By the artistic marketeer Thursday
Why Do Market Research?
Market research provides critical information about your market and your business landscape. It can tell you how your company is perceived by the target customers and clients you want to reach.
It can help you understand how to connect with them, show how you stack up against the competition, and inform how you plan your next steps.
Market research can also play an important role in the process of developing your products and services, bringing them to the marketplace, and marketing them to consumers. Here are a few ways that market research can help inform your business strategy:
- It can give you an accurate view of your business and your marketplace. For example, you can see how you are perceived in comparison to your competitors, and evaluate what your competitors are doing to attract customers.
- It can help you determine who and where your customers are, and which customers are most likely to do business with you. (In fact, for customers who indicate that they don’t want to do business with you, market research is your opportunity to ask them “why not?”.)
- It can reveal how customers and prospects view your existing business and products, and show you if you are or are not meeting your customers’ needs. It’s even possible you may uncover some opinions about your business and/or products that you weren’t aware of.
- It can help you decide whether a new idea for a business or product will fly – that is, if customers will find it appealing – based on how similar products have performed in the marketplace.
- It can help you make wise product packaging and promotional decisions, as well as effective marketing messages.
- For many businesses, market research is a key component in developing marketing strategy by providing a fact-based foundation for estimating sales and profitability. In fact, it can make the difference between making wise decisions that drive business forward and poor decisions that can damage your business.
- The competitive environment you face is increasingly challenging. It’s safe to assume that your competitors are conducting research to gain their own advantage. That may be the best reason of all to make market research a key part of your business growth strategy.
Market research can be valuable to your company’s growth and success. Here’s a way to start:
- First, identify your competitors. This can be simple if there are one or two other companies that do what you do. Sometimes, it’s more complex.
- Work with your company leaders to identify where else customers go for the product or service you offer.
- Think about your business goals. Are you trying to grow? Introducing a new product? Enhance service or move locations?
- Consider research needs and goals. Do you want perspective on your business, or are you considering a major shift in your business strategy?
- These informative articles offer more detail on the role and benefits of market research:
Types of Marketing research
Market research generally involves two different types of research: Primary And Secondary.
Primary research is research you conduct yourself (or hire someone to do for you.) It involves going directly to a source usually customers and prospective customers in your target market to ask questions and gather information.
TYPES OF PRIMARY RESEARCH ARE
- Interviews (telephone or face-to-face)
- Surveys (online or mail)
- Questionnaires (online or mail)
- Focus groups
- Visits to competitors’ locations
When you conduct primary research, you’re typically gathering two basic kinds of information:
Exploratory. This research is general and open-ended, and typically involves lengthy interviews with an individual or small group.
Specific. This research is more precise, and is used to solve a problem identified in exploratory research. It involves more structured, formal interviews.
Primary research usually costs more and often takes longer to conduct than secondary research, but it gives conclusive results.
Secondary research is a type of research that has already been compiled, gathered, organized and published by others. It includes reports and studies by government agencies, trade associations or other businesses in your industry.
For small businesses with limited budgets, most research is typically secondary, because it can be obtained faster and more affordably than primary research.
A lot of secondary research is available right on the Web, simply by entering key words and phrases for the type of information you’re looking for.
You can also obtain secondary research by reading articles in magazines, trade journals and industry publications, by visiting a reference library, and by contacting industry associations or trade organisations. (Note: When you locate the research you want, check its publication date to be sure the data is fresh and not outdated.)
One excellent source of secondary research data is government agencies; this data is usually available free of charge. On the other hand, data published by private companies may require permission, and sometimes a fee, for you to access it.
Some of the major steps involved in the marketing research process are as follows:
1. Identification and Defining Problem
2. Statement of Research Objectives
3. Planning the Research Design or Designing the Research Study
4. Planning the Sample
5. Data Collection
6. Data Processing and Analysis
7. Formulating Conclusion, Preparing and Presenting the Report.
Marketing research exercises may take many forms but systematic inquiry is a feature common to all such forms. Being a systematic inquiry, it requires a careful planning of the orderly investigation process.
