Conducting Market Research

Conducting Market Research

by Leo Sun

Prior to the launch of any new product, companies engage in exhaustively thorough market research in order to gauge its probability of success. If your subjects are properly selected, you can gain valuable information that may allow you to better temper your product for the intended target audience. What are your considerations prior to starting market research?

• Demographics of your target geographical area – are you targeting the right region?
• Price range and profit margin – will you make enough money from each sale?
• Intended production volume – if you intend to take a higher volume approach, do you have the facilities to back it up?
• Age range, marital status, family – do you have a detailed sketch of your ideal customer in mind?
• Income and Lifestyle range – how much money will your average customer make?
• Males, females or both – which sex are you focused on?
• Seasonal, cyclical nature of your product – is your product marketable year-round or only on certain occasions?

These may be bewildering questions at first. However, a well-run company should have a marketing manager to coordinate appropriate market research with a marketing researcher. The researcher and the manager define the objectives to be attained through the research.

A well known acronym in the world of marketing research is “DECIDE”, which is a quick way to remember the steps of research.

• Define the marketing problem
• Enumerate the decision factors
• Collect relevant information
• Identify the best alternatives
• Develop and implement a marketing plan
• Evaluate the final decision

The marketing team should then develop the plan and outline the costs, to be presented to the marketing manager for approval.

Now, with an approved market research in place, it’s time to address the two main forms of market research:

• Qualitative research: an exploratory, limited way to gauge the needs of your target demographic, focused on a smaller group with higher detail. These include focus groups and in-depth interviews with selected individuals. An example of this would be to approach a group of surfers at the beach with your surfboard designs, to gather a small amount of high quality opinions from a dedicated group.
• Quantitative research: surveys of much larger groups with the intent of garnering hard statistics to use for future financial plans. Examples of these are surveys conducted over the phone, by mail and on the Internet. These results tend to be of lower quality and diversity, but can be compiled quickly to formulate a larger picture of the targeted area.

Ideally, a company would employ a mix of both kinds of research to gain the best perspective on their customer base. There are many kinds of research – coolhunting, viral marketing, concept testing, demand estimation and online panels are all methods market researchers employ to garner results. The findings from the research should be compiled by your marketing team through comprehensive charts and tables to be presented to management.

Once the marketing manager presents the final results, the company should move on to the product testing phase.

The product testing phase takes place after the completion of the product manufacturing phase and before the product launch. This can be done on qualitative and quantitative bases as well, but if you intend to use large groups for quantitative tests, you should be aware of the physical constraints that were not there during the survey phase, as you must produce enough of the product for testing purposes. A simple example of this is the software beta tester, who is hired by a company to endlessly use the software in search of bugs and glitches. In this example, you would need to devote a lot of manpower and hours to clean and temper your product. If your product is something simpler, such as food, you need only serve your product and record a survey response.

Market research may sound and feel like an overwhelming, costly operation, but it can be done  on a smaller scale for home and small businesses. If you don’t have a marketing team ready to launch a research project, there are freely available reports online for a myriad of products. These can include established research for automobiles, consumer spending habits and restaurant choices, among others. You can also hire university students looking for a business school class project or a few extra cash. This would still be considerably cheaper than hiring a professional marketing research firm.

On the other hand, if you have money to dedicate to market research but you don’t have a full marketing team, consider hiring professionally contracted services or virtual assistants to get the job done efficiently with little hassle.

Source: businessdictionary.com