BASICS OF MARKET RESEARCH

Why do market research? The decision to conduct market research should be based on the need for information in order to make a specific decision. Often decision makers make judgments based on a sample of one , that is, their own thinking or opinions. By taking the time to simply ask for other s opinions, leaders will make better decisions. The group conducting the research should be clear about: 1. The purpose of the research What do you want to know? Avoid the urge to cover the waterfront , and focus on a few specific topics. 2. Why the information is important, and how it will be used. If you don t have the resources or intention of acting on the research results you should not do the research. Market research is a means to an end, not the end itself. It should lead your group to action. What market research results CAN do for your Business Well-designed and conducted market research can help you make smarter decisions by providing you with information about your constituents, including their feelings, motivations, plans, beliefs, behavior and personal backgrounds. This information can be used in a variety of ways, including to identify opportunities, develop programs, and improve performance. Many times research will help steer your path by making educated guesses about the best course of action. You ve decided you do need market research now what? Get organized Decide who is responsible for your market research effort, and who is in charge. If the responsible party is a group, select a single person who has final say. Line up your resources before you begin. Plan who will do each of the following: Determine the purpose of your research, and how you will conduct it (email survey, etc.); Identify who you want to survey and get the necessary contact information; Write the research instrument (most often a questionnaire); Contact the ARC for assistance with questionnaire review and revision; Coordinate your research timeline through the ARC; Manage data collection and data entry (if necessary);

Analyze the data and review the results; Determine a course of action.

Plan to use any professional resources available to you. Also, determine in advance how you will pay for research costs, if any. The ARC can help steer you your research efforts to low-cost solutions. Decide on the focus for the research If you haven t already done so, define the primary goal of your research. Ask What is the big decision our group needs to make, and what information do we need in order to make that decision? That information is What you want to know . There is a tendency when developing surveys to think we can add just one more topic . Resist this urge. The advantage to web surveys, the method most often used by the Alumnae Association, is that they are easy and inexpensive to conduct. Better to do several focused surveys that one massive, all-encompassing survey. Think through how you will analyze the results before beginning the research There s nothing worse than doing a survey, sitting down to analyze the results, and then realizing you asked the wrong questions, or didn t ask some important additional questions. Furthermore, without adequate planning, research can be misleading by providing misinformation. For example, a seemingly logical question to ask when following up after an event is about the quality of individual speakers or programs. However, equally or perhaps more important would be to ask about the importance of the speaker or program to the overall event. You could have a series of high-quality speakers or programs, but if none of them are considered important to the overall event future attendance could suffer. By planning your analysis you may anticipate some of these issues. Consider confidentiality In designing your research you need to decide whether or not the identity of respondents will be kept confidential, and what measures you will take to ensure confidentiality. Ensuring respondents that their individual responses will be kept confidential can encourage them to be more candid and honest with their feedback. Respondents can still be given the opportunity to have their specific concerns or problems addressed by including a question giving them the option of providing their name and number if they would like to be contacted. How to ensure respondent confidentiality Web surveys conducted via the organization the Alumnae Association uses ensure confidentiality you will not even know who responded to the survey. Ensuring confidentiality with a mail survey will include at minimum that responses be mailed back to an independent third party. Although the Association would be happy to provide this service, most alumnae would not consider us to be an independent third party. Ensuring confidentiality with a phone survey, focus group or in-depth interview will involve contracting out for data collection.

