Transcript Market Research What is Marketing Research?

Market
research
prepared by:
MOHAMMAD MARWAN
AL ASHI
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feasibility study...prepared by:Mohammad
Marwan Al ashi(section2-1)
Market Research
What is Marketing Research?
• marketing research is the systematic
gathering, recording, and analyzing of data
about problems relating to the marketing of
goods and services.
Every small business owner-manager must ask
the following questions to devise effective
marketing strategies:
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CONTINUE What is Marketing
Research?....
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Who are my customers and potential customers?
What kind of people are they?
Where do they live?
Can and will they buy?
Am I offering the kinds of goods or services they want at
the best place, at the best time, and in the right amounts?
Are my prices consistent with what buyers view as the
product's value?
Are my promotional programs working?
What do customers think of my business?
How does my business compare with my competitors?
feasibility study...prepared by:Mohammad
Marwan Al ashi(section2-1)
CONTINUE What is Marketing
Research?....
• Marketing research is not a perfect science. It
deals with people and their constantly
changing feelings and behaviors, which are
influenced by countless subjective factors. To
conduct marketing research you must gather
facts and opinions in an orderly, objective way
to find out what people want to buy, not just
what you want to sell them.
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Why do it?
• It is impossible to sell products or services that
customers do not want. Learning what customers want
and how to present it attractively drives the need for
marketing research. Small business has an edge over
larger concerns in this regard. Large businesses must
hire experts to study the mass market, while smallscale entrepreneurs are close to their customers and
can learn much more quickly about their buying habits.
Small business owners have a sense their customers'
needs from years of experience, but this informal
information may not be timely or relevant to the
current market.
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Continue : Why do it? …
• Marketing research focuses and organizes
marketing information. It ensures that such
information is timely and permits
entrepreneurs to:
1. Reduce business risks
2. Spot current and upcoming problems in the
current market
3. Identify sales opportunities
4. Develop plans of action
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How to do it ?
• Without being aware of it, most business
owners do market research every day.
Analyzing returned items, asking former
customers why they've switched, and looking
at competitor's prices are all examples of such
research. Formal marketing research simply
makes this familiar process orderly. It provides
a framework to organize market information.
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Market Research - The Process
• Market research, like other components of marketing
such as advertising, can be quite simple or very
complex. You might conduct simple market research
such as including a questionnaire in your customer bills
to gather demographic information about your
customers. On the more complex side, you might
engage a professional market research firm to conduct
primary research to aid you in developing a marketing
strategy to launch a new product.
• Regardless of the simplicity or complexity of your
marketing research project, you'll benefit by reviewing
the following seven steps in the market research
process.
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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, such as:
• Launching a new product or service
• Low awareness of your company and its products or
services
• Low utilization of your company's products or services
(the market is familiar with your company, but still is
not doing business with you)
• A poor company image and reputation
• Problems with distribution - your goods and services
are not reaching the buying public in a timely manner
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Step Two: Set Objectives, Budget, and
Timetables
• Objective: With a marketing problem or opportunity
defined, the next step is to set objectives for your market
research operations. 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?
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Step Two: Set Objectives, Budget, and
Timetables
• Budget: How much money are you willing to invest in your
market research? How much can you afford? Your market
research budget is a portion of your overall marketing
budget. A method popular with small business owners to
establish a marketing budget is to allocate a small
percentage of gross sales for the most recent year. This
usually amounts to about two percent for an existing
business. However, if you are planning on launching a new
product or business, you may want to increase your budget
figure to as much as 10 percent of your expected gross
sales. Other methods used by small businesses include
analyzing and estimating the competition's budget and
calculating your cost of marketing per sale.
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Step Two: Set Objectives, Budget, and
Timetables
• Timetables: Prepare a detailed, realistic time
frame to complete all steps of the market
research process. If your business operates in
cycles, establish target dates that will allow
the best accessibility to your market. For
example, a holiday greeting card business may
want to conduct research before or around
the holiday season buying period, when their
customers are most likely to be thinking about
their purchases.
