MARKET RESEARCH

ROLE AND IMPORTANCE OF MARKET RESEARCH

Process of collecting and analyzing data for a good/service in a market

Analyzing consumer reaction to eg. Price changes, forms of promotion, packaging

Impacts marketing decisions

IMPORTANCE OF A RESEARCH PLAN

Reduce risk of new product launches Predict future changes Explain patterns in sales of existing

products and market trends Assess most popular designs, flavors,

styles, promotions and packages

STAGES OF MARKET RESEARCH

Management problem identification Research objectives Sources of data (primary, secondary) Sampling (probability, non

probability) Research techniques (focus groups,

surveys, in depth interviews, observation)

Analysis and presentation of results

MANAGEMENT PROBLEMIDENTIFICATION

Most important step in process Clear idea of purpose of research of

problem to be investigated

What is the size of the potential market for our product?Why are sales falling?

How can we challenge our competitors?

MARKET RESEARCH OBJECTIVES

Must tie in with original problem Set to collect all information needed

to solve problem

How many people are willing to buy our product?

If we advertise via newspaper, what will be the impact on sales and market

share?

SOURCES OF DATA

Primary: original data gathered from people in target market

Secondary: use and analysis of data that already exist

Secondary data may be more beneficial and should be undertaken first!

Advantages: cheap, quick, identifies nature of market/helps plan for primary research, comparison of data from different sourcesDisadvantages: out of date, unsuitable/irrelevant, inaccurate, not available for new product developments

SECONDARY SOURCES OF DATA

Government publications: social indicators report, economic trends, annual abstract of statistics, family expenditure survey

Local libraries and local government offices Trade organizations: society of motor traders,

furniture retailers assoc, engineering employers federation

Market intelligence reports: mintel, keynotes, business monitor intl, euromonitor

Newspapers and specialist publications: marketing journals, financial times

Internal company records

SAMPLING

Probability and non probability sampling

Sample size: larger samples give better results

Cost and time to consider

PROBABILITY VS NON PROBABILITY SAMPLING

PROBABILITY SAMPLING NON PROBABILITY SAMPLING

Simple random sampling: each member of population has an equal chance of being included in sample

Convenience sampling: sample chosen based on ease of access

Systematic sampling: sample is made up of every nth item from population

Snowball sampling: refer from friend to friend

Stratified sampling: sample is taken from different groups/layers/stratas of population (different opinions)

Judgemental sampling: sample made up of suitable persons (timely)

Ad hoc quotas: any person is chosen to make up pre-set quota

RESEARCH TECHNIQUES

Quantitative: number of consumers who may buy a product and in what quantities

Qualitative: discovering motivational factors behind consumer buying habits

QUANTITATIVE RESEARCH

OBSERVATION: how consumers behave

TEST MARKETING: testing limited quantity of new product on the market

CONSUMER SURVEYS: directly asking consumers about preferences or opinions

Who to ask? : sample must represent population

What to ask? : clear, logical questions

How to ask? : self completed questionnaire or direct interview

How accurate is it? : sampling bias, questionnaire bias, untruthfulness

QUALITATIVE RESEARCH

FOCUS GROUPS

PRESENTATION OF RESULTS

Bar charts Histograms Line graphs Pie charts

LIMITATION OF MARKET RESEARCH

90% of products fail after they have been launched! PROBLEMS WITH PRIMARY DATA Reliability of data Human behavior: untruthful, unpredictable Sampling and bias: sample may not represent

population (sampling discrepancy) Badly constructed questionnaires, leading

questions

PROBLEMS WITH SECONDARY DATA out of date, unsuitable/irrelevant, inaccurate, not

available for new product developments