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Market Research - The Key to Understanding Your Customers

By Jim Strand, Market Research, Griffioen Consulting Group

For a company to succeed in the market place, a core market research program should be implemented, covering each market and each product or service provided.

Tue Oct 7, 2008

For a company to succeed in the market place, a core market research program should be implemented, covering each market and each product or service provided. The goal of the market research program is to develop an understanding of customer needs, their motivation and behavior, as well as the purchasing process.

Customer expectations need to be identified and tracked over time to appreciate the dynamics of the market, and to position products and services in response to customer demand. A better understanding of customer expectations allows a company to develop strategic and tactical answers to competitive actions and external influences on the market.

Satisfying customer demand and stimulating loyalty to company brands are key drivers of profitability. Understanding customer perceptions of the brand is critical to develop an effective and successful strategy to influence product or service purchase habits. On the back end, measuring performance of products and sales and service programs over time is important to ensure these programs continue to act as effective agents of loyalty.

All of this must be directed at exceeding continually changing customer expectations within affordable boundaries. Formulating a successful strategy should focus on customer satisfaction. The strategy is dependent on clearly defining and prioritizing customer expectations and applications or usage, establishing a base of reference, and tracking these characteristics to help identify and understand factors that impact change. Customer expectations evolve over time as they progress through life cycles and customers are presented with new technologies or other changes in the market place.

The brand represents the company's commitment to satisfy customer needs. The brand image reflects the ability to respond and deliver on the promises made or implied that satisfy customer expectations. The brand position defines the corporate brand relative to the competition.

Brand equity, then, is the measure of the brand's ability to command preference in the market, to justify pricing, and generate loyalty. Brand equity evolves over time and is nourished by continuously developing superior products or services that exceed customer expectations.

Market research is the mechanism for defining the relationship with the customer and measuring the ability to foster that relationship. A fundamental trilogy defines customer satisfaction and stimulates loyalty.

Provide innovative and exciting products or services that project real value
Provide consistently superior quality over time
Provide a leading sales and service experience for the customer

The motivational theme for a market research program is to bring a company in close contact with its customers to thoroughly appreciate the customer experience. If possible, direct contact can help significantly to understand the intensity and emotion of the customer experience. An effective market research program takes into consideration the many stakeholders and customers at all levels in the entire sales and marketing process.

A number of information sources can provide valuable insight during the market research process:

Naturally, the customer is the primary source of information.
Company employees provide a low cost way of obtaining information about the customer.
The sales and distribution channels are another source. Field personnel or sales staff, whether they are company employees or not, have constant interaction with the customer and can be reliable sources of information.

An effective market research model involves many components to serve the company objectives and to support the business strategy:

Research planning and design should be a collaborative exercise between the client and the market research firm. Careful planning and preparation are critically important to the success of a market research program.
The execution of the research program must be closely monitored to ensure the integrity of the results - whether quantitative or qualitative.
Whenever possible, client representatives should be actively engaged in the research.
Findings, implications and recommendations should be actionable.
Research should integrate the Voice of the Customer with the client's knowledge about the market and products.

It is important to select the most effective methodology for the information collection. The first questions by a market research practitioner are:

"Why do you want to do the research?"
"How are you going to use the data that will be collected?"

Quantitative and qualitative approaches can work independently or together for the most comprehensive results. Market research is a continuum, blending various approaches and methodologies:

Mail, telephone, intercept, Internet, focus groups, roundtable discussions, one-on-one interviews, consumer rallies, central location clinics, event measurement, and many others can be effective in the right climate and situation.
Standards development and measurement are keystones to defining and tracking satisfaction and loyalty performance.
Brand and product development research may require more sophisticated statistical techniques.
Product usage, purchase behavior, and buyer motivation should be carefully defined and monitored over time.
Advertising and merchandising concepts and execution require distinct methodologies before costly investment and as follow-up.
Research for products and services that are gender or age specific should be assigned to specialists in the field.

In global markets, many research methodologies must be substantially modified to accommodate market conditions recognizing geographic, political, cultural, economic, and social influences unique to the region or country. New and emerging markets present challenging and complex issues to effectively penetrate and sustain a profitable presence in the market.

The paradigm has shifted in the market place. Products and services can no longer be designed in a vacuum and then simply introduced in the market place, expecting acceptance. Developing products and services starts with clearly defined customer needs so that these products can be delivered to a receptive market place.

A carefully planned, designed, and executed market research program is key to obtaining an in-depth understanding of your customers. This understanding forms the basis from which to develop the right products and services that meet your customers' needs.

Jim Strand is a Market Research consultant with the Griffioen Consulting Group. With more than 20 years of experience in Market Research, Jim has been actively involved in the design, development, and implementation of global research programs in customer satisfaction, brand, loyalty, product development, quality, advertising, and market environment. Jim Strand can be contacted at jstrand@griffioenconsulting.com.

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