Transcript Marketing Research: Applications

Marketing Research:
Applications
Assessing Market Potential: Sales Forecasting
• Defining market demand
– Demand can be measured at several levels
Levels of Market Demand
Product Levels
Space Levels
Time Levels
Product-item Sales
Individual Customer Sale
Short-range Sales
Product-form Sales
Sales by territory
Medium-range Sales
Product-line Sales
Sales by Country
Long-range Sales
Company Sales
Global Sales
Industry Sales
National Sales
2
Describing a market
• Penetrated Market
– Current number of users of a product or a
service and the sales volume generated by
them.
• Potential market
– Those people who have an interest in buying
the product or the service
• Available Market
• Source of
Information:
• Secondary
data
• Sample
Survey
– Those people in the potential market having
an ability to use the product/service.
• Served or Target Market
– The market that the firm can effectively
compete in
3
Predicting Future Demand
• In choosing the appropriate forecasting method, the
analyst must consider the following:
– The data that can be used: The accuracy, currency,
representativeness, representativeness and extensiveness of data
must be assessed before choosing a technique.
– The Technique: The analyst must have adequate knowledge
about the technique and its limitations; he/she must be
comfortable with it.
– Cost: Greater accuracy involves greater cost. Cost Vs. level of
accuracy demanded must be assessed before choosing the
technique
– Time horizon: The method or technique must be the most
appropriate for the period of time in question.
4
Approaches to Sales Forecasting
• Basic approaches to sales forecasting include:
Stage 1. Environmental forecast about consumer
spending, consumer saving, interest rate. Inflation,
employment, investment etc.;
Stage 2. Use the above data along with industry and
environmental trends to forecast sales and profits to
be earned by the industry. Often, this is not possible.
I those cases, this stage is skipped.
Stage 3. Develop a company sales forecast using the
data in 2 above and assuming a given market share.
5
Forecasting Sales of established products/services
• Two approaches with variants
– Questioning people to generate primary data
• Surveys of buyer intentions
• Sales-force opinion
• Expert opinion
– Analyzing historical data with Secondary data
• Time dependent approaches
– time-series analysis,moving average,exponential smoothing,
statistical demand analysis etc.
• Mathematical and statistical models
– linear programming, transportation algorithm, assignment
models, PERT/CPM Network models, Decision Tree analysis,
Inventory models, Markov Process, Queuing, Simulation etc.
6
Segmentation Research I
• “Segment”
– refers to a unique group of customers or potential customers
who share some common characteristics that differentiate them
from others.
– Segmenting and choosing the optimum market is called target
marketing and is a vital marketing skill.
• Segmentation of the consumer market may be based on:
–
–
–
–
–
demographic variables
geographic variables
geodemographic variables
psychographic variables
behavior patterns
7
Segmentation Research II
• Geographic segments:
– Based on consumers geographic location including streets,
towns, cities, provinces, countries, regions, continents,
trading and/or political blocks, such as AFTA, NAFTA,
ASEAN etc.
• Demographic segments:
– based on variables such as age, sex, level of education,
marital status, family lifecycle, job type and level of income
etc.
• Geodemographic segments:
– based on variables such as house-type and locations, for
example, people who live in high-rise apartment complex
8
Segmentation Research III
• Psychographic segments
– developed on the basis of the psychological profile of
people and includes variables such as attitude, lifestyle
and personalities of people.
• Behavioral segments
– based on behavior pattern of people such as consumption
behavior such as heavy user, medium user, light user etc.
and on the basis of other benefit enjoyed.
9
Segmentation in Industrial, organizational and
Business-to Business Market.
• Different variables that may be used in
these markets include:
– Customer type
• Type of product or service, standard industrial
classification code may be used
– Customer location
– Size
• In terms of sales, number of staff etc.
10
Product Research
• Has three roles:
– Idea Generation
• Includes alternative specifications for product concepts
utilizing end user analysis or problem analysis.
– Screening: Evaluating new-product ideas
• Refers to initial screening of consumer reactions to new
product concepts. Not effective for products that are
radically innovative and for products that require
significant changes in the consumption pattern.
– Consumer product/market testing
• involves testing the product in the market
11
STAGE I: Idea Generation
• Focus groups and direct observation provide insights for product
development.
• Secondary data, Group discussion, Brainstorming [ on a given
problem]
• Problem Inventory Analysis -->Examining Customer complaints
• Attribute based customer surveys
– Involves listing all the product attributes and then
systematically modify one or more of them to see what would
improve the product.
• Morphological Analysis
– Involves identification of the relevant dimensions of the
product under study and enumeration of relevant variables
with each dimension identified.
• Imitation, Acquisition, licensing
12
STAGE II: Screening
Purposes of concept testing:
• Determine customer attitude towards
the product concept or idea.
• Measure customers’ reaction towards
the product’s attributes, e.g..
packaging, color, size, etc..
• Predict the trial rate of the intended
product
• Determine whether the product
concept warrants further
development and provide guidance
on how the concept might be
improved or re-defined.
