Q. Why does marketing research cost what it does

A. The highest cost in any research is data-gathering — which is as it should be. The old phrase “garbage in, garbage out” is never more true than in marketing research. You must ask the right people the right questions or the answers are useless, no matter how you analyze them!

The data-gathering cost is based on the difficulty of reaching the right respondents. Researchers usually want to know the “incidence” when developing costs. Incidence is the percentage of people in the population who fit your respondent specifications.

For example, if you want to conduct a study with respondents who have checking accounts at banks (80% incidence or higher in all U.S. markets), it will be much cheaper than one in which the respondents do their banking via the Internet (about 12-15% incidence, depending on the market).

In addition to the incidence figure, ease of access is key. Some groups are particularly difficult to reach. Among these are physicians and high level executives (their calls, mail, faxes, etc. are well-screened) as well as farmers and building contractors (they are out and away from their phones, mail, faxes, etc. most of the day). Easier access equals lower research costs.

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