Market Research Studies- A study presentation

Submitted By – Group 4

Diwyesh Anjan (1211094)Priyanka Singh (1211126)Amit Kumar Pandit (1211167)Anubhav Tiwary(1211171)Pushpendu Kumar (1211285)Abhash Chauhan (1211321)

Market Research – An overview

Definition : Systematic gathering, recording, and analysis of qualitative and quantitative data about issues relating to marketing products and services.

Defining the problem and

objectives

Developing the research plan

Collecting the information

Analyzing the information

Presenting the findings

Distinguish between the research type needed e.g.- exploratory- descriptive- causal

Decide on - budget- data sources- research approaches- research instruments- sampling plan- contact methods

Information is collected according to the plan (N.B. it is often done by external firms)

Statistical manipulation of the data collected (e.g. regression) or subjective analysis of focus groups

Overall conclusions to be presented rather than overwhelming statistical methodologies

Market Research Process

Market Research can show the likelihood of adoption of new

products

Market Research can show un-met needs and provide an understanding

of unfamiliar market

Market Research can measure customer satisfaction to find out how

to maintain a competitive edge

Market research can find new territories for products or services

New Products

Existing Products

New MarketsExisting Markets

A strategic framework for market research in business expansion

Role of Market Research in Product Life Cycle

Market assessment studies

Needs analysis

Pricing research

Competitor research

Channel Analysis Brand positioningMarket assessment

studiesPromotional

researchCustomer

satisfactionUse & attitude

surveys

Needs based segmentation

Acquisition & diversification

strategies

Primary research plays an important role throughout the lifecycle

Secondary research plays an important role at the beginning of the lifecycle

Type of Market Research

Source

Primary Secondary

Objective

Exploratory Descriptive Casual

Collection of data

specifically for the

problem or project in

hand

Based on data

previously collected for

purposes other than the

research in hand (e.g.

articles, government

stats etc.

Preliminary data

needed to develop

an idea further.

E.g. outline

concepts, gather

insights, formulate

hypothesis

Describe an

element of an

ideas precisely e.g.

who is the target

market, how large

is it, how will it

develop

Test a cause and

effect relationship

e.g. price

elasticity. Done

through

experiment

Type of Market Research Contd..

Methodology

Qualitative Quantitative

Type of Question Probing Simple

Sample Size Small Large

Information /Respondent

High Low

Questioner’s Skill High Low

Analyst’s Skill High High

Type of Analysis Subjective, Interpretative Statistical

Ability to replicate Low High

Areas probed Attitudes, Feelings, Motivation Choices, Frequency, Demographics

Large-scale surveys or experiment Multi-phase or multi-component research

Small scale projects Focus groups and depth interview

Amount of qualitative evidence

Amount of quantitative evidence

High

Low

HighLowDecision Framework

Market Demand Research

Market Share Research

Image Research

Market Characteristics Research

Sales Analysis Research

Forecasting Research

Business Trends Research

Applying Market Research…..

Market Research

Problem Identification Research Problem Solving Research

Segmenting Research

Product Research

Pricing Research

Promotion Research

Distribution Research

Strategic Decision

TimeShort Run

Medium Run

Long Run

Space

Product Sales

Customer

Territory

Region

Country

World

Item

Line Sales

Company

Industry

Demand Estimation

Demand Estimation Market Research

Deciding the attractiveness of market to enter

Decision for production and supply level of productsI. If supply is more than demand it will lead to reduced prices and profit marginII. If supply is less than demand it will account for lost sales

Decision for target segment and continuity of a product

Time Space Product

Demand forecast for short medium and long term

Demand for each level of geography

Product wise demand for company and industry

It involves identifying• Market• Potential market• Available market• Target market • Penetrated market

Demand research also gives

answer for• Market share• Market penetration • Share penetration

Demand estimation consists of following three dimensions

Methodology Advantages Challenges

Consumer Survey

Conducted at shopping centers Conducted by trained interviewers Sample Questionnaire: How much

your monthly consumption would change if • price of rose by 10%• Your income increase by 20%• Advertising expenditure doubles• Competitor reduced price by 2%

Only way to obtain information about possible consumer response

Especially useful if a firm is thinking of introducing a new product or changing the quality of an existing one

The only way that the firm can test consumer reaction is to directly ask them, since no other data are available

Some time consumers are unable or unwilling to provide accurate information

In this case manager is not able to estimate the market demand

Consumer survey needs to be replaced by observational research

It refers to gathering of information on consumer preferences by watching them buying and using goods

Consumer Clinics

This is laboratory experiments Participants are given a sum of

money to spend it in simulated stores to see the reaction.

