An Overview of Using Surveys for Market Research

Using Surveys for Market Research

Most of us, at one point in our life, have been asked to complete a survey. I know I have certainly been asked to complete surveys - most recently by a PhD student I encountered at the local Starbucks! Having personally never relied upon large scale surveys to guide new product design, I wanted to explore the role surveys could play in launching new ventures. Here’s what I have found.

From a pedagogical level, a survey is a short or long questionnaire designed to solicit feedback on a product or service. They are typically used to assess customer satisfaction, conduct customer segmentation studies, evaluate product usage, and, among other things, understand the perceptions consumers have of a business brand. The data gained through survey information are also descriptive; they are expressed in percentages terms and frequency counts, and sometimes cross-tabulated for the purpose of comparison. And while the aforementioned definition and uses of surveys are simplistic and intuitive, their execution is not. Just like business forecasting, it is part art and part science. And just like business forecasting, garbage in yields garbage out.

Industry Selection, Competitive Advantage, and Business Success

Note: One of our goals with the smbZen BizJournal is to make it an educational resource & reference guide for entrepreneurs and small business owners.  In the coming weeks, we will have more posts like the one below, posts that aim to provide guidance and discourse on business methodologies and trends.  We hope you find these posts insightful and useful. To that end, any feedback would be greatly appreciated.  Simple leave a comment here or send an email to support @ smbzen.com.   Thanks!

Industry Selection

Industry selection is the single most important determinant to business success. If the characteristics of an industry are unsound (i.e it is shrinking, there are many entrenched competitors, etc), the probability of failure is extremely high.  Conversely, if the industry is growing, i.e. the general trends are in your favor, the probability of success substantially lower.  March Andreessen, founder of Netscape, OpsWare, and Ning writes:

In honor of Andy Rachleff, formerly of Benchmark Capital, who crystallized this formulation for me, let me present Rachleff’s Law of Startup Success:

The #1 company-killer is lack of market.

Andy puts it this way:

• When a great team meets a lousy market, market wins.
• When a lousy team meets a great market, market wins.
• When a great team meets a great market, something special happens.

You can obviously screw up a great market — and that has been done, and not infrequently — but assuming the team is baseline competent and the product is fundamentally acceptable, a great market will tend to equal success and a poor market will tend to equal failure. Market matters most.

The Future of Small Business Marketing and Operations

This past February, the Intuit Institute for the Future issued a 32 page report discussing the three trends that will affect small businesses over the next decade.  Given our focus on entrepreneurship and small business here on the smbZen BizJournal, we found the report to be both interesting and incredibly insightful.  The trends are:

1. “The Connected World: Small Business Management On My Time, On My Terms”
2. “Beyond Web 2.0: Technology Fuels Small Business Formation, Operations, and Innovation”
3. “Small Business Marketing: The Mindset from Push to Pull”

In the following sections, we discuss trend two and trend three.

You Don’t Need A Great Idea To Start A Business: Just Start.

Coming up with a winning idea for a new product or service is one of the most difficult things to do.  If you already have an idea, great, but what if you don’t?  Despite what some experts might suggest, launching a successful business without an idea can work.  Hewlett Packard is the best known example of this in action.  Just look at HP’s initial business plan.

Another example is Sony.  When Masaru Ibuka started Sony, he didn’t have a specific product in mind.  In his book Made in Japan, Akio Morita, one of Sony’s first employees, recalls discussing possible business ideas in a conference room shortly after the company’s founding. In fact Sony’s first two products (a rice cooker, and then tape recorder) failed in the marketplace.

Incongruities, A Source of Entrepreneurial Opportunity

Exploiting Incongruities

In addition to capitalizing on unexpected success, individuals can also launch businesses by searching for and exploiting things that are incompatible, non-conforming, or inconsistent with themselves.  Drucker calls these “incongruities”.

An incongruity is a discrepancy, a dissonance, between what is and what “ought” to be, or between what is and what everyone assumes it to be.  We may not understand the reason for it; indeed, we often cannot figure it out.  Still, an incongruity is a symptom of an opportunity to innovate.  It bespeaks an underlying “fault,” to use the geologist term… …Like the unexpected event, whether success or failure, incongruity is a symptom of change.

Two instances of incongruities are when (a) the realities of an industry are in discrepancy with the assumptions about it, and (b) when the perceived values assigned to a given product or service and different from those placed on it by the customer.  Unlike the unexpected success however, these opportunities are usually only evident to those working in and having domain expertise with a given industry.  Take the case of Southwest Airlines.

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