Why Market Research?

I have talked with many business managers in Cambodia. We’ve talked about their possible market research needs and how they approach their overall marketing. Many times, I heard them say they don’t have a lot of marketing budget, or even no budget at all. Sometimes, I was asked to submit a proposal, but they turned it down and saying the cost was over their budget. Some businesses use their internal staff to conduct some research for them in order to save some costs. However, I noted that most companies that I met spend a lot of money on advertising and promotion. I think this is because they believe that advertising and promotion help them to generate more sales, which is obviously true. However, I always wondered how maybe just a little market research might help them spend their money a little more effectively and get a greater return on their marketing investments.

I have been thinking about this and believe that it is in fact a really good investment. Smart businesses invest in market research to help guide their decisions on market expansion, product development, advertising and promotion, new products and even recruiting new staff. Multi-national companies spend a lot of money on market research before they make any of these decisions. Market research can especially help companies to be more competitive and to take action faster than competitors, as they can recognize the current environment and forecast the future trends.

I believe the management teams of every company needs market information in order to make the right decision. You can imagine what will be the end result if the management team of a company makes a decision to take their product to a province where there is no demand for that product. The end result will be a loss of money, plus a loss of time and effort also. But if the management team in the company knows that there is no demand, they would decide not to expand. This is why market research is needed. There are a lot of examples to support the idea that market research is not really an expense for the company, but an investment instead because people who invest in it will get a good return.

In conclusion, business owners should use market research planned and conducted by market research professionals, not internal staff who usually lack extensive experience in it.  The market research professional can also give you recommendations based on the findings from their research and experience with other clients that you can use. You can find research professionals from just a quick search on Google Search or in Yellow Page Business Directories.  However, make sure you ask for some references before deciding to select one company to do market research for you. Pricing alone should not be the most important criteria you use.

Many times when you SAVE money with the cheaper alternative, you actually WASTE money getting less useful information and, quite possibly, LOSE money making the wrong or less good decisions.

 

Introducing the most misunderstood and misused term in advertising: “U.S.P.”(Unique Selling Proposition).

Perhaps no advertising term has been so indiscriminately and consistently (yes, I said CONSISTENTLY!) misused as U.S.P. or Unique Selling Proposition. Defined by Rosser Reeves, legendary Chairman of Ted Bates agency, in his 1961 seminal advertising book, Reality in Advertising, U.S.P. has become recognized worldwide as something that effective marketing communications must have. Unfortunately, most marketers, then and now, have only a very dim idea of what a U.S.P. really is and how to develop one.

“Father of the U.S.P.”

Reeves had developed the concept based on years and millions of dollars spent researching the effectiveness of Bates and competitive agencies’ advertisements. He effectively (and concisely) captured all that learning into what was the ideal selling idea, or what made marketing communication WORK.

Even in 1961 Reeves observed that U.S.P “is the most misused series of letters in advertising. Applied loosely and without understanding to slogans, headlines, visuals and more —in fact to most anything that advertising creators consider slightly different   from what they find in their competitors’ advertisements.”

U.S.P. — The Definition

What I hope to explain here, is that U.S.P. is a PRECISE term, and in Reeves words, “deserves a precise definition.” That definition has three parts, from which interestingly the acronym U.S.P. is derived. Imagine that!

PROPOSITION: Each communication must make a proposition to the customer. By “proposition” this means, buy this and you will get this specific benefit.

UNIQUE: The proposition must be one that competition cannot, does not or chooses not to offer. It can be a unique feature or benefit but, AND THIS IS IMPORTANT, it can be derived from the uniqueness of the brand itself. This latter consideration is especially relevant in today’s crowded and many times over-regulated advertising field, where many brands within a category essentially do the same thing. Many marketers give up and say, “There’s nothing unique about my offering, so I’ll just say what it does.” Remember, there is always the possibility of being unique, as long as the BRAND’s uniqueness is capitalized upon.

SELLING: The proposition must be capable of “selling” new customers to try a product or service, or convincing existing ones to remain loyal, even in the face of new competitive offers.