Stores differ in terms of • Price of product • Packaging of product• Product displays etc.

Participants have the incentive to purchase the commodities they want the most

This method is more realistic than consumer survey, because in this we are observing the actual market behavior

Participants know that they are in artificial situation and being observed

So, they are not likely to act normally The sample of participants must

necessarily small High cost of running the experiment Inference or results from small sample

are questionable

MarketExperiment

Conducted in the actual market place In several markets following

parameters are changed• Commodity price• Packaging• Amount of promotion

Firm can also determine the effect of age ,sex, education, income etc

Validity of the results can be established by conducting it on a large scale

Consumers act /behavior is normal as consumers are not aware that they are part of an experiment

High cost affect the scale of experiment Experiment is conducted for short period Inference or results about entire market

over extended period are questionable Irregular factors such as strike or bad

weather seriously effect the result Competitors could try to sabotage the

experiment by changing prices

3 Technique of estimating demand

Demand Estimation Market Research Contd..

Positioning ResearchObjectives of Research Importance and need of Research

Identification and analysis of competitive products

in the market

Identification of determinant attributes and

measuring their significance to the user

Identification of the products and other rival

products current position in the market

Creation of a competitive positioning map

Category membership should be determined first,

i.e. other products that compete in the same market

Determinant attributes define the products

benefits ,value to the user, and associations with the

product consuming process and consumer

consumers evaluate your products and the

competing products according the most significant

determinant attributes

What are our relative (to our competitors) strengths and weaknesses?•How do consumers see our product? What do they think about us?•What is our image?•What is our competitive advantage? (how are we better than or different from the competition)•Who are our customers?•Are our selling points  being relayed to the right mix of consumers?•Can we target our product to other markets by emphasizing other benefits?

Positioning Research Answers the following Question

Positioning Research- Consumer Decision Model

Product attributes define consumer perceptions

• Consumers abstract several pieces of information on

product characteristics into perceptual attributes.

• Based on these perceptions, consumers develop

preferences and make purchase choices subject to

situational constraints.

• Various analytical methods such as multiple

determinant analysis, factor analysis, MDS and

conjoint analysis have been used to model these

relationships

• The model assumes that the heterogeneity in

product perceptions and preferences can be linked

to differences in individual characteristics arid

ground variables. This assumption facilitates

identification of homogenous consumer segments

Consumer Decision Model

Product Characteristics

Product Attributes

PreferencesChoice

Individual characteristics: influence product

attributes and preferences

Situational factors: influence preferences and

choice

Price: influence Product Attributes and choice

Positioning Research Methodology and Tools

• Positioning Base Research• Evaluate positioning assumptions and prior market structure studies, market segmentation information, branding research, client and

competitive advertising, and competitive brand name architecture. build hypotheses regarding the strength of comparative brands, their brand equity, acceleration of brand power and how consumers view the marketplace

• far reaching interviews with client management, field sales, product development and customer service staff. • Positioning Qualitative Research: • A non-directive design and style , combined with projective interviewing techniques to uncover buyer perceptions of the brand choices, and

their differentiation qualities. • The focus here is to uncover the language about the choice dimensions on which buying decisions are made.  Positioning relies upon a

solid segmentation and market definition analysis• Continue the qualitative exploration with a larger sample using an online qualitative time extended method which combines both qualitative

and quantitative assessments.  • Positioning Quantitative Market Survey • Test hypotheses developed from the Positioning Qualitative Surveys related to segmentation, strength of segment dimensions, and

category perceptions and buyer attitudes. • Screen positioning concepts using concept statements and appeal ratings to assess qualities of positioning distance, or differentiation power

