Observational Research – Customer Insights (2023)

This chapter derived from 6.5 Observational Research by Paul C. Price, Rajiv Jhangiani, I-Chant A. Chiang, Dana C. Leighton, & Carrie Cuttleris licensed under aCreative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.[1]

Learning Objectives

By the end of this chapter, students must be able to:

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  • Explain different types of observational research methods
  • Choose an appropriate type of method for a particular situation

Observational Research – Customer Insights (1)


The termobservational research is used to refer to several different types of non-experimental studies in which behavior is systematically observed and recorded. The goal of observational research is to describe a variable or set of variables. More generally, the goal is to obtain a snapshot of specific characteristics of an individual, group, or setting. As described previously, observational research is non-experimental because nothing is manipulated or controlled, and as such, we cannot arrive at causal conclusions using this approach. The data that is collected in observational research studies are often qualitative in nature but they may also be quantitative or both (mixed-methods). There are several different types of observational research designs that will be described below.


Naturalisticobservationis an observational method that involves observing people’s behavior in the environment in which it typically occurs. Thus naturalistic observation is a type of field research (as opposed to a type of laboratory research). Jane Goodall’s famous research on chimpanzees is a classic example of naturalistic observation.Dr. Goodall spent three decades observing chimpanzees in their natural environment in East Africa. She examined such things as chimpanzees’ social structure, mating patterns, gender roles, family structure, and care of offspring by observing them in the wild. However, naturalistic observationcould more simply involve observing shoppers in a grocery store, children on a school playground, or psychiatric inpatients in their wards. Researchers engaged in naturalistic observation usually make their observations as unobtrusively as possible so that participants are not aware that they are being studied. Such an approach is calleddisguised naturalistic observation.Ethically, this method is considered to be acceptable if the participants remain anonymous and the behavior occurs in a public setting where people would not normally have an expectation of privacy. Grocery shoppers putting items into their shopping carts, for example, are engaged in public behavior that is easily observable by store employees and other shoppers. For this reason, most researchers would consider it ethically acceptable to observe them for a study. On the other hand, one of the arguments against the ethicality of the naturalistic observation of “bathroom behavior” is that people have a reasonable expectation of privacy even in a public restroom and that this expectation was violated.

Contrived observation occurs in an artificial environment, such as a lab setting. For example, researchers may wish to measure people’s physiological responses to an ad that is being screened in the university researcher’s classroom.

(Video) Insights vs. Observations! Difference between Observation and Insight with Simple Real Life Example

Source: DW News. [2]


In cases where it is not ethical or practical to conduct disguised naturalistic observation, researchers can conductundisguised naturalistic observation where the participants are made aware of the researcher’s presence and monitoring of their behavior. However, one concern with undisguised naturalistic observation isreactivity.Reactivityrefers to when a measure changes participants’ behavior. In the case of undisguised naturalistic observation, the concern with reactivity is that when people know they are being observed and studied, they may act differently than they normally would. For instance, you may act much differently in a bar if you know that someone is observing you and recording your behaviors and this would invalidate the study. So disguised observation is less reactive and therefore can have higher validity because people are not aware that their behaviors are being observed and recorded. However, we now know that people often become used to being observed and with time they begin to behave naturally in the researcher’s presence. In other words, over time people habituate to being observed. Think about reality shows like Big Brother or Survivor where people are constantly being observed and recorded. While they may be on their best behavior at first, in a fairly short amount of time they are, flirting, having sex, wearing next to nothing, screaming at each other, and at times acting like complete fools in front of the entire nation.


