Types of Research
What is primary market research?
When conducting primary market research, you can gather two basic types of information: exploratory or specific. Exploratory research is open-ended, helps you define a specific problem, and usually involves detailed, unstructured interviews in which lengthy answers are solicited from a small group of respondents.
Specific research, on the other hand, is precise in scope and is used to solve a problem that exploratory research has identified. Interviews are structured and formal in approach. Of the two, specific research is the more expensive.
Where to get primary market research data
This data comes from direct mail, phone surveys and face-to-face interviews.
When conducting primary research using your own resources, first decide how you will question your targeted group: by direct mail, telephone or personal interviews. If you choose a direct-mail questionnaire, the following guidelines will increase your response rate:
- Questions that are short and to the point
- A questionnaire that is addressed to specific individuals and is of interest to the respondent
- A questionnaire of no more than two pages
- A professionally prepared cover letter that adequately explains why you’re doing this questionnaire
- A postage-paid, self-addressed envelope in which to return the questionnaire
- An incentive, such as “10% off your next purchase”, to complete the questionnaire
- An online survey
Using phone surveys
Even following these guidelines, mail response is typically low. A return rate of three percent is typical; five percent is considered very good. Phone surveys are generally the most cost-effective. Some telephone survey guidelines include:
- Have a script and memorise it – don’t read it.
- Confirm the name of the respondent at the beginning of the conversation.
- Avoid pauses because a respondent’s interest can quickly drop.
- Ask if a follow-up call is possible in case you require additional information.
In addition to being cost-effective, speed is another advantage of telephone interviews. A rate of five or six interviews per hour is typical, but experienced interviewers may be able to conduct more. Phone interviews can also cover a wide geographic range relatively inexpensively. Phone costs can be reduced by taking advantage of less expensive rates during certain hours.
One of the most effective forms of marketing research is the personal interview. They can be either of these types:
- A group survey. Used mostly by big business, group interviews or focus groups are useful brainstorming tools for getting information on product ideas, buying preferences and purchasing decisions among certain populations.
- The in-depth interview. These one-on-one interviews are either focused or non-directive. Focused interviews are based on questions selected ahead of time, while non-directive interviews encourage respondents to address certain topics with minimal questioning.
What is secondary market research?
Secondary market research uses outside information assembled by government agencies, industry and trade associations, labour unions, media sources, chambers of commerce, and so on. It is usually published in pamphlets, newsletters, trade publications, magazines and newspapers. Secondary sources include the following:
These are usually free, often offer a lot of good information, and include government departments, business departments of public libraries, and so on.
These are valuable, but usually involve cost factors such as subscription and association fees. Commercial sources include research and trade associations, banks and other financial institutions, and publicly traded corporations.
These are frequently overlooked as valuable information sources, even though more research is conducted in colleges, universities and technical institutes than virtually any sector of the business community.
How to conduct market research
The reason that research is so important for a start-up business is that you cannot assume that you know your market without having conducted any research into it – no matter how big or small a business is.
A learner at university is given a history assignment to complete. To pass and achieve high marks, the student has to visit a library and undertake web research to find information and facts to complete the project.
A well-researched assignment, featuring carefully substantiated facts, ensures that the student gets an A. If the student is lazy, conducts basic research, and guesses most of the information, the student will fail. The same principal applies when conducting research to write a business plan. The harder you work at gathering information the better your chance of success. However, there is no easy way to get the information unless you are prepared to pay a professional research company to do the work for you.
If you feel that you cannot do the research yourself but cannot afford professional help, approach a mentor or organisation that can provide you with the support that you require during the start-up stages of business. Some organisations will assist free of charge. Browse through the Entrepreneur mentorship directory for details.
Do you have any experience?
If you do not have skills or experience in a particular industry, but want to find out more about the industry, offer to work for a company free of charge. Other options include applying for an internship to learn the ropes or to “shadow” a staff member for a few days to get an idea of how they operate.
Your own research is best
If you opt to do your own research it will not be easy, but it is one of the best ways to gather accurate information. Start by creating a list of questions you need to complete your research.
You can gather information from these sources:
- Reading the local press
- Talking to possible customers and suppliers
- Industry associations
- Web searches
- Trade Magazines
- Government agencies
Who is your potential market?
For the business to be a success, establish that you are approaching the right target market. Study the demographics of the area; talk to members of the public to establish what they want and need.
