Global marketing has become a fact of life. Local companies are affected by global ones, understanding the global market is a must. Firms are going beyond geographical boundaries to take advantage of resources they don’t have in their countries. Understanding these diverse markets is a must and it is done through global market analysis. Conducting research in these countries is hard, so it is better to get research done by a local firm. Marketing and research go hand in hand now, previously the market analysis department did not have a say in decision making but now, and they play a major role. They help in predicting trends in the market.
Importance of Market Research
Market research is very important; it helps companies to tailor their messages to their targeted audience and helps the organisation to perform better. Research can measure the reputation of a company among consumers, governmental officials and the academic community. Mathematical models are used to estimate the failure or success of a product. Research helps in getting consumer reaction to products that are already being sold by the company or even a product that is at a conceptual stage. Research can tell a marketing company what flavour or colour the appeals most to the consumer. Target audiences can be set accurately and positioned in the right market. Research can prove whether your advertisement communicates what it was intended to be.
The major steps involved in market research are:
• Defining the market research problem
• Formulation of Research design
• Analysis of secondary data
• Development of a questionnaire
• Collection of primary data
• Data Analysis
• Preparation and Presentation of report
Phases of Global Market Research
These is in general for global market analysis with more steps. International Marketing Research design has 5 major phases
• Phase 1: Deciding whether to internationalise- Assessing the demand for the company’s products or services
• Phase 2: Deciding on markets to enter- Understanding their local competition and the potential of the product
• Phase 3: Market entry strategies- Understanding the competitors strategy
• Phase 4: Designing the international marketing mix, the 7 Ps- Understanding the behaviour of the consumer, SWOT analysis, and deciding on the media mix
• Phase 5: Implementation of plan in international market- Final implementation and analysis of performance.
Acquiring secondary data is a must; this gives a clear background as to how the process of research takes place. Other companies would have also done market research in these global markets. By reading these works of market researchers can design their analysis work. At the end of the research work, companies usually list out the drawbacks of the research or the challenges they faced during the implementation phase.
Primary research must be done when the agency is not able to acquire enough or reliable information. Collecting primary data takes more time and money consuming. Designing a primary data collection is a must and the right collection technique to collect data. Some of the popular methods of data collection for global market analysis include:
• Observational and Tracking Methods
• Focus Group Interviews
• In-depth Interviews
• Action Research
• Survey and Questionnaires
• Psychological or Psychographic approach2
Global market analysis is very important and companies which have knowledge about global markets must be selected, so that data obtained is accurate. Market research allows marketing agencies to tailor their message or product accurately in the right country at the right time. Geographical boundaries have more differences, in terms of weather, culture, religion and language. The product or service should be positioned in a market where it is profitable.
Primary Research is a form of research where the data is collected directly from a respondent. Market research is done to understand an area in-depth. Understanding the marketing environment is a must. Market research helps in finding out how the market is. Being aware of what’s going on in the market is called Market Intelligence. The areas that are considered a part of market intelligence are-
– Product Position- The position they have in the market favourable, unfavourable or neutral? Primary Research answers these question, so that the marketing efforts can be designed based on the position to brand, product or service.
– Market segmentation- Understanding the market segment is a must, the product or service needs to be positioned accurately in the dynamic market. Research finds out if the product should be marketed to seniors, working professionals or teenagers. This also helps in tailoring the message.
– Consumer Behaviour- Understanding a consumer’s behaviour is a must, their personality, their attitude, motivation and other intrinsic factors. Primary Market research is one on one research.
Management consultants help with primary market research. As a type of research primary market research takes a lot of time, by hiring a management consultant they would be able to conduct an in-depth research which would provide conclusive and empirical results.
Primary market research has several steps, this steps need to be clearly defined at demarcated, the following are the six major steps-
– Defining the problem statement- The problem must be clearly stated i.e. what are you trying to find out or prove. An example could be finding out the sales forecast for a period of a month. The time and place needs to be clearly defined.
