Prof. Neha Yadav

Fundamentals of Market Research

What is Market Research?It is a systematic and objective

identification, collection, analysis, dissemination and use of information for the purpose of improving decision making related to the identification and solution of problems and opportunities in marketing.

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Role of Marketing Research

LEVEL 2 (Tactical)

LEVEL 1 (Strategic)

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Ethical Considerations in Market ResearchAny information collected for the purpose of marketing

research from a respondent should not be misused for any other purpose.

Badgering or forcing respondents to answer a questionnaire or certain questions is not a good professional practice. A better approach is to explain the necessity of asking a question and let the respondent decide further.

Confidentiality of the responses in good faith must be ensured.

Questions of personal nature which could embarrass the respondent, must be given an opportunity to think about it and refuse to participate.

Marketing researcher’s foremost responsibility is to accurately reflect the respondent’s replies in report. The report must not be based on preconceived ideas of the researcher.4

Classification of Market research

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Market Research ProcessStep 1: Problem Identification

Step 2: Development of an Approach to the Problem

Step 3: Research Design Formulation

Step 4: Fieldwork or data Collection

Step 5: Data Preparation and Analysis

Step 6: Report Preparation and Presentation6

Problem Identification & Developing an Approach

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Management Decision Problem

Marketing Research Problem

Asks what the Decision maker needs to do

Asks what information is needed and how it should be obtained

Action Oriented Information Oriented

Focuses on Symptoms Focuses on underlying causes

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Chain Restaurant Study

One day I received a phone call from a research analyst who introduced himself as one of our alumni.

He was working for a restaurant chain in town and wanted help analyzing the data he had collected while conducting a marketing research study.

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Chain Restaurant Study

When we met, he presented me with a copy of the questionnaire and asked how he should analyze the data. My first question to him was,

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Chain Restaurant Study

When he looked perplexed, I explained that data analysis is not an independent exercise.

Rather, the goal of data analysis is to PROVIDE INFORMATION RELATED TO THE PROBLEM COMPONENTS.

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Chain Restaurant StudyI was surprised to learn that he did not have a clear understanding of the marketing research problem and that a written definition did not exist. So before going any further, I had to definedefine the marketing research problem.

Once that was done, I found that much of the data collected was not relevant to the problem. In this sense, the whole study was a waste of resources. A new study had to be designed and implemented to address the problem defined.

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MANAGEMENT DECISION PROBLEMShould a new product be introduced?Should the advertising campaign be changed?Should the price of the brand be increased?

MARKETING RESEARCH PROBLEMTo determine the preference and purchase

intentions for the proposed new productTo determine the effectiveness of the current

advertising campaignTo determine the price elasticity of demand

and impact on sales and profits of various levels of price changes

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Components of ApproachObjective/Theoretical FrameworkResearch should be based on objective

evidence and supported by theory.Theory is conceptual scheme based on

foundational statements called axioms.Objective evidence is gathered by compiling

relevant findings from secondary sources (supported by empirical findings)

In other words, it is called the literature review based on which the framework of research can be based.

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Analytical Models:Verbal Model, Graphical Model, Mathematical ModelResearch Questions:RQs are refined statements of the specific

components of the problem.Each problem component can be again broken down

into sub components.Ex: To measure customer satisfaction towards fast

food industry

Ambience, Quality of food, Staff, Cleanliness and Hygiene, Price

Questions on each component can be asked from the respondent.

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Hypotheses:It is an unproven statement about a phenomenon

that interests a researcher.It is the possible answer to the research questions.COMFORT FOOD REAL RESEARCHEx: RQ1: What foods are considered to be comfort

foods?H1: Potato Chips are considered to be comfort foods.H2: Ice creams/Chocolates/ Soups are considered to

be comfort foods.RQ2: When do people eat comfort foods?H3: People eat comfort foods when they are in good

mood.H4: People eat comfort foods when they are in bad

mood.16

Research DesignFramework or Blueprint for conducting the Market

ResearchIt details the procedures necessary for obtaining the

information needed to structure or solve the problems.Foundation for conducting the project.Components or tasks involved:1.Design exploratory, descriptive and or causal phases2.Define information needed3.Specify measurement and scaling procedures4.Construct and pretest questionnaire5.Specify sampling process and sample size6.Develop a plan of data analysis

