Planning Market Research

Planning Market Research

Richard Skiba

Copyright © 2024 by Richard Skiba

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Skiba, Richard (author)

Planning Market Research

ISBN 978-1-7636964-0-2 (eBook)

Non-fiction

Contents

Chapter 1 – Introduction

Chapter 2 - Communicating the Role of Market Research in Enterprise Operations to Relevant Personnel

Chapter 3 - Identifying Contribution of Market Research to Enterprise Activity

Chapter 4 - Analysing Enterprise Planning and Performance Documentation to Determine Research Needs

Chapter 5 - Consulting Relevant Personnel to Determine Research Needs

Chapter 6 - Developing a Statement of Market Research Needs

Chapter 7 - Drafting Research Objectives

Chapter 8 - Undertaking Preliminary Project Scoping

Chapter 9 - Consulting with Relevant Personnel on Draft Research Objectives to Ensure Relevant and Useful Information is Gathered

Chapter 10 - Reviewing and Finalising Draft Objectives in Light of Scoping Parameters

Chapter 11 - Identifying Types of Data Required to Inform Objectives

Chapter 12 - Determining Combinations of Types of Data to Best Inform Objectives

Chapter 13 - Identifying and Evaluating Suitable Data Gathering Methods

Chapter 14 - Identifying Data Sources

Chapter 15 - Quantifying Required Data

Chapter 16 - Identifying and evaluating suitable data processing methods

Chapter 17 - Making Decisions on Data Types, Combinations, Gathering Methods, Sources, Quantities and Processing Methods

Chapter 18 - Estimating Resources and Timelines Required For Market Research Projects

Chapter 19 - Determining Feasibility of Market Research Projects

Chapter 20 - Preparing a Market Research Plan for Approval

Chapter 21 - Obtaining Approval to Implement Plan from Appropriate Personnel as Required

References

Chapter 1

Introduction

Market research is a systematic process of gathering and analysing information about your business's target market. Its primary objective is to uncover who your customers are and what they desire [1]. This research provides insights into various aspects of the market, such as the demographics of your audience, their interests, buying behaviours, perceptions of your business or industry, and the problems they need solutions for. By answering questions like these, market research helps businesses understand how best to connect with their target audience and fulfill their needs. Beyond tracking data, market research delves into understanding the underlying reasons behind customer behaviours and preferences, providing a deeper insight into market dynamics [1].

Conducting market research is crucial for several reasons. First, it helps identify business opportunities by revealing gaps in the market and areas where demand is growing. It also assists in attracting and retaining a loyal customer base by aligning your offerings with customer preferences. Understanding what influences buying behaviour enables you to tailor your marketing strategies effectively. Market research also plays a vital role in verifying the potential success of a product before its launch. Additionally, it helps in gauging your brand's perception, allowing you to make necessary adjustments to improve your market position. All these factors contribute to a well-rounded business plan and a robust marketing strategy, ensuring that your business remains competitive and responsive to market needs [1].

Market research, while valuable, requires time and resources, so it’s important to be strategic about when to conduct it. Here are four key moments when market research is particularly beneficial [1]:

Before Launching a New Business or Venture: Initial market research helps identify existing competition, understand pricing structures, and assess competitors' marketing strategies. This insight is essential for positioning your business effectively in the market.

Before Entering New Markets: Understanding the characteristics of potential customers in new markets is crucial. Economic conditions, emerging trends, and cultural differences can vary significantly, and market research helps avoid costly errors by providing valuable insights into these factors.

Before Developing or Launching New Products or Services: As businesses expand, launching new products or services is often part of the growth strategy. Market research before these launches helps assess market conditions and customer needs, guiding the development and marketing strategies.

After Launching New Initiatives: Follow-up research after launching a new business, entering new markets, or releasing new products or services is essential to evaluate what is working and identify areas for improvement. This ongoing assessment ensures that your business remains aligned with market demands and can adapt to changes effectively.

