Video Transcript: Market Research

welcome to this module of marketing. 201, in this particular module, we're going  to talk about something that is actually a very deep subject, called marketing  research. And marketing research is a valuable skill to have, whether you are  working for a nonprofit, for a church ministry, or even a for profit business. We'll  talk about marketing research, what kind of data you need to look for, why you  need to look for it, and some of the different places you can go to retrieve the  information that you're looking for. What is the definition of marketing research.  Marketing research is actually the systematic and objective identification,  collection, analysis, dissemination and the use of appropriate information for the  purpose of improving decision making that's related to different problems and  different opportunities related to marketing of your services, of your products, of  your skills, of your ministry, whatever the case might be. So that's what  marketing research is. It's just really a process that you go through to collect  information, the appropriate information, reliable, authentic information that  actually is valid numbers. So you want to make sure that you don't use bad data. Here's a little bit of a diagram about how the market research paradigm is all laid out. You start at the top by identifying what information is it that you need to  have for your project, and then you go about the process of collecting that  information. And in this particular day and age, there's an immense amount of  data that's available online that you can use to collect this data, get your  information from the next thing you're going to do the third step is go through the process of analyzing this data, of crunching the numbers, so to speak. One of  the things that's always puzzled me about marketing is how people always sort  of have this impression that marketing is one of the Black Arts. There's really not a whole lot of art to it at all. It's very analytical. It can be very numbers oriented,  and this analysis process that you would go through is proof of that, and then  you're going to go through a fourth step in the process called dissemination. In  other words, who are your stakeholders in your organization that need to know  the information that you are looking up? Is it the people who are doing product  development? Is it the director of your agency, the senior leadership team at  your church who needs to know this stuff, and this is you need to be able to get  that information dispersed out to them. And then the final step is using that  information, making sure it's valid, like I said, and using that information to make appropriate decisions. Marketing research specifies the information that's  necessary to address all of those different issues that we're just talking about  manages, it manages and implements the data collection process. In other  words, there's sort of a defined process that you'll go through, and then you'll  analyze the results, communicate the findings and their implications. Basically  what we just were talking about on the diagram that we had immediately prior to  the slide. There's different kinds of classifications of market research, Problem  identification, and that is research that's undertaken to help identify problems  which aren't necessarily apparent or appropriate on the surface, but yet they 

kind of exist, or they're likely to kind of pop up at some point in the future. In  other words, you know, they just kind of come out, things that come out of  nowhere. This is what you're looking for, and some of the examples of that might be market potential for a particular service or a product. Researching potential  market share of a new product or of competitors who may have a competitive  product. What kind of market share do they have? Images, in other words,  people's perception of a product or of a business, market characteristics, sales  analysis, forecasting, trends, research, all of that would fall under problem  identification research classification. The second class here is problem solving.  Research. In other words, you're taking undertaking research to help solve a  specific marketing problem. And in that particular example, we would be talking  about customer or audience segmentation. We're talking about product or  pricing problems, promotion problems, and even the. Research about  distribution and distribution, I'm talking about, say, different channels of selling  your product or your services through wholesalers or distributors or online  directly to clients or customers. So that's what we're talking about with  distribution research. So okay, so here's a little bit more, a nice diagram that  illustrates how this classification of marketing research falls out. We got the two  different legs there. Problem identification. The right right leg is the problem  solving research problem identification, we look at doing market potential, who  has market share for that particular product. In other words, who are the players  in that business that exist image research we're talking about doing, who's got a  good perception out there? Are there opportunities based on people who are  doing a poor job of fulfilling orders or serving that particular market, market  characteristics research, in other words, what sort of product opportunities exist, what part of this market is not being tapped by the product opportunity that you  might be researching, forecasting. Research, what sort of sales forecasting  would you predict out for the next year? For example, business trends. What are the trends? Are the trends moving towards this type of a solution, or are they  gradually moving away? Is it going, is it going to go out of existence in the near  future? Problem Solving Research, again, we're talking about audience  segmentation. We're talking about demographics like, what age group are these  people in? What gender are they? Are they male or female? Product research,  we're talking about pricing research, what are the different pricing levels? What  sort of sales are taking place. In other words, quantity, unit product, unit sales,  total sales for different price levels. You're going to do that type of research,  promotional research. How are these people reaching the end client? And then  again, the final one that you see there in the purple bubble is distribution  research. How are they getting that product to clients? Are there middlemen in  there, like wholesalers or retailers? Are there distributors in there, or are you  going directly from you to the end client? Let's talk a little bit about segmentation research, a couple of different areas here where you need to likely will be doing 

