Published October 2004

‘Demand’ insight drives
better ‘supply’ decisions

This article is not about supply chain management; rather, how marketing research can improve your company’s market position. When you bring the “demand” side of the marketing equation into the “supply” side of business decision making, you produce better outcomes.

It doesn’t matter what life stage your business or product is in, research is the genesis of strategy. Because marketing research is such a complex and critical marketing function, this is the first of a two-part series.

This series will outline a basic “how to” guide on properly planning, designing, collecting and analyzing a marketing research study. Part one covers planning and design.

Plan: The first step in conducting an accurate study is to analyze your business situation and marketing problem. The purpose of marketing research is to solve problems and answer key questions about how to best market your products and services.

After you’ve analyzed your situation and identified the data gaps, define the objectives of your research.

Example: If the problem is you are losing share to a key competitor, the objective could be stated, “Determine why we are losing market share by identifying how our customers perceive our products vs. those of brand ‘X.’”

It is important that your study remain focused on solving one problem or marketing situation at a time. Attempting to address more than one issue (or objective) may cause problems in the design and collection phases of your study.

Design: Guided by your research objective, design your study by considering data sources and methodology. First determine which of your marketing questions can be answered by secondary sources, e.g. your database or syndicated data (research you can purchase from aggregators or resellers, like Claritas).

The questions that can’t be answered through a secondary source are the ones that will constitute your survey. Short surveys produce the best results. In the example above, you’d query customers about their attitudes toward your products and those of brand “X.” Your questions should be sequenced in a way that won’t lead or bias the respondents’ answers.

There are many ways to glean customer insights: focus groups, telephone interviews, online, mail, packaging and point-of-sale surveys. Choose the method that makes the most sense based on your business situation, customer base and research objectives.

Finally, you’ll design your sample (identify respondents). The two fundamentals of sampling are size and segment. Your sample size should be large enough to deliver a high confidence level in the data, but not so large that the study becomes cost prohibitive. It is easy to find “sample calculators” online.

In terms of segment, be sure that your sample accurately represents the segment population you are researching, e.g. if 70 percent of your customers are middle-income women between 35 and 54, then 70 percent of your sample should statistically represent that profile.

Developing marketing strategy based on customers’ preferences and perceptions is always a good business decision.

Be sure to check out the November issue for part two of this series: collecting and analyzing your marketing research data.

Andrew Ballard, president of Marketing Solutions Inc. in Edmonds, develops brand leadership strategies for businesses and teaches strategic marketing through Edmonds Community College. He can be reached at 425-672-7218 or by e-mail to andrew@mktg-solutions.com.

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