Primary Market Research

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 twobasic types of information: exploratory or specific. Exploratoryresearch is open-ended, helps you define a specific problem, andusually involves detailed, unstructured interviews in which lengthyanswers are solicited from a small group of respondents. Specificresearch, on the other hand, is precise in scope and is used tosolve 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 asample cost analysis form for different research methods.

When conducting primary research using your own resources, firstdecide how you’ll question your targeted group: by direct mail,telephone, or personal interviews. If you choose a direct-mailquestionnaire, the following guidelines will increase your responserate:

Questions that are short and to the point;
A questionnaire that is addressed to specific individuals andis of interest to the respondent;
A questionnaire of no more than two pages;
A professionally-prepared cover letter that adequately explainswhy you’re doing this questionnaire;
A postage-paid, self-addressed envelope to return thequestionnaire in. Postage-paid envelopes are available from thepost office;
An incentive, such as “10 percent off your next purchase,” tocomplete the questionnaire.

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

Have a script and memorize it-don’t read it.
Confirm the name of the respondent at the beginning of theconversation.
Avoid pauses because a respondent’s interest can quicklydrop.
Ask if a follow-up call is possible in case you requireadditional information.

In addition to being cost-effective, speed is another advantageof telephone interviews. A rate of five or six interviews per houris typical, but experienced interviewers may be able to conductmore. Phone interviews also can cover a wide geographic rangerelatively inexpensively. Phone costs can be reduced by takingadvantage of less-expensive rates during certain hours.

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

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