Home-Based Business Market Research Sources: Primary Research
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Home-Based Business Market Research Sources: Primary Research

If you are going to conduct primary research, you will have to decide how you will question your target group of individuals. The most commonly used avenues are direct mail, telemarketing, and personal interviews.
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In conducting your market research, you'll be gathering two types of data: primary information that you will compile yourself, and secondary information that is already compiled and organized - reports and studies published by government agencies, trade associations, or other businesses in your industry.

Primary Research

If you are going to conduct primary research, you will have to decide how you will question your target group of individuals. The most commonly used avenues are direct mail, telemarketing, and personal interviews.

Direct Mail Questionnaires

If you choose to circulate a direct mail questionnaire, these guidelines will increase your response rate:

  • Keep your questions short and succinct. Because most people don't like to be bothered with questionnaires, your chances for a high response rate will diminish if the items are too cumbersome.
  • Make sure your questionnaires are addressed to specific individuals and that they are of interest to the respondent.
  • Limit the questionnaire's length to two pages.
  • Enclose a professionally prepared cover letter that adequately explains what you need.
  • Include a postage-paid self-addressed envelope, and use a special reply permit indicia. Postage-paid envelopes are available at your local post office.
  • Send a reminder about two weeks after the initial mailing.

Be aware that mail response will be low, perhaps less than 5%.

Telephone Interviews

Mail questions can be moderately complex; telephone questions should be kept simple. Telephone surveys are generally the most cost-effective method, considering overall response rates; they're three times less costly than personal interviews, which yield an average response rate only 10% higher. Following are some phone survey guidelines:

  • At the beginning of the conversation, confirm the name of the respondent if calling a home, or give the appropriate name to the switchboard operator if calling a business.
  • Avoid pauses; respondent interest can quickly be lost.
  • Confirm that a follow-up call can be made if additional information is required.
  • Make sure you don't divulge details about the poll until the respondent is reached.

As mentioned, phone interviews are cost-effective. Speed is another big advantage. You may be able to perform five or six interviews per hour. Phone interviews also cover a wide geographical range at a relatively low cost. Phone charges can be reduced by taking advantage of cheaper rates during certain hours.

Face-to-Face Interviews

One of the most effective forms of marketing research is the face-to-face or personal interview. The primary advantages over telephone and mail surveys are: a low respondent-refusal rate, a less distorted sample - telephone availability and erratic postal response rates are not factors - and a wider range of subjects covered.

There are two main types of personal interviews:

  • The group survey: Used mostly by larger businesses, group interviews can be a useful brainstorming method resulting in enlightening information about product modification, new product ideas, buying preferences, and purchasing decisions among certain populations. In most cases, groups should be kept to four or fewer; otherwise, some respondents tend to dominate while others sit back and contribute nothing. Your role is to make sure the group doesn't stray from the subject, which is briefly introduced at the beginning.
  • The depth interview: In this one-on-one interview, you use a small checklist and basic common sense. Depth interviews are either non-directive or focused. Non-directive interviews encourage respondents to address certain topics with minimal questioning. The respondent, in essence, leads the interview. The focused interview, on the other hand, is based on a preset checklist. The choice and timing of questions are left to you, depending on how the interview goes.

Typical Costs of Market Surveys

When considering which type of survey to use, keep certain cost factors in mind:

  • Mail: Most of the costs here concern the purchase of envelopes and postage, printing of questionnaires and a cover letter, time spent on analysis and presentation, your time, and any incentives used.
  • Telephone: The main costs, in addition to the analysis and presentation, are the phone charges, preparation of the questionnaire, and your time.
  • Personal Interviews: Costs include the printing of questionnaires and prompt cards (if needed), the incentives used, your time, and analysis and presentation.
  • Group Discussions: Main costs are expenses in recruiting and assembling the groups, renting the conference room or other facility, your time, any incentives used, analysis and presentation, and the cost of recording media, such as CDs, if used.

The questions a home-based entrepreneur asks are not markedly different from the kinds of questions asked by business operating from traditional locations. They should be designed, at least in part, to gauge public opinion of home-based businesses - whether people feel they are as professional as other businesses. These days, most consumers care less about where a company is located and more about the quality and value of that business' products or services.

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