MARKET

RESEARCH
CHAPTER VI
 What is Market
Research?
Market Research is the process of
evaluating the viability of a new
service or product through research
conducted directly with potential
customer. It allows a company to
define its target market and get
opinions and other feedback from
consumers about their interest in a
product or service.
 6.1 Basic Questions in Market Research

WHY WHEN
WHAT WHERE
WHICH HOW
WHO
 6.1 Basic Questions in Market Research
WHY. Purpose and objective for
conducting the market research.
WHAT. Determines the scope and
limitations of the market research to be
conducted.
WHICH. Determine which segment of
the market must be studied.
 6.1 Basic Questions in Market Research
WHO. Identifies who among the
members of the selected market segment
will participate in the market research.
WHEN. Determines the time and timing
of the research.
 6.1 Basic Questions in Market Research
WHERE. Pinpoints the relevant location
of the market research.
HOW. Determine the methodology to be
used for the market research.
6.2 Market Research
Methodologies
-are systematic, objective
ways to gather, analyze, and
interpret data related to a
company’s target market,
competition, and/or
environment to help make
informed business decisions.
 Market Research Methodologies

1. Sales Data Mining

Sales data mining is the process of
extracting valuable insights and patterns
from large volumes of sales data to inform
strategic decision-making and improve sales
performance.
 Sales Data Mining
• Using the information from Case Example
3, the data can logically be arranged
chronologically from 7am to 6pm otherwise
known as data array. The data can be further
grouped into intervals of two, three, or four
hours.
 Table 3.1 Hotdog Sales According to Two-Hour Limited Time Interval
TIME Hotdogs Bought
7-8 am 2
9-10 am 5
11-12 nn 13
1-2 pm 7
3-4 pm 11
5-6 pm 6
After arranging and classifying data, the researcher can now do a frequency
distribution and construct a frequency table. This table organizes data into groups
of values according to the most logical characteristics.
 The frequency and relative
distributions above can be more
useful if translated into graphs.
Graphs shows visual patterns that
13 20 11
are not easily seen.
 Three Commonly Used Graphs

HISTOGRAM FREQUENCY POLYGON PIE CHART

 HISTOGRAM
• A histogram or bar graph
consists of a series of
rectangles or “bars.” each bar
is proportional in width to the
range of values within a class
and proportional in height to
the number of items falling in
HISTOGRAM a class.
 FREQUENCY POLYGON.
• The frequency polygon is
constructed by marking the
frequencies on the vertical
axis with a dot corresponding
to the values on the horizontal
axis. These dots are then
connected with a straight line
FREQUENCY POLYGON
to form a polygon.
 PIE CHART
• It is a circular graph divided
into sections that represent the
relative frequencies or
magnitudes of the grouped
values.

PIE CHART
✓In order for the data to be more useful
to the entrepreneur, a cross-tabulation is
highly recommended. This will explain
why some data fall at one end of the
distribution while others are at the
opposite end.
 Example of Cross-Tabulation
TIME 12 below 13-19 20 above Sum
7-10 am 0 0 7 7
11-2 pm 12 4 4 20
3-6 pm 1 16 0 17

TIME 12 below 13-19 20 above Sum

7-10 am 0.00% 0.00% 100.00% 100.00%
11-2 pm 60.00% 20.00% 20.00% 100.00%
3-6 pm 5.88% 94.12% 0.00% 100.00%
 Market Research Methodologies
2. Focus Group Discussion
It is one of the most common present qualitative
research tools. It is effective in extracting consumer
and non-consumer experiences regarding products,
places, or programs. This methods can also be used
for generating initial insights.
Four Key Decisions
1. Respondent Selection
2. Sample Size
3. Data Gathering
4. Data Analysis
RESPONDENT
SELECTION

it includes;
1.The definition of the respondents;
2.The classification of the respondents; and
3.The screening of the respondents
DATA GATHERING
METHOD

it involves;
1.The selection and preparation of the venue and
equipment;
2 The formulation of the discussion agenda; and
3. A facilitator who is very skilled in moderating and
possesses the ability to draw out significant insights
from the participants.
DATA ANALYSIS

it includes;
1. The integration of the information gathered;
2. As well as some observations on respondent
behavior; and
3. A listing of recommendations and report
writing.
Nine Steps in Conducting a Focus Group
Discussion (FGD)
1.Develop the research objectives. What is the
research all about?
2. Determine the participant profile. Who are the
most knowledgeable or most relevant participants?
3 Determine the appropriate token or “compensation”
for the participants.
Nine Steps in Conducting a Focus Group
Discussion (FGD)
4. Develop a participant screener
questionnaire.
5. Recruit the participants.
6. Select a good facilitator.
The key qualities of a good facilitator are:

