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1. To determine the characteristics of
market research.
2. To discuss the six steps in the
marketing research process.
3. To evaluate several ways of
researching markets.
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The Market Research Process
Defining the Problem
Developing an Approach
Identifying the Research Design
Collecting Data
Analyzing & Interpreting Data
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• Is a well-organized collection and
analysis of data about particular
groups of people (target markets),
competitors and other factors of
markets
target market: a specific group of consumers to
whom a company aims the selling of its products
or services
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• Includes six steps:
1. defining the problem
2. developing the approach
3. identifying the research design
4. collecting the data
5. analyzing and interpreting the data
6. preparing the research report
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Define the Problem
• market potential
• market share
• company image
• sales analysis
• forecasting
Develop the Approach
• project analysis
• skills analysis
• budget analysis
• environment
• overall theory
Identify the Design
• secondary vs.
primary
• internal vs.
external
qualitative vs.
quantitative
Collect the Data
• various
questioning
techniques and
methods
• non-sampling
errors
Analyze and Interpret
• target market
• customer
preferences
• compare to
hypothesis
Research Report
• brief summary
• information
sources
• factual and
precise
• results
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• A problem within a company may concern:
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market potential
market share
company image
sales analysis
forecasting
any factor effecting the market potential of a
product
• The problem will most likely be recognized
on more than one level of management
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• Market potential:
– the maximum possible sales of a product or
service a company is capable of producing
• Market share:
– the percentage of the total sales of a specific
product or service from a given company
• Company image:
– the way current and potential customers view
the company or organization
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• Sales analysis:
– the process of gathering, analyzing and
comparing the sales data of a company
• Forecasting:
– the estimating or predicting in advance of
future results of sales by looking at current
and past sales
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• Consider the process necessary to reach
your marketing objective
• Consider factors involved in the campaign:
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project analysis
skills analysis
budget analysis
environment
overall theory
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• Project analysis:
– determines the difficulty of the project and
how capable your team is of achieving the
set goals
• Skills analysis:
– evaluates how much internal and external
research must be done and determines who
is able to gather the information
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• Budget analysis:
– highlights available funds and determines
how much the project is going to cost to
complete
• Environment:
– determines the economic environment
relative to the company’s products or
services, the influencing factors of the
environment and related government
regulations
• Overall theory:
– establishes the hypothesis to prove or
disprove with research
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• Develop a framework for the design of
the research program
• Set aside time and upper management
assistance
– this step takes the most amount of time,
thought and expertise of all steps in the
process
• Incorporate primary and secondary data
research
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• Are divided into the following
categories:
– secondary data which includes
 internal and external research
– primary data which includes
 qualitative and quantitative research
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Secondary Data
Internal
External
ready to use
information
other than
company
records
published
materials
projective
techniques
previously
gathered
information
databases
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• Should be evaluated before any other
data is collected
• Consists of information previously
gathered for a purpose other than the
one at hand
• Can be located quickly and
inexpensively
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• Should be examined for the following:
– reliability
 measure of the consistency of the results
when repeating the research
– validity
 degree to which the research measures what
it should be measuring
– relevance
 how much the research relates to the topic at
hand
– accuracy
 amount of exactness; the quality of being
completely correct
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Internal
External
published
materials
information
other than
company
records
ready to
use
previously
gathered
information
databases
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• Ready to use data
• Data requiring little further processing
• May include:
– sales invoices
– warranty cards
– invoice books
– management records
– customer comments or suggestions
– annual sales charts and goals
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• Includes
– published materials
 statistical data
 census data
 government publications
 directories
– computerized databases
 bibliographic databases
 numerical databases
– syndicated services
 surveys
 scanner tracking of individuals
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• Is researched specifically for the
matter at hand
• Is conducted after secondary data
has been collected
• Is usually more expensive than
secondary data
• Can be obtained through
communication or observation
observation: the recording of actions performed by
either a person or an electronic device.
