Definition: Iinformation that comes directly from the source--that is, potential customers. You can compile this information yourself or hire someone else to gather it for you via surveys, focus groups and other methods. .

When conducting primary market research, you can gather two basic types of information: exploratory or specific. Exploratory research is open-ended, helps you define a specific problem, and usually involves detailed, unstructured interviews in which lengthy answers are solicited from a small group of respondents. Specific research, on the other hand, is precise in scope and is used to solve a problem that exploratory research has identified. Interviews are structured and formal in approach. Of the two, specific research is the more expensive. Figure 3.1 provides a sample cost analysis form for different research methods.

When conducting primary research using your own resources, first decide how you'll question your targeted group: by direct mail, telephone, or personal interviews. If you choose a direct-mail questionnaire, the following guidelines will increase your response rate:

  • Questions that are short and to the point;
  • A questionnaire that is addressed to specific individuals and is of interest to the respondent;
  • A questionnaire of no more than two pages;
  • A professionally-prepared cover letter that adequately explains why you're doing this questionnaire;
  • A postage-paid, self-addressed envelope to return the questionnaire in. Postage-paid envelopes are available from the post office;
  • An incentive, such as "10 percent off your next purchase," to complete the questionnaire.

Even following these guidelines, mail response is typically low. A return rate of 3 percent is typical; 5 percent is considered very good. Phone surveys are generally the most cost-effective. Some telephone survey guidelines include:

  • Have a script and memorize it-don't read it.
  • Confirm the name of the respondent at the beginning of the conversation.
  • Avoid pauses because a respondent's interest can quickly drop.
  • Ask if a follow-up call is possible in case you require additional information.

In addition to being cost-effective, speed is another advantage of telephone interviews. A rate of five or six interviews per hour is typical, but experienced interviewers may be able to conduct more. Phone interviews also can cover a wide geographic range relatively inexpensively. Phone costs can be reduced by taking advantage of less-expensive rates during certain hours.

One of the most effective forms of marketing research is the personal interview. They can be either of these types:

  • A group survey. Used mostly by big business, group interviews or focus groups are useful brainstorming tools for getting information on product ideas, buying preferences, and purchasing decisions among certain populations.
  • The in-depth interview. These one-on-one interviews are either focused or nondirective. Focused interviews are based on questions selected ahead of time, while nondirective interviews encourage respondents to address certain topics with minimal questioning.