What is market researchand why is it so important?
Market research involves measuring and evaluating your customers
BEFORE developing and launching your product or service
ALREADY IN BUSINESS ?
If your business is not working or if it was going great and then all of a sudden you are experiencing less sales .... then you have to define what the problem is AND DO MARKET RESEARCH!
STARTING A BUSINESS ?
If your launching a new business, then you must define a problem to be solved in the market place AND DO MARKET RESEARCH!
I can honestly say that if you hire a market research company to do your market research, then you're about to spend a lot, and I mean a lot, of money. Market research is very time consuming and it takes a total mathematically strategic thinking brainiac to work out how to get your business on track. If you have the financial resources to hire a market research firm, then I strongly encourage you to seek one out. My company could do your market reserach for you but really, I don't want to. Instead I want to give you guidance on how to do the first initial steps in the market research process to help you get on track. I will be adding to this page to help you, but for now I'll simply be giving you a taste on how to start your own market research.
But before I begin, I want you to know that I wish I could tell you that growing a highly successful business, or even a business that just survives, is a logical and sequential process. It isn't .... but with market research strategy, it is!!
Market research is a step by step process.
But why do marketing research?
TO FIND OUT WHAT GIVES VALUE TO YOUR CUSTOMERS
This the THE MARKETING CONCEPT and is the core theory that marketing involves focusing on how to add value to customers so you make a lot of money and outperform any competition.
I know that you know that your idea is brilliant. I know that you know that if you work hard enough and are passionate enough, your idea will blossom into a thriving business. You don't want to go spend all your savings or borrow money to develop a product or service that you 'believe' people will want. You want to know for certain that you're going to make money and have a good life.
Wouldn't it be fantastic if you knew for sure what gives your customers value and why they choose your brand and why they will continually buy from you. This will give you security. This will give you a reason to get up in the morning because you've got customers who are eager to buy from you. Just the thought of this makes you feel good.
HERE ARE THE STEPS
TO FIND OUT
WHAT GIVES VALUE TO YOUR CUSTOMERS?
1. Defining the research problem and objectives
2. Planning a research design
3. Planning a sample
4. Collecting the data
5. Analyzing the data
6. Formulating conclusion
The very first and singular most important step in the market research process is:
Defining the Problem
....it is not until you know what is to be solved that you can solve it ...
What is the problem?
Do you know what is causing this problem?
You need to take a really close look at your business and clearly articulate what the problem is.
Get a piece of paper and write across the top,
"The problem is .........."
Write down your problem.
Read what you have written out loud.
Underneath the problem, write down questions about the problem and circle the question that you think will answer the problem.
You've done it! You've defined your problem and the question circled about the problem is your research objective.
You've now completed the first step in market research.
Once you have your research problem defined, you need to develop your research design based upon the research problem/question.
There are three types of research design:
Exploratory / Descriptive / Causal
Exploratory research is used when very little is known about the symptoms of the problem (ie. there's ambiguity surrounding the problem). Pilot studies, pretests, and focus groups are often used and this collection of primary data can get very expensive. Often, companies hire market research firms to gather this data. Another type of exploratory research is the gathering of secondary data where you look at previous research. This is a cost-effective way of gathering data.
Descriptive research provides the answers to the who, what, where, how and when of marketing research. The findings describe what is happening but they generally do not explain why it is happening. There are two types of descriptive research: cross-sectional and longitudinal. Cross-section explores what is happening at a single point in time. Longitudinal measures trends in awareness, attitudes, and behaviour over time using repeat measurements studies.
Causal research examines information on relationships and the impact of one variable on another. It provides the type of evidence necessary for making inferences about relationships between variables. For example, whether one variable causes (mediates) or determines (moderates) the value of another variable. Causal research requires experimental design.
WHICH RESEARCH DESIGN SHOULD YOU USE?
There is no "best" answer here. Â You need to look at your research question and then choose a design that will best answer the question. But here's a big hint to save you money. Do secondary research first, then conduct surveys.
Planning the Research Design
....This is the master plan that will specify the research methods and procedures for collecting and analysing information to help solve your problem....
It is not worth sampling oranges if you have a problem with your apples. To achieve valid results a valid sample must be obtained.
Step 3 in the market research process is:
Planning the Sample
....If you measure the wrong people you will get the wrong results, hence you need to think about who your sample is....
A sample is exactly that. It's a sample of people from the population. The populationis everyone of interest in the study (the census). For example, if we were interested in researching stay-at-home mothers in Sydney, then every mother who stays at home in Sydney would be the “population”. But it’s too costly to research the entire population, so we pick a sample to represent the population.
The Sample Design
Once the research plan is designed, it is also important to consider the sample design.
You need to consider the: sampling frame, sample selection process, and size of the sample.
The sampling frame lists the characteristics of the people who will be in the sample.
The sample selection process is either done by probability or non-probability. With probability sampling, everyone in the population has an equal chance of being selected into the sample. On the other hand, non-probability sampling involves judgement as not everyone has a chance to be in the sample.
View this video:
You cannot analyse data until you have collected it and placed it on file. Even this requires planning.
Step 4 in the market research process is:
Collecting the Data
.... It's methodical, it's boring for some, but it's necessary ....
It's external or internal andhelps to clarify or redefine the research requirements and may actually satisfy the research needs without the requirement for further primary research, which will save you tonnes of money.
It's qualitative or quantitative. and may require the development of data collection forms.
Step 5 in the market research process is:
ANALYSING THE DATA
.... Highly related to the research problem, analysis of the data should be the operationalisation of the research design ....
Data must be analysed so it's useful for you, but you need to do the data entry.
This involves several easy-to-do steps:
A field edit is a preliminary edit aimed at detecting the most obvious inaccuracies and omissions in the data.
A central office edit is an in-depth assessment of the data and is more concerned with what to do with the data than the procedures involved in getting the data.
Codinginvolves assigning numerical codes to items (or questions) on an instrument and codes (or values) to the various responses generated into a form that is ready for analysis.
This is because numbers can be more easily computer-analysed.
Sometimes automatic—in the case of online/computer surveys.
Otherwise, it has to be entered by you.
Where the data entry is manual, it can be sped up if two people do it.
One person calls out the response while the other enters the data.
Error checking should be conducted through both the editing and data entry stages, but there is still a need for more checking of the data.
Once the data has been entered, computerised checks need to be made to check for inconsistencies and unexplained missing responses. This task is called data cleaning (also called data screening or data checking).
Construct Tests (if required)
You now need to test for reliability and validity.
Reliability is the ratio of the variance found in all the items to the individual items.
Validity assesses the extent to which the items used to measure a specific construct do not measure other constructs.
Tabulation and Descriptive Statistical Analysis
To check the accuracy and consistency of your data, tabulation or a simple frequency check will provide valuable insights.
Hard data will mean nothing to you without the proper tools to interpret and analyze that data. I will add to this page techniques to get more rich, useful information out of your data using Excel, so you can take the next step to build a rich profile of data-driven marketing techniques.