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Qualitative
focus
groups
projective
techniques
Quantitative
exploratory
research
causal
research
in-depth
interviews
descriptive
research
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• Is collecting, analyzing and interpreting
data by observing what people do and
say
• Involves in-depth interviewing of small
groups in an unstructured manner
• Develops an initial understanding of
public opinion
• Breaks down into focus groups,
projective techniques and depth
interviews
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• Consist of a small, prescreened, group of
8-12 participants discussing a specific
topic in a relaxed atmosphere
• Are conducted to gather information on
the launch of a new product and
determine its accessibility and
adaptability into the market
prescreening: selecting contestants on the
basis of demographics, product usage and past
consumer behavior
demographics: the physical characteristics of a
population, such as: age, gender, income,
education, occupation, etc.
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• Are used to judge customer reactions to
a new advertising campaign
• May obtain in-depth data pertaining to
motivation, branding, intentions,
knowledge and attitudes
• Use a moderator to take and record the
observations of the participants
• Consist of asking questions, drawing out
answers and encouraging discussion
amongst the group
• Are usually recorded
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• The Buick division of General Motors
held focus groups to help develop a new
model of car they were working on. They
set up the focus groups in 20 different
locations across the country in order to
interview a wide selection of people. The
research found the main features people
desired in the car were a stylish body,
legitimate backseat, at least 20 miles to
the gallon and certain speeds of
acceleration.
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• Place participants in stimulating activities
where they may reveal information they
would not under direct questioning
• Examples of projective techniques:
– cartoons: respondents are asked to
complete a comic strip scenario with their
own phrases or situations
– word association: respondents are
given a word and then asked to reply with
the first word or phrase which comes to
mind
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• Are instructed one-on-one interviews
used to gain opinions of respondents
• Utilize projection techniques such as
cartoons and word association
• Are ideal for researching sensitive,
personal or confidential topics
• Are good for interviewing people with
busy lifestyles not able to attend focus
groups
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• Uses structured questions of a large number
of participants where response options are
predetermined
• Consists of numbers and hard data and is
used to find a final course of action
• Breaks down into exploratory, descriptive
and causal research
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• Is used to provide insight and
understanding, clarify concepts and form
hypotheses
• Is flexible and is used as a basis of study
when little is known about the topic or
situation of the campaign
• Is usually followed by further exploratory
research or conclusive research
hypothesis: a temporary theory to explain certain
facts to guide an investigation (or in this case, to
guide the research); tested for accuracy
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Joe Pop decides he would like to produce a
new drink. Before he begins his descriptive
research he must determine his market is in
need of the new drink and that it will be
profitable for him to begin production. He
looks up past records of his sales and the
demand graph from last year. He also sets up
a taste testing study and a focus group
discussion to better understand his market’s
need for this new product. After the studies
and a bit more research he
can determine whether or
not to begin a campaign for
his new item.
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• Is a form of conclusive research
• Describes market characteristics or
functions
• Seeks to:
– identify users of a particular product
– determine the percentage of the population
buying or using the product
– forecast or predict the product’s future
demand
conclusive research: tests the hypothesis with
clearly defined formal and structured data
through large sample groups
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• cross-sectional study: the observation
of a defined population at varying time
intervals under diverse environmental
conditions
• longitudinal study: a single group is
followed over time to measure
improvement of a task involving a
product
population: a group of pre-selected people involved
in the research study
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• sampling: using a subset of the
population to make generalizations
about a topic
subset: a pre-selected group of individuals
participating in a research study representing the
entire population in terms of gender, race, age,
ethnicity, etc.
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Busy Bee cleaning company has noticed a need
for a new vacuum cleaner. They now must
determine what aspects their customers would
like to see in a new product and how many
people would be interested in buying a new
vacuum. The company conducts a study
involving two neighbors. One will use the new
vacuum for two weeks, while the other uses the
old one. After the study, the neighbors will judge
the cleanliness of their carpets and decide what
they like and dislike about their vacuums. With
this information Busy Bee will be able to decide
what type of budget to set for the new product
and project their future profits from it.
