Planning and conducting market research

Market research is about sensing what the reality is, out there in the big wide world, right now. It follows that without market research, any company enters the market with its eyes firmly shut. Market research should never be used as a security blanket after a decision has been made – it is here to deepen the understanding of the Value Line, for example the customer, competitors and channels, anticipate the changes in market requirements and eliminate poor decision alternatives.

Market research can lead to life changing solutions

Market research has been criticised for resulting more in incremental product innovation rather than truly break through innovations and business concepts that have changed people’s lives. I don’t agree – it’s the sort of market research you do that counts.

If anybody had cared to have asked – “What’s the worst thing about sending a letter?” or “What’s the worst thing about having to find information?” Both questions would have been answered with the lengthy time and the financial costs involved. If you’d then have asked – “How about a way to send a letter instantly and for free then? Would that be the ultimate solution?” Or “What if you could find information for free, instantly? How would you feel about that?”, people would have said “That sounds amazing!”

The gap between the ideal solution and the current solution – would have been there for all to see. Of course to some it would sound like science fiction, but the best ideas do – they are almost but not quite beyond imagination – and it’s the not quite part that it’s vital to grasp. If you can imagine it, you can do it.

You see what you need to know to create world changing solutions is already out there, what’s missing is the imagination to create the solution and hence the solution itself. That’s your job.

The main job, jobs and outcomes that world changing products met were always there… it just took somebody to come up with the product that could satisfy them better than the current solutions. No amount of market research would have given you the solution itself – no one given the questions above would have said – “I know lets invent email and this is how it’s going to work.” That’s your company’s job, your job. That’s the passion of marketing and the fun of business, because it’s that which gives you the chance to do something ground breaking. It’s by asking people how they do jobs and what they love and hate about the products they use to do them, you get the data so that things can really improve, so that your solutions really will matter to them, more than matter. They’ll change lives.

The discoveries of email and the Internet therefore could have been made by looking at what jobs people were doing and how they could be done better. The right market research, mixed with innovation inside the firm could have provided them. But you’ve got to ask the right questions, you have to view all of this in the right way, because you’ve got to get the right answers, the right data from with which to start.

Today, market research shows its other purpose… it can certainly deliver many insights into how email or the Internet could be improved!

Good market research will lead a company to recognise that the buyers in any market differ in their priorities, perceptions and preferences. It asks who is buying the product and why? If finds out what jobs and outcomes customers require today as well as tomorrow.

A better way to put this is market research uncovers jobs that are not getting done well or at all, and then allows you to create an offering that customers will love because it’s so special in ways that matter to them. It reveals what offerings could help people do jobs so well they will be life changing in every sense of the word. Later we will go on to look at segmentation – this is seeing if there are varying groups of people with similar priorities. From there opportunities posed by segments will be identified and financial estimates made on the proposed strategy indicating whether returns would meet the company’s financial objectives, passion and goals. As we shall see later, once segments have been chosen through targeting, the firm then goes about creating separate solutions, value propositions and positioning them.

The 7 Phases of a Market Research Plan

This can be split into 7 phases:

1. “Why?” Why exactly are we doing this?

The ultimate research objective (what do we want to find out?)
Main questions to be answered
Problems to be solved
Level and scope of analysis
Decision alternatives (our options – what we can do at the end of our research)

At this point it’s absolutely vital you are very clear about what you want to do.

For example an airline set its main problem to be solved as – “Will offering an in flight internet service create enough incremental preference and profit to justify its costs against other possible enhancements we could make?”

Then the main questions to be asked were identified,– e.g. “How many passengers will use it at different levels? What type of first class passenger is most likely to use it? How much goodwill will be added to the airline image?”

2. “Who and What?” Who do we need to speak to? Who and what do we need to analyse?

Who you will survey (for example, consumers, customers, employees, non users etc.)
What you will survey (for example companies, trends, products, Value Lines, Performance 14 etc.)
How many of them you will survey
How you will find them
How you will choose them
How you will incentivise them

This of course depends on the “Why?” part at Phase 1.

