How to conduct Market Research: Planning

In this article, we will discuss a concept that emerged as a result of putting together of some concepts such as Marketing, Sales, Consumer Behaviour; The Market Research

Why we will consider in this article?

Actually, there are several reasons,

1. As a result of SEO optimizations made in terms of advertising revenue, brand promotion, etc., if you say let’s search for a “market research”, you cannot see very sharp results at first glance.
2. Still, the most important reason for companies to go bankrupt and not be able to provide cash flow (you won’t believe it) is market research (not finding a software developer).
3. Lack of cumulative knowledge (What is it? The concept of market research has a 100-year-old origin, but those who work in this field still make very basic mistakes. The main reason for this is that professionals working in this field are unfortunately based on emotions, not metrics)

Now, let’s give an introduction with the reasons why we mentioned this issue:

Reasons for Startup Fails (2nd bullet point)

According to the infographic shared by Statista, 42% of the failed startups (as a joke) went bankrupt because they did not understand the market need. To be a striking example of this, I would like to share with you a simple example that has stuck in my mind for years: Disk Ball Project.

Kadir Köymen’s team is developing a product to add to the games they play when they take a break at the office; an airless soccer ball. Thus, they aim not to harm the environment and not to disturb the people working at that time. After completing the product, when they do research on how to market this magnificent product, they realize that this product is already on the market. (hover ball)

Even if Kadir Köymen uses the phrase “if we don’t know, the market is not enough” for the defeat he faced, it would be useful to stop here. This is not a simple motive statement, we will talk about the customer persona in the rest of the article.

Even if we do not touch on the other causes of collapse in the infographic shared by Statista, we can see that different items are only relevant to market research.

In the light of all these, it is useful to look at the following data shared by the Union of Chambers and Commodity Exchanges of Turkey. The subjects I marked with yellow are the fields of activity that will pose a problem, especially when entered without thoroughly examining the market scope. In December alone, 369 companies declared bankruptcy.

The Origin of Market Research (3th Bullet Point)

In the 1920s, Daniel Starch, whose area of expertise was psychology, conducted the first market research for advertising. He assumed the first chair of the Research Department of the Association of American Advertising Agencies, founded in 1917. (American Association of Advertising Agencies) developed the Starch Test method. The test was a study to measure the level of interest, frequency of interaction, and interest of the reader in the advertisements published in newspapers and magazines in general. The tangible result of the study pointed to the retention rates of the advertisers.

In the 1930s, Statistician George Gallup founded a public opinion research firm called the American Institute of Public Opinion. Today, the company continues its activities under the name Gallup Internation. The “Gallup Poll”, which was the first for the 30s, is used as a standard in basic market research activities today.

Paul Lazarsfeld and Robert Merton, two sociologists in the 1940s, conducted the first focus group study to collect qualitative (quantitative) data.

By the 1950s, psychologist and marketing expert Ernest Dichter had pioneered motivational research and in-depth interviewing.

In the 1960s, marketing professor Paul Green introduced predictive statistical techniques.

In the 1970s, Jerry Yoram Wind and Richard Cardozo published an article on Market Segmentation.

In the 1980s, psychologist Martin Fishbein tried to make sense of customer/consumer behavior with the multi-attribute attitude model he developed.

With the beginning of the use of the internet in the 1990s, Dr. Stephen Turner wrote a web log analysis program called Analog and presented it to users. (Web log analysis follows a strategy to understand when a server is visited by whom and for what purpose)

In the 2000s, Fred Reichheld developed the Net Promoter Score (NPS) method for measuring customer loyalty and satisfaction.

Today, artificial intelligence and data mining are becoming one of the essential steps of more and more market research.

Now that we have completed the introduction, let’s move on to the main issue…

The Market Research

I will deal with the subject in 3 separate sections. After the Planning process, Commissioning process and Analysis, we will be talking about the information that feeds these sections.

Planning

When we start planning a market research, our primary job will be to seek answers to some questions;

1. What answer are we looking for?
2. How many of the answers we are looking for already exist?
3. What about our Research Hypothesis?
4. What are the interrelated factors in the context of his hypothesis?

The main purpose of asking these questions is, of course, to define the Problem Definition. As John Dewey said, a well-defined problem is a half-solved problem.

