Vanson Bourne White Paper: Market Research

MR: What is it?

Market Research;

What is it? 1-2What’s it for? 3What do you do with it and how do you do it? 4-6Which agency should I use? 7-10

Things to take into consideration when

choosing a Market Research company

white paper

The clue is in the name. This is an

examination or questioning of a defined

market, which is usually carried out by asking

carefully-constructed and replicable

questions of a representative sub-set of that

market (rather than everyone because that

would be a census which would be very

expensive, take too long and is unnecessary)

which gives us a perspective on the current,

past or future behaviour of the whole market.

It tests the whole market by researching the

responses, attitudes, understanding, of this

‘sample’ group. That’s market research.

01 | Vanson Bourne - Things to take into consideration when choosing a Market Research company

MR: What is it?

What it isn’t is telemarketing, where the client

organisation is making contact in order, more

or less directly, to sell a product or a service.

And haven’t we all received calls purporting

to be ‘doing some market research’ which

goes along the lines of:

• Caller: “Evening sir, I’m just doing some

research and I just like to ask you some very

quick questions. Can I take up a minute of

your time?”

• Me: “Sure”.

• Caller: “How many doors do you have in

your house?”

• Me: “Er, not sure, let me see, six bedrooms,

two bathrooms, living room, dining room,

kitchen, study and playroom. So that’ll be

13 doors. Oh and of course the front and

the back door, so that’ll be 15.”

• Caller: “15, thank you. A large number! And

how many windows do you have?”

• Me: “Er, each room has an average of two

windows so say 30 to 36.”

• Caller: “thank you, and do you have any

double glazing …..

You can see where such a call might be

heading, so at this point I suggest you

terminate the call as this isn’t market research,

it’s cold calling under the guise of MR.

Another key difference between the two is

that a properly conducted survey must start

with questions that ensure that you, the

interviewee, is the right type of person to be

interviewed. Without these the whole thing is

a waste of time, yours and the interviewer’s.

How so? Well, it may be that plenty of people

like you have already been interviewed,

meaning the research company has, as we

would say, ‘reached quota’ and therefore

doesn’t need to ask someone like you. Or you

might not be the type of person they want to

interview at all. But, if they don’t ask, they

don’t know. So, if you are not being asked

questions about you at the start of the

interview, be suspicious; what or who you are

is evidently not important, and this is not

market research.

The essence of a market research project

involves the agency or consultancy taking the

responses that have been gathered from the

correct people and then using an aggregate

of those responses to infer the view of the

entire market.

Here is another key difference between MR v

telemarketing. With the latter, the answers are

passed to the client with the respondents’

identity still attached, so the client can

continue the sales process with that person.

This is ‘attributable’ research which does have

a role to play in MR, but infrequently. Most of

the time, MR deals with non-attributable data,

ie where the respondent is anonymous and

his or her responses are confidential. And this

is a key reason that MR agencies exist, to act

as a conduit between the company wishing

to understand the market and those

individuals who are able, having the

appropriate knowledge and understanding,

to deliver a verdict. But as far as is possible,

this verdict has to be unbiased, considered

and appropriate. If the “research” exercise is

actually about sales lead generation, then

none of those qualities are likely to be

available. Hence the need for anonymity and

confidentiality.


MR: What’s it for?

There are many reasons to conduct market

research. Briefly, the more usual drivers are:

• In generic terms, to gather an

understanding of what’s happening right

now to your market. This understanding

needs to be objective, rational and specific

to your product or service.

• To understand what your market thinks of

your brand and what characteristics your

market would choose to use to describe

your company, your product or your

service.

• To examine how other organisations that

deliver a similar product or service are

doing, which could either mean in terms of

their market share or what the market

thinks of their specific product or service

compared with yours.

• What to do next? The research can be

devised to show up gaps in the market.

What is the market looking for? What are its

priorities? How important are new

developments for the market? What are the

appropriate price points for a new product

or service? Where would the market turn to

learn about or indeed acquire the product

or service?

• What about your customers? How does the

view of those who have actually bought

from you differ from those who haven’t?

