The Market Research Process

1. The Market Research Process Chapter 29.1

2. 5 Steps of the Market Research Process • Define the Problem • Obtaining Data • Analyzing Data • Recommending Solutions • Applying the Results

3. Step 1: Defining the Problem • Most difficult step of the research process • Problem definitionoccurs when a business clearly identifies a problem and what is needed to solve it. • Helps researcher create objectives that will help answer the problem • Objectives are used to develop the actual question

4. Step 2: Obtaining Data • Data (or facts) are collected • Primary Data - obtained for the first time and used specifically for the particular problem under study • Secondary Data - already exists; previously collected for some other purpose

5. Ways to collect Secondary Data • Internet Sources – company home pages, digital dossiers, business clearinghouses • U.S. and State Government Sources – data collected by the government, like population demographics and economic trends • Specialized Research – companies collect data to sell to other businesses like demographic data, economic forecasts, and consumer purchase information • Business Publications – BusinessWeek, Forbes, Wall Street Journal

6. Ways to collect Secondary Data • U.S. and State Government Sources – data collected by the government, like population demographics and economic trends • Specialized Research – companies collect data to sell to other businesses like demographic data, economic forecasts, and consumer purchase information

7. Secondary Data Advantages Disadvantages • Easily obtained • No or low cost • Saves time and money • Data may not be suitable for the problem under study • Can be inaccurate

8. Ways to collect Primary Data • The Survey Method • The Technological Method • Interviews • The Observation Method • The Experimental Method

9. The Survey Method • Information is gathered from people through the use of surveys or questionnaires • Most frequently used method • Conducted in person, by phone, by mail or Internet • Census– survey the entire target population • Not usual because population is normally too large and it would cost too much money and time • Sample– part of the target population that represents it accurately • Size of sample depends on the amount of time and money available • Generally speaking, the larger the sample the more accurate the results

10. Technological Method • Online surveys and focus groups – survey is conducted in a “chat room” environment • Smart Phones/Devices – IPods, smartphones • Fax broadcasts – questionnaires can be sent to a select group of fax numbers • Automated dialers • automatically rejects busy signals and answering machines • Prerecorded voice walks caller through a series of questions and caller responds with key pad

11. Interviews • Questioning people face-to-face • Because it is expensive they are usually conducted in central locations • “Mall Intercept Interviews” - (started in shopping malls) • Focus Group Interview – 8-12 people brought together to evaluate advertising, product, or packaging under the direction of a moderator

12. Advantages and Disadvantages

13. The Observation Method • Peoples actions are watched and recorded • Better results because people are unaware that they are being observed • Mystery Shoppers – sent in to observe interactions between customers and employees • Disadvantage – cannot measure attitude or motivation

14. The Observation Method • Point-of-Sale Research – combines natural observation with personal interview • People can explain their buying behavior

15. The Experimental Method • Researcher observes results when changing one or more marketing variables while keeping all the others constant • Used to test: • New package design • Media usage • New promotions

16. Step 3: Analyzing the Data • The process of compiling, analyzing and interpreting results • Data Mining – computer process that uses statistical methods to extract new information from large amounts of data

17. Step 4: Recommending Solutions to the Problem • Conclusions drawn form research are usually presented in an organized report

18. Step 5: Applying the Results • After research is completed and changes have been made, businesses must monitor the results carefully. • The research efforts were a success if resulting decisions lead to increased sales.

19. Review • What are the five steps to market research? • Defining the problem, obtaining data, analyzing data, recommending solutions, applying results • What are the two types of research? • Primary and Secondary • What are the five methods used to collect primary data? • Survey methods, technological method, interview, observation method, experimental method