a lot of research if you're doing any kind of marketing work for an agency or a  business. So segmentation research, one of the things you're going to have to  do is, what sort of basis of segmentation Are you going to be dealing with here?  And I had just briefly thrown out a couple of them. We're talking about gender  type segmentation. Are they male, female? The other thing you do is age based  segmentation. Are these? Is this product for kids under a certain age. Are they  for young adults, like 20 to 30 or from 30 to 40, or even 10 year segments on up  40 to 50, 50 and then retirees? The other thing that you'll want to do is you'll  want to establish market potential and responsiveness for the various segments, so where, which one of those market segments is going to be really responsive  to whatever product or whatever service that you're going to be putting out  there? And you'll find that this is actually very critical, because what happens in  these different age brackets? They may not need your product number one, but  even if they do all need your product, what will happen is you will end up  communicating to different segments of that age breakdown in different ways.  So some people may some age groups may be very responsive on Twitter,  whereas other people are going to be looking for a direct mail postcard in their  mailbox. This is really important for you to get right. Selecting target markets  you're going to look this is not just geographic, but it's going to be geographic.  It'll be the age, it'll be regional. I mean, you need to know where this stuff is  going to be going, what it's referring to here, lifestyle profiles, demographics, the media, product image characteristics. Are they looking for a luxury brand type  thing, or are they looking. For a cut rate, low cost provider of this product or  service. So these are things that you're going to be looking for under  segmentation research. If we step over to the right hand side, we talk about  characteristics for product research. And this also is a pretty critical area for you  to get right, whether you're developing a new service, a new offering for your  nonprofit agency, if you're looking for a new product for your business, or, you  know, whatever you're going to need to test the concept. You're going to need to going to need to go out to the people that you'll be offering this to and asking  questions. What do you think about this concept? And every single time I've  done this particular aspect in my own personal career, when you go out and you start asking questions, you start getting answers that you never even thought of, new concepts, different ways that you can add value to what your idea was.  You're going to determine optimal product design, they may come back with a  whole lot of feedback for you on what they like about your product, what they  don't like about your product, and stuff your product may not even have that it  should. Packaging, testing, you're going to need to look at the graphics, how you package the product, product modifications, brand positioning, is this going to be a luxury item, or is it going to be a low cost entry into the market? And then  continuing on with product research. You're going to deal with issues such as  test marketing. You'll stick your toe in the water in certain controlled 

methodologies, I guess you might say, to find out how viable this product is with  the features that it has and at the price point that you want to provide it for. So  it's a lot easier to do a test marketing campaign and get the feedback that you  need to have and then come back make your adjustments, than it is to just roll  the whole thing out nationwide or worldwide and find out that you made a  colossal mistake or oversight of some sort. So that's those are the real key  components here. Probably the most important product research components  for marketing research is segmentation research, product research, pricing  research, and then the second one that we have on this slide is promotional  research, pricing policies. Do you want them to pay in advance, up front, before  you deliver the product? Are you going to do payment plans like $300 per month for six months? You're going to need to determine the importance of price in  brand selection, and what, again, what they're referring to here is, is this a luxury item? Are you going to position this as a high price, best in class, or are you  going to start off with a low ball product that's low cost, that are going to be  accessible to a wider audience of families with kids, for example, product line  pricing kind of is in the same ballpark what I was just talking about. It's product  line pricing. Are you going to be high price, low cost, or medium, middle of the  road, type, pricing strategy, price elasticity of demand. This is referring to  whether you are able to price your products in a way that you can respond to  demand. In other words, is there a lot of room for you to move your prices  around based on how popular it becomes? It gets kind of technical. I don't really  want to go a whole lot deeper than that, because you just got to know what your  pricing is, how much room you have to move around with your price relative to  the cost that it costs you to actually make the product or service, provide the  service, initiating, responding to price changes. You need to have a way of as  you go forward with any product, any service that you offer, assuming that you're working for a for profit business, of monitoring your competitors, paying attention to what they're doing. Are they moving their prices around? Are they adding new features and benefits to their product line to increase the value they're providing  to the end client? So you need to have a way of monitoring price changes and  monitoring doing competitive analysis. We call it on the right hand side, we deal  with promotional research. You need to develop some sort of a budget,  assuming that you would have a budget to promote yourself with. So you'll want  to break it out by month. You want to break it out by a specific promotional  channel, whether it's direct mail or advertising or cable TV or whatever the case. Might be, sales promotional relationships. I'm assuming that most of you  probably may not have a sales staff, but then again, maybe you might have  people that you need to compensate sales commissions with promotional This  could also refer to doing sales promotions as in 10% off, 20% off, that kind of  thing, optimal product mix. Again, do you want to, if you're selling coffee, for  example, do you want? Do you you want to advertise this in multiple different 