You have to decide where you want to set up business and ensure that the area attracts the target market.
Legalities and regulations (bylaws etc)
Ensure that you comply with all relevant legislation regarding the marketing format of choice – billboards, posters and any other form of outdoor advertising that you are planning to use. You may have to obtain written approval from the council and find out if there are any fees to pay.
What the competition offers and charges
Tailor-make the product so that you can compete successfully in the market place. To appeal to advertisers you need to offer a package that is unique, different or includes extra value of some kind to make your offering tempting.
Contact at least 3 suppliers to find out production and the other expenses associated with the marketing method of choice. Consider other issues such as transport, insurance and labour costs.
How to conduct market research on a budget
Some companies with new products go into a beta testing phase, where they supply the product to members of the target audience and monitor how they enjoy using it–and this is something you can do with virtually no budget at all.
Another option is to introduce the product to groups and observe their reactions. You don’t need formal focus groups for this, just several gatherings (or even roundtables) of people who are representative of your target audience, the right facility, and well planned meetings. Also, be sure to look at all published information concerning the market and purchasers of products that you deem similar to the one you plan to introduce. And by the way, you’ll definitely need that identity package no matter how you choose to proceed.
Advanced search techniques that can be used to get better research results on Google
The major search sites on the World Wide Web offer incredible research resources, which can help you find almost anything. The web is not known as the “information highway” for nothing. However, even the best search engines index less than a quarter of the web pages available unless you know how to refine research requests. This is why it is important to follow the correct procedure to find what you are looking for as quickly as possible.
What makes Google so popular?
One of the reasons why Google.com is probably the best search engine available at the moment is that it is the fastest, but also because it includes full-text site searches, not just title/url searches as many other search engines do.
How to refine a Google search
For example if a browser is searching for suppliers of shoe soles (not ballet shoe soles) in the Western Cape, they would need to type this formula in to the search box: “western cape” + “shoe soles” + manufacturers – ballet.
Below is the explanation of why you would use this method to achieve the best results:
Phrase search (“Word String”)
If you are searching for a specific product that you need in a particular province, such as the Western Cape, by putting double quotes around a set of words (“Western Cape”), you are telling Google to consider the exact words in that exact order without any change.
Search exactly as is (+)
By adding a plus sign (+) you are asking for specific information about a product or a service. By attaching a + immediately before a word (remember, don’t add a space after the +), you are telling Google to match that word precisely as you typed it. (Putting double quotes around a single word will do the same thing). As you are also looking for manufacturers, you must add more information to refine the search even further. In this example you would add a plus sign (+) before manufactures.
Terms you want to exclude (-)
Attaching a minus sign immediately before a word indicates that you do not want pages that contain this word to appear in your results. The minus sign should appear immediately before the word and should be preceded with a space.
For example, many kinds of shoe soles are manufactured in the Western Cape – rubber, leather and even ballet shoe soles. If you don’t want the search to find ballet shoe soles add a minus sign (-) before ballet and the search engine will ignore any references to ballet.
Fill in the blanks (*)
The *, or wildcard, is a little-known feature that can be very powerful. If you include * within a query, it tells Google to try to treat the star as a placeholder for any unknown term(s) and then find the best matches. [ Zuma voted * on the * Act ] will give you information about different votes on different laws.
Easy advanced search
You can create advanced searches by either using the Advanced Search link on to construct your search using their interface or you can build your own advanced search by using various combinations of the criteria provided. You will find Advanced Search located just below the search button at the top of a Google page. Simply click on it and it will open up the advanced search box that will request a variety of questions to narrow down the search and find what you are looking for.
Every word matters
It is important to keep in mind that every word matters. Generally, the search engine will use all the words you put in the query or search box.
Keep it simple
If you’re looking for a particular company, just enter its name. A search engine is a program that matches the words you give to pages on the web. Therefore, before you type any information into the “search box” think carefully and use the words that are most likely to appear on the page. For example, instead of saying [my stomach hurts], rather type [stomachache].
Describe what you need with as few terms as possible
For example, [weather johannesburg] is a simple way to find the weather and it is likely to give better results than the longer [weather report for Johannesburg south africa].
Google searches are insensitive
A search is always case insensitive. A search for [Mail and Guardian] is the same as a search for [mail and guardian]. Generally, punctuation is ignored, including @#%^&()= and other special characters.
