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Market Research
After
choosing a business idea,
the next step is to know your
market to find out such questions as: 'Why would people
buy my product or service rather than those which already
exist?' 'How many are they likely to buy?'
To
answer these and other related questions requires market
research. Market research is the collection and analysis
of information with a view of improving the business marketing
activities. It is an essential part of all businesses not
only to assess the business idea, but also for continued
development.
Qualitative
& Quantitative Research
Research is often categorised as either being 'qualitative'
(how many do?....) and 'quantitative' (Why do they do?...).
Qualitative
Research
This involves the collection of data that is open to interpretation,
for example people's opinions. It is useful for investigating
people's motives, attitudes, beliefs and intentions.
Quantitative
Research
This involves the collection of information that is quantifiable
and is therefore not open to interpretation as with qualitative
research. It includes data such as sales figures, market
share and market size.
Quantitative
research is the most likely research to be undertaken by
small businesses. It can be split into two broad areas:
1.
Primary research - This is also known as 'field'
research and is commissioned by an organisation for a specific
purpose. This is usually undertaken because the required
information does not already exist in any available format,
so the research has to be done from scratch.
2.
Secondary research -
This is also known as 'desk' research. It consists of data
and information that already exists that can be accessed.
Market
Research Methods
The most commonly used methods for collecting primary and
secondary data are:
1.
Interviews and surveys
This
involves the collection of primary data directly from individuals.
Techniques include:
- Personal
interviews - These are face-to-face meetings with
an interviewer and respondent. It can be used to obtain
information about the type of people, how they behave
(purchase behaviour), likes, and dislikes, attitudes and
opinions about the subject matter.
- Group
interviews and focus groups - These are used to produce
qualitative data that provide useful insights into underlying
attitudes and behaviour. Usually involve six to eight
people representative of the target group. It is useful
where budgets are limited or the research topic is not
yet fully understood.
- Telephone
interviews/research
- They are primarily used in industrial markets as a means
of reaching a large number of respondents relatively quickly
and directly. Telephone interviews are useful for usage
and purchase surveys for market size, trends, competitive
share, assessing advertising and promotional impact and
customer satisfaction.
-
Postal or self-completion - This is a popular form
of research. It involves sending a questionnaire through
the post to the respondent for self-completion and either
it is returned by post or left at an indicated place.
The postal or self-completion questionnaire is useful
where target respondents can be easily identified from
contacts or mailing lists. It is less expensive than telephone
and face-to-face interviewing and can achieve a higher
response if you send a user-friendly covering letter with
the questionnaire and offer a special incentive to complete
the form.
2.
Desk Research
This
consists of data and information that already exists that
can be accessed. The most common used sources are: government
published data, trade published data, Chambers of commerce,
directories and publications such as 'Yellow pages, 'Kompass',
market research agencies and press published data.
3.
Test Trial
You
can test your product before any major investment is made.
Any refinements required can be made during this phase.
4.
Search Engines
Search
engines such as www.altavista.co.uk, www.lycos.co.uk are
useful tools to finding information. By typing in the keyword
or phrase, a search can be made on the Web. If carried out
correctly, market research will enable you to eliminate
the guesswork, myth and intuition about your market, thereby
taking some of the risk out of start-up.
Useful
Links
The
Market Research Society
British Market Research
Association
Chartered Institute of Marketing
Data Protection
Suggested
next stage: How to design
a questionnaire.
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