In-house Market Research How to conduct effective research linked to your business strategy Thursday 30 th August 2012
About market Linking market Case study research research to business strategy 2
About market Linking market Case study research to business research strategy 3
Market research is gathering information about customers, or markets. • Good information is a tool that can be used to support business decisions. 4
Market research can help businesses make decisions associated with: Identifying and evaluating opportunities in the market P Understanding potential and P existing customers Setting strategies and P targets P Monitoring performance 5
There are two main categories of market research. Secondary • Primary • – Information that – Information gathered first-hand already exists from the source 6
Secondary data is available from a variety of internal and external sources. • Internal sources: – Internal organisational data and reports External sources: • – Business source corporate database (available to all AIM WA Professional Members) – Other online databases – Libraries • Journals • Other publications – The Australian Bureau of Statistics (ABS) – Business or industry associations – Government departments 7
Primary data is gathered directly from the market to address an organisation’s specific needs. • Sources of primary data include: – In-depth interviews – Field visits • Observation • Customer intercepts – Focus groups – Surveys 8
Market research may be exploratory or confirmatory. Exploratory Confirmatory Generating options Selecting the best option (Tends to be more qualitative) (Tends to be more quantitative) 9
As with decision-making, the exploratory phase precedes the confirmatory phase. Exploratory Confirmatory Scan environment Generate options Select option Evaluate outcomes Secondary In-depth Surveys Surveys • • • • research interviews Secondary • • Focus groups research BUSINESS DECISION CYCLE 10
Linking market About market Case study research to business research strategy 11
Good market research should help an organisation fulfil its purpose, or reason for existence. 12
All organisations (regardless of whether they are for- profit or not-for-profit) exist to create value by producing something that the market wants or needs. Value = Benefits - Costs 13
Organisations strive to produce value by operating their value chain. Value = Benefits - Costs • Organisations succeed by making a winning offer to valuable segments of the contestable market. 14
In the for-profit sector, the value that the organisation creates is split between customers and shareholders. This model is known as shareholder capitalism, and it is • fundamentally flawed – it defines value and its recipients far too narrowly and assumes an infinite supply of natural resources. 15
Shareholder capitalism fails to recognise that organisations are embedded in and depend upon a massively complex system that is far more than just the economy. Any strategy that weakens the total system is bad strategy. • 16
The great opportunity of our time is to recalibrate business as a total system contributor. Environment Society Economy • To achieve this, businesses must reimagine themselves as vehicles for delivering true social and environmental value, in addition to customer value. In other words, businesses must identify their transcendent purpose . •
Businesses with a transcendent purpose tend to look something like this:
Market research cannot help your organisation find its transcendent purpose • Market research is not useful when conceiving an idea’s soul. But it CAN help good organisations succeed. • 19
Organisations that succeed over the longer term tend to excel in the following areas: Measures of Performance Vision Value proposition Culture Value chain Purpose 20
Market research can help organisations make decisions associated with most of these factors. Measures of Performance Vision P P P Value proposition P P P Culture Value chain O Purpose 21
About market Linking market Case study research research to business strategy 22
The Ethical Toy Company is an organisation with a transcendent purpose. • The Ethical Toy Company exists to: Provide ethical toys and games that are simply awesome for children, families, society and our planet. Our most important measures of performance are: • – Total funds donated to growing the common good (50% of profit) – Net Promoter Score (NPS) and outcomes-based evaluation 23
Its values form the basis of its culture. • Creative nature – We nurture and emulate the creative power of nature. • Liberation – Our products explore young people’s possibilities, and reject stereotypes, especially around gender. • Virtuousity – Our products celebrate and reinforce the diverse array of human virtues. 24
Like its purpose, The Ethical Toy Company’s vision focuses on “system level” value creation. Through our success, for “growing the common good” to become the common goal of toy and game companies world-wide. 25
The different components of the strategy fit together and reinforce each other. Sharing our wisdom Ethical, efficient value chain Irresistible Nurturing & offer & creative culture brand 26
Market research will help the company set its targets, achieve its goals and monitor its Internal & partner surveys performance. Benchmarking / secondary Sharing our research wisdom Ethical, efficient value chain Benchmarking Market & / secondary customer research research Irresistible Nurturing & offer & creative culture brand Culture surveys 27
The Ethical Toy Company’s strategy is reflected in its scorecard. Factor Metric 2013 2015 2018 $ invested in growing Financial common good (50% of profit) Customer NPS Need a direct line to customers Outcomes (customer survey) Growth Market share Growth of category Process Waste Culture Internal NPS Transparency Internal survey Partner survey 28
Today we will focus mostly on market research associated with delivering a winning offer to valuable segments of the market. Sharing our wisdom Ethical, efficient value chain Market & customer research Irresistible Nurturing & offer & creative culture brand 29
The market research planning process always begins with identifying and articulating the underlying decision problem. Set the research Identify Identify sources of Choose research objective information needs information method Identify the decision What information do we How do we get the What research problem need? information? techniques? · · · · Why are we What is relevant? Can we find the One research conducting this · people we seek? technique or several? How much do we · · research? need? Do we have the skills Qualitative, · What are the · How accurate must to collect and quantitative or some questions we want the information be? analyse the combination? answered? information internally? Market research techniques should be selected to match the • research objective and the information needs. 30
When setting your market research objective, start with a global objective stated in one or two sentences, and then expand these to a list of specific information goals. • The following questions may be useful when developing your market research objective: – What is the marketing problem we are trying to solve? – What is already known that relates to the subject? – What are the consequences of making a wrong decision? – What are the alternative courses of action available to us? – What do we expect the results of the study to tell us? – How accurate must the information be? – What hypotheses are there to test on the subject? – What assumptions are being made? 31
P Identifying and evaluating opportunities in the market Understanding potential and P existing customers P Setting strategies and targets P Monitoring performance 32
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