In addition to these key times, it is important to continuously monitor trends and industry developments. Markets and customer preferences are constantly evolving, so staying informed through regular market research helps ensure that your business remains competitive and responsive to ongoing changes.

How Market Research Works

Market research is essential for evaluating the potential success of a new product or service before it enters the market. It helps businesses refine their product designs and develop effective strategies for launch by providing insights into consumer preferences and market conditions. The primary purpose of market research is to understand target market segments and their needs, which guides decisions on product features and marketing approaches [2].

To conduct market research, businesses follow a systematic process. They begin by gathering relevant data about the target market sector, which involves identifying consumer demographics, preferences, and buying behaviours. This information is then analysed to extract meaningful insights. These insights help in making informed decisions about how to design and market the product effectively to appeal to the intended audience. For instance, if research indicates that a particular feature is highly desirable, the business can emphasize that feature in their marketing efforts [2].

Market research is a critical element of the research and development (R&D) phase for new products or services. It involves various methods such as surveys, product testing, interviews, and focus groups. Each method provides valuable feedback that informs product development and marketing strategies, helping businesses stay competitive and meet consumer expectations.

Primary Market Research vs. Secondary Market Research

Market research typically involves both primary and secondary research [2]:

Primary Market Research: This involves collecting new data directly from potential customers or other relevant sources. It includes:

Exploratory Research: This initial stage is less structured and uses open-ended questions to gather broad insights about consumer attitudes and perceptions. Methods include focus groups, telephone interviews, and questionnaires. The aim is to identify key issues and generate questions for further investigation.

Specific Research: This follows exploratory research and is more focused. It dives deeper into the specific issues or problems identified earlier, providing detailed insights into consumer preferences and behaviour.

Secondary Market Research: This involves analysing existing data that has been collected by other sources. It includes:

External Data Sources: Secondary research draws on information from government census data, trade association reports, polling results, and previous research conducted by other businesses. This data helps provide context and background, which can be valuable for understanding broader market trends.

History of Market Research

The formal practice of market research began in Germany in the 1920s, and it quickly gained prominence in the United States during the Golden Age of Radio [2]. As radio became a popular medium for advertising, companies started to analyse audience demographics for various programs. This new approach allowed them to target specific consumer groups more effectively than traditional methods like billboards and magazines. By evaluating the impact of their advertisements on different audience segments, businesses could better tailor their marketing strategies and measure the effectiveness of their campaigns [2].

Types of Market Research

Market research involves various methods to collect and analyse data about consumer preferences, market trends, and product effectiveness. Different types of market research include [2]:

Face-to-Face Interviews: Face-to-face interviews are among the earliest methods used in market research. Historically, researchers would approach individuals on the street to gather opinions about newspapers, magazines, and the ads featured within them. This method provided insights into which advertisements were memorable and effective, allowing companies to assess the reach and impact of their marketing efforts. The data collected from these interactions were then compared to the publication's circulation numbers to gauge ad effectiveness. Modern market research has evolved from these early techniques, incorporating more structured and varied approaches. Today, face-to-face interviews are still valuable for gathering in-depth feedback, but they are often supplemented by other methods to enhance the breadth and depth of data collected.

Focus Groups: Focus groups involve a small, representative sample of consumers who are brought together to evaluate a product, advertisement, or brand. Participants provide feedback on their experiences and perceptions, which helps companies understand consumer reactions and preferences. For example, a focus group might test a new product and discuss their opinions on its features, packaging, and overall appeal. The insights gained from focus groups can inform decisions about product adjustments, marketing strategies, or whether to proceed with a product launch. This method is particularly useful for gathering qualitative data and understanding the nuances of consumer opinions.

Phone Research: Phone research, or telephone interviews, emerged as a more efficient and cost-effective alternative to face-to-face interviews. Researchers would call participants to gather information on various topics, from product preferences to brand awareness. This method allowed for broader data collection and faster turnaround times compared to in-person interviews. However, the rise of mobile phones and the decline in landline use have made telephone research increasingly challenging. Many people now use mobile phones with strict privacy settings, making it harder to reach and engage with participants through this method.

