Market survey is a valuable tool to help minimize risks and increase the probability of success. However, that doesn’t mean it is a sure-shot way to eliminate risk and guarantee complete success. You should undertake market assessment with a survey before you finalize marketing plans for your product or service. This chapter aims to explain what a market survey is and how to conduct it.
Markets are changing rapidly, becoming complex and competitive. It is difficult to keep pace with the rapidly changing demand and supply patterns as an entrepreneur is unable to respond quickly to a new environment. He needs better market understanding and a market survey puts him in contact with the market. A systematic use of this tool can reduce risks in decision-making.
WHAT IS A MARKET SURVEY?
A market survey is an objective and systematic collection, recording, analysis and interpretation of data about existing or potential markets for a product/service. This definition will be better understood by looking at the objectives of a market survey. During a market survey, one needs to focus on:
# Size of the market and the anticipated market share in terms of volume and value
# Pattern of demand—seasonal or fluctuating in time (in a month, day, etc)
# Market structure
# Buying habits and motives of buyers#Unique selling proposition of certain products/services
#Past and present trends affecting the selected product or similar productPROCESS OF CONDUCTING A MARKET SURVEY
A systematic 5-point process is involved in a market survey:
1. Defining objectives and specific information needed:
#Identifying source to obtain information
# Assessing time and cost for the study
#Working methodology and action plan2. Selecting a sample size by determining whom to contact and when
3. Preparing questionnaires for the survey
4. Collecting data and analysing it
5. Preparing a report, based on analysed data
PRIMARY AND SECONDARY SOURCES OF INFORMATION
Conducting a market survey does not always mean contacting people directly. There may be information in the form of reports, published material or documents of trade/industry associations. Data may be collected from two sources:
# Primary data sources: Information coming straight from those in the specified market, e.g. in the toy market, information obtained from toy manufacturers and traders.
#Secondary data sources: Data existing in reports or in a published form and may not have been collected for specific purpose. Such information can also be had from census office, banks, traders and manufacturers’ association or published anywhere.SCHEDULE FOR MARKET SURVEY
A market survey is not restricted to collecting information on the market for a product, but also about marketing infrastructure and existing market conditions. Designing a market survey schedule could fetch a lot of data. Questions may be designed on these areas:
#Existence of competitors, their products and marketing strategies
#Information on all consumer groups
# Information on competing products/ similar products
#Attitude of existing/potential consumers, including buying preferences,behaviour etc.
MARKET RESEARCH: 10 TIPS TO BE MORE EFFECTIVE
1. Clearly identify the issue/problem that needs to be investigated. See
if any published/secondary sources of information are available for
this problem.
2. Based on existing information, check if the problem can be definedor narrowed down. Further, with this as your basis, write down“terms of reference” for any subsequent study.MARKET RESEARCH: 10 TIPS TO BE MORE EFFECTIVE
1. Clearly identify the issue/problem that needs to be investigated. See
if any published/secondary sources of information are available for
this problem.
3. Try to look at the problems from different angles:
.. your own point of view as producer or seller
.. customers/consumers’ viewpoint as buyer and end users of products/services
.. competitors’ viewpoint for they may have addressed similar problems
4. Try to remain objective throughout the market research process and
check impulses/gut feeling from totally influencing the research.
5. Prepare schedule in as simple and clear a form as possible.
6. Maintain a tight control on the subject. If other subjects surface during
the research, give them the attention they deserve.
7. Complete the research promptly and maintain confidentiality lest the
competitors hear of it and forge ahead in the market.
8. Be prepared to take necessary action, which the research identifies.
9. Use the research immediately for the good of the enterprise.
10. Review all market research exercise and processes—the lessons learnt and areas to improve next time.
MODEL QUESTIONNAIRE FOR MARKET SURVEY
For Market Potential Collect data about sources of market information like consumers, suppliers and manufacturers.
A. Consumers
.. What is their annual consumption and requirement?
.. What is their present source of supply?
.. What is the customer’s brand loyalty and preferences about price, quality, payment terms, etc?
.. Are they satisfied with the present product and supply?
.. What is their purchasing criteria and purchasing power?
.. What is the consumption pattern? (basis to calculate their requirements)
.. What could be the future consumption pattern, in quantity and quality due to technological changes, etc?
.. What is the size of the average order, specifications and time and frequency of their placement?
.. Will any government institutions/departments or any company/industry buy the products? Is it possible to establish linkages with them, and how?
.. What is the life of your potential buyer?
.. Their age group, sex?
.. What geographical area they live in? Urban, village and which part of the country?
B. Suppliers (Traders)
.. Who are the principal traders in the item, their range of products and business terms/commissions, etc?
.. What are the possibility to trade with them and on what business terms?
.. What is the normal stock level maintained and problems in stocking?
.. What are future predictions on business conditions?
C. Manufacturers and Competitors
.. What are their products range, installed capacity, selling price?
.. What are their normal business terms about payment, price, etc?
