4.4.

Market Research

 Market Research
 Concerned with finding out whether consumers will buy a product or service, and
is done by analyzing consumer reactions
 Reasons for market research
 Reduce the risks associated with new product launches
 Predict future demand changes
 Explain patterns in sales of existing products and market trends
 Assess the most favored designs, flavors, styles, promotions for a product
 Market research process:
 Identify consumer needs and tastes
 Primary and secondary research into consumer needs and competitors
 Product idea and packaging designs
 Testing product and packaging with consumer groups
 Brand positioning and advertising testing
 Pre-testing of the product image and advertisement
 Product launch and after launch period
 Monitoring of sales and consumer response
 Types of market research
 Primary research
 Gathering data or feedback first-hand, through
 Questionnaires (short and focused, allows open-ended questions)
 Observation (foot traffic, queuing time)
 Sampling (new product or campaigns)
 Focus groups (asking groups of people)
 Interviews
 Advantages
 Up to date
 More relevant/direct
 Confidential and unique
 Objective
 Disadvantages
 Time consuming
 Costly
 Questionable validity
 Secondary research
 Collecting second-hand information from other sources like
 Market analyses (shows relevant market data)
 Government publications
 Academic journals
 Media articles
 Secondary research should be undertaken first because it is cheap, fast,
comes with plenty of sources and offers a wide range of information
 Advantages
 Cheaper and faster
  Range of sources
 Insight to trends
 Disadvantages
 May become obsolete or out of date quickly
 May be in an inappropriate format
 Partial information
 Widely available to competitors
 Qualitative vs. quantitative research
 Qualitative research
 Used to get feedback to understand motivation , behavior, perception
through focus groups, expert panels, in-depth interviews of credible individuals
 Qualitative explores attitudes and opinions and can be very deeply
relevant even if only few are interviewed
 Can only give an indication and does not have statistical relevance.
 Relatively inexpensive but harder to analyze, more time consuming, and
results are subject to bias or skill of interviewer
 Quantitative research
 Used to get statistical data from total (for figures) or representative sample
(for opinion, decisions), using interviews that have closed questions or use ranking
or sliding scales
 Quantitative can only ask factual answers but may not reveal reasons why
 A larger representative sample is needed and must be designed well so it
ends up more costly to undertake
 Sampling
 Consumer surveys ask consumers for their opinions and preferences
 It can obtain both qualitative and quantitative information
 How many…..
 What do you look for….
 4 points for consideration when making surveys
 What to ask?
 Questions are unbiased and unambiguous
 How to ask?
 Should the survey be self-completed or filled in by an interviewer?
 How accurate is it?
 Accurate and valid
 Who to ask?
 It is impossible to ask everybody even if it is just potential
members of a target market
 A sample reflects the characteristics of the survey population
 Sample should be significant and valid to avoid sample error
 Sampling methods
 Random sampling
 Random selection, based on the principle that everyone is given
equal chance
 Stratified sampling
  Segmentation with number of respondents per group based on
proportion to the population
 Majority of the population will compose of majority of the survey
 Cluster sampling
 Used for localized surveys (e.g. towns, region, etc.)
 Sample based on a geographic location/ concentration of the target
 Quota sampling
 A certain number or quota is set, made up of samples from each
segment or random
 Snowball sampling
 Respondents are networked from a respondent’s referral
 Convenience sampling
 Respondents are chosen based on accessibility and proximity