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