Market research and the product

Market research gathers information to make a marketing decision. It starts with a clear question, then a plan, data collection, analysis and action. Primary research is new data collected for the question at hand: surveys, interviews, focus groups (a small group discussing a product with a guide), observation and experiments such as a test market or an A/B test (showing two versions to similar groups and comparing results). Secondary research uses data someone else already collected, such as government statistics or industry reports; it is cheaper and faster but may not fit the question exactly. Quantitative data are numbers that can be counted and compared; qualitative data are words, opinions and reasons.

Research is only as good as its sample. The population is every person the business cares about; the sample is the people actually studied. A random sample gives everyone in the population an equal chance to be chosen, so it tends to represent the population. A convenience sample (whoever is easiest to reach) and a sample of people who choose to reply can produce sampling bias. A leading question pushes people toward an answer, and a double-barreled question asks about two things at once. A bigger sample cuts random error, but it does not fix bias. When a random sample represents the population, a sample share can estimate the number of buyers in the whole population: share times population.

A product is anything offered to meet a need: a good, a service or both. Services are intangible, cannot be stored (perishable), vary from one delivery to the next, and are usually produced and used at the same time. Products have levels: the core benefit (what the buyer really wants), the actual product (its features, design, brand and packaging) and the augmented product (extras such as delivery, setup and warranty). Consumer products are convenience products (bought often with little effort), shopping products (compared on price and quality), specialty products (a particular brand buyers will make a special effort for) and unsought products. A brand is a name, logo or design that sets a product apart; brand equity is the extra value a trusted brand adds. A product line is a group of related products; the product mix is all of a firm’s lines.

Products pass through a life cycle. In introduction, sales are low and profits are often negative; the goal is awareness and trial. In growth, sales rise fast, rivals enter and profits rise. In maturity, sales level off and competition is fiercest; firms defend share with new features, promotions or lower prices. In decline, sales fall, and firms cut costs, reposition the product or drop it.

To estimate the number of buyers from a random sample, find the sample share (yes answers divided by sample size), then multiply by the size of the whole population.

To evaluate a piece of research, ask three things: who was asked and how they were chosen, how the question was worded, and whether people said something or actually did something. A neutral question asks for an opinion without hinting which answer is wanted.