Transcript Document

FMD 451
Target Market Research
Market Research
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What is marketing research?
The marketing research process
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Six stages
What is Marketing Research?
Marketing research is the systematic and
objective identification, collection, analysis,
and dissemination of information,
undertaken to improve decision making
related to identifying and solving problems
in marketing.
American Marketing Association
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Identifying your market?
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Identifying Your Market
Step One: Identifying Why a Customer
Would Want to Buy Your Product/Service
Step Two: Segment Your Overall Market
Step Three: Research Your Market
Types Of Markets
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A market is simply any group of actual or potential buyers of a
product. There are three major types of markets.
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1. The consumer market. Individuals and households who buy
goods for their own use or benefit are part of the consumer
market. Drug and grocery items are the most common types of
consumer products.
2. The industrial market. Individuals, groups or organizations
that purchase your product or service for direct use in producing
other products or for use in their day-to-day operations.
3. The reseller market. Middlemen or intermediaries, such as
wholesalers and retailers, who buy finished goods and resell
them for a profit.
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Why would a consumer buy
your product?
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What does your product have to offer?
What are the features of your product and its benefits?example: is
anti-lock brakes; they are features on a car, but the benefit to the
consumer is safety.
This will help you narrow down your key target market!
In one column, list the features of your product/service. In the other,
list the benefits each feature yields to the buyer.
Features:
Benefits:
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Segment your Market
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Market segmentation is the process of
breaking down a larger target market into
smaller segments with specific
characteristics.
Segmentation will help you customize a
product/service or other parts of a marketing
mix, such as advertising, to reach and meet
the specific needs of a narrowly defined
customer group.
Segmenting your market!
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Geographic: Where do your customers live? What state or
region-climate concerns?
Demographic: What is their age, race, religion, gender,
income level, family size, occupations, education, and
marital status?
Psychographics:What are their attitudes, beliefs, and
emotions? What is their lifestyle, family stage, hobbies,
status seeking, and entertainment. Example: Do they see
themselves as avante garde, high tech, socially
responsible, ect?
Buying Behaviors: Why does your customer buy? Price,
brand, loyalty, how frequently, what time of the year, ect.
Example of Customer Profile
Career Option's Sample Customer Profile:
Professionals in Transition Segment
Gender:
30% Female
70% Male
Age:
10% 26-30 30% 31-40 30% 41-55 30% 56-64
Income:
25% 30-40K
25% 40-50K 50% 50-75K
Marital Status:
80% Married
20% Single
Level Of Education:
60% Bachelor's degree 40% Master's degree
Occupations:
10% Health Care
20% Financial
30% Marketing/Advertising
40% Hi-Tech Fields
Job Sought:
70% Same Field
30% New Field
Most Important Benefits:
1. Assistance in finding work quickly.
2. Want a better job.
3. Want equal salary or increase.
4. Stability.
Psychographic Summary: This segment closely associates work with self-esteem. They feel pressure because most
have families and comfortable lifestyles to maintain. They are not interested in forging new careers but want
stability.
Choose the Target Market you
will sell to!
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After identifying and defining the possible
segments within your target market, you must
face the critical question of whether it would
be profitable and feasible for you to pursue
each identified segment, or choose one or
two.
Brand new companies should choose one or
two!
Find out what is important to your
customer?Create a survey!
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Price
Quality
Brand Name
Variety of services
Salespeople
Customer Service
Special Offers
Promotional Campaign
Packaging
Convenience of Use
Convenience of Purchase
Location
Guarantees
Store/Office Decor
Payment Terms
Medium
Low
Not At All
Market Segmentation
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Segment potential buyers into similar groups.
Buying habits
Ability to pay-Price
What is the size of the market
Checklist!
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Identifying Your Market
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___ Determine why a customer would want to buy your product/service.
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___ Identify your products'/services' benefits and features.
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___ Decide which segmentation criteria will best segment your target
market: geographic, demographic, psychographic or behavioral.
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___ Segment your market.
___ Divide larger target market segments into smaller segments.
___ Decide if it would be profitable and feasible for you to pursue each
segment.
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Two Types of Marketing
Research
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Problem Identification Research
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Market Potential, Market Share, Brand image,
Forecasting, Business Trend
Problem-Solving Research
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Segmentation Research
Product Research
Promotion Research
Distribution Research
Examples of Marketing Research Projects
• concept test: evaluates new product or
advertising ideas
• copy test: tests advertising content
• price responsiveness studies: tests how
customers will respond to various price levels
• market-share analysis
• segmentation studies
• customer satisfaction studies: monitor how
customers feel about products and service
Marketing research process
1. Define the Problem
2. Developing an Approach to the Problem
3. Formulating a Research Design
4. Doing Field Work or Collecting Data
5. Preparing and Analyzing Data
6. Preparing and Presenting the Report
1. Define the Problem
Defining a problem
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Understanding the purpose of the study
Understanding the background issues
E.g. the company growth rate is low.
