4.4.

Market Research

What is Market Research?

Market Research is the process of collecting, analyzing and reporting data related to a particular market, including
data on consumption of goods and services and on consumption of goods and services on competitors behaviors.
Importantly, businesses use market research information to make business decisions.

The Marketing Mix:

• Price
• Promotion
• Product
• Place

 Market Research
 Concerned with finding out whether consumers will buy a product or service, and is
done by analyzing consumer reactions
 Reasons for market research
 Reduce the risks associated with new product launches
 Predict future demand changes
 Explain patterns in sales of existing products and market trends
 Assess the most favored designs, flavors, styles, promotions for a product
 Market research process:
 Identify consumer needs and tastes
 Primary and secondary research into consumer needs and competitors
 Product idea and packaging designs
 Testing product and packaging with consumer groups
 Brand positioning and advertising testing
 Pre-testing of the product image and advertisement
 Product launch and after launch period
 Monitoring of sales and consumer response
 Types of market research
 Primary research
 Gathering data or feedback first-hand, through
 Questionnaires (short and focused, allows open-ended questions)
 Observation (foot traffic, queuing time)
 Sampling (new product or campaigns)
 Focus groups (asking groups of people)
 Interviews
 Advantages
 Up to date
 More relevant/direct
 Confidential and unique
 Objective
 Disadvantages
  Time consuming
 Costly
 Questionable validity
 Secondary research
 Collecting second-hand information from other sources like
 Market analyses (shows relevant market data)
 Government publications
 Academic journals
 Media articles
 Secondary research should be undertaken first because it is cheap, fast, comes with
plenty of sources and offers a wide range of information
 Advantages
 Cheaper and faster
 Range of sources
 Insight to trends
 Disadvantages
 May become obsolete or out of date quickly
 May be in an inappropriate format
 Partial information
 Widely available to competitors
 Qualitative vs. quantitative research
 Qualitative research
 Used to get feedback to understand motivation , behavior, perception through focus
groups, expert panels, in-depth interviews of credible individuals
 Qualitative explores attitudes and opinions and can be very deeply relevant even if
only few are interviewed
 Can only give an indication and does not have statistical relevance.
 Relatively inexpensive but harder to analyze, more time consuming, and results are
subject to bias or skill of interviewer
 Quantitative research
 Used to get statistical data from total (for figures) or representative sample (for
opinion, decisions), using interviews that have closed questions or use ranking or
sliding scales
 Quantitative can only ask factual answers but may not reveal reasons why
 A larger representative sample is needed and must be designed well so it ends up
more costly to undertake
 Sampling
 Consumer surveys ask consumers for their opinions and preferences
 It can obtain both qualitative and quantitative information
 How many…..
 What do you look for….
 4 points for consideration when making surveys
 What to ask?
 Questions are unbiased and unambiguous
  How to ask?
 Should the survey be self-completed or filled in by an interviewer?
 How accurate is it?
 Accurate and valid
 Who to ask?
 It is impossible to ask everybody even if it is just potential members of a target
market
 A sample reflects the characteristics of the survey population
 Sample should be significant and valid to avoid sample error
 Sampling methods
 Random sampling
 Random selection, based on the principle that everyone is given equal chance
 Stratified sampling
 Segmentation with number of respondents per group based on proportion to
the population
 Majority of the population will compose of majority of the survey
 Cluster sampling
 Used for localized surveys (e.g. towns, region, etc.)
 Sample based on a geographic location/ concentration of the target
 Quota sampling
 A certain number or quota is set, made up of samples from each segment or
random
 Snowball sampling
 Respondents are networked from a respondent’s referral
 Convenience sampling
 Respondents are chosen based on accessibility and proximity