Market Research
The gathering of information to
make marketing decisions.
Market Research
Simple
Complex
You run a small bakery.
You have developed a
new cookie and want to
know if customers will like
it. You prepare a plate of
the new cookies and offer
a free sample to every
customer. You ask each
customer what they think
about the new cookie.
A large national company has
developed a new snack
product. Before producing
large amounts and selling it
across the country, the
marketers want to make sure
that people will buy it and like
it. They decide to test market
the product in one city, keep
track of how much is
purchased, and ask customers
their opinions of the snack.
Marketing Research
Process
Much valuable marketing research is performed in an
informal way.
Angry phone calls from
customers!
Talking to customers in the store
Types of Data
Data is divided into two categories: primary data and
secondary data.
Primary
Data
Secondary
Data
•Data collected for and
about a specific business.
•Data collected for someone
else, or for nonmarketing
reasons, but is available for
you to use.
Primary Data
Data that's tailored to a company's particular needs.
By customizing tried-and-true approaches — focus
groups, surveys, field tests, interviews or
observation — you can gain information about your
target market.
More specific results than secondary data
Professional primary research can be pricey!
Collecting Primary Data
The Four Methods
Observation
Interview
Experiment
Survey
Observation
•The researcher watches customers
and records their behavior.
•Another form of observation used
by many service companies is the
secret shopper (or mystery
shopper). This is a person hired by
the company to visit its place of
business and observe the quality of
service.
Interview
•A formal meeting between two or
more people, during which
questions are asked of one person.
•In marketing, interviews are used
to gain insight into customers’
thoughts, opinions, and reactions to
products.
•A focus group is a small group of
people who discuss topics of
interest to a researcher. The
researcher observes and collects
information as the members of the
focus group exchange ideas.
Survey
•An organized study in which a
researcher asks questions of a
number of people.
•A survey can be conducted in
person, over the phone, by mail,
or over the internet.
•The series of questions is called
a questionnaire. The questions
should be fair and unbiased.
Who should you survey?
The idea behind a survey is to ask a
small sample of people, who
represent a larger group of people.
Asking EVERYONE would be too
expensive and time consuming!
Many national surveys use 1,000
people to get useful information
about national attitudes and
opinions.
Experiment
•The researcher sets up an
actual experiment and
compares the results.
•Taste tests are common
experiments.
•Often researchers use a
combination of observation,
survey, and experiment to get
the most valid data to make
decisions.
Secondary Data
Based on information taken from studies previously
performed by government agencies, chambers of
commerce, trade associations, and other
organizations.
This includes Census Bureau information and Nielsen
ratings.
Although secondary research is less expensive than
primary research, it's not as accurate, or as useful, as
specific and customized research.
Sources of Secondary Data
Business Records
Government Databases
Private Databases
Libraries
Internet
Private Databases
Marketing research firms collect information in
order to sell it to outside parties.
An industry publication is a magazine or newsletter
that focuses on a specific industry.
Gathers and publishes market information
A trade association is an organization of people in a
specific type of business.
Sometimes provides free information published in
journals
Trend Research
One of the major goals of
marketing research is to spot
business opportunities.
One way to do this is to look
for new trends.
In marketing, a TREND is a
direction of movement of
consumer behavior.
Successful businesses
recognize trends early and
develop products to meet new
needs.
Types of Trends
Social
Demographic
Product
• Changes in
society
• Lead to changes
in consumer
behavior
• Ex: Increase in
working
mothers (child
care, convenient
food)
• Changes in the
size of the
population
• Growing
markets
• Increase in older
population:
health care,
travel, financial
services
• Development of
products
• Ex: Flat screen
TVs, 100 cal
snakes, wireless
• Trend: lasts at
least 10 years
• Fad: Popular for
a short time,
then disappears
Is Marketing Research
Always Right?
The market is constantly changing
Customers are always changing their minds
Surveys can be biased
Incorrect representation of target market
People did not respond truthfully
Different methods of data collection can yield
different results