4.

4 Market Research
 Introduction

●Market research - The action or activity of

gathering information about consumers' needs
and preferences.
●Also collects data on competitors and market
trends to gain insight into a specific market.
●Market research can be
Adhoc research
Continuous research
Role of market research

●Gives up to date information

●Enables businesses to improve their marketing
strategies
●Assess customer reactions to a new product
●Gives businesses an understanding on
competitors
●Helps businesses predict the likely future
happenings
Types of market research

●Primary research
New research, carried out to answer specific issues or
questions.
●Secondary research
Secondary research (also known as desk research)
involves the summary, collation and/or synthesis of
existing research/data
 Primary research

●Involves gathering first-hand data for a specific

purpose.
●Also known as field research or bespoke
research.
●Often used to gather data and information from
customers to identify their buying patterns and to
anticipate changes in the market trends.
 Methods of primary research

●Surveys (questionnaires)
●Interviews
●Focus groups
●Observation
 1.Surveys
●Survey or a questionnaire is a document that
contains a series of questions used to collect
data for a specific purpose.
●Most common method.
●Types of surveys:
Self-completed survey
Personal survey
Telephone survey
Online survey
Postal survey
 Points to remember

●Avoid bias to collect meaningful and useful data

●Avoid jargon
●Include both open ended and closed ended
questions.
●Should be tried and tested on a small group.
●Gather only relevant data
Benefits & Limitations

●Generate qualitative & quantitative data

●Simple to complete
●Costly and time consuming
●There might be some reservations due to bias or
dishonest answers.
Interviews

Involve one-to-one discussions between an

interviewer and interviewees.
Beliefs, attitudes and feelings can be examined in
detail.
Face-to-face interviews, telephonic interviews
Provides range of non-quantifiable information that
might prove to be difficult to analyse.
Time consuming, interviewer bias which impacts
respondents answer.
Focus Group

Involves forming small discussion groups to gain

insight into the attitudes and behavior.
Participants share a similar consumer profile eg:
Teenage girls for nail polish
Provide information to help a business devise
marketing strategies.
Audio visual recording of the discussion is useful
for market research.
Drawbacks: Only extroverts participate, conform
majority view, cost
Observation

Involves watching how people behave and

respond in different situations.
Done under controlled conditions or in real life
situations.
Carried out using surveillance filming,
photographic evidence or in person. Eg: Traffic
audit, theme park, health clinics etc.
Benefit: Records actual behavior
Limitations: Does not reveal why a person
behaves or responds in the way they do.
Benefits & Limitations of Primary
research

Benefits:
Relevance, Up to date, confidential and unique
Limitations:
Time consuming, Costly, Validity
Ethical considerations

Marketers need to consider ethical issues of

conducting market research.
Eg: Use of photography without consent is
unethical
Ethical market research requires investigators to
be reasonable, objective and accurate in the
process of planning, collecting, processing and
reporting research information.
Qualitative & Quantitative
research
- Qualitative research involves
getting non-numerical
responses.
Purpose is to understand behavior, attitudes and perceptions.
Soft answers (people’s views, opinions etc) are received through open-ended
questions.

- Quantitative research involves

getting numerical responses.
Purpose involves gathering facts and measurable information.
Hard answers are received through closed ended and ranking scale questions.
Sampling

Population - all members of a particular group. The

term specifically refers to the total group of all
potential customers in a particular market.

Unrealistic for market researchers to conduct

research on an entire population.

A sample refers to the proportion or subgroup of the

population selected for market research purposes.
Sampling methods

There are several sampling methods that can be used for market
research purposes:

- quota
- random
- stratified
- cluster
- snowballing and
- convenience
Quota Sampling

Researchers select a number of candidates from different

market segments and then group them together according
to various characteristics.

Eg: Conducting research on 70 males; Conducting

research on people between 30 and 50 years.
Random Sampling

Random sampling select anyone in the population

for market research.
Allows all respondents the same equal chance of
being selected.
Stratified Sampling

Method where the population is segmented into various strata (layers of

subgroups) that share similar characteristics.

A number of respondents from each stratum is selected based on the

proportion of the population comprised in that stratum, i.e. the sample size
for each layer is proportional to the size of the stratum.

- 5 cr – people Coimbatore
- 60 % male 40 % female

- 100 people
60% male 40%female
Cluster Sampling

Identifying the population by geographical areas

(clusters), and then interviewing people within
certain clusters randomly.
Snowballing

Research participants referring or recommending

further subjects to take part in the market
research.

It uses word of mouth to increase the sample size,

with participants suggesting their friends, family
and colleagues to be part of the research.
 Convenience Sampling

Practice of using people that are within easy

reach, in an unplanned way, to conduct market
research.

The sample is simply made up of whoever is

willing to participate in the research.
Results from data collection
• Data collected can be presented in several ways:
• Bar charts
• Pie charts
• Line graphs
• Histograms
Non-Sampling errors

• Caused by researcher mistakes like mistakes in

recording, processing and analysing data.
• Also caused when respondents do not give
honest answers.
Sampling errors

- Inappropriately designed market research is referred

to as a sampling error. Such errors are caused by poor
sample design or methodology.
- For example, a group of students doing research for
a school project may find convenience sampling easier
than stratified sampling.
- Inappropriate sampling methodology causes
non-sampling error. These mistakes are not attributed
to human errors.
- For example, untruthful answers by respondents
distort the results and findings.