ENT4310 Business Economics and Marketing

ENT4310Business Economics and Marketing A six-step model for marketing research Arild Aspelund

Outline • Key variables of market research • A six-step model for marketing research • Selection of methods • Development of tools • What characterizes good marketing research?

What do you wanna know? • Volume • What is a reasonable estimate of the total market for this product or service? • Value • What value would consumers associate to the product or service? • Does it change with the population? • Appropriability • What is a reasonable estimate of your part of the pie?

Define the problem Develop research plan Make decision Collect information Analyze information Present findings A Six-step Model for Market Research

Step 1: Defining the problem • The problem must be adequately defined • Not too narrow, not too broad • Remember that reality is complex • Clearly state the alternatives, objectives and limitations of the research project • Different problems require different research approaches • Exploratory • Descriptive • Causal

Step 2: Develop the research plan • The research plan helps you to coordinate the job, but also • Communicating and assessing objectives • Assessing costs • Document the process • Contents and key decision points • Data sources • Research approaches • Research instruments • Sampling plan • Contact methods

Step 2: Develop the research plan- Data sources • Theretwosourcesof data • Primary data – datacollected for thisspecificproject • Secondary data – originallygathered and structures for another purpose • A marketing researchprojectnormallyinvolvesuseofboth types of data • Researchersusually starts outtheproject by investigating and exploringsecondary data • Secondary data areadvantageousbecause it is readilyavailable at usuallylowcosts

Step 2: Develop the research plan- Research approach • Most projectswillinvolvegatheringofprimary data. And you have severalwaysofdoing so. • Just make sure your data fitsyour purpose! • Observationalresearch • Observing relevant actors in relevant settings – consumerbehavior! • Focusgroupresearch • 6 – 10 carefullyselectedpeople • In-depthdiscussionofvarioustopics • Professionallymoderated • Consumermotivation, quality and functionalfeed-back

Step 2: Develop the research plan- Research approach • Survey research • Large scaleinvestigationsofpeoplesknowledge, beliefs, preferences and satisfaction in the general population • Market potential and feasibility studies for newproductlaunches • Behavioral data • Analysisofactualconsumerbehavior from collectedcustomerrecords • More reliable thatquestionnaire data • Experimentalresearch • The most scientificapproach • Primarily used to detectcause-and-effectrelationships

Step 2: Develop the research plan- Research instruments • Questionnaires • A veryflexible instrument for data collection, and by far the most frequently used • Questionnairesneed to be developed, tested and debuggedbeforetheyareexposed to the respondent • Carefullychoosequestions, wording and sequence • The form ofthequestioncaninfluencetheresponse • One canchoose from a broad range ofquestion types

Step 2: Develop the research plan- Research instruments • Ensure questions are free of bias • Make questions simple • Make questions specific • Avoid jargon • Avoid sophisticated words • Avoid ambiguous words Somequestionnairedo’s and don’ts • Avoid negatives • Avoid hypotheticals • Avoid words that could be misheard • Use response bands • Use mutually exclusive categories • Allow for “other” in fixed response questions

Shadowing Behavior mapping Consumer journey Camera journals Extreme user interviews Storytelling Unfocused groups Step 2: Develop the research plan- Research instruments Qualitativemeasures

Galvanometers Tachistoscope Eye cameras Audiometers GPS Step 2: Develop the research plan- Research instruments Mechanical devices

Step 2: Develop the research plan- Sampling Plan • Probabilitysample • Simple randomsample • Stratifiedrandomsample • Clustersample • Non-probabilitysample • Conveniencesample • Judgementsample • Quotasample • Sampling unit • Samplesize • Sampling procedure

Step 2: Develop the research plan- Contact Methods • Mail questionnaire • Telephone interview • Personal interview • Online interview • Whatarethepro’s and con’softhesemethods?

Step 3: Collect the information • Collectingthe data is the most time and resourceconsuming part oftheprocess • Make sure yourselfreasonably sure thatyou have doneyourhomeworkbeforeenteringthisphase • Numerous problems mayarisealongtheprocess • Respondents not available, not cooperative, biased or dishonest • Such problems areunavoidable, just make sure theydon’tleave a bias in your data

Step 4: Analyse the information • … this is thepointwhereyou do not want to findoutthatyour data is not analyzable… • Structure out the data and explore it • Analyze it according to • Interesting descriptives • Relevant causal relations • Your level of sophistication in analytical methods will determine the value added from the research process

Step 5: Present the findings • Structuretheinformationthatyoufind relevant for management • Make sure thepresentation is not overloaded • Rathersplit it up in nicepackages… • Presenting thescientificmethod is almost as important as presenting theresults • Youneed to documentyourreliability…

Step 6: Make the decision • Decisions are made in the intersection between the findings and their reliability • Ingredients of good market research • Scentific method • Creativity • Multiple research methods • Accurate model building • Cost-benefit analysis • Healthy scepticism • Ethical focus

Summary and Continuation • The key variables of market researcharevolume, value and appropriability • The market researchprocesscan be definedinto 6 distinctivesteps • Definethe problem • Develop a research plan • Collectinformation • Analyzeinformation • Present findings • Make decisions • Continuation • Market analysis – ExternalAnalysis

ENT4310 Business Economics and Marketing