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Market Research
Why and How?
So what is today about?
“It is a capital mistaketo develop before
one has data”
Sir Arthur Conan Doyle
So what is market research?Market research can be
defined as the collection, collation and analysis of data relating to the market and consumption of data.
So who uses it?
I know every successful business, but which sectors use it most?
Spending on Market Research by Sector in the UK
44%
21%
13%
9%
4%4% 5%
Manufacturing Companies
Service companies
Retailers and wholesalers
Ad. agencies
Public sector
Non-ad. research agencies
Other
So who uses it?Right so how much do
businesses spend on this? And do they do it themselves or get professional research
companies to do it?
Market Research Budgets
1 - 2% of company revenue = total budget
of this:
50% - 80% internally
20% - 50% externally
85% of British top 500 companies have internal departments
Outsourced to market research firms
Types of Market Research
By Source
- Primary - Secondary
By Methodology
- Qualitative - Quantitative
Types of Market Research: By Source Primary Collection of data
specifically for the task, product or project.
Secondary Based on data
previously collected for purposes other than the research (e.g. published articles,
government stats, etc ONS, mintel, Keynote etc…)
Types of Market Research: By Methodology
Qualitative Quantitative
Type of Question Probing Simple
Sample Size Small Large
Information per respondent High Low(ish)
Questioner’s skill High Low(ish)
Analyst’s skill High High
Type of analysis Subjective, Objective,
Interpretative Statistical
Ability to replicate Low High
Areas probed Attitudes Choices
FeelingsFrequency
MotivationsDemographics
Benefits of Qualitative Market Research vs Quantitative
Benefit Comment/Example
Cheaper
Probes in-depth
motivations and feelings
Often useful to do before quantitative research
Smaller sample size
Allows researches to observe (through one way mirror) ‘real’ consumer reactions, can understand
Gives the researcher a low time and cost to gain understanding of what to probe in larger scale quantitative research
Population
Is simply every individual that can be included in the research
This is also known as the target population
Asking surveying everyone can be expensive though
Time = Money
Sampling
In most cases it is impractical to survey the whole population.
It would be too costly and too time consuming to gather and process the data (information).
Instead researches take samples of the population
Sampling How?
Samples should be representative, they should have the same characteristics as the whole population
If they are not representative then the results may be inaccurate, wasting time, money and even influencing bad decisions
Example
A survey may be carried out by a food company to find out how many people would buy a new, premium priced pizza.
If they only asked pensioners (old people, older than even Pat) on low incomes, their findings would most certainly predict less demand / revenue.
Because the sample did not accuratelyreflect the whole population. This is called Bias sampling
Bias sampling
This occurs when an individual or party already has a preference or favourite with reference to the questions asked
For example ask Pat what is the best football team in the UK
Sheffield Wednesday’s Football Club
Random Sampling
Every item in the population has an equal chance of being chosen. You could also pull names from a hat.
This is best suited when the preferences of the population are all the same i.e. not gender specific
Although never Bias
Systematic Sampling
A regular pattern is used to choose the sample. Every item in the population is listed, a starting point is randomly chosen and then every x individual is selected. For example, a mixed (male and female) class could be listed and every 3rd student selected
This is may be unrepresentative if a pattern exists in the list. For example, every 3rd student in the above sample may be a girl.
Convenience Sampling
The most convenient sample is chosen which, for a sample of size sixty, could mean the first sixty people you meet.
It is highly likely that this sample would be biased and unrepresentative.
It s cheap though
This guy did not even get
out of bed for it
Stratified Sampling
Also a random method but the sample is divided into strata's or segments based on characteristics
For example spit the population into boys and girls, or age……
Quota Sampling
The population is divided into categories (strata) by age, gender, social class..., and then a sample is chosen from each category. The size of each sample is in proportion to the size of each category within the population.
For exampleYear Group Year 7 - 9 Year 10-11 Year 12-13
Number of girls 480 320 100
If I want a sample of 30 girls, I would choose the number of people to take part from each year as follows:
Year 7-9 480 / 900 x 30 = 16Year 10-11 320 / 900 x 30 = 11 (nearest whole number)Year 12-13 100 / 900 x 100 = 3 (nearest whole number)
Snowball Sampling
Is a highly specialised method of sampling. It involves starting a process with one individual or group and using their contacts to develop the
sample, hence “snowball”
When this is undertaken via email this is also referred to as Viral Marketing or viral research, as like a virus it start with one person and spreads. This is a very effective tool, when used correctly
Cluster Sampling
This involves separating the population into clusters, usually in different geographic areas
A random sample is then taken from the cluster and thought to be representative of the entire population
Issues to consider in questionnaire designSensitivity of questionBias in formulationCultural issuesRepetitionRespondent motivationQuestioner trainingComprehensivenessEase of completion
Careful how you ask the question
Q. Do you approve of smoking whilst working?
A: No
Q. Do you approve of working whilst smoking?
A:Yes
Market Research: Summary
Market Research is usually an integral part of understanding innovations - you ignore it at your cost....
But it must be timely, objective and relevant, otherwise it is worse than useless, leading you down the wrong path
So, be involved as far as you can be, especially up front and don’t let the jargon deter you!
Top 10 market research activities
Market Measurement 18%
New Product development/concept testing 14%
Ad or brand awareness monitoring/tracking 13%
Customer Satisfaction (inc Mystery Shopping) 10%
Usage and Attitude Studies 7%
Media Research & evaluation 6%
Advertising developing and pre-testing 5%
Social Surveys for central/local government 4%
Brand/corporate reputation 4%
Repeat customer Studies 3%
Source: BMRA