It is the marketing managers’ job to make their market research cost-effective. The costs and benefits of market research involve a complex balancing of factors and require particular analytical and evaluative skills.
Well, market research has never been for free. In fact, carrying out primary market research can be extremely expensive and time consuming. Gathering secondary data and information requires labor and time. While purchasing ready market research reports can cost thousands of dollars.
The purpose of market research should reduce the number of bad product decisions and as a consequence, minimize the risk of failure. It should increase company profits and help pinpoints strategies for increasing the reputation of the firm. Without the market research, the less a firm does, the greater the risk involved as the less it will know about its market.
International business managers know how important market research is as global spending on market research increase every year.
How to make your market research cost-effective?
How to make market research more cost-effective is always an important consideration. A cost-effective market research means that the cost of research should be less than the gain from that research.
Here are two simple ideas that might lower the cost of conducting market research at your business organization.
1. Conduct market research online.
The information technologies of the last two decades made it easier to reach out to a wide range of current and potential costumers than more traditional methods of surveying people on the street or visiting them at their homes for personal interviews.
Internet and smartphones have made it easier to contact a very wide range of potential consumers than the older methods of street surveys or home visits to interview people directly.
Thanks to the Internet and smartphone, not only can the survey / questionnaire be sent out, filled in and returned over online, but businesses can also access the vast quantity of data and information that electronic methods offer them. Being able to answer the survey / questionnaire questions conveniently increases the chance that they will respond to a market research request. Smartphones also allow using prerecorded messages and questions to which people respond by pressing numbers on the screen keypad. The results can then be analyzed electronically.
The beauty of online market research is that even small-sized businesses can contact large numbers of respondents in a short-time period.
(!) This form of targeted marketing is cost-effective because firms which are conducting research projects can gather at the low cost using electronic means the data and information which their marketing strategies.
2. Use data and information from loyalty programs.
This is especially applicable to retailers such as supermarkets, coffee shops or fast-food restaurant that offer loyalty programs to their customers. The business will have a very clear and detailed picture of what each customer is like when it comes to shopping.
The company will know exactly the total number and type of goods bought by each consumer, when, where and how often the purchases were made, as well as age and gender of their customers. Then, retailers can target each consumer with advertisements and special offers about products to increase sales.
(!) This form of targeted marketing is cost-effective because money is not wasted on promoting products to people who do belong to the target market, will not buy the product at all or not respond to a particular type of promotion.
Although some forms of market research are becoming cheaper and cheaper, after the research has been gathered, data analyzed and results used in management decisions. The truth is that well-designed and focused market research will always pay for itself resulting in higher sales and profits in the long-term.
However, there are still many unanswered questions.
To what extent can the firm create a direct link between a particular piece of research and the success or failure of its marketing operations?
To what extent can the firm trust its findings and reduce the problems of bias?
It is often cheaper to use data produced by other organizations, but how reliable is this?
