SiTuiX"~'Y SMALL BUSINESS BRIEF A NOTE ON THE USE OF MARKETING RESEARCH BY SMALL BUSINESSES Mark C. Hall Minnesota State University, Mankato mark. hallmankato. msus. edu INTRODUCTION There is no question that timely and accurate information is as valuable to small business decision makers as it is to decision makers in large organizations. Interestingly though, evidence exists that small businesses make little use of (Oumlil, 1989; Hall, Anglin, and Elliott, 1997; McDaniel and Parasuraman, 1986), and place limited value on (Brush, 1992; Callahan and Cassar, 1995), marketing research —the very discipline capable of providing this valuable information. Why this is the case has been the subject of some speculation. Andreason (1983) for example, has proposed that small businesses oRen avoid marketing research due to misconceptions concerning its nature. More specifically, he proposes that managers of small businesses oRen operate under the myths of: 1) "big decision", 2) "survey myopia", 3) "big bucks", 4) "sophisticated researcher", and 5) "most research is not read." The primary purpose of this note is to help dispel some of these common misconceptions. Specifically, this is done by identifying a number of inexpensive (misconception 3), relatively simple (misconception 4), and in some cases, non-survey based (misconception 2), marketing research approaches that can be employed by small businesses. THE MODEL Marketing research, as a discipline, is very expansive. Consequently, classification schemes (taxonomies) are oRen helpful in understanding its scope and domain. One approach to classifying marketing research involves looking at it from an applications (subject area) perspective. Using this approach, one encounters studies that involve: I) industry, 2) competitor, 3) customer (buying behavior), 4) environmental, 5) market potential, 6) forecasting, 7) pricing, 8) product, 9) distribution, and 10) promotion analyses. A second approach involves looking at marketing research from a techniques of data collection perspective. Commonly used data collection approaches include: I) using secondary data (existing records or documents), 2) observation, 3) surveys, and 4) experimentation (deliberately manipulating one variable to elicit a response in another). 95 Journal ofSmall Business Strategy Vol. 10, No.2 Fall/IVinter l 999 Combining these two perspectives yields the Table I matrix of possible application/technique combinations. Identified within each cell of the matrix are user-friendly methodologies appropriate for that combination. CONCLUSION As indicated in Table I, there are a variety of simple and inexpensive methodologies available to the small business marketing researcher. Each is capable of providing the decision-maker with needed insight and information. To control costs, employees can be used in the data collection process. Additionally, in terms of analysis, none of the suggested approaches require much more than simple tabulation. The immediate task though would seem to be in convincing the small businessperson to give marketing research a try. Once understood and sampled, marketing research is more likely to become an integral part of the organization's operation. REFERENCES Andreason, A. R. (1983).Cost-conscious marketing research. Harvard Business Review Jul- ~Au ust, 74-79. Brush, C. G. (1992). Marketplace information scanning activities of new manufacturing ventures. Journal of Small Business Mana ement October 41-53. Callahan, T. J. &. Cassar, M. D. (1995). Small business owners'ssessments of their abilities to perform and interpret formal market studies. Journal of Small Business Hall, M. C., Anglin, K. & Elliott, K. M. (1997). Marketing research: The small business perspective. In V. Beguin (Ed.), 21st National Small Business Consultin Conference Proceedin s 196-199. McDaniel, S. W. & Parasuraman, A. (1986). Practical guidelines for small business marketing research. Journal of Small Business Mana ement Janua, 1-8. Oumlil, A. B. (1989). Marketing management tools for the small business consultant. ~Cl«i 30ik, 293-301. Mark Hall is a Professor of Marketing at Minnesota State University, Mankato in Mankato, MN. He earned his doctorate from the University ofArkansas. He has published research, in among others, The Journal of Marketing Management and the Marketing Education Review. His research interests are in tire areas ofmarketing education, marketing research, and industrial marketing. 96 Table I Marketing Research Applicationfl'echnique Link ct Secondary data Observation Surveys Experimentation Examine: Survey/ b h Industry trade publications for industry trends by phone, or at a trade show, industry cu Analysis "lead-users" about industry trends patent applications within the industry suppliers about indusuy trends Examine: Observe/ external secondary sources (newspapers, trade journals, etc.) Ior the number and location of competitor product olferings, prices, competitors Competitor promotions, «tc. customer flow into a competitor's Survey a sample of competitors at a trade Analysis internal sales records to ascertain the place of business show to assess intentions, strategies, etc. impact of a competitor's marketing e(Tort a competitor's products at a trade show patent applications of competitors a competitor's web site court records involving competitors Emuniner internal complaint and/or compliment Observer o~ records for insight into customer Survey: Customer satisfaction and/or failure points and/or video tape customer flows Analysis through your store at the point of sale, a sample of customers ct return slips for trends to assess wants and needs (Buying and/or video lope products considered n Behavior) sales invoices for customer zip codes and/or time spent considering them a sample of customers to assess and/or addresses satisfaction and/or dissatisfaction license plates in your parking lot sales invoices to identify your best/worst customers and/or best/worst 'O products vn Secondary data Observation Surveys Erpenmentatton Examine popular literature for nvjrpn taenia( environment trends (Political, observe the world around you Survey a naturally-formed sample of regulatory, legal, social, technological, people (old, young, etc.) to asses social economic, etc.) uends Market pptential Exurmue census data for insight into Observe traAic flow on the street market size and/or growth and/or sidewalk Analysis Systematically alter assumptions porecastin Examine internal sales mcords for Survey a sample of your customers to and/or the marketing mix to assess general trends, seasonality, cyclical assess future purchase intentions impact on sales (test marketing, -whm-if" analysis) Pricing Exam/ne internal accounting records Observe and/or video tape Systematically alter prices to for cost and/or profit data customers —do they compare price assess elasticity of demand Product Exam/ue internal service and/or Survey a sample (via a focus group) to Sysremart catty utter produm warranty records for product failures Observe scanner data for product sales generate new product ideas and/or assess versions to assess various and/or rates reaction to a new product concept concepts, names, packages Distribution $&wremurtcatty a/rer hours of Examine internal records for delivery Observe trends in store locations, operation, methods of delivery, failures and/or damage layout, atmospherics, etc. shelf space, shelf positioning, etc. Sysremar/ca//y alter: advertisements to assess media, Examiner Surveyr placement, timing, messages prptnptipn listener/reader/viewer characteristics a sample of the target market to assess compensation plans to assess oAnalys'f various media to assess reach and Observe conversations between awareness impact on sales, elfon, motivationna ysis m customers and salespeople a sample (via a focus group) to assess point of sale promotions 'z0redemption rates of coupons reaction to advertising and/or other promotional materials sales presentations and/or sales call fmquency direct mail pieces 'o 'O