FMD 451. Target Market Research. Market Research. What is marketing research? The marketing research process Six stages. What is Marketing Research?.
Target Market Research
What is marketing research?
The marketing research process
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
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
A market is simply any group of actual or potential buyers of a product. There are three major types of markets.
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.
Career Option's Sample Customer Profile:
Professionals in Transition Segment
30% Female 70% Male
10% 26-30 30% 31-40 30% 41-55 30% 56-64
25% 30-40K 25% 40-50K 50% 50-75K
80% Married 20% Single
Level Of Education:
60% Bachelor's degree 40% Master's degree
10% Health Care 20% Financial
30% Marketing/Advertising 40% Hi-Tech Fields
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.
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.
High Medium Low Not At All
Problem Identification Research
Market Potential, Market Share, Brand image, Forecasting, Business Trend
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
Defining a problem
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.
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?
Formulating an analytical framework and models, research questions.
Determine a hypothesis: an educated guess
The hypothesis provides a research problem for the investigators which can be tested scientifically.
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.
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.
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
Field work involves personal, telephone, mail, or electronic interviewing
Proper selection, training, supervision, and evaluation of the field force are essential
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.
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!
information collected for the specific purpose at handSource of information
balance sheets, sales figures, customer DB
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
internetSource of information
Advantages of secondary data
less effort expended process
less time consuming
some information can be obtained only from secondary data
Disadvantages of secondary data
collected for some other purpose
may not be very accurate
may be outdatedPros and Cons of Secondary Data
Data collection methods
qualitative research—personal interviews & focus groups
Design study materials (e.g., questionnaire design)
Data collectionPrimary Data
Data collection by asking people questions
large size data, flexibility
errors in questionnaire, expensive, response errorSurvey
flexible, more information
expensive, time-consuming, interviewer bias
e.g., “shopping mall intercept”: a convenient, low-cost method
but lacks representativenessPersonal Interview
quickness, cost efficiency
limited amount of information, limited accessibility of people, have to remember response optionsTelephone Survey
low response rate
less controlMail Survey
low cost—much lower even than mail
low response rate—large response bias
Data reliability—difficult to verify if personal information is trueInternet Survey
individual depth interview
focus group interview
resulting data have more depth and richness of context
results not necessarily representative of population
Hard to quantify the resultsQualitative Research
Focus group interview
Loosely structured group discussion led by interviewer
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 Group Interview
Postal research questionnaires
Diary panels - sources of continuous data
In-home scanning - hand-held light pen to scan barcodes
In-store testingFocus Groups
mechanical observation (e.g., scanner data)
can have high degree of accuracy, short period of time for data collection
unaware of motives, attitudes, or decision processesObservational Method
Tests the effects of variables in a controlled situation
Example: test of two different versions of advertisements in two different cities
unrealistic settings (laboratory experiments)
Expensive (real experiments)Experiment
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
(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”Questionnaire
Choosing a sample:
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 resultsSample selection
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)
Low frequency alternatives%
Up to ½ 7.4
½ to 117.7
1 to 1½26.5
1½ to 214.7
2 to 2½17.7
More than 2½16.2
High Frequency alternatives%
Up to 2½62.5
2½ to 323.4
3 to 3½ 7.8
3½ to 4 4.7
4 to 4½ 1.6
More than 4½ 0
Schwarz et al. (1985)
A sample is a subset of the population selected to represent the population as a whole
Samples should be representative of the population
larger sample gives more reliable results
small samples are OK when they represent the population
(US presidential election poll: sample size of 1,000)Sample
every member of the population has a known probability of being included
the researcher selects easiest population members from which to obtain information
lacks the representativeness of the population
(e.g.) shopping mall interceptSampling
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
(13 + 18 + 13 + 14 + 13 + 16 + 14 + 21 + 13) ÷ 9 = 15
13, 13, 13, 13, 14, 14, 16, 18, 21
So the median is 14.