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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.
Secondary research is usually faster and less
expensive to obtain that primary research.
Gathering secondary research may be as simple
as making a trip to your local library or business
information center or browsing the Internet.
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Step Four: Design Research
Instruments
• The most common research instrument is the
questionnaire. Keep these tips in mind when designing
your market research questionnaire.
• 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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Step Four: Design Research
Instruments
• Remember to pre-test the questionnaire. Before taking
the survey to the printer, ask a few people such as
regular customers, colleagues, friends, or employees to
complete 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,
open-ended questions, and closed-ended questions for
different sections of the questionnaire. The form or
way a question is asked may influence the answer
given. Basically, there are two question forms: closedend questions and open-end questions
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Step Four: Design Research
Instruments
• Close-end questions - Respondents choose from possible
answers included on the questionnaire. Types of close-end
questions include:
1. Multiple choice questions which offer respondents the
ability to answer "yes" or "no" or choose from a list of
several answer choices.
2. 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 may range from "Strongly Disagree,"
"Disagree," and "Indifferent" to "Agree" and "Strongly
Agree."
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Step Four: Design Research
Instruments
• Open-end questions - Respondents answer questions in
their own words. Completely unstructured questions allow
respondents to answer any way they choose. Types of
open-end questions include:
1. Word association questions ask respondents to state the
first word that comes to mind when a particular word is
mentioned.
2. 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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Step Five: Collect Data
• To help you obtain clear, unbiased and reliable
results, collect the data under the direction of
experienced researchers. Before beginning the
collection of data, it is important to train,
educate, and supervise your research staff. An
untrained staff person conducting primary
research will lead to interviewer bias.
• Stick to the objectives and rules associated with
the methods and techniques you have set in Step
Two and Step Three. Try to be as scientific as
possible in gathering your information.
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Step Six: Organize and Analyze the
Data
• Once your data has been collected, it needs to
be cleaned. Cleaning research data involves
editing, coding, and tabulating results. To
make this step easier, start with a simply
designed research instrument or
questionnaire.
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Step Six: Organize and Analyze the
Data
• Some helpful tips for organizing and analyzing your data are listed
below.
• Look for relevant data that focuses on your immediate market
needs.
• Rely on subjective information only as support for more general
findings of objective research.
• Analyze for consistency; compare the results of different methods
of your data collection. For example, are the market demographics
provided to you from the local media outlet consistent with your
survey results?
• Quantify your results; look for common opinions that may be
counted together.
• Read between the lines. For example, combine U.S. Census Bureau
statistics on median income levels for a given location and the
number of homeowners vs. renters in the area.
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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. For example, you may
want to report your findings in the market analysis
section of your business plan. Also, you may want to
familiarize your sales and marketing departments with
the data or conduct a company-wide informational
training seminar using the information. In summary,
the resulting data was created to help guide your
business decisions, so it needs to be readily accessible
to the decision makers.
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Define the Problem or Opportunity
• The first step of the research process, defining
the problem or opportunity, is often overlooked but it is crucial. The root cause of the problem is
harder to identify than its obvious
manifestations; for example, a decline in sales is a
problem, but its underlying cause is what must be
corrected. To define the problem, list every factor
that may have influenced it, then eliminate any
that cannot be measured. Examine this list while
conducting research to see if any factors ought to
be added, but don't let it unduly influence data
collection.
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Assess Available Information
Assess the information that is immediately
available. It may be that current knowledge
supports one or more hypotheses, and
solutions to the problem may become obvious
through the process of defining it. Weigh the
cost of gathering more information against its
potential usefulness.
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Gather Additional Information
• Before considering surveys or field experiments,
look at currently held information: sales records,
complaints, receipts, and any other records that
can show where customers live and work and
how and what they buy. One small business
owner found that addresses on cash receipts
allowed him to pinpoint customers in his market
area. With this kind of information he could
cross-reference his customers' addresses and the
effproducts they purchased to check the
ectiveness of his advertising.
