This is how Small Businesses should use Market Research

Market research is very useful for small businesses. As a small business, especially doing something disruptive, you have to follow your gut much more than in other scenarios, for sure and there are some types of research that will not be applicable. Three things I have learned about marketing and market research:

  1. Online surveys are often overrated and poorly implemented, qualitative research is often underrated.
  2. Market research is not about outsourcing your job to consumers, but they can provide valuable input to various decisions you will need to make.
  3. I am not Steve Jobs.

Small Business

More detail on those:
1. While I don’t want to get into semantics I think it is important to point out that market research is more than quantitative surveys about the viability of a product idea (as sometimes seems to be the assumption).

If your respondent hasn’t experienced something you should probably not ask them about it explicitly. For example, just last year I stayed away from the the word smartphone, it turns out that among consumers there is a broad understanding of what it is but when it gets down to specifics perceptions vary. Try asking your friends what makes something a smartphone (they might focus on touch screen, data and internet, apps, …). Asking your friends brings me to the next point.

Qualitative research (focus groups, interviews, observation) is often underestimated or overlooked. If you run a music startup and ask a DJ friend how they store and manage music, would you consider that market research? If you ask a few people to come into the office to talk about how and on what devices they store and listen to music, are you running a focus group or are you just talking to people? My suggestion, without worrying about the exact definition of market research, is to figure out as many ways as possible to inform your decision making (qual, quant, observation, reading forum posts, using competitor products, mopping up available data, web analytics, …), pick the most appropriate ones, use them in the right order.

On qual and quant specifically, talk to people in a more or less formal methodology, listen to their problems, how they react to your ideas, what they think of competitors or perceived competitors. Follow up with a survey to validate and quantify what you have heard. Two most common mistakes with surveys: One is constructing your questions without a basis for comparison (30% were somewhat or very interested in the product, means nothing. 30% preferred idea A to idea B, means something). The other is sticking your survey on a forum or emailing it to a group without considering the biases within that population and within the sample who responded. The results might be useless or worse and you probably should have stuck with qual.

2. You can’t expect consumers to do your job for you, but their input can inform your decision making. If potential users aren’t informing the process what or who is? If you start with a big hairy problem or a vision, asking consumers explicitly about it is probably of little use. Ask customers how much they want to pay and the answer will come back as close to zero. There are limitations to any information gathering or problem solving method. Knowing them is what makes you competent, working around them is what makes you good. As you break your big problem/vision down into its parts that’s when you will find specific missing pieces or decision points that consumers can inform.

3. I have often heard it said that Apple is a visionary company and they “don’t do market research”. I think it is true they don’t defer to consumers on big product decisions. No one should, coming back to point 2. I know for a fact that they do customer satisfaction surveys and I would be very surprised if they don’t do brand tracking and media effectiveness research. Unless you are in the position of a Steve Jobs you might want to generate some customer/user feedback (numbers or comments) to validate or modify your assumptions, both for yourself as well as for colleagues and potential investors. In my case personally, the alternative to doing market research is not being Steve Jobs, it is being a worse marketer. Update: The Apple Samsung trial confirms that Apple does more market research than previously thought. Not for product development but for understanding customer perception of their and competitors products

Written by Fredrik Samanta on Quora

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Market research

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Market research for small businesses: Tips [Video]

This short video presents four quick tips on using market research in your small business. The following were highlighted:

  1. Researching your competitors
  2. Looking outside your industry for inspiration and new innovations
  3. Researching what big companies are doing
  4. Identifying new trends and business opportunities using social media & other media research

Debunked: The myth that Apple doesn’t conduct market research

I have often heard it said that Apple is a visionary company and they “don’t do market research”. I think it is true they don’t defer to consumers on big product decisions. No one should! I know for a fact that they do customer satisfaction surveys and I would be very surprised if they don’t do brand tracking and media effectiveness research. The Apple vs. Samsung trial confirms that Apple does more market research than previously thought. Not specifically for product development but for understanding customer perception of their and competitors products – as stated by Fredrik Samanta on Quora

Apple do researchThe type of Market Research Apple engages in

As part of the ongoing Apple-Samsung trial, there has been numerous court filings wherein both Apple and Samsung are looking to have all sorts of confidential data and trial exhibits sealed. Apple’s Greg Joswiak – the company’s VP of Product Marketing – submitted a declaration to the Court explaining why documents relating to Apple’s market research and strategy should be sealed.