channels based on who drinks coffee? So you're dealing with a coffee drinker,  you're probably going to be dealing with people that are at least in their mid 20s, and as you go up the age scale, more and more of these people are going a  higher percentage of these people are going to be drinking coffee. People who  are 60 and over probably aren't spending a lot of time on Twitter, so you've got  to be paying attention to your optimal promotional mix here in that the younger  people may be on Twitter, they may respond to special promotions for coffee,  but the people who are who are 60 and over, will probably respond much better  to a direct mail campaign, a very targeted direct mail campaign, copy decisions.  Again, this is an area that we really aren't touching on in this particular course  here, but writing copy is incredibly important to the success of anything that you  do with relative to marketing. And I'll give you an example. My wife thinks I'm  crazy, but I can give you example after example of email marketing, for example, where I'll take a subject line and I'll write two different I will write a subject line  and I'll change, or I'll transpose, I'll switch around two words in that subject line,  the open rate, the response rate on one version versus the other will be triple or  quadruple. I mean, it's just, it's crazy, so you need to pay very careful attention  to the copy that you create for any of your promotional campaigns. It's very  important that you pay attention to the perceptions that you create with this stuff. Media decisions, you know, what are you going to do? You're going to print it out and mail out postcards. Are you going to record some video and do it on cable  television. You got to kind of figure out where you're going to go with this stuff so that you can create the marketing collateral that you need to have in order to  proceed forward with this Creative Advertising testing. Yeah, well, you know,  we're not Procter and Gamble. We're not selling all kinds of soap or laundry  detergent or anything like that. But you do want to pay attention to what you're  doing, like I mentioned a few minutes ago with the email campaigns that I do,  sometimes you want to just pay attention. And you want to if you're not getting  optimal results back at first from whatever what you've sent out, you may want  to try tweaking a few things and sending out a slightly different message.  Evaluating advertising effectiveness is just critical. Whenever you spend any  money promoting whatever it is you're doing, you need to know that that money  was well spent. And you will want to track every single channel that you've put  your advertising in, whether you're going to go cable TV and direct mail, for  example, you will want to track how many direct mail responses you're getting  versus how many responses you've gotten off of your cable television campaign. All right, claim substantiation, well, I don't know that's, I don't know where,  honestly, I didn't know where that came from. Claim substantiation, I guess  might refer to people who are claiming a coupon, or some sort of a, you know,  maybe they won a sweepstakes or something, they're claiming your free product as a gift. Problem solving research, let's talk a little bit about distribution  research. You know, I mentioned earlier in this module, we talked about the 

wholesale part of this, or retailers, or if you're going to go online and go through  amazon.com or have your own e commerce website, or whatever you need to  determine what type of distribution you're going to have. Or maybe you  manufacture some sort of equipment, some sort of machinery, and you're going  to end up having a whole nationwide channel of manufacturers representatives  who aren't on your payroll, but they'll get a commission every time they sell your  product. So you need to figure out what sort of distribution channels you're going to have, and sometimes you can actually have more than one channel, but what you want to be very careful of is that you don't want to be having one channel  cannibalizing sales via another channel. Intensity of your wholesale and your  resale coverage channel margins is something that you'll want to be very careful of if you're going to end up manufacturing a product and you're going to send it  out to retailers, or if you're going to send it out to distributors, who then sell it to  retailers, you need to be able to have enough room in the pricing so that each of them can pretty much double the double the number, and sell it successfully. So  if you make a product for that, you're going to sell to a distributor for $5 they're  going to turn around and sell it for $10 to a retailer, who's going to turn around  and sell it for $20 to Joe. Joe Blow walking down the street. And then the other  thing too, assuming that you're going to go through retail or distributors or  wholesale outlets or even manufacturers reps. You need to understand where  these outlets, where these people are going to be located in the country, if  you're selling bathing suits or something like that, in and in November and  December and January down south, in the southern states like Florida or  Alabama or Arizona or wherever, it doesn't do real good to set up a whole  distribution chain or a distributor in Maine or someplace like that, at least not  that time of year. So you need to be careful about where these where you're  focusing your efforts on setting up your marketing and your distribution  channels, the geographic location, all right, segmentation research, what's it  look like you're going to determine the basis of the segmentation look at  marketing potential and responsiveness for the various segments, selecting  target markets, life, lifestyle profiles, for demographics, testing concepts. You're  going to look at product design, package testing, pricing, research, the  importance of price and brand selection, pricing policies. I think we kind of  covered some of this. So this might be a little bit redundant here. Promotional  research. You're gonna look at optimal promotional budget, sales promotional  relationships, copy decisions, distribution research. So here's another great slide here for the market research process, you're going to define the problem that  you're trying to solve, develop the approach to the problem, formulate a  research design. And this is, this is almost like an academic level research  project, I guess, to be honest with you, in 30 years, heavy duty marketing work  that I've done, I don't think I've ever necessarily gotten this granular about  defining the problem or developing a specific approach to a problem, or laying 