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feasibility study...prepared by:Mohammad
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Gather Additional Information
• Customers' addresses tell much about them.
Lifestyles - and buying habits - are often
correlated with neighborhoods.
• Credit records are an excellent source of
information, giving information about
customers' jobs, income levels, and marital
status. Offering credit is a multifaceted
marketing tool with well-known costs and
risks.
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Gather Additional Information
• Employees may be the best source of information
about customer likes and dislikes. They hear
customers' minor gripes about the store or
service - the ones customers don't think
important enough to take to the owner.
Employees are aware of the items customers
request that you do not stock. They can often
supply good customer profiles from their day-today contacts.
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Outside Data Secondary Research
• Secondary research exploits published sources
like surveys, books, and magazines and applying
or rearranging the information in them to bear on
the problem or opportunity at hand. A tire sales
business owner might guess that present retail
sales of tires is strongly correlated with sales of
new cars three years ago. To test this idea, it's
easy to compare new car sales records with
replacement tire sales three years later. Done
over a range of recent years, this should prove or
disprove the hypothesis and help marketing
efforts tremendously
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Secondary Research…
• Localized figures tend to provide better information as
local conditions might buck national trends.
Newspapers and other local media are often quite
helpful.
There are many sources of secondary research
material. It can be found in libraries, colleges, trade
and general business publications, and newspapers.
Trade associations and government agencies are rich
sources of information .
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Sources of Secondary Research
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Trade associations
National and local press Industry magazines
National/international governments
Websites
Informal contacts
Trade directories
Published company accounts
Business libraries
Professional institutes and organizations
Omnibus surveys
Previously gathered marketing research
Census data
Public records
feasibility study...prepared by:Mohammad
Marwan Al ashi(section2-1)
Primary Research
• Primary research can be as simple as asking
customers or suppliers how they feel about a
business or as complex as surveys conducted
by professional marketing research firms.
Direct mail questionnaires, telephone surveys,
experiments, panel studies, test marketing,
and behavior observation are all examples of
primary research.
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Primary Research
• Primary research is often divided into reactive and
non-reactive research. Non-reactive primary research
observes how real people behave in real market
situations without influencing that behavior even
accidentally. Reactive research, including surveys,
interviews, and questionnaires, is best left to marketing
professionals, as they can usually get more objective
and sophisticated results.
Those who can't afford high-priced marketing research
services should consider asking nearby college or
university business schools for help.
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Sources of primary Research
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1. Interviews
2. Mystery shopping
3. Focus groups
4. Projective techniques
5. Product tests
6. Diaries
7. Omnibus Studies
feasibility study...prepared by:Mohammad
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1.0 Interviews.
• This is the technique most associated with
marketing research. Interviews can be
telephone, face-to-face, or over the Internet.
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1.1 Telephone Interview.
• Telephone ownership is very common in developed countries. It is ideal
for collecting data from a geographically dispersed sample. The interviews
tend to be very structured and tend to lack depth. Telephone interviews
are cheaper to conduct than face-to-face interviews (on a per person
basis).
Advantages of telephone interviews
1. Can be geographically spread
2. Can be set up and conducted relatively cheaply
3. Random samples can be selected
4. Cheaper than face-to-face interviews
Disadvantages of telephone interviews
1. Respondents can simply hang up
2. Interviews tend to be a lot shorter
3. Visual aids cannot be used
4. Researchers cannot behavior or body language
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1.2 Face-to-face Interviews
• Face-to face interviews are conducted between a market researcher and a
respondent. Data is collected on a survey. Some surveys are very rigid or
'structured' and use closed questions. Data is easily compared. Other faceto-face interviews are more 'in depth,' and depend upon more open forms
of questioning. The research will probe and develop points of interest.
Advantages of face-to-face interviews
1. They allow more 'depth'
2. Physical prompts such as products and pictures can be used
3. Body language can emphasize responses
4. Respondents can be 'observed' at the same time
Disadvantages of face-to-face interviews
1. Interviews can be expensive
2. It can take a long period of time to arrange and conduct.
3. Some respondents will give biased responses when face-to-face with a
researcher.
