Marketers conduct market research in order to choose one action over another. Through their research, market researchers want answers to questions such as:
- What price should we ask for the product?
- Which customer segments should we target?
- Which advertisement will consumers find most appealing?
Market research may be conducted in-house, by the company itself, or by a third-party organisation which specialises in market research. It can be accomplished through:
- Product testing, as well as
- Focus groups.
Test subjects are typically compensated with product samples and/or paid a small stipend for their time. Market research is a super important component in the research as well as development (R&D) of a new product or service.
How The Backward Market Research Method Operates
The backward research method was described first in a 1985 Harvard Business Review article by marketing professor Alan Andreasen. As opposed to the traditional market research process, the backward research method begins with a manager and the researcher spending an important amount of time talking about the manager will utilise the research findings and in determining what the closing report will look like.
Does Backward Market Research Work?
This type of market research really works as it forces the manager (or the decision-maker who is commissioning the research) to think deeply regarding actionable solutions to the problem as well as to carefully consider what actions they are, and are not, willing to take.
For example, in order to deal with sluggish new account openings at a bank, the manager could be willing to offer gifts to current customers in exchange for referrals. In addition, the manager may be prepared to run a sales promotion which offers a better interest rate on new accounts however just if competitors are doing this. The manager may not be willing to advertise in local media or to alter employee pay scales or work schedules.
Once these constraints are well-understood, the market researcher is able to focus on designing research in order to study receptiveness of potential customers as well as current customers to incentives, such as better interest rates and gifts. And the manager can drop the ideas of conducting a study with employees or consider the effects of a radio commercial.
Successful research is designed in order to lead to actionable conclusions. By working backwards and then ascertaining results prior to the research actually hitting the field, managers are more likely to obtain results that they are able to work with. Managers need to tell researchers the answers that they need to accomplish the business’ goals. By determining where they would like to go, and then determining how to get there, both managers, as well as researchers, can expect successful research.
Would you like to learn more about market research and how to apply these principles to your own business? If you do then you need to do our Market Research Course. Find out more by following this link.
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