Market Research For SMEs- The Inexpensive Way
Having worked with large corporates in market research and now working with SME’s I can see the relevance of market research for small businesses, however the biggest road-block seems to be the perception that it is “expensive”. I believe that market research could be non-expensive and deliver a competitive edge to small businesses.
I write this short note to deliver how to conduct basic market research, without going through the full process formally, with a view to making sense for small businesses.
If you are a small business owner and have thought about any of these questions and you would love answers to them… market research can surely help. Also market research I believe forces you to think objectively about the success and failures of your business and this itself makes it worth it.
- Assessing the market we are in: What are the market trends and how do they impact me?
- Identifying business expansion opportunities: How do I increase my product/service adoption? How do I attract new customer segments?
- Reactions to a new product/service or product changes: How will my customers react to a new product? What will happen if I change the pricing? Some people in our office love the design, some hate it. What should I do?
- Understanding existing customers: Are my current customers satisfied? Will they continue buying me? Why do they buy me? What is their profile?
- Reactions to marketing activities: I spent some money in this activity. Did it help?
- Troubleshooting: I new competitor has entered the market, how do I counter him? What targets should I set? And so on…..
Market research, even at the basic level does need some professional involvement to ensure neutrality, and basic correctness of methodology. There are various field services agencies (which typically handle outsourced work of larger agencies) which are typically not expensive and have a field & a data processing setup and are able to bring on board some research understanding as well. There are also the smaller full service research agencies which are individual driven.
Before getting into any research it is important for the business owner to figure out
- What question(s) he is looking for answers to. It is a good idea to identify one or two key questions and focus the research on that.
- Who is the target respondent, identify the core target and research with them, avoid the peripheral targets for research purposes to avoid wastage
Tools to use:
- Depth interviews: These are one-on-one interactions typically with senior people. So for example if you have a new product and you want reactions from a 35 year old senior manager you could use depth interviews.
o List down the questions you would like to ask in a free flow (typically 30-40minutes)
o Hire a field agency that will be able to set-up appointments for you, in case you are not able to go through friends and family. Appointments could costs between Rs.1000-5000 per appointment.
o You could do the interactions yourself or the field agency would be able to get a freelance moderator (Rs. 1500-4000 per interaction)
o Audio record the interactions and you will be able to extract the key takeouts
o Get into creating a formal presentation only if absolutely necessary
- Focus groups: These are freewheeling discussions which involve 8 respondents. So for example you have developed your website and want to get reactions from 20-28 year olds about to get married in the next 6 months
o List down the questions (typically 30-40minutes)
o A field agency will be able to organize a group (Rs 12000-18000). This will include a household venue, respondent gifts, pick up and drop, refreshments and a moderator.
o Again video record (Rs. 1500 odd) and extract the key takeouts. As a business owner it would be good to attend personally as you would also be able to barge in and ask any specific question which may come to you at the spur of the moment
- Secondary/ desk research: Sometimes a lot of information is available from secondary sources such as online and associations. This is a good way to find market data such as market sizes, key players, market trends etc. Internally available data is very often useful but is stored in un-usable formats. Use these data processing agencies to convert your internal data into electronically usable formats.
o Again if you need extended manpower here you would be able to get the field agency to outsource a relevant person (s) for a short duration (Rs. 300-700 / man day)
- House-to-house quantitative: This is a one-on-one, face-to-face interview with consumers. So for example if you want reactions of a 100 housewives to better understand your customers.
o Use this only if numbers are critical and you are looking at answers like 40% like/agree, else stick with focus groups.
o You will need a questionnaire and fieldwork, both of which can be done by these field+ agencies. (Rs. 200-700 per interview)
o The questionnaire needs to be then punched (data processing) and ask for basic tables in excel as outputs from the field & data processing agencies.
If you have a closed loop of respondents e.g. you would have the email ids of all your customers send out the instrument online to illicit feedback, e.g. you could send out the link of your new application and ask for feedback. You may need the field agency to call and follow-up to get required responses. Offering a small incentive helps.
There are certain do-it-yourself online survey sites ( www.surveymonkey.com) where you can even set up small surveys for free.
Quoting Bhraman Rattan who has just launched a Facebook application in the matrimony space http://apps.facebook.com/marryinaweek “I spent Rs. 30,000 on doing two focus groups, and they helped me take a lot of decisions like final name, look and feel of the page, what are the important criterion for finding a match and what are target consumers key concerns particularly regarding privacy”
This Article has been contributed by Vivek Kumar, Director at SMEJoinup.com. He can be contacted at firstname.lastname@example.org. He was also the Associate Director at ACNielsen, the largest market research company in the world, and has worked with them for 10 years.Image Courtesy: http://www.b2bmarketing.net/node/12049
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