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FMD 451. Target Market Research. Market Research. What is marketing research? The marketing research process Six stages. What is Marketing Research?.

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FMD 451

Target Market Research

Market research
Market Research

What is marketing research?

The marketing research process

Six stages

What is marketing research
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

Identifying your market
Identifying your market?

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
Types Of Markets

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.

Why would a consumer buy your product
Why would a consumer buy your product?

  • 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:

  • 1. 1.

  • 2. 2.

  • 3. 3.

  • 4. 4.

Segment your market
Segment your Market

  • 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
Segmenting your market!

  • 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
Example of Customer Profile

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

Marital Status:

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

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
Choose the Target Market you will sell to!

  • 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
Find out what is important to your customer?Create a survey!

High Medium Low Not At All

  • 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

Market segmentation
Market Segmentation

  • Segment potential buyers into similar groups.

  • Buying habits

  • Ability to pay-Price

  • What is the size of the market


  • Identifying Your Market

  • ___ Determine why a customer would want to buy your product/service.

  • ___ Identify your products'/services' benefits and features.

  • ___ Decide which segmentation criteria will best segment your target market: geographic, demographic, psychographic or behavioral.

  • ___ 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.

Two types of marketing research
Two Types of Marketing Research

Problem Identification Research

Market Potential, Market Share, Brand image, Forecasting, Business Trend

Problem-Solving Research

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
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
1. Define the Problem

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.

Example subaru of america
Example: Subaru of America

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
2. Developing an Approach to the Problem

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.

Define the research objective
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 objective1
Define the Research Objective

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
3. Formulating a Research Design

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
4. Doing Field Work or Collecting Data

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
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.

Source of information

First, select sources of information:

Secondary data

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

information collected for the specific purpose at hand

Source of information

Source of information1

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


Source of information

Pros and cons of secondary data

Advantages of secondary data

low cost

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 outdated

Pros and Cons of Secondary Data

Primary data

Primary data collection process

Data collection methods


qualitative research—personal interviews & focus groups



Design study materials (e.g., questionnaire design)


Data collection

Primary Data



Data collection by asking people questions

personal interview

telephone survey

mail survey

Internet survey


large size data, flexibility


errors in questionnaire, expensive, response error


Personal interview

Survey (cont.)

Personal interview


flexible, more information


expensive, time-consuming, interviewer bias

e.g., “shopping mall intercept”: a convenient, low-cost method

but lacks representativeness

Personal Interview

Telephone survey

Survey (cont.)

Telephone survey


quickness, cost efficiency


limited amount of information, limited accessibility of people, have to remember response options

Telephone Survey

Mail survey

Survey (cont.)

Mail survey


low cost


low response rate

less control

Mail Survey

Internet survey

Survey (cont.)

Internet survey


low cost—much lower even than mail


low response rate—large response bias

Data reliability—difficult to verify if personal information is true

Internet Survey

Qualitative research

Qualitative research


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 results

Qualitative Research

Focus group interview

Qualitative research (cont.)

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

Focus groups

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


home audit

direct observation

In-store testing

Focus Groups

Observational method

Observational method


personal observation

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 processes

Observational 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)



Questionnaire design


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


open-ended questions

closed-end questions


Developing the questionnaire
Developing the Questionnaire

  • General rules:

    • 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.


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
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
Types of Questions

  • Pg. 257

  • Likert scale

    • strongly agree

    • agree

    • neither agree nor disagree

    • disagree

    • strongly disagree

Pre testing the questionnaire
Pre-Testing the Questionnaire

  • 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

Survey and questionnaire design

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 results

Sample selection

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 7.4

½ to 1 17.7

1 to 1½ 26.5

1½ to 2 14.7

2 to 2½ 17.7

More than 2½ 16.2

High Frequency alternatives%

Up to 2½ 62.5

2½ to 3 23.4

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

Sample size

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 (cont.): Sampling procedure

random sampling

every member of the population has a known probability of being included

convenience sampling

the researcher selects easiest population members from which to obtain information

lacks the representativeness of the population

(e.g.) shopping mall intercept


Data processing

When conducting the survey with volunteers:

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

Data analysis
Data Analysis

  • 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

  • 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.

  • Mode- The number repeated most often=1

Prepare and present the final research report
Prepare and Present the Final Research Report

  • 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!