Steps in the positioning exercise: Tools/techniques usedIdentification and analysis of competitive products in the market

quantitative approach- consumer survey

Identification of determinant attributes and measuring their significance to the user

discussion group- association of words, completion of the sentence, completion of a short story, drawing test, subject perception test, role playing test.

identification of the products and other rival products current position in the market

target segment survey -likert scale semantic differential scale, staple scale, attribute assessment scale, fixed sum scale

Positioning Research studies

• Consumer survey – The consumer survey provides information on: (1) the level of brand awareness –; (2) brand purchase intentions – i (3) shopping habits

• Consumer panel – This study provides the total unit sales for each segment; the relative size of each segment; and the market shares, based on units sold, for each brand in each segment

• Semantic scales – Semantic scales describe how consumers perceive the marketed brands. Respondents are asked to rate each brand along each physical characteristic on a scale from 1 to 7 according to the way they perceive the brand. The study also provides the ideal ratings of each segment for each physical characteristic.  Finally, it provides the importance of each characteristic, in other words, the weight each characteristic holds in the buying decision.

• Multidimensional scaling of brand similarities and preferences  –It provides a map showing the similarities and differences between marketed brands on three different dimensions. Two brands close to one another on the map are perceived as being similar

• Conjoint analysis – This study is rather complex and expensive and is therefore not always made available to participants. It provides the utilities – a real number between from 0 to 1 – of various levels for each of the four most important physical characteristics and for each segment. High utilities, for instance close to 1, demonstrate high consumer preferences for the corresponding physical levels

Product introduction market research

1. Identify and define research Objective: To develop and create new product To extend the current product offerings

Objective selection:• Idea generation:

a) Consumer research: Identify customer needs and wants Inviting suggestion from consumers and employees

b) Market research: Market growth and size Level of competition Market trends

c) Competitors research: No. of competitors Competitors product offerings

• Idea screening:a) Analyses of gathered informationb) Business analysis

Cost of the product (raw material cost, production cost and other OH costs) Expected Profitability

Product introduction market research contd..

2. Concept testing:– Testing on the sample of targeted customer– Analyze whether customer understand product idea– customer’s willingness of acceptance and reaction for new product

3. Product development :– Take necessary step to produce and distribute (includes production department, marketing department,

finance, advertising department )– Produce small scale for test marketing based on the inputs

4. Test marketing:– Introduce product on a very small scale among targeted sample– Analyses of consumer feedback

a) if feedback is positive than introduce the productb) if not then finding out the reasons and reintroduce after making necessary changesc) still the reactions are negative then drop the plan

5. Commercialization :– Introduce the product on large scale– Invest in advertising and other tools of marketing

6. Review market performance:– Profit– sales– Consumer satisfaction– Post sale service

Market research methodology for product introduction

1. Staggered comparison test:In the staggered comparison test, the respondent is first given one product and is asked to give his opinion about the same. Later on, he is asked to try a second product and give his opinion on that product. this method use for to get consumer response accurately.

2. Paired comparison test:Consumer offered two identical product but differs slightly. It helps in identifying the consumer response

3. Non-directive method:Information is collected from the respondents by providing them product without any prior information

Conclusion: Product market research helps in reducing the risks and maximizes return on investment for the company.

Pricing Market Research

When to use the pricing research:• Introducing a new product to the market• For an existing product

– What will be the effect of price change• If price is increase/decrease, what will be the change in market share of the product• To whom the firm will lose the market share

– Gauge the quality of the product• High price for high quality products

Direct methods Based on Willingness to Pay estimation Consumers are directly asked about their willingness to pay for a particular product through an open ended

question, e.g. What is the highest price you would be willing to pay for product X? Advantages:

Easy to collect the data Little knowledge required from respondents Suitable for new products

Disadvantages: Respondents generally overstate their price sensitivity Not very useful when the new product concept is unusual

Types of Pricing Market Research

Pricing Market Research Contd..

