Tweet

Market Research Best Practices

Guest post by: Jesse Hopps

Article Overview: Market research is the process of systematically gathering, recording, and analyzing data regarding customers, competitors, and market conditions, to help organizations make better business decisions about the development and marketing of new or existing products and services.

Market Research Best Practices

Market Research Best Practices

Market research is the process of systematically gathering, recording, and analyzing data regarding customers, competitors, and market conditions, to help organizations make better business decisions about the development and marketing of new or existing products and services.

Benefits of Market Research

• Drive Customer-Centricity- use our Customer-Centricity Checklist to learn 12 proven strategies.
• Identify Market Opportunities- read our report: Market Segmentation, Targeting, & Positioning, to learn how to identify new opportunities.
• Reduce Time-to-Market- leveraging the "voice-of-the-customer" streamlines the product development, testing, and marketing processes, increasing velocity.
• Monitor Competitive Advantages- regular competitive analysis ensures that your organization will not lose or fail to communicate key advantages.
• Provide Decision-Making Insights- making decisions without adequate market intelligence can be disastrous. Base your decisions on facts, not gut instinct.
• Better Allocation of Resources- by analyzing which products, programs, channels, and markets are most lucrative, organizations can focus their precious resources on profitable activities.
• Increase Profitability & Growth- having a solid understanding of market needs is critical for meeting and exceeding customer expectations, and leads to customer retention, increased profitability, and growth.

Primary vs. Secondary Research

There are two categories of market research: primary research and secondary research. Primary research involves the collection of data that does not currently exist or is unavailable to an organization. Secondary research involves the collection, analysis, and summarization of existing data derived from third-party research firms or other sources.

Many organizations do not have the resources in-house to conduct effective primary research campaigns, and glean insights from full-service research firms such as Gartner, Inc., IDC, Forrester, Harris Interactive, AC Nielsen, Datamonitor, Dun and Bradstreet, Millward Brown, NPD Group, or TNS.

Following are a list of common market research projects designed to test or validate assumptions made by the business:

• Market Sizing & Segmentation- how large is our target market? How should we segment our market? What are our customer profiles?
• Competitive Analysis- who are our direct/indirect competitors? What products/services are eroding our market share? What messages are competitors sending? Who is growing quickly and needs to be watched?
• Product Positioning- how much price power do we have? Where do customers position us? What is our price elasticity of demand?
• Product Penetration- what is our market share? Are we gaining or losing share of wallet? What geographies are not penetrated?
• Brand Awareness & Preferences- what brand attributes are most important? How aware is our market of our brand?
• Consumer Behavior- how do our customers use our products? What products are usually purchased together? How does placement affect sales?
• Customer Analysis- how many customers do we have? What customers are most profitable? What is our customer lifetime value?
• Customer Satisfaction- what is our retention rate? How does customer satisfaction affect profitability? Are we getting referrals?
• Demand Forecasting- what were our previous sales by product line? What staffing will we need to deliver on sales? What is our sales forecast?
• Distribution Channels- which channels are not producing results? How can we increase promotion of our products?
• Decision-Making Process- how do our customers prefer to buy? What are the top buying criteria? Is our sales process aligned?
• Marketing Effectiveness- how effective was our last campaign? Where do the majority of our leads come from? What is the ROI from marketing?

Market Research Tools & Best Practices

1. Define Responsibilities- Use our Marketing Analyst Job Description to define key responsibilities and set the direction for this function.

2. Identify the Problem- a clear statement of the problem is the key to effective market research. Examples of common research problem questions are:

1. What competitive advantages do we have?

2. Who is our target market? What makes them unique?

3. Where do our prospects position us in the market?

4. What is our market share? Is it being eroded?

5. How likely are customers to refer us business?

6. Which sales channels are most effective?

7. How can we improve our sales process?

8. What new products should we develop?

9. How effective are our marketing campaigns?

10. What is the optimal price for our products?

• Establish Research Objectives- set objectives that once achieved provide the information required to solve the problem. Generally, your objective is to validate a working hypothesis. For example, your objective may be to test a cause-effect relationship such as: if we reduce our price, what will the impact be on sales volume and profitability?
• Set Research Project Timelines- based on your problem and objectives, develop a project charter to schedule resources and set timelines for execution.
• Select Research Design- there are three main types of research design: exploratory, descriptive, and causal. Exploratory research involves collecting information in an unstructured and informal way, such as reviewing competitors. websites to gain further understanding of their offerings. Descriptive research refers to methods that analyze marketing variables like consumer attitudes, behaviors, and intentions. Customer satisfaction and brand perception surveys are examples of descriptive studies. Causal research is conducted by controlling various factors to identify cause-effect relationships that affect the problem. Testing the effect of marketing campaigns on sales in a specific geographic region is an example of causal research. Causal research is most informative but can be very expensive and can require complex experiments to ensure validity. Start with exploratory and descriptive research designs if your organization does not have an existing market research function.
• Determine Data Requirements- determine what information you will need to solve the research problem and estimate the cost of gathering that data. Primary research data is typically more expensive and time-consuming than secondary research data, but provides much more accurate insight. Depending on your timelines, budgets, and resources, decide if purchasing an industry benchmarking report from an analyst firm will provide a better cost/benefit than conducting primary research for your project.
• Download Tools & Templates- following are some market research reports, tools, and templates that you can download and quickly customize to suit your specific needs:

