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Market Research Blue Paper

Market Research Blue Paper

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Published by 4imprint
The overall concept of market research has not changed much over the years, but the tools have. Research that was once reserved for big companies with deep pockets can be conducted on much smaller scales in shorter time frames, with equal rates of effectiveness. If your business or organization is looking to refine its marketing approaches, read on to see how research can be the key.
The overall concept of market research has not changed much over the years, but the tools have. Research that was once reserved for big companies with deep pockets can be conducted on much smaller scales in shorter time frames, with equal rates of effectiveness. If your business or organization is looking to refine its marketing approaches, read on to see how research can be the key.

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Market Research

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Market research: Meet your customer
David Ogilvy, renowned advertising professional and purported “father of advertising,” once likened the marketer who ignores research to a general who ignores decodes of an enemy signal. While that may be a dramatic analogy, market research can very well be the single determining factor of success or failure in any business objective or marketing campaign. Like Ogilvy, savvy professionals have known this for years. They know that without market research—without understanding the wants, needs and behaviors of target audiences, effective messaging and engagement cannot occur. They see the following jarring statistics as evidence for the need for adequate market research1: • Over 25,000 new consumer products SKUs are introduced annually in North America with only half of these new product launches considered successful at launch. • For every seven product ideas that are created, typically only one succeeds in the market. • An estimated 46% of all resources allocated to product development and commercialization is spent on products that are cancelled or that fail to yield an adequate financial return. The overall concept of market research has not changed much over the years, but the tools have. Research that was once reserved for big companies with deep pockets can be conducted on much smaller scales in shorter time frames, with equal rates of effectiveness. What’s more, the processes around market research have shifted in the past 5-10 years and certain sub-sets of market research are continuing to evolve. In this Blue Paper®, we’re going to review the basics of market research, touch on various approaches that are common today and explore the latest trends. If your business or organization is looking to refine its marketing approaches, read on to see how research can be the key.

1 Strohmenger, Roxana. “A Cool Research Methodology That I Predict You Will Use | Forrester Blogs.” Forrester Blogs | Making Leaders Successful Every Day. 18 Jan. 2011. Web. 04 Feb. 2011. <http://blogs.forrester.com/ roxana_strohmenger/11-01-18-a_cool_research_methodology_that_i_predict_you_will_use>.
© 2011 4imprint, Inc. All rights reserved

A note on semantics
There is market research and there’s marketing research: Market research is specifically about the customer. It’s about finding out what makes them tick—who they are, what they care about, how they feel, what they perceive. The findings of market research can influence what products and services a business offers, determine whether or not customer expectations are being met and pinpoint what drives purchase behavior. On the other hand, marketing research is about discovering how messages are received and processed by target audiences. It determines how changes to the marketing mix can impact customer behavior. The findings of marketing research can influence the marketing strategy and communications plan, determine how a business should allocate its marketing budget and pinpoint what messaging will resonate the most among target audiences. While slightly different, both kinds of research are crucial in revealing not only who your customers are but how they want to engage with your brand. These terms are used interchangeably among many marketers, and this paper will follow suit. It’s important, however, to know the difference in the event that your business seeks assistance from research firms or vendors who tend to draw a clearer line between the two.

Determining an objective
The planning stage of market research is all about objectives because objectives help determine the scope of marketing research endeavors. What’s more, setting objectives allows for more defined budgets and more effective measurement. Before embarking on the road to research, ask these questions: 1. 2. 3. What is the purpose of this research? What information is being sought? How will the information be used?

The most effective research objectives, like any objectives, are focused and specific; they include both what it is that is to be done and how it is known that it has been achieved. For instance,

© 2011 4imprint, Inc. All rights reserved

A few common market research objectives often cover the following areas2: • Market attractiveness: - Market size - Competitive presence and customer preference - Customer spending patterns, budget cycles and purchase intent - Channel trends, preferences and allegiances • Customer insights: - Specific customer needs and aspirations - Buying behaviors, usage patterns, decision models - Preferences, favorability and intentions • Communications planning and ad testing: - How target audiences receive information - Which communications channels customers pay attention to - Opportunities and vehicles for influencing target audiences - Evaluation of alternative brand promises and calls to action and the subsequent impact on target audience decisions or purchases • Product and concept testing: - Evaluation of product improvements, alternatives and packaging - Evaluation of potential products and solutions, clarification of needs, wants and preferences • Customer satisfaction: - Measurement of the quality of customer experience, perceptions, reaction, loyalty and intent • Pricing: - Testing the response of price, feature, placement, packaging, promotions and loyalty programs among target audiences After consideration to the objectives has been taken, the development of a research plan can take place.

