Estimated duration: 2hrs
Introduction
When it comes to actually undertake your market research there are two broad methods at your disposal – Primary and Secondary.
Primary data is data that you gather for the specific purposes of solving your defined problem. It is highly focused upon your needs and can be very expensive. Secondary data is data that has already been gathered for some other purpose. When you start your research activity you will normally engage in gathering secondary data initially, and then if you still do not have sufficient data to solve the problem as defined, you will move on to primary data collection.
Secondary Market Research
Secondary research (sometimes called desk research) tends to be the first step in market research and can sometimes be perceived as ‘good enough’. This type of research tends to rely on published data and the quality of this can vary, depending on which part of the world you’re trying to obtain information from. Remember, this data has been collected against a specific brief that you will not be aware of. Importantly, it may not have had your product or information in mind when developed so if fitness for purpose is not clear, use it as a guide only. In Europe, for example, the quality tends to be higher than in African and Asian markets where the information tends to be harder to collect.
Good sources of secondary information:
- Publications: The Economist, The Wall Street Journal, Forbes, Fortune, Business Week, McKinsy Report, Financial Times
- Trade Shows & Associations
- Sales People
- Suppliers & Industry Experts
- Customers
Exercise 1
Take 10 minutes to list the other sources of information that you use or have heard about.
Primary Market Research
Primary, or field research, is specific to your company’s needs. Rather than scouring through general information, this is research specifically tailored to you, where you can establish exact information about the marketing of your product in the chosen market. However, unless you know what you’re doing it’s important not to go it alone, however, and conduct research either jointly with an agent or distributor, or appoint an external agency.
Primary data research can be a very time consuming and expensive exercise, so it needs to be well scoped and planned based on agreed objectives. Based on the objectives and the depth or breadth of the information required, the research will seek quantitative (data with objective and measurable properties) or qualitative (data with subjective properties, not of a measurable value) data, sometimes both.
Primary market research is a great way to gather information about your business’ product or service idea. You might conduct market research to determine things like the size of your target market or the demand for your great product idea. Primary market research is tailored to your small business’ specific needs and can be customized to suit. There are four ways primary market research can be conducted – all with their own benefits for your product or service idea.
The four types of primary market research:
- Observation – Just as it sounds, observation market research involves watching your potential customers and their behaviours in action. This means – without interacting – watching customers buying products or services similar to yours, listening to what they say as they shop, noticing what they buy and how much they paid. This type of market research works best if your business caters to customers, not to other businesses.
- Focus Groups – Focus group market research means assembling a small group of eight to 12 potential customers to gather information and opinions about your product or service. These groups are led by an objective discussion moderator. Focus groups are a great way to get feedback on a product or service idea directly from several potential customers.
- Interview – Interviews are like focus groups, but there is only one participant speaking to one researcher, who leads the discussion. Interviews are well-suited for product or service ideas that could be too personal or private for group discussion, like personal hygiene products or financial services.
- Survey/Questionnaire – This method of market research involves getting feedback from potential customers through a structured, multi-question survey. Market research surveys or questionnaires can be done over the phone, through mail/email or in person. You may need to conduct several surveys to several groups in order to get feedback from all possible types of customers. One note about surveys – if you don’t have the resources to conduct a large amount of them, small sample groups are okay – but be cautious of making major business decisions based on this small amount of feedback.
The Questionnaire
A questionnaire is a structured technique for data collection that consists of a series of questions, written or verbal, that a respondent answers.
Researchers can collect quantitative primary data for descriptive research through surveys or observation. A questionnaire is a written list of questions, the answers to which are recorded by respondents. Respondents read the questions, interpret the meaning and write down their answers. It is very important that the questions are clear and easy to understand as there will be nobody present for clarification. A questionnaire should not be long or complicated. More pages with a clear and user-friendly layout are better than fewer pages which are cramped. It should have a simple and attractive appearance. A questionnaire should be written in such a way that it minimises demands imposed on the respondents. They should feel encouraged to participate in the questionnaire as uncompleted responses have limited usefulness. It is best that the researcher try to lower / eliminate fatigue and boredom on the part of the respondent. There are a number of different types of questionnaires including mail, e-mail or internet questionnaires, personal questionnaires and telephone questionnaires.
Steps Taken to Maximise Response Rate
Abundant evidence suggests that the conduct of survey-based research is becoming increasingly difficult. Response rates to all forms of data collection have steadily declined over the past few decades.
One of the disadvantages is that there may be a low response rate. Web survey response rates are fairly low, which threatens the efficiency of web surveys. To use questionnaires and surveys to gather information effectively, it is critical to increase response rate without compromising the lost cost advantage. Questionnaires will be administered via email therefore it is essential to take any steps required to increase response rate:
- The researcher must ensure that the questionnaire is not too long but they must also ensure that they get all the information needed.
- The researcher is advised to pre-notify respondents. Pre-notification works because it underscores the legitimacy of the questionnaire or survey. The better you know the respondent the more chance of them responding
- Create a survey that asks the right questions to meet the objectives, thus providing end data that is useful.