– Method of data collection- The method needs to be defined and followed spot on. Whether the method adopted is going to be a survey or an interview. If a survey is selected, is going to be a telephonic interview or an online survey. The method needs to be defined in the beginning, so that the questions can be devised.
– Sampling technique- Defining the sampling technique is a must, random, stratified, cluster or some other technique. A mix of techniques must be avoided, for primary market research the company must use stratified sampling. As a technique for data collection, stratified sampling the researcher divides the entire target population into different subgroups, then selects the final group or sample. This method is adopted when the population size is vast, complete enumeration cannot be possible when the sample size is large.
– Analysis of data- After the process of data collection, the data must be interpreted through statistics. The researcher must define the software they are using to interpret the data. The statistical measures they are going to use to prove the problem statement.
– Error checking: This step is very crucial, the researcher must check if the data is entered accurately, if a hypothesis is stated it needs to be proved or disproved at this stage. The data or evidence must be corroborated at this stage.
– Research Report Writing- All the chapters of the research must be combined, the charts, tables and other forms of pictorial representation must be written at this stage. The Interpretation of the research findings is finished at this stage.
Management consultants can conduct in-depth works of research. Market analysis in general takes time and primary market research is more tedious, companies must hire management consultants to carry on this task. The steps are many and each step takes a lot of time, the end result is that market research answers many questions that companies are asking.
Marketing research is a process used by businesses to collect, analyze, and interpret information used to make sound business decisions and successfully manage the business. In other words, it links the consumer to the marketer by providing information that can be used in making marketing decisions (i.e. B2C or B2B). This can not be implemented without the use of a MIS (Marketing Research System) to gather, sort, analyze, evaluate, and distribute needed, timely, and accurate information to marketing decision makers.
Here are the steps to implementing a marketing research process.
1. Ask yourself if there is a real need for marketing research. It’s not only the first step to take but a very critical one as well! Research takes a lot of time due to the overload of secondary information available on the Internet. It’s ideal to think that it takes months or even a year to completely finalize a marketing research agenda. The other factor you will need to consider is the cost of doing it, especially if you hire an agency to do it for you. What you want to compare is the value of the information vs the cost of the information. If the value of the information is worth the cost and time of doing it, then by all means, go for it buddy!
If you’re still unsure, here’s a few quick guides to go by to determine that marketing research is not needed:
a) The information is already available
b) The timing is wrong to conduct marketing research
c) Funds are not available for marketing research
d) Costs outweigh the value of marketing research
2. Define the problem. This is the most important step (assuming you’ve decided to do marketing research). If the problem is incorrectly defined, all else will become wasted effort! Keep in mind that the need to make a decision requires decision alternatives. If there are no alternatives, no decision is necessary. For example, let’s say your sales are down by 30%, therefore becoming a problem with your revenues. Your alternatives may be to see how well ads #2 does compared to ads #1 in terms of sales. Use secondary data sources to develop ideas further into the research.
Here’s a powerful technique to use in order to pinpoint important problems and receive information all in one: create a focus group! Here’s why:
a) it generates fresh ideas
b) allow clients to observe their participants
c) understand a wide variety of issues
d) allow easy access to special respondent groups
3. Establish objectives. Research objectives, when stated effectively, can provide the information needed to solve the problem you have from step 2. All of your objectives should be what you want to study in your market research and specific as possible.
Here’s a quick checklist of what to include in each and every objective:
a) specify from whom information is to be gathered
b) specify what information is needed
c) specify the unit of measurement used to gather information
d) use the respondents’ reference to re-word the question
4. Determine research design. There are 5 different designs you can choose from to get the information you need, such as descriptive, exploratory, causal, and diagnostic research. Descriptive research describe market variables. Exploratory research allows you to get information in an unstructured way. Causal studies is to try to reveal what factor(s) cause some event to happen. Diagnostic research focuses on the sources of satisfaction and dissatisfaction.