• kindness with firmness

• involvement and encouragement
• complete understanding
• flexibility
• sensitivity
Nine Steps in Conducting a Focus Group
Discussion (FGD)

7. Develop a facilitator’s discussion guide.

8. Arrange for the venue and logistics.
9. Analyze the results of the focus group
discussion.
 Market Research Methodologies

3. Observation Technique
One of the best ways of gathering data about
customers in their natural setting without having
interact talk to them.
 Market Research Methodologies

3. Observation Technique
Having a clear objective in mind will help the
researcher focus on the important things to observe
or watch out for. Recording the event as it happens
may be the best means to capture the information.
Following conditions to met by the researcher:
1. The needed information must be observable or inferable
from the behavior that can be observed.
2.The subject matter contains some sensitivity that needs
detached observation.
3. The behaviors of interest must be repitative, frequent, or
predictable in some manner.
4. The behaviors of interest must be of a relatively short
duration.
Advantages and Disadvantages of
Observation Technique
 Advantages of Observation
Technique
1. It allows the researcher to see what customers actually
do rather than rely on what they say they do.
2. It allows the researcher to observe customers in their
natural setting.
3. It does not subject the researcher to the unwillingness of
customers or their inability to reply to certain questions.
4. Some information are better gathered quickly and
accurately through observation.
 Disadvantages of Observation
Technique
1.The researcher can only see the outside behavior of the customer,
but cannot determine the inner motivation of the customer.
2. The researcher cannot get the reasons behind the behavior.
3. The researcher can only focus on the “here and now.” it cannot
cover the past nor cover the future.
4. Finally, the observation technique may border on the unethical
because the respondents have not agreed to be observed.
TWO TYPES OF OBSERVATION
TECHNIQUE
1. Human Observation
-humans observe the events as they
happen.
2. Mechanical Observation
-mechanical devices are used to record
events for later analysis.
GUIDELINES IN CONDUCTING
OBSERVATION RESEARCH
1.Determine the pre-observation objectives
2. Prepare your pre-observation tips:
a. Prepare and clarify your observations
points and issues.
b. Prepare your observations materials.
c. Identify the persons to be observed.
d. Position yourself strategically without
being notice.
3. Focus on what you want to observe:

a. Is it customer demographics?
b. Customer buying behavior?
c. Customer usage behavior?
d. Other customer information?
4. Observation proper:

a. Observe keenly and listen intently.

b. Be mindful of the surroundings.
c. Be alert for obvious movements.
d. Be sensitive to subtle movements.
e. Look at the customer when the customer is not looking.
f. Do not obvious.
g. Observe and take note of other things that you feel
are important.
5. Post-observation tips:

a. Review your notes.

b. Make sure that the flow is correct.
c. Tabulate what needs to be tabulated.
d. Interpret and analyze your data.
e. Make a format report.
 Market Research Methodologies

4. Survey Research
It is the most preferred instrument for in-depth
quantitative research. The respondents are asked a
variety of questions which are often about their
personal information, their motivations, and their
behaviors.
 Market Research Methodologies

4. Survey Research
 Surveys can be conducted via telephone, personal
(face-to-face interview), and mail interview (either
printed or electronic mail). The most popular type of
survey research is the Usage, Attitude, and Image
(UAI) survey, which is intended to derive market
awareness, market size and share, product usage and
preference, customer interest, and customer image.
Three important concerns that has to look
into:
Three important concerns that has to look
into:
1. Sampling techniques
2. Getting the sample size
3. Designing the questionnaire ― which is the
most sensitive phase.
 a.) Questionnaire Design
There are some basic rules that have to be followed in questionnaire
formulation. These are:

 The questions, in their totality, should be able to elicit all the

necessary information required in research.
 Each question should be clear and definite.
 Each topic should cover one topic at a time.
 Each question should be presented in a neutral manner.
 Each question should be translated into dialect that the target
respondents are familiar with.
 b.) Sampling Techniques
Classified into probability and non-probability sampling.

