MARKET RESEARCH

ROLE AND IMPORTANCE OF

MARKET RESEARCH

Process of collecting and analyzing data for a

good/service in a market
Analyzing consumer reaction to eg. Price
changes, forms of promotion, packaging
Impacts marketing decisions
 IMPORTANCE OF A RESEARCH
PLAN

Reduce risk of new product launches

Predict future changes
Explain patterns in sales of existing products
and market trends
Assess most popular designs, flavors, styles,
promotions and packages
 STAGES OF MARKET RESEARCH

Management problem identification

Research objectives
Sources of data (primary, secondary)
Sampling (probability, non probability)
Research techniques (focus groups, surveys,
in depth interviews, observation)
Analysis and presentation of results
 MANAGEMENT PROBLEM
IDENTIFICATION
Most important step in process
Clear idea of purpose of research of problem
to be investigated

What is the size of the potential market for our

product?
Why are sales falling?
How can we challenge our competitors?
 MARKET RESEARCH OBJECTIVES

Must tie in with original problem

Set to collect all information needed to solve
problem

How many people are willing to buy our

product?
If we advertise via newspaper, what will be the
impact on sales and market share?
 SOURCES OF DATA
Primary: original data gathered from people in target
market
Secondary: use and analysis of data that already exist

Secondary data may be more beneficial and should be

undertaken first!

Advantages: cheap, quick, identifies nature of market/helps

plan for primary research, comparison of data from different
sources
Disadvantages: out of date, unsuitable/irrelevant, inaccurate,
not available for new product developments
 SECONDARY SOURCES OF DATA

Government publications: social indicators report,

economic trends, annual abstract of statistics, family
expenditure survey
Local libraries and local government offices
Trade organizations: society of motor traders,
furniture retailers assoc, engineering employers
federation
Market intelligence reports: mintel, keynotes,
business monitor intl, euromonitor
Newspapers and specialist publications: marketing
journals, financial times
Internal company records
 SAMPLING

Probability and non probability sampling

Sample size: larger samples give better
results
Cost and time to consider
 PROBABILITY VS NON
PROBABILITY SAMPLING
PROBABILITY SAMPLING NON PROBABILITY SAMPLING
Simple random sampling: each Convenience sampling: sample chosen
member of population has an equal based on ease of access
chance of being included in sample

Systematic sampling: sample is made Snowball sampling: refer from friend to

up of every nth item from population friend

Stratified sampling: sample is taken Judgemental sampling: sample made

from different groups/layers/stratas of up of suitable persons (timely)
population (different opinions)
Ad hoc quotas: any person is chosen to
make up pre-set quota
 RESEARCH TECHNIQUES

Quantitative: number of consumers who may

buy a product and in what quantities

Qualitative: discovering motivational factors

behind consumer buying habits
 QUANTITATIVE RESEARCH

OBSERVATION: how consumers behave

TEST MARKETING: testing limited quantity

of new product on the market

CONSUMER SURVEYS: directly asking

consumers about preferences or opinions
 Who to ask? : sample must represent
population
What to ask? : clear, logical questions
How to ask? : self completed questionnaire or
direct interview
How accurate is it? : sampling bias,
questionnaire bias, untruthfulness
 QUALITATIVE RESEARCH

FOCUS GROUPS
 PRESENTATION OF RESULTS

Bar charts
Histograms
Line graphs
Pie charts
 LIMITATION OF MARKET
RESEARCH
90% of products fail after they have been launched!
PROBLEMS WITH PRIMARY DATA
Reliability of data
Human behavior: untruthful, unpredictable
Sampling and bias: sample may not represent
population (sampling discrepancy)
Badly constructed questionnaires, leading questions

PROBLEMS WITH SECONDARY DATA

out of date, unsuitable/irrelevant, inaccurate, not
available for new product developments