In business, information is key to everything and carries a very definite competitive advantage. Whether you need to assess the success of a new widget or work out how your business is doing generally, knowledge of your customers’ opinions is hugely valuable. For SMEs market research is vital something that should be exploited to make fundamental decisions about how and where to grow the business.
Market research can be conducted on an ad hoc basis or as a continuous assessment of the business. Occasional or one-off research is important for developing new products or services. Customers are asked what works best, what appeals, etc., so that when launched the product/service is as close to customer requirements as possible.
Such ad hoc research is valuable for focusing on particular developments, but provides no information about how well the company is doing in general and what it needs to do to improve. Continuous research provides a changing picture of the business’s development. Such research tracks demand and competition and enables firms to gain a better knowledge of the market in which they’re operating.
Market information largely falls into two categories: statistical and attitudinal. Hard facts and statistics can be sourced from government and trade bodies such as UK Trade & Investment, the British Market Research Association (BMRA) and the Office of National Statistics (ONS). BMRA is the trade organisation for the market research industry and its members must adhere to strict guidelines. It publishes information about the size of the UK market research industry and a league table of its members. Any firm wanting to locate a market research expert can search for an appropriate company by specific and relevant criteria using ‘Selectline’ on the BMRA’s website.
Other sources of factual market information include commercially-published reports from publishers such as Mintel, Euromonitor and KeyNote. Such reports tend to be expensive and may not be specific enough for particular sectors. The Internet is particularly valuable for gaining statistical information, tracking economic trends and viewing legislation. Although certainly possible to hire a specialist to do this sort of desk research, it can often be done in-house if a business is prepared to devote time to it.
Attitudinal information in other words customers’ opinions of products and services can usually only be learnt by asking people; under such circumstances SMEs might find consulting a professional market research company a better use of their budget.
Once businesses have identified the information they are looking to obtain, professional market researchers identify the appropriate techniques to obtain quality results. Their impartiality means that they have a better chance of been given honest rather than expedient answers by customers and they can also interpret the data quickly and in context. Market research agencies are most often employed for the whole package, but experienced marketers may only need them for data capture in the field or to analyse information already held.
Omnibus surveys are conducted by market research organisations which canvass opinions from about 1000 people. SMEs can pay to include one or more questions within such a survey at a cost of usually about £500-£1000 per question. By such means small companies can participate in a large project. However, such omnibus surveys are more usual in the B2C arena.
B2B companies often use syndicated research where a group of SMEs co-operate and combine their research. Jonathan Wheeler, managing director of Westcombe Business Research, and Council Member of the BMRA says: Companies with restricted budgets which means most of them should reserve it for questions to which they can’t find answers elsewhere. It’s best by far to do a small amount of research properly than try and cover too much and do it badly. Even if you’re employing a specialist you don’t have to try and do everything at once. Good research provides useful information; bad research can be misleading and merely wastes resources.
Technology has of course made a huge difference to market research. For SMEs it has opened the way to use their websites to conduct research. For market research technology has made analysis more sophisticated and faster. Market research interviewers now use PDAs to send answers direct to a server where the collated information can be analysed within hours. Depending on the size and complexity of the survey, reports and recommendations can often be with the client the following day.
Some programmes are available for SMEs to conduct their own Internet surveys, but the results tend to be unhelpful. Programmes are often viewed with suspicion by users, lack comprehensive instructions and don’t give any help interpreting the information which is received.
Firms attempting their own market research would be better using their website for a quick overview of what’s happening in the market place. Heidi Stewart, marketing team leader at the National Business-to-Business Centre says: Online surveys are a really quick way to get a response from customers. Businesses can post a simple survey on their website and offer an incentive to those who complete it. The replies offer a basic snapshot and provide data for analysis.
Website statistics can also reveal which web pages are viewed most frequently and provide help with identifying demand patterns for specific products/services.
With the growth of the Internet, even small businesses now have an overseas presence. The UK is a world leader in international market research, largely because many UK market research agencies have either subsidiaries or working partnerships overseas to tap into knowledge of local culture and regulations. Businesses needing to conduct international market research may also qualify for a subsidy under the DTI’s Export Marketing Scheme.
Market research is about structuring the collection of data and analysing and interpreting it accurately, says Wheeler of Westcombe.
It’s often seen as a luxury by small businesses, but understanding your market knowing what your customers are looking for and recognising economic trends is a necessity. Market research helps you understand your marketplace which is vital for the future development of your business.
Can you really do without it?
