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Market Research

Many marketing mistakes that are made by managers in agribusiness today could have been avoided. Major management blunders are often the lack of proper analysis through marketing research. They fail for many reasons:

• They’re convinced that they possess an intuitive insight into the marketplace and that they can sense an opportunity and develop the necessary strategies for success without the need of "fancy research."
• Others are simply impatient, and don’t want to take the time required to do some study and analysis. They feel that the cost in time of doing marketing research is too high relative to the results that can be achieved by "striking while the iron is hot."
• Finally, some people are intimidated by the concept of marketing research. They feel it involves complicated methodologies and expense for which they are not equipped.

Marketing research can be as in-depth and complicated or as simple as one desires. And any form of market intelligence is usually better than none. So it’s important to understand what kinds of research alternatives are available and how to use them.

Expensive primary research

Primary information has never been obtained before, and involves going out and gathering the data for the first time. Techniques include phone surveys, questionnaires, personal interviews, and group sessions called focus groups. Primary research is expensive and takes a lot of time. Some firms are large enough to undertake it themselves. Others who don’t have the in-house resources retain outside consulting or research firms. Regardless, it should never be done until all secondary sources are exhausted.

Cheap secondary research

Secondary data or research is information that has already been compiled. Secondary data is very inexpensive (in some cases free), and takes very little time compared to primary research. In most cases, if a thorough job of secondary research is done first, it will preclude the need for primary research.

There is an overabundance of useful information for making intelligent marketing decisions. Firms that quickly run out and do a survey or series of interviews before digging out research that has already been done are foolishly wasting time and money.

Secondary data is almost always at our fingertips. Agricultural extension offices, university libraries which contain doctoral and masters theses, trade associations, and a variety of journals and periodicals all potentially hold the answers we are seeking.

Look before researching

About a year ago, a marketing manager for a small agribusiness wanted to implement a marketing strategy that required knowing the per capita purchases of his product category. Not knowing the information himself, nor able to obtain it from others he asked, he was convinced that he should undertake some primary research. He planned to randomly select a sample in his marketplace and send them a mail survey. When he received enough responses, he would have them analyzed using a computer program for the data processing.

Prior to embarking on the project, an associate of his advised him to pursue some secondary sources more exhaustively. Within one week he came across an article in a trade journal about some similar research that had been completed several months prior.

This manager contacted the author of the article by phone, and was delighted to learn that this researcher had a good deal of information that was current, and which he would make available to the manager. Within two weeks the marketing manager had about 80% of the information he would have obtained from his primary research, at 10% of the cost and 20% of the time.

It is worth noting that the secondary source that he found did not answer every question that he would have asked had he done primary research. Nevertheless, he determined that the incremental increase in marketing information would not justify the added cost and time.

One must be alert to the manner in which secondary information was gathered. But, in most cases, marketing decision made in agribusiness today are such that 70 to 80% of them can be made with good secondary information. The firms that are able to dig out this data will have a competitive edge in the marketplace.