Though it is not necessary that all research processes would invariably follow a given sequence, yet marketing research often follows a generalised pattern which can be broken down and studied as sequential stages.
The various stages or steps in the marketing research process are discussed below:
The market research process begins with the identification “of a problem faced by the company. The clear-cut statement of the problem may not be possible at the very outset of the research process because often only the symptoms of the problems are apparent at that stage.
Then, after some explanatory research, clear definition of the problem is of crucial importance in marketing research because such research is a costly process involving time, energy and money.
Clear definition of the problem helps the researcher in all subsequent research efforts including setting of proper research objectives, the determination of the techniques to be used, and the extent of information to be collected.
2.Statement of Research Objectives:
After identifying and defining the problem with or without explanatory research, the researcher must take a formal statement of research objectives. Such objectives may be stated in qualitative or quantitative terms and expressed as research questions, statement or hypothesis. For example, the research objective, “To find out the extent to which sales promotion schemes affected the sales volume” is a research objective expressed as a statement.
On the other hand, a hypothesis is a statement that can be refuted or supported by empirical finding. The same research objective could be stated as, “To test the proposition that sales are positively affected by the sales promotion schemes undertaken this winter.”
An example of another hypothesis may be: “The new packaging pattern has resulted in an increase in sales and profits.” Once the objectives or the hypotheses are developed, the researcher is ready to choose the research design.
3.Planning Research Design or Designing the Research Study:
After defining the research problem and deciding the objectives, the research design must be developed. A research design is a master plan specifying the procedure for collecting and analysing the needed information. It represents a framework for the research plan of action.
The objectives of the study are included in the research design to ensure that data collected are relevant to the objectives. At this stage, the researcher should also determine the type of sources of information needed, the data collection method (e.g., survey or interview), the sampling, methodology, and the timing and possible costs of research.
4.Planning the Sample:
Sampling involves procedures that use a small number of items or parts of the ‘population’ (total items) to make conclusion regarding the ‘population’. Important questions in this regard are :
- who is to be sampled as a rightly representative lot?
- Which is the target ‘population’?
- What should be the sample size ?
- How large or how small?
- How to select the various units to make up the sample?
The collection of data relates to the gathering of facts to be used in solving the problem. Hence, methods of market research are essentially methods of data collection. Data can be secondary, i.e., collected from concerned reports, magazines and other periodicals, especially written articles, government publications, company publications, books, etc.
Data can be primary, i.e., collected from the original base through empirical research by means of various tools.
There can be broadly two types of sources
(i) Internal sources—existing within the firm itself, such as accounting data, salesmen’s reports, etc.
(ii) External sources—outside the firm.
6.Data Processing and Analysis:
Once data have been collected, these have to be converted into a format that will suggest answers to the initially identified and defined problem. Data processing begins with the editing of data and its coding. Editing involves inspecting the data-collection forms for omission, legibility, and consistency in classification. Before tabulation, responses need to be classified into meaningful categories.
The rules for categorizing, recording and transferring the data to ‘data storage media’ are called codes. This coding process facilitates the manual or computer tabulation. If computer analysis is being used, the data can be key punched and verified.
Analysis of data represents the application of logic to the understanding of data collected about the subject. In its simplest form analysis may involve determination of consistent patterns and summarising of appropriate details.
The appropriate analytical techniques chosen would depend upon informational requirements of the problem, characteristics of the research designs and the nature of the data gathered. The statistical analysis may range from simple immediate analysis to very complex multivariate analysis.
7.Formulating Conclusion, Preparing and Presenting the Report:
The final stage in the marketing research process is that of interpreting the information and drawing conclusions for use in managerial decisions. The research report should clearly and effectively communicate the research findings and need not include complicated statements about the technical aspect of the study and research methods.
Often the management is not interested in details of research design and statistical analysis, but instead, in the concrete findings of the research. If need be, the researcher may bring out his appropriate recommendations or suggestions in the matter. Researchers must make the presentation technically accurate, understandable and useful.