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 Uploading ....Note: Wikipedia "research" 1/29/07 used as starting point for parts of this section.
IntroductionEntrepreneurs have to become involved in both Primary Research, and Secondary Research. In Feasibility Analysis and Concept Testing, Primary Research is the key. In Industry Analysis, Secondary Research, if considering competing in existing industries is the norm. For Competitive Analysis, both forms of research are often used.
Primary research is research that's tailored to a company’s particular needs. By customizing tried-and-true approaches — focus groups, surveys, field tests, interviews or observation — you can gain information about your target market. For example, you can investigate an issue specific to your business, get feedback about your Web site, assess demand for a proposed service, gauge response to various packaging options, and find out how much consumers will shell out for a new product. Secondary research is based on information gleaned from studies previously performed by government agencies, chambers of commerce, trade associations and other organizations. This includes Census Bureau information and Nielsen ratings, and use of Purdue's libraries such as Kranner's Management and Economics Library (MEL). MEL has setup a specific link for students of ENTR200 to use in their secondary research efforts. Click here to be linked to this MEL resource. Use your Purdue career acount login when asked. For purposes of this introduction, readers are encouraged to use the guidelines published in Purdue's "OWL" at this link. Types of marketing research applied to the entrepreneur
Marketing research techniques come in many forms, including:
- test marketing - a small-scale product launch used to determine the likely acceptance of the product when it is introduced into a wider market. This should be cared out as part of Feasibility Analysis (section of this Wiki), as should the following technique.
- mystery shopping- An employee or representative of the market research firm anonymously contacts a salesperson and indicates he or she is shopping for a product. The shopper then records the entire experience. This method is often used for quality control or for researching competitors' products. It is also used to ascertain how well employees are performing, and to obtain an independent view of a company.
- store audit - to measure the sales of a product or product line at a statistically selected store sample in order to determine market share, or to determine whether a retail store provides adequate service
- demand estimation - to determine the approximate level of demand for the product. This has obvious implication when making projections for Business Plans.
- Commercial eye tracking research - examine advertisements, package designs, websites, etc by analyzing visual behavior of the consumer
- sales forecasting - to determine the expected level of sales given the level of demand. With respect to other factors like Advertising expenditure, sales promotion etc.
- customer satisfaction studies - exit interviews or surveys that determine a customer's level of satisfaction with the quality of the transaction
- price elasticity testing - to determine how sensitive customers are to price changes
- brand equity research - how favorably do consumers view the brand?
- advertising and promotion research - how effective are ads - do potential customers recall the ad, understand the message, and does the ad influence consumer purchasing behaviour?
- Internet Strategic Intelligence - searching for customer opinions in the internet: chats, forums, web pages, blogs... where people express freely about their experiences with products, becoming strong "opinion formers"
- Marketing Effectiveness and analytics - Building models and measuring results to determine the effectiveness of individual marketing activities
Primary Marketing research methods
Methodologically, marketing research uses four types of research designs, namely:
- Qualitative marketing research - generally used for exploratory purposes - small number of respondents - not generalizable to the whole population - statistical significance and confidence not calculated - examples include focus groups, in-depth interviews, and projective techniques
- Quantitative marketing research - generally used to draw conclusions - tests a specific hypothesis - uses random sampling techniques so as to infer from the sample to the population - involves a large number of respondents - examples include surveys and questionnaires
- Observational techniques - the researcher observes social phenomena in their natural setting - observations can occur cross-sectionally (observations made at one time) or longitudinally (observations occur over several time-periods) - examples include product-use analysis and computer cookie traces
- Experimental techniques - the researcher creates a quasi-artificial environment to try to control spurious factors, then manipulates at least one of the variables - examples include purchase laboratories and test markets
Researchers often use more than one research design. They may start with secondary research to get background information, then conduct a focus group (qualitative research design) to explore the issues. Finally they might do a full nation-wide survey (quantitative research design) in order to devise specific recommendations for the client.
Business to business market research
Business to business (b2b) research is inevitably more complicated than consumer research. The researchers need to know what type of multi-faceted approach will answer the objectives, since seldom is it possible to find the answers using just one method. Finding the right respondents is crucial in b2b research since they are often busy, and may not want to participate. Encouraging them to “open up” is yet another skill required of the b2b researcher. Last, but not least, most business research leads to strategic decisions and this means that the business researcher must have expertise in developing strategies that are strongly rooted in the research findings and acceptable to the client.
There are four key factors that make b2b market research special and different to consumer markets:[1]
- The decision making unit is far more complex in b2b markets than in consumer markets
- B2b products and their applications are more complex than consumer products
- B2b marketers address a much smaller number of customers who are very much larger in their consumption of products than is the case in consumer markets
- Personal relationships are of critical importance in b2b markets.
Commonly used marketing research terms
Market research techniques resemble those used in political polling and social science research. Meta-analysis (also called the Schmidt-Hunter? technique) refers to a statistical method of combining data from multiple studies or from several types of studies. Conceptualization means the process of converting vague mental images into definable concepts. Operationalization is the process of converting concepts into specific observable behaviours that a researcher can measure. Precision refers to the exactness of any given measure. Reliability refers to the likelihood that a given operationalized construct will yield the same results if re-measured. Validity refers to the extent to which a measure provides data that captures the meaning of the operationalized construct as defined in the study. It asks, “Are we measuring what we intended to measure?”
