Simple Method to Conduct Market Research Lesson 1 – Objective and Data Collection

1. Simple Method to Conduct Market ResearchLesson 1 – Objective and Data Collection

2. Group Discussion – Lunar New Year Fair Stall • Your teacher encouraged you to bid a fair stall for running in the coming Lunar New Year. • You are interested in doing so but you have no idea on what to sell and how to sell. • Assuming you have successfully bid a fair stall this year, discuss in a group of five what you would like to sell and why?

3. A Market Research is Necessary • In order to start with a business, you must know what you are going to sell and how to sell it/them. • A market research can help. • Market Research is ‘the systematic gathering, recording and analysing of data about problems relating to the marketing of goods and services’ (American Marketing Association) • Once that research is completed, it can be used to determine how to market your product.

4. Typical Market Research Process

5. 1. Identify the Problem and Define the Objective • The first step in a market research process is to identify the problem clearly. • Then, define the objective of the research clearly so the researcher can decide what information is required to obtain and how it can be obtained.

6. Activity 1 • What are the ‘problems’ you should consider in planning your Lunar New Year fair stall project?

7. Activity Whom to sell? Who are our target customers? How to identify the target group? What to sell? Wet foods, dry foods, fast foods or thematics ? Where to sell? Victoria Park or Fa Hui Park?

8. Identify the Target Customers • ‘Market segmentation’ is the division of the market or population into subgroups with similar features . • It is useful to identify the target customers by segmenting on geographic differences, behaviour differences, demographic differences, psychographic differences and gender differences. • For example: • Geographic segmentation is grouping customers according to their nations, regions, countries or cities. • Psychographic segmentation is grouping customers according to variables such as social class, lifestyle, or personality.

9. Define Market Research Objectives • To understand what product customers would buy. E.g. dry goods like plush, toys etc. • To see what price could be accepted by customers. • To reveal competitors’ reaction. • To design product packaging. • To see if customers will like the product or not. E.g. the market trend • To find an appropriate place to sell the product. E.g. in Victoria Park or Fa Hui Park etc.

10. 2. Data Collection Methods • After identifying the research objectives, it is necessary to collect data that fits the objectives. • From the data collected, one can know the prices of different commodities in the market, as well as the supply and demand situation. • Market information can be divided into ‘primary data’and ‘secondary data’.

11. Primary Data • Primary data is information that is obtained directly by the researcher from first-hand sources. • It is important as it is specifically collected to analyse the situation that the researcher studies. • E.g. would customers buy the good if the price is $50? • Any ideas of how to collect primary data?

12. Major Types of Methods of Collecting Primary Data • Observational research e.g. focus group • Quantitative research e.g. questionnaire • Qualitative research e.g. interview (face-to-face, telephone etc.) • Experiments e.g. taste tests • For example, you want to know young people's expectation on price of a plush. You interview some of your classmates or friends. The data collected is primary data.

13. Secondary Data • Secondary data is information that is obtained from previously published materials, such as internet, magazines, newspapers, government census publications etc. • It can help the researcher to know the customer behaviours and the market trend. • For example, you want to know young people's expectation on price of a plush. You search relevant discussions on the internet and use the data for analysis. These discussions are secondary data.

14. 3. Select Appropriate Research Approach • A market research approach is a strategy applied by companies to provide answers and information associated with the objective of the market research. • When conducting a research it is necessary to determine which approach is being adopted because an appropriate research can help a company to satisfy customers’ needs and survive in a competitive market.

15. Examples of Appropriate Research Approaches

17. Simple Method to Conduct Market ResearchLesson 2 – Research Design

18. Typical Market Research Process

19. 4. Design Research Instruments and Techniques • After selecting the appropriate research approach, marketers should design the research questions and choose the method(s) of reaching target respondents.

20. Questionnaire Survey as a Common Research Approach • Survey questions can be classified into three forms: • closed, • open-ended, and • open response-option questions.

21. Closed Questions • A format that limits respondents with a list of choices provided. Common forms of questions are Yes or No, Ranking, Multiple Choicesand Rating with a scale of 1-10. • Advantages: • Easy for respondents to answer. • Responses can be easily classified or processed, making analysis very straightforward. • Disadvantages: • Divergent responses are not entertained. • The respondents may not have considered the answers provided in multiple choices question before.

22. Open-ended Questions • Respondents are asked to give a reply to a question with their own words. No answers are suggested. • Example: What do you feel about your shopping experience in Lunar New Year fair? • Advantages: • Respondents have great freedom to answer, with no influence by any specific alternatives suggested by the researcher. • Researcher can explore fully all the factors that underpin respondents’ answers such as reasons, feelings, opinions and beliefs. • Disadvantages: • Data analysis is very time consuming.