5. Choose method of assessing data. Secondary data is more easy to access than primary data, such as online surveys. However, if you are into the traditional way of doing data collection (i.e. telephone, mail, F-2-F), they all still have a place in marketing research. The questionnaire that you present to the respondents must be worded clearly and unbias.
Here’s a few pointers you want to remember when creating the forms for your questionnaire:
a) use nominal, ordinal, interval-Likert, interval-S-D, interval-Stapel, and ratio measurements
b) questions pertaining to each research objective (step 3)
c) questions pertaining to attribute, attitude, or behavior
d) have 1 open-ended question (I would definitely keep this at a minimum, if I were you)
6. Determine sample plan and size. Your sample plan should describe how each sample element is to be drawn from the total population. The sample size tells how many elements of the population should be included in the sample. In other words, the purpose of the sample plan is to give you representativeness, while the sample size gives you accuracy!
Here’s a small but important task to take to prevent or minimize nonsampling errors from occurring: validate your participants by re-contacting!
7. Analyze and report the data. It’s always good to go back and run tests on the information you have to screen out errors that may occur. Once you have all that you need for the research (pie charts, bar graphs, statistics, survey, etc), you want to be sure to create a report of it. Carefully present the research report in a way that communicates the results clearly, yet accurately to the client.
Remember marketing research is all about connecting the dots. The more information you know about your consumers, the more you bridge together with your consumers. The more closer you bridge together with your consumers, the more miles you create for long-term customer relationships.
Sizing a Market – This type of market research is designed to create an estimate of the market size (measured by units or dollar volume) that a new product is expected to garner in the marketplace. In general this is usually done for entirely new product category or anticipating the introduction of a new product that substantially changes the competitive landscape in which customers are already familiar (for example, I would suspect that the new premium chewing-gum category that has emerged in the last 18 months might have upset the conventional wisdom of analysts in that industry). Conducting this type of market research can be expensive, so the best place to start is usually by evaluating the off-the-shelf syndicated market research reports that are available for any market of a reasonable size. Sizing a market is almost always a quantitative market research study, although depending on the market specifics it’s possible that there might be a qualitative lead-in activity or even a qualitative follow-up to get more details on a specific portion of the market.
Product Concept Development – Product concept market research is typically designed to provide customer input to help product-marketing managers develop products that more directly meet the needs of the target customer. Typically there are tradeoffs involving ease of use, price, industrial design decisions and bundling options. For the product marketing manager, conducting market research allows them an opportunity to get feedback from the group who is actually going to decide whether they’ll pay the bills or not, the customer. Product concept market research can be done either qualitatively or quantitatively. Generally the direction hinges on the customers familiarity with the product or changes being considered, and a terminology that is well enough understood by the potential respondents to ensure that clear communication is taking place without significant uncertainty that their definitions match what we believe them to mean. If the product category is understood, and the terminology is well enough defined, quantitative research is probably the best bet. Otherwise it’s likely to fall to qualitative methods to ensure a complete understanding of the concepts and to the respective reactions.
Customer Profiling – The intent of customer profiling market research is to create a profile of a typical customer who purchases a certain product or service. Having a complete profile of a customer can be very helpful when defining a design center to develop the next generation of a product category and to ensure that the engineers and marketers have the right person in mind as they make those decisions. Creating a customer profile often includes collecting the following:
Demographics (age, title, physical city of location),
Firmographics (company industry, number of employees, decision making structure around the product category being studies) and
A number of questions about the particular product was purchased, how it was being used, what product it replaced, the number of people using it…
In many cases, customer-profiling research becomes the “bible” as a product development team makes decisions about what features or capabilities would be desired and which other ones would be passed over. For smaller companies conducting profiling market research is often the first type of research that a company does because it’s straightforward and it’s hard to argue with “who are our customers?”.