Survey Research: Surveys are a popular method for collecting consumer opinions and attitudes without the need for face-to-face interaction. Traditionally, surveys were distributed via mail, often accompanied by incentives like coupons or vouchers to encourage participation. Surveys can cover a range of topics, including consumer satisfaction, product feedback, and pricing opinions. They are a cost-effective way to gather quantitative data from a large audience. The results help businesses understand consumer preferences and make informed decisions about their products or services.

Online Market Research: With the increasing use of the internet, online market research has become a dominant method for data collection. Online surveys and feedback forms allow participants to provide their opinions at their convenience, making the process less intrusive and more flexible. Participants can sign up to take surveys and share their views on various topics, from product features to brand perceptions. This method leverages digital platforms to reach a wide audience and collect data efficiently. The shift to online research reflects changing consumer habits and preferences, offering a modern approach to understanding market dynamics.

Each of these market research methods has its strengths and limitations, and businesses often use a combination of techniques to gain a comprehensive understanding of their target market and make data-driven decisions.

Chapter 2

Communicating the Role of Market Research in Enterprise Operations to Relevant Personnel

Communicating the role of market research to relevant personnel is important for aligning research activities with the strategic goals of the enterprise. When all stakeholders understand how market research fits into the broader business strategy, they can better appreciate its significance in shaping marketing plans and operational decisions. This alignment ensures that research objectives are in sync with the company’s goals, leading to more targeted and effective marketing strategies. For instance, if the enterprise is aiming to enter a new market, understanding the role of market research helps in defining the scope of the study and the type of data required to make informed decisions about market entry strategies.

Effective communication about the role of market research promotes collaboration across different departments within the organization. By clearly explaining how market research supports various aspects of the business, including product development, sales, and customer service, teams can work together more efficiently. This understanding helps in optimizing resource allocation, as departments can prioritize research activities that align with their specific needs and objectives. For example, the marketing team might need insights into customer preferences, while the product development team might require data on market trends and competitor activities. Clear communication ensures that resources are allocated where they are most needed and that all departments benefit from the insights generated.

When relevant personnel understand the role of market research, they are better equipped to use the insights derived from it in decision-making processes. Market research provides valuable data on consumer behaviour, market trends, and competitive dynamics, which can guide strategic decisions such as product development, pricing, and market positioning. Communicating the importance of this research helps decision-makers recognize the value of the data and integrate it into their planning and strategy formulation. For instance, if the research indicates a growing demand for a particular feature in a product, the product development team can prioritize incorporating that feature to meet customer expectations.

Communicating the role of market research also fosters accountability and effective measurement of marketing efforts. When personnel understand how market research contributes to setting objectives and measuring performance, they are more likely to take ownership of research-related tasks and ensure that they are carried out thoroughly. This understanding also facilitates the evaluation of marketing strategies and their impact, as teams can use research data to assess whether their efforts are achieving the desired outcomes. For example, if a marketing campaign’s success is to be measured against customer feedback collected through market research, personnel will be more diligent in analysing and acting on that feedback.

In a rapidly changing market environment, the ability to adapt and innovate is critical for maintaining a competitive edge. Effective communication about the role of market research helps personnel stay informed about emerging trends, consumer preferences, and competitive threats. This awareness enables the enterprise to make proactive adjustments to its strategies and explore new opportunities. By understanding the role of market research, teams can leverage the insights to drive innovation and respond to changes in the market effectively. For example, if research reveals a shift in consumer preferences toward sustainable products, the company can adapt its product offerings and marketing strategies accordingly.

Communicating the role of market research to relevant personnel is essential for aligning research with strategic goals, enhancing collaboration, facilitating informed decision-making, promoting accountability, and supporting innovation. This ensures that market research is effectively integrated into enterprise operations, leading to more successful and data-driven marketing strategies.