Considering the designs and techniques
The best approach to research is one that considers a variety of methods and research designs. Start with secondary and tertiary research—research previously

2 “Marketing Minds Research - Research Objectives.” Marketing Minds Research - Online Market Research and Customer Surveys. Web. 03 Feb. 2011. <http://www.marketingmindsresearch.com/research_objectives.html>.
© 2011 4imprint, Inc. All rights reserved

conducted by others but relative to your objectives—and then expand to research conducted by your own team through primary research methods. These methods can be performed on a variety of scales and, thanks to tools we’ll address later in this paper, are accessible to practically any budget. Traditionally, all research can be broken down into four designs, based on either questioning or observations: Quantitative research Often what is referred to as traditional market research, this refers to the numerical and statistical information gleaned from polls, surveys, Web analytics, and the like. It’s great for measuring actions and seeing patterns and, by definition, quantitative research is historical (meaning that it measures what’s already happened) but it can yield powerful predictive intelligence when it’s modeled well.3 Types of quantitative research include: • Surveys Generally easy to administer than other types of market research, respondents are selected at random or at will to answer a series of predetermined, usually multiple choice or yes/no answer questions. Surveys are an incredibly affordable and flexible method of research and can be conducted in a variety of ways, such as: direct mail, comment cards, e-mail, websites and pop-ups, mall intercepts and social media. • Web analytics Most websites are set up to measure who is visiting, when and how often. Further information, such as what links are being clicked, the order the site is navigated and what users do once they leave the site, can also be collected to comprise numerical data on website engagement. While most web analytic tools are free, they come in varying forms of complexity and require a significant investment of time to interpret and analyze.

3 Norman, Eric. “Market Research - Branding in the Age of Social: Gaining Insight Through Research : MarketingProfs Article.” MarketingProfs: Marketing Resources for Marketing Professionals. 09 Mar. 2010. Web. 03 Feb. 2011. <http://www.marketingprofs.com/articles/2010/3449/branding-in-the-age-of-social-gaininginsight-through-research>.
© 2011 4imprint, Inc. All rights reserved

Census data This is research that is compiled based on factual statistics relating to a population of people—birth rates, literacy rates, race, geography, annual income. Some of it may be based on surveys, while other data is based on information collected by hospitals and other government entities.

Qualitative research This type of research is more subjective than quantitative and includes interviews and focus groups, but can be research that allows people to express their ideas and feelings in open-ended prose. It’s great for uncovering motivations behind actions, and is important for getting to the essence of brand-related beliefs and decisions. It can help marketers better understand how a brand, product or service is received and what might boost or impede progress, and what resonates with target constituencies. Types of qualitative research include: • Open-ended interviews Composed of questions that cannot be answered with a simple yes or no. This type of interview gives you a lot of information, but is time consuming for both the interviewee and interviewer. The greatest benefit is first-person insight, including common trends, emotional motivators, and general likes and dislikes of your primary market. • Observation Direct observation can involve a researcher watching subjects and taking notes in the background which could be from behind a oneway mirror, video camera or website recording the happenings. With participant observation, the researcher is actually part of the situation being studied as with a moderated focus group or one-onone interviews. • Focus groups4 Typically lead by professional facilitators, this is research that takes place in small groups. “This technique is good if you need a range of opinions,” says Kristin Schwitzer, president of Beacon Research, a firm that specializes in innovative online research methods, based in Annapolis, Maryland. In general, you want to get reactions from
4 Brown, Carolyn. “How to Conduct Qualitative Market Research.” Small Business and Small Business Information for the Entrepreneur. 25 Oct. 2010. Web. 04 Feb. 2011. <http://www.inc.com/guides/2010/10/how-to-conductqualitative-market-research.html>.
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eight to 10 people. Traditionally done in a closed room, in the past few years this method has expanded to include a webcam or online bulletin board focus group, in which consumers participate in an asynchronous group discussion over the duration of three to four days. Participants answer questions from the moderator and respond to images or video on their computer screen. Since focus groups must be lead by trained professionals to be most effective, they can be a more expensive form of market research. Ethnographic studies5 Largely qualitative, this method of research involves the observer looking for certain social behaviors among populations in their natural setting, either at one time (cross-sectional) or over several time periods (longitudinally). Ethnographic studies, unlike other forms of research, focus on the assumption that a person’s behaviors are inherent and subconscious. Rather than asking users what they want, it is more effective to focus on what users do, what frustrates them, and what gives them satisfaction. Examples of ethnographic research include: • Product use analysis Participants are asked to use a product or a marketing piece, like a website, while they are observed. This helps to identify problems with a product or obstacles in reaching target audiences with marketing messages. • Internet cookies This is a means of digitally tracking website users to see what other sites they visit, how long they stay and where they click. Cookies can also be used to populate custom ads based on user behavior. Experimental techniques For the most part quantitative, this method of research involves the creation of a quasi-artificial environment in order to attempt to control certain factors while manipulating variables.