Data collection
methods include:
• Focus group discussion
• Survey Research
– Not very easy
– Questions are to be
formulated carefully
to capture and
effectively
communicate the
spark of an idea.
• Demonstration
13
Typical Questions in Concept Testing
QUESTION ITEMS
TYPICAL QUESTIONS
Uniqueness of the In your opinion, how different is this product compared to
concept
other existing products in the market?
Product attribute What do you particularly like about the shape of this
product?
User
Would you be more likely to buy this product for yourself
or as a gift for someone else?
Price/Value
Which of the statements shown in this card best describes
Reaction
how you feel about the product? (Show cards with
comments expressing reactions).
Place of Purchase Where would you shop for the product?
Frequency of
How often would you buy this product?
purchase
Overall impression From what you have learnt about the product, which
word/phrases [show some words/phrases]best describes
your reaction to this product
14
STAGE III: Product/Market Testing I
• Product and market testing provides a more detailed
assessment of a new product's chances for success.
• Includes technical testing, preference and satisfaction
testing, simulated test markets and test markets to evaluate
potential success/failure and define important marketing
elements.
–
–
–
–
–
Uncovers product shortcomings
evaluate commercial products
evaluate alternative formulations
uncover the appeal of the product to various market segments
gain ideas for other elements of the marketing program
15
Product/Market Testing II
• Technical Testing on a prototype provides
information on product shelf life, product wear/tear
rates, problems regarding use/consumption,
potential defects, maintenance schedule
• Preference and satisfaction testing
– reserved for the final version of the product
• Simulated test marketing [laboratory test markets]
provides insights to potential market
response/market share
– Popular models include ASSESSOR, BASES, DESIGNOR,
and LITMUS
16
Approaches to measure performance
of the test product
• Three Approaches:
– Testing against a standard product
• Test Product --> brand leader
– Horse Racing Alternative
• Several test products are developed for testing against
one another to determine which one attains the highest
level of consumer acceptance.
– Testing against a historical standard
• Test product --> Performance of a successful product
which may not be involved in the test. A seldom used
technique.
17
Product/Market Testing III:
Test Marketing
• Objective:
– To obtain reasonable prediction for performance of a new
product;
– To understand the contributing factors underlying a
particular performance;
– To provide management with the opportunity to pre-test
alternative marketing strategies.
• Only those products, which have shown a good chance
of success in the earlier concept and product
development test, are subjected to test marketing.
18
Typical information gathered
and major design issues in test marketing
• Awareness level;
• Purchase and repurchase
rate;
• Users’ experience with the
product;
• Users’ perception of the
product;
• Users’ profile and lifestyles;
• Reasons for not using
products;
• Market share.
Design Issues:
• The number of test markets
to be chosen;
– at least three
– involves cost-benefit
analysis
• The criteria used for
selecting test markets;
– a normal and not overtested market
• The length of the test.
– six to 12 months
19
Price Research I
• Generally undertaken for exploring pricing
approaches for new products or services before
they are launched. Involves
• showing different sets of brands in the same
product category to respondents at different prices
and asking them which one they would buy;
• presenting different prices for a product/service to
respondents and asking them if they would buy
the product/service. The responses are then used
to construct a so-called “buy-response’ curve.
20
Price Research II
• Pricing research may also be conducted using consumer
panels. Data obtained may be analyzed using regression
analysis. Regression analysis can help in sorting out
effects of price Vs other variables on quantities sold.
• Sample survey may also be used in price research.
However, this should be used with care since obtaining a
response curve using survey may be subject to error and
bias.
• Other pricing research techniques include:
– Laboratory experiments,
– simulated test markets
– using standard test market
21
Promotion Research
• Objective: To develop advertising appeals.
• Types of research generally undertaken include:
– Psychological or motivational studies
• Generally used within the framework of individual interviews.
Involves talking with people in depth about what a product or
service may mean to them, what feelings are evoked by it, and
discover what it symbolizes to them.
– Sociological studies
• Focus group studies may be undertaken to generate ideas.
– Anthropological studies
• A small number of people may be observed to understand how a
product fits into their lives and what keep them interested in a
particular brand.
22
ADVERTISING RESEARCH
MESSAGE RESEARCH
Pre-test
MEDIA RESEARCH
Newspaper as a Medium
Verbal Response
Circulation Research
Physiological Response
Readership Research
Behavioral Response
Television as a Medium
Post-test
Telephone Interview
Recognition
Audimeter Device
Recall
People Meter
Triple Association
Diary Method
Radio, Cinema, Internet
23
Message Research: Pre-test
• Pre-test refers to the test of an ad-message before releasing
the advertisement. Test techniques commonly used are:
– Verbal responses involving
• Consumer jury method
• Portfolio test
• Qualitative research
• On-the air-test and Theater persuasion test
– Physiological responses involving
• Galvanic skin responses
• Pupil dilation responses and
• Eye movement tracking
– Behavioral responses involving
• In-store persuasion
24
Pre-test II
• Consumer jury method: Uses 50 to 100 customers as
jurors who are asked to rank the test advertisements in
order of interest, preference or ability to influence the
purchase of the product.