3. How? How are we going to get our information?

How you are going to gather the information? Your approaches need to be set. Think about whether you need observational research, focus groups, surveys, behavioural data, or experimental research. Experimental research is the most scientifically valid of all – simply this is the experimenting with doing what you propose but on a small scale to test results.

Secondly think about the research instruments to collect the primary data– questionnaires, qualitative measures and technological devices such as neurological scanners and think about the contact method and – mail questionnaire, telephone interview, personal interview, and online interviews all should be considered.

Thirdly, you need a time line for all this to happen.

4. Now it’s time to collect the data.

This is where you design your data collection methods and then go to work. You have to focus on getting the right sort of data to avoid all sorts of complications.

5. During this time, and afterwards you’ll have to analyse the data – objectively.

Avoid the trap of using the data to confirm what you thought or wanted!

6. Present the findings in a report format, usually within a Value Plan.

7. Make a decision

A market research plan for a new product

The best example to use

As researching a new product involves the most comprehensive research, we are going to use it as an example. Should you wish only to do research in a smaller level or scope, for example only research competitors in your industry, or just your current customers, you can take parts of this example that follows to use as you please. Remember the 80/20 principle as you go, the research with the most impact will often be found in a handful of specifics.

EXAMPLE: Phase 1 – Market Research – Why?

So let’s start at Phase 1 and ask…

The ultimate research objective (what do we want to find out?)
Problems to be solved
Main questions to be answered
Level and scope of analysis
Decision alternatives (our options – what we can do at the end of our research)

The Ultimate research objective is the big question you are trying to find an answer to. What are you trying to find out? In the case of a new product, you’ll be looking at many aspects to answer the question – “What can we produce that is better?”

We’re going to work along the Value Line for the 5Cs – Consumer, Competitors, Collaborators, Context and Company, in that order. We’ll use a Performance 14 Analysis at each stage, because we need to uncover the Value Lines in operation, and the value they are producing. It follows that a deep analysis of the Performance 14 and the Value Creators within each part of the Value Line is required.

Setting our objectives involves analysing the current external and internal situation by –

Looking at the Value Lines of consumers. Consumers can be customers, non customers, non users and key players.
Finding out about the entire Value Line(s) of the market.
Looking at competitors Value Creators along the Value Line.
Looking at current trends, past trends and the future and how they affect the Value Creators.
Looking at our company in terms of our Value Creators and what Value Creators we would need to develop.
Testing competitors products yourself and with others.
Asking ourselves.

Split along the 5Cs some main questions we might want to ask would be –

Consumers

What jobs and outcomes are customers trying to achieve?
What are they using to help them?
What do they think of the solutions they use?
What’s the best in class solution?
How does in meet up to their ideal solution?
Where to they hear about or see solutions?
Where do they go to buy?
What happens when they get solution?
What happens after they have the solution?
Why are people not using solutions?

Competitors

Who are the main competitors?
What are the best solutions?
How do they execute the Value Line?
What momentum do they have?
What collaborators are they using?
What are they likely to be working on now?

Collaborators

Who will we need to out execute on the Value Line?
What collaborators will we need to take from competitors?
Can collaborators hinder us in any way?

Context

Is the market changing in the value it wants and how?
Are people buying in new ways?
How are context factors affecting the rest of the Value Line?
What do the next 2, 5 and 10 years hold?
Can we learn from the past?

Company

Does it follow our passion?
What will we need to out execute on the Value Line?
Have we identified better value?
Can we create better value?
Can we better communicate this value?
Can we better deliver value?
Can we better support value?
Can we gain access to it?
Will it be worth the investment and time?

Once you have got a very clear idea of what you want to achieve and you’ve put it in your Value Plan, you need to select the right level and scope of analysis to suit you.

At different times you will of course want to focus on different depths and scopes of analysis. What’s important to realise is your level of analysis depends on the situation you are in. In other words the questions your objectives and the questions you want answering.

