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Unit 2: Reaching Your Market
Chapter 7
Marketing Research
Learning Goals
 Identify three areas of marketing research
 Give examples of five ways to collect
primary data
 Identify five sources for secondary data
 Explain the bias that can occur with different
types of marketing research
Learning Goals
 Describe how information technology is used
in marketing research
 Identify and analyze three trends that affect
marketing
 Explain the benefit of a sales forecast
 Summarize reasons why marketing research
might lead to wrong conclusions or actions
Day 1 Response Journal
What kinds of information do you think
marketers want to know about you?
***Save As Oct 23 in your Response Journal
Folder***
Marketing Research
 According to the marketing concept, the best way to
make a profit is to meet customers’ needs and wants
 You also want to do a better job meeting those needs
than your competitors do
So …
 How do you learn about customer needs and wants?
 Where do you get information to decide on a target
market?
 How do you learn about the competition?
 How do you learn about new opportunities to expand
the business?
 The answer to these questions is _________________
Market Research
Marketing Research
 Market Research is the gathering information
to make marketing decisions
 Can range from very simple and inexpensive to
very complex and costly
 Read the examples in paragraph 2 & 3 on page 91
 Market Research is conducted in many areas
This chapter will focus on research in 3 areas;
1. Customers
2. Competition
3. Opportunity
Three Areas of Marketing Research
Marketing
Research
Purpose
Sample Question
Customer
Learn about customers so What is my customers’
that the company can
favourite snack food?
meet their needs
Competition
Learn about competition
so that the company can
beat the competition
Does my competitor’s
product have better
features than mine?
Opportunity
Learn about new
opportunities so that the
company can grow
Which market is
growing the fastest?
Types of Data
 Information is often called data
There are two broad categories of data;
1. Primary Data
 Collected for and about a specific business
 Always collected first hand
 Can be qualitative or quantitative
 Qualitative data uses research questions that require judgment
from people
• Open ended questions – “Describe the taste of the pop you just
sampled?”
 Quantitative data is based on facts and figures and can be
numerically analyzed
• Closed ended questions - Yes or No, Multiple Choice,
Always/Sometimes/Never, etc.
Types of Data
2. Secondary Data
 Collected for someone else or for nonmarketing
reasons, but is available for all to use
 Secondhand data
 E.g. the government collects data on population
that business could use
 Usually quicker and less expensive to gather
 If the info you need already exists, there is no
need to go through the time and expense of
collecting it yourself
Collecting Primary Data
There are 5 ways to collect primary data;
1. Observation
2. Interview
3. Survey
4. Diaries
5. Experiment
 Collecting primary data is usually expensive
and time-consuming
1. Observation
 Involves watching customers and then recording
their behaviour
 Read the example in the first paragraph on page 93
 Video cameras are often used so that the customers
don’t know they are being watched
 Another form of observation is the
Secret Shopper a person hired by a company
_________________;
to visit its place of business and observe the quality
of service (posing as a customer)
 The employees don’t know the secret shopper is observing
them
 The secret shopper then reports back to the company,
especially noting any problems
2. Interview
 An _____________
is a formal meeting
Interview
between two or more people, during
which questions are asked of one person
 Asking in-depth questions of customers
to gain insight into their thoughts,
opinions, and reactions to products
2. Interview
 A variation of an interview is the ________________
Focus Group
 A focus group is a small group of consumers who
discuss topics of interest with a researcher
 An interactive interview; the researcher observes
and collects info as the members of the focus group
answer questions and/or use the product
 A key component of the focus group is the
______________
Moderator
 The moderator asks questions and focuses the
discussion
 Members of the focus are chosen to represent the
target market
Nike Focus Group Example
2. Interview
 ______
Bias is a prejudice for or against something
 Bias can be introduced through tone of voice,
facial expressions, or body language
 Bias can also be introduced though the
questions asked
 E.g. “Lots of people like protein bars. Do you
like protein bars?”
• An unbiased version of the above questions
would be “What is your opinion of protein bars?”
3. Survey
 A ___________
is an organized set of
Survey
questions asked to a significant number of
people
 Can be conducted in person, over the
phone, by mail or through the Internet
 A survey is given to a sample of people
chosen represent the larger market
 Read the example in paragraph 2 on page
94
 The answers from all surveys are then
statistically analyzed
4. Diaries
 A diary is a record of your thoughts, activities
or plans
 Diaries are used to collect specific
information that research participants keep
for a ____________
(a week, a month, etc.)
Set Time
Researchers most often use diaries to …
 Study how people __________________
Use Their Time
and ________________________
Spend Their Money
4. Diaries
Diaries have two formats;
1. Open Format
 Allows participants to write their own responses
 Gives more feedback to researchers
 Labour intensive to analyze responses, and
therefore too expensive for most companies to use
2. Forced-Choice Response
 Participants pick an answer from the alternatives
outlined (similar to multiple choice)
 Much easier to analyze
 Does not allow for any additional information
5. Experiment
 In the experiment method, the researcher
sets up an actual experiment of some kind
and later compares the results
 Read the example in paragraph 7 on page
94
 Procedures and requirements of scientific
accuracy must be followed
 A ______________
is a common experiment
Taste Test
Coke Vs. Pepsi Taste Test
Who Collects Primary
Data?
