Although marketing research can be considered a bargain, especially if the results of a study greatly increase revenues or cut costs, good marketing research is not cheap. Marketing researchers are trained, experienced Purpose of Research professionals, not unlike attorneys or architects. Accordingly, the first-time research buyer may be startled by the prices for research services. For example, focus groups run about $3,000 each, and a telephone survey could range anywhere from $5,000 to $25,000 or more, depending on the number of interviews and length of the questionnaire.
Because costs of this size represent a substantial investment for most small businesses, owners should ask themselves the following questions before ever contacting a research firm:
1. Is the research really necessary? In some cases, maybe a “best guess” would prove just as effective as a well-designed research project. In other cases, however, research may be absolutely necessary. For example, many lending institutions require a feasibility study of a proposed business idea, using marketing research, before they make any loans.
2. Is the research worth doing? Will the outcome of the research result in a benefit exceeding the cost of the research itself? Spending $20,000 on a research project to realize an increase in company revenues of $1,000 a year simply doesn’t make sense.
3. Can I do the research myself? This is probably the hardest question to answer. You must be able to determine the complexity of the research problem and the risk involved if the research were not done. To strike an analogy, several companies offer do-it-yourself legal guides that allow the small business owner to create contracts, incorporate and so forth. If you feel comfortable with this type of approach, fine; if not, see an attorney. The same holds true for marketing research.
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