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Another approach to data collection in observational research is participant observation. Inparticipantobservation, researchers become active participants in the group or situation they are studying. Participant observation is very similar to naturalistic observation in that it involves observing people’s behavior in the environment in which it typically occurs. As with naturalistic observation, the data that is collected can include interviews (usually unstructured), notes based on their observations and interactions, documents, photographs, and other artifacts. The only difference between naturalistic observation and participant observation is that researchers engaged in participant observation become active members of the group or situations they are studying. The basic rationale for participant observation is that there may be important information that is only accessible to or can be interpreted only by, someone who is an active participant in the group or situation. Like naturalistic observation, participant observation can be either disguised or undisguised. In disguised participant observation,the researchers pretend to be members of the social group they are observing and conceal their true identity as researchers. In contrast withundisguised participant observation,the researchers become a part of the group they are studying and they disclose their true identity as researchers to the group under investigation. Once again there are important ethical issues to consider with disguised participant observation.First, no informed consent can be obtained and second passive deception is being used. The researcher is passively deceiving the participants by intentionally withholding information about their motivations for being a part of the social group they are studying. But sometimes disguised participation is the only way to access a protective group (like a cult). Further, disguised participant observation is less prone to reactivity than undisguised participant observation.

One of the primary benefits of participant observation is that the researcher is in a much better position to understand the viewpoint and experiences of the people they are studying when they are a part of the social group. The primary limitation with this approach is that the mere presence of the observer could affect the behavior of the people being observed. While this is also a concern with naturalistic observation when researchers because active members of the social group they are studying, additional concerns arise that they may change the social dynamics and/or influence the behavior of the people they are studying. Similarly, if the researcher acts as a participant-observer there can be concerns with biases resulting from developing relationships with the participants. Concretely, the researcher may become less objective resulting in more experimenter bias.

Exhibit 1: Different types of equipment are used to study physiological/neurological responses in humans.

Observational Research – Customer Insights (2)Eye-tracking equipment

Observational Research – Customer Insights (3)

Neuromorphic camera/sensor equipment

Observational Research – Customer Insights (4)
Eye-tracking equipment, Neuromorphic camera/sensor equipment © 2022 Western Sydney University taken by Sally Tsoutas Western Sydney University Photographeris licensed under an Attribution-NonCommercial-NoDerivatives 4.0 International

In many situations, the means of observation are mechanical rather than human. This involves video cameras, traffic counters, checkout scanners, smartphones, and a range of devices that measure physiological responses. These devices include eye-tracking monitors, pupilometers, psychogalvanometers, voice pitch analyzers, and instruments to measure neurological signals.


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In structured observation, the emphasis is on gathering quantitative rather than qualitative data. Researchers using this approach are interested in a limited set of behaviors. This allows them to quantify the behaviors they are observing. In other words, structured observation is less global than naturalistic and participant observation because the researcher engaged in structured observations is interested in a small number of specific behaviors. Therefore, rather than recording everything that happens, the researcher only focuses on very specific behaviors of interest. For example, a marketer may be interested in the number of people entering a mall, or the number of times people stop to take a look at a displayed ad. Unstructured observation, on the other hand, is flexible and more informal. There is no checklist for the researcher to follow. The researcher may observe all aspects of a phenomenon and then provides details about things that he/she found to be relevant in understanding a situation. This technique can be more subjective than the structured approach.

When the observations require a judgment on the part of the observers (e.g., do customers look happy while shopping in a store?) this process is often described as coding. Coding generally requires clearly defining a set of target behaviors. The observers then categorize participants individually in terms of which behavior they have engaged in and the number of times they engaged in each behavior. The observers might even record the duration of each behavior. The target behaviors must be defined in such a way that different observers code them in the same way. In one study, for example, researchers video-recorded a subset of their participants’ reactions and had two observers independently code them. The two observers showed that they agreed on the reactions that were exhibited 97% of the time, indicating good interrater reliability.

One of the primary benefits of structured observation is that it is far more efficient than naturalistic and participant observation. Since the researchers are focused on specific behaviors this reduces time and expense. Also, oftentimes the environment is structured to encourage the behaviors of interest which again means that researchers do not have to invest as much time in waiting for the behaviors of interest to naturally occur. Finally, researchers using this approach can clearly exert greater control over the environment. However, when researchers exert more control over the environment it may make the environment less natural which decreases external validity. It is less clear for instance whether structured observations made in a laboratory environment will generalize to a real-world environment. Furthermore, since researchers engaged in structured observation are often not disguised there may be more concerns with reactivity.


Market researchers are able to gather data by observing physical evidence which can provide key insights. Artefacts – such as food cans in garbage bins and counting of physical inventories are key methods that can be used. Content analysis of ads, newspapers, images, or memos can help researchers understand certain aspects of a phenomenon.