Sometimes you’ll want to zoom right into fine detail under a microscope, other times, you’ll want to zoom right out to see the bigger picture.

So you might want to zoom into a fine level of focus and use market research to assess how a new feature has been received and how it could be improved, or to assess what features competitors provide to see how you compare. In both cases it would be worth looking at what benefits those features provide. In other words, the outcomes they help achieve. You may find that other features could do a better job. For example, you see a feature on an essay website – “£1000 No Plagiarism Guarantee.” You think you could offer a £2000 one. But instead you could offer a free plagiarism scan with ever essay. When you look behind the feature, you see the benefit, the outcome it provides is maximise the chance of a plagiarism free essay.

Yet, in the long term, you’ll need to be able to switch to a broader scope of focus than this. If you just focus on your own features and those of industry competitors you are forgetting that your product is just there to do a job. Doing so makes your outlook myopic. You’ll need to widen your focus to take in substitute products, and the job itself. When you look at substitute products for example, you can take features from them and use them in your own. When you look at the job, you’re looking at the reason your product exists in the first place. You’ll likely want to take in trends and how they are affecting value in years to come.

Remember, none of the ways above is right or wrong, the level of analysis to use depends on the circumstances.

Here are some examples from the essay industry so you can see how the level of focus might differ.

Product niche – custom essays 2:1 standard on 3-hour delivery

Product – custom essays

Product variations – custom essays, essaybank, essay editing

Group of substitute products – custom essays, essaybank, essay editing, tuition, model answer books

Jobs (Mini Goal) – write an essay, had in a good essay, cheat

Jobs (Main Goal) – get an education or compile information

Jobs (Chief Goal) – get a degree or to get a better job

As we are looking at developing a new product in our example, we need a wider level of focus.

If you remember our Google and library example, ultimately, looking at the job to be done lets you see ahead of the curve by seeing where current trends are going. It helps you think differently from the rest and will protect you from unseen innovations. Most businesses seem to simply look at products and solutions already out there and just try and improve them. They forget to widen their focus. That’s quite easy to do because these things are right under your nose, as well as everyone else’s. Such improvements are valuable; especially to keep ahead of competitors, but they will never lead to the next big thing. Worse still, because that’s how most of the world thinks, there can be one big group think going on that can lead to lots of similar solutions fighting for small customer numbers.

When you look at jobs on a Mini Goal, Main Goal and Chief Goal viewpoint, you look at the reasons people are selecting products in the first place. It gives you a far wider view of things than most companies possess and freedom to innovate around what matters to people most!

In our essay example, you then realise that even universities are just one solution to getting a job and earning money, and that how small a part of all this your product – custom essays – really is.

After deciding your level of focus you need to decide your decision alternatives – what exactly can we choose to do?

In the case of new products, the decision alternatives will often be something like –

Weigh up against alternatives
Proceed immediately with production
Put on hold
Decide not to pursue
Carry out further analysis

Being clearer about these at the start means you have a definite course of action once you get your results.

EXAMPLE – Market Research – Who and What?

In this case of a new product you will look at the 5Cs. So as well as researching consumers, you’ll be looking at competitors, and their products, collaborators, the context of which all this is going on and your own company.

Consumers

Are we analysing customers? Non customers?
Are they users of your product, or similar products?
Have they never used it because they don’t want to, or because they have never heard of it?
What segments – groups of people with similar priority of Value Factors are there?
Which are we looking at?
Who are the Key Players – the buyers, users, final decision makers, payers and key influencers and will we research them?

This obviously determines the types of questions you will ask.

Competitors

What solutions do the same job?
Are we looking at just leaders?
What price bracket(s) are we looking at?
Will we be looking at specific features?
What competitors will we look at?
What can we learn from world class competitors?
Who will we need to out execute on the Value Line?

Collaborators

What types of collaborators are key?
Which specific collaborators are key?
What collaborators will we need to take from competitors?
Can collaborators hinder us in any way?

