PURPOSE OF MARKETING RESEARCH

Marketing research can help a business do one or more of the following:

• Gain a more detailed understanding of consumers' needs –

• Marketing research can help firms to discover consumers' opinions on a

huge range of issue
• Reduce the risk of product/business failure –
• Forecast future trends
• marketing research provide information regarding the current state of the
market
• it can also be used to anticipate future customer needs.
• Firms can then make the necessary adjustments to their product portfolios
and levels of output in order to remain successful.
NEED OF ACCURATE AND UP-TO-DATE INFORMATION

To undertake marketing effectively, businesses need information - information

about customer wants, market demand, competition, distribution channels etc. This
information needs to be updated regularly because businesses operate in a dynamic
environment, characterized by frequent changes as follows

CHANGES IN TECHNOLOGY

enabling new products and new production processes (e.g. the growth of digital
study products like this toolkit which are reducing demand for printed textbooks)

CHANGES IN CONSUMER TASTES –

meaning that the demand for some products will decline, whilst others will grow
more popular (e.g. increased demand for activity-related holidays at the expense of
mass-market beach holidays)

CHANGES IN THE PRODUCT RANGES OF COMPETITORS –

the introduction of new rival products, or changes in pricing policies can greatly
influence the demand for a product (e.g. the introduction of the Microsoft X-Box -
which has challenged Sony's PlayStation 2)

CHANGES IN ECONOMIC CONDITIONS –

an improvement or worsening of the economic climate will have an impact on

incomes on a national or regional level. Different products may be affected
differently e.g. luxuries v necessities etc
 MARKETING RESEARCH TECHNIQUES 0300 2395986

Marketing research techniques come in many forms, including:

• AD TRACKING - periodic or continuous in-market research to monitor a

brand's performance using measures such as brand awareness, brand
preference, and product usage

• ADVERTISING RESEARCH - used to predict copy testing or track the

efficacy of advertisements for any medium, measured by the ad's ability to
get attention, communicate the message, build the brand's image, and
motivate the consumer to purchase the product or service.

• BRAND EQUITY RESEARCH - how favorably do consumers view the

brand?

• BRAND NAME TESTING - what do consumers feel about the names of the
products?

• COMMERCIAL EYE TRACKING RESEARCH - examine advertisements,

package designs, websites, etc by analyzing visual behavior of the consumer

• CONCEPT TESTING - to test the acceptance of a concept by target

consumers

• COOLHUNTING - to make observations and predictions in changes of new

or existing cultural trends in areas such as fashion, music, films, television,
youth culture and lifestyle

• BUYER DECISION PROCESSES RESEARCH - to determine what

motivates people to buy and what decision-making process they use

• COPY TESTING - predicts in-market performance of an ad before it airs by

analyzing audience levels of attention, brand linkage, motivation,
entertainment, and communication, as well as breaking down the ad's flow of
attention and flow of emotion

• CUSTOMER SATISFACTION RESEARCH - quantitative or qualitative

studies that yields an understanding of a customer's of satisfaction with a
transaction

• DEMAND ESTIMATION - to determine the approximate level of demand

for the product
• DISTRIBUTION CHANNEL AUDITS - to assess distributors' and retailers'
attitudes toward a product, brand, or company

• MARKETING EFFECTIVENESS AND ANALYTICS - Building models

and measuring results to determine the effectiveness of individual marketing
activities.

• MYSTERY SHOPPING - An employee or representative of the market

research firm anonymously contacts a salesperson and indicates he or she is
shopping for a product. The shopper then records the entire experience. This
method is often used for quality control or for researching competitors'
products.

• PRICE ELASTICITY TESTING - to determine how sensitive customers are

to price changes

• SALES FORECASTING - to determine the expected level of sales given the

level of demand. With respect to other factors like Advertising expenditure,
sales promotion etc.

• SEGMENTATION RESEARCH - to determine the demographic,

psychographic, and behavioral characteristics of potential buyers

• STORE AUDIT - to measure the sales of a product or product line at a

statistically selected store sample in order to determine market share, or to
determine whether a retail store provides adequate service

• TEST MARKETING - a small-scale product launch used to determine the

likely acceptance of the product when it is introduced into a wider market

• VIRAL MARKETING RESEARCH - refers to marketing research designed

to estimate the probability that specific communications will be transmitted
throughout an individuals Social Network. Estimates of Social Networking
Potential (SNP) are combined with estimates of selling effectiveness to
estimate ROI on specific combinations of messages and media.
Marketing research methods
Methodologically, marketing research uses the following types of research designs:[1]

Based on questioning:

• Qualitative marketing research - generally used for exploratory purposes -

small number of respondents - not generalizable to the whole population -
statistical significance and confidence not calculated - examples include focus
groups, in-depth interviews, and projective techniques
• Quantitative marketing research - generally used to draw conclusions - tests
a specific hypothesis - uses random sampling techniques so as to infer from
the sample to the population - involves a large number of respondents -
examples include surveys and questionnaires. Techniques include choice
modelling, maximum difference preference scaling, and covariance analysis.

