Conducting Your Own Market Research
From BMA National's Knowledge Base, www.marketing.org
by Andy Marken, Marken Communications

Whether your company is a manufacturer or distributor, thorough research is essential to its survival in today's competitive climate. That research can be conducted for a variety of reasons — from determining whether you should make or carry a specific product line, to where to locate your distribution points.

But if market research is so important, why have many companies put it off for so long? There are several reasons:

A "We-Know-Our-Market-Area-Because" Attitude. Some of the most common mind-sets include: We've lived in this community for years; We've performed product manufacturing / marketing for others; We were working in our target market before we became an integrator.

These attitudes are commonly expressed by entrepreneurs. They are risk-takers. They risk their savings, their futures and their business reputations with supreme confidence in their technical and marketing knowledge.

A Belief that Market Research Is Too Scientific. If you've ever read the articles in The Harvard Business Review or any other professional publication, it's easy to see how market research can put off most people. Major studies that have been conducted by professional market researchers are long, detailed, and costly. But the types of studies I'm referring to — and the kind you're more likely to conduct — aren't that involved. Don't be intimidated by the research specialist. The areas of your research may be small problems from their point of view, but major for you and your business.

A Belief that Research Is a Big Waste of Time. It's your business, your financial success, your future. It can't be a waste of time. You may be impatient and feel that you have to hit the market immediately in order to keep up with the competition, but the competition may be making some serious mistakes. It's easier and less costly to learn from others' mistakes.

A Belief that Research Costs Too Much. Insurance costs, too, but you would never run your business without it. This is exactly what market research provides for you — insurance. It can help you make decisions and recommendations more confidently. It can also point out areas where changes can or should be made to improve your success. Research can pinpoint the kinds of customers you will be dealing with, and what they look for in the companies they patronize.

A little effort that helps hone your marketing is well worth the time, effort, and money. Here are five steps that can help you through the process.

Step 1: Identify the Problem.
Manufacturers often wonder if their product is on the down side of the sales curve, or if their salespeople are simply tired of selling it and are focusing most of their attention on new products instead of on the company's most profitable products. Distributors need to forecast end-user/dealer needs so they can add new lines and stimulate more dealers in their market area. Dealers need to know the geographic and economic areas they draw customers from or the types of businesses that are attracted to their system sales.

Regardless of your position in the selling cycle, you don't have the luxury of research that takes weeks and months to complete. It has to be done in concert with your regular business. To begin your market research, write down your questions and problems on paper. Don't worry about how you will get the information, just list those areas where you want or need more facts.

Step 2: Evaluate the Problem.
Ask yourself the following questions: What alternatives are available to you, depending upon the results of the research? If there are alternatives, who in the organization supports these options?

Acknowledge and understand your own biases toward one alternative or another so that you can develop a reliable research effort. Estimate how much a bad decision will cost your organization, and from that you can determine how much time, effort, and money can be used to carry out the research.

There are times when a problem simply can't be researched because of the number of variables that are involved. With this in mind, determine if your research project is feasible or necessary.

Step 3: Develop a Plan of Action.
By now you are convinced that there are some marketing problems that can be solved using very basic, simple research. Put your plan of action in writing.

First, spell out why the research is needed. This includes statements about what you want to consider (new product, new market area, new location, new product line mix, new advertising alternatives, etc.); what you don't know (what information is needed to help you make a better decision); what your alternatives are (and how the research will help you select the right one); and how much you are going to spend on the project.

Committing your actions to paper crystallizes and focuses your thinking. It also keeps others informed.

Step 4: Select Information Sources.
Your research approaches are divided into two categories — primary or original resources and secondary or printed resources.

If you intend to use primary sources, you must pinpoint exactly who you need to contact, whether it's specific buyers in companies, heads of certain companies, or certain types of users.

Secondary resources are materials that are already available. They have been produced by your trade association, publications, or the government (including local, state, regional, and federal). It's surprising how much useful information is available. You need only know who to ask and what to ask for.

Some of the larger banks have conducted original research and every bank has a study of your area available. Ask your own bank manager what their market research department has available nationally, regionally, and locally. They have probably already studied and analyzed many of the other secondary reports you would research, making your work even easier. Don't reinvent the wheel. If they have done the work and developed the answers, use them.

The media is one of your best sources for research results and can also suggest other sources for further research data. National, regional, state, and local magazines have studied their markets to determine how they can best serve them. They should be able to provide you with a breakdown of their circulation as well as industry/market area trends and statistics.

The same is true of newspapers, radio, and television stations. Local media spends hundreds of thousands of dollars annually to determine what their market area is doing, what its make-up is, and how it is changing. This is how they prove to advertisers that they can deliver a specific market.

