Don’t Let The Budget Dictate Your Market Research Approach

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Limited Market Research Budget

A recent report about market research in the pharma industry revealed that the combination of both qualitative and quantitative research is ideal in order to facilitate better decision making regarding product launches. The problem often is that there is not always budget for both.

Depending on the industry and target market, qualitative research may be cheaper than quantitative research or vice versa. In some cases, both approaches yield similar results, but this doesn’t mean that picking the cheapest will be your best bet.  I had a client who wanted to test pricing for a new product with a couple of focus groups. This was a cheap, but useless approach for what he wanted to accomplish.  It was equivalent to asking family and friends what they thought about the product’s price, and take their answers as representative of the population of the DFW metroplex.

Qualitative and quantitative research approaches have different roles in new product development research.

  • Qualitative research is most useful in the initial phases of product development to explore potential customers’ unmet needs, understand motivations behind purchase or usage behavior, and formulate hypothesis about product features and benefits. It can also be used later in the process to get a deeper understanding of certain behaviors and needs.  If you target market is really small, as sometimes happens in B2B, then this approach may give you all the answers you need, but in general I recommend my clients not  to make go/no-go  decisions based solely on qualitative research.
  • Quantitative research, on the other hand, can be used to test hypotheses and confirm findings from qualitative research with samples that are representative and large enough to provide a more solid ground for investment decisions regarding a product launch. However, be careful with making the sample too small or too convenient. Even if you use surveys, the results may end up being totally qualitative and directional at best or misleading at worst.

If you budget is limited, you should really think hard about the type of decision you expect to make when the data comes back. That should be the deciding criterion in selecting which approach is the best fit.

If you decide based only on budget, learn at least what the limitations of the chosen approach are, and adjust your expectations accordingly. You may realize that you will be wasting time and money in a research approach that won’t help you to make decisions. Some of my clients, in this situation, decide not do the research, others, with new acquired knowledge, find ways to get the budget to do it right, knowing they will win in the long run. Ignorance is usually more expensive than paid research.

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