How To Research Your Market
By: Colleen Davis
Whenever you enter a new market or want to introduce a new product, you need to do some research to find out whom best to market to.
It would almost be impossible to create a new product without some research first. If you didn’t do any research, how would you know what the market is missing? How would you gauge your likely success in the marketplace? How would you know what people want and need? How would you know which marketing strategy to use – television or direct mail? Add more to your flyer printing budget or your radio ad budget? The answers to these questions can only be found by research.
You need to conduct two kinds of research: primary and secondary. You’ll most likely do more secondary research than primary. Let’s go into more detail about both.
Primary Research Primary research is considered to be any type of investigation that uses you do on your own, or you hire someone else to gather the research for you.
Primary research is broken down into two types: exploratory and specific. Exploratory helps you to define a problem and generally involves unstructured interviews, like focus groups. You ask open-ended questions (non "yes or no" questions) and ask for whatever feedback comes to mind from the participants.
Specific research is used to solve a problem that has usually already been defined through exploratory research. You are asking a specific question and you want information related to that question. Interviews are more structured so you can extract the information you want from the participants.
Types of Primary Research There are basically three ways to conduct primary research: by direct mail, phone surveys and personal interviews.
Direct mail – You can send out a postcard or letter containing a survey and ask participants to mail it back. To increase your response rate, you should make your questions short and to the point. You should also address the survey to a specific individual and don’t forget to send a reminder follow-up that includes a copy of the survey two weeks after the initial mailing. And don’t forget to offer a coupon or a discount to make the survey worth their while. Average response rate is below 5%.
Phone surveys – These are the most cost-effective way to conduct primary research based on speed of response and the fact that they cost about one-third less than personal interviews. To increase participation, ask to talk to a specific person and avoid long pauses, as respondent participation can quickly drop (i.e., hanging up the phone). To save even more money, plan to call people when the cheapest telephone rates are available, generally in the evening. (You can check this out with your local telephone provider, or you could go with Vonage, which offers unlimited long distance for a flat monthly fee.)
Personal interviews – You can either conduct a group interview, like a focus group, in which the group is allowed to brainstorm to come up with ideas, or you can conduct an in-depth interview with one person. When interviewing one person, you can either have a pre-set list of questions, or let the interviewee lead the interview and ask questions based on the interviewee’s previous answers.
Secondary Research Secondary research is data you refer to that someone else has gathered. This could be statistics or a list of info from government agencies, labor unions, chambers of commerce, etc. Obviously, you’ll save a lot of time and money by conducting secondary research.
Types of Secondary Research Secondary research is divided into three sources:
Public – Public sources are usually free and can offer a lot of good information. These sources include public libraries, government agencies and the like.
Commercial – Commercial sources include research and trade associations, or could be financial institutions. These sources have equally valuable info as public sources, but you must pay a fee to get the info.
Educational – Educational institutions are generally forgotten in favor of the first two sources, but can contain great info in the libraries and business sections of colleges, universities, and sometimes even high school libraries.
You’ll most likely conduct secondary research over primary research just because of the time and money savings. There’s nothing wrong with that! For market research, secondary research is more than sufficient.
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