Anyone who enters the world of market research is always struck by the amount of jargon involved in labeling different processes.
If you’re new to market research – or wish to explain some key marketing processes to clients – then you should find this brief glossary of key phrases useful!
1. Demand estimation
This phrase refers to the process of finding out the demand for a particular service or product. One way of doing this is to establish how many people are talking about a particular topic online (social media monitoring tools such as Brandwatch can help collate such data by quickly trawling Facebook, Twitter, blogs and forums).
2. Ad-copy testing
Ad-copy testing is the process of releasing several differently-worded, adverts at the same time and tracking their effectiveness. For instance, if you are trying to increase interest in a new pen, you could issue one advert which offers a free pen to everyone who joins the company’s Facebook group and one promotional advert which concentrates on the unique selling points of the pen. Monitoring which advert attracts the most ‘clicks’ will help eliminate the less effective ad and increase your return-on-investment. Google paid ads are the most obvious examples of ad-copy testing as they allow you to try out several different adverts at once.
3. Positioning research
This is necessary if you need to find out where you are in the marketplace – hopefully most firms should have a good idea already! By being fully aware of how you and your competitors are perceived by consumers you should be able to build an effective marketing strategy.
4. Price Sensitivity Tests
‘Price sensitivity’ refers to how much a product’s demand is related to its price. Some markets are more price-sensitive than others; bus and coach ticket prices, for instance, are very sensitive. Other markets, such as the luxury car market, can be said to display price elasticity – prices can be raised without sales and profit margins being dented.
Those rare companies which inspire brand loyalty, like Apple, also enjoy the fruits of price-elasticity. Apple consumers tend to be prepared to pay higher prices as they are confident that they will get better products by doing so. Supermarket customers, in contrast, are more price-sensitive and can react to higher prices by doing their shopping elsewhere! The most obvious way of testing price sensitivity is to hold a sale – does your custom increase accordingly?
5. Sales forecasting
This is the process of estimating with confidence the number of sales you are due to generate over a set period of time. Comparing year-on-year figures can help with sales forecasting, as can measuring the amount of traffic visiting your website and establishing the conversion rate (the proportion of website visitors who make a purchase).
6. Buyer decision-making
‘Buyer decision-making’ refers to the factors which cause an individual person to make a purchase. Of course, different people have different criteria for making a purchase but it is vital for companies to try and identify the most common buyer decision-making behaviors of their target audience. For people shopping for laptops the decision-making process could place a strong emphasis on the aesthetic look of the product. Or it might factor in on the size of the hard drive or the battery life. By knowing your target audience’s tastes you can tailor the language of your website accordingly, draw up an effective marketing strategy and even alter your product to meet demand!
7. Internet Strategic Intelligence
Internet Strategic Intelligence is all about finding out where on the worldwide web people are talking about your services and tracking their conversations to find out what they are saying. An effective social media monitoring tool will help you do this and once you’ve analyzed the data you can use it to build a plan based on what people want.
8. Segmentation research
Even if you have a very specific audience which you are looking to serve, it is still likely that there will be much variation within your key demographics. Segmenting your audience into different groups – for example: business managers, couples, over-55s, early-adopters of technology – can reduce the risk of excluding key customers from your marketing strategies.
9. Eye-/Click-/Mouse- tracking
If you have created a new website, it is always an advantage to know how the users of the website will navigate their way around it. Which part of the website will they head to first? Which part of the website do they spend the longest on? Which part of a particular website page do they spend the most time on and is there any particular part which causes users to leave the website? This is where eye-tracking, click-tracking and mouse-tracking comes in useful.
Click-tracking is the easiest way of directly monitoring website usability experience; Google Analytics will let you track the order of clicks on a website.
Mouse-tracking also provides vital insights – most people will rest their mouse over the particular part of a web page they are reading.
Eye-tracking (the process of measuring the point of the gaze on the screen) is more expensive than click-tracking and mouse-tracking as it involves more sophisticated, camera-style software. For this reason it tends to be used on top-end websites.
10. Concept testing on beta sites
A ‘beta’ website is one which is still in a state of development; you could say that it’s ‘still under construction’. It is common for companies to give a limited number of people access to their ‘beta website’ in order to test its usability. You will often find ‘feedback buttons’ on beta sites for this very purpose.
As with all the other processes mentioned above, it’s all about understanding your audience.
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