Market research

2 Market research design
HOW IDEAS ARISE FOR MARKET RESEARCH
How do ideas for market research arise? First of all, someone has to know something about the capabilities of market research before he or she can think of it as a possible solution. Most people know something about market research in a general sense. They know it can be used to find out how many people do something or thinksomething. But do they fully appreciate that it can be used to work out how much people are prepared to pay for each feature of a product? Do they know that you can work out the importance of issues that influence customer satisfaction without asking the customer how important each issue is? If you don’t know what something can do, it is fully understandable that it may not come to mind. Furthermore, thereare very few processes in business that say ‘Before we make that decision, we must carry out market research’. The decision to do so is entirely judge mental. The manager faces a problem or has an idea and at some stage he or she may (or may not) think this is a candidate for market research. Now it is significant that we have suggested that the person that has the idea for the research is amanager. After all, it is managers who make decisions, and remember that market research is there to reduce

business risk in decision making. This problem or idea usually gestates and develops before it is brought to the attention of the market research agency that is challenged with finding the information. On its way, the idea may well have been bounced between people, including an internalmarket research manager who helps scope the idea in a way that the agency can best deal with. The point is this, it may well be weeks and sometimes months before the idea or problem is finally put before the agency and what was reasonably urgent then, is desperately urgent now. Time may determine the research solution simply because there is not much of it and there is a limit to what can be done inthe period. Therefore it is not surprising that the agencies at the end of the line are squeezed to work quickly.
MARKET RESEARCH SUPPLIERS
There is a limit to how much market research can be carried out by a company that has a need for information. Surveys usually involve a small army of people who design the questionnaire, ask the questions, enter the data on to computers, run the analysis andinterpret the results. An industry has grown up to supply these services. The market research industry is service-oriented and, like many service industries, it is fragmented, with dozens if not hundreds of suppliers. Some of these suppliers are specialists, offering fieldwork only. Others are specialists in certain types of work – such as qualitative research or studies of the chemical industry.Yet others are generalists that can handle a complete cross-section of work over a wide range of markets. Ad hoc research is the mainstay of the large majority of agencies. Projects are carried out for individual clients and designed as one-offs to meet specific needs and objectives. Because the ad hoc research agencies work closely with clients, and involve themselves in the full background tothe research requirement, their service shades into management consultancy. Anyone new to market research always wants to know what ad hoc research costs. The costs could range extremely widely, depending on the number of interviews, who they are with, how they are carried out, and in which countries. However, as a rough indication, the starting level for complete projects is around the US $10,000mark and can go up to six figures, though many are in the US $25,000 to US $80,000 range. An excellent starting point for finding a market research agency is through one of the trade associations in each country that represents the market research industry (for example, the Market Research Society of the United Kingdom or the American Marketing Association, the Market Research Association or the...