1. Advertisement Evaluation Matrix

2. Business Requirements Template

3. Brand Perception Survey

4. Competitive Ad vs. PR Analysis Tool

5. Competitive Analysis Tool

6. Competitive Website Analysis Tool

7. Customer Profile Template

8. Customer Satisfaction Survey

9. Market Requirements Document

10. Market Research Report Template

11. Marketing Analyst Job Description

12. Market Segmentation, Targeting, & Positioning

13. Practical Product Management Tools Report

14. Product Development Charter

15. Product Development Schedule

16. Product Feature Priority Tool

17. Product Feature Request Form

18. Product Launch Checklist

19. Product Positioning Tool

20. Product Requirements Document

21. Product Sanity-Check Tool

22. Sales Analysis Tool

23. STEP Industry Analysis

24. SWOT Internal Analysis

• Choose a Research Method- there are two methods for gathering information: observation or asking questions. The most common, and cost-effective tool is the questionnaire or survey. Structured surveys are quantitative and list close-end questions, such as multiple-choice, yes/no, or scale rankings. Unstructured surveys gather qualitative data and allow respondents to answer in their own words. Depending on your research objectives and problem, either type of survey can be effective. Some organizations find that mixing these types provides both measureable results and real-world insights that can be missed by setting specific questions. If you require primary research data, consider each of the following research methods:
• 1. Telephone Surveys - consider Harris Interactive.
• 2. Online Surveys - Question Pro, Key Survey, SPSS.
• 3. Personal Interviews - use our Business Requirement Document to collect data directly from discussions.
• 4. Focus Groups - create a customer/prospect advisory panel that represents a cross-section of your target market and their needs.
• 5. Video Cameras - watch consumers USE your product.

• Collect & Analyze Data- once you have selected your research method, built your data-collection tool, and performed the study, gather all the data together to glean insights. The first step is the ensure data quality and accuracy; verify that raw data was correctly entered into the data-collection form and that there are no respondents who are looking to skew results. Next, aggregate the data to determine averages, slice-and-dice by demographics, and do other statistical analysis. Ensure that there is a large enough sample size to provide a real statistical representation and determine the margin of error. For a survey of 100 people, expect a margin of error of +/- 10%. For a sample size of 600, expect +/- 4%.
• Report to Senior Management- based on your findings, create a report summarizing the research problem, objectives, research design & methods, information sources, and results. Focus on providing a high-level overview rather than getting into the low-level findings. Assess the implications of your results on business opportunities and risks, and make recommendations for improving business operations. Send your Market Research Report to the relevant stakeholders, and invite them to meet to discuss further.

Related Articles
  Market Research – What’s That Then?
  The art and science of SEO : Part 1
  Self-Quiz – Should my business hire a consultant?
  Best Practices
  The EEOC Task Force Splendid Approach for Businesses
  Content Marketing Principles and Practices
  Learn the Latest Best Practices in Business Presenting
  Sharing best practices company-wide
  Unfair Business Practices
  Modular EHR’s: Small Investment; Big Gains
  Unearthing the truth about reusable fabric grocery bags
  Expansion of The Indian Payment Card Market in the Recent Years
  5 Top Income Producing Tasks For Your Internet Home Based Business
  Book Review: Influencer: The Power to Change Anything
  3 Tips to Choosing the Right Affiliate Marketing Products
  Do you understand your market?
  VII D. Promote Institutional Investors: PROMOTING STOCK MARKET DEVELOPMENT IN AFRICA
  The Stuff Youre Stepping In Could Be Your Silver Lining
  The Need for a Skill
  Promote Corporate Events with Press Releases

Article Tags: analyzing data, best practices, better business, business decisions, existing products, market research



Related Forum Posts
Re: How should i promote a new website? - ignore this message IF it's already been stated. I haven't had a chance to read all the replies and i have to jet from the office... I suggest marketing where ever your Target Market congregates. If it's a forum of concerned parents - go there. Strike up a deal with the forum owner (JV) and have him promote it to the list of members (Integration Marketing). If you want to go with Forums then i would partner with a parent who is a frequent poster/moderator on a particular Target Market Forum and have him/her add your link to their signature. That was just a thought but it's not as intense once you get buy in from the Forum owner or high ranked poster/moderator. Hope that sparks some new ideas.
Re: Ideas For Business - Hello Lucy, you may consider this list for Ideas for Business: (Top 23 list) Rank Company 1 Google 2 Genentech 3 Wegmans Food Markets 4 Container Store 5 Whole Foods Market 6 Network Appliance 7 S.C. Johnson & Son 8 Boston Consulting Grp. 9 Methodist Hospital Sys. 10 W.L. Gore & Associates 11 Cisco Systems 12 David Weekley Homes 13 Nugget Market 14 Qualcomm 15 American Century Invest. 16 Starbucks Coffee 17 Quicken Loans 18 Station Casinos 19 Alston & Bird 20 QuikTrip 21 Griffin Hospital 22 Valero Energy 23 Vision Service Plan
Re: Do Women Play the Stock Market? - I also play Stock Market.....
.. - We are the UK Market Leaders.....the first to venture into this on a huge scale. What makes this a success is the simplicity of the product and the price, very affordable to the mass market.
NEW PRODUCTS LIKE = Projector phone in the market - Hi ideasuniversity, I'm back. This just shows that there is no end to new stuff coming out. Someone has to work on it. Research and Development never stops. Has anyone a new idea? Let us know what it is. Maybe it can be shown here first in the future.


Share this article with your friends. Fund someone's dream.

Leave a comment below or share on the left and you'll help support entrepreneurs in Africa through our partnership with Kiva. Over $50,000 raised and counting - Please keep sharing! Learn more.

Newsletter

Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!

Name:
Email:

Popular Articles

The Death of the Sales Magazine

Smart & Simple Internet Techniques

Setting Goals for your Home Based Business

Suggestions

Email us your ideas on how to make our
website more valuable! Thank you Sharon
from Toronto Salsa Lessons / Classes for
your suggestions to make the newsletter
look like the website and profile younger
entrepreneurs like Jennifer Lopez.