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Research Design Formulation

Contd…..18

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Exploratory & Conclusive Research Differences

Objective:

Character-istics:

Findings/ Results:

Outcome:

To provide insights and understanding

Information needed is defined only loosely. Research process is flexible and unstructured. Sample is small and non-representative. Analysis of primary data is qualitative

Tentative

Generally followed by further exploratory or conclusive research

To test specific hypotheses and examine relationships

Information needed is clearly defined. Research process is formal and structured. Sample is large and representative. Data analysis is quantitative

Conclusive

Findings used as input into decision making

Exploratory ConclusiveTable 3.1

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Comparison between the research designs

Exploratory Descriptive Causal

Objective Discover Ideas and Insights

Describe market characteristics or functions

Determine cause and effect

Characteristics Flexible, Versatile, Often the front end of total research design

Marked by the prior formulation of specific hypotheses, pre planned and structured design

Manipulation of one or more independent variables

Methods Expert surveys, pilot surveys, Secondary data (analyzed qualitatively), qualitative research

Secondary data analyzed quantitatively, Surveys, panels etc

Experiments

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Exploratory Design-Qualitative1. Direct Focus group Interviews In Depth Interviews2. Indirect Projective Techniques a) Association

Techniques b) Completion Techniques c) Construction Techniques d) Expressive Techniques

Exploratory Design- Secondary Data

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Uses of Exploratory Research

Formulate a problem or define a problem more precisely

Identify alternative courses of action

Develop hypotheses

Isolate key variables and relationships for further examination

Gain insights for developing an approach to the problem

Establish priorities for further research

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Methods of Exploratory Research

Survey of experts (discussed in Chapter 2)

Pilot surveys (discussed in Chapter 2)

Secondary data analyzed in a qualitative way (discussed in Chapter 4)

Qualitative research (discussed in Chapter 5)

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Use of Descriptive Research

To describe the characteristics of relevant groups, such as consumers, salespeople, organizations, or market areas

To estimate the percentage of units in a specified population exhibiting a certain behavior

To determine the perceptions of product characteristics

To determine the degree to which marketing variables are associated

To make specific predictions

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Methods of Descriptive Research

Secondary data analyzed in a quantitative, as opposed to a qualitative, manner (discussed in Chapter 4)

Surveys (Chapter 6)

Panels (Chapters 4 and 6)

Observational and other data (Chapter 6)

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Cross-Sectional Designs Involve the collection of information from any given sample of

population elements only once

In single cross-sectional designs, there is only one sample of respondents and information is obtained from this sample only once.

In multiple cross-sectional designs, there are two or more samples of respondents, and information from each sample is obtained only once. Often, information from different samples is obtained at different times.

Cohort analysis consists of a series of surveys conducted at appropriate time intervals, where the cohort serves as the basic unit of analysis. A cohort is a group of respondents who experience the same event within the same time interval.

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Longitudinal Designs

A fixed sample (or samples) of population elements is measured repeatedly on the same variables

A longitudinal design differs from a cross-sectional design in that the sample or samples remain the same over time

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Cross-Sectional vs. Longitudinal

Sample Surveyed at T1

Sample Surveyed at T1

Same Sample also Surveyed at T2

T1 T2

Cross- Sectional Design

Longitudinal Design

Time

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Evaluation Criteria

Cross-Sectional Design

Longitudinal Design

Detecting ChangeLarge amount of data collectionAccuracyRepresentative SamplingResponse bias

---++

+++--

Note: A “+” indicates a relative advantage over the other design, whereas a “-” indicates a relative disadvantage.

Table 3.4

Relative Advantages and Disadvantages of Longitudinal and Cross-Sectional Designs

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Uses of Causal Research

To understand which variables are the cause (independent variables) and which variables are the effect (dependent variables) of a phenomenon

To determine the nature of the relationship between the causal variables and the effect to be predicted

METHOD: Experiments

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Types of Errors

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•Surrogate Information error - Respondent Selection Error - Inability Error•Measurement Error - Questioning Error - Unwillingness Error•Population Definition Error - Recording Error•Sampling Frame Error - Cheating Error•Data Analysis error

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-End of Session-

(Reading: Chapters 1 to 5, Marketing Research by Naresh Malhotra, 5th Edition, Pearson Publication)

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