A good research program can be invaluable to the success of any venture. There are five major types of research activities that can be undertaken. These are:
1. Market analysis. To identify profitable markets across geographical areas. This would include analysis of existing market sizes, characteristics and major players. Market segmentation can also be done by type of product and by type of end-user.
2. Marketing research. To determine the best marketing mix for your products, e.g., pricing, distribution, packaging, features, etc.
3. Advertising research. To assess the various advertising options such as media, distributions of brochures, copy, format, offers and so on.
4. Product research. To collect data from various sources to develop, monitor and improve the quality of the products.
5. Customer satisfaction. To measure customer satisfactions with the products and service.
Market research has four components. These are:
1. Scan the environment. What is going on? What is out there? Environment scanning can be thought of as the activity of intelligence gathering, looking at the competitive situation and new market opportunities. An example would be to assess the size, growth and major players in a particular industry.
2. Generate options. What are the options? What are the possibilities? For example, if your product line has become aged and tired, there are probably a number of ways you can rejuvenate it. All these need to be identified and explored. If you are seeking to expand you market, you will want to identify all possible groups that could be targeted for expansion. This phase should be thought of as the creative component with a goal to broaden your horizons so that you do not neglect opportunities or miss possibilities.
3. Select an option. Which option is the best? It is at this stage that you must decide exactly what functionality a product will offer. This is where you determine which market is likely to be the most profitable, or best protected from competition. Because resources are always limited, you have to select one or two options on which to concentrate your efforts. This stage is usually very stressful.
4. Evaluate success. How well did we do? Did we gain market share? How satisfied are the customers that bought the new product? The results will affect management’s on-going strategic review of business directions.
Here are some tips on selecting the right market research tools.
1. Do plan on using a variety of techniques over the course of a project. Make every effort to find the right tool for the job at hand. Every tool is specialized, and no tool is perfect.
2. Don’t confuse exploratory and confirmatory techniques. Do not try and squeeze precision out of tools that cannot provide it, and do not expect discoveries and new insights from tools whose purpose is to narrow down the possibilities and eliminate options.
3. Don’t fixate on specific research tools. Keep the focus on the decision to be made and on what information would be most helpful. Let the tool follow from the research objective.