So you see, every brand CAN have a U.S.P., and by doing so can have more effective marketing. Unfortunately, most SME’s don’t ever really create one. These SME’s without a U.S.P. could be described in the words of Jay Abraham, a marketing consultant some describe as “the most expensive and successful marketing consultant on the planet”, as being …“only ‘me too’, rudderless, nondescript, unappealing businesses that feed solely upon the sheer momentum of the marketplace. There’s nothing unique; there’s nothing distinct. They promise no great value, benefit, or service—just ‘buy from us’ for no justifiable, rational reason.”

This is the first in a series of posts where I will comment on and attempt to explain some of the marketing communications, U.S.P.’s and Brand Essences currently in use by branded marketers here in Phnom Penh. Next post will be my view of the very crowded, and in my view undifferentiated branded coffee shop category. I will share my take on Starbucks, Cafe Amazon, Brown Coffee, Coffee Bean and Tea Leaf and Cost.

And after that, I will post about some marketers that I think are “doing it right.” Stay tuned.

 

 

How to Do Market Research–The Basics

Marketing research can give a business a picture of what kinds of new products and services may bring a profit. For products and services already available, marketing research can tell companies whether they are meeting their customers’ needs and expectations. By researching the answers to specific questions, small-business owners can learn whether they need to change their package design or tweak their delivery methods–and even whether they should consider offering additional services.

“Failure to do market research before you begin a business venture or during its operation is like driving a car from Texas to New York without a map or street signs,” says William Bill of Wealth Design Group LLC in Houston. “You have know which direction to travel and how fast to go. A good market research plan indicates where and who your customers are. It will also tell you when they are most likely and willing to purchase your goods or use your services.”

When you conduct marketing research, you can use the results either to create a business and marketing plan or to measure the success of your current plan. That’s why it’s important to ask the right questions, in the right way, of the right people. Research, done poorly, can steer a business in the wrong direction. Here are some market-research basics that can help get you started and some mistakes to avoid.

Types of Market Research
Primary Research: The goal of primary research is to gather data from analyzing current sales and the effectiveness of current practices. Primary research also takes competitors’ plans into account, giving you information about your competition.

Collecting primary research can include:

  • Interviews (either by telephone or face-to-face)
  • Surveys (online or by mail)
  • Questionnaires (online or by mail)
  • Focus groups gathering a sampling of potential clients or customers and getting their direct feedback

Some important questions might include:

  • What factors do you consider when purchasing this product or service?
  • What do you like or dislike about current products or services currently on the market?
  • What areas would you suggest for improvement?
  • What is the appropriate price for a product or service?

Secondary Research: The goal of secondary research is to analyze data that has already been published. With secondary data, you can identify competitors, establish benchmarks and identify target segments. Your segments are the people who fall into your targeted demographic–people who live a certain lifestyle, exhibit particular behavioral patterns or fall into a predetermined age group.

Collecting Data
No small business can succeed without understanding its customers, its products and services, and the market in general. Competition is often fierce, and operating without conducting research may give your competitors an advantage over you.

There are two categories of data collection: quantitative and qualitative. Quantitative methods employ mathematical analysis and require a large sample size. The results of this data shed light on statistically significant differences. One place to find quantitative results if you have a website is in your web analytics (available in Google’s suite of tools). This information can help you determine many things, such as where your leads are coming from, how long visitors are staying on your site and from which page they are exiting.

Qualitative methods help you develop and fine-tune your quantitative research methods. They can help business owners define problems and often use interview methods to learn about customers’ opinions, values and beliefs. With qualitative research, the sample size is usually small.

Many new business owners, often strapped for time and money, may take shortcuts that can later backfire. Here are three pitfalls to avoid.

Common Marketing Mistakes

  1. Using only secondary research. Relying on the published work of others doesn’t give you the full picture. It can be a great place to start, of course, but the information you get from secondary research can be outdated. You can miss out on other factors relevant to your business.
  2. Using only web resources. When you use common search engines to gather information, you get only data that are available to everyone and it may not be fully accurate. To perform deeper searches while staying within your budget, use the resources at your local library, college campus or small-business center.
  3. Surveying only the people you know. Small-business owners sometimes interview only family members and close colleagues when conducting research, but friends and family are often not the best survey subjects. To get the most useful and accurate information, you need to talk to real customers about their needs, wants and expectations.

Source: https://www.entrepreneur.com/article/217345