FAQ: Market Research
I'm interested in conducting market research, what do I need to know?
When conducting market research, one of the most important things to ensure is a sample size that is representative of the market you wish to target. Focus on both Confidence Level and Sampling Error. Confidence Level is the probability that the data represents the thinking of all possible participants. Sampling Error is essentially the opposite, which is the probability that there are irregularities in the data.
When you decide on the margin of error that is acceptable for your market research it is easy to calculate your ideal sample size using a sample size calculator. This will tell you how large your sample must be to ensure the market research is valid.
When developing market research questions, be careful of myopia or bias. Since market research is typically undertaken by people who are heavily invested in a product or service, they often see a very one-sided perspective of the product. In effect, they could be hindered by over-investment, neglecting to ask critical questions, or considering diverse perspectives. Furthermore, product development teams may, even unintentionally, ask a set of questions that will only confirm their existing point of view. For this reason, it is advisable to solicit an external “set of eyes” when developing your market research questionnaire.
What are the steps to conduct market research?
The first step is to have a well-defined goal for the research so you know what you want to accomplish. Is there a need for your company to fill? Do customers know your brand? The next step is determining what information you need to accomplish that goal: for example, if you want to determine how to improve a product, you should find out which features customers are interested in.
You need to decide how to collect the information—through online surveys or a telephone survey—and then collect it. Next, you’ll need to analyze your data to determine the findings. Finally, you need to determine what to do with the results. Are there major changes your company should consider implementing?
How to calculate market research ROI?
Determining the ROI of market research can be difficult because market research is not directly linked to profit. However, one option is to estimate the cost risk of making a poor business decision, estimate how much market research will reduce that risk, and calculate the cost savings. Another is to determine the value of the business activity, multiply by the degree of confidence in that activity that market research will provide, and divide by the cost of the research. Finally, future market research ROIs can be determined by analyzing the past benefits of previous research programs. Investment returns in market research are indirect, but tend to be high.
How to present market research results?
The first thing to do is understand your audience. Are you sharing the results with your boss, your partner, or your marketing team? Determine what you want them to take away and be sure to make the most relevant points a priority in your report or presentation.
The format of your presentation will be important, too. If you’re doing a slideshow resist the urge to dump all your information into massive paragraphs; if you’re writing a report then it’s usually best to stick to the format of introduction, a review of the performance of demographic groups, topic and item scores, findings, recommended actions and financial impact. Be sure that any recommendations you make are clear and actionable, or the research won’t do anyone much good.
What are descriptive statistics in market research?
Charts, tables, mean scores, averages and percentages are used to describe survey data. For example, if a question asks customers about their perception of the company, descriptive statistics may be used to summarize how many responded positively and negatively. Inferential statistics must be used to draw conclusions from the data.
What is brand engagement and why does it matter?
Brand engagement signifies an emotional commitment to a brand. It’s more than brand awareness; it is loyalty and word-of-mouth marketing. Brand engagement is important both internally and externally. Building the brand internally and obtaining employee engagement with the brand helps to further solidify and build the brand ultimately improving the brand for consumers.
Social media has given new meaning to word-of-mouth marketing and the ability for consumers to interact with brands on new levels and build relationships in new ways. Brand engagement goes hand in hand with customer engagement and engaged customers translate to increased revenues, profitability, and market share.
So, does your brand matter? Yes! And, it matters to your employees, your customers, and your bottom line. Surveying your customer base, the market, and your employees, can identify the level of brand engagement that exists today and can identify key action items to increase brand engagement across these key populations.
What is sampling in market research?
Sampling is the process of surveying a small group and extrapolating their responses to a larger group. Instead of surveying every member of a population about what products or services they prefer, you use a sample size calculator to determine how many responses are needed from the group to obtain valid data at a particular confidence level and sampling error. This is the most common market research technique because in many cases it is impossible to survey a company’s entire customer base.