Market Research PDF

# Market Research ## Definition - Is defined as a marketer connected with the customers through transmission of information. - The AMA definition of market research is a function which links the consumer through the transmission of information. ## Function of Market Research - Scan opportunity a...

# Market Research ## Definition - Is defined as a marketer connected with the customers through transmission of information. - The AMA definition of market research is a function which links the consumer through the transmission of information. ## Function of Market Research - Scan opportunity and forecast - Evaluate competition - To assess for future. - To monitor progress. ## Reasons For Market Research - **Forecasting**: forecast future sales and future revenue. - **Segmentation**: develop new strategy. - **Products**: goods and services. - **Customer Psychology**: to know competitors. - **Strategy**: to encourage segmentation breakdown. - **Competition**: a large market group. - **Product**: to target market. - **Segmentation**: to have a psychological understanding of customer. - **Price**: price. # Type of Consumer Research - **Function**: - Exploratory - Descriptive - Casual - **Technique**: - Survey - Experiment - Observation ## Exploratory Research - Try to understand the research domain. - Trying to find out what kind of questions do we need to ask. - Example: Customer-driven research done by our lecturer: - He asked broad open ended questions and got several responses. - Thereafter developed questions from whatnot was answered broadly. - Did not know the right kind of question to ask. ## Descriptive Research - Describe a part/particular target market/population. - With some kind of parameter, e.g. opening a business of men's clothing franchise of men clothing. - We would want to know how tall and big the population is before opening the franchise. - It's objective is to gather detailed information about a specific market segment/consumer behavior in a product store. ## Causal Research - Deals with causality. - **Definition**: A variable A results in variable B, does a change in A result in a change in B? - Example: The number of breaking and entry of a higher sales of ice cream (we found this occurrence during the summer). This example has a higher correlation but no causal relationship. - Does A leads to B, e.g. of casual relationship false, e.g. if technology is easy to use then more people will use it. ## Reliability and Validity - **Reliability**: The hallmark of a good research are reliability and validity. - **Reliability fundamentally is extent to which a result are stable and consistent.** When we talk of reliability think of consistency. - **Validity**: It answers this question, are you measuring what you intend to measure. # Research Process - **Problem definition** - **Design** - **Collect and analyze data** - **Conclusion** ## Problem Definition - It's critical - It’s exploratory - **Secondary Data:** - **P-Data** - **Focus group** - **Depth interview** - **Questionnaire** ## Problem Definition - Defining the problem is critical. - Exploratory research helps to determine what the problem is; get data which is **primary data**, when the information gotten now is in connection with the current research (facts and figures are newly collected for a project). - **Secondary data**: data collected before or not for the research at hand (facts and data already collected/recorded prior to a project). - Secondary data could be internal or external data. - **Internal data**: gotten from inside a firm. - **External data**: gotten from outside a firm. - **Informal**: mind and forty. - **Formal**: quantitative data. - **Qualitative Data**: watching, primary data. - **Focus group**: Get groups of people and ask a series of questions. Ensure subjects are current and future customers of products. - **Depth interview**: Interview potential customers. - **Questionnaire**: Open ended questions. ## Data Sources - **1° Data:** - Internal - External - **2° Data:** ## Primary Data Sources - **Informal**: Information from friends, family, other consumers. - **Quantitative data**: that is based on frequency measurements. - **Qualitative data**: we observe customer. We get insight into customer behavior, culture and how it affects customer behavior. # Research Design - How are we going to find a solution? - **The plan** - **Basic technique:** - Surveys - Experiment - **and quantitative data**. Most are qualitative and quantitative. ## The Plan - The technique we are going to use. - Time and cost constraints. - **Elements of plan** - **Survey:** combination of questions that respondents will respond to. It can be done online or physical. - **Panel Data**: Data gotten when we are interested in the effect of time. Ie. we are interested in the effect of time. Questions in survey could be open ended questions or scales that have been validated for a particular research. ## Approaches to Survey (Type of Surveys) - Phone: carrying respondents to ask questions. - Email: sending mails to respondents. - Interview: conducted in person. ## Evaluation of Survey - Time - Cost - Response Rate ## Non-response Bias - (Lost of non-respondents) leads to bias. ## Research Bias - **Social Desirability Bias**: The consumer gives responses based on what is more socially acceptable. ## Can You Have Reliability Without Validity? - Yes, you can. You can be consistently measuring. Some, but it may not be valid. ## To have validity, you must have reliability? ## Experiment - **Causality.** - **Variables**: features. - Manipulation. - Control. - Validity: - **Ext**. - **Int**. - **Location/Lab/Field**. ## Where Causality is, we must use Experiment - **Dependent Variables**: we manipulate and measure. - **Independent Variables**: ## Presentation drives of likelihood of research - **Validity**: External validity is to what extent do we generalize those results. - **Internal Validity**: what are we measuring, and how we intend to measure it. - **Where are we going to run it, field or lab?** - If we do it in lab it maximizes internal validity but reduces external validity. - If we run our experiment in field expects validity is higher and internal validity is lower. ## Location and Validity - **Lab**: - **Internal**: + - **External**: - - **Field**: - **Internal**: - - **External**: + # Observation - Ethnography. - Hawthorne effect. - Ethical considerations. ## Ethnography - Research by observation is called ethnography. ## Hawthorne Effect - Is a bias on observation; the act of observation change an outcome. ## Ethical Consideration - Is important in ethnography. Ethical considerations are important in observation research ## Optimal Design - There is no optimal design (nameless). Optimal design in research is an approach that seeks to achieve the best possible outcome with minimal resources. - **Trade-off**: Cost, time associated, sample. ## Sample of a population - **Probability sampling**: - **Simple Random Sampling**: Each member a chance or equal probability of being drawn. - **Non Probability Sampling**: - Don't have equal chance of being drawn. ## Collecting and Analyzing Data - **Collection errors** - **Bias** - **Gross error** ## Conclusion and Report - Interpretation - Communication - Aim achieved. - Was a team reached after research. ## Conclusion - It's Important for: - **Market Plan** - **Understanding Market** - **Variety of sources of data** - **Key for any market organization.** - **Critical to the success of a firm.**