.. What are their salient features, like technical skill, finance, other resources, etc.?
.. What are their strengths and weaknesses? (Try to do their SWOT analysis)
.. Where do they get information regarding market and consumer profiles from? For Information on Raw Materials
..Who are the major manufacturers/suppliers?
..What is the time required to get raw material after order placement? Supply terms (tax structure, price, packing, payment, etc)? Cost of transportation?
.. What is the standard or minimum order quantity?
..Is raw material freely available or is there a quota system?
..Will any decision/policy affect its availability or price?
For Information on Machinery and Equipment
1.Who are the manufacturers/suppliers
2. What capacity, specifications and brands are available in market?
3. What is the price of the machine? (Consider all costs—taxes, transport, accessories, etc.)
4. Which electrical equipments, like motors, starters, switches, are needed?
5. What performance guarantees/warranties are given? Is the supplier/ manufacturer reputed and reliable?
6. What is the normal repair/maintenance cost per year?
7. What spare parts would be frequently required?
8. What quality and maximum output (production) a machine can give?
9.Does the supplier train you/staff to acquire skills to operate machinery?
What is MARKET RESEARCH?
Market Research is a systematic, objective collection and analysis of data about a particular target market, competition, and/or environment. It always incorporates some form of data collection whether it be secondary research (often referred to as desk research) or primary market research which is collected direct from a respondent. The purpose of any market research project is to achieve an increased understanding of the subject matter. With markets throughout the world becoming increasingly more competitive, market research is now on the agenda of many organisations, whether they be large or small.
Market Research Is either quantitative, qualitative, or a combination of both. Qualitative and quantitative market research methods each provide different insights into customer behaviour. Normally, research results are more useful when the two methods are combined.
Qualitative Market Research
Qualitative market research provides an understanding of how or why things are as they are. For example, a Market Researcher may stop a consumer who has purchased a particular type of bread and ask him or her why that type of bread was chosen. Unlike quantitative research there are no fixed set of questions but, instead, a topic guide (or discussion guide) is used to explore various issues in-depth. The discussion between the interviewer (or moderator) and the respondent is largely determined by the respondents' own thoughts and feelings.
There are various types of qualitative market research methodologies. Research of this sort is mostly done face-to-face. One of the best-known techniques is the market research group discussion (or focus group). These are usually made up of 6 to 8 targeted respondents, a research moderator whose role is to ask the required questions, draw out answers, and encourage discussion, and an observation area usually behind one way mirrors, and video and/or audio taping facilities.
There are various types of qualitative market research methodologies. Research of this sort is mostly done face-to-face. One of the best-known techniques is the market research group discussion (or focus group). These are usually made up of 6 to 8 targeted respondents, a research moderator whose role is to ask the required questions, draw out answers, and encourage discussion, and an observation area usually behind one way mirrors, and video and/or audio taping facilities.
In addition, qualitative market research can also be conducted on a ‘one on one’ basis i.e. an in-depth market research interview with a trained executive interviewer and one respondent, a paired depth (two respondents), a triad (three respondents) and a mini group discussion (4-5 respondents).
The various types of qualitative market research methodologies are summarised below:
- Market Research Depth Interviews
a single respondent is interviewed based on various themes and topics (can be conducted either face to face or via the phone).
- Market Research Paired Depths
the same as a depth interview but there are two respondents. Particularly useful when ideas need to be 'bounced off' one another
- Triads
conducted with three respondents.
- Market Research Mini-Groups
contain 4-5 respondents.
- Focus Groups or Group Discussions
normally contain 8 respondents. With groups you benefit from the interaction between the different personalities.
- Market Research Observation
observing a respondent in their 'natural' environment.
- Workshops
to elicit new ideas and to evaluate ideas
Quantitative Market Research
Quantitative market research is numerically oriented, requires significant attention to the measurement of market phenomena and often involves statistical analysis. For example, a bank might ask its customers to rate its overall service as either excellent, good, poor or very poor. This will provide quantitative information that can be analysed statistically. The main rule with quantitative market research is that every respondent is asked the same series of questions. The approach is very structured and normally involves large numbers of interviews/questionnaires.
Perhaps the most common quantitative technique is the ‘market research survey’. These are basically projects that involve the collection of data from multiple cases – such as consumers or a set of products. Quantitative market research surveys can be conducted by using post (self-completion), face-to-face (in-street or in-home), telephone, email or web techniques. The questionnaire is one of the more common tools for collecting data from a survey, but it is only one of a wide ranging set of data collection aids.
The various types of quantitative market research methodologies are summarised below:
- Face-to-Face Interviewing
either in the street or, for more complex projects, in people's homes.
- Telephone Interviewing
a quick and cost effective way of achieving data.
- Postal and Self-Completion Market Research
cheap but takes a relatively long time to collect data.
- Omnibus Market Research Surveys
useful when only a few questions need to be asked. Questions are attached to other larger surveys. Data is obtained at a low cost.
