IMK Chapter 2 – Market Research

1. Types of information
Economic and demographic

This includes general data about the growth of the country, inflation and business cycle trends,
aging, immigration, population trends. It also includes profitability analysis for the division of
products such as specific industry economic studies.

Cultural, sociological and political climate

This is the non-economic review of conditions that impacts the country. It includes leisure time,
ecology and safety and how it impacts the business.

Overview of market conditions

A detailed analysis of the market conditions the business faces by market segment.

Summary of technological environment

A summary of the state-of-the-art technology as it relates to the division’s business.

Competitive situation

A review of competitors products, marketing strategies, market segments, sales revenue.

2. Sources of data

Internal data – electronic collections of consumer and market information obtained from data
sources within the company network, including accounting, marketing, customer service, and sales
departments

Marketing intelligence – the systematic collection and analysis of publicly available information
about competitors and developments in the marketplace. Its goals are to: i) improve strategic
decision making, ii) assess and track competitors’ actions, and iii) provide early warning of
opportunities and threats

Marketing research – the systematic design, collection, analysis, and reporting of data relevant to a
specific marketing situation facing an organization; provides data that a company cannot collect on
its own.

These data can be collected in the form of

Secondary data consists of information that already exists somewhere, having been
collected for another purpose
The Internet & other sources provide up-to-date economic & political data on countries & regions
 Primary data consists of information gathered for the special research plan
◦ Independent research agencies will provide customized analysis on specific products & markets
3. Potential Problems with data
Secondary data

Availability of Data
◦ Detailed data on population, income, the numbers of wholesalers, retailers, manufacturers, and
facilitating services are not available in many parts of the world
◦ Researchers’ language skills may hinder research accuracy

Reliability of Data
◦ Official statistics may sometimes be too optimistic, reflecting national pride rather than practical
reality
◦ Print media often overestimate countries’ figures

For example, China’s National Statistics Enforcement Office reported that they uncovered an
instance of 60,000 cases of false statistical reports. The head of the China’s National Bureau of
Statistics was also involved in a corruption scandal in 2006.
Seeking advantages, hiding failures, local officials, factory farmers, rural enterprises, file fake
numbers on everything from production levels to birth rates.
Companies in developed countries are also known to shave their production statistics to match their
sales reported to tax authorities.

Comparability of Data
◦ Lack historical series to compare and verify current information
◦ The manner data are collected and reported is much too broad to be of specific value

For example, it is difficult to compare supermarkets in Japan with supermarkets in US because

Japanese supermarkets are bigger than US supermarkets, and may sell things such as furniture,
stationery, and might even have a restaurant, whereas US supermarkets only sell foodstuff and
necessities.

Validating Secondary Data

◦ Any secondary data must be checked and interpreted carefully
◦ Following questions should be asked to effectively judge the reliability of secondary date:
Who collected the data? For what purpose were the data collected? How (by what methodology)
were the data collected? Are the data internally consistent and logical in light of known data sources
or market factors?

This is to check the consistency of the secondary data with other data of known validity.

Primary data

Ability to Communicate Opinions

◦ Depends on respondent’s ability to recognise the usefulness and value of a product and concept

For example, someone who has never used an office computer cannot offer his or her reasonable
opinion on a new computer software package and the likes and dislikes of the good. The more
complex the concept, the more difficult for the respondent to express his or her opinion on the
subject.

Willingness to Respond
◦ Cultural differences often lead to unwillingness of inability to respond to surveys

For example, in some countries, women would never consent to be interviewed by a man or a
stranger. French Canadian women do not like to be questioned and might be reticent in her
responses. In other societies, men would consider beneath his dignity to discuss personal grooming
procedures and brand preferences.

Sampling in Field Survey

◦ Lack of adequate demographic data and available lists from which to draw meaningful samples
◦ In many countries, telephone directories, cross-index street directories, census tract, and detailed
social and economic characteristics of population are not available
◦ Inadequate mailing list and poor postal service

Problems encountered in drawing random sample include:

 No officially recognised census of population
 No other listings that can serve as sampling frames
 Incomplete and out-of-date telephone directories
 No accurate maps of population centres => no cluster (area) samples can be developed

Language and Comprehension

◦ Differences in idiom and the difficulty of exact translation create problems in eliciting specific
information desired
◦ Equivalent concepts may not exist in all languages
◦ Literacy posed another problem
◦ Different dialects and languages used in one country

◦ 3 ways to help ferret out translation errors:

Back translation, parallel translation, decentering
◦ Affected by the availability of good quality secondary data

Possible exam question:

List and discuss THREE types of information that can be utilized in market research, the sources of
the data and the potential problems that may arise.