How loyal is your customer? What are

factors in their decision making that most

influence whether they buy from you or

not? Similarly, who within the customer

makes the decisions? What does the

decision-making unit look like? How

satisfied or delighted are your customers?

• In addition, research can be used to create

the basis of analysis and comment on a

particular development or concern that the

market might be facing. Analysis based on

research findings can cause an issue to be

promoted up the market’s agenda. This

gives the commissioning company a

thought leadership platform from which

they can communicate knowledgeably,

with material that is relevant and valuable

to their target market.

As we see, there are a number of reasons, not

all mutually exclusive, why an organisation

might need to commission market research.


MR: How do you do it and what do you do with it?

Having gone through the process of

determining why you need to conduct

research, you then need a clear

understanding of what you’re going to do

with it once you have the results. But first, for

the research to have value and to ensure that

it meets its aims and objectives, the following

elements must be discussed:

• Which research methodology is to be

adopted? Why is that approach considered

the most appropriate?

- If this is quantitative research, with an

emphasis on numbers, then telephone

and/or online interviews are the two

most likely options for data collection.

Telephone interviewing might be

suggested if the respondent is difficult to

reach and/or if the universe (the number

of appropriately qualified people and

organisations) is small. The ‘sample’

would then need to be used carefully

and sparingly.

- If this is qualitative research, where the

emphasis is on gathering opinions and

attitudes in great detail, then either a

focus group or in-depth interview, either

by telephone or in person, approach is

customary.

• How many interviews are to be conducted?

What is the rationale used to determine this

number? This will vary depending on

whether it is a qualitative exercise, where

the project is looking at market indications

and depth analysis, or a quantitative project

where a robust number of interviews is

required to deliver a perspective on the

universe.

- In quantitative research, this is usually

based on the size of the universe and is

consistent with the make-up of the

market - you don’t simply interview

anybody who’s prepared to answer. For

example, if the information required was

to represent all UK-based organisations,

then more interviews are required with

the smallest (one man band)

organisations than the biggest, as they

make up some 77% of the UK’s business

population. But this can introduce a

complex sample frame (the marrying of

organisation size and sector to produce a

coherent distribution of interviews) and

in most research exercises, the research

agency may simply recommend a

minimum number within each cell of the

sample frame, usually around 30, which

offers a sufficient degree of robustness.

But beware, if the cell is broken up and a ‘

sub-set’ is being interviewed, then results

will only be ‘indicative’ and not

statistically sound. As you can probably

see, there is an art to this.



• Who are we going to interview? What role

or function, or skill set or knowledge or

position does the respondent need to have

in order for them to represent the market

we are examining and be qualified in the

specific topic of the research?

- Market research projects can define a

questionnaire or a discussion guide,

depending on the research

methodology, before determining who

would be best placed to answer the

questions. Alternatively, the project can

identify the type of respondent that

needs to be interviewed; whose

responses would address the project’s

overall objectives.

- Irrespective of the order of events,

ensuring the respondent is qualified to

answer the questions is key and

whoever’s doing it for you has to be able

explain how they go about meeting the

specification.

• The research instrument. Another key

ingredient in ensuring the research delivers

meaningful data from appropriately

qualified people is the questionnaire or

discussion guide. Creating a questionnaire

is both art and science. The core questions

might be obvious, but less so are how to

apply cross-checking questions, or how

to make sure the interviewee has a

meaningful path through the questionnaire

that delivers value, whichever set of

answers they provide. Crystallising the

research objectives into plain,

straightforward questions and engineering

a flexible questionnaire structure and

engaging the right interviewees in the right

organisations are the core skills of the

market research company. Whatever

analysis and commentary that flows from

the data collection process should be

regarded as suspect if these core skills are

not applied.



Assuming all these preliminaries are in place

and the project has been successfully carried

out, then you have to decide what to do with

the results. The purpose of the research will

determine the communication strategy for

the results as shown in the following diagram.

The diagram below explores the

multi-layered communications strategy that

could be adopted by the client organisation.

