Session 24th and 25th August

Overview of Marketing research Subhajit Bhattacharya Assistant Professor Department of Marketing Xavier Institute of Social Service Dr. Camil Bulcke Path, Post Box - 7, Ranchi, Pin-834001, Jharkhand, India 09470140279(M)

email: [email protected]

Class Slides; Marketing research : School of Management ,National Institute of Technology, Rourkela

"Marketing research is the systematic and objective search for, and

analysis of, information relevant to the identification and solution of any problem in the field of marketing.“(Green and Tull, 1993 ) Green, P.E., Tull, D.S. and Albaum, G (1993), Research For Marketing Decisions, 5th edition, Prentice-Hall

Why to do market research? Market research is important for every business, and should not be just a one-off activity. Successful businesses conduct research on a continual basis to keep up with market trends and to maintain a competitive edge. Regardless of whether you’re starting or expanding your business, market research is vital to understanding your target market and increasing sales.

Business owners conduct research for many reasons  Reduces Uncertainty  Helps focus decision making  Forecasting

and

coping

up

with

the

change

in

business

your

existing

environment  Identify

potential

customers

Understanding

customers  Set realistic targets  Develop effective strategies  Examine and solve business problems  Prepare for business expansion  Identify business opportunities.

TYPES OF RESEARCH Exploratory  Descriptive  Causal 

Uncertainty Influences the Type of Research

CAUSAL OR DESCRIPTIVE

COMPLETELY CERTAIN

ABSOLUTE AMBIGUITY

EXPLORATORY

Degree of Problem Definition

Exploratory Research (Unaware of Problem) “Our sales are declining and we don’t know why.”

“Would people be interested in our new product idea?”

Descriptive Research (Aware of Problem)

Causal Research (Problem Clearly Defined)

“What kind of people are buying “Will buyers purchase more of our product? Who buys our our products in a new package? competitor’s product?” “Which of two advertising “What features do buyers prefer campaigns is more effective?” in our product?”

Exploratory Research Secondary Data Experience Survey Pilot Studies

EXPLORATORY RESEARCH Initial research conducted to clarify and define the nature of a problem  Does not provide conclusive evidence  Subsequent research expected 

DESCRIPTIVE RESEARCH Describes characteristics of a population or phenomenon  Some understanding of the nature of the problem 

CAUSAL RESEARCH 

Conducted to identify cause-and-effect relationships

IDENTIFYING CAUSALITY A causal relationship is impossible to prove.

Evidence of causality: 1. The appropriate causal order of events 2. Concomitant variation--two phenomena vary together 3. An absence of alternative plausible explanations

Stages of the Research Process

Problem Discovery and Definition

Research Design

Discovery and Definition

and so on Conclusions and Report

Sampling Data Processing and Analysis Data Gathering

The Marketing Research Process Problem Discovery

Selection of Sample Design

Exploratory Research

Collection of the Data

Selection of the Basic Research Method

The Research Process (cont.) Editing and Coding

Data Processing

Interpretation of the Findings

Report Writing

Selection of Exploratory research technique

Problem discovery

Secondary (historical Data)

Selection of Sample design

Probability Sampling Pilot study

Experience Survey

Non-probability Sampling

Case Study Collection of data (fieldwork)

Selection of basic research method

Problem Definition

Editing & coding data

Data Processing and Analysis

Survey

Experiment

Interview

Laboratory

Questionnaire

Field

Secondary Data Study

Interpretation of findings Observation Report

MARKETING RESEARCH VS. MARKETING INTELLIGENCE 

Marketing Intelligence: The formal and/or informal ongoing collection of information about competitors and other environmental developments (e.g., regulations, tech.)  



Includes reading trade reports, newspapers, visiting competitors, etc. Likened to a low-wattage light bulb in large room

Marketing Research: The design, collection, analysis etc. of data relevant to a specific marketing situation 

Likened to a focused flash in a part of a room

THE MARKET RESEARCH PROCESS STEP 1. Determine the research Purpose/objective –MOST IMPORTANT STEP! 



Problem or opportunity analysis 

What is (are) the problem(s) or opportunities?



What is the scope of the problem(s) and the possible reasons? Or what is the scope of the (potential) opportunity, and what are the crucial success factors?

Generation & Evaluation of decision alternatives 

Generate alternatives to be considered



Decide on criteria for choosing among the alternatives



Time constraints

STEP 2. Set Research Goals (FastTrac) /Research Objectives  Practical

Suggestion: Generate research questions to which you want answers.



An aside: The value of models 

EX: Sales volume = function of …..

