How a well-designed market research plan can help you uncover unmet market needs
So whether you’re just getting ready to launch a new product, looking to improve on an existing one, deciding on the look and feel of your packaging, or even wondering whether you have the right name or brand for your business, you need to first do some market research. So you need a solid market research plan.
How to Develop a Tight, Focused Market Research Plan
The first place to start with your market research plan is to define your research objectives. It’s extremely important that you’re clear about the answers you’re looking for from the research results.
Most likely, your research objectives will fall under at least one of the following categories:
- To identify potential target market segments
- To establish a buyer profile and demographics for products or services
- To test the feasibility of entering a new market
- To determine market influences on timing, pricing, service, etc.
- To gauge consumer sentiment towards state of the economy and buyer confidence
- To study usage and attitude of product or service users
- To study usage and attitude of competitors’ users
- To identify and examine perceptions towards brands, companies, images, packaging
- To capture key concerns and expectations from consumers or users
- To measure customer satisfaction or to benchmark satisfaction against competitors
Of course, all elements of your market research plan are important to success. But of all elements, your sample is perhaps the most vital to accuracy. In case you don’t know, a sample is simply the people you select to study. You can’t practically study the whole population or the entire market, so you need an adequate percentage and cross-section of your target consumer.
Let’s say there are 100,000 target consumers for your product. You could sample 1% for example, which is 1000. Your sample could be bigger or smaller, but it’s important that your sample is large enough to be more accurate. If your sample is too small, you may find that results either are too similar or too varied. You might be fine sampling 30 or 100 people – but be prepared to sample more if necessary.
Also make sure your sample reflects the demographics of your target market. So, if your target market consists of people of various income levels, ethnicities, age groups, home owners or renters, and gender, your sample should be a cross-section of these.
There are several research methods available, but your market research plan needs to be focused on one or two methods that will yield the results you are seeking.
By far the most common method to capture market intelligence is by conducting surveys. You can conduct surveys in groups or individually. You can conduct surveys in person, over the telephone, or even online. In some cases, surveys are better conducted as interviews, while in others, it’s best to let the respondent complete the survey on its own.
Keep in mind that most people are unlikely to agree to spend a lot of time on a survey. Also, the average person has a brief attention span. So keeping the survey down to 20 minutes or less is imperative. It’s best to limit the survey to 15 minutes maximum.
There are two ways to collect data for market research: quantitative and qualitative.
Quantitative data collection is statistical, and uses mathematical analysis to measure the research findings. It can inform of significant differences in comparative data, as well as provide more simple analyses such as averages, and satisfaction scores. Therefore, quantitative data collection requires an adequate sample.
Qualitative data collection, on the other hand, is used to identify key issues that a business may want to explore in-depth. Although qualitative methods such as focus group discussions don’t actually measure the findings statistically, but can be used to uncover issues which can be quantified and then measured through quantitative analysis. Therefore, qualitative data collection is often used as a basis to design quantitative research.
Here’s a list of primary research methods you can use to research your market, along with a brief description:
- Surveys – completing questionnaires face-to-face, via telephone or online
- Interviews – asking and probing respondents to gain detailed responses. Good for open questions.
- Focus Groups – moderating a discussion with users. Useful for capturing key concerns and messages
- Ethnography – observing customers using products in their natural environments (e.g. at home)
- Product clinics and tests – having users try products and give feedback (e.g., taste tests)
It’s common for businesses to hire research agencies to conduct primary research because of the effort and resources involved.
But that’s not to say you can’t do your own research. Particularly small businesses can benefit from doing their own research, since they don’t need extensive data and can work with smaller samples. Outsourced research management can be an expensive investment for small business owners.
You should also consider secondary research for your market research plan. Secondary research simply means the research has already been conducted by someone else, or the data is made available. Below are some examples:
- Government statistics – this is great place to start your research if you’re a small business
- Public libraries – another good places to find statistical data and information
- Chambers of commerce, trade boards, city hall and local government offices
- Phone directories and yellow pages
- Online and offline market research sources
Especially for small businesses, secondary research is a good option for their market research plan. For example, the cost of obtaining and purchasing research may be far cheaper than conducting research yourself. There are some good online sources for compiled market research where you can purchase relevant data for your market research plan.
If you’re conducting your own research, limit it to a timeframe. After a period of time, many factors can affect the results of research. Events such as elections, long holidays and seasons can affect the emotions of your respondents.
- Importance of Market Research
- Business Research
- Types of Market Research
- Competitive Intelligence Resources
- How to Conduct Market Research