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Tuesday, 9 March 2010
Some practical pointers on using market research
While most people have some sense of what market research involves - e.g. ‘do a survey’ or ‘run focus groups’ - they do not always understand what research can or cannot do.
While most people have some sense of what market research involves - e.g. ‘do a survey’ or ‘run focus groups’ - they do not always understand what research can or cannot do.
Here, we have some quick answers to common questions and views SMEs often have about doing market research.
Market research is only for big companies
This is probably half-true. Most users of market research do tend to be MNCs.
Market research is probably also not for some types of SMEs, like a brand new start-up, which must worry about business survival, or a ‘mom-and-pop’ business, which does not plan to change business practice or expand.
However, most other businesses, especially those with intentions to grow, will always benefit from having insights into the market to help them plan their course.
A business manager always needs to understand the market, size up the current competition and work out how best to configure the product, service or marketing campaign. He can either rely on his gut instinct, or invest some resources in sussing out the market and the opportunity space.
Perhaps the main difference between large companies and SMEs in this respect is that large companies tend not to make big decisions on gut instinct. We think that SMEs shouldn’t either.
Market research is a luxury for small companies
A typical turnkey piece of market research is likely to set you back between $15,000 to $50,000 - this is approximately the same price as investing in a proper IT or telco system.
It may seem a strange comparison, but market research and IT systems share quite a bit in common:
# A good set of market insights serves the same function as a proper IT system in that it provides a reliable platform for you to build and grow your business on.
# In the same way that it makes sense to invest to get the right IT solution properly set up the first time round rather than an interim solution, it is also a good idea for the business to invest in building a shared and formal understanding of ‘What makes us strong?’ or ‘What’s important to our customers?’ rather than piece it together over time and through (costly) trial and error.
# You can upgrade your IT system every year or, like most SMEs, bite the bullet, buy something good and use it for as many years as you can. The same goes for market research. A good set of market insights from a well-designed study can remain useful and relevant for years.
So how much should I spend on research?
If your marketing campaign is going to cost you only $30,000, don’t spend $15,000 researching it. Just do it!
On the other hand, if your new product or campaign is going to cost you $300,000, it is unwise to jump in blind when you could spend just $15,000 and get concrete indications from customers on which benefits to focus on, which ones that can be dropped, or whether the product/advertising should even be launched.
How do I get the most out of my research supplier?
Tip 1: Always tell your agency why you need to do the research in the first place.
Some clients believe that giving a very general brief which gives no indication of the business intent will help the agency to do their work more objectively.
This is a misconception - it is the same as doing a science experiment without knowing what you are supposed to find or prove. What test should you administer?
The results of all research can vary greatly depending on what questions you ask, how you ask them and how you read the answers. Telling the agency your specific concerns and hypotheses will go a long way to help them design the right questions to validate or allay your concerns.
Much of our initial discussions with clients involves working with them to uncover and articulate the exact business or marketing issues they are hoping to solve through the research before we get into recommending an approach.
Tip 2: Don’t tell the agency what questions they should ask in the research or how they should do the study.
Unless you are required (by your regional HQ, principal, etc) to carry out a study in a particular manner, you will often benefit more from just telling the agency the problem you are trying to solve (see tip #1) and leaving them to recommend what is necessary to solve the problem.
Feel free to tell them your constraints, like budgets or deadlines, but let them worry about how to make it work, or tell you how best to trade them off.
There are many research tools available these days - from street intercepts to workshop sessions - to help your product teams come up with new ideas. If you give your agency the right mandate, you may discover that there are other ways to skin the cat than what you had in mind.
Tip 3: Choose a partner, not a deal.
When we do interviews with SME business owners we find that they may drive hard bargains, but will often pay more for value-add, attention and flexibility rather than take a ‘basic’ product at a lower price.
We also consistently find that business people would always rather work with a few partners they trust than keep seeking out the best offer with different suppliers.
We think this is exactly how you should choose an agency for a piece of research.
The writer is country business manager of Acorn Marketing and Research Consultants in Singapore. His company is the largest independent Asian research network with offices in nine countries around the region, managing research in more than 30 countries around the world. It is a supporting partner of the Emerging Enterprise Awards 2010 - which is jointly presented by ‘The Business Times’ and OCBC Bank - and will offer a brand and product development package worth $30,000 to each of the three winners
2 comments:
Some practical pointers on using market research
By DANNY LAI
23 February 2010
While most people have some sense of what market research involves - e.g. ‘do a survey’ or ‘run focus groups’ - they do not always understand what research can or cannot do.
