Transcript The Market Research Process

THE MARKET RESEARCH
PROCESS
Chapter 29.1
5 Steps of the Market Research Process
1.
Define the Problem
2.
Obtaining Data
3.
Analyzing Data
4.
Recommending Solutions
5.
Applying the Results
Step 1: Defining the Problem

Most difficult step of the research
process

Problem definition occurs when a
business clearly identifies a problem
and what is needed to solve it.

Helps researcher create objectives
that will help answer the problem

Objectives are used to develop the
actual question
Step 2: Obtaining Data

Data (or facts) are collected
 Primary
Data - obtained for the
first time and used specifically
for the particular problem under
study
 Secondary
Data - already exists;
previously collected for some
other purpose
Obtaining Data
Secondary Data
Data that has
already been
collected
Done before
primary data
Primary Data
Data that are
collected for the
first time
Done only if secondary
data does exist to
support your
question/problem
Ways to collect Secondary Data

Internet Sources – company home pages, digital dossiers, business
clearinghouses

U.S. and State Government Sources – data collected by the
government, like population demographics and economic trends

Specialized Research – companies collect data to sell to other
businesses like demographic data, economic forecasts, and
consumer purchase information

Business Publications – BusinessWeek, Forbes, Wall Street Journal
Ways to collect Secondary Data

U.S. and State Government Sources – data
collected by the government, like population
demographics and economic trends

Specialized Research – companies collect data to
sell to other businesses like demographic data,
economic forecasts, and consumer purchase
information
Secondary Data
Advantages



Easily obtained
Disadvantages

Data may not be
suitable for the
No or low cost
problem under study
Saves time and money

Can be inaccurate
Ways to collect Primary Data

The Survey Method

The Technological Method

Interviews

The Observation Method

The Experimental Method
The Survey Method

Information is gathered from people through the use of
surveys or questionnaires

Most frequently used method

Conducted in person, by phone, by mail or Internet

Census – survey the entire target population


Not usual because population is normally too large and it would cost
too much money and time
Sample – part of the target population that represents it accurately


Size of sample depends on the amount of time and money available
Generally speaking, the larger the sample the more accurate the results
Technological Method

Online surveys and focus groups – survey is
conducted in a “chat room” environment

Smart Phones/Devices – IPods, smartphones

Fax broadcasts – questionnaires can be sent
to a select group of fax numbers

Automated dialers
automatically rejects busy signals and answering
machines
 Prerecorded voice walks caller through a series
of questions and caller responds with key pad

Interviews

Questioning people face-to-face

Because it is expensive they are usually conducted
in central locations
 “Mall
Intercept Interviews” - (started in shopping malls)
 Focus
Group Interview – 8-12 people brought together
to evaluate advertising, product, or packaging under
the direction of a moderator
Advantages and Disadvantages
Type of Survey
Personal Interview
Advantages
•
•
•
Telephone Interview •
•
Mail Survey
Internet Survey
Disadvantages
Easier to get people to respond
Easy to administer
•
•
Expensive
Take time to tabulate results
Quick
Efficient
Inexpensive
•
•
Limited by “Do Not Call Registry”
People are irritated by unwanted
calls
•
•
Successful response rate is only 10%
Incentives can increase results
•
•
Limited to people with internet access
Many people dislike receiving
uninvited surveys
•
•
•
Inexpensive
Reaches large audience
Respondents find them less
intrusive
•
•
•
Quick
Automatic data entry
Allows for real time data
collection, multiple choice and
opened ended questions
The Observation Method




Peoples actions are watched and
recorded
Better results because people are
unaware that they are being
observed
Mystery Shoppers – sent in to
observe interactions between
customers and employees
Disadvantage – cannot measure
attitude or motivation
The Observation Method

Point-of-Sale Research –
combines natural observation
with personal interview
 People
can explain their
buying behavior
The Experimental Method

Researcher observes results when
changing one or more marketing variables
while keeping all the others constant

Used to test:

New package design

Media usage

New promotions
Step 3: Analyzing the Data

The process of compiling,
analyzing and interpreting
results

Data Mining – computer process
that uses statistical methods to
extract new information from
large amounts of data
Step 4: Recommending Solutions to the Problem

Conclusions drawn form research
are usually presented in an
organized report
Step 5: Applying the Results

After research is completed and
changes have been made, businesses
must monitor the results carefully.

The research efforts were a success if
resulting decisions lead to increased
sales.
Market Research Flow Chart
• Determine research
questions and
• Determine how to
solve it
Define the
Problem
Obtain Data
• Secondary Data
• Primary Data
• Analyze and
interpret data
• Does it answer the
research question
Analyze Data
Recommend
Solutions
• Organized in a
written report
• Clear and well
supported by data
• Implement changes
• Monitor results
Apply Results
Review

What are the five steps to market research?
 Defining
the problem, obtaining data, analyzing data,
recommending solutions, applying results

What are the two types of research?
 Primary

and Secondary
What are the five methods used to collect primary
data?
 Survey
methods, technological method, interview,
observation method, experimental method