Setting Up A Market Research Project

Science LabworkLast week I wrote about showing value in market research by creating actionable results.  In it, I mentioned about thinking with the end in mind.

I recently compared doing a market research project with the traditional “biology research project” we all did back in high school, in other words the Scientific Method. Read more of this post

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How To Write A Good Survey

I recently had the opportunity to look over the results of a participant survey for a organization that put on a week long conference.  While I did not write the survey, I was analyzing the data to help them out for next years conference.  While I was looking at the results, I remembered that there were some good rules of thumb to remember when writing a survey to get better responses and response rates.

survey example

Here are some easy one to think about when developing your survey.
  • Purpose of survey: Before you start, you need to identify the purpose and what are the “key learnings” you want to know. List them out. The questions you will ask for a market depth survey is very different than a customer satisfaction survey. Be sure to include demographics to make sure you get your buyer profile.
  • Execution of survey: How the survey is going to be executed is just as important as the survey itself. Included in this is the list you are sending the survey. Mail surveys versus email surveys have different Expected response rates. A cold list versus an online panel versus a customer list will get varying responses.
  • Length & Complexity: This needs to be considered in conjunction with who you are sending the survey to. Customers are more likely to answer longer and more complex surveys. Those with no connection to your company, are not as likely to answer that same survey. Also, you need to consider any type of incentive to promote your response rate. The longer and more complex, the better the incentive.
  • Question bias: This is something even seasoned survey writers fall in to. I remember a marketing class I had that had a handout showing questions from statistically accurate surveys. On the surveys, there were essentially the same question, but with dramatically different results because of the wording of the questions.
  • Ratings vs Rankings: Ask five different market researchers the scale system they like, and you will likely get six different answers. Odd scale versus even scale. Five-point versus seven-point. Six-point versus ten-point. These are all things to consider. The more points the more finite between the values. Odd scales have a mid-point, when even scales force someone to be either positive or negative. Asking rankings are generally not a good idea. This is because of two main reasons. You cannot synthesize these answers across respondents. My difference between #1 and #2 is likely different than your difference between #1 and #2. Also, my difference between #1 and #2 could be different between #11 and #12.
  • Open-Ended Questions: When filled out on surveys, these are great. However, it is only when they are filled out. A lot of people tend to skip these questions. Be sure to limit them and use them as only as needed. Also, be sure to use some form of text analytics if you have a larger group of respondents.

Surveys can help shape strategy and answer pressing operational and product questions. However, be sure to make sure that the survey serves your needs based on posing good questions.

–J. Nolfo helps companies understand their market and customers though a variety of market research strategies. He has over ten years of experience of market research for strategic planning purposes. He is the Director of Research at Rhino Market Research. He shares his thoughts about market research and business concepts with his blog “Pensare…Understanding Market Research in Business“. If you would like to discuss this blog or how J. can help you understand your market and customer needs, email him at jnolfo@rhinomarketresearch.com.

Using Market Research for Strategy

When I introduce myself to someone new or I get asked at a networking function what I do, I respond to them that I provide market research to small businesses for strategic planning purposes.  I emphasize the “for strategic planning purposes”.  Market research can be just a lot of data.  However, by making it useful, makes market research provide information to its ultimate user; useful information.

Market Research StrategyTraditionally, market research has been more of a tactical department within companies.  Management determines there is a problem or an opportunity to evaluate.  Then, market research analyzes the problem or opportunity with an appropriate quantitative or qualitative methodology.  After that, the results are presented and a decision is made based on those results.

However, more and more companies are looking for those that do their market research to be more strategic in nature.  In a study by the Market Research Executive Board, the study found that 65% of senior leaders want market research to be a strategic partner.  However, only 25% of senior leaders view market research in that way.  In today’s employment marketplace, the roles of people not evolving with the times is just not going to continue to happen.  This certainly extends to those in market research, especially as more and more is being expected of them.

–J. Nolfo helps companies understand their market and customers though a variety of market research strategies. He has over ten years of experience of market research for strategic planning purposes. He is the Director of Research at Rhino Market Research. He shares his thoughts about market research and business concepts with his blog “Pensare…Understanding Market Research in Business“. If you would like to discuss this blog or how J. can help you understand your market and customer needs, email him at jnolfo@rhinomarketresearch.com.

How To Use Market Research To Improve Your Marketing

so what's all this new marketing stuffEverybody wants to improve their marketing efforts. Improved marketing and promotion leads to more customers and better retention of your current customers.

However, many businesses spend thousands of dollars every year on a variety of marketing tactics without a lot of success. This is mainly due to the lack of understanding how to marketing and advertising in an effective way. If these businesses a little research before they develop their marketing, their messaging would be more effective. Although each business is unique, a few basic market research strategies can help. Here are two:

Determine a concise target market

Before you start any business or marketing campaign, you need to learn about who is the intended target for the business or marketing campaign. This can be done through either primary or secondary research. Before launching a new product, service, or campaign, you need to know:

  1. Who wants or needs the product or service I am selling?
  2. How many potential consumers are out there?
  3. Where are my potential customers located?
  4. How much are my potential customers willing to spend?
  5. Why will they buy my product or service?

