Market research training - UK consultant
Market research - the key to understanding your customers
Market research is defined as the systematic and focussed collection of information on customers and markets for analysis and subsequent usage in formulating your marketing strategy. It is critical in finding out what your customers and potential customers think and for discovering what their wants and needs are. As shown in the diagram 'marketing cycle' research fits into the overall marketing cycle by providing input to the analysis. This, when accompanied by internal analysis of strengths, weaknesses and offerings, and competitive analysis provides the basis for deciding and then developing the marketing strategy.
Why do you need to understand your customers?
Unfortunately in the real world you do not operate as a sole supplier and customers have choice. They can choose either to take your offering or someone else's. Marketing is about understanding customers' needs and wants and then crafting your offering to be as close to those needs as possible so that they buy yours. Note that wants and needs are not the same and it is critical to understand the difference between them or you will be focussing on the wrong driver:
Wants are what a person desires and are aspirational (e.g. I want a Mont Blanc pen - but maybe I only want something to write with and will buy a pencil or a ball point pen, or maybe just some other form of communication - or is it just a fashion accessory or perhaps a status symbol that says something about me (conspicuous consumption)
Needs are what people/firms must have to carry on what they are doing (at the basic personal level: food, shelter, clothing etc [cf Maslow's 'Hierarchy of Needs']). When it comes to the crunch - customers will buy to satisfy their needs.
Linking needs to wants, however, is usually a very productive marketing strategy because, normally, the closer that you can make a customer feel that wants and needs are aligned the more successful you will be. Offering something that feels like a Rolls-Royce but for the budget of a family saloon could be a winner (but at what cost?!). When Japanese car makers entered the UK market they focussed on cheap cars with features as standard that were extra on other cars - i.e. they met real needs for transport but included aspirational wants for other features (tape players etc) at needs prices - and took significant market share. Advertising often links this aspirational aspect of our lives to needs by linking glamorous lifestyles (e.g. Martini) or sex (e.g. Obsession) or 'cool' (e.g. Specsavers) to products.
Market research is how you find out what customers Need.
Why carry out research?
By collecting and analysing information that is relevant it enables you to make informed and robust decisions as an input into subsequent action. The objectives of research include:
- defining and evaluating your place in a market;
- providing information regarding future trends in demand;
- identifying customer needs and requirements;
- discovering what they think of you and your offerings;
- uncovering ways to delight your customers further;
- providing an evaluation of advertising and promotional strategies and their content;
- revealing opportunities for business development and improved competitiveness;
- discovering opportunities for increasing profit/product penetration.
You may use research to address any or all of these issues
There are two types of market research:
Desk research; and Field research; and it is important to understand the difference between them. Desk research is usually easier and almost invariably much cheaper. It may not of course provide you with precisely what you need and, therefore, you may have to resort to field research.
Desk research
Before commencing any external study and commissioning field research it is always worth asking - has it been analysed before. This is usually easier and quicker and the scale of information you can access has been altered radically by the explosion of information you can obtain over the internet. This allows you to access all (published) information globally on a subject. The surprising thing about the internet is that so much is available - and for free! - although an unfocussed search over the internet may take a long time and result in masses of data which will take forever to analyse. Information can come from two sources - external and internal. Typical examples of external desk research include:
- Public library searches;
- press clippings;
- sector and published surveys;
- trade information;
- Internet trawls;
- Books and other publications.
Where you have a large customer base then this should also be part of your desk research. Understanding your current customer patterns of usage will give valuable information on what is successful and what is not. One of the major benefits of effective and up-to-date customer records is that it should facilitate the analysis of your own customer base. This will allow you to analyse:
- Purchases made;
- Comparisons with peer customers;
- Patterns of consumption;
- Profit from products;
- Product penetration.
This will provide you with unique insights as no one else will have this information. It might be necessary and desirable, however, to look externally as well - either for purposes of benchmarking, market trend analysis or competitor analysis.
Field research
This is where you have to go out and find out information first hand by talking to current and potential customers. The major types of types of field research include:
- Telephone research;
- Written questionnaires;
- Street interviewing;
- Face to face interviewing;
- Product tests;
- Consumer panels;
- Focus groups;
All these techniques have a role to play in collecting market information but they result in different 'cuts' of information and some may not be appropriate. You must decide on which are the best techniques and having obtained the information - analyse the results.
One of the criticisms levelled against market research is that it is merely a 'front' for selling. This is called 'sugging' and it really upsets people, involving as it does lies - whether directly or by 'evasion' or 'omission'. It can also have far reaching and damaging effects on your relationships as people complain and will also affect the value of the exercise making it largely unproductive.
~ Neil Jones ~
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