Market Research: A Comprehensive Guide
Market Research Process
Need for Market Research
Define the problem, establish research questions, determine research design, identify information types and sources, determine the methods of accessing data, design data collection forms, determine sample plan and size, collect data, analyze data, prepare and present the final research report.
What is Market Research?
Market research, which includes:
- Social research
- Opinion research
is the systematic gathering and interpretation of information about individuals or organizations using the statistical and analytical methods and techniques of the applied sciences to gain insight or support decision-making.
Market research is the process of designing, gathering, analyzing, and reporting information that may be used to solve a specific marketing problem.
The American Marketing Association
Marketing research is the function that links the consumer, customer, and public to the market through information.
Balance in Market Research
Lower business risk = higher costs, objectivity = subjectivity, science = practice, resources (time, money) = information, investment = expenditure
Information Characteristics
Accurate and timely, specific and organized for a purpose, presented within a context that gives it meaning and relevance.
Market Research for Situations That:
- Search for meaning among big data
- Information is needed to take decisions
- Require a rational way of reasoning
- Involve a decision to lower the risk
- Require assessment, evaluation, grading, direction, trend analysis
International Organizations
ICC – International Chamber of Commerce, ESOMAR – global organization of data professionals, market research, and public opinion polling.
ICC/Esomar International Code
Sets out global standards for self-regulation for researchers and data analysis and is undersigned by all Esomar members.
Negotiations for Market Research Project
- Research brief – what do I actually want
- Talk
- Research proposal
- Decision (client)
- Contract
- Market research starts
- Problem, Objectives, Information, Technical, Costs, Communication
- Contract signed
Market Research Usage
Developing a Company Marketing Strategy
- Refining market propositions
- Research for innovation: defining market propositions, launch and monitoring of in-market performance
Other Applications
- Media research
- Institutional and social research
- Opinion pooling
- Employee research
- Mystery shopping
- Customer satisfaction
- Market description
- Market profiling-segmentation
- Stage in the purchase process
- Customer trust, loyalty retention analysis
- New product concept analysis
- Habits and uses
- Product fulfillment
- Competitive product and market positioning
- Brand equity
- Advertising value identification
- Advertising media and message effectiveness
- Salesforce effectiveness
- Sales lead generation
- Customer service
Steps in the Marketing Research Process
- Define the research problem (objective, customer population)
- Determine the research design (secondary/primary data)
- Choose the method for collecting primary data (telephone, face-to-face, online)
- Design the sample (probability/non-probability sampling)
- Collect the data (translate, combine data)
- Analyze and interpret data (tabulate/cross-tabulate data and interpret it graphically)
- Prepare the research report (executive summary, description of research methods, discussion of results of the study, conclusion)
Types of Research Design/Question
- Explanatory: Define problems, systematic and flexible, results: define, explain general problem, end by defining hypothesis
- Descriptive: Describe, measure, identify (Who, where, how, why, when), Snapshot or panel (same people, same question during some period of time)
- Causal: If-then, predictions/experiments
Secondary Research
Internal Sources
- Company reports
- Previous company research
- Salesperson feedback
- Customer feedback
External Sources
- Published research
- Trade organizations
- Syndicated research
- Government sources
Primary Research
Exploratory Research
- Customer interviews
- Focus groups
- Projective techniques
- Case studies
- Ethnographies
Descriptive Research
- Cross-sectional
- Longitudinal
Causal Research
- Laboratory research
- Field studies
Qualitative Methods
- Interviews
- Focus groups
- Observations
- Projective techniques
- Experiment
Quantitative Methods
- Research question
- Hypothesis
- Blocks of questions
- Questions
Ways of Conducting Quantitative Questionnaire
- Self-respondent
- Face-to-face
Channels
- Personal
- Telephone
- Paper
- Mobile
- Online platforms
- Social platforms
Segmentation
Philip Kotler
Market segmentation is the sub-dividing of a market into homogeneous sub-sections of customers, where any sub-section may conceivably be selected as a market target to be reached with a distinct marketing mix.
Stanton
Market segmentation consists of taking the heterogeneous market for a product and dividing it into several sub-markets or segments, each of which tends to be homogeneous in all significant aspects.
Differences
- Behavioral
- Demographic
- Psychographic
- Geographical
Criteria for Effective Segmentation
Substantial
A viable market segment is a homogenous group with clearly defined characteristics (age, socio-economic, brand perception).
Longevity
Not focusing on unstable customers that will disperse or change from year to year.
Accessible
When demarcating a market segment, it is important to consider how the group might be accessed and, crucially, whether this falls within the strengths.
Differentiable
All customers within this segment should be internally homogeneous (similar preferences and characteristics) but externally heterogeneous.
Actionable
The market segment must have practical value – its characteristics must provide supporting data for a marketing position or sales approach, ideally in relation to the existing measurements of the market segment as defined by initial market research.
Structure of the Market
- Absolute non-users market (not use)
- Relative non-users market (maybe)
- Market of competitors’ consumers (buy at competitor)
- Market of existing firm’s consumers (current)
Sampling
- Population
- Census (ideal population)
- Sample (subset of population)
- Sample unit (basic unit)
- Sample frame (a master source of sample units)
- Sample frame error (the degree to which the sample frame fails to account for all of the population)
- Sampling error (size and ways of sampling methods used (bias))
Probability
Members of the population know that they have a chance of being selected into the sample.
Nonprobability
sampling methods: 1. Convenience sample – most convenient way, reduced time and effort (malls, high traffic areas), selection subjective. 2. Purposive sample – require judgement or „educated guess“ – knowledge about the population choosing those types of individuals who constitute sample. 3. Referral sample – „snowball samples“ – referral sample require respondents to provide the names of prospective respondents, 4. Quota sample – application of the research objectives, 50% female, 50% male
Online sampling techniues – online panels, river samples (invite website visitors to take part in the survey), e-mail list samples.
Steps in a sample plan: Define a population, Obtain a sample frame, Decide on the sample method, Draw a sample, Validate the sample