Don’t Let The Budget Dictate Your Market Research Approach

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Limited Market Research Budget

 

More often than we want to admit, the budget dictates the market research approach taken in projects. Although the combination of both qualitative and quantitative research is ideal, there is not always a budget for both.

 

Budget For Qualitative or Quantitative Research?

 

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. However, this doesn’t mean that picking the cheapest will be your best bet. 

 

For example, I once had a client wanting to test pricing for a new product with a couple of focus groups. Unfortunately, this was a cheap, but useless approach.  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 hypotheses 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 your target market is really small, as sometimes happens in B2B, then this approach may give you all the answers you need. In general, I recommend my clients not to make go/no-go decisions based solely on qualitative research.

 

  • Quantitative research, on the other hand,  is appropriate to test hypotheses and confirm findings from qualitative research. The goal is to use representative and large enough samples to provide a more solid ground for investment decisions. 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 it. Consequently, they may be directional at best or misleading at worst.

 

Guiding Principle When Budget is Limited

 

If your budget is limited, think first about the business decisions at stake. That should be the deciding criterion in selecting the best approach.

 

If you let the market research budget dictate the approach, learn at least what the limitations of the chosen approach are. Moreover, adjust your expectations accordingly. You may realize that you will be wasting time and money in a research approach that doesn’t support decision making.

 

Some of my clients, in this situation, decide not to do the research. In contrast, others, with newly 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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