STEP 3. Estimate Value of Information Cost-benefit analysis

4. Design research: A detailed blueprint used to guide a research study toward its objectives Research Approach: Exploratory Descriptive Causal

4 (Continued) Data collection methods SECONDARY Data/studies/literature already competed Standardized data (e.g., syndicated data)

PRIMARY – To be collected to meet research objectives Qualitative (depth interviews, observation, etc.) Surveys Experiments

5. Collect data 6. Prepare and analyze data 7. Prepare a research report

Qualitative Research

QUALITATIVE RESEARCH 

Not measurements, but WORDS!  Instead

of asking how many times someone

purchased an item, you ask "WHY...?"  Typically

the samples are small, and not

"random"

MOST FREQUENT USES 

Understanding basic issues 



Pretesting ideas or questions 



do people want a product that cleans their refrigerator?

Message testing 



why do people buy/use our product?

How do people like this ad?

Recommended to capture the basic feel of a problem prior to conducting a more analytical study

STRENGTHS •Good for examining feelings and motivations

•Allows for complexity and depth of issues •Provides insights

Weaknesses •

Can’t extrapolate to the whole population



Volume of data



Complexity of analysis



Time-consuming nature of the clerical efforts require

GENERAL APPROACHES 

Individual interviews  Nonstructured  Structured

Projective Techniques  Group interviews 

 Structured

or unstructured  Focus groups 

Observation

Depth Interviews

What is an In-depth Interview? A conversation on a given topic between a respondent and an interviewer • Used to obtain detailed insights and personal thoughts • • • •

Flexible and unstructured, but usually with an interview guide Purpose: to probe informants’ motivations, feelings, beliefs Lasts about an hour Interviewer creates relaxed, open environment

• Wording of questions and order are determined by flow of conversation • Interview transcripts are analyzed for themes and connections between themes

In-depth Interviews Technique: Laddering • Laddering – questioning progresses from product characteristics to user characteristics

• An example “Why do you like wide bodies?” “They’re more comfortable” “Why is that important?” “I can accomplish more” “Why is that important?” “I will feel good about myself”

Advantages – Tendency to have a freer exchange – Can probe potentially complex motivations and behavior – Easier to attach a particular response to a respondent

Disadvantages

– Qualified interviewers are expensive – Length and expense of interview often leads to small sample – Subjectivity and “fuzziness”

PROJECTIVE TECHNIQUES Projective techniques are unstructured and indirect forms of questioning which encourage the respondents to project their underlying /fundamental motivations, beliefs, attitudes or feelings regarding the issues of concern.

MAIN TYPES OF PROJECTIVE TECHNIQUES 

Word Association 



asks the respondents to give the first word or phase that comes to mind after the researcher presents a word or phrase

Completion Test 

asks the respondents to complete sentences, dialogs, or stories, etc.



Picture Drawing and Interpretation



Third Person Techniques



Role Playing

EXAMPLE: WORD ASSOCIATION Results of a Word Association Test with Alternative Brand Names for a New Fruit-Flavored Sparkling Water Drink Possible Brand Name Ormango Tropical Fruit Orange Sparkle Paradise Passion

Associated Words Green, tart, jungle Juice, sweet, island Light, bubbly, cool Fruity, thick, heavy

EXAMPLE: COMPLETION TEST Investigate teenagers’ attitudes to tea Someone who drinks hot tea is ______________ Tea is good to drink when __________________ Making hot tea is _________________________ My friend thinks tea is _____________________

Story Completion Example: Department Store Patronage Project “A man was shopping for a business suit in his favorite department store. After spending 45 minutes and trying several suits, he finally picked one he liked. As he was proceeding to the checkout counter, he was approached by the salesman, who said, “Sir, at this time we have higher quality suits which are on sale for the same price. Would you like to see them?” “What is the customer’s response? Why?

Sentence Completion Example: Department Store Patronage Project 1. 2.

A person who shops at Sears is ___________________________________________ A person who receives a gift certificate good for Zeller’s would be ______________________________________.

3.

The Bay is most liked by ________________________.

4.

When I think of shopping in a department store, I ___________________________________________

Another Projective Technique: – Shopping Lists -- Ask respondents about the type of person who would buy a particular group of products Instructions to Subjects: “Read the shopping list below. Try to project yourself into the situation as far as possible until you can more or less characterize the woman who bought the groceries. Then write a brief description of her personality and character. Whenever possible indicate what factors influenced your judgment.”

Advantages 



May elicit responses that subjects would be unwilling or unable to give if they knew the purpose of the study. non-threatening Helpful when underlying motivations, beliefs and attitudes are operating at a subconscious level.

Disadvantages • Require highly trained interviewers and interpreters of results • Serious risk of misinterpreting. • Subjectivity • Is the psychological material uncovered related to the topic or to the person?