Ipsos MORI Omnibus

POST-SALES OR CUSTOMER SATISFACTION RESEARCH. Most companies no

longer believe that a sale ends their relationship with a customer. Nearly one-third of the
research revenues generated by the leading American market research firms concern
customer satisfaction. Many companies now wait a few days or weeks, then contact
customers with survey questionnaires or telephone calls. Companies want reassurance
that the customer enjoyed the buying experience and that the product or service has met
the buyer's expectations.

The reason behind post-sales research is to ensure that current customers are happy, will
consider themselves future customers, and will spread positive word-of-mouth messages
about the product and company. One study found that 70 percent of customers believed it
was important for companies to stay in contact with them, but less than one-third of those
same customers reported that they had heard from companies whose products they
purchased. Nearly 90 percent of those surveyed said they would be more likely to choose
a company's products if it stayed in touch with them and sought their satisfaction.

Personal Research Methods

CLOSED-END QUESTIONNAIRE. A closed-end questionnaire is the type of market

research most people have experienced. It includes such common activities as filling out
a comment card at a restaurant or responding to a telephone survey. In closed-end
questionnaires, the person being surveyed cannot expound on their answers. Such surveys
usually ask for "yes" or "no" responses or for measures of multiple choice opinion (e.g.,
"extremely interested, " "somewhat interested, " "not interested"). This type of market
research is generally conducted to elicit the opinions and beliefs of the public. It is
commonly used for political polling and to determine the awareness or popularity of a
product or service.

The inherent problem with multiple-choice questionnaires that ask for clear-cut answers
is that many people do not think in a clear-cut fashion. If not carefully prepared, closed-
ended questions may elicit answers that do not provide a clear view of the person being
surveyed. Sometimes, the company conducting the survey may intentionally or
inadvertently write questions that elicit the answers it wants to receive, rather than
answers that provide a true picture of what is happening in the marketplace.

OPEN-ENDED QUESTIONNAIRE. Over time, market researchers have grown

increasingly aware that people often have opinions that do not fit into a multiple-choice
questionnaire. To capture these opinions and try to analyze them, researchers are shifting
toward open-ended research—asking people to say exactly what is on their minds. For
example, manufacturers are giving customers plenty of space on questionnaires to explain
their likes and dislikes about products and services, and telephone researchers will
frequently mix closed-end and open-end questions on the same survey to try to delve
deeper. A "no" response to whether a person watches a particular cable television station
may trigger a follow-up question of "Why not?, " for instance, and the answer will be
taken down word for word.

A problem with both closed- and open-ended questionnaire research, particularly when
conducted over the telephone, is that people gradually become bored or annoyed and stop
providing their true opinions. In addition, some studies have shown that a large
percentage of Americans refuse to answer marketing research surveys.

FOCUS GROUPS. In-person, sit-down discussions around a table with groups of

consumers, would-be consumers, never-buyers, or any other demographic group a
company wishes to bring together are called focus groups. This can be the least expensive
type of market research when handled on a local basis by a small business wanting to get
a handle on its customers. Or, it can be one of the most expensive if a major corporation
wants to test its plans in various sections of the country. Small, local businesses may
invite a focus group to a neighborhood home to sit around the dinner table and discuss
how the company can develop new markets. In contrast, most major corporations conduct
their focus groups in a controlled environment, usually with a one-way mirror at one end
of the room. This allows executives to observe the proceedings unobtrusively or to
videotape the session for further study.

The key to gathering good information from a focus group is for the moderator to keep
the conversation flowing freely without taking a side. The moderator's job is to involve
everyone in the discussion and prevent any individuals from dominating the conversation.
Most market research experts agree that focus group research should be accompanied by
other types of research and not be the sole basis for launching new products. The reason
is that opinions expressed among strangers may not always reflect the way people would
react when alone. For example, a focus group discussing low-fat foods may garner an
enthusiastic response from people who want to be publicly perceived as being concerned
about their health. The same people, however, might say they never buy low-fat products
if questioned during an anonymous phone interview.

5 primary research methods?

Questionnaires
Interviews
Surveys
Observations
and testing