What is market research?

Market research is the science of finding out what your prospect wants in a product or service prior to actually spending the money to develop a product or service. It is also used to determine specific improvements to existing products and services. It is not asking your friends and family "What to you think about this idea". People who know and like you will always give you positive feedback!

Why do I need to do market research anyway?

If you can identify market needs in advance of publishing something, you’ll have a better chance of selling more copies. There are many emerging trends in the marketplace and identifying them in advance will help you develop a strong publishing strategy for the future. For instance, if you had done your homework in 1995, you would have found out that people were just starting to develop web pages for the Internet. Knowing that in advance, you could have decided to publish books and software to assist these people. By now, you would have a line of books on this "hot" topic!

How can market research help me fine tune my marketing strategies?

Market research is a wonderful way to find out why your prospects are purchasing from your competitors and not you. By doing a blind research project (that’s where you don’t identify the company doing the research) you can ask questions like "rank your favorite publishing companies", "what are the most important services you expect from a publisher", "how would you compare these two products or services", and many more. By looking carefully at the results, you might change your positioning statement, order processing policies, pricing as well as offers.

What kinds of market research should I do?

There are many types of market research tools ranging from focus groups to large mailings of questionnaires. The type of tool you pick, depends on the result you are looking for and how much time and money you have to spend.

Why should I use a focus group and how much does this cost?

Focus groups are generally used to get the personal, in-depth opinions of a small group of targeted prospects. The cost will depend upon how many you conduct and where. Generally, you can conduct a focus group, moderated by a professional at a professional facility for a cost of $5,000 to $8,000. These costs would include the development of a discussion guide, recruitment of participants, focus group room rental, videotaping of the session, transcript of the session and a complete analysis report of the results of the focus group.

How many focus groups should I conduct?

Because participants of focus groups need to be in the same physical location, many companies conduct several groups in different regions of the country to assess varying opinions based on location of the prospect. However, a way around this is to conduct a focus group prior or after a meeting or convention where prospects from all over the country are attending. In general, you should conduct a minimum of 3 focus groups in order to obtain the most in-depth information.

Can I project the results of a focus group?

No. This is a major drawback to this type of market research. Focus groups tend to give you feedback that is influenced by other participants in the group. While this is sometimes helpful, you should not make the mistake that the results will be mirrored across the entire prospect population.

Why should I use a professional moderator?

This is one of the mistakes a lot of companies make in an effort to save money. Professional moderators are trained on how to elicit information without skewing the results. They are also trained on how to control the group and not have one or two people dominate the discussion. They also have no "stake" in the outcome so they can

What about telephone questionnaires?

Telephone questionnaires are generally used after a focus group has been held although it is also used when you need to get information very quickly. Another use of a telephone questionnaire is to finely tune a final mailed questionnaire to make sure the respondants don’t miss-interpret a question as well as to ensure that all the questions needed are in the questionnaire.

How many questionnaires do I need to mail before I can project the results?

This depends upon the total size of your prospect market, the number of unique segments of that market, and you’re anticipated response rate to the questionnaire. Generally, a sample of 5,000-10,000 questionnaires will provide enough responses to generate projectable results.

What kind of incentive should I use to increase response to a mailed questionnaire?

For years, most companies have included a $1.00 bill in their questionnaire (to pay for a cup of coffee, etc) and this addition of actual cash has been shown to increase response. However, there are other incentives as well such as making a donation to a charity or donating a book to a library. Be creative (and don’t forget to test!)

Market research can be a powerful marketing tool. Don’t forget to use it!

ABOUT THE AUTHOR
This article was written by Carol Ann Waugh, President of Xcellent Marketing, a marketing and new business development firm specializing in the educational and library market. Xcellent Marketing offers a variety of marketing services to help publishers increase their revenues and profits from identifying new markets, providing critiques of web sites and marketing communications such as direct mail, catalogs, advertisements, etc. as well as developing effective traditional as well as Internet-based marketing plans. Carol can be reached at (303) 388-5215 or at cwaugh@xcellentmarketing.com.