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 the launch period.
Monitoring of sales and consumer response
Types of Market 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)
Up to date
Confidential and unique
Secondary research should be undertaken first because it is cheap, fast, comes with plenty of sources and offers a wide range of information.
Cheaper and faster
Range of sources
Insight to trends
May become obsolete or out of date quickly
Maybe in an inappropriate format
Widely available to competitors
Qualitative vs. Quantitative Research
Used to get feedback and 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 a few are interviewed.
It 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 the interviewer.
Used to get statistical data from the 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.
Consumer surveys ask consumers for their opinions and preferences.
It can obtain both qualitative and quantitative information
What do you look for...
4 points of 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
The sample should be significant and valid to avoid sample error
Random selection, based on the principle that everyone is given an equal chance.
Segmentation with the number of respondents per group based on proportion to the population.
Majority of the population will comprise of the majority of the survey.
Used for localized surveys (e.g. towns, region, etc.).
Sample-based on a geographic location/ concentration of the target.
A certain number or quota is set, made up of samples from each segment or random.
Respondents are networked from a respondent’s referral.
Respondents are chosen based on accessibility and proximity.