Chapter- 8 MARKET RESEARCH

What is Market Research?

Market research is the systematic design, collection, analysis, and reporting of data and findings relevant to a specific marketing situation facing the company.

Market research firms fall in to the three categories:

1) Syndicated-service research firms-These firms gather consumer and trade information, which they sell for a fee.

2) ustoms market research firms-These firms are hired to carry out specific pro!ects. They design the study and report the findings.

") Specialty-line market research firms-These firms provide speciali#ed research services to other firms.

enefits of Market Research

$nformation gained through marketing research isn%t !ust &nice to know.& $t%s solid information that can guide your most important strategic 'usiness decision. Market research is effective when the findings or conclusions you reach have a value that e(ceeds the cost of the research itself.

Market Research

The )rocess Market research, like other components of marketing such as advertising, can 'e *uite simple or very comple(. +ou might conduct simple market research such as including a *uestionnaire in your customer 'ills to gather demographic information a'out

your customers. ,n the more comple( side, you might engage a professional market research firm to conduct primary research to aid you in developing a marketing strategy to launch a new product.

-egardless of the simplicity or comple(ity of your marketing research pro!ect, you%ll 'enefit 'y reviewing the following seven steps in the market research process.

Step !ne: "efine the #ro$lems% the &ecision alternati'es% an& the research o$(ecti'es:

The market research process 'egins with identifying and defining the pro'lems and opportunities that e(ist for your 'usiness, such as.

1 /aunching a new product or service.

2 /ow awareness of your company and its products or services.

" /ow utili#ation of your company%s products or services. 0The market is familiar with your company, 'ut still is not doing 'usiness with you.)

1 3

2 poor company image and reputation. )ro'lems with distri'ution, your goods and services are not reaching 'uying pu'lic in a timely manner. the

Step T)o: Set !$(ecti'es% *&get an& Timeta$les

,'!ective. 4ith a marketing pro'lem or opportunity defined, the ne(t step is to set o'!ectives for your market research operations. +our o'!ective might 'e to e(plore the nature of a pro'lem so you may further define it. ,r perhaps it is to determine how many people will 'uy your product packaged in a certain way and offered at a certain price. +our o'!ective might even 'e to test possi'le cause and effect relationships. 5or e(ample, if you lower your price 'y 16 percent, what increased sales volume should you e(pect7 4hat impact will this strategy have on your profit7

+n'est in ,o*r market research

8ow much can you afford7 +our market research 'udget is a portion of your overall marketing 'udget. 2 method popular with small 'usiness owners to esta'lish a marketing 'udget is to allocate a small percentage of gross sales for the most recent year. This usually amounts to a'out two percent for an e(isting 'usiness. 8owever, if you are planning on launching a new product or 'usiness, you may want to increase your 'udget figure, to as much as 16 percent of your e(pected gross sales. ,ther methods used 'y small 'usinesses include analy#ing and estimating the competition%s 'udget, and calculating your cost of marketing per sale.

Timeta'les. )repare a detailed, realistic time frame to complete all steps of the market research process. $f your 'usiness operates in cycles, esta'lish target dates that will allow the 'est accessi'ility to your market. 5or e(ample, a holiday greeting card 'usiness may want to conduct research 'efore or around the holiday season 'uying period, when their customers are most likely to 'e thinking a'out their purchases.

Step Three: Select Research T,pes% Metho&s an& Techni-*es

There are two types of research. primary research or original information gathered for a specific purpose and secondary research or information that already e(ists somewhere. 9oth types of research have a num'er of activities and methods of conducting associated with them.

Secondary research is usually faster and less e(pensive to o'tain that primary research. :athering secondary research may 'e as simple as making a trip to your local li'rary or 'usiness information center or 'rowsing the $nternet.

See Market -esearch Types, Methods and Techni*ues for more details a'out the activities and methods for primary and secondary research.

Step .o*r: "esign Research +nstr*ments

The most common research instrument is the *uestionnaire. ;eep these tips in mind when designing your market research *uestionnaire.

1 ;eep it simple.

2 $nclude instructions for answering all *uestions included on the survey.

" 9egin the survey with general *uestions and move towards more specific *uestions.

1 ;eep each *uestion 'rief.