Discuss with decision makers, interviews
with industry experts, analysis of
secondary data, conducting focus groups
analysis.
Example: Subaru of America
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Management problem: What can Subaru do
to expand its share of the automobile
market?
To conduct market research – need to define
the problems more precisely
Q.1 What needs do buyers of passengers cars,
station wagons, and SUV seek to satisfy?
Q.2 How well do existing automobile product
offerings meet these needs?
2. Developing an Approach to the
Problem
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Formulating an analytical framework and
models, research questions.
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Determine a hypothesis: an educated guess
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The hypothesis provides a research problem for
the investigators which can be tested
scientifically.
Define the Research Objective
Pg. 253-What information do you want to
learn?
 Prior to developing specific survey questions
and the sampling frame.
 What needs to be accomplished by
conducting the survey?
 Need to be measurable
 Objectives: assess support level for a ballot
measure vs. gather opinions about current
and potential services.
Define the Research Objective
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Good market research objectives are focused
and specific. They include:
An action verb-what you want to do
A type of finding
Sample verbs: identify, define, describe,
generate, evaluate, select, test, measure,
prioritize, monitor, track.
Sample findings: usage, problem, reactions,
perceptions, ideas, size, growth, trends,
competition, awareness, satisfaction,
preferences.
3. Formulating a Research
Design
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A framework or blueprint for conducting the
marketing research
Details procedures needed to obtain the required
information.
Conducting exploratory research, precisely defining
the variables, designing appropriate scales to
measure them.
How to obtain the data: survey or experiment
Design questionnaire
4. Doing Field Work or Collecting Data
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Field work involves personal, telephone,
mail, or electronic interviewing
Proper selection, training, supervision,
and evaluation of the field force are
essential
5. Preparing and Analyzing
Data
Data Processing
 Editing, coding, transcribing of collected data.
 Analyze using different statistical techniques
 Interpreted the results, find conclusions
related to the marketing research questions
6. Preparing and presenting the report.
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Source of information
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First, select sources of information:
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Secondary data
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information already collected for another purpose
If use secondary data—designing the
questionnaire, planning the sample, and collecting
data are done for you. But make sure they are
done right!
Primary data
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information collected for the specific purpose at
hand
Source of information
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Sources of secondary data- pg. 255
 internal sources
balance sheets, sales figures, customer DB
government publications
 Statistics, bureau of Economic analysis, bureau of
labor statistics, census bureau
periodicals and books
 WWD, California Apparel news, Journal of
consumer research, Advertising age
Trade associations-FBI, Cotton inc., National Retail
federation, Fashion Group international
internet
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Pros and Cons of Secondary Data
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Advantages of
secondary data
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low cost
less effort expended
process
less time consuming
some information can
be obtained only from
secondary data
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Disadvantages of
secondary data
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collected for some
other purpose
may not be very
accurate
may be outdated
Primary Data
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Primary data collection process
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Data collection methods
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surveys
qualitative research—personal interviews & focus
groups
observation
Experiment
Design study materials (e.g., questionnaire design)
Sampling
Data collection
Survey
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Survey
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Data collection by asking people questions
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Advantages
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personal interview
telephone survey
mail survey
Internet survey
large size data, flexibility
Disadvantages
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errors in questionnaire, expensive, response error
Personal Interview
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Survey (cont.)
 Personal interview
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Advantages
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Disadvantages
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flexible, more information
expensive, time-consuming, interviewer bias
e.g., “shopping mall intercept”: a convenient,
low-cost method
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but lacks representativeness
Telephone Survey
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Survey (cont.)
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Telephone survey
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Advantages
 quickness, cost efficiency
Disadvantages
 limited amount of information, limited
accessibility of people, have to remember
response options
Mail Survey
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Survey (cont.)
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Mail survey
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Advantages
 low cost
Disadvantages
 low response rate
 less control
Internet Survey
Survey (cont.)
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Internet survey
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Advantages
low cost—much lower even than mail
Disadvantages
low response rate—large response
bias
Data reliability—difficult to verify if
personal information is true
Qualitative Research
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Qualitative research
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Types
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Advantages
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individual depth interview
focus group interview
resulting data have more depth and richness of context
Disadvantages
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results not necessarily representative of population
Hard to quantify the results
Focus Group Interview
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Qualitative research (cont.)
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Focus group interview
 Loosely structured group discussion led by interviewer
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The discussion is observed or videotaped
Best for preliminary research
Individual depth interview: similar interview with a single
person
Difficult to understand without seeing it, so we have a
video.