5 Malhotra, Naresh K. Marketing Research: an Applied Orientation. Upper Saddle River, NJ: Pearson/Prentice Hall, 2007. Print.
© 2011 4imprint, Inc. All rights reserved

Examples of experimental techniques include: • Purchase laboratories These simulated storefronts seek to observe the purchase behaviors of individuals based on surroundings, placement and options. • Test markets This technique is usually the act of releasing a product or launching a marketing campaign to a select number of individuals prior to launching on a larger scale to determine and predict the effectiveness of a product or campaign prior to a big-budget rollout.

Knowing what questions to ask
Now that we’ve gone over the basic designs and techniques of marketing research, how do you know what questions research should address? Author and marketing expert, Sarah White, says that basic market research should cover the following, based on previously outlined objectives6: • Descriptive information: demographics, information sources, influences • How audiences use products or services: buying behavior, usage traits, loyalty to specific brands • Customer perceptions: likes and dislikes, perception of an offering’s attributes, benefits and flaws Descriptive information is often already compiled on certain populations and available for purchase (or free of cost) to anyone. Sources like U.S. census data and the Consumer Expenditure Survey conducted by the Bureau of Labor Statistics can both be accessed online and offer great insight into the “who, what, where” questions of market research. Things like population size, geographic concentrations of certain populations or consumers, and more can tell a marketer a lot about target audiences and may even help pinpoint geographic locations to purchase mailing lists or Internet search ads.

6 White, Sarah, and Sarah White. The Complete Idiot’s Guide to Marketing. Indianapolis, IN: Alpha, 2003. Print.
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Everything else falls into the category of “why” research—the psychographic information. Large research companies like Forrester have a multitude of already compiled market research covering this information on file for purchase.

Online market research tools
Perhaps the biggest reason why market research has become more accessible to businesses and organizations of all sizes has to do with the Internet. A veritable pooh-pooh platter of tools now exist—most free or highly affordable—that help marketers maintain a pulse on a target audience’s behaviors, opinions and emotions. Let’s take a look at a few of these options … Keyword search7 Keyword searches are Internet searches conducted on keywords that people would use to find a website, product or service. Tools like Google’s AdWords® tool, WordTracker™ and Trellian’s Keyword Discovery Tool™ are all highly regarded means of finding the best keywords for a website, yes, but also for gaining customer insight. According to Inc. Magazine, these can also help remind marketers of product niches that they might not have considered. There are other reasons to conduct keyword searches, too. “First, you’re going to be reminded of product niches that you might not of thought of.” says Jennifer Laycock, editor-in-chief of Search Engine Guide, an online guide to search engines, portals and directories. “Second, these services will also give you a guesstimate of how many existing sites already use that phrase,” Laycock continues. Competitor links8 A traditional search engine can also help you check out your competitors, their prices and their offerings. Try typing “link:www.[competitor’s name].com” into Google to find out how many other sites link to your competitor’s website. “It is a great way to see a competitor’s link development and PR campaigns,” says Shari Thurow, Web expert and author of the upcoming book Search Engine Visibility. “Is the competitor promoting a product or service similar to your own? Maybe you can get publicity because you have a new or better product.”
7 Inc. Staff. “How to Use Internet Market Research Tools.” Small Business and Small Business Information for the Entrepreneur. Web. 04 Feb. 2011. <http://www.inc.com/guides/biz_online/online-market-research.html>. 8 Inc. Staff. “How to Use Internet Market Research Tools.” Small Business and Small Business Information for the Entrepreneur. Web. 04 Feb. 2011. <http://www.inc.com/guides/biz_online/online-market-research.html>.
© 2011 4imprint, Inc. All rights reserved

Blogs9 Blogs are updated much more regularly than traditional websites and, therefore, they can be another gauge of public opinion. Search blogs by using blog-specific search engines, such as Technorati or Nielsen BuzzMetrics’ Blogpulse®. Online surveys As mentioned, surveys are a fantastic and cost-effective means of gauging public opinion. While not generally seen as scientific as in-person or phone surveys that use a random sampling of the population, online surveys are a low-cost way to do market research about whether an idea or a product will be appealing to consumers, how they use a website or garner brand information, and more. Now many companies offer to conduct online research for you or give your company the tools to carry out your own surveying. Some online survey companies include EZquestionnaire, KeySurvey, and WebSurveyor. Social media tools Social sites like TwitterSM, Facebook®, YouTubeSM, FlickrSM and others are great tools with infinite possibilities. Marketers can use these sites to not only listen to target audiences for trends and patterns in wants and behavior, but also as a channel for distributing surveys and requesting feedback.

