Analysing Understanding Market PDF

# **An Introduction to Market** - **Agenda:** - Understanding Market - Marketing - History of Market Research ## **What is Market?** (Latin *Mercatus*) - Since ancient, prehistoric time - Gathering of people for selling and buying - Now: exist nationally or globally. ## **We Live in...

# **An Introduction to Market** - **Agenda:** - Understanding Market - Marketing - History of Market Research ## **What is Market?** (Latin *Mercatus*) - Since ancient, prehistoric time - Gathering of people for selling and buying - Now: exist nationally or globally. ## **We Live in a Market Economy** - Economic systems are market economies. | Economic system | Description | |---|---| | **MARKET ECONOMY** | Decision by price signals → forces of supply and demand | - **Market economy:** State can play an important role in shaping economic activity and promoting social welfare. - **Free market economic system:** Limited state intervention. ## **Type of Market** - **Perfect competition:** many sellers, small size, same product. - **Monopolistic competition:** many sellers, similar product (tiny differences) - **Oligopoly:** few firms (3-5), might collaborate for one price - **Monopoly:** One firm, no alternatives. | **Economist** | **Max Profit** | **Regulate market** | **Consumer welfare** | | --- | --- | --- | --- | | X | √ | √ | ## **Product Differentiation** - **Process** to distinguish the product, attractive to specific group: - **Vertical** _(measured objectively)_: Ex. CO2 emission. - **Horizontal** _(preferences)_: color, size. ## **Type of Goods Based on the Difficulty to Evaluate the Quality** | Goods | Description | |---|---| | **Search goods** | - Easily compare - Salt, sugar,... - Small differences - Big differences in sale | | **Experience goods** | - Difficult to compare - Know fully after buying - Ex. Dinner after buying - New wine,... | | **Credence goods** | - After purchase - Capability to evaluate | ## **Beyond Economic** - Knowledge of human - Social sciences show some area of life exchanging product ≠ market logic. - Ex. Gifting, religion, donating organ,... ## **Expanding Role of the Market** - Late 20th century, free-market capitalism (after WW II) influencing political debate. - **Neoliberalism:** Privatization of public services, government spending → products + services depend on market exchange. - **Marketization:** Different logic → market logic. - Ex. Health care (private hospital,...), art and culture (private museum). ## **Marketing** - Has in the study of markets one of its central preoccupations. - **Marketing:** The act of communicating, delivering, and exchanging offerings that have value for the customers. - **Economics:** Supply >< **Marketing:** Demand. - Reduce powers of firms → Increase impact on client. ## **Process of getting potential client** - Know what clients want. - Design product accordingly. - Promote, sell, distribute (effective manner). - **A function inside a company.** - **Core business of many providers** (ad. , digital...) - **Academic discipline.** ## **Key Notion: Market Orientation** - **Production-oriented company:** Focus — production process, aim → cheap, quick goods, cost, serve mass. - **Product-oriented company:** Focus — product/ service quality, aim → improve quality, sold at premium prices, selected market. - **Sales-oriented:** Focus — strategies to push people to buy, aim → immediate sales, not long-term. - **Market-oriented:** Focus - consumer's needs & satisfy it, aim → understanding the market. ## **Segmentation** - **Divide** the market to approachable groups. | Criteria for segmentation | **Demographic (B2C)** | **Firmographic (B2B)** | **Psychographic (B2B/B2C)** | **Behavioral (B2B/B2C)** | |---|---|---|---|---| | Definition | Classification based on individual attributes. | Classification based on company or organisation attributes. | Classification based on attitudes, aspirations, values. | Classification based on behaviors like product usage, technology laggards, etc. | | Examples | Geography, Gender, Education level, Income level. | Industry location, Number of employees, Revenue. | Lifestyle, Personality traits, Values, Opinions. | Usage rate, Occasion of the purchase decision. | | Difficulty | Simpler | Simpler | More advanced | More advanced | ## **The 4Ps** (3): also know as _the market mix_ (Jerome McCarthy) **4 Keys factors of any marketing strategy:** - **Product:** What your comp. sells / to fulfill a demand. - Key to this P of marketing is determining what it is that makes your product special. - **Price:** The amount charged customers / related to product perceived value. - Right price: 7 sales + profit. - Factors impacting price: cost, competitors,… - **Place:** Place you sell the product (where you choose to advertise). - Goal: Best place to showcase product to potential customers. - **Promotion:** Advertising & public relation make up your promotion strategy. - Goal: Show why consumer needs it / what problem will it solve / why consumer should spend money on it. | Feature, product | Product | Place | Location | 3Ws | |---|---|---|---|---| | Interaction | ☑ | ☑ | ☑ | ☑ | | Marketing channel, Promo strategy | ☑ | ☑ | ☑ | ☑ | | Price | ☑ | ☑ | ☑ | ☑ | | Price strategy & Profit Margin | ☑ | ☑ | ☑ | ☑ | ## **Market Research** - **1920s:** **Daniel Starch** - Starch Test - Attemp to measure the effectiveness of ads in newspaper and magazine. - **1930s:** **George Gallup** - Technique of aided recall. - Ask interviewees if they recalled an ad. - Polling technique. - Assess public opinion (fact + small sample based). - **1940s:** **Paul Lazarsfeld** Focused interview. - Test preliminary analysis & hunches by direct observation of human beings. - **1950s:** **Ernest Dichter** Motivational research. - Investigate consumers unconscious desires, taboos, … - Include: + Deep interview (as therapy session) + Observation of consumers in real/stimulated setting - **1960s:** **Paul Green** Conjoint analysis. - Allows marketing managers to make right decision on what product or service to sell. - Backbone of market research. - **1970s:** **Jerry Yoram Wind** Two-step market segmentation. - Base: Macro + micro segmentation. - Organise current & previous customers → Identifying most likely candidate for future customers. - **1980s:** **Martin Fishbein** - Theory of reasoned action - **1990s:** **Stephen Turner** - Analog. - Freeware web log analysis software shows web owners usage patterns on their web server. - **2000s:** **Fred Reichheld** - The Net Promoter score. - A measurement to quantify how satisfied the customers. ## **Brief History of Market Research** - **1940s - 1960s:** Quantitative questionnaire era. - **1940s - 1960s:** Qualitative consumer era. - Quantitative: Standard, start using qualitative methods. - Enrich, create motivational research. - **1960s - 1980s:** Refining the process. - Quantitative method returned + assistance of new tech / qualitative took back seat. - Incorporate views from other social sciences (psychology, sociology, anthropology…). - Studied role of emotion → newfound thinking. - **1990s:** Beginning of web analytics. - Launch of Analog - Start using data to improve effectiveness. - Web and become sophisticated criticism on respect of privacy. - **1990s - 2000:** Ethnography entered. - Research method by anthropologists / based on observation on participant → help go beyond attitude-behavior gap. - **2000s:** Neuro marketing. - Use device that measure physiological function for consumer research. - **Next:** AI ## **Conclude:** Understanding market is important. - Method: Many exist, will have more. # **Lesson 2: Designing a market study** ## **I. Market or marketing research** - **AMA definition:** Marketing research = a function - Links consumers, customers, public to the marketer - Links through info. → Identify opportunities / define problems. - **Info:** Generate, refine, evaluate actions. - Monitor performance. - Improve understanding . - **Market research:** - Identify information needed to address issues. - Design method for information collecting. - Manage and implement data. - Analyze results. - Communicate the findings. - **ESOMAR definition:** Market research = process (focused in 2007) - Systematic gathering + Interpretation of data. - Data: Individual + organization. - Statistical + analytical methods + techniques. - Gain insight or help making choices. ## **III. Provider of market research** - **Internal:** - **External** - **Full Service:** Syndicated data (collect in standard format) - **Limited:** Customized services (studies for specific client). - Segment specialists (carry research on customer specific field service (survey focus). - Specialized service (focus on few highly specific research techniques). ## **III. Research process** - **A. Identification and formulation of problems** - **1. Ambiguous problems:** (A lot of things we don't know) (Stage 1) - **2. Somewhat define problems:** (Stage 2) - Know important issue/variable - Don't know the relation of variables - **3. Clearly defined problems** (Stage 3) - Know issue + variable + their relationship - Don't know the right decision to make. - **B. Determining the research design** - **1. Research problem & design → related to other**. - **2. Exploratory research.** - Goal: explore problem/situation - Vagueness - Based: Qualitative research method (in-depth interview, focus group,...) - Ex. Academic literature, secondary data, ... - Use: Refine problem, identify relationship, develop good survey question. - **3. Descriptive research.** - Build on exploratory research. - Describe the market + characteristics - Size + revolution. - Key competitors + their size. - Market segments. - Performance. - Different indicator - Financial data (not marketing specific) - Brand awareness (market segments know brand exists). - Share of wallet (how much money people spend on product category) - Net promote score (likelihood to recommend a product). - Employed at stage 2. - Based: Internal external research. - **4. Causal research** - Less used due to complexity. - Goal: Uncover causality or relationship of cause and effect. - Ex. Price increase 10%, impact on customer's decision? - **Claim causality**: Meet 4 requirements - Relationship of cause and effect. - Time order (cause before effect). - Control over might-impacting factors. - An available theory explains relationship of cause and effect. ## **Aware**: Correlation ≠ Causation - Sometimes, statistical methods detect correlation between variables, but causality refuse because the lack of plausible explanatory theory. - Ex: Sun - sunburn / ice cream ## **C. Design the sample and method of data collection** - **1. Known as research design.