With any methodology, it is important to consider whether answers to the survey questions themselves will result in unique responses which can identify individual respondents. For example, if you conduct a survey of international alumnae and ask for country of residence and date of graduation, there s a very good chance you could identify many individual respondents by their response to these two questions. You may not have any intention of doing so, but many respondents will realize that their confidentiality has been compromised, and may terminate the survey, change their responses, or just be angry that you haven t delivered on your promise of confidentiality. Decide who you want to survey - your target population The target population for your research depends on what you want to know. Carefully match the target population to the research focus. It could be frustrating for a new graduate to be asked about career and education histories since graduation, or for a graduate 15 years out to be asked about the quality of the food in their headquarter dorm. Determine whether you need Quantitative or Qualitative Research Quantitative Research is any research method that produces information that can be usefully analyzed numerically, typically by obtaining data from a scientific sample of the population. Depending on how they are designed, examples can include telephone surveys, web-based email surveys, or mail surveys. U.S. Census, labor and health statistics and sales or income trends are also examples of quantitative information. Quantitative research would be useful for answering questions such as: What proportion of our alumnae of color population would be interested in an alumnae of color affinity group? How does interest in an alumnae of color affinity group vary by geographic region? What is the demographic profile of engaged alumnae vs. the profile of inactive/disenfranchised alumnae? Qualitative Research is any research method that produces information based upon description and interpretation rather than numeric analysis. Examples include focus groups, in-depth interviews, and one-on-one interviews. Qualitative research would be useful for answering questions such as: How alumnae make decisions; Whether our alumnae or subgroups of our alumnae have needs that are unmet by existing products or services; What possible barriers exist to use of Association or Club products or services, and reactions to specific program ideas or service offerings.

Decide how you will do your research the research methodology Evaluate the pros and cons of each research method with your information needs in mind. Consider the cost/benefit of the different methodologies. For example, do the advantages of a phone survey outweigh the significant cost? Our recommendation is to consider a web survey first. If the number of email addresses for the target population is low, or the target population leans heavily toward individuals who do not have web access, then consider another methodology, or a combination of methodologies (for example, web survey for those with access, paper survey for those without). Methodology Web/online survey (quantitative) Pros Very inexpensive Can do in-house Better response rates No data entry Allows for skip patterns, attractive formatting Helps avoid the bias that can be a problem with phone surveys if volunteers conduct the interviews Often less expensive than telephone or in-person contact Helps avoid the bias that can be a problem with phone surveys if volunteers conduct the interviews Can gather nuances, follow up Can be good for teasingout why alumnae aren t attending events, aren t engaged, etc. Cons Email may be seen as spam or invasive Missed demographics those without email or web access Respondents may provide ambiguous responses Not an effective way to reach disenfranchised alumnae Still relatively expensive and time-consuming Lower response rates Respondents may skip questions or provide ambiguous responses Not an effective way to reach disenfranchised alumnae Expensive Time consuming Use of volunteers (especially alumnae or students) increases likelihood of bias in data. Often works best for an outsider .

Mail survey (quantitative)

Qualitative research Focus groups, In-depth interviews

Phone survey (quantitative)

Ability to influence response rate by encouraging reluctant respondents to participate Ability to probe on openended questions to ensure complete, unambiguous responses Ability to clarify questions for respondent as needed

Can be expensive and time-consuming Use of volunteer callers (especially alumnae or students) increases likelihood of bias in data If being conducted inhouse , need to data enter paper responses or merge computer files for analysis

Stages of marketing research process

Step 1: Problem Definition The first step in any marketing research project is to define the problem. In defining the problem, the researcher should take into account the purpose of the study, the relevant background information, what information is needed, and how it will be used in decision making. Problem definition involves discussion with the decision makers, interviews with industry experts, analysis of secondary data, and, perhaps, some qualitative research, such as focus groups. Once the problem has been precisely defined, the research can be designed and conducted properly. Step 2: Development of an Approach to the Problem Development of an approach to the problem includes formulating an objective or theoretical framework, analytical models, research questions, hypotheses, and identifying characteristics or factors that can influence the research design. This process is guided by discussions with management and industry experts, case studies and simulations, analysis of secondary data, qualitative research and pragmatic considerations. 'Step 3: Research Design Formulation' A research design is a framework or blueprint for conducting the marketing research project. It details the procedures necessary for obtaining the required information, and its purpose is to design a study that will test the hypotheses of interest, determine possible answers to the research questions, and provide the information needed for decision making. Conducting exploratory research, precisely defining the variables, and designing appropriate scales to measure them are also a part of the research design. The issue of how the data should be obtained from the respondents (for example, by conducting a survey or an experiment) must be addressed. It is also necessary to design a questionnaire and a sampling plan to select respondents for the study.

