Market Research Defined

“Before you approach anyone with an idea you must do the research.”
-Peter Jones, Entrepreneur – Dragon’s Den (UK) – American Inventor (USA) – The Guardian, Media Planet May 2015

All customers really want are better ways of solving their problems. This means one of the main tasks of marketing is to understand the customer and their problems so that ways of making life easier for them can be identified. Despite it being clear that customers are at the heart of every successful business, failure rates calculated by a variety of studies show that around 50% of all start-ups fail within five years.

startupbusinessdraftSo what is going wrong for some while others enjoy success?

Fortune Magazine published an article with research from founders on why they failed and these were identified as the top five reasons:
1. No market need
2. Ran out of cash
3. Not the right team
4. Outcompeted
5. Pricing/costing issues.

Research can Help Improve your Chance of Success:

One way you can take steps to avoid failure in the early days of starting your business by is conducting good research. You can start by doing it yourself and/or hire some experts. For example failing because there is no market need could be identified through research before too much money is spent on developing a dead-end venture. A quick Google search may show you that there are many similar products already on the market or none at all. If there are none, you could be onto something fresh but you should dig deeper to see if there are any underlying reasons for why something similar isn’t being sold. Perhaps others have identified that it isn’t profitable and if you wanted to move forward you’d have to figure out a way to make the numbers work. Additionally, pricing issues can be also be worked out by finding the right numbers through market research methods.

Definition of Market Research:

Market Research is a major discipline of marketing. The main function is intelligence gathering and analysis on a particular market, industry, geography, customer group, competitors, or specific product or service area. Simply put: marketing research comprises of any organised effort to gather information about target markets or customers and is a very important part of business strategy.

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If you’ve got yourself a start-up, any information is probably useful, but the key question that needs to be answered is: why should anyone buy from you rather than from your competitors? Your backers, which include investors, will expect you to have a thorough understanding of your marketing and industry including the trends within it. Based on this your backers will expect you to have identified your customers and competitors and estimated the size of your market. For new product launches, they will not only expect it to work but they will expect for some market testing (field research) to gauge customer reaction to it, compared to competitors’ products. Unless you start out to create a truly new global industry, it is likely that there will be an existing market or industry that sells similar goods or services to the ones you propose.

Desk & Field Research:

You need to find as much relevant information as you can about your markets, your industry, your customers and your competitors. There are two ways you can do this; Desk Research and Field Research. Desk Research is research that you can do from a desk. Field Research involves going out and collecting new information that is not publicly available.

Main Research Methods & Uses:

QualResearchFolderDraftQualitative Research: is used to gain an understanding of underlying opinions, reasons, and motivations and is based upon subjective evaluation of behaviours, attitudes or events. It usually involves a smaller sample of respondents. It can be used to verify results found through quantitative research. The most common method used to generate data in Qualitative Research is an interview which may be structured, semi-structured or unstructured. Qualitative research techniques include focus groups, case studies and participant observation.

Quantitative Research: is based upon hard data where there are definitive and absolute answers. Groups of people can be surveyed and statistics and data can be gathered. Data can be collected through questionnaires, surveys, polls or by analysing pre-existing statistical data. Basically, Quantitative Research is used to “quantify” the problem by generating numerical data or data that can be transformed into usable statistics. This use of measurable data then creates facts or “proof points”. Quantitative Research is often used in conjunction with Qualitative Research to provide hard evidence.

Uses for Market Research:
* test initial concepts for initial testing and evaluation,
* position a business,
* assist in new product/service launches,
* to evaluate a product/service’s strengths and weaknesses which will help determine how to improve a product/service,
* to determine what a customer wants or needs, to analyse competition.

customerexepriencesurveysampledraftFor example, while a product is being developed, research can be used to determine customer reaction or which features or packages would be most popular. Once the development of your product/service is completed, then the marketing of it begins. In some instances, a smaller test market may be used to test consumer acceptance before the product is launched in a larger scale like regionally, nationally or internationally. For example, let’s assume you are making a totally new refreshing cider made from locally sourced apples. You might decided to ask your local supermarket if you can setup a taste-test booth so that you can study people’s facial expressions and ask them questions about your product and what they liked or didn’t like about it. At this point, modifications can usually still be made before a national launch. If your cider wasn’t tested by a small group, the consumers who end up purchasing it may never buy it again. Testing participants can help make or break a new product. The continued success of your product is dependent upon post-launch research.

Areas of Expertise in Market Research Include:

* Advertising
* Behavioural Analysis
* Branding
* Concept Testing
* Consumer/Consumer Communities
* Data & Web Analytics
* Employee Research
* Forecasting
* New Product Development
* Opinion Polling
* Packing & Design
* Pricing
* Product Testing
* Reputation Management
* Social Media
* Usage and Attitude

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If you’re looking to hire a market research company to help you sort your research projects in the UK and Ireland, the Market Research Society (MRS) publishes a useful Market Research Buyers Guide that the MRS says is the only source of accredited market and social research organisations in the UK and Ireland – all companies listed abide by the MRS Code of Conduct which the MRS says gives you “the reassurance of service and integrity”. To find an accredited supplier that is not headquartered in the UK, the Market Research Society provides international links listing research societies for countries around the world.