Knowing when to ask for help
Sometimes businesses and marketers are intent on primary research but don’t have the budgets or the expertise to conduct market research in-house. Luckily, there are many market research firms out there, from tiny consulting firms to huge multinational corporations that can be recruited to do the detailed work. But how do you find one that will best fit your company’s needs? Ed Erickson, of Erickson Market Research, explains.10 First of all, Erickson warns marketers to not get intimidated. Instead, be inquisitive by asking three very specific questions of each potential research supplier11:

9 Inc. Staff. “How to Use Internet Market Research Tools.” Small Business and Small Business Information for the Entrepreneur. Web. 04 Feb. 2011. <http://www.inc.com/guides/biz_online/online-market-research.html>. 10 Erickson, Ed. “Strategy - Four Questions for Choosing the Right Research Firm : MarketingProfs Article.” MarketingProfs: Marketing Resources for Marketing Professionals. 6 Mar. 2007. Web. 04 Feb. 2011. <http://www.marketingprofs.com/7/choosing-right-research-firms-erickson.asp>. 11 Erickson, Ed. “Strategy - Four Questions for Choosing the Right Research Firm : MarketingProfs Article.” MarketingProfs: Marketing Resources for Marketing Professionals. 6 Mar. 2007. Web. 04 Feb. 2011. <http://www.marketingprofs.com/7/choosing-right-research-firms-erickson.asp>.
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1. 2. 3. 4.

Who, specifically, is going to do the work? What methods do you recommend for this project? How, exactly, will your proposed approach help me make marketing decisions? How do you report your research findings?

“There is no single right or wrong answer to any of these questions,” says Erickson. “The nature of the project and the relationship you want with the firm will determine the “right” answers.” In a recent MarketingProfs article, Erickson goes on to explain why each question should matter to the marketer and what to listen for in a research firm’s answer. Here’s an overview of his explanations …12 1. Who, specifically, is going to do the work? As with any service-oriented business, the people actually doing the work will have the greatest impact on the project’s success or failure. That’s why it’s often said that you hire the people, not the company. Meet the key players upfront so you can more clearly evaluate the firm’s ability to deliver. Establish your expectations for outcomes and processes at the start. Also, evaluate how well those working on the project fit with your work style and company culture. 2. What methods do you recommend for this project? The firm should be able to clearly communicate what the appropriate method is, how to best execute it, and why they recommend it. Do not settle for a vague description of the work to be done. Instead, use the following approach for this conversation. First, communicate the main goals for the research project. Then, fill in as many specifics as you can about the product, the company’s marketing and distribution channels, and what you already know about the market. This should give the firm enough information to describe, in detail, its data collection and analytic approach to meeting the objectives. Ask about the alternatives, and discuss the pros and cons of each. Be comfortable that the people you’re asking to do the work are knowledgeable and experienced.

12 Erickson, Ed. “Strategy - Four Questions for Choosing the Right Research Firm : MarketingProfs Article.” MarketingProfs: Marketing Resources for Marketing Professionals. 6 Mar. 2007. Web. 04 Feb. 2011. <http://www.marketingprofs.com/7/choosing-right-research-firms-erickson.asp>.
© 2011 4imprint, Inc. All rights reserved

3. How, exactly, will your proposed approach help me make marketing decisions? Once the firm has outlined the general approach, insist it relate the specific techniques to be used directly to the research objectives. A research firm that understands your company’s strategy and business issues will provide you with insight that you can actually use. Look for a firm that begins with the end in mind. 4. How do you report your research findings? The research report must contain the appropriate analysis and conclusions, and it must be presented in a way that makes sense for your organization. The presentation of results must tell the story in the data. It must also speak clearly to the research objectives and provide useful, realistic direction for marketing decision-makers. This is why it’s so important to hire a research firm that understands the marketing strategy behind the project. A well crafted report will have the following: • • • A format and tone that respects your company’s culture Charts and other graphics that clearly display rich information Text that discusses implications and makes recommendations from data “Just as there is someone for everyone” says Erickson, “There is a research firm for every project. Don’t settle for a firm that happens to be available.”13