More formally, formulating the research design involves the following steps: 1. 2. 3. 4. 5. 6. 7. 8. Secondary data analysis Qualitative research Methods of collecting quantitative data (survey, observation, and experimentation) Definition of the information needed Measurement and scaling procedures Questionnaire design Sampling process and sample size Plan of data analysis

Step 4: Field Work or Data Collection Data collection involves a field force or staff that operates either in the field, as in the case of personal interviewing (in-home, mall intercept, or computer-assisted personal interviewing), from an office by telephone (telephone or computer-assisted telephone interviewing), or through mail (traditional mail and mail panel surveys with prerecruited households). Proper selection, training, supervision, and evaluation of the field force helps minimize data-collection errors. Step 5: Data Preparation and Analysis Data preparation includes the editing, coding, transcription, and verification of data. Each questionnaire or observation form is inspected, or edited, and, if necessary, corrected. Number or letter codes are assigned to represent each response to each question in the questionnaire. The data from the questionnaires are transcribed or key-punched on to magnetic tape, or disks or input directly into the computer. Verification ensures that the data from the original questionnaires have been accurately transcribed, while data analysis, guided by the plan of data analysis, gives meaning to the data that have been collected. Univariate techniques are used for analyzing data when there is a single measurement of each element or unit in the sample, or, if there are several measurements of each element, each RCH variable is analyzed in isolation. On the other hand, multivariate techniques are used for analyzing data when there are two or more measurements on each element and the variables are analyzed simultaneously. Step 6: Report Preparation and Presentation The entire project should be documented in a written report which addresses the specific research questions identified, describes the approach, the research design, data collection, and data analysis procedures adopted, and presents the results and the major findings. The findings should be presented in a comprehensible format so that they can be readily used in the decision making process. In addition, an oral presentation should be made to management using tables, figures, and graphs to enhance clarity and impact. For these reasons, interviews with experts are more useful in conducting marketing research for industrial firms and for products of a technical nature, where it is relatively

easy to identify and approach the experts. This method is also helpful in situations where little information is available from other sources, as in the case of radically new products.

Secondary data analysis

Secondary data are data collected for some purpose other than the problem at hand. Primary data, on the other hand, are originated by the researcher for the specific purpose of addressing the research problem. Secondary data include information made available by business and government sources, commercial marketing research firms, and computerized databases. Secondary data are an economical and quick source of background information. Analysis of available secondary data is an essential step in the problem definition process: primary data should not be collected until the available secondary data have been fully analyzed.

Qualitative research
Information, industry experts, and secondary data may not be sufficient to define the research problem. Sometimes qualitative research must be undertaken to gain a qualitative understanding of the problem and its underlying factors. Qualitative research is unstructured, exploratory in nature, based on small samples, and may utilize popular qualitative techniques such as focus groups (group interviews), word association (asking respondents to indicate their first responses to stimulus words), and depth interviews (one-on-one interviews which probe the respondents' thoughts in detail). Other exploratory research techniques, such as pilot surveys with small samples of respondents, may also be undertaken.

The Importance of Market Research

Market research is the application of the scientific method in search of the truth about marketing phenomena. These activities include defining the market opportunity and problems, generating and evaluating market ideas, monitoring performance, and understanding the marketing process. Exploring Marketing Research By William G.Zikmund The concept of a business seems simple. Companies produce goods and services and consumers buy the end products. The challenge lies in creating and delivering value to the customer. Businesses that have a solid value proposition can be considered successful. So how do we deliver value? Some questions that we should consider when understanding the concept of value are:
y y y y y y

What type of products or services does a company sell? Does the product or service meet the consumer s need? What does the customer think about the company? What are the customer s expectations when buying and using the products or services? What are the customer s initial perceptions of the company s products or services? Are there alternative products or services that can meet the customer s needs?

