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 PROBLEM
IDENTIFICATION
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
sources
Disadvantages: out of date, unsuitable/irrelevant, inaccurate,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 Convenience sampling: sample chosen
member of population has an equal based on ease of access
chance of being included in sample
Systematic sampling: sample is made Snowball sampling: refer from friend to
up of every nth item from population friend
Stratified sampling: sample is taken Judgemental sampling: sample made
from different groups/layers/stratas of up of suitable persons (timely)
population (different opinions)
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