Indirect methods

More realistic & accurate than Direct methods

Gabor-Granger approach: It determine the highest

price a respondent is willing to pay for a given product

Variation of the GG model is to simply ask respondents

the highest price they would agree to pay and the lowest

price they would find acceptable before suspecting a

poor quality product

Advantages:

Simple and easy to complete the data collection and

analysis

Useful for pricing situations that are later in the

product development cycle and the customers have a

clear idea about the range of prices to use

Disadvantages:

Bias towards overstating prices

Lack of context for customers

Would you buy this product at Rs. 100?

At Rs. 90 At Rs. 110

Done: Won’t buy at lower price

At Rs. 95 ? At Rs. 105 ? Done: Will buy highest at Rs. 110

No Yes

NoNo

Yes Yes

Market Research for Pricing Strategy Van Westedorp (VW) Price Sensitivity Models

Extension of Gabor-Granger approach. Also known as “Psychological price” Modeling Focused on finding an acceptable price as a quality indicator; takes into account concerns about low

prices possibly indicating low quality as well as high pricing Process:

• Four indirect questions to calibrate price:– Cheap: at what price does this product start to seem cheap to you – Expensive: at what price does this product start to seem expensive to you – Too Cheap: at what price does this product become too cheap, that is, so cheap that you would

question its quality and not buy it? – Too Expensive: at what price does this product become too expensive, that you would not

consider buying it? • Plot a graph of cumulative frequencies for each question – find “marginal cheapness” and “marginal

expensiveness”• Area between these two points is the acceptable price for most customers

Advantages:• avoid imposing price points on respondents• best suited for pricing situations that are very early in the product development cycle and the client

doesn’t really have a clear idea of the price range to play in • simple and easy to complete

Disadvantages:• overstate their price sensitivity • results can be unstable as even small changes in the sample can results in large changes in the price

curves, and the range of acceptable prices can be quite large Extended VW model – to overcome the shortcomings of VW model

– Use regression modelling to capture the exact acceptable price estimates

Market Research for Pricing Strategy

Product/Price mix model Discrete Choice Model (DCM)

Consumers make decisions based on the competitive differences among the attributes given Process:

• Respondents are asked to choose among competing products at different prices • The prices and/or product attributes are changed and respondents are asked to choose again.

With these data, a model is then built to predict the likelihood that a person will choose a specific product given the relative prices of the products in the test

• Respondents are shown multiple scenarios at a time (task) and asked to pick the one they would choose/purchase

Advantages:• It is more realistic approach as it include actual choices people face in stores• Easy to administer and can capture interactions more efficiently

Disadvantages:• Too many attributes to handle – generally more than 8 at a time• Results are based on certain assumptions, like the same level of awareness and distribution,

which may not be realistic some timesOther Methods*

Value Maps Conjoint analysis

http://blog.verint.com/8-pricing-research-techniques

New Trends in Market Research

Data Collection Data Analysis Google Analytics Amazon Predictive Recommendation

Data Mining

Self ReportingObservational

ResearchFocus on what customer actually want rather

than what they think they want

“How do think you will behave ?” “ I know how you behaved “

Text Messaging Service & Voting

Use of Android, iOS, Windows based application like OpinionMeter, iOpinionSurveysUse GPS to trigger question or track movement over time . E.g. Survey at Petrol Pump

Use of location awareness to understand behavior, habits and lifestyle of subjects

Mobile Market Research Methods

SMS Surveys

Smartphone Surveys

Location Awareness

Mobile Ethnography

Shift in Approach

Latest Technique in Market Research

Virtual Shopping

Online Collaboration Tools

Idea is to replicate a real situation for research subjects & observe behavior Use of virtual store simulation to mimic a shopping experience for a participants Use for testing retail issues like product placement, store layout, packaging etc.

Use of tools like Skype, instant messaging and share whiteboarding to conduct variety of traditional market research techniques using new technology.

Useful for gathering people from broader geographies

Biometric Market Research Techniques

Heart Rate Monitoring

Respiration Monitoring

Skin & Muscle Activity

Brain Activity

Eye Tracking

Measure a subject’s response to stimuli ( e.g. TV Commercial) ,provide valuable data that a subject might not be able or willing to express verbally

Social Media Market Research

Pattern Recognition

Consumer Panel

Social Network

Market Research Online Communities (MROC)

Public opinion is measured by aggregating searches and mentions on-line. By developing a system such as Mass Opinion Business Intelligence, companies can gauge their “share of opinion” as well as the valence of the mention.