(Video) Market researchers observe where we look | Made in Germany

  1. Price, PC, Jhangiani, R Chiang, ICA, Leighton, DC & Cuttler, C 2017, 'Observational research' in Research methods in psychology, Pressbooks, chapter 6.5, viewed 2 March 2022, <https://opentext.wsu.edu/carriecuttler/chapter/observational-research/>.
  2. DW News 2013, Market researchers observe where we look: made in Germany, online video, 4 September, viewed 3 March 2022, <https://www.youtube.com/watch?v=Hatmm84sqm0>.


Observational Research – Customer Insights? ›

Observational research is the wide-ranging set of methods businesses use to collect information by directly or indirectly “watching” consumers act in natural (and sometimes planned) environments. As such, it's used primarily in B2C contexts.

What is customer observational research? ›

Observational research is the wide-ranging set of methods businesses use to collect information by directly or indirectly “watching” consumers act in natural (and sometimes planned) environments. As such, it's used primarily in B2C contexts.

What are the 4 types of observation in research? ›

There are several different approaches to observational research including naturalistic observation, participant observation, structured observation, case studies, and archival research.

Which kind of research provides insights through observation? ›

Observational research is a qualitative research method where the target respondent/subject is observed and analysed in their natural/real-world setting.

What is an example of observational research in marketing? ›

Transportation departments use observational research to conduct traffic counts and usage patterns. Many retail marketers use observational techniques when they count license plates in parking lots, record purchasing behavior through bar-coded transactions and observe package scrutiny and preference.

What is an example of observational research? ›

In an observational study, researchers study how participants perform certain behaviors or activities without telling them what methods or behaviors to choose. For example, if a scientist wants to study how the amount of water humans drink affects their diets, they might choose an observational study.

What is observational research method? ›

Observational research is a research technique where you observe participants and phenomena in their most natural settings. This enables researchers to see their subjects make choices and react to situations in their natural setting, as opposed to structured settings like research labs or focus groups.

What are the advantages of observation research? ›

The biggest advantage of observational research has already been noted: it enables businesses to observe potential customers in a natural setting, which can reveal penetrating insights unavailable through other methods such as focus groups and surveys.

What is the most common type of observational study? ›

The most common observational study categories include case reports, cross-sectional studies, and cohort studies. Case reports are retrospective looks at a specific event and only involve one subject.

What are the three types of observational research methods? ›

There are three main types of observational studies: cohort studies, case–control studies, and cross-sectional studies.

What is an observational insight? ›

Observations are just raw data: things you saw and heard — what you recorded without judgment. Insights, however, are a deeper interpretation and understanding of what you are seeing and hearing. Insights make sense and meaning out of your observations.

What are two major types of observational research studies? ›

Three types of observational studies include cohort studies, case-control studies, and cross-sectional studies (Figure 1).

What are 5 qualitative observations? ›

Qualitative observation is a research method in which researchers collect data using their five senses, sight, smell, touch, taste, and hearing.

What is the best example of an observational study? ›

An opinion survey asking questions about how people liked the most recent documentary is an example of an observational study. Here, the researchers have no control over the participants.

What companies use observational research? ›

Companies such as Motorola, Gillette, Steelcase, and Xerox have used observational research to identify opportunities for entirely new products. Researchers go to customers' environments to watch and interview people in context.

What type of research design is an observational study? ›

Observational study designs, also called epidemiologic study designs, are often retrospective and are used to assess potential causation in exposure-outcome relationships and therefore influence preventive methods.

What is the goal of observational research? ›

Observational studies involve the study of participants without any forced change to their circumstances, that is, without any intervention. Although the participants' behaviour may change under observation, the intent of observational studies is to investigate the 'natural' state of risk factors, diseases or outcomes.

What is an example of an observation? ›

For example, watching an apple fall from a tree could be an observation. Noticing that fish only come to a particular part of the river in the early morning is also an observation. Smelling garbage decomposing is another example of observation.

