Market research is a means for businesses to understand their audience, evaluate market opportunities, and drive data-driven business decisions. These costs can be very cheap or quite expensive when approaching the type of research, extent of the work, and methodologies involved. This article discusses the major factors that determine market research costs and intends to provide guidelines on what businesses should invest in.
Factors Influencing the Cost of Market Research
Research Type
The nature of market research that will be carried out greatly affects the overall cost. In general, there are two main types of market research:
Quantitative: This involves getting and analyzing numerical data. Surveys, experiments, and secondary data analysis are instrumental in conducting this form of research. Quantitative research can be costly due to the kind of samples taken and the need for more comprehensive data collection.
Qualitative: This is primarily about finding underlying ideas, opinions, and motivations among members of the public. Examples of such approaches would be individual interviews, focus groups, or ethnographic studies. While qualitative studies usually engage a smaller sample size, they may be more time- and labor-intensive, resulting in more expensive costs per participant.
Scope and Scale
The two factors that determine costs in a project research are scope and scale. Any project that has a wider scope—that is, national or international studies—requires remarkably greater investment in resources, larger samples, larger data collection, and possibly multiple locations for research. Smaller, focused studies generally have less cost.
Methodologies
The other element that influences the cost of market research is the research methods used. For instance:
Surveys: Generally, online surveys are cheaper compared to telephone or personal interviews. That is because fewer logistically connected labor efforts are included. However, the survey cost may escalate depending on its length and the level of complexity involved.
Focus Groups: Conducting focus groups requires participants to be recruited, facilities to be rented, and moderators to be paid—all increasing the cost.
Secondary Data Analysis: This may end up being less costly than primary data collection, although again, some of the databases or reports would have included a cost for subscription or purchase.
Analysis and Reporting
The costs may vary based on the depth and complexity of data analysis. Advanced statistical analysis, data visualization, and comprehensive reporting contribute to the overall cost. The business may want to have an ongoing approach to reporting and monitoring its activities. Hence, additional costs are incurred over time.
General Cost Estimates
While the cost of market research varies, here are some rough approximations to give a feel of what a business might expect.
Low-Cost Surveys: Online surveys with low sample sizes will cost you only a figure between $5000 and $7000. This price keeps on rising when the size of the sample increases, as well as the complexity of the survey design. A smaller target population or harder to reach cohort will have an impact on the cost as well.
Focus Groups: A focus group session is going to cost anything from $4,000 to $12,000 per group, depending upon the location, participant recruitment, and the facility.
Full-Scale Research Studies: Large, multimethod research projects, including surveys, focus groups, and secondary data analysis, can cost around $20,000 to over $100,000, depending on the scope and complexity of the work.
Costs for market research will vary, and there could potentially be significant differences, depending largely on the type of research, coverage of the project, amount of methodologies implicated, and data analysis requirements for the piece of research. By knowing these variables, a business can, through cost minimization strategies, have the capability to factor in issues surrounding the investment in market research in order to get value from the research while at the same time avoiding undesired spending beyond budgets.
