Marketing Research in Practice

Most of the topics I have written about discuss the concepts of marketing research in theory. Today, I want to give you an overview of how marketing research works in practice. Marketing research from a practical standpoint should be discussed periodically because the realities of business are constantly changing and the ideal approach to research and the feasible approach can be very far apart.

Recently, I submitted a bid to a prospective client, who was looking to conduct a survey from a population that was difficult to reach. My bid came up higher than was expected. The department who was to execute the findings of this survey was on a tight budget. Yet, I had to explain the largest cost driver was hiring a marketing research firm to provide the sample. One faction within the company wanted to move ahead at the price I quoted; another wanted to look for ways to reduce the scope of the study and hence the cost. The tradeoff between cost and scope is often the first issue that emerges in the practice of marketing research.

Much of the practice of marketing research parallels what economists have long referred to as “the basic economic problem:” limited resources against unlimited wants. Thanks to the push for company departments to work cross-functionally, there have never been more stakeholders in the outcome of marketing research, with each function having its own agenda from the outcomes of the research. The scope of the study can expand greatly because of the many stakeholders involved; yet the time and money available for the study are often finite.

Another issue that comes up is the selection of the marketing research vendor. Ideally, a company should retain a vendor who is strong in the type of research methodology that needs to be done. In reality, however, this isn’t always possible. Many marketers don’t deal enough with marketing research vendors in order to know their areas of expertise; many believe that every vendor is the same. That’s hardly the case. Before I started Analysights, I worked for a membership association. The association had conducted an employee satisfaction survey and retained a firm that had conducted several. As part of the project, the employee research firm would compare the ratings to those of other companies’ employees who took a similar survey. However, most of the employers who called on this firm to conduct surveys were financial institutions – banks in particular – and their ratings were not comparable to those of the association. As a result, the peer comparison was useless.

Moreover, picking a vendor who is well-versed in a particular methodology may not be possible because they do it so well, that they charge a premium for the service. Hence, clients are often required to develop second-best solutions.

There are many other political issues that come up in the practice of marketing research, too numerous to list here. The key to remember is that marketing research provides information, and information provides power. The department with control of the information has great power in the organization, which results in less than ideal marketing research outcomes.

To ensure that your marketing research outcomes come as close to ideal, it is necessary to take a series of proactive steps. First, get all the stakeholders together. Without concern for money and time, the stakeholders as a group should determine the objectives of the study. Once the objectives are set, the group needs to think through the information they need for those objectives. Collectively, they should distinguish between the “need to know” and the “nice to know,” information and first go with the former. Generally, about 20% of the findings you generate will provide nearly 80% of the actionable information you need. It’s always best to start with a study design whose results provide the greatest amount of relevant, actionable information at the smallest scope possible.

Once the stakeholders are on board for the objectives and the information they must obtain for the objectives, then there should be some agreement on the tradeoffs between the cost of executing the research, the sophistication of the approach, and the data to be collected. Then timeframe and money should be considered. Once the tradeoffs have been agreed to, the study scope can be adjusted to meet the time allotted for the study and the budget.

Marketing research, in theory, focuses on the approaches and tools for doing marketing research. In practice, however, the marketing research encompasses much more: office politics and culture; time and budget constraints; dealing with organizational power and conflict; and identifying the appropriate political and resource balance for conducting the study.

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