Applied research sets out to prove a specific hypothesis of value to the clients paying for the research. For example, a cigarette company might commission research that attempts to show that cigarettes are good for one's health. Many researchers have ethical misgivings about doing applied research.
Sugging (or Selling Under the Guise of market research) forms a sales technique in which sales people pretend to conduct marketing research, but with the real purpose of obtaining buyer motivation and buyer decision-making information to be used in a subsequent sales call.
Frugging comprises the practice of soliciting funds under the pretense of being a research organization.
ENTR200 studentscan expect to receive a 45 minute or so briefing by Purdue's MEL personnel on use of the Krannert library for course requirements. Additionally, a detailed example requiring use of MEL will be discussed in the Industry & Competitive Analysis section of ENTR200.
Again, for Purdue students, you are encourage to download and use the MEL toolbar available from MEL's homepage available at this link:
More help:
Collection
Market Research and Competitive Analysis
Apr 01, 2007
Topic: Sales & Marketing
Summary: Is there is a market for your product? If so, is it a competitive market space? Who are the key players? Can you clearly differentiate your offering from the competitors’ so customers will buy your product? These are just some of the questions entrepreneurs should ask themselves before launching a new company or product. Conducting quality market research and competitive analysis is the focus of this collection. Valuable insights into performing solid primary and secondary market research activities and proven techniques for analyzing market and competitor data are included.
Entrepreneurs' Stories
- Market Research Informs a Business Idea (Kauffman Foundation)
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Sally E. Smith, Apr 01, 2007 (Article)
This entrepreneur and former banking executive shows how she used market research to discover the opportunity for an unexpected new venture. She researched ways around obstacles, identified solutions, and stayed creative--until one day, she found herself at the helm of a very successful business.
- Creative Research to Test Assumptions (Kauffman Foundation)
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Kevin Leibel, Apr 01, 2007 (Article)
This entrepreneur attributes his success to a philosophy built on persistence, creativity, and a penchant for asking, "Why not?" His path as an entrepreneur is rooted in creative, out-of-the-box market research capabilities.
How To's
- How to Conduct Fundamental Market Research (Kauffman Foundation)
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Bill Warner, Apr 01, 2007 (Article)
Completely understanding your market allows you to confidently approach any customer, potential partner, or investor. This entrepreneur and angel investor outlines a five-step process for knowing breadth and depth of the market landscape.
- Successful Entrepreneurial Market Research Techniques (Kauffman Foundation)
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Greg Heinemann, Apr 01, 2007 (Article)
While it is true that large companies always can afford full market research programs, entrepreneurs running growing companies should know there is a vast array of data and information that can be obtained at little cost and time.
- Methods for Conducting Early Market Research (Kauffman Foundation)
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Stephen K. Markham, Apr 01, 2007 (Article)
By understanding customers' needs, a product can be developed to meet these needs. This author outlines three quick and inexpensive methods to help: Be Your Own Customer, Critically Observe the Customer, and Listen to the Voice of the Customer.
- Questions to Answer When Analyzing Competition (Kauffman Foundation)
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Bill Warner, Apr 01, 2007 (Article)
Your basic business strategy and product plan needs to be rooted in an understanding of what it takes beat the competition. To do so, this author says you must have a realistic understanding of what you are up against, and he lays out a method to do smart market research.
- Using the Internet for Market Research (Kauffman Foundation)
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Sam Richter, Apr 01, 2007 (Article)
Much of the good business information is hidden in "the invisible Web," the 80 percent of the Internet not accessible to popular search engines. Good news: there are free and low-cost ways to access business information online. This article includes valuable Web sites to visit when you need information for your business or strategic planning.
- Ten Focus Group Tips (Kauffman Foundation)
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Grace W. Ueng, Apr 01, 2007 (Article)
Market research results can help an entrepreneur change company behavior. To that end, this author recommends a ten-step plan for tapping the power of focus groups to conduct research that is immediately actionable.
- Secondary Market Research Resources (Kauffman Foundation)
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Nikki Marchand, Apr 01, 2007 (Article)
Understanding your industry, competitors, and customers is necessary for any entrepreneur. Primary research helps gather specific data, but secondary market research is also helpful. This article outlines fundamental, secondary research resources, which are either accessible online or at your local library.
Tools & Templates
- Guide to Online Market Research (James J. Hill Reference Library)
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Nikki Marchand, Apr 01, 2007 (Link)
This research guide is filled with tools, including databases, trade publications, and more to assist entrepreneurs as they study a potential market--customers, demographics, competitors, trends, and more.
- Developing My Customer Profile (Kauffman Foundation)
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FastTrac, Sep 20, 2006 (Link)
Use this tool to identify your major customer groups, their distinguishing characteristics, and the market research needed to develop a customer profile.
- SWOT Analysis Worksheet (Kauffman Foundation)
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FastTrac, Apr 01, 2007 (Link)
A SWOT analysis helps identify Strengths and Weaknesses and examine the Opportunities and Threats you or your competitors may face. This tools helps you learn more about your competition gain greater insight into the market.
- Competitive Advantage Worksheet (Kauffman Foundation)
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FastTrac, Sep 20, 2006 (Link)
Use this tool to capitalize on your strengths or unique innovations so that customers prefer to do business with you.
- Market Research: Trial HillSearch Membership (James J. Hill Reference Library)
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 N/A, Apr 01, 2007 (Link)
HillSearch, a market research online tool sponsored by the James J. Hill Research Library, offers a free ten-day trial membership for all who register at this link.
See also
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