The purpose of researching the market is to gather information in order to understand customer preferences for products and services. You will need two types of marketing research: primary and secondary. Primary research gives you an up-close and personal view of your potential customer, and secondary market research provides guidance and perspective.
Look before You Leap : Marketing research is most useful when you first plan and define goals. Do you just want to explore and get a feel for the market, or are you trying to solve a specific problem? What will you measure? How? Why? Once you have answered these questions you are ready to embark on your quest to know the customer. Your information on the whole should play a major role in shaping important business decisions.
Start with Secondary Market Research : Secondary research entails gathering and interpreting ready-to-use data. It should be done before primary market research because with little effort, you can get large amounts of information that can play a crucial role in guiding primary research, which tends to be much more time-consuming and/or costly. Some sources for secondary research are as follows:
- - Demographic studies
- - Marketing research studies
- - Newspaper and magazine articles
- - Opinion polls
Money is only green paper if we do not know what to do with it. Likewise, we’ve got the sources, but so what ? You have to know your customers well. Let’s take a look at consumer demographics. If you are interested in, for instance, selling women clothing, you would probably want to know the age range of females in an area. How many females are there? What is their income? Are they single or married?
Secondary information can be stored in two forms: print or online. Newspapers, magazines, microfilm, and CD-ROMs are all considered printed material. Helpful CD-ROM databases are as follows:
- - Moody’s
- - Business Newsbank
- - General Business File
- - Standard and Poor’s Register
Online information is in the form of computer databases. The benefits are that it is faster and it’s free if your library computer system is hooked up to the net. There are many different kinds databases.
Move On to Primary Market Research : Secondary information has its limitations. Statistics and studies are useful only to a certain extent. A customer is a human being, and if you really want to understand him or her, you cannot rely solely on data. Primary research humanizes the customer, as it involves collecting information directly from potential customers. Three very common sources of primary research are interviews, focus groups, and customer surveys.
Now, you are probably wondering, How do I find the right people to interview and fill out my surveys? What you need is a list of prospects for your product or service. The best list is made up of those people you wish were your customers — the people you have identified as your prospects. Researching from a bad list is like asking a goldfish about the landscape of the Sahara desert—you probably wouldn’t get very good information.
There are thousands of quality lists compiled in many different ways, ranging from attendees of trade shows to voter registrations. You can buy or rent them from list vendors, who can be found in the telephone book under “Mailing Lists.” There are even list compilers who can create a customized list of prospects for your company. Once you compile a list and contact prospects, you can begin gathering information, using such tactics as interviews and questionnaires.
Interviews : Interviews include personal interviews, focus groups, and telephone interviews.
- - Personal interviews. A face-to-face encounter fosters in-depth discussions that will allow you to address complex issues. Remember, getting a pat on the back tells you you’re going in the right direction, but you also need criticism to tell you when you are not on the right path. A downside to personal interviews is that there is an interview bias: Interviewees may be afraid of expressing their true feelings for fear of insulting you.
- - Focus groups. You can interview more than one customer at the same time.
- - Telephone interviews. A personal interview can easily be conducted over the phone. The interview bias is reduced, because people tend to be less shy about telling a stranger what is really on their mind.
Questionnaires : Since prospects can respond to questionnaires anonymously, the interview bias is not a problem. Questionnaires should be concise and easy to complete. The principles of a good questionnaire are that the questions should be worded simply, address marketing problems and/or issues, and should not conflict with each other. Before you start handing it out, test your questionnaire by asking prospects about the quality of the questionnaire.
Remember, your goal is to learn what your potential customers think by getting them to talk. People tend to be less inhibited when they are relaxed, so don’t be afraid to use informal ways to mingle with prospects, such as in casual conversations or at parties.