Market research is necessary for any sort of business. It helps us to be familiar with the market conditions, desire of consumers and rules laid out by Government. Also you know number of competitors and their hold in a market, economic trends, technological advances, and numerous other factors that make up the business environment.

Involves a systematic, objective collection and analysis of data about your niche markets in order to gain an in-depth understanding of its various aspects like industry audience, competition and prevalent trends therein. Market’s research processes include accumulation of a variety of related and non-related facts that are further used to create meaningful and relevant information that helps support business decisions.

I found a great list of why companies should do market… research. And even through budgets are tight with the current state of the economy, market’s research can provide benefits from a variety of places.
- Find things that satisfy the customer
- Give crucial information about various factors that affect the business
- Help companies formulate plans
- Identify potential in a specific area
- Minimize the chance of loss
- Help keep tabs on what your competitor is doing

There are two types of Market Research: primary research or original information gathered for a specific purpose and secondary research or information that already exists somewhere. Both types of research have a number of activities and methods of conducting associated with them. Secondary research is usually faster and less expensive to obtain that primary research.

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1. Not knowing what you don’t know
Its easy to do online surveys these days. Too easy. It may be so cheap and easy that you do it without understanding the basics and end up with misleading answers that send your business down the wrong path. This is worse than never doing any research in the first place. Spend a little time and get to know what you don’t know about market research. A basic review of the following topics is a great start.

• Sampling and sampling error
• Quantitative vs. qualitative research
• Question bias / question design
• Response rates / confidence levels
• Questionnaire coding
• Why people take surveys (social contract)

Some great books on these subjects are:
“Mail and Internet Surveys: The Tailored Design Method” by Don A. Dillman
“Asking Questions: A Definitive Guide to Questionnaire Design” by Norman Bradburn, Seymour Sudman, Brian Wansink

2. Not eliminating sampling errors
Now that you know what sampling error is you can understand why it is critical to conducting meaningful market research. Many of the online surveys you see today are full of potential sampling errors. Don’t be one of them. Take the time to develop a good sample and then make sure you get as many of those people as possible to your survey. This is probably the biggest difference between professional market research and your do-it-yourselfers. The pros take the time and money to develop good samples and then make sure that they get good response rates. You can to if you put in the effort.

• Always use a true random sample
• Tracking your respondents (PINs)
• Program the survey to eliminate duplicates and respondents with bad intentions
• Check the data for oddities (clean the data of illegitimate records)
• Use incentives (does not have to be monetary, see social contract)

3. Making decisions with inaccurate information
If you never understood any of # 1 and # 2 it is a good bet your survey is useless. Worse than that you may think it is telling you what to do with your important business decisions. Making decisions with inaccurate information is worse than taking a guess. 

4. Writing bad questionnaires
You might get everything else right and then go and write a bad questionnaire. Lots of online surveys have at least one bad question. What is a bad question? It’s any of the following:

• Biased questions
• Unanswerable questions (impossible to know the answer)
• Questions with two meanings
• Hard to understand questions (way to long, strange use of words)
• Dumb questions (asking about something the researcher should already know, or has already asked)

5. Programming a hard to take survey
After you have spent all that time creating a good sample and writing good questions don’t ruin it by programming a hard to use survey. One of my top gripes is forcing respondents to complete every answer. Too much of this is going to get you either a contrived answer or the respondent leaving. Neither is good. 

• Don’t force non-critical questions
• Don’t have non-standard buttons
• Don’t use non-standard technologies (java applets, etc.)

6. Going cheap
Both the good and bad thing about online market research is that it can be much less expensive than in the past. The bad of this is that it is just too easy to conduct flawed market research. Many of the above items cost time and money (sampling, questionnaire design, etc.) Spend the time and money to do it right. Even better hire a quality market research firm to do it for you. Either way you will save money in the long run by conducting quality market research. 

7. Confusing social networking with quantitative market research
Talking with lots of people (social networking) might gain you valuable qualitative information but it is not quantitative market research. The difference is qualitative information rarely represents all of your audience and gives you individual opinions and ideas. Quantitative research on the other hand is designed to represent all of your audience and gives you answers that you can know reflects all of your customers. Don’t confuse the two. Social networking can be useful but understand its limitations.

8. Being overly “cute” with the survey tool
Your market research is supposed to gather meaningful information about your target audience. It is not supposed to impress them with all the high technology you can master. Keep your survey technology as simple as possible to reduce excluding respondents that are not up to speed with the latest and greatest.

• Keep Flash and JavaScript to a minimum (use them but not in critical areas, always provide alternatives.)
• Use tried and true web technologies

9. Relying on only one source of information
Market research is a snapshot of opinions at a certain time. If your research results in wildly different answers than you were anticipating it is wise to confirm these conclusions with more data. 

• Conduct another survey
• Look for corroborating data

10. Ignoring your market research
If you go to all the trouble to conduct a good study then have a plan to do something with that information. Too many organizations will conduct market research for one reason or another and when they get information back just sit on it. Don’t be the one who ends up saying “Wow, if we had just done what our market research told us we wouldn’t be in this bad position”. Before you conduct any online research have a plan as to what you will do with it.