What is the most important step to a successful market research?
The answer is to define what is the problem that need to be answered by a research, because all aspects of planning and execution of the research will flow from this.
For this reason, when we are planning to do a market research, either we will do it by our internal resource (if we have the capability to do so) or with the help of a research agency, the first step that must be done is to prepare a document called a Market Research Brief.
The Market Research Brief is a guide for all parties, both the researcher and analyst as well as the users of a market research.
Why is the market research brief called as the guideline?
The answer is because the market research brief clearly describes the important points regarding the market research that will be carried out. In general, this research brief covers all the aspects which can be abbreviated as 4W and 1H, namely:
- WHY are you likely need to conduct a market research?
This is the certain background that lead you to conduct a market research. As explained in the previous article entitled A Simplified Market Research Method, we need to know the reason why we need to conduct a market research? Is it to explore something that we do not know? Or Is it to evaluate the performance of our product or services according to certain criteria or parameter and at the same time also benchmarked to other products or competitors.
The other reason that could lead us to conduct a market research is because we have business decisions need to make that prompted to do the research. For example, we have several product design or prototype, and we want to know which one is the most preferred product design by the consumers or customers, and the same time we also want to know whether the product design is perceived by the customers as better or not compare to the available products in the market. So, the purpose of the research is whether we shall make the product or not based on the result of research.
So, in general, the WHY is the reasons which lead us to conduct the research, and usually it is related to the background or market situation and/or the business decision we need to make in regards to our product development.
- WHAT information we expect to get from the market research?
This would be the objective(s) of the research that we are going to conduct. So, after we know and realize about the Why we need to conduct the research as described earlier, then we need to list down what information that we expect to get from the market research itself.
For example, we want to develop a new skin care of cosmetic product which is a combined foundation with a moisturizer as 2 in 1. The reason why we need to conduct the research is because we want to know whether the product concept is preferred by the consumers or not and they perceive it as something unique or different compare to the existing products. The most important is to check whether they are aspiring this kind of product to be launched or not.
So, to answer that questions, we need to get the information from the research. This will be the objective(s) of the research.
Below is the example of the information that we expect to get from the market research:
- What is the usage of foundation and moisturizer among the consumers (the frequency of usage and application of foundation as well as moisturizer in their daily routine)?
- What are the brands that they frequently use?
- What are the factors that influence them to select those brands?
- What is the importance of each factors?
- What is the good and weakness of the current brands that they currently use?
- What is the perception of the consumers if there is a new product which combine the foundation and moisturizer as 2 in 1? Will they like it?
- What is the price that the consumers will expect for this kind of product?
- What is the general comment of the consumers towards this kind of product?
It is especially important to review this objective carefully, whether we have covered all information that we expect from the research that we are going to conduct. This objective will be the source of input for the questionnaire’s development. So, the researcher will refer to this objective when they design the questionnaire.
- WHAT are the criteria to the make decision?
As described earlier, one of the reasons that could lead us to conduct a market research is a business decision that we need to make. So, in accordance with this, we require to set criteria or condition that we will use as reference in making the decision. These criteria or condition is called the action standard.
The example of the action standard as follows:
- We will launch the product if 60% of respondents are willing to buy this new product
- No gross negative (maximum 20%) about the new product
- We will develop the new product (2 in 1 foundation and moisturizer) if 75% of respondents are considering changing the usage of the current products by this new product
Gross negative is something important to consider. As an illustration, if the score is using 5 point of scale; (5 strongly agree, 4 agree, 3 somewhat agree, 2 disagree, 1 strongly disagree), the combined of total number of answers for the 1 and 2 scores from all respondents is the gross negative.
- WHO are the respondents?
We need to define clearly and select carefully who are the respondents or audiences for our market research. Therefore, we need to have certain criteria about the respondent. They should be the target customers or target consumers of our products/
Below is the example if we will conduct a market research for skin care cosmetic product:
- Respondent should be the routine daily user of foundation and moisturizer
- Age between 25-35-year-old (depend on the target range of age that we have)
- B and C socio economic class (usually related to the buying power)
- User of brand X, Y, Z, etc. (this kind criteria is more precise)
This respondent’s criteria are crucial to ensure that we get the qualified result of the market research that we conduct.
- WHEN is the result needed?
This is about the timeline. I wrote an article entitled 5 Important Times When We Need Market Research which describe the common timeframe in accordance with the product life cycle when we need market research.
The timeline should be defined clearly, so that the researcher can come up with the right proposal for the market research. It will involve the strategy on the resource allocation i.e. number of field team (interviewers), data input and data processing, analysts, etc., to meet the timeline.
- HOW much budget that we can allocate for the research? and HOW are we going to execute it? Is it by internal resource or by external resource (research agency)?
It is especially important to check on how much budget that we can allocate for the market research. As mentioned earlier, the research brief is used as reference to design the market research that we are going to conduct. This information will be taken as reference for the researcher in designing the market research itself.
There are certain factors which could affect the cost of the market research:
- Number of respondents involved. The researcher will define the optimum number of respondents according to the statistic and sampling methodology.
- The coverage area i.e. city, province, region. We need to check what is the potential area need to cover.
- The type of respondents. In common practice, we will provide a kind of token to the respondents as the appreciation to them for giving their time to participate in the research. In relevant to this, the type of respondents somewhat will also impact to the budget required.
- The data collection technique applied for the research. In the current technology development, we have new options to collect the data thru online applications which could give the opportunity for us to expand the coverage as well as to optimize the cost. However, in certain condition the face to face interaction is still considered as the best way to collect the responds from the respondents i.e. focus group discussion, in-depth interview, because these techniques will need to capture the spontaneous responds and answers of the respondents including the expressions and gestures of the respondents.
- The scope of the research itself. This is rationale factor, because the more aspects need to cover in a research will impact the resources and time required. Therefore, the scope needs to be carefully reviewed. Sometimes, we need to make prioritization on the scopes, and it can optimize the resources, the time and at the end it will rationally optimize the budget.
- The resources to execute the research. In some company, they have internal resource market research team that will conduct and execute a market research project. This set up will potentially optimize the cost, especially if the number of market research projects carried out are quite many. In other company, they will assign a market research project to third party or market research agency which potentially require higher cost but again it’s depended on the condition of the company and the business.
- The market research brief is an important reference to guide all parties, both the researcher and analyst as well as the users of a market research.
- The market research brief should clearly describe the important points regarding the market research that will be carried out. In general, this research brief covers all the aspects which can be abbreviated as 4W (Why, What, Who, When) and 1H (How) and this is called the component of a research brief which is shown by the scheme as below.
Hopefully, this article can give you brief explanation about the research brief and how to formulate it to get a successful market research for your business.