Positioning Research – Positioning research is often closely related to branding market research, as its function is to understand the positioning of one product relative to another. Much larger companies actually conduct positioning research simply to understand whether or not their “line logic” is clear or understandable by their customers – and doesn’t even get into the complexity of how customers relate their product line with other company’s products. This is often very interesting research because it’s often the case that the positioning developed by marketing managers is sometimes different than the way customers view strengths and weaknesses of different products relative one to another. Sometimes, to the chagrin of marketing managers, the phrase ‘perception is reality’ comes up over and over again in this type of research, as marketing managers realize that it takes more than words on a brochure to change customers’ perceptions of a products positioning. Consider whether a Jaguar holds greater status than does a Mercedes. Which car would you expect to be more comfortable? Which car would you expect to be faster? Having a portfolio buy-up strategy, which calls out the benefits of the next product, without saying derogoratory about the product just down the line, is a challenging task, but that’s where positioning research really shines.
Messaging Research – Messaging research is very closely related to advertising research, although it tests the most basic concepts of an advertising campaign – the most basic idea that is believed to be the primary motivator for a product. As an example, what do you see when you notice a Rolex advertisement? Do they tout the increased accuracy of a Rolex watch over others? Do they talk about how much more shock resistant a Rolex is than another watch? Do they talk about how much deeper in the ocean a SCUBA diver can go with a Rolex than another watch? No, they don’t message on any of these points, instead when you go to their website they show handsome people directing their million dollar yachts through rough seas, they show close-ups of the meticulously detailed watches, they show brave men, obviously risking their lives, climbing to the top of a snowy, distant peak. Their messaging is about living the good life and being ready for any adventure – whether you’re made of that stuff or not – as though having a watch that costs tens of thousands of dollars puts you just a little bit closer to intrepid. At the crux of messaging market research is, what are the few things that we should emphasize if we’re fortunate enough to get a few seconds of consideration from a potential customer? Messaging market research is about finding the blend of unique capabilities or attributes of our product and framing that in a way that makes sense to the people who are somewhat inclined to purchase our product. Messaging research tends to be qualitative because non-verbal communication is an enormous part of communication and many people want to be able to “read” the respondents as they first try to digest our schpeel.
Industrial Design – Industrial Design (or ID as it is more typically called) typically refers to the shape, feel and texture of a product. You could say that the ID of the RAZR phone is a big hit, big enough that other companies are quickly copying it. ID research is focused on understanding what effect the industrial design may play in the purchase of a certain category of product, and how to optimize a product’s industrial design for the target audience. If we all own the same products, it appears that ID is becoming one of the fundamental ways that companies are trying to differentiate products that are otherwise quite similar. ID market research has generally considered best handled in face-to-face qualitative research (often in-depth-interviews with one person at a time). However online capabilities have increased significantly in the last several years and there is a reasonable case for conducting ID research on a web site. If you’re looking for an example of how strong online capabilities have come take a look at the Audi web site – where you can view their cars, pull back, zoom in, view the car from any angle just by positioning the mouse. The capabilities are available from some of the higher end online research houses. The one caveat is that people often want to feel the heft of a product to understand if it’s plastic, metal or wood, understand how quality the finish looks, feel the quality of moving parts. In many cases online research is capable of supplementing face-to-face methodologies and for some product categories may be able to replace it entirely.
Customer Segmentation – Segmentation market research studies attempts to understand what groups of customers exist in a product category in order to more precisely target their needs or to target the needs of a more attractive group (maybe the high quality group, instead of the value driven customers). While these customers may all be purchasing the same products, because they have different perspectives, they’re responses to product changes could be entirely different, so it’s a good idea to understand how large your groups, or segments are, and how they’ll likely respond to the changes that you’re company is considering. This is a type of market research that generally ends with a large quantitative bang. Segmentation research can be quite simple – understanding how customers in the Eastern part of the country dress compared to those down South, or it can involve very high-end statistical analytics that can be very costly. However, good customer segmentation can greatly improve a companies product development and target customer efforts.
