The Dictionary in the American Marketing Association website defines Market Research as, “The systematic gathering, recording, and analyzing of data with respect to a particular market, where market refers to a specific customer group in a specific geographic area.”
In general, market research means the gathering of information and data from both free and purchased sources to better understand your target audience. This data typically cross-references multiple data sources to create a deep customer view. Data sources can include demographic information, such as age and gender, geographic information like zip code or city, economic information such as household income, and psychographic information such as interests and hobbies. This combined information can help you better identify and target those most likely to purchase your product or service.
Market research can be qualitative or quantitative in nature, and it is generally recommended to use both approaches to achieve a solid picture of your target audience.
Qualitative Research
Qualitative research is considered subjective research. Focus Groups, surveys, and any other research where people are asked questions and respond according to what they report they might do or feel is considered qualitative research. This type of research is best used to determine and test out appropriate messages, branding concepts, and creative themes to see how audiences will respond. This is not the best type of research to obtain definitive information about interest in or willingness to buy a particular product, because people often will report differently than their actual behavior will show. This phenomenon is known as response bias.
Quantitative Research
Quantitative research looks at actual data available about your particular audience. It might be purchasing data, response data, or other analytical data that is based on facts and not what someone “may” do. Quantitative research looks at trends and predictive patterns to identify commonalities and predict the likelihood of certain activities. This type of research is closely related to database marketing and the use of response modeling.
Your marketing investment will go a lot further if you understand who buys your products, and how to effectively target prospects that are most likely to buy your products. Without market research, you’re just throwing darts at a dartboard and hoping that something sticks. When you’re armed with information about who buys your products – and you use that information to target potential customers – you can generally spend less and get more overall return for your marketing dollars.
Additionally, market research can often help you identify the next most lucrative product opportunity – what product you might effectively cross-sell to your existing customers or what product prospects are interested in who haven’t yet purchased a product from you.
You can effectively complete simple market research projects on your own – and the Internet has become a very useful tool to support “do-it-yourself” research. In general, if you’re planning a simple survey and merely looking to test some different marketing messages or gather some directional information, you can probably use a simple web-survey as a tool to gather information. However, if you’re doing focus groups or looking to gather some real breakthrough intelligence – it’s probably best to hire a research firm specializing in the specific discipline you’re seeking. For instance, focus group research is a very different specialty than large-scale, national survey research.
Self-service for Simple Survey Research
If you want to execute some simple surveys on your own, the Internet is your very best tool. There are a number of companies out there that offer a pool of people you can rent to survey – and you can select only those participants who match your ideal target. These services also offer the software to complete and analyze your survey. An example of such a company is Zoomerang http://info.zoomerang.com, and there are others as well. The advantages are that you can get results incredibly quickly – and the costs are extremely affordable.
There are many firms specializing in market research. In general, the more extensive your research project, the higher the cost. A multi-city focus group project can easily cost $50,000, as can a major national survey. However, statistical validity can often be achieved by using a small sample size, and a good research firm can help you get the most for your budget.
Tips in choosing a research firm:
- Be sure you understand what you’re trying to accomplish.
- Interview at least 3 different firms – by forcing yourself to survey the market, you will ensure you get the best firm for your needs, at the right cost.
- Spend time outlining your objectives with the firm and ask for their proposals. Indicate that you are leaning toward a survey or a focus group study, but let the firms propose alternative research strategies they might suggest to achieve your objectives. If you’re going to spend time interviewing, and ultimately hiring, a professional research firm, be sure you listen to their suggestions.
- Don’t be afraid to push them to accomplish more with less – but be realistic about your expectations. For example, you can’t expect a one-hour focus group to cover 10 topics and get meaningful data about each of them. You’re better off identifying 2-3 major issues you want to investigate or for which you have a hypothesis and focus on getting in-depth discussion around those issues.
- Don’t be afraid to ask questions – just because they use terms you might not understand, don’t be intimidated. You’re the customer! Make sure they take time to help you understand what they are proposing, how it will work, and how it will give you the information you need to reach more customers or sell more product!