Download The Market Research Process

THE MARKET RESEARCH
PROCESS
Chapter 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
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
Advantages



Easily obtained
Disadvantages

Data may not be
suitable for the
No or low cost
problem under study
Saves time and money

Can be inaccurate
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
Personal Interview
Advantages
•
•
•
Telephone Interview •
•
Mail Survey
Internet Survey
Disadvantages
Easier to get people to respond
Easy to administer
•
•
Expensive
Take time to tabulate results
Quick
Efficient
Inexpensive
•
•
Limited by “Do Not Call Registry”
People are irritated by unwanted
calls
•
•
Successful response rate is only 10%
Incentives can increase results
•
•
Limited to people with internet access
Many people dislike receiving
uninvited surveys
•
•
•
Inexpensive
Reaches large audience
Respondents find them less
intrusive
•
•
•
Quick
Automatic data entry
Allows for real time data
collection, multiple choice and
opened ended questions
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.
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