 Probability Sampling is where the respondents are randomly

selected from a population such as in lottery method.
 Non-probability Sampling on the other hand, refers to the technique
that is resorted to “when it is difficult to estimate the population of the
study because they are mobile or transitory in a given location.” This
renders the characteristic or profile of a group that is difficult to
generalize.
 c.) Sample Size
There are three basic sample determinants. These are follows:

1. Data variability of a proportion. Dispersion of the data or how widely

the data is from a central point.
2. Confidence level in the estimation process. The higher the confidence
level desired, the bigger the sample size needed; the current industry
standard has 95% confidence level.
3. Error in the result of the estimation process. The less error margin
desired, the bigger is the required sample size; it expressed as plus or
minus (+/—) a certain percentage.
 c.) Sample Size

•Assuming that the population is is unknown, the

formula for computing the sample size is as follow:
Where:

Z = 1.96(The value of the normal variable for a confidence level of 0.95.

This means that the probability of finding the true population value
within a given interval is 95%. If 99% is the chosen confidence
level, the value of Z is 2.58)

p = the proportion of getting a good sample

1-p = the proportion of getting a bad sample
d = error margin in decimal
n = sample size
Steps in Conducting a Survey Research
 Steps in Conducting a Survey Research
1. Develop the research objectives. Determine what you want to
know and learn. Define the goals of your research.
2. Determine your sample. Identify who and what kind of people you
will interview and where you are going to find them. Determine the
number of target respondents you need and how you are going to
choose them.
3. Choose the interviewing methodology. From the difference
interview methods, such as face-to-face, by phone, or by mail,
choose the appropriate methodology to use for your research.
4. Create your questionnaire. In drafting your questionnaire, identify
the key information you will have to ask from your respondents.
 Steps in Conducting a Survey Research
5. Pre-test questionnaire. Determine a similar profile of target
respondents and test the questionnaire. Be mindful of the comments of
the respondents so that you may revise the questions accordingly and
appropriately.
6. Conduct interviews and enter data. Plan and execute the
implementation of your survey well. Be professional in conducting the
interviews. Ensure that data are entered legibly.
7. Analyze the data. Review your notes. Organize the questionnaires
for more orderly processing. Tabulate the graphs, and do the statistics.
Write the report including the insights gained from the result.
 COSTUMER PROFILING
 The three method of classifying or profiling are
demographics, psychographics, and technographic.
 Methods of Customer Profiling
•Demographics
In demographic classification, we categorize customer
into the following:
1.Age
2.Income classes
3.Social classes/ Reference groups
4.Ethnic backgrounds
 Methods of Customer Profiling
•Demographics
In demographic classification, we categorize customer
into the following:
5.Religious belief
6.Occupations
7.Domiciles
 Methods of Customer Profiling
•Demographics
The customers are classified according to the following
income classes:
1.Class A, the high income class
2.Class B, the upper middle income class
3.Class C, the middle income class
4.Class D, the lower middle income class
5.Class E, the low income class
 Methods of Customer Profiling
Demographics
Ethnic backgrounds and religious beliefs affect the cultural
beliefs of people such as the food they eat, how they save and how
they spend, and their levels of conservatism or progressiveness.

Social classes and reference groups often dictate what is

acceptable or unacceptable behavior. These classes or groups often
include family, friends, neighbors, fellow workers, and societal
affiliations.
 Methods of Customer Profiling
Psychographics
Psychographics defines the costumer‘s motivations,
perceptions, preferences, and lifestyle.

Motivation goes to roots of costumer‘s needs and wants. This can

be classified into physiological and psychological. Physiological needs
and wants refers to costumer’s personal likes and disliked and include
the satisfaction of thirst, hunger, and shelter.
 Application of Customer Profiling

1. The first way is to develop a product or service to test out in the

marketplace.

a. The costumers most attracted to the product or service can

then be profiled.
b. After profiling, the next step is to find out how huge this
market is for exploration purposes.
 Application of Customer Profiling

2. The second way is to profile the different types of customer in a

given industry or areas as to their needs and wants.

a. From these types, the entrepreneur could then choose the

customer group with the best potentials.
b. Products or services can be developed by the entrepreneur to
match this chosen customer group.
 Market Aggregatiom
Some entrepreneur prefer to appeal to
broader market if possible. They want market
aggregation rather than market segmentation.
They prefer the deal in commodities like rice,
bread, and water that appeal to market
aggregates rather than market segments.
 Market Mapping

Market mapping refers to grouping

customers and products according to certain
market variables an entrepreneur can use
one or a combination of demographics,
psychographics, and technographic to create a
market map.
 Market Mapping

The purpose of market mapping is to provide

the market analyst a better understanding of the
market as a whole and to paint a clearer picture
of where the different competitors are relative to
the different market segments.
THANK
YOU!