MARKET RESEARCH

Chapter 17

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Marketing Research
Marketing research is related with collecting facts and figures from the market to assist the managers to make correct decisions. Need for Marketing Research:
        

There may be many reasons for carrying out market research. It may be carried out find out the likes and dislikes of the customers, appropriate price for the product, how many people might buy the product. finding the profile of the customers, the places they buy about competitors and; the promotion techniques which might be most effective.
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Market research can find out the TYPES of INFORMATION:



Quantitative Information answer questions about the quantity of a certain product. E.g How much YEOs Green Tea was sold in December 2010? finding the quantity or how many Qualitative Information answers questions where an opinion or judgment is necessary. E,g. Why do more men buy this product than women? finding out the opinions and judgement or reasons for particular action.

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Both types of information can be gathered as a result of:

 

PRIMARY RESEARCH Field research SECONDARY RESEARCH Desk research

PRIMARY RESEARCH - Also known as field research, it involves collection and collation of original data through direct contact with potential or existing customers

Lodge International School Business Studies Year 11

Primary research
1) Questionnaire: a set of questions focusing on finding information. It can be postal, telephonic or face to face  Advantages:
 

Detailed qualitative info can be gathered about the product Consumers opinion can be obtained If questions are not plan properly, the answers to them will not be very accurate or misleading Can take a lot of time and money Collating and analysing the results is also time consuming.

Disadvantages:
  

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Primary research
2. Interviews: Prepared questions asked by an interviewer and detailed input is collected.  Advantages:
 

Interviewer is able to explain directly to the interviewee Detailed info on like and dislike about the product can be gathered Consciously or unconsciously, interviewer could led the interviewee into answering a certain way resulting in inaccurate results Time consuming and expensive
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Disadvantages:


Primary research
3)Consumer Panels: Groups of people who are 3)Consumer willing to provide their input and feedback on particular products or services.  Advantages;


They can provide detailed info about consumers opinions Time consuming, expensive and biased

Disadvantages:


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Primary research
4)Observations: recording, watching or auditing a 4)Observations: particular activity or product.  Advantages:


Inexpensive way of gathering data

Disadvantages:
The info only gives basic figures  It does not provide the reasons for consumer decisions


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Primary research
5) Experiments: for new products to a limited geographical area or limited number of customers and finding out their feedback.  Advantage: Advantage:
 

Relatively easy to set up and carry out. Easy way to gather consumer first reaction to the new products e.g. Maggie cooking People might not give true feeling as not to cause offence Many other potential consumers may shop elsewhere and will not be included in the research Only those who shop at the particular area are included in asking for opinions.
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Disadvantages:
  

Process of marketing research

Step One: Define Marketing Problems and Opportunities  The market research process begins with identifying and defining the problems and opportunities that exist for your business Step Two: Set Objectives, Budget and Timetables  Your objective might be to explore the nature of a problem so you may further define it.  Or, perhaps it is to determine how many people will buy your product packaged in a certain way and offered at a certain price.  Your objective might even be to test possible cause and effect relationships. For example, if you lower your price by 10 percent, what increased sales volume should you expect?  What impact will this strategy have on your profit?  How much money are you willing to invest in your market research?  How much can you afford?  Prepare a detailed, realistic time frame to complete all steps of the market research process.
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Step Three: Select Research Types, Methods and Techniques  There are two types of research: primary research or original information gathered for a specific purpose and secondary research or information that already exists somewhere. Both types of research have a number of activities and methods of conducting associated with them. Step Four: Research Design  Includes incorporating knowledge from secondary information analysis, qualitative research, methodology selection, question measurement & scale selection, questionnaire design, sample design & size and determining data analysis to be used.