What is the purpose of observational method? ›

Observation methods are generally used in cases where it is important to avoid the sort of errors that can occur in interview methods or 'bias' as a result of evaluation and interpretation processes on the part of the workers, or when, in future workplace design, no workers are yet available for the planned jobs.

What are the pros and cons of observation? ›

Comparison Table for the advantages and disadvantages of the Observation Method
The observation approach is simple because it frequently does not involve technical skills.In the observation method, only some things are observed. Feelings, emotions, and opinions remain unobserved.
3 more rows

What are the strengths of observation? ›

  • Controlled observations can be easily replicated by other researchers by using the same observation schedule. ...
  • The data obtained from structured observations is easier and quicker to analyze as it is quantitative (i.e., numerical) – making this a less time-consuming method compared to naturalistic observations.
May 10, 2023

What are the problems with observational research? ›

The main problem in observational studies is the presence of confounders and selection bias (which are prevented in RCTs through randomization and blinding). A confounder can be defined as any factor that is related not only to the intervention (e.g. treatment) but also to the outcome and could affect both.

When should you use observation as a method of data collection? ›

When should you use observation for evaluation? When you are trying to understand an ongoing process or situation. Through observation you can monitor or watch a process or situation that your are evaluating as it occurs. When you are gathering data on individual behaviors or interactions between people.

What observation techniques are most commonly used? ›

In marketing research, the most frequently used types of observational techniques are:
  • Personal observation. observing products in use to detect usage patterns and problems. ...
  • Mechanical observation. eye-tracking analysis while subjects watch advertisements. ...
  • Audits. ...
  • Trace Analysis. ...
  • Content analysis.

What are observational methods best suited for research? ›

Observational methods are best suited for research requiring self-report descriptive data; that is when behavior is to be examined directly asking the respondents themselves. 16. An observational study is said to be low in control when the situation or setting is manipulated or contrived by the researcher.

What are the limitations of observation method? ›

The most limiting factor in the use of observation method is the inability to observe such things such as attitudes, motivations, customers/consumers state of mind, their buying motives and their images. It also takes time for the investigator to wait for a particular action to take place.

What is the conclusion of the observation method? ›

Conclusion Under the observation method, the information is sought by way of investigator's own direct observation without asking from the respondent.

What is the importance of collecting data through observation and interviews? ›

It gives the researcher a better understanding of what is happening in the culture and lends credence to one's interpretations of the observation. Participant observation also enables the researcher to collect both quantitative and qualitative data through surveys and interviews.

What are the 4 types of insight learning? ›

The four stages of insight learning are preparation, incubation, insight, and verification.

What is observational vs insight learning? ›

Insight is the sudden understanding of the components of a problem that makes the solution apparent. Latent learning refers to learning that is not reinforced and not demonstrated until there is motivation to do so. Observational learning occurs by viewing the behaviors of others.

What are the four major purposes of observing? ›

Observations help guide our decisions, inform our practices, and help us to develop a plan of action that best fits each child's individual needs. With every observation, we can begin to see how all the pieces fit together to make the whole child.

Is observational research qualitative or quantitative? ›

Observational studies are part of qualitative research and are theory building (i.e. the aim is to draw out the general themes) and follow a phenomenological approach (i.e. the participant observer seeks out the meaning of the experiences of the group being studied from each of the many different perspectives within it ...

What are 3 examples of qualitative observation? ›

Some examples of qualitative observations are texture (smooth or rough), taste (sweet or salty), temperature (hot or cold), and even mood (angry or happy).

What are 4 quantitative observations? ›

The four types of quantitative observation include:
  • Descriptive. This involves observing and measuring variables to analyze them. ...
  • Correlational. This type of quantitative observation involves determining the extent of a relationship between one or several variables using statistical data. ...
  • Quasi-experimental. ...
  • Experimental.
Mar 7, 2023

How do you analyze qualitative observational data? ›

Qualitative data analysis requires a 5-step process:
  1. Prepare and organize your data. Print out your transcripts, gather your notes, documents, or other materials. ...
  2. Review and explore the data. ...
  3. Create initial codes. ...
  4. Review those codes and revise or combine into themes. ...
  5. Present themes in a cohesive manner.