Punctuation that is not ignored
Punctuation in popular terms that have particular meanings, like [ C++ ] or [ C# ] (both are names of programming languages), are not ignored. The dollar sign ($) is used to indicate prices. [ nikon 400 ] and [ nikon $400 ] will give different results.
The hyphen – is sometimes used as a signal that the two words around it are very strongly connected. (Unless there is no space after the – and a space before it, in which case it is a negative sign.) The underscore symbol _ is not ignored when it connects two words, e.g. [ quick_sort ].
Before you Begin
Evaluating a start-up before taking the plunge
One of the best ways to find out about a business is to talk to other business owners who have had experience in the same field. They can be a gold mine of useful information.
Gathering Competitive Intelligence on Similar Businesses
A competitive intelligence investigation is another route that can be taken and this will define and analyse the market and gather information about products, customers and competitors in order for you to be able to make a strategic decision as whether or not it would be viable to continue with your business plans.
Today, competitor intelligence is a practical and useful tool designed to accurately understand and predict the competition’s behaviour with precision. You can approach local companies to customise a competitive intelligence report so that it meets your specific needs. CBIA is South Africa’s oldest company who offer competitive intelligence services, outsourcing, consulting and training.
Five tips to Gain Business Intelligence
- Which everyway you choose to gain business intelligence make sure it is done legally and never obtain information through industrial espionage.
- If you have budget restraints conduct your own consumer research to examine your competitors. Study their strategies and operations. Your analysis should provide a clear picture of potential threats, opportunities, strengths and weakness.
- Focus on building a reputation. While products can easily be replicated, a strong reputation or brand is nearly impossible to breakdown.
- When your niche is overrun by strong competitors, target “sub-niche” exclusively to capture a larger share of the targeted market
- By offering specific unique features or benefits that your competitors do not offer such as loyalty-programs with attractive advantages can be implemented alongside your product or service offerings.
Where to find market research data on SA household income and other demographics
The South African Advertising Research Foundation (SAARF) is also a good source of demographic data for market research. The acronyms AMPS®, RAMS® and TAMS® are the registered trade names of the major research surveys conducted by SAARF.
- AMPS® stands for the All Media and Products Survey
- RAMS® for the Radio Audience Measurement Survey and
- TAMS® for the Television Audience Measurement Survey
The SAARF produces ten research products:
- The SAARF All Media and Products Survey (SAARF AMPS®)
- The SAARF Radio Audience Measurement Survey (SAARF RAMS®)
- The SAARF Television Audience Measurement Survey (SAARF TAMS®)
- The SAARF Universal Living Standards Measure (SU-LSM®)
- SAARF Branded Data (Branded AMPS®)
- SAARF Media Groups Measure (SAARF MGM)
- SAARF Lifestyles
- SAARF Life Stages
- SAARF Development Index
- SAARF Crime Monitor
These products provide reliable, comprehensive and unbiased research. This research offers demographic profiles and lifestyle information about South Africa’s adult consumers (aged 16 and older) and data about these consumers’ media habits, and their consumption of products, brands and services. All the SAARF data is available free of charge to anybody who wants to use it.
This kind of market research provides a great deal of data with regard to how the consumer ticks. The Living Standards Measure (LSM) paints a comprehensive picture of what consumers want and what they can afford. Developed by the South African Advertising and Research Foundation (SAARF), LSM has become the most widely used segmentation tool in South Africa. It is a means of segmenting the South African market that cuts across race, gender, age or any other variable used to categorise people. Instead, it groups people according to their living standards.
How many registered SMME’s are there in South Africa?
According to the Companies and Intellectual Property Registration Office of South Africa (Cipro), the total registered entities (different types of business registrations) can only be measured by registration type rather than size of the business. The two most useful sites to visit for more statistics are CIPRO and Statistics South Africa.
According to the Companies and Intellectual Property Registration Office of South Africa, the total registered entities per year between the 1st of January 2000 and the 31st of July 2009 are:
- Close Corporations 1 564 965
- Public Companies 2 454
- Private Companies 1 597 991
- Non Profit (Section 21) 17 600
- Limited by Guarantee 8
- External companies 1 383
- External Companies (Section 21) 11
- Incorporated (Professionals) 5 698
- Co-operatives 21 880
Since 2000 there have been 3 211 990