The Research Process

The Research Process Outlets–the Place Decision 2

Section 6.1 – The Research Process - Objectives • Define market research • Explain how businesses use market research • Identify the steps used in the research process 3

Section 6.1 – The Research Process Research and Market Concept • Business must know their customers in order to be successful • Small business owners get to know their customers by reviewing sales data and by talking to their customers. This process is called Market Research • Market Research is the process of systematically collecting, recording, analyzing, and presenting data related to marketing goods and services • Information generated by Market Research can benefit: product development, pricing, promotional activities, distribution, and customer satisfaction • Large companies use surveys and focus groups as part of their market research in order to monitor the degree of customer satisfaction 4

Section 6.1 – The Research Process Steps in Research Process • The five steps in the research process are: • Identify the problem • Conduct secondary research • Select and design primary research • Collect data • Report and analyze data 1. • Identify the problem 2. • Conduct secondary research 3. • Select and design primary research 4. • Collect data 5. • Report and analyze data 5

Section 6.1 – The Research Process Steps in Research Process • Identify the Problem • Ask a question that research can help answer • Examples: • How can you improve your product and make it stand out in the market? 6

Section 6.1 – The Research Process Steps in Research Process • Conduct Secondary Research • Secondary Research is published data that has been collected for some other purpose • Data are recorded facts and figures that are organized and analyzed in some way • Can include: • Internal data from a company (sales report, merchandise returns) • External data from sources such as books, magazines, the Internet or companies that specialize in market research • Some companies sell research reports based on product category • American Sports Data, Inc. A.C. Nielsen • U.S. Census can provide demographic information 7

Section 6.1 – The Research Process Steps in Research Process • Conduct Secondary Research – cont. • Secondary research is conducted before primary research because secondary data may actually answer all or part of a research problem or question • Research may provide background information for the study • Can lead to the type of questions needed for Primary research 2 1 8

Section 6.1 – The Research Process Steps in Research Process • Select and Design Primary Research • Primary research is original research conducted for a specific marketing situation • Secondary research is not sufficient to answer the research question • Type of research depends on the objectives and subjects (members of a population) who are to be studied • The more specific the characteristics of the population, the easier it is to select the primary research method 9

Section 6.1 – The Research Process Steps in Research Process • Select and Design Primary Research – cont. • Types of Research Methods: • Experiment • Observation • Survey 10

Section 6.1 – The Research Process Steps in Research Process • Select and Design Primary Research – cont. • Experiment: • Experimental design of research broken into independent and dependent variables • Independent Variable is the variable that is being manipulated, or changed • Dependent variable is the one that is affected by the change made by the independent variable • EX. Changing ticket prices to a baseball game (independent variable) to see if sales increase (dependent variable) • Experiments let you draw conclusions from the interaction of variables 11

Section 6.1 – The Research Process Steps in Research Process • Select and Design Primary Research – cont. • Observation: • Observation method is the watching of actual behavior and recording it • Includes some method of recording, which can include text, audio, and/or video • Allows freedom for interpretation • Can not only record actions, but can also record their comments and body language • Because information is recorded, researchers can reexamine the observations later to help answer the research question 12

Section 6.1 – The Research Process Steps in Research Process • Select and Design Primary Research – cont. • Survey: • Asking questions of participants in a study • Can be basic or it could be specific to a particular product or service • Can be for a focus group/panel or part of written/verbal questionnaire 13

Section 6.1 – The Research Process Steps in Research Process Select and Design Primary Research – cont. Questionnaire Written surveys that can be administered in person, by telephone, fax, mail, or online Data can be easily quantitative Quantitative research allows for statistical analysis which includes things such as correlations and numerical percentages Can compare data with demographic data • Focus group • Group or panel involves six to ten participants who are brought together to discuss their feelings • Moderator asks questions and seeks responses from participants • Considered qualitative research: data collected is subjective, so no statistical analysis can be done • Data collected may become basis for later questionnaire

Section 6.1 – The Research Process Steps in Research Process • Collect Data • Data collection method depends on the survey tool and the characteristics and needs of the population • Examples: Asking every 10th person entering baseball game to take survey; Conducting Mall intercept • Many participants in various surveys do not expect to go out of their way to complete the survey • Many survey participants are compensated for their participation • Each research method had advantages and disadvantages related to time, cost, and accuracy of data collection • Mail and fax questionnaires return rate • Online duplication of responses by same participant 15

Section 6.1 – The Research Process Steps in Research Process • Collect Data – cont. • Census • Population or subjects of the study have to be determined early in research planning • If population that is being surveyed is a small group, then a census can be taken • Census is a study that counts everyone in the research population 16

Section 6.1 – The Research Process Steps in Research Process Collect Data – cont. Sample You must also decide how to locate and select those people who are part of your study’s population Use Random Sample if you have a complete list of all members of study’s population If you do not have all of the members of a study’s population, then you need to use a Non-Random Sample Through Mall Intercept, ask qualifying questions first to determine if candidate represents the population you wish to study • Used when a census is not possible to collect data • Sample is a number of people who are representative of a study’s population • Focus groups can be used to determine type of people that should be sampled • Size of sample should be large enough to represent the population under study 17