things out in quite an academic or a scientific approach like this. But anyway,  you want to know what kind of problem you're solving, because all of a sudden,  if you're not focused on what you're trying to solve. You start solving all every  other problem except the one that you really wanted to set off to solve at the  beginning. So you're going to look at defining the problem. Let's just collect the  data, doing the field work to ask questions of your target market. Collect the  data, do your research online, and then when you get back to the ranch, you  can take some time and go add up all your normalize your data, is what we call  it, so that apples are related to apples, oranges are related to oranges. And then you can kind of sit down and compare what's this information telling me, and you can kind of prepare and present that report to the stakeholders in your  organization that need to know the answers. There's a number of places that  you can go. This used to be a lot more critical back in the day. The best  comment I can make right now is that Google is your friend. You go on to  Google and you can type in just about any question, and you'll just get page  after page after page of information and data related to the question that you're  asking, full service suppliers for market research. You can get syndicated  services. You can get you can hire all this stuff up, but in the digital age, it's  almost easier for you to just sit down with your laptop and just go through and  do it yourself. I mentioned Google, another big, another big, big supplier that has this kind of information happens to be Facebook, and if you go into their ads  manager that you might see in the left hand side of your Facebook page. You  can go in there, and you can select any region as small as a single zip code, up  to, say, several counties within a state, or even several group of several states,  or say, the east half the United States or the whole North America or worldwide,  but you can take that targeted area, and then you can start adding any kind of  questions you want in there. And just to give you an example, I know from  experience that if I went into Facebook Ads Manager right now and I did a bit of  an analysis, I can tell you that there are 620,000 people in the United States that have told Facebook they like peanut butter and jelly sandwiches. So think about  the implications of that. If you can get research like that and get answers like,  how many people are there in the United States that like peanut butter and jelly  sandwiches, and Facebook has got the answer? What sort of trivia question can you come up with that Facebook may not be able to answer? So Facebook just  has incredible information for that. If you're going to go out and have somebody  do some research for you, like a research firm or perhaps a marketing intern  from a local university or college. First of all, you just want to know what kind of  reputation they got. Do they complete projects on schedule? Are they known for  maintaining ethical standards? Are they flexible? And it's just kind of all the  standard questions I mentioned some marketing research firms if you're working on a big marketing problem, like in my in my particular situation, we'll get in  involved very heavily with automotive companies, and there they'll spend 

millions of dollars on doing marketing research, and they'll come up with all  kinds of very sophisticated bound volumes of information. But in your case, you  might want to consider hiring the intern from a local university, somebody that's  kind of maybe in their senior year, for example. Another very good possibility is  you can go online and actually hire people to create this information for you and  one particular place that I use very frequently is a place called upwork.com U, P, W, O, R, K.com, you can go on there, and you can write up a job posting  describing exactly what it is you need to have, And you'll get multiple dozens of  responses back of people who are offering their credentials and their services to help you achieve whatever it is you want to achieve. In the pricing on it is very  favorable. You can hire people anywhere from $5 an hour to maybe $100 an  hour or more, depending on what you're trying to get done. All alternate sources  of data. Again, we kind of covered this a little bit. Your local public library is great if you're into the offline volumes of and they actually do have some pretty good  stuff in the Reference Department sometimes, on the other hand, if you get a  library card from the local library. Many times, they will have database  subscriptions that you can sign in on their website and go to that particular menu item, and they have databases that you can tap into that aren't publicly  available. So that's another thing to consider mailing list vendors. This is great  for research. You've told them you want a list of everybody that subscribes to  such and such a magazine, or a combination of magazines, or who knows what, and they will come back and they'll immediately tell you exactly how many  names would be on a list that you might want to buy the post office research  data. This is a very underutilized capability, I guess, but you can sign on to a  portion, a part of their website, the post US Post Office website, and you can  actually target your direct mail postcards, or your direct mail letters, or whatever  you're sending out down to the specific street level. Very, very, very helpful  information or capability to have Facebook ads without ordering any advertising, you can use a huge list of their demographic criteria. To spec out an ad, a  potential ad, and personally, and you can use demographic criteria, personal  interests, determine market demand or interest down, literally, like I said earlier,  to the zip code level. And you can try using this approach to determine how  many people in the US are interested in, like I said, peanut butter and jelly  sandwiches.