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Market Research: what does it cost?

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Here is the question I get over and over again when I give a speech, a training or a public conference: “What the hell does marketing research cost?”.

And my answer is always the same: “the price of a car”. It can be a small car, it can be a Rolls-Royce, it can be a second-hand or a new car. It’s up to you. This answer isn’t satisfying, is it? But market research is much depending on the content of the research that it’s difficult to give a price.

Yet, a recent article in the French magazine “Capital” gives some good answers to that question. The best known market research agencies in France are IPSOS and Sofres and their prices for some of the most commonly used “tools” of market research. In terms of quantitative research, one (1) question to a panel of 1000 consumers will cost you about 700€; two (2) focus groups with 10 consumers each will cost you 20000€, which makes 1000€ per consumer. Now you start understanding why market research is practiced extensively by large companies but not by SMEs (Small and Medium Enterprises).

The price means nothing however as long as you don’t know what the work looks like. Paying 20000€ for two focus groups may be very expensive if the work is not done properly and according to the rules; it may be the right price if the work is done properly and gives the company valuable insights. While speaking to the executive of a public company the other day, I got however a feeling about the content of the work that you can expect. I was presenting the work and the methodologies of IntoTheMinds and the executive seemed surprised. Her company uses to work with large agencies and she told me that it was the first time she met with an agency which transcribed AND coded all interviews performed.

What is coding and why is it important ?

When we perform interviews, we transcribe every single word which is pronounced during this interview. The texts are then analyzed with the help of special softwares. What we do is that we “code” the text, which means that portions of the text are given a “title” to reflect what they are dealing with. All those codes are then gathered at the end of the interviews, analyzed in terms of frequencies and occurrences. We are then able to establish “links” between different topics and to draw maps of what customers want and why they want it.

According to the executive I was talking to, coding (because it’s time consuming and can be done only by highly-qualified professionals) is not done any longer by agencies which prefer to write down a few keywords and topics during the interviews and after. This is a very weak way of doing which does not allow to deliver robust results … but it’s a very cheap one.

My take:

If you get a quote for a market research assignment make sure you get enough details about the methodologies used. If qualitative research is applied, ask specifically that the interviews be transcribed, coded and that the so-called mind-maps are delivered to you. It is the only way to make sure you get results that make sense and that you may be able to use in your company. Needless to say that it’s exactly what we do at IntoTheMinds.

 

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Author: Pierre-Nicolas Schwab

Dr. Pierre-Nicolas Schwab is the founder of IntoTheMinds. He specializes in e-commerce, retail and logistics. He is also a research fellow in the marketing department of the Free University of Brussels and acts as a coach for several startups and public organizations. He holds a PhD in Marketing, a MBA in Finance, and a MSc in Chemistry. He can be contacted by email, Linkedin or by phone (+32 486 42 79 42)

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