FOCUS GROUPS

Focus Groups A loosely structured interview conducted by a trained moderator among a small number of informants simultaneously.

POPULARITY OF FOCUS GROUP Percentage of Companies Using Frequently Use Sometimes Use Never Use

56% 36% 8%

FOCUS GROUP CHARACTERISTICS 8 - 12 members (usually paid)  homogeneous in terms of demographics and socioeconomic factors but heterogeneous views  experience related to product or issue being discussed  1 1/2 –2 hour session  1-way mirror/client may sit behind  qualified moderator  conversation may be video and/or audiotaped 

Tiered viewing room with wraparound mirror offers multiperspective viewing. Room is generously equipped with outlets so laptop computers can be utilized during session. Strategically placed state-of-theart audio and video taping offer unobstructed viewing. Attached Conference Room offers closed circuit television viewing for additional 12-14 viewers.

Common Applications of Focus Groups • Understanding Consumers – perceptions, opinions, and behavior concerning products and services

• Product Planning – generating ideas about new products

• Advertising – Develop creative concepts and copy material

KEY ISSUES Focus groups are small numbers, not random, not statistically valid  Focus groups are a lot of work  can get insights from focus groups that can’t get in other ways  Know their limits  Beware of power relations 

Process of Conducting Focus Group Research • Planning

• Recruiting • Moderation • Analysis and interpretation of the results

Advantages  



  

  

 

Richness of data Versatility Ability to study special respondents  Children  Professionals (doctors, lawyers) Direct involvement of managers (vividness) Easily understandable Flexibility in covering topics May uncover unanticipated ideas that are important Can define constructs of importance Gives “flesh” and connectedness to real consumers/people Can show them designs, have them try out prototypes group synergy

Disadvantages   

 



 

Lack of generalizability (small sample size) High selection bias Might be misused  focus group is not a replacement for quantitative research Subject to Interpretation Cost-per-respondent is high (compared to survey)  Results dependent on skill of moderator in running the group and analysis may be the response in the moment – which may change over time strong personalities are a hazard “professional respondents”

SKILLS REQUIRED FOR MODERATOR 

Observation



Interpersonal



Communication



Interpretive

GUIDING THE DISCUSSION know your objectives  don’t try to do too much – 2-4 major topics is probably all  have an outline of how you want to proceed  be ready to be flexible if need be – or to rein in the discussion  Stick to the time limit 

MODERATOR’S ROLE   

    

encourage discussion encourage them to talk with one another not you bring in people who aren’t speaking Reduce influence of people who dominate Bring out a variety of viewpoints keep on discussion track w/o stifling allow silence avoid premature closure

MODERATOR, CONT.    

Ensure safety Listen and regroup as needed Do NOT act as a leader but DO keep the discussion on topic Preferably someone not connected with the topic 



However, for some topics, really need someone who understands topic, terminology

Use 2 people if possible – one to guide, one to take notes

INTRODUCING THE PROCESS Introduce purpose, sponsorship if applicable  Lay out guidelines, e.g. time  Be clear on the topic(s) of discussion  Make introductions  Specify that you are interested in thoughts not decisions 

OBSERVING AND RECORDING  



videotaping audiotaping note-taker 







Has to be someone other than moderator

One-way mirrors Take notes at the end of each focus group session to identify important themes which may structure future groups’ questions Don’t ignore the lone wolf -- exceptions

REPORTING  



fast synthesis of important issues Key quotations useful but NOT a transcription 

Though use a transcription to create report if at all possible

Transcripts, stories, etc. must be coded for overarching themes (example-- ad/employee study): major themes were accuracy, value-congruence and effectiveness)  Analysts look for connections between themes as well (e.g. effective ads resulted in expressions of pride in the company  Fuzzy numerical qualifications may be added, such as “many,” “few,” “most,” “widely,” “typically,” “occasionally” 

• Suggest opportunities and limitations Examples: “The qualitative findings give reason for optimism about market interest in the new product concept…We therefore recommend that the concept be further developed and formal executions be tested.” “The results of the study suggest that ad version #3 is most promising because it elicited more enthusiastic responses and because it appears to describe situations under which consumers actually expect to use the product...

Example of limitations section: “The reader is cautioned that the findings reported here are qualitative, not quantitative in nature. The study was designed to explore how respondents feel and behave rather than to determine how many think or act in specific ways. Therefore, the findings cannot serve as a basis for statistical generalizations, but should instead be viewed as working hypotheses, subject to quantitative validation.” “Respondents constitute a small nonrandom sample of relevant consumers and are therefore not statistically representative of the universe from which they have been drawn.”

