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.