What are the characteristics of an observational study? ›

An observational study measures the characteristics of a population by studying individuals in a sample, but does not attempt to manipulate or influence the variables of interest.

What are the variables in an observational study? ›

Observational studies have explanatory and response variables only. Because the researcher cannot interfere with the study, there cannot be any independent nor dependent variables. Remember, an independent variable is something that is controlled in the study.

What are the features of observational research design? ›

The observational design is subdivided into descriptive, including cross-sectional, case report or case series, and correlational, and analytic which includes cross-section, case-control, and cohort studies. Each research design has its uses and points of strength and limitations.

What are the 7 types of observation? ›

Different Types Of Observation Methods
  • Anecdotal Records. This observation is usually recorded after the event has occurred and written in past tense. ...
  • Running Records. ...
  • Learning Stories. ...
  • Jottings. ...
  • Sociograms. ...
  • Time Samples. ...
  • Event Samples. ...
  • Photographs.
Jan 16, 2023

What are the 4 processes of observational learning? ›

Observational learning is a major component of Bandura's social learning theory. He also emphasized that four conditions were necessary in any form of observing and modeling behavior: attention, retention, reproduction, and motivation.

Why is observational research important in marketing? ›

Observational research allows a researcher to better understand the actions of customers, employees, and other individuals, and the implications of such actions.

What is an example of a customer observation? ›

A very well-known example of customer observation is the net promoter score survey, which is used to gauge customer satisfaction and identify areas for improvement.

What is an example of observational learning in consumer Behaviour? ›

Other examples of observational learning might include a child learning to place their napkin in their lap by watching their parents at the dinner table, or a customer learning where to find the washroom after observing where other customers have gone when leaving their tables.

What is customer research process? ›

What is Consumer Research? Consumer research is a part of market research in which inclination, motivation and purchase behavior of the targeted customers are identified. Consumer research helps businesses or organizations understand customer psychology and create detailed purchasing behavior profiles.

What are 5 observations examples? ›

Scientific Observation Examples

A scientist looking at a chemical reaction in an experiment. A doctor watching a patient after administering an injection. An astronomer looking at the night sky and recording data regarding the movement and brightness of the objects he sees.

Why is observation important in customer service? ›

Observing customers can give you valuable insights into their needs and how your product or service can be improved to better meet those needs.

What are 3 examples of customer information? ›

What is customer information? Name, phone number, email address, company address, orders and much more. These are customer information, that every company has to store to provide a perfect customer support.

What is observation method in consumer behaviour? ›

Observation is a market research technique in which highly trained researchers generally watch how people or consumers behave and interact in the market under natural conditions. It is designed to give precisely detailed and actual information on what consumers do as they interact in a given market niche.

What are the two methods used for consumer research? ›

There are two main research methods of studying consumer behavior: quantitative and qualitative. Quantitative methods gather insights with numerical data. Qualitative techniques get insights on consumers' behavior and interactions with a product. Surveys are used to collect both types of data.

How can you conduct research on customer information? ›

There are several methods you can use to do research, including: conducting your own research using customer surveys, feedback and interviews. conducting analysis of your own business using your past performance in sales, goods returned and repeat business. researching industry and market trend information.

How do you gather customer research? ›

On that note, here are the 20 customer research methods marketers shared with us.
  1. Leverage Existing Customer Reviews. ...
  2. Spend a Day in Your Customer's Office. ...
  3. Turn to Data Analytics. ...
  4. Collect Customer Survey Responses. ...
  5. Watch Customers Use Your Product. ...
  6. Leverage Publicly Available Data. ...
  7. Use Facebook Audience Insights.
Oct 30, 2019


1. User Research: Informing Product Decisions with Customer Insights
(Stanford Online)
2. Understanding consumer behaviour, from the inside out
3. Developing customer insight to drive marketing strategy
(The Chartered Institute of Marketing - CIM)
4. Insight through observation
(Phoenix Enterprise Projects)
5. Consumer Observation for Writing an insight – Mat Shore Innovation
6. Observational Research Introduction
(Dr. Baker SDSU Marketing)


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