4.4.

Market Research

● Market Research
● Concerned with finding out whether consumers will buy a product or service, and is
done by analyzing consumer reactions
● Reasons for market research
● Reduce the risks associated with new product launches
● Predict future demand changes
● Explain patterns in sales of existing products and market trends
● Assess the most favored designs, flavors, styles, promotions for a product
● Market research process:
● Identify consumer needs and tastes
● Primary and secondary research into consumer needs and competitors
● Product idea and packaging designs
● Testing product and packaging with consumer groups
● Brand positioning and advertising testing
● Pre-testing of the product image and advertisement
● Product launch and after launch period
● Monitoring of sales and consumer response
● Types of market research
● Primary research
● Gathering data or feedback first-hand, through
● Questionnaires (short and focused, allows open-ended questions)
● Observation (foot traffic, queuing time)
● Sampling (new product or campaigns)
● Focus groups (asking groups of people)
● Interviews
● Advantages
● Up to date
● More relevant/direct
● Confidential and unique
● Objective
● Disadvantages
● Time consuming
● Costly
● Questionable validity
● Secondary research
● Collecting second-hand information from other sources like
● Market analyses (shows relevant market data)
● Government publications
● Academic journals
● Media articles
● Secondary research should be undertaken first because it is cheap, fast, comes with
plenty of sources and offers a wide range of information
● Advantages
 ● Cheaper and faster
● Range of sources
● Insight to trends
● Disadvantages
● May become obsolete or out of date quickly
● May be in an inappropriate format
● Partial information
● Widely available to competitors
● Qualitative vs. quantitative research
● Qualitative research
● Used to get feedback to understand motivation , behavior, perception through
focus groups, expert panels, in-depth interviews of credible individuals
● Qualitative explores attitudes and opinions and can be very deeply relevant even if
only few are interviewed
● Can only give an indication and does not have statistical relevance.
● Relatively inexpensive but harder to analyze, more time consuming, and results are
subject to bias or skill of interviewer
● Quantitative research
● Used to get statistical data from total (for figures) or representative sample (for
opinion, decisions), using interviews that have closed questions or use ranking or
sliding scales
● Quantitative can only ask factual answers but may not reveal reasons why
● A larger representative sample is needed and must be designed well so it ends up
more costly to undertake
● Sampling
● Consumer surveys ask consumers for their opinions and preferences
● It can obtain both qualitative and quantitative information
● How many…..
● What do you look for….
● 4 points for consideration when making surveys
● What to ask?
● Questions are unbiased and unambiguous
● How to ask?
● Should the survey be self-completed or filled in by an interviewer?
● How accurate is it?
● Accurate and valid
● Who to ask?
● It is impossible to ask everybody even if it is just potential members of a target
market
● A sample reflects the characteristics of the survey population
● Sample should be significant and valid to avoid sample error
● Sampling methods
● Random sampling
● Random selection, based on the principle that everyone is given equal chance
● Stratified sampling
 ● Segmentation with number of respondents per group based on proportion to
the population
● Majority of the population will compose of majority of the survey
● Cluster sampling
● Used for localized surveys (e.g. towns, region, etc.)
● Sample based on a geographic location/ concentration of the target
● Quota sampling
● A certain number or quota is set, made up of samples from each segment or
random
● Snowball sampling
● Respondents are networked from a respondent’s referral
● Convenience sampling
● Respondents are chosen based on accessibility and proximity