The Market Research Process
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Transcript of The Market Research Process
THE MARKET RESEARCH PROCESSChapter 29.1
5 Steps of the Market Research Process
1. Define the Problem
2. Obtaining Data
3. Analyzing Data
4. Recommending Solutions
5. Applying the Results
Step 1: Defining the Problem Most difficult step of the research
process Problem definition occurs when a
business clearly identifies a problem and what is needed to solve it.
Helps researcher create objectives that will help answer the problem Objectives are used to develop the
actual question
Step 2: Obtaining Data
Data (or facts) are collected Primary Data - obtained for
the first time and used specifically for the particular problem under study
Secondary Data - already exists; previously collected for some other purpose
Obtaining Data
Secondary Data
Data that has already been
collected
Done before primary data
Primary Data
Data that are collected for the first time
Done only if secondary data
does exist to support your
question/problem
Ways to collect Secondary Data
Internet Sources – company home pages, digital dossiers, business clearinghouses
U.S. and State Government Sources – data collected by the government, like population demographics and economic trends
Specialized Research – companies collect data to sell to other businesses like demographic data, economic forecasts, and consumer purchase information
Business Publications – BusinessWeek, Forbes, Wall
Street Journal
Ways to collect Secondary Data U.S. and State Government Sources – data
collected by the government, like population demographics and economic trends
Specialized Research – companies collect data to sell to other businesses like demographic data, economic forecasts, and consumer purchase information
Secondary Data
Easily obtained
No or low cost
Saves time and
money
Data may not be
suitable for the
problem under study
Can be inaccurate
Advantages Disadvantages
Ways to collect Primary Data The Survey Method
The Technological Method
Interviews
The Observation Method
The Experimental Method
The Survey Method Information is gathered from people through the use of
surveys or questionnaires Most frequently used method Conducted in person, by phone, by mail or Internet Census – survey the entire target population
Not usual because population is normally too large and it would cost too much money and time
Sample – part of the target population that represents it accurately Size of sample depends on the amount of time and money available Generally speaking, the larger the sample the more accurate the results
Technological Method Online surveys and focus groups – survey is
conducted in a “chat room” environment Smart Phones/Devices – IPods, smartphones Fax broadcasts – questionnaires can be sent
to a select group of fax numbers Automated dialers
automatically rejects busy signals and answering machines
Prerecorded voice walks caller through a series of questions and caller responds with key pad
Interviews Questioning people face-to-face Because it is expensive they are usually
conducted in central locations “Mall Intercept Interviews” - (started in
shopping malls) Focus Group Interview – 8-12 people brought
together to evaluate advertising, product, or packaging under the direction of a moderator
Advantages and Disadvantages
Type of Survey Advantages Disadvantages
Personal Interview
• Easier to get people to respond
• Easy to administer• Expensive• Take time to tabulate results
Telephone Interview
• Quick• Efficient• Inexpensive
• Limited by “Do Not Call Registry”
• People are irritated by unwanted calls
Mail Survey• Inexpensive• Reaches large audience• Respondents find them
less intrusive
• Successful response rate is only 10%
• Incentives can increase results
Internet Survey
• Quick• Automatic data entry• Allows for real time data
collection, multiple choice and opened ended questions
• Limited to people with internet access
• Many people dislike receiving uninvited surveys
The Observation Method Peoples actions are
watched and recorded Better results because
people are unaware that they are being observed
Mystery Shoppers – sent in to observe interactions between customers and employees
Disadvantage – cannot measure attitude or motivation
The Observation Method
Point-of-Sale Research – combines natural observation with personal interview People can explain their
buying behavior
The Experimental Method Researcher observes results when
changing one or more marketing variables while keeping all the others constant
Used to test: New package design Media usage New promotions
Step 3: Analyzing the Data The process of compiling,
analyzing and interpreting results
Data Mining – computer process that uses statistical methods to extract new information from large amounts of data
Step 4: Recommending Solutions to the Problem
Conclusions drawn form research are usually presented in an organized report
Step 5: Applying the Results
After research is completed and changes have been made, businesses must monitor the results carefully.
The research efforts were a success if resulting decisions lead to increased sales.
Market Research Flow Chart
• Determine research questions and
• Determine how to solve it
Define the Problem
• Secondary Data• Primary Data
Obtain Data
• Implement
changes• Monitor results
Apply Results
Review What are the five steps to market
research? Defining the problem, obtaining data,
analyzing data, recommending solutions, applying results
What are the two types of research? Primary and Secondary
What are the five methods used to collect primary data? Survey methods, technological method,
interview, observation method, experimental method