By identifying your target market, you will be able to evaluate the viability of your business, increase its visibility, and make the necessary changes to increase sales. By developing a target market you are less likely to waste your advertising dollars on promoting to the wrong group of customers.

Develop a database

It is surprising to me the number of businesses, large or small, that do not have and maintain a database. By developing and maintaining a database, a company can get a full understanding of their customers’ profile. By using your customer data more effectively, new products can be developed more efficiently and a more cost effective direct marketing campaign can be achieved.

Many businesses do not truly conduct market research. They probably see it as too difficult, too expensive, or not a perceived value. However, the value of doing it ahead of time can prevent a considerable waste of money on products and services that potential customers may not want and marketing campaigns that they may not respond to.

–J. Nolfo helps companies understand their market and customers though a variety of market research strategies. He has over ten years of experience of market research for strategic planning purposes. He is the Director of Research at Rhino Market Research. He shares his thoughts about market research and business concepts with his blog “Pensare…Understanding Market Research in Business“. If you would like to discuss this blog or how J. can help you understand your market and customer needs, email him at jnolfo@rhinomarketresearch.com.

It Cost How Much?

“So how much is that going to cost me?”

“$636.62”

“Seriously?”

That is exactly the conversation I had last week when talking to an auto mechanic last week to get my EGR valve replaced (along with some basic maintenance) on my vehicle last week.

Handing Over MoneyPrices on products and services tend to be established on a number of factors: cost, margin, competitive pricing, among others. Pricing can also be established on qualitative and quantitative research. However, doing research on pricing tend to be overlooked or minimized.

A recent study by Shane Fredrick, associate professor of marketing at the Yale School of Management, documents a common bias by businesses and consumers alike to overestimate how much others will pay for goods. The effect may influence pricing and negotiations, which depend on accurate assessments of others’ valuations.

Although the study is very academic, as to be expected. It’s insight into overestimating others’ willingness to pay could be attributed to two very different beliefs. The first is a belief that others will enjoy the good more. The other is a belief that others are less averse to spending money.

Fredrick reports, “In general, businesses and individuals need to accurately predict the economic valuations of others. Firms must decide how to price new products, the host of a yard sale must determine how much to mark down a used product, parties negotiating the terms of an offer must guess the other side’s reservation price, and so on. Thus, whatever its basis, the bias explored here may be pertinent to real-world decision making.”   The tendency to overestimate others’ willingness to pay implies an exaggeration of demand, and in turn, pricing being set too high.

Let me know how you have overestimated pricing and what you did to fix it.

–J. Nolfo helps companies understand their market and customers though a variety of market research strategies. He has over ten years of experience of market research for strategic planning purposes. He is the Director of Research at Rhino Market Research. He shares his thoughts about market research and business concepts with his blog “Pensare…Understanding Market Research in Business“. If you would like to discuss this blog or how J. can help you understand your market and customer needs, email him at jnolfo@rhinomarketresearch.com.

What’s the difference between qualitative market research and quantitative market research?

When people think of market research, people typically think of a group of people sitting around a table talking about which logo looks best. Although this is important, it only represents a small portion of market research and what market research can do.

Actually, there are two types of market research: qualitative market research and quantitative market research. Let’s explore these.

Qualitative market research (sometimes referred simply as “Qual”) is any personal interview conducted among a small number of individuals simultaneously. The idea of qualitative market research is that the research relies more on group discussion than on a series of directed questions to generate data. Renata Tesch in her book “Qualitative research: analysis types and software tools” names over 40 types of qualitative market research. Although each that she mentions is unique in their own ways, I believe that is just complicating things for those not in research. Examples of qualitative market research are the traditional focus group previously mentioned, but also Diads and Triads (2 on 1 & 3 on 1). Some have experienced one-on-one interview, like mall-intercepts. The idea of this type of research is to get verbal feedback about something that is subjective. I recently heard somebody call this as “marketing research” with the idea of that this form of research is to investigate parts of the 4Ps like the product and promotion. To read a little more about the 4Ps click here.

Quantitative market research (sometimes referred simply as “Quant”) is research that is done “on paper” like a survey. The main point on all of this is that it is all statistically relevant. There are generally four types of quantitative market research. I like the way Dr. R. Ouyang from Kennesaw State University breaks these out, although it is a little formally presented.

  • Descriptive: Descriptive research involves collecting data in order to test hypotheses or answer questions concerning the current status of the subjects of the study. It determines and reports the way things are.
  • Correlational research attempts to determine whether and to what degree a relationship exists between two or more quantifiable variables. However, it never establishes a cause-effect relationship. The relationship is expressed by correlation coefficient, which is a number between .00 and 1.00.
  •  Cause-comparative: Causal-comparative research: establishes the cause-effect relationship, compares the relationship, but the cause is not manipulated, such as “gender.”
  • Experimental: Experimental research establishes the cause-effect relationship and does the comparison, but the cause is manipulated. The cause, independent variable makes the difference. The effect, dependent variable is dependent on the independent variable.

Quantitative market research is heavily used at the beginning of developing a new product or service to determine customers, market depth and price, among others.

By know what you are trying to accomplish, then you can determine what type of research needs to be done. By doing the appropriate type of research for your needs, the return on it will benefit your business more than the money you put into it.

How do you use these types of research in your business?

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