There is also a growing list of online databases that are as close as your telephone and terminal. These include Dialog, Dun & Bradstreet, Dow Jones, and hundreds of other national, international, and regional databases that are cropping up to meet the needs of information-hungry businesses. (See Navigating Cyberspace Resources for more information.)

Step 5: Set Time Limits.
As you can see from the list of available resources, there is a world of data available to you if you only ask. In fact, there may be more information available than you have time to study. Before launching into your research, determine exactly when the results have to be presented. This will help put limits on the extent of your research. Time limits are important because the longer the research drags on, the better the chances are of your information becoming outdated.

A deadline or due date gives you a cutoff point for the research. It also gives you (and those around you) an action date, a point they can look forward to for doing something constructive with the new information. Your market research could take a few days or a few weeks. But the results will help you and your organization chart a safer course.

Navigating Cyberspace Resources

Looking at the new world of virtual information resources available through the Internet, World Wide Web and commercial online services is a bit like standing on the beach and gazing into the ocean. It's overwhelming. Before you jump online and start surfing in these new waters:

• Develop an online research plan that outlines key areas of inquiry and gives you a systematic pathway to find the information needed.
• Define your information needs, knowledge gaps, and issues that need to be resolved.
• Focus your search on specific product categories, consumer targets, market areas, time frames, etc. so you don't get sidetracked into interesting but useless areas on the Net.
• Search across multiple sources because it's seldom that you'll find everything at one location.
• Integrate information from multiple sources such as technological, social/cultural, occupational, political, economic, and stockholder data to identify patterns.
• Search databases for analyses rather than just drawing out data to help your interpretation.
• Make your data robust by using multiple sources.

Where to Look

Educational Sources. Originally developed for educational and scientific research, almost every major and secondary educational institution in more than 38 countries has an online library you can browse through to find information that covers your area of specific interest. As in every good library, the individual studies and reports will also provide cross-references to other studies on the subject.

To make it easy for you to review data in other areas, these references are often "hotlinked" (connected) to the study that is cited. If the reference is highlighted, just double-click your mouse and the computer will quickly move you to the new research, study or report. In a few minutes it's possible to go from MIT to the University of Sydney to the University of Tokyo to the University of Toronto to Stanford and glean information on your specific subject.

Governmental Databases. Every day federal, state, regional, and local governmental agencies around the globe compile tons of information on every subject under the sun. While some of this information obviously isn't available to the general public, the majority of the data and analyses is available to businesses and researchers.

For example, the U.S. Census Bureau maintains a number of demographic databases that can be accessed. The Commerce Department has the National Trade Databank for international trade data, and the SEC maintains public company report files online. Treasury, U.S. Postal Service, Department of the Interior, HUD, the FBI and other departments maintain online databases that can be accessed. Similar agencies in other countries maintain online information as well.

Every state develops and maintains databases on business and consumer activity as do an increasing number of cities. Even regional transportation, environmental resources, and other area organizations compile, store, and make available documentation and data that can be used to help you determine market and sales activities and trends.

Company Web Sites. Every day a few hundred more companies add their home pages to the Web. While the information is posted on the Web site to attract new customers and keep existing customers, it's also available for you to peruse, review, and analyze. Supplier, competitor, customer, and prospective customer Web sites can be a rich source of product, product development, product application, customer/target customer, business/marketing/sales philosophy, as well as engineering and manufacturing data.

Supplier Web pages help you plan your production and product schedules, as well as take advantage of new technologies as they emerge. Competitor sites let you gauge your products or programs against theirs so you can fine-tune your activities. Customer and prospective customer sites can be a source of information on how you can better service them with specific products or services that aren't available from your competition.

Professional Online Services. General and industry-specific database research firms have existed for years. Companies such as Dialog, Lexis-Nexis, Dow Jones News/Retrieval, and NewsNet are just a few of the hundreds of online information service providers. These organizations make it fast and easy for you to gain highly targeted, precise access to more than 10,000 databases that are available around the globe.

Global searches allow you to filter out product, service, technology, or application-specific information. In addition, services also offer "key word in context" scanning so that you can get more precise information.

To make the task even easier, services such as Lexis-Nexis can provide direct access to information on products, marketing strategies, competitive earnings, and other information that may be of interest to your organization's survival and growth.

A new profession called information/knowledge professionals has grown up around the Net that provides help for those who don't have the need to contract with an online service for continual access, or who don't have the time to search the tens of thousands of national and international resources that are available. These information/knowledge professionals maintain accounts with database services and online vendors.

They can provide excellent value-added services by using systematic search approaches. They also can help you understand and define your information needs, as well as the resulting information you'll receive.

Unlike academic research which is often done just to satisfy intellectual curiosity, your market research is driven by the need to meet your firm's business objectives. Acquiring the information is only the first phase of the job, and the Net has suddenly made that search dramatically easy. It's then up to your company to distill and use that information to provide the organization with market knowledge.