Whether you're launching a small start-up company or beginning a new multi-million dollar project, you must determine a budget for the required market research. However, there are so many crucial factors to consider if you want to set an appropriate budget that will meet your needs without over spending. So, after consulting with MarketResearch.com Research Specialist Robert Kaminsky, here are four tips that will help you allocate the best percentage of your budget for your market research efforts.
1. Consider your overall budget to determine the right market research allocation.
Before you can set a market research budget, it is important to nail down a firm overall project budget. Once this is set, you should allocate an appropriate percentage of that budget to market research. The next three factors discussed will help you determine what that percentage will be, but, keep in mind, the decided percentage should be a reasonable portion of the overall budget. This can go both ways. For example, if your overall project budget is $250,000, do not expect to get the answers you need out of a single $5,000 report; on the other hand, you don't necessarily need to fork out $100K either.
2. Research what is available before making any final decisions.
One size doesn't always fit all. However, if you're one of the one sizes that does fit, than you are definitely in luck! There are massive amounts of syndicated research out there on all kinds of topics, from general market overviews to some of the most detailed analyses. One of the best things you can do to help set a realistic budget (and to keep within that budget) is to research inventory of already published information before you consider commissioning someone to create custom research. Much of the time, you will be able to answer many, or all, of your questions with a syndicated report and, in turn, save a large portion of your budget in the long run, as published information is often up to 1/10th the cost of a custom project.
3. If you must go custom, prepare your budget accordingly.
So, what do you do if syndicated reports don't answer all of your questions? This is extremely important to consider when determining your budget. If you need to commission custom research, you will need to be prepared to adjust your budget accordingly (and your time line as well), as custom projects can cost anywhere from $5,000-$50,000, and are completed after you request it, making the process much more time consuming.
While the expenditures are greater, the benefits can be more substantial as well. Custom reports are designed to provide the specific answers to your questions, so the intelligence you receive is as extensive and detailed as you need. However, out of respect for your budget, consider this solution as a last resort, otherwise, you will be looking at an average budget of $30,000-$50,000 and at least a two-month time line from the initial project layout.
4. Understand what costs to expect and what information that gets you.
Market research is a big investment, both in terms of time and money. It's not something you want to dive into blindly. That's why it is so important to educate yourself on realistic expectations for what a report in your price range can give you. This knowledge will help you land the right market research report for your needs and budget. Below is a detailed guide to the expected cost vs. information gained in a published report:
- Top-Level Reports:
- Average cost: $100 - $1,000
- Reports typically included in this price range tend to cover very basic information about an industry. They will answer questions like how large is the industry and who are the top players, and provide some basic insights into the fundamentals of why the industry is what it is today.
- Full-Market Reports:
- Average cost: $1,500 - $8,000 (most commonly $3,500 - $4,000)
- Reports are most commonly purchased by those who need to fully familiarize themselves with an industry. They include a full explanation of the market and its subcategories as well as metrics covering the market's current state and future projections for market development. These reports will also have current trends and technologies, and they often have explanations of why a market will move in one way or another over the course of several years.
- Product Detail Market Reports:
- Average cost: $15,000 - $35,000
- Reports cover not only the performance of the market and its subcategories as a whole, but they also cover the specific market values and trends of specific products/services in the industry within specific regions or countries. For example, if you are a pharmaceutical manufacturer and want to know how the different drug offerings for one specific ailment are selling within each country, a Product Detail Market Report is the best option.
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