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Step Five: Collect the Data  Often called data collection or survey fielding, this is the point at which the finalized questionnaire (survey instrument) is used in gathering information among the chosen sample segments. There are a variety of data collection methodologies to consider. Step Six: Organize and Analyze the Data  Once your data has been collected, it needs to be assembled into a format in which it can be analyzed easily. This involves editing, coding and tabulating the responses. Step Seven: Present and Use Market Research Findings  Once marketing information about your target market, competition and environment is collected and analyzed, present it in an organized manner to the decision makers of the business.
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EXERCISE
DO ACTIVITY 17.1 PP 265

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Secondary research


Secondary research occurs when a project requires a summary or collection of existing data. As opposed to data collected directly from respondents or "research subjects" for the express purposes of a project, (often called "empirical" or "primary research"), secondary sources already exist. These secondary soures could include previous research reports, newspaper, magazine and journal content, and government and NGO statistics. Sometimes secondary research is required in the preliminary stages of research to determine what is known already and what new data is required, or to inform research design. At other times, it may make be the only research technique used. Also known as desk research
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Secondary data can be collected from internal and external sources

Internal sources  Information which is available for inside the business such as  Sales department records, customer records and sales reports  Opinions of distributors and public relations departments  Financial statements and records External sources  These include:  Newspapers  Government statistics and census reports  Media reports  Market research agencies reports  Employers association reports
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Advantages of secondary research Secondary data is the most easily accessible data and saves the researcher the trouble of going through the tiresome process of collecting data personally. Secondary data is readily available at cheap rates and is usually quite inexpensive. Collecting secondary data and analysing it saves time and effort. Secondary data is unobtrusive. It is easily available and the researcher can get it without much struggle. Secondary data avoids data collection problems and it provides a basis for comparison.
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Exercises
DO  ACTIVITY 17.2 Page 267


ACTIVBITY 17.3 Page 267

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Accuracy of Marketing Research

The accuracy of marketing research data collected depends on the following factors:
  

The size of the sample: the bigger the better. Type of sample: Quota sample may be more accurate then random sampling. Testing the questionnaire on a small sample and improving it and then going in for an actual survey will be more accurate rather than going straightaway for data collection. Primary Research tends to be more accurate than secondary research because the later might be carried out by someone else for other purpose. Moreover you can never be sure of the methods of collecting it. Newspaper articles may be biased, Statistics may be outdated biased,
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Exercise
DO ACTIVITY 17.4 PP 269

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How to design a questionnaire?

The most common research instrument is the questionnaire. Poorly designed questionnaires do not uncover the information you are seeking. Pretest any question with a few people to see which questions are being misunderstood or are not effective in drawing out the type of response you are interested in. Keep these tips in mind when designing your market research questionnaire.
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TIPS
    

Keep it simple. Include instructions for answering all questions included on the survey. Begin the survey with general questions and move towards more specific questions. Keep each question brief. If the questionnaire is completed by the respondent and not by an interviewer or survey staff member, remember to design a questionnaire that is graphically pleasing and easy to read.
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Tips


cont

Remember to pre-test the questionnaire. Before taking prethe survey to the printer, ask a few people-such as peopleregular customers, colleagues, friends or employees-to employeescomplete the survey. Ask them for feedback on the survey's style, simplicity and their perception of its purpose. Mix the form of the questions. Use scales, rankings, openopen-ended questions and closed-ended questions for closeddifferent sections of the questionnaire. The "form" or way a question is asked may influence the answer given.
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Types of Questions
1)
    

Closed-ended questions ClosedRespondents choose from possible answers included on the questionnaire. Types of closed-end questions include: closedTrue/False questions which offer respondents the ability to answer yes or no. Multiple choice questions which offer respondents one or more choices from a list of several answers. Scales refer to questions that ask respondents to rank their answers or measure their answer at a particular point on a scale. For example, a respondent may have the choice to rank their feelings towards a particular statement. The scale have values such as Strongly Disagree, Disagree, Indifferent, Agree, and Strongly Agree
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2) Open-ended questions Open Respondents answer questions in their own words. Completely unstructured questions allow respondents to answer any way they choose.  Types of open-ended questions include: open Word association questions ask respondents to state the first word that comes to mind when a particular word is mentioned.  Sentence, story or picture completion questions ask respondents to complete partial sentences, stories or pictures in their own words. For example, a question for commuters might read: "My daily commute between home and office is _____ miles and takes me an average of ______ minutes. I use the following mode of transportation: _______."
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Exercise
DO  ACTIVITY 17.5 PP271  ACTIVITY 17.6 PP272

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