Market Research

Marketing research is a formalised means of collecting, analysing and interpreting information to be used in helping making marketing decisions.

Market Research should be thought of as a lamp-post. Without light you are fumbling around in the dark

However, it should not be used as a drunk may use the lamp post to prop himself up

Nor should it be used as a dog may use a lamp post

Market Research
How to collect certain information about: your customers, market and competitors.
This information tells you about: your potential market, prices, trends, competition, target customer, its preferences, income, habits, accessibility, convenient time and plans.

This information should be accurate, and reliable to help you make the right business decision.

Important questions

What kind of business should I do?

What is the demand for my business? Who are my customers?

Who are my competitors and what kind of product, price and service they offer?
How I differentiate my business from my competitors? What types of service do my customer prefer? What types of advertising attract my customers? What is the market price and how I can change my price accordingly?

What are the market forces that will affect my business?

Where should I locate my business? How much profit can I get at different locations and times?

An Existing business

What are the new trends, product, time, location and service in the market? And how I adapt them?
What are my weaknesses and strengths in my business compare to my competitors? How I can differentiate my business and make it unique?

Should I change and redirect my advertising campaign according to the recent situations?
How can I change my customers spending habits? How can I expand my business with minimum cost?

How to design a questionnaire

Keep your questions very short, understandable, and clear.

Make your questions only in your subject matter. Customize your questions to encompass more than one group of people, male/female. Be honest with the intent of the questionnaire. Give enough time answer. Be courteous and friendly when asking people to participate in your survey. Ask questions in different repeated ways, so you minimize missing data.

Ask direct questions.

Ask questions that can be answered easily, open/closeended . Ask questions that do not have more than one meaning. Make sure your questions do not offend anyone.

2 steps in designing the research

1.

Defining the general problem

Explore a new thinking

Improving current performance

2.

Identify specific components of the research task.

Characteristics of the targeted consumer population and env. context of the problem

2 Approaches to Research
1.

Exploratory research is conducted because a problem has not been clearly defined. It helps determine the best research design, data collection method and selection of subjects.

2. Problem- solving research

Market Research

Secondary Research

Internal Sources

Company Accounts Internal Reports and Analysis Stock Analysis Retail data - loyalty cards, till data, etc.

External Sources

Government Statistics Commercial Data Household Expenditure Survey Magazine surveys Other firms research Research documents publications, journals, etc.

Sampling Methods

Market Research

Sampling Methods: Random Samples equal chance of anyone being picked

May select those not in the target group indiscriminate Sample sizes may need to be large to be representative Can be very expensive

Market Research

Stratified or Segment Random Sampling

Samples on the basis of a representative strata or segment Still random but more focussed May give more relevant information May be more cost effective

Market Research

Quota Sampling
Again by segment Not randomly selected Specific number on each segment are interviewed, etc. May not be fully representative Cheaper method

Market Research

Cluster Sampling

Primarily based on geographical areas or clusters that can be seen as being representative of the whole population Sample selected from multi-stage sub-groups
Samples developed from contacts of existing customers word of mouth type approach!

Multi-Stage Sampling

Snowball Sampling

Primary Research

Market Research

Primary Research

First hand information Expensive to collect, analyse and evaluate Can be highly focussed and relevant Care needs to be taken with the approach and methodology to ensure accuracy Types of question closed limited information gained; open useful information but difficult to analyse

Market Research

Quantitative and Qualitative Information: Quantitative based on numbers 56% of 18 year olds drink alcohol at least four times a week - doesnt tell you why, when, how Qualitative more detail tells you why, when and how!

Purpose

Market Research

Advantages of Market Research

Helps focus attention on objectives Aids forecasting, planning and strategic development May help to reduce risk of new product development Communicates image, vision, etc. Globalisation makes market information valuable (HSBC adverts!!)

Market Research

Disadvantages of Market Research

Information only as good as the methodology used Can be inaccurate or unreliable Results may not be what the business wants to hear! May stifle initiative and gut feeling Always a problem that we may never know enough to be sure!