Members of the panel are contacted and assigned an internet chat room wherein questions about products or services are asked

No control of researcher, open communities where consumer can express their opinions. Use of brand/fan page through facebook, twitter,Flickr. Use of LinkedIn for B2B research

Closed communities that recruits members for a particular study and interest. Members are invited to discuss topics based on their interest and for the purpose of meeting others with similar interest.

References• Pricing Models in Marketing Research by Stan Lipovetsky, Shon Magnan, Andrea Zanetti Polzi

(Scientific Research)• http://blog.verint.com/8-pricing-research-techniques

Example: Nivea deodorant : pearl and beauty

1. Objective: To introduce new deodorant in the market called pearl and beauty for young women(in Germany , France and U.K.)

• Secondary and primary research – Consumer usage and attitude study– External study of fragrance houses

• Findings: – women desired attractive and neat skin– Women cared about the body odor – No specific product in market which addressing the underarm beauty and care

2. Concept testing: for finding out the consumer preference research conducted within the target segment (18-35 year old women, beauty oriented, look for product for extra benefits)

– Created product concepts which describes the product benefitsFollowing are the some criteria:– Deodorant category performance measure– Product attributes specific to the new product and Nivea core values– Product needed to relevant and motivate customer to purchase

• Research team also tested for various name ideas and packaging, design and color style

Example: Nivea deodorant : pearl and beauty

3. Product development: – developed the product at small scale based on the inputs

4. Test marketing:– De-branded sample proposed to sample customers to avoid bias– Customer used for two weeks and gave positive feedback and they were

willing to replace their current deodorant

5. commercialization: – Research to check whether advertisement positivity supporting and

communicating the message.– Do advertisements stands out properly– Conducted qualitative research on advertisements ideas

6. Review performance:– Continuous consumer tracking– Monitor the sales effectiveness and profits

Positioning Research Example-Spider Chart

• Opening an new upscale restaurant in La Buena, CO• 1: Identifying positioning attributes• Following seven attributes were identifed : • Cuisine type , price range, food quality, service levels, décor,

hospitality and serving size.except for cuisine type others can be rated on a scale of 1 to 10. The example assumes all attributes of equal importance

• 2. Performing the Research• Telephone researchers ask respondents (residents living in up-scale

neighborhoods and military officers on base) torecall the last three restaurants they visited and to rank the attributes of each

• 3. Analysis of data• The first analysis arranges comparative data along rating scales,

consolidated to reveal commonality and singularity of ratings for each attribute. Each restaurant is represented by a different color and line configuration

• 4: Sample of an individual restaurant analysis• Data for any of the seven restaurants identified for analysis(the red

dotted plot) can be compared to both the average of all seven restaurants ( the solid blue plot) and with the range mid-point (5 and less on thescale represented by the grey area). It allow us to describe how customers perceive this restaurant.

Different coloured dotted lines on the spider chart indicates different restaurant

This consolidated plot is a bit intimidating and confusing on firstlook, but it does provide an overall picture of the competitors. Itbasically shows no particular attributes have been ignored by atleast one establishmen

Positioning Research Example-Spider Chart

• 5: Analysis of upscale cuisine type restaurants• The three cuisine type A restaurants have many attributes in common. Every attribute is “occupied” by at

least one establishment at a rating of 7 or higher. There is a slight shift toward mediocre performance when looking at serving size and hospitality

• 6: Discovering unoccupied positions and/or new categories• Pairing attributes may reveal promising combinations that identify unoccupied positions. . The examples

below demonstrate three such situations. The plots on previous pages helped determine which pairs might bare fruitful investigation.

• Each axis represents an attribute. The American restaurants are represented by red X’s, foreign cuisine by blue O’s.

• A potential position for a new entry is represented by a red circle enclosing an X. The grey circle around the red circle represents the magnitude of the differentiation from the new business in relation to its nearest American competitor (Its radius is half the distance to the nearest American competitor).