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• Is also a form of conclusive research
determining cause and effect relationships
• Is completed by manipulating one or more
independent variables through experiments
and determining the effects of those
changes
independent variable: a variable in an experiment
determining the outcome of other variables
(dependent variables)
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• Correlation study:
– examines the relationship among multiple
characteristics or variables
– when one variable increases another
variable should increase or decrease
consistently
1.2
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0.6
0.4
0.2
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A grocer wants to determine if the change in
packaging style (independent variable) will have
an effect on the sale of limes (dependent
variable) through the use of an experiment.
Before the experiment, the store sold the limes in
pre-weighted five pound bags. After recording
the sales of the limes with the package design,
the store started to sell the limes in an open
produce bin, therefore manipulating the
independent variable. The change showed
higher sales of the limes. The question now
becomes, did the packaging change cause this
increase in sales?
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• Use the various questioning
techniques and methods to gather
information
• The most common techniques are
– questionnaires
– interviews
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• Are used to gain information (concerning
people’s attitudes, opinions, awareness,
knowledge, intentions, behavior, etc.)
through the use of written or verbal
questions
• Should follow a specific order:
– researchers must identify themselves
– ask interesting, involving questions first
– move from general to specific questions
– ask personal or demographic questions
last
– thank the participants
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• Mail questionnaires
• Telephone interviews
• Online surveys
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• Advantages:
– inexpensive
– allow respondents to answer at their
leisure
– easy to reach target population
• Disadvantages:
– results can take a long time to receive
– low response rates
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• Advantages:
– fast completion time
– ability to cover a large geographic area
– use of few interviewers
• Disadvantages:
– interview length limited
– unlisted numbers/call screening
– lack of visuals
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• Advantages:
– short turnaround
– use of visual stimulus
– inexpensive
– easy to access participants
• Disadvantages:
– do not reflect population as a whole
– response rate lower for longer surveys
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• Social desirability bias: the tendency of
candidates to give answers thought to be
socially accepted or correct
• Assessment of non-attitudes: the
question requires a response the participant
never thought about or considered before
• Rating scales: unclear answers involving
words like sometimes, often, rarely, etc.
could be interpreted differently by every
person
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• Advantages:
– high participation rates
– use of visuals
– prescreening of individuals
– interviewer can probe and explain
• Disadvantages:
– high costs
– time consuming
– need for highly trained interviewers
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• Fixed alternative: provide multiplechoice answers; are best when possible
answers are few and clear-cut
• Open-ended: allow the respondent to
fully express his or her answer; more
difficult to analyze (often used in in-depth
interviews)
• Projective methods: vague questions or
stimulus response questions and
activities
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• Caused by interviewers
– intentional errors by leading a respondent
to provide a certain response with a
biased question
– unintentional errors by not having a clear
understanding of the interview process
• Caused by respondents
– intentional errors by lying or not
responding
– unintentional errors by not understanding
the question, guessing or not paying
attention
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• Nominal:
– consists of assigning items to groups or
categories (religion, race, gender, etc.)
• Interval:
– maintain equal intervals between numbers (the
Fahrenheit scale for temperatures)
• Ordinal:
– used for ranking, so higher numbers represent
higher values (asking a person how much they
like ice cream on a scale from one to five)
• Ratio:
– are like interval scales, but they have a true zero
point (height, age, weight, length, etc.)
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• The process of assigning meaning to the
information collected
• Review research goals to help organize
data and direct analysis
• Identify patterns in the responses
– determine customer preferences about the
business compared to competitors
– get a better focus on who makes up the
target market and their needs and wants
– compare data to the hypothesis established
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• A brief summary of the overall
research process and the objectives
• Includes the data collected from the
research methods and where and how
it was collected
• Incorporates the information sources
• Breaks down the number of
interviews/questionnaires
based on multiple
characteristics relevant to
the research and findings
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• Explains how the respondents were
selected and discusses how they
reflect the entire population
• Should be factual, precise and
comprehensive
• Contains all of the results pertaining to
customer preferences, target market,
competition, etc.
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