Section 6.1 – The Research Process Steps in Research Process • Collect Data – cont. • Data Mining • Process of collecting data from one or more existing database and looking for relationships among the data • Computer software is used to do statistical analysis • Used to find out and predict: • Market Segmentation; Customer or client profiling; Fraud detection; Success or failure of promotion; Credit risk or acceptability 18

Section 6.1 – The Research Process Steps in Research Process • Report and Analyze Data • In order for data collected to be useful, it needs to be reported and analyzed • It is important to be very specific and clear in report language • Reporting Qualitative-Research Data (Subjective) • Researched data is reported in Paragraph format • No conclusions can be drawn, only interpretations drawn from facts • This data provides insight into a problem which researchers must be able to detect if they hope to find answers to the research question 19

Section 6.1 – The Research Process Steps in Research Process • Report and Analyze Data – cont. • Reporting Quanitative-Research Data (Objective) • Researched data can be reported in graph and charts, with analysis, or interpretation, written in accompanying paragraphs of text • Link report information to the objective of the study • Since people are not consistent from day to day, you can suggest or infer something, but you cannot conclude anything about any given data 20

Section 6.2 – Outlets – The Place Decision – Objectives • Explain how businesses make the place decision as part of the marketing mix • Discuss direct and indirect channels of distribution 21

Section 6.2 – Outlets – The Place Decision Place of Decision • Price decisions involve how you get your product to the customer • All four marketing-mix decisions must focus on the target market • Determining the type of customer you have is the first consideration about a product’s distribution • The intended use of the product determines the type of customer: • Business Customers • Ultimate Customers 22

Section 6.2 – Outlets – The Place Decision Place Decision Business Customers • Organizational buyers • Purchase products for use in the operation of a business Ultimate Consumers • Customers • Buy products for their own personal use • Reaching each type of customer requires a different channel of distribution • Needs and shopping habits are completely different • How and where customers shop are important factors in deciding on a channel of distribution

Section 6.2 – Outlets – The Place Decision Channels of Distrubition • The path a product takes from the producer or manufacturer to the consumer Direct Channels • A Direct Channel of distribution is the path a product takes without the help of any intermediaries between the producers and consumer • Certain products require direct contact with customers for a sale to take place Distributing Services • Services are distributed directly to customers • EX. Personal trainers work directly with his or her clients • Ex. Fantasy sports leagues provided by sports sites

Section 6.2 – Outlets – The Place Decision Channels of Distrubition Direct Marketing • Marketing activities to sell products directly to customers through the use of a customer database • Solicit business over telephone, fax, mail, or e-mail Telephone Sales • Selling activities in which a live person or a recording calls a number in the database to inform the potential customer about a product or service • Businesses use telemarketing to get word out about a new product offering • Telemarketing can produce immediate sales

Section 6.2 – Outlets – The Place Decision Channels of Distrubition Direct Marketing – cont. Print • Traditional way to apply direct-marketing techniques • Can also be combined with other media for more marketing exposure • Catalog companies can publish specialized versions of their catalogs based on customers’ buying habits • Advertising in magazines and on television can generate direct sales through use of 800 number Television • Infomercials are 30-minute television advertisements of an educational nature • Products and services are available for purchase 24 hours a day on TV networks like HSN

Section 6.2 – Outlets – The Place Decision Channels of Distrubition Direct Marketing – cont. E-mail and the Internet • Benefits: • Information can be obtained and purchases can be made without having to leave home • Purchases only need access to a computer with an internet connection to make purchases anywhere around the world • Customers are more likely to respond to e-mail solicitation if they have requested this information themselves • Spam, or unsolicited e-mail is one of the biggest concerns Web users have today

Section 6.2 – Outlets – The Place Decision Channels of Distrubition Indirect Channels • The path that a product takes using intermediaries, or people or services in the middle of a transaction, between the producer and consumer • Intermediaries include: • Agents • Wholesalers • Retailers

Section 6.2 – Outlets – The Place Decision Channels of Distrubition Indirect Channels Agents • Bring buyers and sellers together for a fee • Can operate from multiple locations and manage sales electronically • Agents do not take ownership of the goods they sell Wholesalers • Resellers who buy goods, store them, and sell them in smaller quantities to retailers or sports organizations • Function helps reduce the number of sales contacts that a manufacturer has to make in order to sell products

Section 6.2 – Outlets – The Place Decision Channels of Distrubition Indirect Channels Retailer • Sell their goods directly to the customer for their personal use • Purchase their products form wholesalers and manufacturers

Section 6.2 – Outlets – The Place Decision Channels of Distrubition Trying It Out Businesses will start with one distribution channel and experiment with others until the find the mix that lets their business grow Businesses must research and identify what to produce, for whom, and what method of delivery will get the product out into the marketplace Multiple Channels • The use of more than one type of distribution channel to reach customers • Ex. Nike – Sells products from own retail stores & Website, but also to retailers, who in turn sells products to customers • Use of multiple channels increases product exposure and provides an opportunity to reach different parts of consumer market

The Research Process