General Advice

Successful marketing requires timely and relevant market information. An inexpensive research program, based on questionnaires given to current or prospective customers, can often uncover dissatisfaction or possible new products or services.

Market research will also identify trends that affect sales and profitability. Population shifts, legal developments, and the local economic situation should be monitored to quickly identify problems and opportunities. It is also important to keep up with competitors' market strategies.

What you should obtain from your research?

You need to have a good overview and understanding of your organization. You need to be able to prove or disprove your findings. For this research, as the consultant you need to prove your points.

There is plenty of information that can be found from the comfort of your PC. Gone are the days of having to go to the library to search through the indexes and databases to find the data you are looking for. (Those of you who enjoy going to the library, by all means, hard-copy research is always welcome.)
 

How is Marketing Research Used?

Marketing research can be used to meet nearly all the marketing information
needs of the small business person. Every area from developing a business
plan to designing an effective advertising program can benefit from the use
of carefully planned and executed research. Specific examples of how
marketing research can guide and assist small business people include:

Developement of Business Plans:When you first sit down with that blank
piece of paper and dream of owning your own business, you should be asking
yourself questions such as: What am I going to sell? Will people buy what
I sell? How much should I charge? Where should I locate? How much
competition is there and who are they? Questions such as these should be at
the heart of any effective business plan, and marketing research can help
you answer them.

What are the Various Types of Marketing Research?

All marketing research falls into two basic categories: secondary and
primary. Secondary research involves literature searches, article reviews
and analysis of existing, available data. While secondary research is
limited to the information you have on hand, it is usually much cheaper
than primary research and can be done by small businesses themselves.

     There are two general types of primary research. Qualitative research
is used for developing new ideas or to get a "gut feeling" for a given
subject or problem. Quantitative research primarily involves surveys based
on representative samples where data is collected using mail, telephone or
personal interviews. Results from quantitative studies can be projected to
entire populations and therefore used in predicting.

Qualitative Research:

Nearly all qualitative research is done using focus groups. These groups
consist of eight to ten carefully selected and recruited individuals who
participate in a directed discussion concerning some issue. The
specifications for recruiting these participants are based on the
objectives of the study. For example, the owner of a gardening service
interested in expanding into a new geographic territory might want to
explore the demand for these services beforehand by conducting focus groups
among home-owners living in the area where the expansion is planned.

     The discussion itself is designed and led by a professional researcher
called a focus group moderator. The moderator follows a specially prepared
script known as a moderator's guide, which is developed with assistance
from the client and outlines the issues to be covered. It is important that
an independent, professional moderator be used to ensure objectivity, and
that all the relevant issues are covered.

     Focus groups are often conducted in special facilities equipped with
one-way mirrors and observation rooms so the client can observe the
discussions first hand without disturbing the participants. The discussions
are either audio or videotape recorded so the moderator does not have to
take notes. After conducting the groups, the moderator will listen to the
tapes, summarize the key points and present the client with a final report
on the findings.

     In most cases, three focus groups are conducted for a single research
project. It would be too risky to arrive at any conclusions based on the
results of just a single group, since the chances of only one group being
representative of the population are quite slim. While two groups are
better than one, many times the findings from the second group vary greatly
from those of the first. A third group strikes a balance between the first
and second and allows the client a better perspective.

     While focus groups are a legitimate form of marketing research, they
are also the most misused and incorrectly applied of all existing
techniques. They should only be used for exploration and generating new
ideas, and never considered to represent the opinions of the entire
population. The results from focus groups cannot be projected in any way.

     On the other hand, focus groups are an excellent method of flushing
out key issues regarding a new idea or potential product or service. They
can also serve as the first stage of the research process by identifying
key points to be addressed in subsequent, quantitative surveys.
 

Quantitative Research

     Quantitative Research: When people speak of marketing research, they
are usually referring to quantitative research. Quantitative research
involves a survey of a selected sample of a specific group using mail,
telephone or in-person interviews. Data is collected by means of a
carefully constructed questionnaire that is pre-tested before the actual
survey. Completed questionnaires are edited, and verbatim responses to
open-ended questions coded using pre-developed categories. The data from
the questionnaires is entered into a computer for tabulation of results.
Final computer output, or "tables," are then ready for analysis.

     It is important for both research buyers and users to understand the
strengths and weaknesses of each of the various research approaches so they
can select the technique best meeting their needs at a cost within their
budgets.

     Mail Surveys: Mail Surveys were extremely popular during the 1950s and
60s when the costs of telephone interviewing were prohibitively high. Mail
surveys are still widely used today, although the advent of the WATS
telephone service has made telephone surveys much more cost competitive.

     The major strength of mail surveys is still their relative low price.
For the price of postage, materials and printing, a small business can
conduct a very cost-effective research study. In addition, since the
respondent actually receives materials from the researcher, illustrative or
test documents can be included in the mail-out.

     The major drawback to mail surveys is their very low rate of return,
or response rate. Even with incentives such as money, and second mailings,
most end up with about a 5% to 15% response rate. This means you do not
know the opinions of 85% to 95% of the people you wish to study.

     In addition, those individuals who do not respond to a mail survey are
often different than those who do. For example, older retirees are more
likely to have the time and inclination to fill out and return a
questionnaire while single people between 25 and 35 years old are much less
likely to do so.

     Different research techniques such as incentives and telephone
reminders can boost the response rate to as much as 50%, but all these
methods add to the price of the study, defeating the purpose of selecting
this technique in the first place.

     In-Person Interviews:
Many of us are familiar with in-person interviews. Every ten years the U.S.
Census Department knocks on doors to conduct in-person interviews and find
out how the population has changed. In-person, or personal interviews,
involve a face-to-face meeting between an interviewer and a respondent.
Using a prepared questionnaire, the interviewer asks the respondent a
series of questions and carefully records the answers. These interviews
take place either at the respondent's home or place of business, or at a
well-traveled location such as a shopping mall.

     Unlike mail surveys, personal interviews usually result in a very high
completion rate. Response rates as high as 95% are not unheard of. In
addition, in-person interviews allow the respondent to physically come in
contact with proposed products, services or advertising under the guidance
of the interviewer. This is why in-person interviews are often used in
researching advertising copy or packaging designs.

     The biggest problem with in-person interviews is their extremely high
price. Since an interviewer is required to visit the respondents at their
home or business or track them down in shopping malls, a great deal of
interviewing time is required. Even at low hourly rates for interviewers,
an in-person interview currently costs at least $100. Considering that most
surveys use a sample size of at least 100 people, this approach can get
very expensive.


 

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