Focus Groups
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Group discussion and focus group
Postal research questionnaires
Diary panels - sources of continuous data
In-home scanning - hand-held light pen to scan barcodes
Telephone research
Observation
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home audit
direct observation
In-store testing
Observational Method
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Observational method
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Types
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Advantages
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personal observation
mechanical observation (e.g., scanner data)
can have high degree of accuracy, short period of
time for data collection
Disadvantages
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unaware of motives, attitudes, or decision processes
Experiment
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Experiment
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Tests the effects of variables in a controlled situation
Example: test of two different versions of advertisements in
two different cities
Advantages
 control
Disadvantages
 unrealistic settings (laboratory experiments)
 Expensive (real experiments)
Questionnaire
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Questionnaire design
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Wording
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Order
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simple, direct, unbiased—no leading questions
written with respondents in mind
first question should create interest if possible
difficult or personal questions should be asked last
Format
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open-ended questions
closed-end questions
Developing the Questionnaire
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General rules:
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Keep the order of questions logical, with smooth
transitions.
Move from general to specific.
Make sure respondents understand the wording.
Be conversational.
Avoid monotony.
Include exhaustive and non-overlapping response
categories.
Questionnaire
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Open- vs. close-ended questions
(asked of Americans) “What do you think is the most
important problem facing this country today?”
1) the energy shortage 2) quality of public schools
3) economy
4) war on terrorism
--- 70% endorsed “war on terrorism”
• Same question in open-ended format
How can we get out of Iraq?
Your questions should
address:
•Attitude measurement
•cognitive component (know/believe about an act/object)
•affective component (feel about an act/object)
•cognitive component (behave towards an object or act
Types of Questions
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Pg. 257
Likert scale
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strongly agree
agree
neither agree nor disagree
disagree
strongly disagree
Pre-Testing the Questionnaire
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Estimate the length of the questionnaire.
Ensure that words, phrases, and subjects are
easily understood by the respondents.
Ensure that answer categories match with
what the respondents have to say.
Ensure that the questionnaire achieves the
research objectives.
Sample selection
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Survey and questionnaire design
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Choosing a sample:
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Samples need to be as representative as possible,
ideally randomly chosen from the population of interest
Sample size must be large enough to have confidence
in the results—depends on situation
Poorly chosen samples lead to biased results
Reported daily TV consumption in hours
Low frequency alternatives
Up to ½
½ to 1
1 to 1½
1½ to 2
2 to 2½
More than 2½
High Frequency alternatives
Up to 2½
2½ to 3
3 to 3½
3½ to 4
4 to 4½
More than 4½
Schwarz et al. (1985)
Reported daily TV consumption in hours
Low frequency alternatives
%
Up to ½
½ to 1
1 to 1½
1½ to 2
2 to 2½
More than 2½
7.4
17.7
26.5
14.7
17.7
16.2
High Frequency alternatives
Up to 2½
2½ to 3
3 to 3½
3½ to 4
4 to 4½
More than 4½
Schwarz et al. (1985)
%
62.5
23.4
7.8
4.7
1.6
0
Sample
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Sampling
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A sample is a subset of the population selected to
represent the population as a whole
Samples should be representative of the population
Sample size
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larger sample gives more reliable results
small samples are OK when they represent the
population
(US presidential election poll: sample size of 1,000)
Sampling
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Sampling (cont.): Sampling procedure
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random sampling
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every member of the population has a known probability
of being included
convenience sampling
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the researcher selects easiest population members from
which to obtain information
lacks the representativeness of the population
(e.g.) shopping mall intercept
Data Processing
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When conducting the survey with volunteers:
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Record all responses on paper.
Keypunch responses into computer for data processing.
Software packages to use for keypunching: Excel, SPSS, or
SNAP.
Each column is a variable and each row is a respondent.
Data Processing
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Data Analysis
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Statistical software packages to use: SPSS, SAS,
STATA, or SNAP.
Statistical techniques: mean, mode, median, cross
tabulation, correlation, factor analysis, and
regression analysis.
Mean-Average- mean is the usual average, so:
(13 + 18 + 13 + 14 + 13 + 16 + 14 + 21 + 13) ÷ 9 = 15
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Median-The middle value- There are nine numbers in the list, so the
middle one will be the (9 + 1) ÷ 2 = 10 ÷ 2 = 5th number:
13, 13, 13, 13, 14, 14, 16, 18, 21
So the median is 14.
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Mode- The number repeated most often=1
Prepare and Present the Final Research Report
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Findings are presented, often by research objective, in a
clear and concise way.
The need for a good report cannot be overstated.
Use Graphical charts to highlight the most important
findings!
How do your findings influence your business and
objectives?!
This must be well written or results will not
be taken seriously!