Intelligent business decisions are based on good information. Good business information is the result of market research. Unfortunately, market research strikes fear in the hearts of many business people but it is a crucial activity that involves surveys and statistics, is expensive, and has benefits that are intangible. Managers who take advantage of market research will be better prepared to guide their companies to larger profit margins and fewer losses.
There are two main areas of research: primary and secondary research. To obtain the information about a product or service, primary research is performed. Primary research is concerned with the design and implementation of original research; that is, data collected from the source. The advantage of doing primary research is that information can be obtained on a specific question or problem, not information that merely applies to an industry or type of business in general. (Perreault & McCarthy, 1999).
Primary research involves information collection techniques such as questionnaires, telephone interviews, and focus groups. Primary data is research that is done personally or someone else has been paid to do it, plus it is collected specifically for the purpose at hand. The benefit is that it is customized for a company. However, primary research is time-consuming and expensive. .
It is not enough to know the answers to what, where, when, and how questions about the business at hand. It is also needed to know why people buy a particular product and service. Budget at least a minimal amount of time and money for research, especially if it is a new business or the enterprise is branching out into a new direction. .
One example of primary research is field study. Field study is where testing is done in the "real world," often by test marketing the product in a few locations to see whether consumers will buy it. Determine the research needs and objectives.