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Introduction to
Market Research

Marketing Research Defined

The systematic and objective
process of generating
information for aid in making
marketing decisions.

The Marketing Research Process

Define the Problem
Develop an Approach to the Problem
Type of Study? Exploratory, Descriptive, Causal?
Mgmt & Research Questions, Hypotheses

Formulate a Research Design

Methodology
Questionnaire Design

Fieldwork
Prepare & Analyze the Data
Prepare & Present the Report

Marketing Research Types

Basic research
Applied research

Basic Research
Attempts to expand the limits
of knowledge
Not directly involved in the
solution to a pragmatic
problem

Applied Research
Conducted when a decision must be
made about a specific real-life problem

Using Marketing Research

We can use Marketing Research to:
Identify & Evaluate Opportunities
Analyze Market Segments
Select Target Markets
Plan & Implement Marketing Mixes
Analyze Marketing Performance
Performance Monitoring Research

Determining When to Conduct

Marketing Research
Time Constraints

Availability of Data

Is sufficient
time
available?

Information
already on
hand
inadequate?

No

Yes

No

Nature of the Decision

Yes

Is the
decision of
strategic
or tactical
importance?

Yes

No

Do Not Conduct Marketing Research

Benefits vs. Costs

Does the
information Yes
value
exceed the
research cost?
No

Conduct
Marketing
Research

ALWAYS Remember
Marketing Research is a tool.
It assists marketing managers in
their decision making.

IT IS NOT A
REPLACEMENT FOR
MANAGERIAL
JUDGEMENT!!

Competitive Analysis

Industry and Competitive Analysis

1. What are the boundaries of the
industry?
Questions
involved

2. What is the structure of the industry?

3. Which firms are our competitors?
4. What are the major determinants of
competition?

Why a Definition of Industry

Boundaries is Important?
Helps executives determine arena in
which their firm competes
Focuses attention on firms competitors
Helps executives determine key factors
for success
Gives executives another basis on
which to evaluate their firms goals

Sources of Difficulty in Defining

Industry Boundaries
Evolution of industries
over time creates new
opportunities and threats

Industry evolution creates

industries within
industries

Industries are becoming

global in scope

Issues in Defining an Industry

What part of the industry corresponds to our firms
goals?
What are the key ingredients of success in that part of
the industry?
Does our firm have the skills needed to compete in that
part of the industry?
Will the skills enable us to seize emerging
opportunities and deal with future threats?
Is our definition of the industry flexible enough to allow
necessary adjustments to our business concept as the
industry grows?

Characteristics of Industry Structure

Structural attributes Enduring characteristics
giving an industry its distinctive character
Variations among industries involves examining
Concentration Extent to which industry sales are
dominated by only a few firms
Economies of Scale Savings firms within an industry
achieve due to increased volume
Product Differentiation Extent to which customers
perceive products of firms in industry as different
Barriers to Entry Obstacles a firm must overcome to
enter an industry

Variables in Identifying Competitors

How do other firms define the scope of their
market?
The more similar the definitions of firms, the more likely the
firms will view each other as competitors

How similar are the benefits the customers derive

from the products and services other firms offer?
The more similar the benefits, the higher the level of
substitutability between them

How committed are other firms to the industry?

To size up commitment of potential competitors to industry,
reliable intelligence data are needed concerning potential
resource commitments

Common Mistakes in Identifying

Competitors
Overemphasizing current and known
competitors while ignoring potential entrants
Overemphasizing large competitors while
ignoring small ones
Overlooking potential international competitors
Assuming competitors will continue to behave
in same way

Forces Driving Industry Competition

New
Entrants
Threat of new entrants
Bargaining power
of suppliers

Industry Competitors

Suppliers
Suppliers

Bargaining power
of buyers

Buyers
Rivalry Among
Existing Firms
Threat of substitute
products or services

Substitutes
Substitutes

Conducting an
Industry Analysis

Seven Questions for Industry

Analysis
1. What are the industry dominant economic traits?
2. What competitive forces are at work in the industry and how
strong are they?
3. What are the forces of change in the industry and what impact
will they have?
4. Which companies are in the strongest/weakest competitive
position?
5. Whos likely to make what competitive moves next?
6. What key factors will determine success or failure?
7. How attractive is the industry in terms of its prospects for
above average profitability?

Q1. What are the industry

dominant economic traits?

Market size (Small markets dont attract big fish)

Scope of competitive rivalry
Market/industry growth rate (life cycle)
Fast growth breeds new entry; slowdowns lead to increased
competition.