Context

What trends are most important here for us to look at?
How are trends affecting things most now?
What about 2, 5, 10 years into the future?
How about in the past?
Buying trends
Social Trends
Product Trends
Political Trends
Environmental Trends
Technological Trends
How are these affecting thins

Company

Who will we need to research inside the company?
What will we need to research, e.g. skills, people, technology etc?

For example we might know the buyer segment we are researching for DVD players is the head woman of the household, aged 21 – 30, yet the payer is the man of the house, who is also the final decision maker on what model is chosen. In addition, the kids are key influencers on what’s cool and what’s not cool and the woman has some say too. All three are users of the product, and in their varying roles, all three have different Value Factors. So we would need to assess Women in their influence as buyers, key influencers and users, the men as payers, users and final decision makers and the kids as users, and key influencers.

Often industries all focus on the same buyer causing convergence. Don’t forget the influencers, buyers, payers and users may all be different people. For example, the insulin industry always looked at the Value Factors of doctors and tailored products to obtain their favour, one company looked at the user instead, and created a product without needles – a Value Pain to users as it caused embarrassment to them but of little importance to doctors. Soon, users were demanding it from doctors and it was a huge success!

Bear in mind that all marketing works by targeting value offerings to Key Players. Key Players comprise buyers, users, final decision makers, payers and key influencers (such as a supplier or distribution partner). These Key Players are split into identifiable separate segments based on the hierarchy of their jobs and the relative importance they place on each.

In market research often the influence of all the Key Players must be researched and assessed.

De-segmentation is a useful way of seeing beyond existing segmentation in consumers to see if there is more similarity to their Value Factors than meets the eye. In other words, de segmentation is one way of going back to focusing on the job to be done, not the different solutions. This obviously has a bearing on who you will want to speak to. Whilst segmentation must always be used – de-segmentation is also a useful tool to decide who you want to speak to. Segmentation does work but one problem is that it can lead to smaller and smaller groups of customers being researched, when sometimes, larger groups of customers can be researched, because they can potentially be just as well targeted with one offering.

To use this tool we look at non customers – and what these three types of people value to meet the need you are fulfilling–

Rare customers
Refuse to use customers
Never considered using customers

For example Prêt a Manger looked at lunch time workers and how they did the job of lunch time eating with either packed lunches or restaurants – the two most popular ways at the time of satisfying work based hunger. They looked at the jobs people were trying to do and the main things that stopped them using sandwich shops – Value Pains they had. These were lack of healthy choices, long time sitting or preparing and high costs. They identified and capitalised on the trend for healthy eating.

Galloway looked at why people didn’t play golf – the “refuse to use” customers or “never considered using” customers – rather than the current golf players. What were the Value Pains associated with golf? In other words – what stopped them doing the job well? The main ones were difficulty and time taken to learn. Their club “Big Bertha” solved these two Value Pains by making the club head oversized, and therefore easier to hit the ball. The club was also favoured by players of golf who had similar problems. As a write this I have thought of another idea – a golf club with software installed that gives you an instant feedback on your swing. Slower, quicker, higher, left/right and so on.

Both these show how focusing just on customers of a product type is myopic, focus on the job itself – regardless of what people do to, if anything, to complete it.

A final example of de-segmentation is the F35 plane, created to replace various aircraft while keeping development, production, and operating costs down. The navy, airforce and marines (infantry) of the US all purchased different fighter plane models as they had different requirements. Using the “create, eliminate, reduce and raise” framework for the current products and customer jobs, it was found that all 3 units has a smaller and similar set of jobs and Value Factors then first thought. The main differences were few. The navy needed short take off durability, and easy service due to being away at sea, the army needed short take off and vertical landing, as well as counter measures such as flares, and the air force wanted the fasted most measurable and stealthiest aircraft.

Three variants of one aircraft could be produced. In other words one base model would be used that would share 80% of their parts (again we see the 80/20 principle in play!):

F-35A, conventional takeoff and landing (CTOL) variant.
F-35B, short-takeoff and vertical-landing (STOVL) variant.
F-35C, carrier-based (CV) variant.