Given the precise reason for conducting the

assignment, the strategy to reveal and

explore the results will vary depending upon

the type of research. Indeed, many might

argue that we’ve been somewhat limited

in our view and that, in essence, each item

in the research type field could be

communicated, albeit in different formats

and styles, to all of the audience types.

For the research to resonate, have traction

and to be credible, then it must address all

of the issues we described earlier, ie who,

why, what, when and how.


Figure 1: Research is not just for Christmas, the multi-layered communications strategy

RESEARCH TYPE COMMUNICATIONS STRATEGY

BRAND ENGAGEMENT EMPLOYEES

MARKET METRICSMARKET

CUSTOMER RESPONSIVENESS

CUSTOMERS

CONTENT GENERATION

SUPLIERS & PARTNERS

EVENT AUDIENCE FEEDBACK

SHAREHOLDERS

THE CHANNEL

MR: Which agency do I use?

Market research is a service industry making it

difficult to define the elements that differenti-

ate one supplier from another. In choosing a

potential service partner, the usual rules

apply, ie the questions that need to be asked

are going to be similar, thus:

• How big are they?

• How long have they been in operation?

• Are they successful? How do you measure

success?

• Who do they work for?

• Are they well-known?

• What do their customers say about them?

• What do they deliver?

• What are their recommendations?

• Have they worked for any of my

competitors?

• Do they know my market and my

customers?

• How do they work?

• Where do they get their sample from?

• How many interviews do they recommend

and how did they reach that decision?

• What are their fees?

• How long will they take to conduct the

research?

• Where are they based?

We now examine each of these questions to

see how an appropriate organisation might

respond.

• How big are they? - Size isn’t everything but it’s probably

wise to have a view as to how many

employees the agency has, as it gives

you a reasonable indication of their

revenue levels, their capacity, the

importance they’ll attach to you as a

customer, their skill set and the likelihood

that they’ll be able to complete the

project.

• How long have they been in operation? - Another useful indicator of experience,

track record and success levels. But

beware - having been in existence a long

time is no guarantee that the agency

knows what it’s doing. Nor is it the case

that freshly-minted start-ups are likely to

be inexperienced. As with any service

solution, you are buying the people.

• Are they successful? - By what terms do we want to measure

success in this instance? Is it profit levels

for example or revenue per head ratios?

Both of these tell us something about the

supplier but on their own don’t say a

great deal. For example, ‘success’ might

be measured by the number of

customers they have or how the market

regards the brand. A more appropriate

measure of success, though, could be the

volume of repeat business that they have

which if this was high could prove that

their current customers like what they do.



• Who do they work for? - Take a look at their client list. Are these

organisations that you’d like to be

associated with? Are they competitors or

are they partners? Are they all large

corporations that everyone has heard of

or is there a mix of known and unknown

brands? If the client roster consists solely

of competitive organisations then you

can be assured that your chosen agency

knows your industry. On the other hand,

they also know your competitors which

could represent a competitive threat. As

is usual with these things, a subtle mix of

large and small, of competitors and

non-competitors, of long-standing

customers and new customers is an

appropriate mix to look out for.

• Are they well-known? - If they are a well-known firm, then their

reputation will precede them. This can be

useful when you want to offer some of

your research results to the outside

world, ie as marketing content or sales

collateral. Be aware, though, of the big

MR brands because they may well decree

that their brand has primacy of

placement over yours. On the other hand,

the agency with very limited marketing

reach will not offer that instant credibility

that a well-known organisation delivers.

• What do their customers say about them? - We’ve talked about the client list as a

gauge of brand association. You might

also examine any information that their

clients have made publically available to

determine a) what they did b) what

relationship it has, if any, with the work

that you require. Is it similar in terms of

scope or subject, does it offer comfort

that they know your business? But try to

look beyond case study material and

investigate beneath the outward veneer.

• What do they deliver? - Another problem with describing a

service proposition is that it can be quite

difficult to say what you actually do in a

way that gives the reader enough detail.

Can you see evidence that they deliver

the sort of inputs you need, ideally to

organisations that are similar to yours?

This capability insurance is vital.

