How to Conduct Market Research


How to Conduct Market Research

Definition:

Marketing research is the systematic and objective identification, collection, analysis, and dissemination of information for the purpose of assisting management in decision making related to the identification and solution of problems and opportunities in marketing.

Research carried out in order to understand customer/consumer interest in a particular product or service.

Marketing research, or market research, is a form of business research and is generally divided into two categories:

• consumer market research; Consumer marketing research studies the buying habits of individual people

• Business-to-business (B2B) market research, which was previously known as industrial marketing research; it investigates the markets for products sold by one business to another.

Importance

Marketing research provides information regarding consumer needs to the marketing managers, so that they can be able to implement marketing strategies and programs intended to satisfy those needs.

Marketing research enables a firm to spot and identify the size of potential markets that are abroad. This therefore enables the firm to export the right amount of its products: not so much and at the same time not so little. This increases the chances of a firm succeeding in international markets.

With respect to existing products in the market, marketing research enables a company to know if it has been able to satisfy customer needs and whether any changes regarding the product are necessary.

Steps in Market research

1. Defining market problems

2. Set objectives, budget and timetables

3. Select research types, methods and techniques

4. Design research instruments

5. Collect data

6. Organize and analyze data

7. Presentation and reporting of findings

1. Defining market problems:

The first step is being able to identify and define the problems and opportunities ahead. The issue will likely be recognized by one or more management Examples of problems might be poor company image, lack of awareness of the company and its products or services or even a bad reputation of the company.

2. Set objectives, budget and timetables:

This involves being able to come up with a defined set of objectives that have been based on facts collected in the previous step. It also entails being able to determine the amount of resources that would be needed for the market research and a comprehensive, reasonable time frame for the whole research process.

3. Select research types, methods and techniques:

This step Involves choosing between two types of research schemes i.e. primary research or secondary research. Primary research is based on information that had not existed before i.e. original information, whereas secondary research involves the usage of already existing information. Secondary research is faster and less expensive.

These methods and techniques may include

Based on questioning:

▪ Qualitative marketing research - generally used for exploratory purposes - small number of respondents - not standardized to the whole population - statistical significance and confidence not calculated - examples include focus groups, in-depth interviews, and projective techniques

▪ Quantitative marketing research - generally used to draw conclusions - tests a specific hypothesis - uses random sampling techniques so as to infer from the sample to the population - involves a large number of respondents - examples include surveys and questionnaires. Techniques include choice modeling, maximum difference preference scaling, and covariance analysis.

Based on observations:

▪ Ethnographic studies -, by nature qualitative, the researcher observes social phenomena in their natural setting - observations can occur cross-sectionally (observations made at one time) or longitudinally (observations occur over several time-periods) - examples include product-use analysis and computer cookie traces. See also Ethnography and Observational techniques.

▪ Experimental techniques , by nature quantitative, the researcher creates a quasi-artificial environment to try to control spurious factors, then manipulates at least one of the variables - examples include purchase laboratories and test markets

Marketing research techniques come in many forms, including:

▪ Ad Tracking ' periodic or continuous in-market research to monitor a brand’s performance using measures such as brand awareness, brand preference, and product usage. (Young, 2005)

▪ Advertising Research ' used to predict copy testing or track the efficacy of advertisements for any medium, measured by the ad’s ability to get attention, communicate the message, build the brand’s image, and motivate the consumer to purchase the product or service. (Young, 2005)

▪ Brand equity research - how favorably do consumers view the brand?

▪ Brand name testing - what do consumers feel about the names of the products?

▪ Commercial eye tracking research - examine advertisements, package designs, websites, etc by analyzing visual behavior of the consumer

▪ Concept testing - to test the acceptance of a concept by target consumers

▪ Coolhunting - to make observations and predictions in changes of new or existing cultural trends in areas such as fashion, music, films, television, youth culture and lifestyle

▪ Buyer decision processes research - to determine what motivates people to buy and what decision-making process they use

▪ Copy testing ' predicts in-market performance of an ad before it airs by analyzing audience levels of attention, brand linkage, motivation, entertainment, and communication, as well as breaking down the ad’s flow of attention and flow of emotion. (Young, p 213)

▪ Customer satisfaction research - quantitative or qualitative studies that yields an understanding of a customer's of satisfaction with a product or service.

