MARKET RESEARCH THE FUNDAMENTALS FOR INFORMED DECISIONS

Transcription

1 MARKET RESEARCH THE FUNDAMENTALS FOR INFORMED DECISIONS

2 MARKET RESEARCH THE FUNDAMENTALS FOR INFORMED DECISIONS Introduction Market research improves decision-making abilities and reduces risk. It provides insights into markets, brands, customers, competitors and products. Having valid data about all these different areas allows for informed decisions about how each of these plays a role in creating a strong and relevant company, brand, or product. Without effective market research, it often comes down to making only educated guesses. When Should Market Research Be Conducted? The uses of market research vary widely. Consider these areas where market research is particularly effective: Understanding your target market Who should be your targets and how should they be segmented? What are the demographics and characteristics of your audiences? Who are your main competitors and what are they doing to be successful? Creating and optimizing brand strategy Does your brand strategy resonate with your chosen targets? What could be improved? What are your brand s perceived strengths or weaknesses? Communication and advertising effectiveness Is your messaging conveying your brand to its best ability? Is your marketing effective? Does your advertising communicate what you intended? Does your marketing motivate consumers to buy your product? Assessing the competition What are the perceived strengths and weaknesses of your competition? How does your brand and/or product compare in the minds of your target audience? Product testing and innovation Is your new idea or product concept appealing to your audience? For current products, what improvements are needed? Does your brand or product provide value to consumers? 1

3 Different Types of Market Research There are two types of market research primary and secondary. Primary research collects data to answer a specific issue or question. Secondary research, on the other hand, is the use of existing data to help understand the current business environment or assist in creating primary research projects. Primary market research has traditionally been divided into two types: qualitative and quantitative. Quantitative research provides statistics (for example, 80% of people view the product positively), while qualitative research provides the why (for example, consumers would buy the product because it tastes good and gives them energy). Depending on the objectives of the research, there can be a qualitative component or just a quantitative component. In some cases, it is beneficial to conduct both types of studies as part of a research project. Both qualitative and quantitative research can be conducted in person, via phone, or online as long as the study is properly designed, implemented and analyzed. Regardless of the methodology used, is it essential that the research objectives be established upfront. The research objectives dictate the method that should be used for each project. The goal is to gather the most appropriate data in order to ultimately create actionable results. Qualitative Studies Qualitative research is conducted with a small number of people and is used to gain in-depth information. It is a deep exploration into attitudes and behaviors. Most importantly, it answers the why behind opinions, thoughts, attitudes, and behaviors. Although qualitative research can be conducted using several different methods, it is always with a smaller number of individuals compared to quantitative research. Methods include focus group or roundtable discussions with small groups of people, individual one-on-one interviews, or even ethnographic interviews, which take place in someone s home or place of business. There are pros and cons to all methods. Timeline and budget factor into the methodology selection, in addition to the best way to answer the research question. Focus group discussions, which usually involve six to 10 people at a time, have a larger number of people to give feedback compared to one-on-ones but the format usually allows for only a couple of hours of interviewing per group. Smaller roundtable discussions, usually consisting of only two or three people, and one-on-one interviews can go deeper into a particular subject, but they are often cost more than focus groups. Ethnographic studies (which aim to understand people s actual daily behavior) provide a truer window into the world of the consumers, yet there is a definite cost premium. Logistics need to be planned well in advance. Remember, qualitative research does not provide enough sample size to be statistically robust and information should never be presented as such. 2

4 Quantitative Research Quantitative studies are conducted with a large sample of respondents in order to determine how a particular population or subpopulation thinks or feels about a product, service, or idea. Quantitative research uses numerical analysis in order to ensure the data are statistically invulnerable. The goal is to produce projectable information to guide decision-making. For example, quantitative research will determine the number or percentage of people who feel one way or another about a service or product. It is critical to have a good representation of the population being interviewed to provide valid and statistically significant data. Quantitative studies are conducted using a survey format, which can be online, phone, or face-to-face. The survey usually has many questions and allows for comparative information to be collected by having participants give ratings. The survey may also include close-ended questions, where the answer is concrete, and open-ended questions, where respondents provide responses in their own words. Open-ended question responses require a trained analyst to provide meaningful and accurate interpretation, and it increases the cost of a survey. Online methods are much faster and can be more cost effective than phone or in-person interviewing; however, hard-to-reach populations are problematic for online, and the sample may be representative of only those who check their or have internet access. Phone interviewing has decreased in recent years due to call screening capabilities and the reluctancy of people to give opinions over the phone. It also is less anonymous than online surveys. Face-to-face interviewing is time consuming, costly, and often conducted with paper and pen, which means the information has to be entered into a database, which can also introduce data errors. ARE TELEPHONE SURVEYS STILL RELIABLE? Telephone regulations and the commonality of cell phones have caused markets to wonder if phone surveys are still a viable option for market research. The answer isn t a simple yes or no, but rather it depends on your audience, topic, and survey duration. Factors such as audience age and questionnaire complexity will impact success. That said, American consumers have made it clear that they prefer landline survey invitations instead of mobile, and favor an invitation from a live operator to the highly undesirable robo-call. Sometimes, phone surveys are the best tool in a researcher s toolbox, giving control to gather a carefully balanced sample. Just remember: Every detail from the introductory script to the interviewer s accent will influence completion rates. A professional market researcher s job is to counsel you on the best option for your situation. 3

5 Who Should Conduct Market Research? Secondary studies reviewing existing research can be done by a skilled researcher who is able to remain objective and take into account factors such as the methodology, who conducted it, when, and how representative it is of the current target audience. As you recall, secondary research can be very helpful prior to designing a primary study. When it comes to primary research, using a third party with appropriate expertise is often more productive for several reasons. 1 An outside expert is able to provide an unbiased view of the data there is no vested interest in the results. An outside firm or expert can also make recommendations on how to use the data and move forward with the results. 2 An outside agency is often able to provide a wider and less influenced pool of participants for the research because of their access to national databases. 3 A third-party research firm can be especially helpful in obtaining support from your organization s additional key decision-makers. 4 An outside agency may also have normative data that can be compared to your study. What Should You Expect in a Research Report? The importance of how study results are analyzed and communicated is critical to the data being understood correctly. Talk with your market research expert about this topic before the survey process begins. Make sure expectations are clear when it comes to: Format of the final report document text-based, presentation with graphical elements, or both? What formal walk-through of the findings is needed? Is an in-person meeting needed, a webinar, or teleconference? Level of detail in the final report what will the table of contents look like? Will you receive both conclusions and recommendations? They are not the same. If recommendations are a part of the project, does the researcher or firm have the expertise to provide you such? Will you be provided with the raw data, and if so, in what format? WHAT IS DATA VISUALIZATION? Data visualization is communicating information through the use of graphic elements as simple as a bar graph or pie chart. The goal is to communicate information clearly and efficiently in a manner which is accurate but also engaging. Care must be taken that the meaning of the data is not distorted in order to make the graphic more visually appealing. Done correctly, data visualization increases understanding. It can help uncover trends, realize insights, explore sources, and tell stories. 4

6 Your brand needs market research that moves you forward and helps you grow. Come to us for the Demeter Difference. CONTACT US DemeterCommunications.com Karsten Dr., Belle Fourche, SD Demeter Communications is a full service marketing and communications firm specializing in agricultural and food marketing. We bring together a talented team of associates with decades of experience to help agribusiness grow.