The Nuts and Bolts of Market Research

Understanding what the public finds important or appealing is an underestimated hurdle.  Knowing what the public can afford or is willing to sacrifice for is a science in itself.  Market research is a necessary prerequisite and an on-going action-item when launching a business or product.

What you think the public will want may not actually be the case.  Unless you are an extraordinary visionary like Elon Musk, or the late Steve Jobs, don’t be stubborn about this.  Do the market research and trust the data, even if it goes against your thinking.  This will mitigate the risk, and move the odds in your favor.

Meeting needs and market niches

One rewarding obligation in business is the ability to satisfy a need.  This may entail solving a problem or filling a market niche.  Sometimes the problem or need already exists.  But sometimes the public doesn’t realize they have the need.  Reveal it to them or create the need with a new idea.  Perform market research to accurately determine these needs or where they can be created.  Then go satisfy them!

Market research resources

To start, the SBA (Small Business Administration) provides many market research tools.  Local economic indicators are available which includes income and employment statistics.  Visit the Bureau of Economic Analysis to find a barrage of economic indicators…key data about your target region.  There are many other resources there including business training, financial support, and a broad network of affiliates that are ready to help.

If you don’t already have a business or product idea, visit the Business Idea Center at the Entrepreneur magazine web site where you can pick an industry and surf into business and product idea paradise.  Once your ideas are established, you’ll need to test them.

Market research techniques

Qualitative research for market studies – focus groups

There are some good web sites and resources that provide viable market research data, but you can’t beat the results you get from actually hitting the pavement and getting live public feedback.  Previously published market research is considered secondary data.  It should be an integral part of your on-going study but you need to get your hands dirty.  Acquire some real-life market research data that shows how the public reacts to your ideas.

Read the Guidelines for Conducting a Focus Group published by Duke University.  This shows a good approach to using focus groups.  The guidelines expressed in this publication argue against doing surveys.  Regardless, surveys do provide good primary test study data.  Just understand their shortcomings and don’t limit yourself!

Quantitative research for market studies – surveys

In order to effectively survey the public effectively, take the time and write up a thorough questionnaire targeting all aspects of your idea.  Carefully  formulate your questions in a way that invokes honesty and unbiased responses.  Again, there are many available resources to help you develop this quickly.

There are many ways to get your survey out to the public.  Don’t restrict yourself to just email since that will limit your exposure to less than half of the population, statistically.  Check out sites like Survey Monkey to help setup and post your survey online. Here’s a link on Survey Monkey which provides very helpful information on how to do this effectively.

Market research data collection

Data collection is the process of gathering and measuring the data derived from your quantitative or qualitative market research.  Ensure that your findings are valid and accurate…this data will be analyzed and interpreted to determine your next course of action.  Your decisions will be based on this data.  Having incorrect market research results is worse than no data at all.  It can cost your company market share, or worse…it can cause your company to fail.

Data matrix

Develop a formal process to capture and secure your market research data for safe keeping.  Using a well-crafted spreadsheet always works, and is what I recommend.  There are other tools you may use as well.  Prepare a table or matrix to insert each data point in the correct category defined by the survey or focus group outline.

Put much thought into the template you create to house your market research data.  It needs to be understandable.  You must know where each data point will be placed.  Also, weeks may go by between data entries, so it should make sense.  You don’t want to spend time trying to figure out what you meant by this or that.  Others may also need to enter data into your template, so please keep this in mind.  It will help ensure data validity, knowing each data point was entered into the correct category.

Put all of the right KPIs (Key Performance Indicators) into your market research outline.  The indicators you choose will depend on what is important to your company, product or service.  KPIs will determine the type of questions you wish to ask and the type of data points you will collect.

Now you can perform the market research using the tools and techniques stated earlier or pick others…it’s all up to you.  Perform the market research study, carefully collect and store the data from the study, and then prepare yourself for the data analysis and interpretation stages.  They will require much thought, vision, and some math.

Market research data analysis

After you have collected the market study data, it’s time to really get to work.  As I stated earlier, market research is not an exact science, so much thought must go into this stage of the operation.  Prepare yourself for some serious math, but with simple concepts.

Most calculations can be performed in spreadsheet formulas, so please don’t get intimidated.  The data analysis stage can be fairly complex and time consuming, but attack it in stages, using a strategy with specific goals that you set.  This effort can have the greatest impact on the marketing of your product or service.

Data distributions

Organize your data very well and reduce it down into clusters using probability distributions.  This allows for effective use of the pertinent, more consistent data points.  Then put the data into a matrix to reveal the frequency distributions.  This shows the percentage of time each data point falls into a particular data cluster.

Always keep the data raw and organized in a table for easier management.  Once these data clusters materialize, it will reveal a story about what the public cares about.  The mental process of interpreting the data will already begin, but be careful to not start interpreting the data until you complete this process.

Data analysis resources

You may use resources for data analysis to help you deal with all of the data you have collected.  About Money provides guidance for this.  Here’s a link to a page which details the process.  Another resource is Market Site which provides software tools for performing statistical analysis on survey results data…there’s a free trial version.

Presenting your data

Displaying your data in a concise, actionable way is very important.  Much consideration needs to go into intuitive data formulation.  You may display your data in one of many ways using charts and graphs.  Here is a link to a page which lists and provides good details about the many ways to display your data is at stats at StatSoft.  They provide many software products and solutions that can help with your data.  To be frank about this though, being a true do-it-yourselfer, I recommend using Excel for all of this.

The results from this analysis will make a key difference in what decisions you make about your products or services.  Also, the marketing efforts you embark on will be determined by this.  Lack of attention in the area of marketing data analysis is one big reason why most businesses fail.  It’s not the difficulty of it, it’s the energy most people are not willing to put into it.  Do the work, as best you can, and with much thought, and you’ll increase your odds of success SUBSTANTIALLY!

Market research data interpretation

Once the data is laid out and analyzed, interpret the results.  Consider what the public thinks about your idea.  This must be fully understood prior to tapping into your personal vision for your idea.  Think it through and try to imagine the future of your business or product while always considering the statistical data first and foremost.

Interpret the data from all angles

Evaluate and prioritize the KPIs used in your market research data collection stage.  Then compare how each data point fits into your goals for each indicator.  Have a strategy in place for this stage, and interpret the data from all angles so you fully understand what it’s saying.  Then, you’ll realize what the public really thinks of your idea.  Develop a good understanding of how the data relates to your business.

Avoid statistical bias

Be objective in your approach when interpreting the data.  You must avoid statistical bias as you proceed with this process.  This type of selective thinking can cause statistical errors and causes you to ignore information which refutes what you think the data reveals.  Be unbiased and use an independent resource to perform the data interpretation in parallel in order to confirm your findings.

The point is to know exactly what the public thinks, whether you like it or not.  You must ignore what you think the public wants.  Your feelings on this are simply irrelevant.

Now that you understand what the public thinks about your idea, make the necessary adjustments for marketability.  Then your advertising can be very effective.

Thank you for reading:
The Nuts and Bolts of Market Research

I’ve included clickable links on certain words and phrases in my blog post to help you find other useful content that I’ve written or content from trusted sources.  Please check those out too and have a great rest-of-the day!

Please subscribe to GravyGrowth.com below and RECEIVE:

The Entrepreneur’s Rapid Reference Guide

COMPLETELY FREE – It’s my gift to you!

GET YOUR FREE COPY NOW