▪ Demand estimation - to determine the approximate level of demand for the product

▪ Distribution channel audits - to assess distributors’ and retailers’ attitudes toward a product, brand, or company

▪ Internet strategic intelligence - searching for customer opinions in the Internet: chats, forums, web pages, blogs... where people express freely about their experiences with products, becoming strong "opinion formers"

▪ Marketing effectiveness and analytics - Building models and measuring results to determine the effectiveness of individual marketing activities.

▪ Mystery Consumer or Mystery shopping - An employee or representative of the market research firm anonymously contacts a salesperson and indicates he or she is shopping for a product. The shopper then records the entire experience. This method is often used for quality control or for researching competitors' products.

▪ Positioning research - how does the target market see the brand relative to competitors? - What does the brand stand for?

▪ Price elasticity testing - to determine how sensitive customers are to price changes

▪ Sales forecasting - to determine the expected level of sales given the level of demand. With respect to other factors like Advertising expenditure, sales promotion etc.

▪ Segmentation research - to determine the demographic, psychographic, and behavioural characteristics of potential buyers

▪ Online panel - a group of individual who accepted to respond to marketing research online

▪ Store audit - to measure the sales of a product or product line at a statistically selected store sample in order to determine market share, or to determine whether a retail store provides adequate service

▪ Test marketing - a small-scale product launch used to determine the likely acceptance of the product when it is introduced into a wider market

▪ Viral Marketing Research - refers to marketing research designed to estimate the probability that specific communications will be transmitted throughout an individual’s Social Network. Estimates of Social Networking Potential (SNP) are combined with estimates of selling effectiveness to estimate ROI on specific combinations of messages and media.

4. Design research instruments:

A basic type of a research instrument is a questionnaire. A good market research questionnaire should be kept simple, beginning with general questions and moving towards more specific questions.

5. Collect data:

Collection of data is an important activity and should be done by experienced researchers. In most cases untrained researchers may be biased towards interviewers. Common data collection methods include computer assisted telephone interviewing, mail surveys, internet surveys and the like.

6. Organize and analyze data:

Analysis of data includes the editing, coding and tabulation of the responses. This is normally done with the help of office suite tools or specific research analysis programs.

7. Presentation and reporting if findings:

Once the information has been analyzed, it should be presented in an organized manner to the business decision makers especially in the sales and marketing departments.

All of these forms of marketing research can be classified as either problem-identification research or as problem-solving research.

A company collects primary research by gathering original data. Secondary research is conducted on data published previously and usually by someone else. Secondary research costs far less than primary research, but seldom comes in a form that exactly meets the needs of the researcher.

A similar distinction exists between exploratory research and conclusive research. Exploratory research provides insights into and comprehension of an issue or situation. It should draw definitive conclusions only with extreme caution. Conclusive research draws conclusions: the results of the study can be generalized to the whole population.

Exploratory research is conducted to explore a problem to get some basic idea about the solution at the preliminary stages of research. It may serve as the input to conclusive research. Exploratory research information is collected by focus group interviews, reviewing literature or books, discussing with experts, etc. This is unstructured and qualitative in nature. If a secondary source of data is unable to serve the purpose, a convenience sample of small size can be collected. Conclusive research is conducted to draw some conclusion about the problem. It is essentially, structured and quantitative research, and the output of this research is the input to management information systems (MIS).

REFERENCES:

(2008). Retrieved 2008, from Wikipedia: www.wikipedia.com/market research

Etzel/Walker/stanton. (2007). Marketing (14th ed.). New York: Mcgraw-Hill Irwin.

Kress, G. (1988). Mraketing research . New Jersey: Preita hall.

McNeil, R. (1998). Business to business market research. London: kogan page ltd.

Tags
Related Essays Business