• What are their recommendations? - Are you looking for advice? This could be

limited to some intelligence around the

data that points out what the numbers

might mean. Or it could be as detailed as

offering a full analysis of the research

results ensuring that the data can be

assimilated quickly and efficiently. What

does the agency offer?



• Have they worked for any of my competitors? - This of course could be a good thing or it

could be a bad thing. If they have worked

for your competition indicates that they

know your market but it could mean that

they stay closer to your competition than

they get to you. And if they’re no longer

working with your competition, what

happened? Getting some detail on these

relationships should provide a guide to

the agency’s capabilities and experience.

• Do they know my market and my customers? - This is a key question. Market research is a

skill that can be applied to any industry or

profession but when briefing an agency

you don’t want to spend too much time

and effort explaining your market. If you

are looking to test an agency, drop a few

acronyms into the conversation and see if

there’s a flicker of understanding.

• How do they work? - This paper has explored various means of

answering questions. How does the

agency conduct its projects? If they carry

out online research, how do they find

their sample? How long would they

typically take to do a project like the one

you are thinking about? Who will actually

be doing the work? How experienced are

they? What processes does the project

team have in place to ensure the

assignment will be on time, reaching

appropriately-qualified people within

appropriately-qualified organisations, and

with an ability to offer analysis and

recommendations?

• Where do they get their sample from? - We’ve touched on this already but it is

one of the key elements to conducting a

successful project. If the people who are

being asked the questions aren’t the

‘correct’ respondent types then the

research is not only worthless, it could

easily lead to erroneous conclusions and

misdirection. Time must be spent

understanding how they select qualified

people, how they’re incentivised to take

part, how much sample the organisation

needs in order to fulfil the project

because not everyone they contact will

either pass the ‘tests’ (what tests?) or be

willing to be interviewed. So what ratios

do they typically work with?




• How many interviews do they recommend and why? - This is market research not a census, so

the number of interviews and how they

are allocated, if this is a quantitative

exercise, need to be carefully thought

out. This is the ‘sample frame’ – the actual

population of organisations in each

sub-group under study needs to be

known so the agency can to suggest the

correct number of interviews in each. As

a rule of thumb, we usually suggest a

minimum of around 30 interviews per

cell when conducting B2B research,

although this can vary depending upon

the population. But the phrase “per cell”

needs to be carefully understood.

Interviews with large organisations, for

example, within a given market could be

termed a universe and 30 interviews

might be enough. But if sub-analysis is

required, say for example by sector or size

category within “large” organisations ,

then each of those sub groups or cells

needs a minimum number of interviews,

to facilitate robust analysis. Similarly, if

there are any ‘conditional’ questions, ie

where respondents see the question

based on an answer they gave earlier,

then again each of those sub-groups

needs a minimum number, let’s say

30 interviews. So, in summary it’s a

complicated business - you don’t want

to be blinded with science but you do

want to feel confident that the research

company is recommending the right

number of interviews, structured in the

best way to give you the multi-level

views of the market that you want.

• What are their fees? - The price is always going to be an issue

and will vary hugely depending on how

many interviews are being suggested,

who is being interviewed, the interview

method, what deliverables you want, and

any geographic or sector requirements.

Getting as much detail as possible on the

elements that make up the fee is very

important if the right decision is to be

made as to who is offering the best price,

should that be a major decision-making

factor.

• How long will they take to conduct the research? - It isn’t so much how long they would

take but rather will they keep to their

word. Timing isn’t always a key factor but

you need to be confident that your

agency knows what it’s doing and that

you can rely on them to deliver when

they say they will.

• Where are they based? - Location isn’t a big concern, or at least it

shouldn’t be. Keeping in touch via email

and telephone is entirely appropriate. In

addition, web-conferencing gives you

and your agency the opportunity to talk

to each other and share documents in a

virtual meeting. But there’s nothing to

beat a face-to-face discussion about

project scope and design at the front and

about project deliverables at the end.

white paper


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Berkshire

RG20 9EQ

Telephone:01635 550449

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Date post:	07-Nov-2014
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Vanson Bourne White Paper: Market Research

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