These questions can be answered by market research. Market research facilitates decision making, reduces uncertainty and highlights consumer problems. Market research drives every aspect of a business such as:
y y y y y y y

Identifying new market opportunities and evaluating the existing markets Segmenting and analyzing the market Selecting the best target market Evaluating and analyzing the company s reputation and performance Positioning a product New product development Planning and implementing a marketing mix that meets business objectives

Market Research Classifications So what type of market research can Product managers utilize in our quest to find answers that will help businesses deliver value? There are three types of market research:
y y y

Exploratory research Descriptive research Causal research

Exploratory Research Exploratory research helps businesses to discover new ideas and find potential market opportunities. It is used to explore a situation or search for a problem. This research process is unstructured. Product managers need not go through all the stages of the market research process from the defining stage to the analysis stage . The findings from exploratory research are usually based on secondary data (Data that is already available in different departments of the company), open ended questions, similar case studies, a pilot study, or even results from previous research. The results from exploratory research are not generally suitable for Product Managers to draw a conclusion and decide to enter a new market. The result is all too often generalised information about potential markets and the related products or services. It is conducted with an expectation that there is need for more comprehensive research. Example: Mars M&M is a global manufacturer producing candy and chocolate. The company discovered, by doing simple exploratory research that consumers refer to the chocolate and candy by their color. The company achieved the result by asking some open ended questions and running focus groups. This piece of information became useful in shaping future research and marketing strategy. Descriptive Research This kind of research addresses who, what, when, where and how type questions. It is structured research (Product managers apply through all steps in research process). Descriptive research explores more detail about a market. For instance, descriptive research identifies what age groups buy a particular product or brand and why. This type of research is more structured and requires formal research design and data collection. Example: Greg Norman is well known for his performance on golf courses. He is also in the wine trade and sells high quality Australian wine that is offered at a fair price. He is considering extending the business to the American or French wine market. In this situation, the use of descriptive research helped him to have a better understanding of the international wine market and enabled him to make better decisions about where to sell his wine. Descriptive research identified what type of wine consumers enjoys drinking. Causal Research Causality can be derived by the use of if x, then y . This type of research helps Product Managers understand the cause and effect of a relationship. Causal research is considered formal research and helps product managers to identify problems and the causes of the problem. Product Managers for example, would be interested in determining what causes a change in customer satisfaction.

The Market Research Process The following chart shows the stages of the market research process:

Define the research objective The first step to the research process is to define the research objective. At this stage, the Product Manager defines the problem that he or she is attempting to solve. Here, the word problem does not have a negative meaning. It can mean a new opportunity. Exploratory research is one of the most common types of research used at the early stage of the investigative process. It is used to obtain a clear understanding of the situation or environment. Secondary data, previous research, discussion with decision makers, experience survey, interviews with industry experts, similar case studies, a review of existing background information are some techniques that will help the Product Manager at this stage of the market research process. Selection of basic research method After defining the problem and formulating the objectives, the Product Manager shall design the research. This determines the way that we collect the data. Survey questionnaires, interview, and observations even secondary data studies are methods that can be used to gather the data. However the most common method is a survey questionnaire. Sampling A sample is a subset from larger population Finding information about the characteristic of a population is an important objective for most types of market research. Information about the population could be achieved by taking a sample. Proper and good sampling has the same characteristic of the population as whole. Data gathering During this stage, the Product Manager collects data. It may be obtained by human observation or a survey questionnaire. It can be over the phone or by face-to-face interviews. Data processing and analyzing After gathering the data, the information must be converted into language which is understandable for a wider audience. At this stage, the first step is editing and coding. The Product Manager checks the data for any minor mistakes and then codes the data. Coding means recording, categorizing, and interpreting the data. The second step in this process is to analyze the data. Drawing conclusions and reporting The final stage in the market research process is reporting and drawing a conclusion. A market research report consists of a description and an interpretation of the research results, a conclusion and also an appropriate recommendation. The costs and risks

associated with delivering any new product are high. Some new products fail to achieve the objectives set. Market research reduces the risk of taking a new product to market.