Market research can help you effectively develop and launch new
products and services. It can also tell you if you need to make changes to
existing products and services and/or alter
the way you are marketing them. Perhaps
it will help you expand into new markets or
identify new prospects based on age,
income level, or location.
Research can be conducted in many
ways: by mail, phone, online, in the form of
surveys, interviews, focus groups and
more. It can be qualitative and/or quantitative in nature, complicated or simple. Not
only does it enable organizations to sell
products, it also helps set policies, shape
laws and promote ideas.
“As a society we are fascinated with marketing,” says Donald I. Shifter, a marketing
professor in the department of business at
Fontbonne University. “Almost every
aspect of our lives — what we eat, wear,
find entertaining — is influenced to some
degree by marketing.”
Shifter defines marketing as the process
of satisfying customer needs, adding that
wants and needs are ever expanding with
each generation — no matter what country
one lives in. The key to this, says Shifter, is
to research who customers are and what
their needs are.
Smart Business spoke to Shifter about
what companies and organizations need to
know before they begin the actual process
of conducting market research.
What is the best strategy for getting started
on the right foot?
Know the demographics of your customers and how your products will match
their needs. Additionally, the geographic
location of customers often dictates their
needs. The research you are contemplating
also must accurately take into account the
current positioning of similar products, so
you can adopt the right prices and places to
sell your products.
Why is this knowledge so important?
It is important, if not vital, to know the
customers’ needs because we live in a time
when product options are expanding
exponentially and customer preferences
are also growing. Thanks to the Internet
and all the information it provides, as well
as social networking, there also is a growing tendency for more interaction on the
customer’s part in making purchase decisions. Today’s customers are becoming
increasingly sophisticated and their behavior can change quickly and/or be difficult
to predict.
How can knowing your customers help
improve results?
Marketers need to identify and understand the characteristics of their targeted
customers to avoid developing products
that have no chance of succeeding. For
example, baby boomers might be interested in new types of vodka or wine offerings
but probably won’t be interested in
expanding their beer preferences. In the
music field, most symphony companies are
struggling as the younger generation is pursuing a wide variety of new kinds of music
as well as the ways in which it is delivered
to them (there are choices between using
an iPod or purchasing recorded music and
listening to it on a CD).
How does market research help the bottom
line in the long run?
It can help in many ways. For example, it
can help avoid costly manufacturing investments that won’t pay off. For example, say
you’re determining whether to begin manufacturing a new model SUV automobile;
however, your research shows smaller,
higher mileage, environmentally friendly
models would represent a more profitable
investment. Or it could be that a competitive analysis would reveal that potential
customers are already being satisfied and
that there would be no competitive advantage for your company’s production of this
specific product for the marketplace.
How has the Internet changed the face of
market research, and to what benefit?
The Internet has revolutionized the way
information is gathered, in scope, accuracy
and even costs. The researcher must be
skilled in the Internet’s use and in his or her
ability to interpret the results for the action
plans that ultimately must follow. The
Internet has opened a very wide, global
market, and the implications of data gathering are important, especially in basic
goods (sneakers, jeans, cookware). One of
the major benefits of the Internet’s application is that a much wider net is being cast
for reaching customers as well as the relative low-cost to achieve and process customer orders. Wherever possible, the use
of the Internet can benefit a company in
risk reduction. The customers’ responses
can be analyzed for future product inventory investments and the improved calculations for customer demand forecasts.
Why and when does ‘good research go bad’?
How can you prevent this from happening?
This can happen when the product itself
is not trending up or has run its course.
Also, the funding to support focus groups
and mailings along with online interviews
could fall short, resulting in conclusions
that do not yield actionable results.
DONALD I. SHIFTER is a marketing professor in the department of business at Fontbonne University. Reach him at (314) 889-4522
or [email protected].