Yes, Apple does market research!

Every month, Apple surveys iPhone buyers and Joswiak explains what Apple is able to glean from these surveys.

The surveys reveal, country-by-country, what is driving our customers to buy Apple’s iPhone products versus other products such as the Android products that Samsung sells, what features they most use, our customers’ demographics and their level of satisfaction with different aspects of iPhone.

And as you might expect, Apple conducts similar surveys with iPad buyers.

Recently, the Wall Street Journal highlighted some of the questions and answers that appear in these research reports:

One chart lists responses from customers in seven different countries, asking them why they bought an iPhone after considering an Android device. “Trust Apple Brand” emerged as the first or second most popular reason in most regions, including in the U.S and China where 54% of respondents cited it as a factor.

Some 67% of Chinese respondents said they bought the iPhone because they liked the physical appearance and design, the highest percentage across the group, which also included Japan, the U.K., France, Germany and South Korea.

Least important, almost universally, was the ability to easily transfer music and other media across multiple devices. “Greater availability of apps I am interested in” was a significant factor in South Korea, where 47% cited it as a reason.

Interestingly, Joswiak notes that Apple’s iPhone and iPad research data is only circulated to a small select group of Apple executives.

Are you surprise that Apple conducts regular monthly market research? Were you one of those persons who quickly referenced Steve Jobs “no market research quote” as justification for not collecting and analyzing customer feedback? Do share your views with us.

Market Research & Emerging Markets

Another thoughtful answer to a question many have asked: How do we approach market research in an emerging market like Jamaica?

 

IMG_00000153We found this insightful, yet simple answer on Quora:

“Market research is a very important part of a business and when you are entering into an emerging market it is of utmost importance that you have put enough efforts in the market research.

You can avail the secondary data through internet, periodicals, research papers, group literature, trade associations, etc. All of these data you can avail at a very minimal expenditure.

For the primary data you really need to spend the money. Money spent on consumer market research depend upon type of customer segment you want to deal with, where your customers are located and type of business (B2B or B2C).

For example if your customer segment comprises of older people it is evident that you can not float a survey to collect data on internet as they are not very familiar with filling surveys online; so you have to go out and complete the survey manually. Hence, that will increase your expenditure. Similarly, if you are dealing in a B2B business money and efforts spend in market research will be less as compared to a B2C business.

Also, just don’t put too much efforts and money in market research, you should have adequate data with you and with that data enter into market. Don’t just miss your time in doing more and more research (I know that’s too bookish but it’s true).”

See the original question and answer here

Market Research Basics

The following question was asked on Quora: “How do you conduct market research?”

This answer by Cate Riegner, was as simple and concise as we could do, so here is it:

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“Think in terms of different methodologies and consider which ones are right for your needs at various stages of business development, product development and marketing:

1. Syndicated/secondary research: This would be research conducted on/for a particular market that provides market sizing information, penetration data, trending data, etc. Search for published findings at trade organization sites, investment sites, etc. The challenge is finding a study that is relevant to your specific needs, and many charge a fee for a published report.

2. Custom quantitative: If you want quantitative data or feedback on a very specific subject related to your product (e.g., behaviors, attitudes, product concept testing), consider doing your own survey.  The challenge here is making sure your sample is “representative” of the market you want to study, your survey is designed well (e.g., no leading questions, appropriate scales), you process and report data accurately. There are great, affordable survey programming/hosting tools out there (e.g, SurveyMonkey), but you need to pay for sample, survey design and possibly analysis depending on your needs.

3. Custom qualitative: This might be user testing, ethnography, interviews, blind-shopper stuides, focus groups (either online or offline). People put a lot more weight on quantitative data (because it is statistically reliable), but I am a huge advocate of qualitative research for deeper, richer insights.  Don’t discount it just because the sample size is small. The question you need to consider here is: Which approach/method is best for what I want to learn/problem I want to solve?  Each of the types of qualitative research I listed above is better for different needs.

4. Analytic data: A lot of data is generated for free online, through traffic logs, blogs, etc. The challenge here is collecting the data and conducting an analysis/generating findings that can be applied to your specific question/problem you are trying to solve.”

Check out all the answers to the above question on Quora.