• How-to

Market research is effective in determining the target segment, market size, market trends, customer perceptions, pricing strategies, etc. which equip companies for better customer acquisition and customer retention. Today, most business decisions are purely data driven and leave behind the older times when such decisions were more intuitive in nature.

With market research becoming one of the most crucial strategies for companies, the amount of spends on these activities has grown by almost 50 percent over the last few years. It thus becomes important to conduct market research in a cost-effective manner to ensure maximum returns on investments.

One of the most crucial ways to enable researchers to do high quality, yet cost-effective and speedy research projects is through online research. Although a relatively new trend in India, it is catching up fast. In fact, quite a few companies are launching online panels to facilitate online surveys in India.

The most important benefit of online research that has a direct impact on the cost factor is the cut down on additional resource costs such as interviewers, briefings or supervision costs, paper costs, postage costs, data entry, etc.

Online research also makes it feasible for companies to field small studies as the cost involved is minimal. This opens the door for numerous SMEs or departments that did not have an option of traditional research due to limited budgets or small study size.

The use of sophisticated techniques is further instrumental in enabling cost-effective market research. For instance, the usage of Hierarchical Bayes helps reduce the required sample size without affecting the robustness of the sample. Development of certain methodologies like Price Sensitivity Method (PSM), where the price of the product is estimated by asking only a small number of questions to each respondent, makes undertaking researches easier and low on cost. Application of standardized software to do various operations, like running programs on Sawtooth, also reduces the cost considerably. Conducting focus group discussions is yet another effective strategy to bring down the research costs.

Consumer needs are constantly changing and companies today need to keep up with them in terms of providing products and services that meet these changing needs. This necessitates companies to understand how their brands are viewed by consumers. Market research is the only effective way for firms to stay abreast of consumer space. It enables companies to differentiate their products and services to target costumers more effectively with different offerings. With market research being used by companies worldwide, cost-effective market research is definitely the need of the hour.

ANIL KAUL is CEO and Co-Founder, AbsoluData Research & Analytics.

©Entrepreneur August 2010

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cost effective, How-to, market research