- Create questions that are short and concise.
- Pilot test the survey on a few respondents before sending it out
- Do not send unsolicited emails.
- Plan timing and delivery of survey. Avoid busy periods and allow respondents enough time to complete the survey.
Piloting Questionnaire
Piloting the questionnaire is important because it helps to refine the questionnaire so that respondents will have no problems in answering questions and there will be no problems in analysing data.
Questionnaire Design
1. Specify the information needed
2. Specify the type of interviewing method
3. Determine the content of individual questions
4. Design the questions to overcome the respondents’ inability and unwillingness to answer
5. Decide on the question structure
6. Determine the question wording
7. Arrange the questions in proper order
8. Choose the form and layout
9. Reproduce the questionnaire
10. Pre-test the questionnaire
Exercise 2
Take 30 minutes to prepare a possible questionnaire to get the information you require. Keep in mind the respondents and how they will react to the questions. How do you intend to pilot the questionnaire?
Quantitative Market Research
Quantitative Market Research deals with the hard facts and statistical data rather than the opinions, feelings, and attitudes of the individuals. Here, the data are quantified to draw inferences about the customer’s behaviour, attitude and preferences in numerical terms that can be easily interpreted and compared with other data facts.
Quantitative market research is often used to determine what proportion of the population possesses certain characteristics, attitudes, behaviours, knowledge and then its significance level is checked using the statistical analysis method. Quantitative research is based on large samples and addresses questions such as:
- How often customer buys the product?
- What proportion of the population makes job searches online?
- How many customers will buy a product if a certain promotional strategy is introduced?
- How many customers rated the ambiance of the restaurant as ‘outstanding’.
The following quantitative market research techniques are used to collect data from the respondents:
Telephone Surveys: Under this method, the researcher first-of-all identifies the representative sample that reflects the similar characteristics or traits as that of the entire population. Then, the sample members are called via telephone and asked questions related to the problem under study.
Generally, the closed-ended answers, including responses like ‘yes’ or ‘no’ are considered ideal as respondents are often reluctant to talk much on the telephones. The telephone surveys can be conducted to find out the solution to the problem such as what proportion of customers are willing to buy the products and services? And what will be the approximate annual sales?
Personal Interviews: Often, the companies select the potential buyers and conduct a one-on-one interview with them to gain insights of the problem under study. The interviewer can either ask the respondent to come to a central location for the interview or conduct interview at his home by fixing an appointment. Here, the interviewer can include both the open-ended and closed-ended questions depending on the nature of the research objective.
Web Surveys: Here, the researcher randomly selects the group of respondents and then send the questionnaires through e-mails to gather information about the problem concerned. Now a days, the web surveys are being extensively used by the organizations as it helps to gather information from a large group of people anytime and anywhere.
Hybrid Survey Methods: Here two or more methods of quantitative research are used simultaneously to obtain a relevant and measurable data from the target audience. For example, the researcher can randomly select the respondents from a specific geographical area and then can use telephone survey to collect information from the female respondents and conduct personal interviews with male candidates.
Thus, the researcher can use either of the quantitative methods depending on the research objective and the kind of data generated which can be used for statistically analysing the results.
Qualitative Market Research
Qualitative research aims to obtain more detailed information than quantitative research
Qualitative research is usually undertaken using in-depth interviews or discussion groups (focus groups) among a relatively small number of people. Its purpose is to provide exploratory, explanatory and diagnostic information – the how and the why – in-depth. It needs to be conducted by experts, preferably face-to-face, although telephone and online methodologies are also used.
Qualitative studies explore people’s views and feelings in greater depth. They offer valuable insights to people’s behaviour and motivations (without claiming the statistical validity of a large-scale sample survey). They provide in-depth information on people’s attitudes and reasons why they think or behave as they do.
Qualitative research typically involves a series of group discussions or individual in-depth interviews, or both. It is often used to identify issues to be addressed in quantitative research.
Because of its exploratory and diagnostic nature, qualitative research results should never be generalised, the sample is not selected in the proper fashion, nor are sample sizes robust enough to be statistically representative of a whole target population.
The issues of reliability and validity
In order for you to have confidence in your research findings, that is to say in order for you to be able to rely upon these findings to assist you in making the right decisions based upon the information that you get from your research activity you need to consider the issues of reliability and validity.
Validity refers to the ability of your research to measure what it was supposed to measure and that it is free from bias. This is a somewhat complicated and specialised area of market research and for now it is enough for you to know that collecting the information must be undertaken very carefully. Avoid asking the questions, for example, that lead the respondent in a certain direction…that is to say, “getting the responses that you want, rather than the ones that you need”.
Reliability in data collection is best explained by saying, that if someone else were to undertake the research that you had just done, using the same methods, they would arrive with broadly similar results.
The greater the levels of reliability and validity that your data has the more confidence you and others will have in them and the more confidence you will have that the decisions made based upon them will be good or the correct ones.