Here, we have some quick answers to common questions and views SMEs often have about doing market research.
Market research is only for big companies
This is probably half-true. Most users of market research do tend to be MNCs.
Market research is probably also not for some types of SMEs, like a brand new start-up, which must worry about business survival, or a ‘mom-and-pop’ business, which does not plan to change business practice or expand.
However, most other businesses, especially those with intentions to grow, will always benefit from having insights into the market to help them plan their course.
A business manager always needs to understand the market, size up the current competition and work out how best to configure the product, service or marketing campaign. He can either rely on his gut instinct, or invest some resources in sussing out the market and the opportunity space.
Perhaps the main difference between large companies and SMEs in this respect is that large companies tend not to make big decisions on gut instinct. We think that SMEs shouldn’t either.
Market research is a luxury for small companies
A typical turnkey piece of market research is likely to set you back between $15,000 to $50,000 - this is approximately the same price as investing in a proper IT or telco system.
It may seem a strange comparison, but market research and IT systems share quite a bit in common:
# A good set of market insights serves the same function as a proper IT system in that it provides a reliable platform for you to build and grow your business on.
# In the same way that it makes sense to invest to get the right IT solution properly set up the first time round rather than an interim solution, it is also a good idea for the business to invest in building a shared and formal understanding of ‘What makes us strong?’ or ‘What’s important to our customers?’ rather than piece it together over time and through (costly) trial and error.
# You can upgrade your IT system every year or, like most SMEs, bite the bullet, buy something good and use it for as many years as you can. The same goes for market research. A good set of market insights from a well-designed study can remain useful and relevant for years.
So how much should I spend on research?
If your marketing campaign is going to cost you only $30,000, don’t spend $15,000 researching it. Just do it!
On the other hand, if your new product or campaign is going to cost you $300,000, it is unwise to jump in blind when you could spend just $15,000 and get concrete indications from customers on which benefits to focus on, which ones that can be dropped, or whether the product/advertising should even be launched.
How do I get the most out of my research supplier?
Tip 1: Always tell your agency why you need to do the research in the first place.
Some clients believe that giving a very general brief which gives no indication of the business intent will help the agency to do their work more objectively.
This is a misconception - it is the same as doing a science experiment without knowing what you are supposed to find or prove. What test should you administer?
The results of all research can vary greatly depending on what questions you ask, how you ask them and how you read the answers. Telling the agency your specific concerns and hypotheses will go a long way to help them design the right questions to validate or allay your concerns.
Much of our initial discussions with clients involves working with them to uncover and articulate the exact business or marketing issues they are hoping to solve through the research before we get into recommending an approach.
Tip 2: Don’t tell the agency what questions they should ask in the research or how they should do the study.
Unless you are required (by your regional HQ, principal, etc) to carry out a study in a particular manner, you will often benefit more from just telling the agency the problem you are trying to solve (see tip #1) and leaving them to recommend what is necessary to solve the problem.
Feel free to tell them your constraints, like budgets or deadlines, but let them worry about how to make it work, or tell you how best to trade them off.
There are many research tools available these days - from street intercepts to workshop sessions - to help your product teams come up with new ideas. If you give your agency the right mandate, you may discover that there are other ways to skin the cat than what you had in mind.
Tip 3: Choose a partner, not a deal.
When we do interviews with SME business owners we find that they may drive hard bargains, but will often pay more for value-add, attention and flexibility rather than take a ‘basic’ product at a lower price.
We also consistently find that business people would always rather work with a few partners they trust than keep seeking out the best offer with different suppliers.
We think this is exactly how you should choose an agency for a piece of research.
The writer is country business manager of Acorn Marketing and Research Consultants in Singapore. His company is the largest independent Asian research network with offices in nine countries around the region, managing research in more than 30 countries around the world. It is a supporting partner of the Emerging Enterprise Awards 2010 - which is jointly presented by ‘The Business Times’ and OCBC Bank - and will offer a brand and product development package worth $30,000 to each of the three winners
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