Every great marketing guru writes at length about the importance of market research.

But there is no aspect of marketing that is inherently more expensive, or that takes longer.

What is the small businessman to do, If you can't afford upwards of $10,000 and minimally a couple of months?

First of all, if you're marketing is working, or the company is doing alright, there is no urgency. You can take the time.

Secondly, unless you are dealing with a brand new business or product line, you already have a lot of the information needed, available already within your company. Interviews with salesman as to what prospects are looking for, what closes people, demographics of customers and the like are tremendously valuable.

The bottom line though is in the long run, you need to work out a way to get complete, real, in-depth market research done. This can be the difference between doing okay and doing great.

The key phrase in this is "long run". Think of market research a long term project. Keep nibbling away at it as possible. You'll get there.

Posted by Richard R. Byrd at 10:38 AM | Permalink

Claude Hopkins invented it. Devoted an entire book to it, "Scientific Advertising", 1923.

Rosser Reeves, famous as the inventor of the "Unique Selling Proposition", talks about it at length, how to do it and why it is crucial, in "Reality in Advertising", 1960.

David Ogilvy heavily promoted it as essential to success, in "Ogilvy on Advertising", 1983.

Sergio Zyman considers it so lost and so essential it is one of the two main themes in his book "The End of Marketing As We Know It", 1999.

SO WHY DON"T MORE MARKETERS DO THEIR HOMEWORK, RESEARCH, SURVEYS, TEST AND MEASURE?

Beats me.

Posted by Richard R. Byrd at 10:57 AM | Permalink

I'm sometimes asked to survey for pricing.

It is very difficult.

One of the great geniuses of marketing, David Ogilvy, says you cannot survey for a price point. I agree. There ARE two effective things you can do in research to establish pricing:

1. Competitor research. What are competitors charging for similar products, lower end and higher end products?

2. You can TEST pricing. Offer the product at different prices or variations and see how it affects sales. This is particularly easy to do with online stores. You can test different pricing, shipping charges, volume discounts etc. and see if they affect your conversion rate.

Otherwise, forget it. Individuals surveyed as to "how much they would pay for a ___" or "Would you consider this price high, low, or reasonable" have no incentive to tell the truth - and some incentive to lie. Worse, they may try to be honest, but things can be very different when they have to reach for their wallet.

Posted by Richard R. Byrd at 09:22 AM | Permalink

David Ogilvy is one of the marketing gods. Founder of Ogilvy and Mather. Responsible for some of the most famous advertising campaigns in history. Retired to live in a castle in France, probably he's worth $100,000,000.

When David Ogilvy talks, you might want to listen.

A very large portion of his book "Ogilvy on Advertising" is about research, what it is good for, how major marketing companies like Proctor and Gamble use it, notable successes, how to go about research - and railing against the way most marketers neglect research..

Quote: "Advertising people who ignore research are as dangerous as generals who ignore decodes of enemy signals."

Amen.

Posted by Richard R. Byrd at 11:23 AM | Permalink

Market research is usually categorized as "quantitative" or "qualitative".

"Quantitative" research, as you would expect, is research that gives you numbers - percentages, rankings, etc.

So what is "qualitative" research? Research that doesn't give you numbers?

Well, exactly.

But any really usable research is going to have a numeric aspect. What are the most important search terms for my website, on a scale of 0 to 100? What percentage of potential customers get the right idea from each of these 3 different possible product names? What percentage of likely voters prefer candidate A to candidate B?

Qualitative research is useful as a preliminary to quantitative research. A great example is combing through testimonials for phrases used repeatedly: "great customer service" "best product for the best price" "got more than I expected" and so on.

THEN you can take those phrases and survey them on a prospective market to see what resonates the best - a quantitative result.

Unfortunately, qualitative research is often used as an end in itself and as a masquerade for ignorance.

A great example is focus groups. That's where you get a bunch of people together to talk about a product, a company, candidate or an issue. These are often presented as a final research result, even quantified ("43% of the participants agreed candidate X is an idiot").

Whereas they are nothing of the sort. Focus groups are called that because they were invented as a way to help focus research. A necessity because when you are starting out on a research project, especially for a new product or company, you often don't have a clue even what direction to go in.

Focus groups are one such tool. Competitor research is in large part about the same thing. One good starting point for keyword research, for example, is what terms competitors seem to be targeting.

There are lots of minefields in market research. Mis-used or misinterpreted qualitative research is one of them.

Posted by Richard R. Byrd at 07:10 AM | Permalink

This article highlights the fact that it is very easy to get a bum steer from a survey.

Some types of questions are notorious in this regards.

Just try to survey consumers for what they would pay for a product or service!

Any question where those being surveyed are likely to feel their answer may affect how others feel about them - or even how they feel about themselves - is subject to bias.

In political polling, how race affects the accuracy of polling results is a controversial subject with no definitive answer.

Market Researchers have responded to this challenge by using focus groups to try and illuminate what is going on in buyers' minds. Unfortunately this descends easily into group think, is subjective and very dependent on who is conducting the research. Focus groups have a bad odor amongst many marketers.

It is possible to get usable answers to emotionally charged questions, but to do it you have utilize the emotion, not try to get around it. L. Ron Hubbard's method using "encoded" questions, wherein the question you ask is not the question you are seeking an answer to - provided a breakthrough in this. It is a sophisticated technique, not for the dabbler, but extremely effective.

Posted by Richard R. Byrd at 02:30 PM | Permalink