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Monday, July 8, 2013

Market Research Methods - Primary & Secondary means

There are several ways to categorize the various market research methods.  The vast majority of techniques fit into one of six categories:
(1) secondary research,
(2) surveys,
(3) focus groups,
(4) interviews,
(5) observation, or
(6) experiments/field trials.

Market Research Methods: An Overview

The most basic classification of market research is primary and secondary research.    Secondary research happens to be the first of six market research methods.  The other five are all different flavors of primary research.

Secondary Market Research
Secondary research is simply the act of seeking out existing research and data.  Secondary data could be US Census data, Twitter comments, journals, and much more.  The best thing about secondary research is that is it often free and it usually can be done quickly.  Your job as a secondary researcher is to find existing data that can be applied to your specific project.  It is possible that you might not be able to find secondary data that is suitable for your research needs.  If that’s the case, you’ll need to conduct your own primary research…and that’s where we’ll find the other five market research methods.

Primary Market Research Method #1 – Surveys
Surveys are perhaps the most widely known and utilized method when it comes to market research.  Surveys come in a wide variety of shapes and sizes, from that little “feedback card” on the table at your favorite restaurant to those never-ending web surveys that make you want to punch your computer.
Surveys make a lot of sense when the following conditions are true:
-You want to measure something objectively (or quantitatively).
-You have something specific to measure.  In other words, you are beyond the exploratory portion of your research and you now want to test more specific questions.
-You have a relatively large sample to query.
-You have the resources (time and money) to conduct a survey.
Conversely, surveys are not a great research tool when:
-You are still exploring your topic.  In this case, you don’t know the right (specific) questions to ask in a survey.  Instead, you might conduct a focus group to get a better understanding of the topic.  Here is an example: Let’s say you want to make and sell a better mousetrap.  Instead of using a survey to ask people what color they prefer, you might want to hold a focus group with people who have mice problems and ask them open-ended questions about what they value in mouse control devices.  You might hear things like “doesn’t kill mouse,” “easy to set,” “small size,” “price,” “disposable,” etc.  Now that you have explored the topic and discovered these attributes, you can then measure their relative importance with survey devices.
-You don’t have the luxury of time and/or money to run a survey.
-Your available audience is too small (for now, let’s define “too small” very simply as less than 30 people.  If you are curious why I picked the number 30, here is my rationale).
Surveys can be used effectively for satisfaction research (customers or employee), measuring attitudes, pricing research, fact gathering (e.g. the census), and much more.  You’ll find surveys administered in all sorts of ways, including snail mail form, web forms, face-to-face (that guy at the mall with the clipboard), over the phone (the guy who calls during dinner), on the sidebar of a blog, and even on mobile devices via text message or otherwise.  Surveys can be self-administered (the respondent reads and answers questions alone) or they can be administered by a person who records your answers.
I could go on and on about surveys, but I’ll save it for now since this is an overview.  You can read more about survey design best practices (e.g. customer satisfaction survey question ideas), incentive strategies, new market research methods, and more.


Primary Market Research Method #2 – Focus Groups
Focus groups involve getting a group of people together in a room (usually physically, although technology is making virtual, or online focus groups more feasible).  These people fit a target demographic (e.g. “mothers under 40 with an income over $50k”, “college males who play 8 or more hours of video games a week”, etc.) depending on the product or service in question.  Participants are almost always compensated in some way, whether it be a money, coupons, free products, etc.  A moderator will guide the discussion, with a goal of getting participants to discuss the topic among themselves, bouncing thoughts off of one another in a natural group setting.  Professional focus group rooms will have a one-way mirror on one wall, with a team of observers on the other side.  The company or group that commissioned the study can sit-in on the meeting, along with members of the research team who can take notes without disrupting the participants.
Focus groups are excellent for exploratory, qualitative research.  In the “new mouse trap” example, a focus group can reveal all sorts of important mouse trap attributes that might not have been considered otherwise.  Focus groups are great tools to use prior to a survey, because it will inform your survey questions to be more specific and targeted.  Focus groups can also be beneficial after a survey, as a way to dive very deep into a topic that came up in the survey.  For example, an employee satisfaction survey may reveal “cafeteria food” to be a big issue.  A follow up focus group with a handful of employees will allow the employer to understand that issue much better (What is the problem with the food?  Is it the taste, price, healthiness, temperature, something else?).

Focus Group

Primary Market Research Method #3 – Interviews
Like focus groups, individual interviews are a qualitative market research method.  To simplify things, think of individual interviews as focus groups with only one participant and one moderator (interviewer).  There is a wide spectrum of interviewing formats, depending on the goal of the interview.  Interviews can be free flowing conversations that are loosely constrained to a general topic of interest, or they might be highly structured, with very specific questions and/or activities (e.g. projective techniques such as word association, fill in the blank, etc.) for the subject.
Like focus groups, interviews are useful for exploratory research.  Use this market research method when you are interested in digging into a specific issue very deeply, searching for customer problems, understanding psychological motivations and underlying perceptions, etc.


Primary Market Research Method #4 – Experiments and Field Trials
Experiments and field trials involve scientific testing, where specific variables and hypotheses can be tested.  These tests can be conducted in controlled environments or out in the field (natural settings).  This form of market research is always quantitative in nature.   Experiments and field trials can be a hairy topic with lots of jargon, but here’s a simple example that demonstrates an effective online experiment: In his first presidential campaign, Obama used “A/B testing” to optimize his campaign donation page.  Some website visitors would see one image and others (at random) would see a different image.  The webpage team was able to measure which image was resulting in more donations, and they could quickly decide to use the more favorable image for all users.  By employing this simple market research experiment on which website images performed better, Obama was able to maximize contributions in a major way.  Another example might be a cereal company making two different packaging styles and delivering each one to limited test market stores where their individual sales can be measured.

A/B Testing in Action

Primary Market Research Method #5 – Observation
Observational research can come in a different shapes and sizes.  In general, there are two categories: strict observation with no interaction with the subject at all, or observation with some level of intervention/interaction between the researcher and subject.  The greatest benefit of this technique is that researchers can measure actual behavior, as opposed to user-reported behavior.  That’s a big deal, because people will often report one thing on a survey, but behaves in another way when the rubber hits the road.  Observational research is a direct reflection of “real life,” so these insights are often very reliable and useful.
There are many examples of observational research.  Here are a few:
Usability testing – Watching a subject use a prototype device is one form of observational research.  Again, this can be done with or without intervention.
Eye Tracking – Let’s say you have come up with a website.  You might ask people to navigate your website, and you will use eye tracking technology to create a “heat map” of where their eyes go on the website.  This information can be used to re-design and optimize the page elements.
Contextual Inquiry – This is a hybrid form of research that involves interviewing subjects as the researcher watches them work or play in their natural environment.
In-Home Observation – Watching a family member go through the morning routine in their home might turn up useful insights into pain-points that need solving.
In-Store Observation – Simply watching shoppers in action is another form of observational research.  What do shoppers notice? How do they go through a store? etc.
Mystery Shoppers – This involves hiring a regular person to go into a store and pretend to be an everyday shopper.  They will then report on aspects of their experience, such as store cleanliness, politeness of staff, etc.  In the case, the mystery shopper is the researcher and the store is the subject being observed.

Eye Tracking Heat Map: An Example of Observational Research

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