Channel Research – This research can take a number of forms depending on the critical business issue. Channel research can be conducted to understand how a company’s channel partners are ACTUALLY behaving, as opposed to how it’s believed that they’re behaving. Channel research can be conducted to understand what is motivating channel partners, or to understand whether a new channel partner that is being considered would be an appropriate choice for a certain product category. This is a very broad category of possible research methods that can span from efforts such as “mystery shoppers” – who walk through a typical customer process and report back on the experience, to price checks or product offering reports.
Price Elasticity – Remember back to Economics 101. As the price of a product increases the marginal value decreases (fair disclosure – I’m not sure that I actually passed EC101) and at some price-point the customers choose an alternative product. This research is designed to understand where that point is for different types of customers. Price elasticity market research really needs to be quantitative although there are times when an initial phase of qualitative research to understand the critical features and attributes may make sense. Pricing research is also very difficult to do because there’s the “monopoly money” syndrome – people tend to make different decisions with a theoretical exercise than they do when the money comes out of their pocket. Price elasticity research really needs to be well planned because there are number of seemingly insignificant but very important details to make decision on.
Marketing is the most important aspect of any business. Only an effective marketing plan or strategy will help to take your business to new heights. To make sure you have the right strategy or plan in place, business owners must consider the opinions of their consumers first. The process of collecting varied opinions and gathering information about the services offered by a specific company using different techniques is referred to as ‘Market Research’. The information thus gathered helps in creating new methods, products and lucrative business decisions.
Types of Market Research
Most of the companies gather information about their services using focus groups or consumer surveys. Their views about the services, like which part of the service they feel is appealing, why they prefer your services over the competitors, what can be done to improve their services and what more do they expect from the business etc., will help the business to perform exceptionally well. Every intelligent marketer who wishes to see his business on the verges of success will definitely agree with the fact that market research is an important part of your business strategy.
Let us get into the “how” factor now. Researches are of two types – primary and secondary. The primary refers to the data you generate yourself about the services and products offered by you, to check out the reaction of the potential market, whereas the secondary points towards the information that already exists. It can be anything such as census, demographic data or the industry trends. Other secondary sources include internet, trade associations, published articles and financial data of the companies.
Why is Market Research important?
A few of the many reasons why market research is important for businesses:
It helps in Better Communication with Your Customers
Consumers always have a higher hand when it comes to doing business. In order to have them connected closely to your business, you must communicate clearly. Try to meet or exceed their expectations consistently to stay in their good books. Show them you care for them by communicating your concern and accepting their suggestions.
Market Research helps you Identify Growth Opportunities
Though businesses want to grow, they are not sure of the path they are expected to follow. In order to stay focused and gain more revenue, the marketers must prioritize the opportunities that bring in more revenue. It also helps your business if you identify the attitude of the consumers and acknowledge the fields where your R&D techniques or your sales figures need to be enhanced/developed.
Remember – if you are not keeping up with the trends as expected by the consumers, someone else might do.
Minimize the Risk by using Market Research
Market research helps all businesses to promote or improve upon a new product. The better way to do it, is to know what the consumers NEED, so that you can be sure that the product launched is as per the consumers’ expectations.
That is the road to profits – customer satisfaction!
The Five Basic Marketing Objectives
1. Market research, as a business tool, can be used by a wide array of users. Take a look at a couple of marketing objectives that is followed by a majority of successful businesses.
2. Brand Positioning – When we say brand positioning we mean, by using market research your business can get to know its position in the market,, and where it stands as compared to its competitors.
3. Understanding the Target Market – Market research will help you to spot the right target and the best market for your services. This information will help you to create successful marketing campaigns and drive the consumers to make happy-buy decisions.
Isn’t that what your business is all about – great value and great sales?
4. Enhanced Communication and Influential Innovation – The message communicated to the audience must fit into their conviction. Market research helps all innovative businesses to focus on the target, test concepts and create better opportunities in the market. It also helps in identifying the desires, requirements and needs of the consumers in a better way.
5. Facing the Competition – The market is filled with similar businesses. To cope up with the cut-throat competition, you have to stand apart from your business rivals. Using the information collected from intensive market research and relevant strategies can add loads of value to your services and make your products a class apart.