Market Research based on identifying, anticipating and satisfying customer

Market Research & Customer Focused Marketing

Market research on Identifying, anticipating and satisfying customer

The premium marketing Institute of Marketing’s definition talks about satisfying needs /requirements. This definition is expanded to include profits.

In terms:

1 : Identifying : Finding out what potential and current customers want now.

2 : Anticipating : Finding out and forecasting what they will want in the future.

3 : Satisfying : Providing products or services that meet customers’ needs, and ensuring this is being done to a satisfactory standard.

 Customer Focused Marketing

Marketing is about serving the customer, placing them first and recognizing that customers have many product and service providers from which to choose.

As potential business owners you will be asking yourself, ’where are we now?’,

’where do we want to get to?’ and ’how do we get there?’. You might approach the same questions from the customer’s point of view.

  • Who are our existing/potential customers?
  • What are their current and future needs and wants?
  • How can we satisfy these needs and wants?
  • Can we provide a service or product our customers will value?
  • Do we have good communication channels to talk to our customers?
  • Can we deliver a competitive service/product?
  • Why should our customers buy and continue buying from us?

Within the limits of your budgets and resources, you must try to find the answers to these questions.

 The Purpose of Market Research

The purpose of market research is to provide you with basic information about your potential market to enable you to make informed decisions.

Ask yourself whether you have enough information about your customers, competitors, and trends in the industry in which you intend to trade. Market research will help you to establish the following:

  • Who will buy your products/services?
  • Who buys your competitor’s products/services?
  • What sales level you can realistically forecast?
  • What are people prepared to pay for the products/services?
  • What is the size of your potential market?
  • What the reaction would be to the introduction of new products/services?
  • Where the products/services are bought currently?
  • Where you should sell your products/services?
  • Why people buy specific products/services?

The results of this market research will enable you to make informal decisions, react to changes in the market place (e.g. legislation or technological advances) and confirm or disprove any assumptions you may have.

 Kinds Of Market Research

There are two categories of market research – quantitative or qualitative.

  • Quantitative Research Any information which can be expressed using numbers as a measure is considered quantitative e.g. sales information, accounting details and statistics.
  • Qualitative research This is concerned with information that is based on description e.g. description ofconsumer behaviour, market segments and product performance.

Market research is not a one-off exercise undertaken before trading. You should undertake market research:

  • Before entering the market
  • When expanding into new markets – either product or geographical
  • Continually when operating the business

 Doing Market Research

In order to obtain information you will have to consider two areas:

1 : Desk Research

2 : Field Research

 Desk Research

Desk Research is the analysis of published material. It is usually the starting point of any research. Its main benefits are that it is quick and inexpensive. Its main failing is that the material is often dated and not comprehensive.  Information for desk research can be obtained from external or internal business data. Examples include:

  • Sales information
  • Competitor information
  • Communication with customers (face-to-face, mailshots, telephones etc.)
  • Reference libraries Chamber of Commerce, Business Links /Business Eye etc.

Internal business data, however, is mostly applicable to existing businesses as new businesses will not have data to base their work on.

 Information Need To Gather

You will need information on:

  • The market size (how big is the market?)
  • The market scope (how wide is the market?)
  • The market share (both yours and your competitors’)
  • Selling methods
  • Prices and discounts
  • Channels of distribution (how to distribute?)
  • The future of the market (what might happen?)
  • The factors which influence buying decisions (why the buyer decides to buy?)
  • Who makes buying decisions?

In addition you need to profile your potential customers, regarding age, location, income etc. There is a vast array of published information available. This information may be specific or general. Some may carry a cost for purchasing. Alternatively, try to access the information through libraries.

 Sources of published data include (secondary data):

Trade information produced by trade associations, in trade press reports and surveys. There are also specialist publishers who compile reports and undertake surveys in specific markets.

Limited companies produce annual company reports and accounts that can be obtained through Companies House. Shareholder reports are also useful. Useful information can be gained from government publications such as:

  • Census data
  • Family expenditure surveys
  • National income statistics
  • Trade and manufacturing trends (in ’trade magazines’)

Competitors’ literature can also be a valuable source of information. It is worthwhile trying to identify someone in the same line of business in another area who may be prepared to give you information and advice. Try contacting trade and professional associations, banks, business clubs etc. that are related to your business field. Do they have a directory or have local or national support groups? What other services and resources can they offer and at what cost? Obtain as much information as possible – in particular concerning:

  • Your existing/potential customers
  • Your competition
  • Your suppliers

 Field Research

Field Research is the collection of new or additional data. This involves using one of

the following research techniques:

  • Surveys
  • Observation

To be of value the information must be accurate, current, sufficient and relevant.

Surveys

Surveys can be divided into three types:

1 : Postal surveys are useful in obtaining quantitative information. The main drawback of this method is that there is often a poor response rate and there are few opportunities to follow them up.

2 : Telephone surveys are a good way of interviewing people. The main advantage of telephone interviewing is that it is relatively cheap

Customer Survey

Customer Survey

and fast. Their success depends on speaking to the right person and on them being willing to co-operate. The main drawbacks to this type of interview are: The interviewee can get interrupted – this may be inconvenient , The interviewee has no proof of who you are – they may think you are a competitor Details sought on the phone may not be to hand However, phoning up competitors and posing as a customer to get information about prices, service details, delivery times and payment terms can be highly useful and effective in helping you design products and services that can compete in the market.

3 : Personal interviews are more expensive than either postal or telephone interviews due to the time involved but, on the basis of information obtained, they can be the most useful.

 

The main advantage of face-to-face conversation compared to telephone conversation is the scope for personal interaction: it gives you the chance to strike up a relationship which can lead to an open question and answer discussion.

 

Observation

Observation is another method of conducting field research. Observation can be where customers are observed, or it may involve visiting exhibitions or counting heads. As a research method it can be useful in obtaining quantitative data. It is also possible to pose as a customer to obtain information from your competitors. Getting out and about in the car to find potential customers and competitors comes under this heading.

Test marketing is a technique more often used in product research. It literally means testing out the product or service with a group of people and noting what they think about it. Whichever method of obtaining information you choose you will have to produce a questionnaire. Questionnaires are used to find out all types of information and to make sure that you are asking for the same information from all the people that you deal with:

  • Facts
  • Knowledge
  • Intentions
  • Opinions
  • Attitudes
  • Motivation
  • Lifestyle

You will need to ’sell’ the idea of completing the questionnaire, to get people to participate.