Market research for libraries

Information Outlook, Feb, 2006 by Samantha Chmelik

Who are your patrons? What are their needs? These seemingly simple questions have complex answers. In this era of online, end-user focused resources, patrons and their requirements have evolved. Capturing that evolution using classic methods like surveys does not elicit useful or robust responses. Using market research techniques to analyze patrons gives librarians more opportunities to attract new patrons (or customers), create innovative library services, and develop new research skills.

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This article will review four concepts in market research:

1. The marketing mix

2. Segmentation

3. Perceptual maps

4. Usability studies

Then we will apply those concepts to libraries. First, we should define what market research is: the formal collection, analysis, and reporting of information relating to the current or future customer or market and its preferences, behavior, opinions, and trends. The results of market research are used for decision making about the marketing mix, a.k.a. the Four P's:

* Product--an offering that satisfies a need or want of and provides a benefit to a specific segment of a market

* Price--brand value plus production costs plus profit margin

* Place/Position--the literal and figurative distribution of the product

* Promotion--the techniques used to communicate information about the product to the market

The marketing mix is used to create a strategy to sell the product. For libraries, the product could be information. The price could be the charge back rate; promotion could be presentations during new employee orientation sessions. The literal place is the physical library; the figurative position is the idea that the library is place of knowledge. To hone that strategy, segmentation is used to define and understand the customers.

Segmentation answers the question: "Who are my customers?" Segmentation is the grouping of customers by specific characteristics. It is used to discover the specific characteristics of customers and then to create products and advertising and marketing campaigns to appeal to those customers. The basic segment categories are customer graphics, demographics, psychographics, geographics, and product graphics. Customer graphics is Knowledge inForm's term for the initial division of customers into consumer customers or business customers. Each of these markets is quite different, so before you divide your customers into other segments, you first must know which "general" type of customer they are.

Within the business and consumer segments, you can use the other segmentation categories to further subdivide those main customer segments. Demographic segmentation is what people usually think of when they are asked to define market segmentation. Easy to measure and use, demographics categorizes people according to population or occupation characteristics. Common demographic subsegments include age, gender, income, and occupation.

Psychographic segmentation separates customers according to class, lifestyle, values, or opinions. Geographic data divides customers by location. Segments can be defined by zip code, city, state, region, or country. Product graphics is based on consumer behavior towards products and services. Subsegments include brand loyalty, product/service benefits, and product/service usage.

Once you have established your segments, you can then use Hiam & Schewe's Six Steps to Segmentation process to:

1. Determine market boundaries in accordance with business strategy. What is our business focus? Who are our generic competitors? What are the fundamental needs of this market?

2. Determine which segment variables will be most useful. Who is our typical customer? Which of their segment characteristics are related to our product?

3. Collect and analyze segment data, identifying specific customers with the same wants and needs.

4. Draw a profile of each segment that with variable information to form a picture of buying behavior.

5. Target the segments by looking for the best opportunities that come from matching the company's resources with those opportunities.

6. Design a marketing plan that best highlights the product features and creates the image that will appeal to the targeted segment. Determine the best method for reaching that group.

For a corporate library, the answers to these questions could be:

1. Our focus is providing information resources to all the employees of our company. Our competitors are Internet search engines, end-user databases, and other libraries (public or academic). The fundamental needs of our market include: 1) obtaining data for strategic planning, 2) information resources available on each desktop, and 3) training in search strategies.

2. Our typical customer is in middle to upper management, with corporate planning, product management, or competitive intelligence responsibilities. This person needs timely, concise responses to his/her questions in a variety of formats.

3. Our typical customer has a title of vice president of higher, spends approximately 50% of his/her time traveling, and has an MBA.