I recently came across an article on the importance of market research and felt obliged to write my personal experience with it (since I'm going to be getting my Masters in Market Research & Consumer Behavior 'n all).
I wrapped up my Peace Corps service in Morocco in April 2015. I loved my service (a topic for a future blog post), but as I got closer to the date when I was going to be back in the states, all I could think about was eating foods I wasn't able to have for over 2 years. When I came back, all the foods I had craved seemed to taste exponentially better because of my heightened attention in my consumption. Absence makes the heart grow fonder.
One afternoon, my mom prepared a traditional Peruvian dish, Papa a la Huancaína. I had always been a huge fan of the lightly spicy Huancaína cheese sauce served over the potatoes and then the thought hit me: "Why isn't the sauce available for purchase as a ready-to-serve, packaged product in stores? Heck, I mean, I'd totally buy it (at the time being a single 29 year old self-proclaimed foodie/convenience-seeker)."
That idea sent me on a bit of an entrepreneurial journey to bring my mom's Huancaína sauce to market.
I had an inkling that our target demographic would be affluent foodies if the product was marketed as an organic, gluten-free product and stocked in local "healthy" grocery stores. This involved tinkering around with the recipe. And we did. But in order to see how this sauce compared to the original, I decided to learn as much as I could about market research to find out what people thought.
I came to find out that there are 2 types of data collection: quantitative (online, mail and telephone surveys) and qualitative (i.e. phone interviews, face-to-face interviews, focus groups). With the data from quantitative research being highly structured, one could use the data to recognize patterns and draw broad conclusions. Qualitative, on the other hand, is less about the volume of data you'd collect from surveying and more about capturing in-depth options and experience about your business, product, or what have you.
My first step was to test my theory about the initial demographic I had in mind for the potential sauce product. I decided to pass out samples of the sauce, along with surveys, at farmer's markets and pretty much any place where you'd find foodie's congregate.I also just happened to be taking a Consumer Behavior and Advertising class at the San Francisco City College (CCSF) during this time, so I decided to approach my teachers with the idea of handing out samples and running surveys with their class. They agreed. The results were interesting (folks kept comparing it to Velveeta, which was a thought that had never crossed my mind), but the data was not as statistically significant as I would have liked it to be.
Next, I decided to approach the culinary department at CCSF to see if they'd be able to let me run a few focus groups with the students in the culinary program. Since they had a bit more of a refined taste palette, I thought it'd be great to get their opinions on our original sauce and the organic version. Some insights included that the organic version tasted earthy, perhaps a little too spicy, and the texture wasn't as pleasing as the original version.
Now, mind you, this was my first foray into market research. In retrospect, there were several biases in the implementation of my experimentation. But, overall, it was a fascinating learning experience. I learned how difficult it is to select the right, unbiased candidates for focus groups, how tricky it can be to create good surveys (from which you'd be able to pull valid insight from), and how powerful marketing research could be a tool for business growth. Some important reasons for a business to conduct market research include:
- Discover who you really compete against in the marketplace (you will be surprised, I promise)
- Uncover your differentiators
- Find your competitive advantage
- Learn what services your clients appreciate most, and why
- See emerging opportunities in the marketplace
- Adjust your marketing messages to reflect what customers really want to hear
- Find out what your customers think about you
- Discover which weaknesses you need to fix right away
- Get your Net Promoter Score and find out whether your customers are likely to recommend your company to others
- Learn how well known your business is in the marketplace
- Explore why some customers chose to buy from another company, instead
- Find out how your pricing compares to the competition
- Find out how important price is to your buyers
- Discover whether there is demand for your new product or service
- Recognize emerging trends in the marketplace
- Demonstrate that you care about your customers — the act of doing research shows that you are interested in them and their opinions
- Discover the one thing your customers would change about your business
- Find out if you are well positioned to enter a new market
- Determine what issues you should be writing and speaking about to engage your audience and build your visibility
- Find out whether internal perceptions about your company match external perceptions
- Learn how your customers find you
- Find out why your customers chose you over a competitor
- See if your customers are aware of all of your key products or services
- Find out what you are known for in the marketplace
- Benchmark your business against competitors in your industry
After a couple months of research, we decided on shifting the business model from sauce production company to an import & distribution company. I had to dissolve the business because of my move to Madrid for my masters program, but lots more market research posts coming up in the near future.