Understanding Market Research and Its Role in Delivering Value

Market research is defined as the application of the scientific method to uncover truths about marketing phenomena. According to William G. Zikmund in Exploring Marketing Research, this process encompasses various activities, including defining market opportunities and problems, generating and evaluating market ideas, monitoring performance, and understanding the marketing process [3]. The essence of market research lies in its structured approach to gathering and analysing data to guide business decisions and strategies.

At its core, market research helps businesses understand and respond to consumer needs, behaviours, and preferences. The seemingly straightforward concept of a business—where companies produce goods or services and consumers purchase them—actually involves complex dynamics. The challenge is not just in delivering products but in creating and delivering value that resonates with customers. This involves a deep understanding of what constitutes value from the consumer's perspective and how businesses can meet or exceed these expectations.

To deliver value effectively, several questions need to be considered: What types of products or services does the company offer? Do these offerings address consumer needs? What are consumers' perceptions of the company? What are their expectations and initial impressions of the products or services? Are there alternative options available that could better satisfy their needs? Answering these questions requires a comprehensive approach to market research, which provides critical insights into consumer attitudes, market dynamics, and competitive positioning.

Market research facilitates decision-making by reducing uncertainty and highlighting consumer problems. It plays a pivotal role in various aspects of business operations, such as identifying new market opportunities, segmenting and analysing the market, selecting target markets, evaluating company performance, positioning products, and developing marketing strategies. By employing different types of market research—exploratory, descriptive, and causal—businesses can gain valuable insights into market opportunities, consumer preferences, and the impact of different variables on consumer behaviour.

Exploratory Research

Exploratory research is the initial step in the research process, aimed at discovering new ideas and identifying potential market opportunities. This unstructured research helps businesses explore a situation or problem without the need for a formal research design. It often relies on secondary data, open-ended questions, case studies, and pilot studies. For example, Mars M&M used exploratory research to find that consumers referred to their products by colour, a finding that informed future marketing strategies [4]. However, the results from exploratory research are typically general and require further, more detailed research to make concrete decisions.

Descriptive Research

Descriptive research provides a more structured and detailed analysis of the market. It addresses specific questions about market demographics, consumer behaviours, and product usage. This type of research involves formal research designs and data collection methods, such as surveys and observations. An example is Greg Norman’s use of descriptive research to understand international wine markets, which helped him make informed decisions about expanding his business [4]. Descriptive research is crucial for gaining insights into consumer preferences and market trends.

Causal Research

Causal research, or experimental research, investigates cause-and-effect relationships by examining how changes in one variable impact another. This type of research helps businesses understand the reasons behind certain outcomes, such as shifts in customer satisfaction. By identifying the causes of problems or changes in consumer behaviour, causal research supports decision-making and problem-solving. For instance, a company might use causal research to determine what factors influence customer satisfaction and how to address any issues.

The Market Research Process

The market research process involves several key steps [4]:

Defining the Research Objective: The first step is to identify and define the problem or opportunity that the research will address. This involves understanding the context and scope of the issue, whether it's a problem or a new opportunity.

Selection of Basic Research Method: After defining the objective, the research design is developed. This includes choosing the methods for data collection, such as surveys, interviews, or secondary data analysis.

Sampling: Sampling involves selecting a representative subset of the population to gather information about. Proper sampling ensures that the data collected reflects the characteristics of the larger population.

Data Gathering: This stage involves collecting data through various methods, such as surveys, interviews, or observations. The data should be collected in a way that aligns with the research objectives.

Data Processing and Analysing: Once data is collected, it must be processed and analysed to extract meaningful insights. This involves editing, coding, and interpreting the data to understand trends and patterns.

Drawing Conclusions and Reporting: The final step is to draw conclusions based on the analysis and prepare a report. This report should summarize the findings, provide interpretations, and offer recommendations for decision-making.

Benefits of Market Research

Market research is a critical component in shaping effective business strategies and achieving long-term success. Its benefits extend across various aspects of business operations, including customer engagement, advertising effectiveness, and risk management. Here’s an in-depth look at how market research delivers value to businesses [2]:

Enhances Communication with Customers: Market research significantly improves communication with both