Market Research and Sales Forecasting Ch 8

Market Research
 It is the process of collecting and analyzing data related to marketing and consumption of goods
and services.
 Uses
 Descriptive: - what is happening in the market, trends and taste of consumers
 Predictive: - what will happen in the future. Changes in market etc.
 Exploratory: - About the possibilities in the market for launching a new product.
 Areas of Research
 Market – Identifying market trends, size, growth etc.
 Competition – Strengths and weaknesses of competitors and their strategies about a
particular product.
 Promotion – To check the effectiveness of promotional activities.
 Product – Different product alternatives and the requirements of consumers.
 Distribution – Decisions about suitability of retail outlets.
 Pricing – Strategy about the pricing of the product.
Types of Marketing Research
 Primary Research / Field Research / First Hand Research
It is the original data gathering from target market by researcher.
 Methods of Primary Research
 Quantitative Research
In this type, researchers find out the number of potential consumer (Market Size).
Quantitative Research Techniques
o Survey Method – A survey consists of gathering data by interviewing
People.
o Observational Method – Data is collected by observing a person that how
much time he takes to decide whether to purchase the product or not.
o Experimental Method – Researcher performs experiments by changing one
aspect of the product. e.g. changing the price and observing the results.
o Test Marketing – A limited quantity of new product is produced and
launched in a limited geographical area and then on the bases of results
decisions are taken.
 Qualitative Research
In this type, researchers find out the motivational factors behind the consumer
buying habits. This type is most important because all decisions for price,
promotion, place, product etc are depend on these results.
Qualitative Research Techniques
Main technique is interviews with individuals or groups.
 Secondary Research / Desk Research
Desk research includes the use of secondary data which has been already gathered by someone for
research. Secondary data is available on Internet, Libraries, Govt. Departments, different survey
repots etc. Advantages of secondary research include cost benefit as it is available at little or no
cost. It clearly indicates whether we should go for the expensive primary research or not.
Note: Advantages and disadvantages are on page 144, table 8.1
Benefits of Marketing Research
 Reducing risk
 Providing link with outside the business.
 Public Relations.
Important issues for market researchers
 Who to ask – (Here we have to select sample for survey)
What to ask – (Construction of a questionnaire)
How to ask - either questionnaires will send to fill by post or filled on spot etc.
How accurate is this survey
Important terms
 Population - The entire group of people or things of interest that the researcher wishes to
investigate. e.g. If we want to study the spending habits of Mobilink workers then the
whole workers in Mobilink should be the targeted population.
 Element - An element is a single member of the targeted population. e.g. 1 worker of
Mobilink is an element.
 Population Frame - Population Frame is a list of all elements in the population from
which the sample is to be drawn.
 Sample - Sample is a subset of the population. It comprises some members selected from
the population. The sample is basically representing the whole population. It is very
important that while selecting the sample, researcher should be careful.
 Subject - Subject is a single member of the sample
 Sampling - It is the process of selecting a sufficient number of elements from the
population for study and research as a subject.
Sampling Methods
 Random Sampling - Having equal chance of being selected as a sample.
 Stratified Sampling - When we need to study/research a particular sub group from the
population, then we make different segments.
 Cluster Sampling - When we need to study a particular area, the area will be known as a
Cluster.
 Quota Sampling - When we take predetermined proportion from different segments of
population. For example we will take 30% sample out of 100% from 20-30 year age
group.20% from 30-40 year age group and 50% from 40-50 year age group.
Questionnaire Design
 It is a document containing a series of questions designed to discover the
information required to meet research objectives.
 Types of Questions
 Closed Questions - Allowing a limited range to response. e.g. selecting one out of every
four responses etc.
 Open Questions - Allowing an open range to respond. e.g. suggesting how the product
could be improved.
Accuracy of Data
There are some reasons why we can’t find reliable data
 Sampling bias – When the wrong sample is selected.
 Questionnaire bias – When the questions are not properly designed.
 Other forms of bias – When the respondent doesn’t answer properly
Presentation of Data