inductive Research

Inductive reasoning is a bottom-up approach that moves from the specific to the general. In this case, the term specifically refers to an observation made by the market researcher that eventually leads to a broad generalization and theory.

An inductive research method approach begins with specific observations made by a market researcher who begins a study with an idea or a topic of interest, just as in a deductive approach to research. However, in an inductive approach, the researcher does not consider related theories until much further along in the research. It is from the regularities or patterns that the researcher observes that the market researcher generates themes that become the analysis of the data.

Inductive Research Steps

The following are the eight steps of inductive research:

  • Specific (Observations and Measurements)
  • Topic of Interest
  • Data Collection
  • Data Clusters or Patterns
  • Data Analysis
  • The Emergence of themes
  • Generalizations
  • Dissemination of Findings

Quantitative Research and the Hypothesis

If the market researcher is conducting quantitative research, at this point, theories can be considered. However, if the market researcher is conducting qualitative research, then the formal hypothesis testing does not take place. However, the market researcher may form generalizations based on the strength of the data and themes that have emerged.

Data collection and data analysis in qualitative research are iterative. That is to say, data collection doesn't happen all at once and then—as though the market researcher has thrown a switch—data analysis begins. Rather, some data is collected, which is considered by the researcher, and then some more data is collected and considered, and so on. At a certain point, when sufficient data clusters or patterns emerge, the market researcher will decide that the data collection can slow, stop, or change direction.

Data collection and data analysis in quantitative research are distinct stages. To mingle data collection and data analysis in the manner of qualitative research would compromise the integrity of the data. Some scientists believe that a lack of boundaries in the data collection and data analysis processes causes the data to become contaminated—and the research to lack rigor. Findings from this kind of compromised research would not be considered robust.

Causal Inquiry, Exploratory Inquiry, and Everything In-Between

Bottom-up research methods feel more unstructured, but they are no less scientific than structured top-down research methods. Because each type of research approach has its own advantages and disadvantages, it is not uncommon for a study to employ mixed methods.

A market researcher who uses mixed methods applies a deductive research approach to the components of the study that show strong theoretical ties. Alternately, an inductive research approach is applied to the components of the study that seem to require a more exploratory inquiry.

It's inaccurate to think of deductive approaches and inductive approaches as two sides of the same coin. In practice, they are two ends of a continuum. Deductive research is associated with linearity and a search for causal relationships. Inductive research is associated with depth of inquiry and descriptions about phenomena. Mixed methods can be placed at about mid-point on that continuum, with an emphasis on research breadth.