3 $f the *uestionnaire is completed 'y the respondent and not 'y an interviewer or survey staff mem'er, remem'er to design a *uestionnaire that is graphically pleasing and easy to read.

<

-emem'er to pre-test the *uestionnaire. 9efore taking the survey to printer, ask a few people-such as regular customers, colleagues,

the

friends or

employees-to complete the survey. 2sk them for feed'ack on the survey%s style, simplicity and their perception of its purpose. = Mi( the form of the *uestions. >se scales, rankings, open-ended and closed-ended *uestions for different sections of the &form& or way a *uestion is asked may influence *uestions

*uestionnaire. The given.

the answer

9asically, there are two *uestion forms. closed-end *uestions and openend *uestions.

Step .i'e: Collect "ata

To help you o'tain clear, un'iased and relia'le results, collect the data under the direction of e(perienced researchers. 9efore 'eginning the collection of data, it is important to train, educate and supervise your research staff. 2n untrained staff person conducting primary research will lead to interviewer 'ias.

Stick to the o'!ectives and rules associated with the methods and techni*ues you have set in Step Two and Step Three. Try to 'e as scientific as possi'le in gathering your information.

Step Si/: !rgani0e an& Anal,0e "ata

,nce your data has 'een collected, it needs to 'e &cleaned.& leaning research data involves editing, coding and the ta'ulating results. To make this step easier, start with a simply designed research instrument or *uestionnaire.

Some helpf*l tips for organi0ing an& anal,0ing ,o*r &ata are liste& $elo)1

1 2

/ook for relevant data that focuses on your immediate market needs. -ely on su'!ective information only as support for more general findings of o'!ective research.

"

2naly#e for consistency? compare the results of different methods of your data collection. 5or e(ample, are the market demographics provided to you from the local media outlet consistent with your survey results7

@uantify your results? look for common opinions that may 'e counted together.

Step Se'en: #resent an& 2se Marketing Research .in&ings

,nce marketing information a'out your target market, competition and environment is collected and analy#ed, present it in an organi#ed manner to the decision makers of the 'usiness. 5or e(ample, you may want to report your findings in the market analysis section of your 'usiness plan. 2lso, you may want to familiari#e your sales and marketing departments with the data or conduct a company-wide informational training seminar using the information. $n summary, the resulting data was created to help guide your 'usiness decisions, so it needs to 'e readily accessi'le to the decision makers.

RESEARCH ST2"3
8141 RESEARCH ! 5ECT+6ES

The o'!ective of the pro!ect is to find out the consumer Satisfaction or )reference and 'ehavior of customer towards A$nsurance Sector especially towards M2B CD4 +,-;.

4hat all are the stimuli effecting there choices 'efore selecting a $nsurance company. $s it the credi'ility, good return or cele'rity endorser.

$t also helps in letting the a'ove $nsurance know its 'asic position in relation to its competitors in the market E how 'etter can it help re-design its product in achieving higher sales growth.

The study of this research also analyses the findings and provide M2B CD4 +,-; with the effective recommendations or suggestions. -DSD2- 8 MDT8,F,/,:+

Research "esign

2 research design is a type of 'lue print prepared depending on various types of 'lueprints availa'le for the collection, measurement and analysis of data. 2 research design calls for developing the most efficient plan of gathering the needed information. The design of research study is 'ased on the purpose of the study.

2 research design is the specification of methods and procedures for ac*uiring the information needed. $t is overall operational pattern or framework of the pro!ect that stipulates what information is to 'e collected from which source 'y what procedures.

T,pes% Metho&s an& Techni-*es Secon&ar, Research

>sually the easiest and least e(pensive, secondary research is information that already e(ists somewhere. $t may 'e a study, a group of articles on a topic, or demographic or statistical data gathered 'y someone else. 5or e(ample, the demographic data a'out car owners in your county availa'le from your ham'er of ommerce may 'e !ust the information you need-and it%s already gatheredG

#rimar, Research

Sometimes, the information you need doesn%t e(ist-anywhereG +ou%ve searched the $nternet, you scoured the li'rary, !ournals and data'ases all to no avail. That%s when you may need to conduct primary research, or research conducted for a specific purpose. 5+$, the secondary research you may have used was pro'a'ly someone%s primary data once.