** - **2. Choose secondary data or primary.** - Depend on the problem. - Need to decide the sample. ## **Research design** - **1. Taking a series of methodological decisions** - Good methodology: Ensure research findings capable of generating actionable insight. - **2. 3 typologies of market studies according:** - Moment the studies must perform. - Data collection methods: Secondary/ primary data. - Type of data: Quantitative/ qualitative data. - **3. Secondary data**: Existed data. - **4. Primary data:** Data you produce. - Quantitative: Numerical. - Qualitative: Indept insight, nonverbal. ## **E. Collect the data** - **1. Question dealt with:** Is the data good quality? - Recruiting participants, how? - Ensure large enough sample, how? - **2. Take place with online software** ## **F. Analyze the data** - **1. Need technical skills.** - **2. Interpret, discuss and present the findings.** - Assign meanings to data. - Visualizing data in a clear manner. - Summarizing key information. - Offering possible explanations. - Develop practical recommendations. - Ex: Customers want eco-packaging - Recommend paper packaging. ## **H. Follow up** - **1. After research: action** - **2. Some never end.** - **Books questions:** - Marketing research: A function that connects customers, consumers with the marketer through information, and the process of identify problem, choose research method, determining the sample group and type of data collected, collect the data, analyzing the data, present and communicate the data, next step. - **Market research**: A process to gain insight to the customers and help making decisions. ## **2. Academics:** Developing new market research method, aim at famous journals. - **Practitioners:** Putting the methods into practice, aim at the clients. - **Similarities:** Good measurement. ## **3. When should it be conducted?** - When it helps the firm gain answers about their clients/ competitors and help the firm improve their performance. ## **4. Who conduct research?** - **Internally:** Market research department - **Externally:** Researching firm ## **5. Why it is important?** - Help firm improve their performance and provide what the clients really need. # **Lesson 3: Analyzing and Understanding Markets : Interviews & Surveys** - **Agenda:** - Qualitative Studies - Survey: Characteristics - Sampling - How to administer survey - Typologies of questions - Creating a questionnaire ## **I. Qualitative study** - **A. Goal:** Understand little-understood phenomenon. - Ex. Why change from Apple to Android? - **B. Quantify phenomena X** → Understand qualities. - Ex. Why consumers don't like? Too complex? - **C. Relationship of qual & quant studies:** - **1. Before quan**: Better understand the issue. - Generate answers to multiple choice. - **2. After quan**: Better understand quantitative research. - Better understand answer pattern. - Illustrate survey answer with key sentences. - **D. Main Typologies:** - **1. Ethnographic & observation-based studies:** - Observing consumers in natural habitat. - Allow observation of how people use products. - Base: Anthropological method. - Use: Large company - **2. In-depth interviews:** - Involves: Asking series of questions - Structure: More or less (based on how much the issue is known). - Method: Online (increasingly) - **3. Focus group / group interview:** - Small participant group. - Animated by moderator. - Participants' interaction: allow obtain unique information. - **E. Individual in-depth interview:** - Semi-structured ? - Consist: Open-ended? - Formula: Encourage people to expand subject - Sample: Often 20 people (phenomenon under study). - Face-to-face with video tools (interview was recorded) - Interview are transcribed. - Analysis of transcript: - Base: Key theme from the analysis. - Goal: Explore the pattern. - **F. Group interview:** - Focus group or round table. - Mostly open-ended? - Meeting of 8-12 people - Room with a one-way glass. - Behind the glass: Analysts. - Lead meeting: Moderator. - Ask? - Ensure everyone's say - Prevent one person monopolizing. - Discussion: Recorded, transcribed, analyzed. ## **II. Survey method** - **A. Surveys** (Method/technique) - **1. Gathering specific data from respondents** - **2. Method: Structured questionnaire** - Standardized - Fixed order - **3. Characteristics:** - Simple to administer - Reliable data - Easy to compare - **4. Problem:** - Respondents: Sometimes unwilling/unable to answer, not clear of their preferences… - Survey: Difficult to develop. ## **III. Sampling** - **A. Define target population** (Sample selection) - **1. Population**: Composed of different elements. - Elements: Information-desired object. - Ex: All French fast fashion consumers. - **2. Selection**: According to research objective. - **B. Select the sampling technique.