23. Open Response-option Questions • A form of question which is both open-ended and specific response-options as well. • Example: What are your major concerns when buying a small gift in the Lunar New Year fair? (Answer: A: quality, B: price, C: size, D: weight, E: others (please specify):________) • Advantage: • Researcher can avoid the potential problems of both closed and open-end questions. • Disadvantage: • Researcher is required to have a good prior knowledge of the subject in order to generate realistic/likely response options. Otherwise, it would still be very time consuming to process the diverse responses collected in open-ended part.

24. Activity 1 – Group Discussion • Assuming the research objective of your Lunar New Year fair stall project is “to see what kind of toys to be sold and what price to be set?” • Back to the group formed in lesson, design a questionnaire that can help you to collect relevant information.

25. Activity 1 • Sample questions: • Will you buy a plush or toys in the Lunar New Year fair? (Answers: Yes/No) • How much will you spend in the Lunar New Year fair? (Answers: A: HK$0-HK$100. B: HK$100-HK$200. C: HK$200-HK$500. D: HK$500 or more.) • Do you agree it is good to buy toys as a gift for Lunar New Year? (Answers: 1. Strongly disagree. 2. Disagree. 3. Neutral. 4. Agree. 5. Strongly agree.) • What do you feel if you receive a lovely plush as a gift for Lunar New Year? (Open-ended) • Which cartoon character you like most? (A: Disney. B: Doraemon. C: Senrio. D: Others (please specify): __________)

26. Activity 1 • A well-designed questionnaire should: • meet the research objectives. • obtain the most complete and accurate information as possible. • make it easy for respondents to give the necessary information and for the interviewer to record and analyze the answer.

27. 5. Design Sample Plan • Sample is a set of data collected and/or selected from a statistical population (all target respondents). Population Sample

28. Population and Sample • Example: • Population of the Lunar New Year fair project: Young people and parents. • Sample size of the Lunar New Year fair project: 100 persons. • Sample selection method: fellow schoolmates.

29. 6. Survey Contact Methods • Common survey/research methods are: • personal interviews • group or focus interviews • mailed questionnaires • telephone interviews. • Which one you find is appropriate for you to conduct a survey?

30. After-class Group Exercise • Conduct a research based on the questions you have discussed in class and collect the data back for analysis in the next lesson.

32. Simple Method to Conduct Market ResearchLesson 3 - Execution and Presentation

33. Typical Market Research Process

34. 7. Execute the Research Programme • Before obtaining the primary data, it is better to check existing secondary sources in order to become familiar with the basic characteristics of the market. • Some required information may have been collected before.

35. Collecting Primary Data • Direct Personal observation: • Collect information by recording actions without interacting or communicating with the participant. • The purpose of observation is to see the actions of the participants. • Questionnaire • A good questionnaire design is important because it will affect the validity and reliability of the responses and data analysis. Therefore, the questions should be: • short and clear; • few in number; • simple and intelligible; • simple alternative, multiple-choice or open-end type.

36. Collecting Primary Data • Interview • Researcher prepares a short list of questions relating to the enquiry and interview the target customers. • The survey should be organised in a way that is easy to complete. • Directions should be given so the respondent knows what to do. • Respondent should be assured that the answers will be handled confidentially.

37. Ensuring that Essential Data are Collected • No matter which method is used, make sure sufficient and essential data are collected for further analysis.

38. 8. Analyse Data Collected • A researcher will also have to decide what method of analysis will be used to make sense of the data. • Most common methods of analysis include the use of mathematical calculations such as: • Total(e.g. how many people like Disney character plush.) • Average(e.g. the average spending of each customer in the Lunar New Year fair.) • Median(e.g. the middle number of spending of each customer in the Lunar New Year fair.) • Mode(e.g. the most often spending range of each customer in the Lunar New Year fair.) • Percentage distribution (e.g. the percentage distribution amongst the preference of different cartoon characters toys.)

39. Activity 1 • Try to analyse the data you have collected by use of the following techniques: • Total • Average • Median • Mode • Percentage distribution

40. 9. Prepare Research Report • The final stage of the market research process is to prepare the research report. • The research report should clearly state the research problem and outline research objectives. It must also describe how research was conducted, specifying who was asked and how, as well as the methods used to analyse the data. • The report should also present and evaluate the main findings of the research and includes conclusion and recommendations.

41. Summarising the Research Findings • Visualise the data • Try infographics: use table or charts for the presentation. • Keep it simple, avoid jargon

42. Recommendations • Recommendations should be actionable and practical. • Don’t just say we need to do more. Tell what to do more and how to do! • The recommendations should help to make decision and provide answers for example: • What kind of goods to be sold in the Lunar New Year fair? • How much should we price our goods?

43. Activity 2 • Make recommendations from your research findings and present it to your classmates.