Sampling

2 sample is the set of o'servations o'tained from e(perimental unit that were selected from a larger group 0the population). 9y studying the sample it is hoped to draw valid conclusions a'out the larger group. $f the conclusions drawn from a sample are to 'e meaningful the sample must 'e o'tained in a random fashion. This means that each mem'er of the population has an e*ual chance of 'eing included in the sample. This ensures that the sample is un'iased. >nfortunately, it is not always easy to o'tain a truly random sample from sampling units that are widely dispersed.

2 representative sample is only possi'le if, 'efore collecting the sample, the researcher has carefully and completely defined the population, including a description of the mem'ers to 'e included.

Sampling is &one in a )i&e 'ariet, of research settings1 7iste& $elo) are a fe) of the $enefits of sampling:

1. -educed cost. $t is o'viously less costly to o'tain data for a selected su'set of a population, rather than the entire population. 5urthermore, data collected through a carefully selected sample are highly accurate measures of the larger population. )u'lic opinion researchers can usually draw accurate inferences for the entire population of the >nited States from interviews of only 1,666 people.

2. Speed. ,'servations are easier to collect and summari#e with a sample than with a complete count. This consideration may 'e vital if the speed of the analysis is important, such as through e(it polls in elections.

". :reater scope. Sometimes highly trained personnel or speciali#ed e*uipment limited in availa'ility must 'e used to o'tain the data. 2 complete census 0enumeration) is not practical or possi'le. Thus, surveys that rely on sampling have greater fle(i'ility regarding the type of information that can 'e o'tained.

$t is important to keep in mind that the primary point of sampling is to create a small group from a population that is as similar to the larger population as possi'le. $n essence, we want to have a little group that is like the 'ig group.

4ith that in mind, one of the features we look for in a sample is the degree of representative ness - how well does the sample represent the larger population from which it was drawn7 8ow closely do the features of the sample resem'le those of the larger population7

8181 RESEARCH METH!"!7!93 A"!#TE"

: T,pe of research :- ;*alitati'e research

-Dlement- onsumers -Sampling unit- Dach element acts as an independent unit.

H Sampling Type.- 2rea sampling.

2s research was limited on the 'asis of geographical location i.e.

S828I282C)>-

H Sample Si#e. - 1<6 ustomers

H Fata Source. - )rimary Fata collected 'y conducting face to face personal interviews.

H -esearch instruments. -

@uestionnaire was used to e(tract the information from the respondents.

;*estions )ere

lose ended

Multiple choices

H Method of Sampling. - -andom

81<1 C!=STR2CT+!= !. ;2EST+!==A+RE

4ords are often used in different ways 'y different people. +our goal is to write *uestions that each person will interpret in the same way. 2 good *uestion should 'e short and straightforward. 2 *uestionnaire should not 'e too long, use plain Dnglish and the *uestion shouldn%t 'e difficult to answer.

,nly through careful writing, editing, review, and rewriting can you make a good *uestionnaire. onsider the following guidelines for conducting your surveys.

>se losed-ended *uestions as well as open-ended ones

)ut your *uestions in a logic order

The issues raised in one *uestion can influence how people think a'out su'se*uent *uestions. $t is good to ask a general *uestion and then ask more specific *uestions. 5or e(ample, you should avoid asking a series of *uestions a'out a $nsurance sector and then *uestion a'out the most important factors in selecting a $nsurance company

1 The purpose of the survey

2 4hy it is important to hear from the correspondent

" 4hat may 'e done with the results and what possi'le impacts may occur with the results.

1 2ddress identification

3 )erson to contact for *uestions a'out the survey.

< Fue date for response

7+M+TAT+!=S
1 The research covers only west Felhi, so the survey results are restricted to a particular area.

2 9iased answers can sometimes 'e received in *uestionnaire 'ecause customers some times tend to hide their salary, price as the factor for 'uying the product etc.

" Survey is done under limited time constraint so the completeness of the product may not 'e sure.

1 9ehavior of the customer keeps on changing as they are continuously in linked with the e(ternal environmental happening.

3 Market is more heterogeneous so the survey is not too fle(i'le.

< onsumer taste and preferences are hard to !udge so it can change fre*uently.

= )eople were hard pressed with time so most of them were reluctant to answer.