** - **1. Probabilistic** - Individual: Equal probability - Systematic: Stratified/ homogeneous group - Selected independently - Cluster: Heterogeneous subgroup - **2. Non-probabilistic** - **Selection**: Accessibility/personal judgement of researcher. - **Convenience sampling:** Individual selected bc easy to reach. - **Judgemental** Selection-judgment of researcher. - Ex: Bloggers. - **Snowball:** Data sources nominates other potential source. - **C. Determine sample size** (Participants' number) - **1. Consideration** - Nature/objective of the research. - Population size. - Conducted analysis? - Resource constraints. - Response rate: (no. completed interviews / no. eligible units in sample). - **D. Sampling process' execution:** - **1. Recruiting method** - Mailing - Online/onsite recruiting… - Market research providers… - Panel (paid money for being contacted) - Not representative, self-selection bias... ## **IV. How to administer a survey:** - **A. Face-to-face interview** - **1. Pros:** - Environmental control. - Help from interviewer. - **2. Cons:** - Consumer's skepticism. - Interviewer's bias. - Training is needed. - Participation's refusal. - **B. Telephone (distant) interview:** -** 1. Pros:** - Question's explanation by interviewer. - Control: Moderate. - **2. Cons:** - Short questions - Consumer's skepticism. - Interviewer's bias. - Their presence impact answer. - Participation's refusal. - **C. Mail Interviews** - Questions are sent regularly to by mail. - Involve agreed-on customers. - 80% response rate. - **D. Electronic interviews** - **1. Pros:** - Forced answer. - Flexibility and skip logic. - Fast and cheap. - Develop and modify: Quick. - Can add image + sound. - Convenient (answer anytime) - **2. Cons:** - Self selection, bias. - (Only those who interest, take part) - No clarification available. ## **V. Typology of questions** - **A. Open questions** - Spontaneous. - Answer filled by respondents. - Use: Often in measuring brand awareness - Brand recall. - Brand awareness: Strength of brand in consumer's memory. - **5. Ex:** First brand come to mind? - Ability to recall brand by packaging… - **6. Ex. Question:** What drink do you familiar? - When you think of soft drink, what brand comes to mind? - **B. Closed question** - Prompted, pre-coded - **Ex:** Have you heard of…? yes/no Do you know… brand? yes/no - **C. Dichotomous (2 choices) & multiple-choice questions ** - **Ex.** of dichotomous: Have you purchase…? yes/no - **Ex** of multiple-choice: What phone do you use? Apple/Samsung/Xiaomi,… - **D. Likert scale questions** - Measure degree of agreement. - Data: Treated as interval. - Construct & administer: Easy. - Answer: Easy. - Use multiple item, condense in a single variable. - Reversed item: Prevent tendency of end-scale question option. - **E. Semantic Differential questions** - 7 point rating scale (2 extremes). - Not always suitable - Include reverse item. - Need pretest. ## **LIKERT VS SEMATIC** - **Likert:** - Measure: Degree of agreement/ disagreement. - Satisfaction/ dissatisfaction. - Flexible. - Build: Easy. - Meaning: Can be specified. - **SEMATIC** - **Measure:** Participants' position between 2 extreme. - **F. Continuous rating question:** - Rate object on a scale. - Characteristics: - Build: Easy. - Method: Online question. - **G. Answer options** - How many? Between 3-7: - (3-5): for telephone interview, multiple item-scale,… - 7+: Hard to handle by respondent. - Odd or even? - Odd: Offre neutral choice - Cons: can be unuseful. - Even: Forced to choose side - Data more useful - **H. Scale** - Likert/semantic scale: question types. - Muti-scale: 1 item-statement. - Ex. I was interested. I pay close attention. I didn't get distracted. ## **II. Preparing questionnaire** - **Step 1. Objective definition and conceptualization** - Define topic. - Use variable. - Choose: Mere description vs causal research. - **2. Survey goals** - Measure consumer behaviour and attitude. - Gain an insight from qualitative studies - Define position of brand, compare to other. - Identity consumer's profile. - Understand consumer's satisfaction. - **3. What can you do with survey**? - Descriptive research - Ex. Data: Intention data, attitude towards a brand. - Causal research - Discover variable's relationships. - Test differences between subgroups. - Describe consumer's profile. - **4. Dependent/ independent variables.** - **Dependent**: Variable that depends/respond to other (ex. intention to buy). - **Independent:** Variable that influence (ex. consumer's characteristic). **End step 1: Clear goal, listed variables.** - **Step 2: Draft question** - Map the flow. - Structure: - Introduction: Salutation - Thanks. - Length. - Informed consent. - Privacy information. - Filter questions. - Questions: - Be short and clear. - Top: General and easy question. - Justification (why you ask). - Text consideration (X ambiguous words (often,...)). - Use validated scale. - **Step 3: Test** - Pilot test: - Do tests sound right? - Do respondents understand? - How long is the questionnaire? - Informal Pilot: - Ask easy questions → collect reactions. - Accompanied Pilot: - Present when test is done, participants tell their feeling. - Large scale pilot: - A large sample (to check reliability?) ==End of OCR for page==