The F-35 is being designed to be the world’s premier strike aircraft to 2040. Specifically the F-35’s requirements are that it be: four times more effective than fighters in air-to-air combat, eight times more effective in air-to-ground battle combat, and three times more effective in reconnaissance and suppression of air defences. These capabilities are to be achieved while still having significantly better range and require less logistics support current aircraft.

The cost, due to shared parts, and resulting economies of scale – $80 million per craft opposed to $120 million per craft in the past.

EXAMPLE: Phase 3 – Market Research – How?

So how will you find out about Consumers, Competition, Collaborators, Context and your Company? There are plenty of sources for your market research. As the amount of information on the Internet doubles ever year, it is increasingly becoming the best way to find information quickly and cheaply.

Wherever you can find information you can conduct market research. People today talk about their lives, pains, problems, thoughts on products and companies anywhere and everywhere.

In addition, much time can be spent deliberating the best way to get data, but this is not half as important as getting the right data – that should be the focus first and foremost. Once you do that, thinking of the quickest, cheapest, and best way to get it is secondary

Consider the following –

Consumers

Consumer reviews
Market research firms
Data bureaus
Forums
Market research websites
Phone interviews
Web surveys
Face to face interviews
Blogs
Questionnaires
Magazines
Radio
News
User observations
Debate groups
Focus groups
Customer feedback
Conversations

Competitors

Use and analyse competitors products
Ask others to use competitors products
Competitors marketing communications e.g. websites, adverts, Facebook, PR etc.
Rumours, leaks
Employees
3rd party data

Collaborators

Current products
Employees
Phone interviews
Web surveys
Face to face interviews
Questionnaires
User observations
Debate groups
Focus groups
Conversations

Context

Consumer reviews
Market research firms
Data bureaus
Forums
Market research websites
Phone interviews
Web surveys
Face to face interviews
Blogs
Questionnaires
Magazines
Radio
News
User observations
Debate groups
Focus groups
Customer feedback
Conversations

Company

Current products
Employees
Phone interviews
Web surveys
Face to face interviews
Questionnaires
User observations
Debate groups
Focus groups
Conversations

EXAMPLE: Phase 4 – Market Research Capturing Data – Designing Devices

Where there is no buy-in with the topic area and seemingly no advantage to the respondents to give up their valuable time, you won’t get many responses unless you incentivise people to help you.

Questionnaire Design

Questions will need to capture 3 different types of information:

Information about behaviour – e.g. factual information, what does the customer do, own etc
Info about attitude – e.g. what does the customer think or feel about something. Why do they do this.
Classification – Who is the customer? What age, gender, where do they live and so on.

Attitudinal questions are rated on scales. These may be:

Verbal – a word or phrase that indicates the level of their feeling
Numerical – a number out of 5, 7, 10

Where the questionnaire tests opinions on a large number of issues, a 10 point scale is recommended as it gives the greatest sensitivity with no mid point. A numerical scale may not be advisable for an international survey. In Germany, 1 is good and 5 is very bad – whereas in the UK, 10 is usually the highest (best) grade.

Ensure that your questions are –

Objective and without bias
Short and simple
Use concrete measurable terms.
Avoid vague terms like ‘usually’ and ‘frequently’ which may mean different things to different people
Don’t use jargon, colloquialism or shorthand
Avoid sophisticated/uncommon words
Word in the positive where possible
Don’t ask questions which are outside the frame of reference of the respondent
Allow ‘other’ for fixed responses

Where a mixture of open ended and closed questions are used, the sequence is usually open followed by closed.

A mixture of question types and styles will help keep your respondent interested. Give clear instructions after every question and give plenty of space. For open questions, the amount of space will be taken as an indication of the size of response expected.

