Market Research and Segmentation: A Comprehensive Guide
Scope of Business Research
Understanding Consumer Behavior
Business research plays a crucial role in understanding consumer motivations, behavior, and attitudes towards products, brands, and companies. It helps assess the influence of reference groups and gauge customer satisfaction levels. The research process typically involves the following steps:
- Presentation of a business problem
- Preliminary investigation
- Specification of research objectives
- Obtaining information
- Data processing
- Analysis and interpretation of information
- Preparation of a report with conclusions
Preliminary Investigation
A preliminary investigation involves reviewing existing information, such as past research reports, sales data, financial records, and published materials. Unstructured interviews with experts may also be conducted.
Sources of Information
Primary Sources
Primary information is collected directly from the source, such as through surveys or interviews. This type of information is original and tailored to the specific research objectives.
Secondary Sources
Secondary sources consist of existing information that has been collected for other purposes. This information is readily available and often less expensive to obtain than primary data.
Population and Sample
The population refers to the entire group of people relevant to the study, while the sample is a subset of the population that is surveyed. The sample size should be large enough to provide reliable and accurate results.
Survey Methods
Postal Mail Surveys
Postal mail surveys are cost-effective but may have lower response rates and potential for external influences on responses.
Telephone Surveys
Telephone surveys are faster and allow for clarification of questions, but interviews need to be brief.
Personal Interviews
Personal interviews enable in-depth questioning and observation, but they are time-consuming and expensive.
Questionnaires
Questionnaires are commonly used tools for collecting primary data. They should be concise and well-structured, with clear and unambiguous questions.
Types of Questions
Closed-Ended Questions
Closed-ended questions provide predefined answer options, making it easier to interpret and analyze responses.
Open-Ended Questions
Open-ended questions allow respondents to answer in their own words, providing more detailed and qualitative information.
Questionnaire Design Tips
- Start with engaging questions.
- Place sensitive questions towards the end.
- Ensure a logical flow of questions.
Examples of Question Types
- Dichotomous (Yes/No)
- Multiple Choice
- Rating Scales
- Filter Questions
- Classification Questions
Market Segmentation
Market segmentation involves dividing a large market into smaller, homogeneous groups of consumers with similar needs, characteristics, and buying behaviors. This allows companies to tailor their marketing strategies to specific segments.
Segmentation Strategies
Undifferentiated Strategy
A single marketing strategy is applied to the entire market, regardless of segments.
Differentiated Strategy
Different marketing strategies are developed for each segment.
Concentrated Strategy
The company focuses on a specific segment where it has a competitive advantage.
By understanding market research and segmentation techniques, businesses can gain valuable insights into consumer behavior and develop effective marketing strategies to reach their target audience.