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Market Research D.I.Y Versus The Professionals

Defining the research problem

It is important in addressing a research problem to understand how we will measure success. The problem might be why a company´s sales volumes in a particular market sector are declining. This has 3 possibilities;

  1. The market sector itself is in decline
  2. The company´s market share is in decline
  3. A combination of both

We should not make assumptions

We should not make assumptions that it is any one of these, but allow the problem to be defined as;

Identifying why the sales of the company are in decline in product sector A.

Assumptions are a market researcher´s danger sign.

Research problems are numerous

Research problems are numerous, but we have to make a fundamental decision;

  • About the appropriate method
  • Who is best equipped to carry out the research

Here are a few guidelines

Here are a few guidelines based on specific examples;

  1. We are asked to identify the market size for a particular product by volume or value.
  2. We are asked to make an assessment of who are the principal players and their market shares.
  3. We are asked to identify how company A is perceived against its principal competitors in a particular market.
  4. We are asked to identify what is the key decision making criteria for different segments of customers, in a market sector.
  5. We are asked to establish the quality of service offered by a company to its customers who may be purchasing via the telephone.

The Appropriate Methodology

  1. We are asked to identify the market size for a particular product by volume or value.
    • Principally a desk research problem
    • Information may be in a published report alternatively access to internet, business libraries, research companies, eg. Frost and Sullivan, Keynote, Mintel etc.
    • Can be supplemented with information from trade journal editors and trade associations.
    • The Solution is In-House
  2. We are asked to make an assessment of who are the principal players and their market shares
    • Refer to company in-house data
    • Competitor information
    • Previously published research
    • Contacts with distributors
    • Trade journal editors
    • Sales Management Team
    • The Solution is In-House
  3. We are asked to identify how company A is perceived against its principal competitors in a particular market.
    • Requires information from client´s customers.
    • Requires development of a questionnaire
    • Requires agreement of a sample frame
    • Requires experienced researcher
    • Solution is Employ a Professional
  4. We are asked to identify what is the key decision making criteria for different segments of customers, in a particular market.
    • The comments are those I have just applied to problem 3.
    • The Solution is Employ a Professional
  5. We are asked to establish the quality of service offered by a company to its customers who may be purchasing via the telephone.
    • This is a mystery shopping exercise
    • Almost impossible for a company to mystery shop itself
    • Need to design a topic list
    • Brief the researcher
    • Provide an objective analysis
    • The Solution is Employ a Professional

Exercise 1: Car Park Barrier Market

Project Objectives

  1. To establish estimated overall market size in UK by value or volume
  2. To establish how market is segregated by major market sectors
  3. To establish the major players and indication of market shares
  4. Establish who are major customers by sector
  5. Some indication of market growth potential
  6. How are the principal suppliers in the market perceived by their customers

Questions

  • Which objectives could you answer from desk research alone, and which would require primary research?
  • What published sources would you consider utilising?
  • Who would you talk to and why?

Exercise 2

  1. To confirm by volume or value the current UK market size
  2. To establish the market trends in the UK in terms of growth/decline or stagnation, over the last 2/3 years and forecast, with the reasons behind this.
  3. Identify any market trends by end user segment as part of the overall market assessment.
  4. Identify any reasons behind market decline in relation to enquiry and quotation levels at Company A.
  5. To make some assessment of key competitor´s market shares.

The Brief

If as indicated some research problems require a professional, a good brief should contain the following elements;

  • Define the problem -what are we trying to find out, eg. problem might be;
  • We want to know what our customers really think of us
  • Research objective is, therefore;
    • Define the key decision making criteria
    • Rank the company against its competitors according to the key criteria
  • Give the necessary background to the problem, ie. why it is important that the research be undertaken.
  • Identify if your company has conducted any previous research in this area as a benchmark.
  • Indicate who is the target audience to be researched. Note: There may be a number of target audiences, eg. OEMs, resellers, specifiers etc.
  • Define how you want the data analysed, eg. by what segments. This has significant impact on sample size and cost.
  • Identify the time scale for project completion.

The Findings (Outcome)

This is a test of how good the brief was.

If the brief was good then the findings should relate to what you wanted to know (the problem). Looking for answers to a problem you did not define will not work

The professional is involved here also.

Sources for Desk Research

Market Intelligence

  • In-House Sources
  • Previous Research
  • Directories
  • Competitors´ Information
  • Managers and Colleagues (word of mouth)
  • Trade Journals

External Sources

  • Published Research (eg. Keynote, Mintel and MSI)
  • Trade Associations
  • Editors of Journals
  • Business Libraries (eg. CIM, Business Information Library and Export Market Information Centre)

Reference Libraries

  • HMSO (including Business Monitor)
  • Research Agencies
  • Consulates (International)

Market Intelligence System (MIS)

An MIS should focus on need to know information, under 3 headings;

  • Market - used published information relating to market in which company is operating, eg. companies such as MSI, Frost and Sullivan, Keynote etc.
  • Customers - information about key customers which may indicate who is growing, being taken over or merged, requires the review of key trade journals and financial papers.

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