If you’re completing self completion questionnaires consider –

Make promises – improved products or services, incentives to fill it in – prize draws, monetary rewards
Assure the user about speed/ease, confidentiality and give clear instructions on what to do next
Have an easy question to get people started
Tick box questions are easier to fill in
Allow the use of pictures as explanations
Make sure the questionnaire is easy to complete with pre set answers linked to the questions where possible
Use open ended questions sparingly as they generally receive poor responses
Make it visually pleasing – for example, logos, smiley and frowning faces
Try and set the layout to squeeze in more questions and still maintain the white space between sections so it looks clean and neat
Address the questionnaire by name – it will have more impact
Writing in an engaging style. Be clear, and brief. Explain the purpose to legitimise the survey
Don’t ask complex questions
Don’t forget to thank the respondent

The number of questions does not influence responses as much as the interest factor – there are many examples of long questionnaires that have obtained a high response rate, if they were interesting to the respondent.

If you don’t have the interest factor, because web questionnaires are really commonplace, the results may represent the views of people with time on their hands, complainers or nerds. They will not be representative, and will therefore be of less use.

Interviews

Principles of interviewing:

Listen rather than speak – facilitate rather than close down conversation
Dig down to find out what people really mean
Adopt a clear line of questioning – non threatening, simple and clear
Facilitate a permissive tone, don’t give any suggestion of the correct response.
Demonstrate engagement with the respondent
Adopt a businesslike approach, an aura of confidence and control and enthusiasm.

Concerns at the outset from respondents:

Anxiety
Don’t know what to expect
May have let self into something they would prefer to avoid
What questions are in store
How long will it take
Have I the ability to answer the questions?

Anticipation is worse than the experience, so try and create a rapport and make sure there is an easy question to start the ball rolling.

Line of questioning:

Avoid launching into detailed questions at the outset. Gradually build up to more searching questions.

Structure:

Intro
Warm up questions
Main body
Thank and close

The main body should be broken into specific sections relating to research objectives, further broken into specific questions.

Open ended questions allow flexibility and allow customers to dispel assumptions that we may have made. Assumptions may prevent a client from asking for particular services or help because they don’t believe we offer that service.

Avoid

Long complex questions
Vague questions
Technical or company/industry specific jargon
Leading questions
Aggressive or threatening questions

Questioning Tips

“What, how why, could,” and “what else” are all good open ended question starters. “Are, do or can” and “often” signify closed questions and should be avoided. Don’t lead, and never put words into the respondent’s mouth.

With market research the focus is on open ended questions, actively listening and probing, asking for explanations and explanations on specific statements, like digging through layers of earth to get to gold – the definable jobs, outcomes and metrics.

We have to probe to get the real value. The number one problem in interviews is the failure to probe. If a consumer proposes a feature or solution, ask why. What is the end result they are trying to achieve? What is getting in the way of their lives? Get to the feelings and emotions they have. The root causes. You want lasting images of their situations; to feel like you are walking in their shoes.

Terms like this are great in achieving that –

Tell me more,
Go on,
Share an example,
Can I ask why?
What problem will that solve for you?

Ask them for analogies, perfect solutions, and what others like them in general feel. This helps them project feelings in unusual, comforting and different ways.

You need a crystal clear and deep picture of the challenges consumers face. It is your goal to understand what it is like to be the consumer. To feel their pains and frustrations. The consumer should be the one talking for at least 90% of the time, and what they say should be transcribed and recorded, preferably by an additional person to the interviewer.

Don’t let them be ambiguous. “The unit must be easy to hold and operate” is ambiguous. What will make it that way? What stops it being that way now? Does it have to be unit? What else could it be? What are the root causes of problems? Do not rely on assumptions! If a consumer says a remote is too small – why? Is it hard to find, are the buttons too close together, or is it pure ego based on the price of the system?

What does the consumer require? Where do we and the other solutions stand? What are the must have requirements? Why are they so important? What cannot happen?

Observing consumer using products lets you read body language, you can view people doing things in their natural habitat, rather than just asking them what they do. What they do can be different to what they say. Face to face interviews allow you to pick up on things phones do not, yet phone interviews are cheaper.

As you have seen, finding out about consumer value is quantifiable, fact based, objectively determined, derived through consensus and repeatable.

Value is identifiable and getting it is a definite science, mixed with a little artistic creation.