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1.3 The Internet
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The Internet can be used in a number of ways to collect primary data. Visitors to
sites can be asked to complete electronic questionnaires. However responses will
increase if an incentive is offered such as a free newsletter, or free membership.
Other important data is collected when visitors sign up for membership.
Advantages of the Internet
Relatively inexpensive
Uses graphics and visual aids
Random samples can be selected
Visitors tend to be loyal to particular sites and are willing to give up time to
complete the forms
Disadvantages of the Internet
Only surveys current, not potential customers.
Needs knowledge of software to set up questionnaires and methods of processing
data
May deter visitors from your website
feasibility study...prepared by:Mohammad
Marwan Al ashi(section2-1)
1.4 Mail Survey
• In many countries, the mail survey is the most
appropriate way to gather primary data. Lists are
collated, or purchased, and a predesigned
questionnaire is mailed to a sample of
respondents. Mail surveys do not tend to
generate more than a 5-10% response rate.
However, a second mailing to prompt or remind
respondents tends to improve response rates.
Mail surveys are less popular with the advent of
technologies such as the Internet and telephones,
especially call centers.
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2.0 Mystery Shopping
• Companies will set up mystery shopping
campaigns on an organizations behalf. Often used
in banking, retailing, travel, cafes and restaurants,
and many other customer focused organizations,
mystery shoppers will enter, posing as real
customers. They collect data on customer service
and the customer experience. Findings are
reported back to the commissioning organization.
There are many issues surrounding the ethics of
such an approach to research.
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3.0 Focus Groups
• Focus groups are made up from a number of
selected respondents based together in the
same room. Highly experienced researchers
work with the focus group to gather in depth
qualitative feedback. Groups tend to be made
up from 10 to 18 participants. Discussion,
opinion, and beliefs are encouraged, and the
research will probe into specific areas that are
of interest to the company commissioning the
research.
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Focus Groups…
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Advantages of focus groups
Commissioning marketers often observe the group from
behind a one-way screen
Visual aids and tangible products can be circulated and
opinions taken
All participants and the research interact
Areas of specific interest can be covered in greater depth
Disadvantages of focus groups
Highly experienced researchers are needed. The are rare.
Complex to organize
Can be very expensive in comparison to other methods
feasibility study...prepared by:Mohammad
Marwan Al ashi(section2-1)
4.0 Projective techniques
• Projective techniques are borrowed from the field of
psychology. They will generate highly subjective
qualitative data. There are many examples of such
approaches including: Inkblot tests - look for images in
a series of inkblots Cartoons - complete the 'bubbles'
on a cartoon series Sentence or story completion Word
association - depends on very quick (subconscious)
responses to words Psychodrama - Imagine that you
are a product and describe what it is like to be
operated, warn, or used.
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5.0 Product tests
. Product tests are often completed as part of
the 'test' marketing process. Products are
displayed in a mall of shopping center.
Potential customers are asked to visit the
store and their purchase behavior is observed.
Observers will contemplate how the product is
handled, how the packing is read, how much
time the consumer spends with the product,
and so on.
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6.0 Diaries
• Diaries are used by a number of specially
recruited consumers. They are asked to
complete a diary that lists and records their
purchasing behavior of a period of time
(weeks, months, or years). It demands a
substantial commitment on the part of the
respondent. However, by collecting a series of
diaries with a number of entries, the
researcher has a reasonable picture of
purchasing behavior.
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7.0 Omnibus Studies
• An omnibus study is where an organization
purchases a single or a few questions on a
'hybrid' interview (either face-to-face or by
telephone). The organization will be one of many
that simply want to a straightforward answer to a
simple question. An omnibus survey could
include questions from companies in sectors as
diverse as heath care and tobacco. The research
is far cheaper, and commit less time and effort
than conducting your own research.
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THE END
• We have given a general
introduction to marketing
research. Marketing research is a
huge topic area and has many
processes, procedures, and
terminologies that build upon the
points above.
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