FOCUS GROUPS VS. IN-DEPTH INTERVIEW 

Advantages of focus groups   



relatively lower cost per person stimulating effect from group interaction vividness to managers

Advantages of in-depth interview  

more information from each respondent flexible with the use of physical stimuli

Use of Focus Groups Buick division of General Motors used focus groups to help develop the Regal. Buick held 20 focus groups across the country to determine what features customers wanted in a car. The focus groups told GM they wanted a stylish car, legitimate back seat, at least 20 miles per gallon, and 0 to 60 miles per hour acceleration in 11 seconds or less.

Based on the results, Buick engineers created clay models of the car and mock-ups of the interior. These were shown to other focus groups. The respondents did not like the oversized bumpers and the severe slope of the hood, but liked the four-disc brakes and independent suspension.

Focus groups also helped refine the advertising campaign for the Regal. Participants were asked which competing cars most resembled Buick in image and features. The answer was Oldsmobile, a sister GM division. In an effort to differentiate the two, Buick was repositioned above Oldsmobile by focusing on comfort and luxury features.

The tag line for the 1998 Regal, “official car of the Supercharged family,” was based on focus group findings.

ONLINE FOCUS GROUPS 

Chat Room Style 



good for capturing top-of-mind reactions to concepts, graphics, audio/video clips, web sites, etc.

Bulletin Style 

good for eliciting more in-depth comments on complex issues, as well as for allowing participation by individuals who would be difficult to gather in “real time”.

http://www.surveycompany.com/onlinesurveys/focusgroup.html

Advantages • Software controls for faster responders • Ability to show websites to participants • Clients “lurk” in “chat room”; can send questions to moderator • Transcripts produced automatically • Individual responses can be tracked (can’t in offline or “3-D” focus group) • Many people are more open when NOT face to face • Friendlier, more humorous online • Distant participants • Convenient for participants • less costly than face-to-face groups

Disadvantages • • • • • • • • • • • •

No body language (often part of analysis) Harder to read emotions Sampling issues (who is more likely to participate?) Difficult to probe Sometimes asynchronous (I.e. over several days) The Internet approach to focus group relies on an individual's ability to type effectively to participate fully Can’t show "external stimuli" to groups in order to obtain their reactions Hard for skilled moderator to utilize the group dynamics to explore an issue Comments likely to be short problem of lag in responses Lack of interaction, synergy Easy for participants to NOT participate

OBSERVATIONAL RESEARCH Watching what people do 

The information must be observable

Helpful conditions: 

the behavior is repetitive and of short duration

Approaches to observational research •

Natural Versus Contrived Situations



Open Versus Disguised Observation



Structured Versus Unstructured



Human Versus Machine Observers

MAIN OBSERVATIONAL RESEARCH METHODS 

Direct Observation



Contrived Observation 



Content Analysis 



Mystery Shopper

Analyzing written material into meaningful units, using carefully applied rules

Physical Trace Measures 

“Garbology”



Ethnographic Research



Behavior (Emotion) Recording Devices

DISCUSSION EXAMPLE 

Toothpaste manufactures have found consistently that if they ask for detailed information on the frequency with which people brush their teeth, and then make minimal assumptions as to the quantity of toothpaste used on each occasion, as well as spillage and failure to squeeze the tube empty, the result is a serious overstatement of toothpaste consumption.  

How would you explain this phenomenon? Would it be possible to design a study to overcome these problems and obtain more accurate estimates of consumption?

Advantages: –We see what people actually do –May avoid interviewer bias

Disadvantages:  No

information on motives attitudes or

intentions  Time-consuming

and expensive

MYSTERY SHOPPERS 

Observational data about a store



Data about customer interactions  Telephone

call

 Purchase

w/ little or no interaction

 Purchase

with conversation

 Knowledge

question about a product

HUMAN OBSERVATION One Way Mirror Observations 

Observing a group discussion as it unfolds

Shopper Patterns and Behavior 

Tracing the flow of shoppers through the store

Content Analysis 

Analysis of written material for insights into

strategy

HUMANISTIC INQUIRY “Immersion” 

The researcher becomes part of the group

Audits 

Examination and verification of product sale •

retail audits: sale to final customer



wholesale audit: warehouses to retailers

MACHINE OBSERVATION Traffic Counters •

Time and flow in retail stores

Behavior Measurement •

People Reader: reading habits

Physiological Measurement •

EEG: electroencephalogram



GSR: galvanic skin response

Pupilometer: pupil dilation Scanner Based •



Store scanners read the UPC codes on products and produce instantaneous information on sales

Overview of Marketing research -

“Our sales are declining and “What kind of people are buying “Will buyers purchase more of we don't ... 1. The appropriate causal order of events. 2. Concomitant variation--two phenomena vary together. 3. .... outlets so laptop computers can.

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