Number of rivals and their size

Number of buyers and their size
Level of backward and forward integration
Technological change (rate and scope)
Level of differentiation between firms products
Opportunities for economies of scale
Ease of entry and exit
Capital requirements

Q2. What competitive forces are at work

in the industry and how strong are they?
Porters Five Forces. Forces influencing
industry and competitive advantage:

Competitive Intensity (Rivalry Among Sellers)

Barriers to Entry (Potential for New Entrants)
Bargaining Power of Suppliers
Bargaining Power of Customers
Threat of Substitute Products

pg. 33 in Applegate

Q3. What are the forces of change in the

industry and what impact will they have?
The most dominant
forces the cause the
industry to change are
called driving forces
Task 1 - identify the
driving forces
Task 2 - assessing
their impact on the
industry (few are
important, generally)

Common Driving Forces

Changes in long term industry growth

rate
Changes in who buy the products and
for what reason
Product innovation
Technological change
Marketing innovation
Increasing globalization
Regulatory changes
Changing societal concerns, attitudes
and lifestyles

Environmental scanning

Q4. Which companies are in the

strongest/weakest competitive position?

Competitive
characteristics

Using the strategic group mapping: two dimensional representation

according to the competitive characteristics of the competitors in the
industry
Axes should not be correlated
Size of circles proportional to combined sales
The closer the circles, the stronger the rivalry

Product line/merchandise mix

Q5. Whos likely to make what

competitive moves next?
In order to
outmaneuver your
competition you have
to evaluate the
competitors future
moves.

Identify competitors
strategies
Evaluate who are the
major players-- now
Who will be the major
players
Evaluate what the
major players are
going to do

Q6. What key factors will determine

success or failure?
Key success factors (KSF) are crucial
elements that lead to success.
What are they now? What will they be?
In beer production KSF can be brewing
skills
In retail apparel KSF can be low cost,
superior service, superior design
In your industry, KSF=????

Q7. How attractive is the industry in terms of its

prospects for above average profitability?

Growth potential
Driving forces
Entry/exit
Stability of demand
Competitive forces
Risk and uncertainty
Competition and its
impact on the industrys
future

Market Reports

Effective Writing
Clear, concise, direct
Thoughts are complete
Attention given to details such as
grammar, spelling
Flow of thoughts

Quantitative Research Reporting

Recall, the opening sections of the
proposal should be the foundation of the
section introduction
Background
Research Problem (w/ research concepts)
Methodology & Procedure
Sample frame
Research Instruments

Reporting The Findings

Frame a percentages and proportions in
absolute numerical terms
Sixty percent (n= 18) of the sample either
strongly agreed or agreed with the
statement that the holiday season tends to
cause a great deal of anxiety.

The Use of Data In Reports

Tables should support
discussion points
Third quarter performance
peaked dramatically in
the East relative to the
West and North. Overall
brand performance
remained stagnant from
region to region in the
first, second, and fourth
quarters.

Discussion & Interpretation

Revisit the Research Problem Statement
Organize discussion around concepts of
interest, research concepts

Dont just spout numbers; tell the story

behind the data
Highlight, topline, and synthesize information

The Conclusion &

Recommendations
Make proactive recommendations for
marketing the product based on the
evidence uncovered in research
Look for opportunities to appeal to the
target market
Are there benefits that should be addressed?
Are there attributes that have unique appeal?

Appendix References
Cite Exhibit tables in a separate appendix
section
Each table labeled with a numerical identifier
Columns are clearly labeled
Reminder: SPSS printouts should be not be bound
with the report

The Use of Data In Reports

Bar charts are appropriate for category
comparisons
Pie charts visually represent portions of
the whole

Company Profile

Business Information
Business Name: XYZ Corporation
Business Address: 153 ABC Street,
Miami, USA
Email: Info@xyz.com
Tel: 666-777-8888

General Business Activities

XYZ Corporation has been established as
a Web development company in North
America. Our traditional business model is
based on the accomplishment of projects
of web designing. The revenues of our
company are expected to be nearly
US$50,000 per month.

Company Strategy
Purpose
Vision
Mission statement
Core values
Goals

Scope of Work
XYZ Corporation conducts Web designing
as well as web development. The
company undertakes all duties for
designing an eye catching website and
conducts all the security checks for
payment gateway integrations.

Financial Considerations
The company expects to reach the desired
profits in the first year and does not
anticipate serious cash flow problems. We
have current borrowing from the Bank of
America to be paid off in 2 years. Most of
the companys liabilities come from
management investment.

Expected Activities of General

Bank Account
Initial Deposit of US$1000 by Bank of
Toronto Official check was made. Then
wire funds of nearly US$300,000 from
securities account were made. To prove
the origin of funds, account documentation
will be provided. Required Banking
Services include savings account,
checking account, online banking, and
secured credit card.

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