While clarifying the definition of the problem, we can start the process with whom the product or service I want to commission will appeal to. Let’s start with our own examples; People say one thing, think something else, do something different in the face of situations, and they can feel something different regardless of all this.

Then, while determining the behavior of our target customer; It can be started from the concepts of discourse, thought, act of doing, feeling. We call this the Empathy Map.

Divide a paper, a presentation page or a collaborative platform page into 4 with your friends; and what the customer says, diversify it with post-its, putting forward the idea as much as possible will lead you to the solution. Even the most ridiculous idea is better than no idea.

It is very important to carry out Market Segmentation work in parallel with the empathy work for the customer. In fact, the goal here is to break the current market as much as possible. In other words, it is to classify the buyer of the product you want to remove. The idea is great, you think, and I think it’s nice. But is it the same for Ahmet, Mehmet, Fatice, Fatma? Let’s reinforce the issue with an example.

Abdul Robert College graduate is a very intelligent young man and after his graduation, he goes to the California Institute of Technology, one of the most competent schools in the world in the field of chemistry, with the love of chemistry that his experiments in high school gained him. While working on Organic Synthesis, he discovers a type of chemical compound that changes color. He reaches out to his friend Hamide from Robert, who at that time is studying Business Administration in Boğaziçi. By using the compound he discovered in paint production, Abdul conveys to Hamide that the picture on a physical painting can change according to our taste, rather than today’s digital screens, and they set up an initiative together and open a store in trendyol. Since the technology is expensive, of course, the painting is put on sale for 1 million euros. Who is the customer? Bill Gates?

While performing Market Segmentation, it is necessary to define demographic, geographical, psychographic and behavioral factors well. Age, gender, education, occupation, family type and socioeconomic status will guide the purchasing behavior of the person. In addition, issues such as the neighborhood, country, city and climate should be taken into account. If there is a substitute product in the entered market or if it is not available, if the product is not correctly positioned and can be confused with the feature of a different brand, a research on brand loyalty, price sensitivity and usage volume should be done.

Let’s say you are targeting a consumer group that earns 5,000 units per month. You have developed a project where you can refund some (for example, 50%) of the public transportation fees to such people and provide cash flow with advertising revenue. Is it private? But you live in Luxembourg and public transport is free. What are you going to do now :)

Customer Persona

We must reduce segmentation in such a way that we must be person-oriented. Of course, we don’t have to deal with the persona of a single person here. If you aim to sell a robot vacuum cleaner;

1. Member of the Housewives
2. Newly Married Couples
3. Student House which is very bad condition
4. A middle-aged civil servant who has just lost his wife

It is impossible to satisfy her to finish her dream to get personal like her.

I would like to underline the word need here. It’s not a want, it’s a need.

While the customer wants a hand vacuum cleaner, you offer him a robot vacuum cleaner. He doesn’t need a tool. What he needs is a clean house. This is exactly what has to be presented to him.

Another important concept should be the concept of consumer/customer. Although they both sound the same, they are actually very different concepts. Become an organization that produces motorcycles for courier service. Have launched an ergonomic and environmentally friendly mobility product. Who is your customer? Couriers? Or is it companies such as fetch and Yemeksepeti that employ them? How important is ergonomics and environmental institutions? Does the state have an incentive in this regard?

If the government enacts an environmental law and says that mobility devices that produce noise below “so much” should be used in courier services, and if the law says that the law will come into effect on June 30, 2022, you can sell your ultra-environmental mobility products to companies, scrambling. However, if there is no sanction and you are offering the solution for your consumer, this may not be taken into account. In this context, it will be important to follow the laws and explanations.

BMW introduced a new vehicle at the CES fair. The vehicle can change color with E-Ink technology. As a consumer/customer living in Istanbul, you want to buy the vehicle. Well, when you buy the vehicle, what will you engrave the color on the license? There is no legal equivalent of a color changing vehicle :)

Of course, with the development of technology, laws and regulations change. While crowdfunding was not possible in Turkey until recently, it is now possible to invest in venture firms. Keeping a close eye on trends will also enable you to make evidence-based predictions that will feed your market research.

In this article, we have included the Planning part of Market Research. Since the summer is getting longer and longer, it is useful to take a break here. In the following articles, we will continue with the commissioning and analysis sections. We will also cover some of the terms we mentioned in this article in depth.

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Thank you for reading! I would love to hear your ideas and thoughts!
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