Conduct Your Own Market ResearchBy: Andy Marken
Whether you are a manufacturer, distributor or retailer, thorough research is essential to your survival in today's competitive market.
Market research is any planned effort that provides you with new facts and information to improve your marketing decisions. Research can be conducted for a variety of reasons, from determining whether you should make or carry a specific product line, to where you should locate your store.
Without calling it marketing research, you've been doing it for some time. Whether you sell to dealers or businesses, you try to get as much information as possible out of your customers. You learn as much as you can about their attitudes, buying habits, long-term wants, needs and other pertinent information.
In this market, you cannot afford not to do research.
Reasons for Saying No
But if market research is so important, why do so many companies put it off for so long? Some of the most common attitudes we've encountered are: "We know our market area because:
"Market research is too scientific." If you've ever read the articles in the Harvard Business Review, or any other professional publication, it's easy to see how market research can put most people off. Don't be intimidated by the research specialist. We're referring to research in areas that are small problems from their point of view, but major for you and your business.
"Research is a big waste of time." It's your business, your financial success, your future. It can't be a waste of time. You may be impatient and you may feel that you have to hit the market immediately in order to keep up with the competition, but the competition may be making some serious mistakes. It's easier, and less costly, to learn from the mistakes of others.
"Research costs too much." Insurance costs too, but you would never run your business without it. This is exactly what market research is for you ... insurance. It can help you make decisions and recommendations more confidently. It can also point out areas where changes can or should be made to improve your success.
If you're a dealer, you need to know the geographic and economic areas you draw customers from or the types of businesses you attract for your system sales. Distributors need to forecast end-user/dealer needs so they can add new lines and stimulate more dealers in their market area. Manufacturers often wonder if their product is on the down side of the sales curve, or if their salespeople are simply tired of selling it and are focusing most of their attention on new products instead of your most profitable products.
Regardless of your position in the selling cycle, you don't have the luxury of research that takes weeks and months to complete. It has to be done in concert with your regular business.
To begin your marketing research, put your questions and problems down on paper. Don't worry about how you will get the information, just list those areas where you want or need more facts.
Ask yourself what alternatives are available to you, depending upon the results of the research. If there are alternatives, determine who in your organization supports the options.
Estimate how much a bad decision will cost your organization, and from that you can determine how much time, effort and money can be used to carry out the research. There are times when a problem simply can't be researched because of the number of variables that are involved.
Before you launch into the research project, get the opinions of others, including engineering, marketing and sales, packaging and advertising, manufacturing, key customers, publications and bankers. They may have to act on your findings, so you need agreement at the outset.
Plan of Action
By now, you are convinced that there are some marketing problems that you can solve for your organization using very basic, simple research. Put your plan of action in writing. Committing your actions to paper crystallizes and focuses your thinking. It also keeps others informed.
First, spell out why the research is needed. This includes statements on: what you want to consider (new product, new market area, new store location, new product line mix, new advertising alternatives, etc.); what you don't know (what information you need to help you make a better decision); what your alternatives are (and how the research will help you select the right alternative); and how much you are going to spend on the project.
Now that you have determined what you want to find out, you've arrived at the part of the project that is most fun and challenging ... getting the facts. There are literally thousands of sources available to you.
Your research approaches are divided into two categories -- primary or original resources and secondary or printed resources.
If you intend to use primary sources, you must pinpoint exactly who you need to contact, whether it is specific buyers in companies, heads of certain companies, heads of certain types of households or certain types of users.
The use of these sources usually involves more expensive, more time-consuming research. It takes time to get the information, tabulate it and analyze the results.
Secondary resources are materials that are already available, such as those on the Internet. They have been produced by your trade association, publications or the government. It's surprising how much useful information is available. You need only know who to ask and what to ask for.
Every year you "contribute" a great deal of money to our local, state, regional and national bureaucracy. Here is a chance for you to get a return on your investment. There are literally thousands of research reports of all sizes, on every subject imaginable. You have paid for that research, so use it.
Some of the larger banks have conducted original research, and every bank has a study of your area available. Ask your own bank manager what their market research department has available nationally, regionally and locally. They have probably already studied and analyzed many of the other secondary reports you would research, making your work even easier. Don't reinvent the wheel. If they have done the work and developed the answers, use them.
The media is one of your best sources of research results, and can also suggest other sources for further research data. National, regional, state and local magazines have studied their markets to determine how they can best serve them. They should be able to provide you with a breakdown of their circulation as well as industry/market area trends and statistics.
The same is true of newspapers, radio and television. Local media spends hundreds of thousands of dollars annually to determine what their market area is doing, what its make-up is and how it is changing. This is how they "prove" to you that they can deliver in your market.
There is also a growing list of on-line databases available as close as your telephone and terminal. These include Dialog, Dun & Bradstreet, Dow Jones and hundreds of other national, international and regional databases that are cropping up to meet the needs of information-hungry businesses such as yours.
As you can see from the list of available resources, there is a world of data available to you if you only ask. In fact, there may be more information available than you have time to study. Before you launch into your research, determine exactly when the results have to be presented. This will help put limits on the extent of your research. Time limits are important because the longer the research drags on, the better the chances are of your information becoming outdated.
You've determined that there is a need for the study, spelled out the possible actions that can be taken, determined your primary and secondary sources of information and are ready to present your findings, alternatives and recommendations.
Your market research could take a few days or a few weeks. But the results will help you and your organization chart a safer course.
© Copyright 1999, G.A.Marken, Marken Communications
The author assumes full responsibility for the contents of this article and retains all of its property rights. MarcommWise publishes it here with the permission of the author. MarcomWise assumes no responsibility for the article's contents.