Observational research is the gathering of primary data by observing relevant people, actions, and situations. Observation is best suited for exploratory research. For example, a maker of personal care products might pretest its ads by showing them to people and measuring eye movements, pulse rates, and other physical reactions. Consumer packaged-goods marketers might visit supermarkets and observe shoppers as they browse the store, pick up products and examine packages, and make actual buying decisions. Or a bank might evaluate possible new branch locations by checking traffic patterns, neighborhood conditions, and the location of competing branches.

Several companies sell information collected through mechanical observation. For example, Nielsen Media Research attaches people meters to television sets in selected homes to record who watches which programs. It then rates the size and demographic makeup of audiences for different television programs. The television networks use these ratings to judge program popularity and to set charges for advertising time. Advertisers use the ratings when selecting programs for their commercials. Checkout scanners in retail stores record consumer purchases in detail. Consumer products companies and retailers use scanner information to assess and improve product sales and store performance. Some marketing research firms now offer single-source data systems that electronically monitor both consumers’ purchases and consumers’ exposure to various marketing activities in an effort to better evaluate the link between the two.

Observational research can be used to obtain information that people are unwilling or unable to provide. In some cases, observation may be the only way to obtain the needed information. In contrast, some things simply cannot be observed, such as feelings, attitudes and motives, or private behavior. Long-term or infrequent behavior is also difficult to observe. Because of these limitations, researchers often use observation along with other data collection methods.