• Portfolio test:A sample of consumers are asked to look
through a portfolio of 6 - 8 print advertisements within
an allotted period of time. The portfolio is then taken
away and the respondents are asked to recall the specifics
of the ads shown. Recalls are generally unaided. The
effectiveness of the test is measured by attributes such as
ability to recall the contents, claim of credibility in the
advertisement, general reaction, etc.
25
Pre-test II
• Qualitative Research: The two most widely used
methods are Focus group discussions and depth
interviews. Commonly used during the development stage
of the advertisement.
• On-the-air test:The test advertisement is broadcast in a
small number of test markets and selected respondents
are interviewed by telephone on the following day to
ascertain various aspects of the ad message.
26
Pre-test III
• Theater persuasion test: Involves a test group of target
customers who are invited to a small theater to view pilot
episodes of some new TV programs. But before the show starts,
they are presented with a list of product brands (including the
brand shown on the test ad) and asked to indicate their
preferred brand. It is announced that a lucky draw will be held
and each winner will be awarded their preferred brand. The TV
program is then shown including the test ad. At the end of the
show, the viewers are once again asked to indicate their
preferred brand followed by a second lucky draw.
• Brand preferences both before and after the show are then
computed and compared.
27
Pre-test - IV
• Galvanic Skin Responses, pupil dilation response and eyemovement tracking method make use of different types of
mechanical devices are not very popular methods.
• In-store persuasion: Involves intercepting a quota sample of
shoppers [Sample X] in a retail store who are shown a stack of print
advertisements including the test ad and are given a coupon booklet with
discounts for several products including the product in the test ad. These
shoppers are given sufficient time to look through these ads. Intercept
Sample X shoppers as they leave the shop and record if they have
purchased the product carried in the test ad. Calculate the purchase
incidence.
• Repeat the same treatment to another Quota sample of shoppers [Sample
Y] who are not shown the stack of ads. Calculate the purchase incidence
and determine if they are significantly different from that of Sample X.
28
Post-test
• Most of the pre-testing techniques are applicable to post testing.
Additional ones are briefly described below:
• Recognition Test: Measures the incidence and intensity of reading
an advertisement. Normally involves interview with 100 to 150
qualified readers of a given issue of a magazine or periodical that
carried the advertisement. Specific questions are then asked to see if
they can remember the ad, its contents and the extent to which they
remembered.
• Recall: Respondents are not shown an advertisement in full in
advance but asked what he/she can remember about the ad.
• Triple Association Test: Used for assessing respondents’ abilities
to associate the product category, the brand, and the copy theme. Two
of these three are read or shown to a respondent who is asked to
mention the third.
29
Media Research I
Focuses on six aspects:
1. Media distribution
Refers to circulation of newspaper/magazine/periodicals or
the number of TV/Radio ownership and Internet
subscription.
2. Media audience
Number of people exposed to the ad medium in question.
3. Exposure
Number of people actually noting the advertisement;
generally less than media audience.
30
Media Research II
Focuses on six aspects...
4. Perception
Number of people having conscious awareness and perception of
the advertisement in question. In print advertisements, perception
is affected by factors such as size, color, position and language of
the media. Typically, perception is less than exposure.
5. Communication
Number of people who comprehend specific things about and
aspects of the advertisement. Communication lags perception.
6. Purchase
Number of people purchasing the product after seeing the
advertisement.
31
Newspaper as Ad Medium
• Major types of information needed are;
– Circulation
• Generally available from secondary sources in
the form of audited circulation figures.
– Readership
• Data on readership is generally unknown and
need to be gathered through sample surveys.
– Often problematic because identifying the reader is not
always easy.
32
Television as a Medium I
Objective is to determine the TV audience. Programs
watched by more people are preferred by advertisers.
Methods of measurement include:
• Determining the Program rating
Respondents are provided with a roster of TV programs shown during
the past three days and are asked a series of questions to ascertain the
programs (i) they generally watch, and (ii) the programs they have
actually watched on each of the three days in question.
• Telephone interviewing
Also known as coincidental telephone interview, this method involves
telephone interview with a sample of respondents during the broadcasting
hour.
33
Television as a Medium II
– Using audimeter device
• Developed by A.C. Nielson Company, this is the most sophisticated
method of TV audience measurement. A technical device called
‘audimeter’ is attached to each of the TV sets of a panel of preselected households. The device automatically records the time
when the TV set is switched on (and off), the channel watched,
duration of watching; and instantly transmits the data to a central
computer for processing. However, an audimeter does not record
who in the household is/are watching.
– Using people meter
– A technical device that like audimeter, which is activated (and
deactivated) by each household member pressing a button when he
or she watches the program (stops watching it).
34
Television as a Medium III
• Diary Method
A specially designed diary is given to a panel of
households to record the television viewing behavior of
the viewer
Radio/Cinema/Internet as media
• Number of radio listeners may be measured in the same
way as TV audience is measured. Simplest way to
measure cinema audience is through sample survey.
Internet users may also be identified using Internetbased surveys.
35