4.4 Marketing
Research
Market Research

The process of collecting, recording, and
analyzing data
about customers,
competitors,
and the market
Why conduct market research?
1.
2.
3.
4.
Reduce the risks of launching a new
product
Predict future demand changes
Explain patterns in sales of existing
products and market trends
To identify the favored designs, flavors,
styles, promotions, and packaging
Marketing Research

Secondary Research

A collection of data from second-hand sources. Often
called “desk” research.


Second-hand research should be conducted first. It is less
expensive and reveal a lot of information.
Primary Research

A collection of first-hand data that is directly related to the
researcher’s needs.

Primary Research can be expensive yet specific to your
needs.
Primary Research

Quantitative Research


Research that leads to numerical results that can
be analyzed and presented.
The average person dines out 3X per week.
Qualitative Research

Research into the motivations behind buying
behaviors and opinions.
All fast food restaurants are cheap.
Methods of Primary Research



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
Surveys
Interviews
Focus Groups
Observations
Test Marketing
Methods of Primary Research
Surveys - Directly asking consumers or
customers about their opinions and preferences

4 things to consider
 Who to ask
 What to ask
 How to ask
 How accurate is it?
Issues with Surveys
1.
Who to ask?
You cannot ask everyone, so a SAMPLE is taken.
2.
What to ask?
Construct a unbiased questionnaire.
3.
How to ask?
Telephone, self-complete, interviews
4.
How accurate is it?
Assess the accuracy and validity research
Methods of Primary Research
Survey DESIGN





Don't ask too many questions – only the most
important ones!
Group income levels unless it is absolutely
necessary quantitative information
Open ended questions are difficult to tabulate
Closed questions are easy to tabulate but may not
provide much insight
Avoid questions that lead to an answer
Methods of Primary Research
Interviews – Are conducted by interviewer
usually in a public place or at the respondents
home.

A skilled interviewer will
 Avoid bias in when asking questions
 Questions can be explained to the interviewee
 Follow up questions can be asked
 Expensive method
Methods of Primary Research
Focus Groups – A group who are asked about
their attitude towards a product, service,
advertisement, or new style of packaging.

Encourages active discussion
 All members are free to talk
 The discussions are usually filmed
 Responses are typically seen as more accurate
than a survey response
Methods of Primary Research
Observation – A qualitative method of collecting
and analyzing information obtained through directly or
indirectly watching and observing others.

Data is collected through direct observation
 Cookies on a computer
 Nielsen TV ratings
 Traffic counts and congestion patterns
 Loyalty cards
Methods of Primary Research
Test Marketing – Marketing a new product in a
geographical region before a full-scale launch.

Promoting and selling to a limited geographical area
 Record consumer reaction to product on a small
scale
 Reduces risk of a full-scale launch failing
 Not always accurate if the test market does not
share same characteristics of larger market
Secondary Data
Secondary data can provide a company with a great
deal of information. But.....



Never completely up to date
May not provide specific answers to your question
Is available to your competitors too
Where do you get Secondary Data







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Market intelligence analysis reports
Academic journals
Government publications
Local libraries and local government offices
Trade Organizations
Media reports and specialist publications
Internal company records
The Internet
Advantages / Disadvantages of
Secondary Data
Advantages
Disadvantages
Typically
May
inexpensive
Can
be out dated
assist with planning primary
research
Originally
Can
Data
be obtained quickly
Comparison
of data from
different sources
collected for another
purpose so it may not entirely
suitable for your purposes
collection methods and
accuracy may be unknown
May
not be available
Marketing Ethical Considerations

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Researches should have permission of the people they
will be studying
Data collection methods should not cause physical harm
Objectivity vs subjectivity should be considered
Surveys and observations should be kept anonymous
Researchers should not take advantage of easy-toaccess groups
Presentation and analysis should be an accurate
representation of what was told or gathered by
researchers
Sampling

Sample


A group of people taking part in market research
selected to represent the target market.
Sampling Error

Error in research caused by using a sample for
data collection instead of the whole target
population
Who to ASK?

Random Sampling

Each member of the target population has an
equal chance to be selected.

You should:



Have a list of all the people in the target
population
Sequential numbers are assigned
A list of random numbers are generated
Who to ASK?

Stratified Sampling


The target population contains
many layers (men, women,
children, teenagers, elderly)
The sample should include
representation from all the
layers in the target population as a percentage of
their group.
Who to ASK?

Cluster Sampling

If the target population is geographically diverse,
clusters of samples may be taken from a few
different locations instead of every location.
Who to ASK?

Quota Sampling

The population is segmented into mutually exclusive
groups (example: women, men)

The selection of the sampling is not scientific. The
interviewer or researchers determine how many to
interview from each group.
Who to ASK?

Snowball Sampling


The first respondent refers a friend, who refers a
friend, who refers a friend.
This type is likely to be biased because friends
tend to have similar lifestyles and opinions.
Who to ASK?

Convenience Sampling

Selecting people because of ease of availability or
because the volunteered

The sample may not represent the target population as a
whole and may be biased towards a group of people.
For example, you interview people for 3 hours at the
grocery store on Thursday afternoon. You may have an
overly represented group of elderly.
Results from Surveys
Data from must be analyzed and presented.
Presentation methods include:
 Tables
Averages can also be used:
 Line Graphs
 Bar Charts
Mean – the statistical average
 Pie Charts
Median- the middle point
 Histograms
Mode - most frequently
occurring
 Pictograms