Top five researching trends for 2011
Now that we’ve addressed a basic overview of market research, let’s delve into the top trends in the industry for the year ahead. 1. The demand for holistic data continues This involves businesses and marketers wanting to be able to integrate more sources of data to get a complete view of the target audiences. Experts say that this information will continue to come not just from survey research or qualitative research but from secondary sources, syndicated sources, social media and the Web, and marketing analytics.14
13 Erickson, Ed. “Strategy - Four Questions for Choosing the Right Research Firm : MarketingProfs Article.” MarketingProfs: Marketing Resources for Marketing Professionals. 6 Mar. 2007. Web. 04 Feb. 2011. <http://www.marketingprofs.com/7/choosing-right-research-firms-erickson.asp>. 14 Moran, Robert. “Interviews.” Future of Insight. Web. 04 Feb. 2011. <http://www.futureofinsight.com/interviews/>.
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2.

The growth of integrated analytics emerges Some research experts are quick to point out that more and more funding is going into analytics. They argue that this is an indicator that new tools that combine analytics and research will continue to become available in the marketplace. Businesses and marketers looking to coalesce research with analytics will benefit from these emerging tools. 15

3.

Market research as a business conscience becomes a priority With social media currently owning many organizations’ public relations agendas, it’s really easy for market research departments to be firefighting for a living, responding to each social media outburst. But the real question market research should answer is this: How damaging are these outbursts to the organization? Is the uproar about a genuine problem with the product, or just hype? In fact, throughout 2011 Forrester researcher Reineke Reitsma predicts that market researchers will focus on how to make sense of all the chatter that’s already happening on social networks, integrate social intelligence into their research, report these insights into the organization, and uncover major issues before these actually hit the groundswell.16

4.

Neuromarketing will continue to expand as a common research method As mentioned in a previous Blue Paper on the topic, neuromarketing is a subset of market research that looks at what actually happens in the brain when consumers make purchase decisions. Covering everything from font usage, color, image placement and more, this research is highly precise and very scientific. It is currently a relatively expensive method of research, but experts predict that it will continue to become a standard and more affordable method in the average market researcher’s arsenal.

5.

Mobile research will lead to faster and easier survey response and engagement from users Nokia® gets the credit for pioneering this trend and many researchers have taken note for their own clients. What started as

15 Moran, Robert. “Interviews.” Future of Insight. Web. 04 Feb. 2011. <http://www.futureofinsight.com/interviews/>. 16 Reitsma, Reineke. “Trends That Will Shape Market Research In 2011: Organization, Technology, And Social | Forrester Blogs.” Forrester Blogs | Making Leaders Successful Every Day. 20 Dec. 2010. Web. 04 Feb. 2011. <http://blogs.forrester.com/reineke_reitsma/10-12-20-trends_that_will_shape_market_research_in_2011_ organization_technology_and_social>.
© 2011 4imprint, Inc. All rights reserved

an experiment in integrating face-to-face interviews with mobile engagement to measure and explore the levels of brand loyalty among existing customers, turned into a marketing campaign in and of itself. The mobile device manufacturer asked users to upload their encounters, along with thoughts and images to personalized mobile blogs, called “Moblogs.” They then were also asked to participate in interviews from time to time to discuss emotions presented in these blogs pertaining to different brands. Results of the research found that participants created sub-communities surrounding brands they blogged about and discussed their emotions and opinions with one another to create a sense of belonging. Nokia was able to walk away from the research with clear insight on what emotions were necessary for brand loyalty among their customers—comfort, simplicity, inclusivity, exclusivity, ethics, style and innovation.17

Using the data
The information that has been gathered throughout the entire research process is only as good as how it is interpreted and implemented into a marketing campaign or business strategy. Many companies spend thousands of dollars in the marketing budget on research, only to have survey results sit in a filing cabinet collecting dust. Recruit help from the experts if necessary, but the objective here is to identify patterns, themes and ideas in the results of your research. If your business or organization pursues market research, be sure there are processes in place to ensure that the data collected is then translated and implemented into the marketing mix. Identify staff members whose responsibility it will be and identify checks and balances for ensuring that data is transferred. Research is an important component to any marketing or business plan. Take the words of Ogilvy to heart and harness the power of research for your company today—you won’t regret it.

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17 Strohmenger, Roxana. “A Cool Research Methodology That I Predict You Will Use | Forrester Blogs.” Forrester Blogs | Making Leaders Successful Every Day. 18 Jan. 2011. Web. 04 Feb. 2011. <http://blogs.forrester.com/roxana_ strohmenger/11-01-18-a_cool_research_methodology_that_i_predict_you_will_use>.
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