To gather this information you will need to conduct market research. Market research will help you to avoid costly mistakes as you prepare to launch new products and services or expand into current or new markets.
There
are two main types of research – secondary and primary.
Secondary
Research:
This
research is conducted using information that has already been captured and
compiled. Sources such as the US
Government, Chambers of Commerce, Trade Associations, and Research institutes
and organizations provide a wide variety of information and insight into
industries, markets and audiences. You
can locate this information at your local library, online through the Internet,
from trade publications and magazines and other materials.
Secondary
research sources are usually the best place to start in your search for
information. Many of the Government
materials are provided free of charge or at a low cost. If you belong to a Chamber of Commerce or
Trade Association you should be able to enjoy the reduced prices provided
through your membership.
Secondary
Research Sources:
- US Government
- US Department of Labor
- US Census Bureau
- US Department of Commerce
- International Agencies
- Foreign Governments
- The General Press
- Archives of Newspapers & Magazines
- Industry Journals
- The National Directory of Magazines
- Trade Associations (Speak to the research staff as well)
- Trade Publications
- Public Company SEC Filings
- Investment Brokerages & Information Services
- Library Reference Desk
- Newsgroups & UseNet (Online discussion groups)
Although
secondary research is considered to be less expensive than primary research,
there are other considerations at play.
Secondary research is often not as accurate or useful since the
information is not customized to the specific research issue at hand. For example, secondary research can provide
you with the amount of money spent on women’s jeans in a given year, but it cannot
tell you how much money women are willing to spend on your particular jean
design. That information will have to be
derived from primary research.
Primary
Research:
This research
is geared to your specific issue at hand.
How will your customers respond to your proposed new packaging? At what price should you set for your product
or service? How should you communicate
the benefits of using your product to the target audience? These are all questions that can be answered
through the use of primary research.
The objective
of primary research is to answer as many of your specific questions regarding
the market, the audience and your products/services as possible before you
launch your marketing and sales campaigns.
This can be accomplished through the use of the following primary
research tools: focus groups, surveys, field tests, interviews or observation.
As you might
guess, professional primary research can be expensive. Focus groups can run anywhere from $5,000 to
$10,000 per group. Surveys can cost from
$5,000 to $25,000 or more. However, it
is possible to conduct your own “do-it-yourself” primary research. The key is to understand the limitations of
this form of research and to be careful not to read too much into the results.
Focus
Groups:
When conducting
a focus group, the first order of business is to determine your objectives for
the research. What, exactly, do you wish
to discover through this process? If you
want to understand what would motivate your audience to purchase the product or
service, it will be important to bring together a small group of people (8 to
10) that represent your target group.
Gather them around a table or in a comfortable setting and either record
and/or videotape the session.
Take time to
prepare and formulate your questions so as not to bias the participant’s
responses. Realize the facilitator will
greatly impact the success or failure of your focus group. This person will be keeping the participants
relaxed, yet focused on the task at hand, without jeopardizing the spontaneity
of ideas and information flow that can come from these sessions.
Surveys:
Surveys are conducted
all the time – via the Internet, over the phone, in person and through the
mail. The most effective surveys take
place in a face-to-face situation. The
second most effective is the telephone survey.
Internet surveys can be helpful, but they are difficult to track and the
nature of the medium makes it complicated to follow-up with a question on a
particular response. This is also the
problem with surveys conducted through the US mail. It is challenging to obtain sufficient
response rates and even more problematical to follow-up on specific answers.
As
with a focus group, it will be important for you to determine your research
objectives before you develop your survey and select the method of
delivery. Many small companies will
create a simple survey they can administer to another person (face to face) in
5 to 10 minutes. This provides the
researcher the important opportunity to ask follow-up questions that might lead
to real understanding.
Primary
& Secondary Research:
Smart
companies will utilize both methods of research. They often begin with secondary research and
then use selected primary research tools to fill in the missing answers. In this way, companies are able to obtain a
wide variety of information that will help them to be successful in their
chosen markets.
