Market Research - The Basics
What is market research?
Market research can be described as information gathered
in order to better understand an industry, product, or
potential clientele. There are two basic types of market
research consisting of primary and secondary. Primary
market research consists of specific information collected
to answer specific questions. A few examples include user
surveys, focus groups, phone interviews, and customer
questionnaires. Many times specific studies are commissioned
by private or public entities and are conducted for a
fee by market research firms that specialize in various
methods of data collection. Results are then published
and may or may not be considered proprietary and thus
may or may not be made publicly available. Secondary market
research is information that has been gathered and repackaged
from already existing sources. Most marketing research
has been, at one time or another in its lifecycle, considered
primary research; someone somewhere identified the information
to be gathered and contracted some entity to collect,
repackage, and perhaps distribute or publish the data.
Most of the information sources familiar to librarians
and their patrons are considered secondary sources of
market research. Sources such as government agencies,
their statistics and publications, books, journals, and
newspapers as well as trade association information are
all considered secondary market research.
Why is market research needed?
Market research plays an integral role in any successful
business endeavor by assisting the entrepreneur as well
as potential investors in identifying key pieces of information
for the business and marketing plans. Understanding the
industry, future trends and outlooks, potential competitors
and their product/service offerings, distribution channels,
price points, identifying possible market niches, customer
demographics, etc. are all possible with the aid of market
research.
How is market research accessed? Where is it available?
Primary market research may be accessed directly from
the vendor who conducted the research or via various services
that collect several providers' reports, called aggregators.
Many market research vendors, as well as aggregators,
make reports and tables of contents accessible via the
Internet as well as through database services such as
Dialog or Profound. Entire reports can range in price
from a few hundred dollars to several thousand. Many times
vendors will sell sections of various primary market research
reports for much less than the entire report would cost.
This is referred to as "cherry picking" and
can be a cost-effective alternative to purchasing the
entire report. Another cost-effective strategy can be
to access the vendor's white papers, generally available
for free at their Internet site. These are summary papers
that are published when a new study is released and many
times contain valuable bits and bytes of information.
A few of the many potential sources of primary market
research are:
Secondary market research is by far the most cost effective
information solution and generally the best place to start
the information gathering process. This information is
extracted from industry studies, books, journals and other
published resources and are readily available at most
public libraries and many times accessible for free via
the Internet as well. You should look to both sources
for a complete picture.
What to look for:
- Basic demographic information. The age, sex, geographical
region, marital status and so on of your existing and
potential customers and clients. More in-depth demographic
information provides details on their personal preferences
and buying habits.
- Customer ideas and opinions. Information such as
product quality preferences, motivators of buying decisions,
color preferences, and so on.
- Buying cycles or patterns. Do they buy weekly, monthly,
yearly? Are the purchases spontaneous or planned? Is
it a purchase for self or a gift for others?
- Trends for new or improved products and services.
What needs do they want to have filled? What's missing
in the marketplace?
- Strategic alliance opportunities. Who else is doing
what you do? What companies could complement your product
or service offerings if you worked together?
- Opportunities for beating your competition. What's
important to your customers - Price? Quality? Features?
Prestige?
Source: http://edge.lowe.org
Pitfalls to Avoid
- Using a sample that does not represent the total market.
- Asking the wrong questions.
- Not listening to the responses.
- Building in biases or predispositions that distort
the reliability of information.
- Letting arrogance or hostility cut off communication
at some point in the marketing process.
Source: Managing
a Small Business
