Focused qualitative observation is a form of observation and study that looks to a specified group of people, or perhaps a single person. The aim is to understand why they do a particular thing or think a particular way. For example, a business might engage in a series of study group sessions with interviewees to understand what motivates them to purchase a particular product.
Qualitative studies form whenever a question needs answering -- consequently, they may be forming at any time and in any place. In a formal setting, a researcher typically proposes funding a study to an interested group. A series of consultations results in a study, which takes place in a controlled setting.
Focused qualitative observation can take numerous forms, though it typically results from a series of interviews, questionnaires and focus groups. The researchers bring one or more people together and, either in a contained environment or mixed together, ask them various questions about the topic at hand. They then take the information they've gathered and analyze it, comparing their results to the hypothesis. Researchers eventually obtain answers, whether it's what they expected or not.
Qualitative observation is useful in determining the "why" of human rationale for any number of reasons. Perhaps a researcher wants to learn why mental patients behave inappropriately under certain circumstances or simply how they feel. Maybe a company wants to discover why its customers aren't buying a particular brand of soap, or a child just wants to know why his friend hit him. Qualitative research can apply to just about any branch of life; its generally social in nature and applicable to situations where researchers utilize quantitative observation (i.e., careful measurements).