Primary data can be collected by;
 An individual
 Businesses
 Many businesses have their own market research
departments
 Market research firms
 Businesses can also hire a market research firm
to do the research for them
 E.g. A.C. Nielson, Ipsos Canada, etc.
Day 1 Assigned Work
Students please complete the following;
 K & U Questions #1 & 2 on page 104
 Thinking Questions #1 & 2 on page 104
 Application Questions #1 & 2 on page 104
*** Save As Ch 7 Day 1 in your Unit 2 folder ***
Day 2 Response Journal
What surveys have you taken in the past? List.
Why do you believe that people aren’t always
truthful when answering survey questions?
***Save As Oct 26 in your Response Journal
Folder***
Surveys
Closed-Ended Questions which
 Most surveys use _________________________
ask you to select an answer from two or more choices
Pros
 Quick and simple for consumers to answer
 Easy to sort and analyze for researchers misinterpret
Closed-ended questions usually take on one of the
following forms;
 Yes/No
 Multiple Choice
 Agree/Disagree
 Check all the Apply
 Rate on Scale
Surveys
Closed Ended Questions – Examples
Do you drink pop more than once a week?
Yes No
I would buy Tide laundry detergent again.
Agree
Uncertain
Disagree
Surveys
From the list of soft
drinks below, circle
the kind you would
most prefer to drink.
a) Pepsi
b) Coca-Cola
c) Dr. Pepper
d) Bark’s Root Beer
e) Other
What do you look for
when you shop for a
DVD player? (check off
all that apply).
Simple remote
Ease of use
Plays MP3s
Brand name
Multi-disc
Warranty
Other
Surveys
Which brands of soap have you purchased in the last
year? (check off all that apply).
 Dove
 Irish Spring
 Ivory
 Jergens
 Lever 2000
 Other
Rate our service using the following scale.
Poor
Cleanliness
Friendly staff
Value
1
1
1
Excellent
2
2
2
3
3
3
4
4
4
5
5
5
Surveys
 Occasionally surveys will use
_______________________
Open-Ended Questions that allow the
respondents to develop their own answers
 Because open ended questions are hard to
analyze, researchers only use them in special
circumstances
 Respondents also tend to resist open ended
questions because they take more time to
answer
Surveys
Open Ended Questions – Examples
What do you like most about this flavor of soft
drink?
What words do you associate with each of the
following flavours: Cola, Root Beer, Grape,
Orange and Ginger Ale?
List your top 3 soft drink flavours.
Surveys
 When researchers conduct surveys they collect
from a ____________________
of their target
Random Sample
market population, thereby giving each
member an equal chance of being selected
 If a sample does not accurately represent the
target market, then the results may be
misleading and the sample is said to be
__________
Biased
 If the survey sample is truly random, then the
results can be projected onto the entire market
Survey Examples
5. Surveys
The 5 common problems that often occur when
creating survey questions are asking …
 A leading question
 Two questions in one
 An unanswerable question
 An ambiguous question
 A nonexhaustive question
Surveys
Leading Question
 A question phrased in such a way as to
suggest the desired answer
Two Questions in One
 A question that requires two separate
answers
 The question should be split into two
Unanswerable Question
 A question that is impossible to answer
Surveys
Ambiguous Question
 A question that has more than one possible
interpretation or meaning
Nonexhaustive Question
 A question or answers that accompany the
question is incomplete
Surveys
Common Problem Examples
Have you ever been caught surfing inappropriate
websites at work?
Leading question
How much time do you spend watching TV and
doing housework?
Two questions in one
When was the first time you saw a commercial
for our product?
Unanswerable question
Surveys
Why is our product better than our competitor’s?
Leading question
How much do you pay for entertainment?
Ambiguous question
How much money do you spend on fast food weekly?
 $5  $10  $15  $20
Nonexhaustive question (answers)
How much do you think the average customer spends
monthly on clothing?
Unanswerable question
Surveys
How much money do you spend on gas and
groceries weekly?
Two questions in one
Where do you use All Around the House cleaner
most?
 Bathroom  Kitchen  Laundry Room
Nonexhaustive question (answers)
Why do you think our cereal is the best tasting
one on the market?
Leading question
Day 2 Assigned Work
Students please complete the following;
 Create 5 closed-ended and 2 open-ended
questions that would help you gather data on
teenage shopping habits
*** Save As Ch 7 Day 2 in your Unit 2 folder ***
Day 3 Response Journal
How many different frequent
shopper or reward program
cards can you list?
Who do you believe benefits
the most from these types of
cards – the consumer or the
company? And why?
***Save As Oct 27 in your
Response Journal
Folder***
Sources of Secondary Data
Secondary data can be found in a variety of
formats, including;
 Newspapers
 Magazines
 Journals
 Databases
 Websites
 Information technology has made it much
easier to find and analyze secondary data
Sources of Secondary Data
 A ________________
is a computerized file
Database
of information
 Database software enables you to find the
information you need quickly and easily
analyze it
 Databases are often accessible through the
Internet
 E.g. A customer database will contain a file for
each customer. Each file will contain info such
as their name, address, phone number, email
and a list of purchases
Sources of Secondary Data
There are 5 categories of sources for
secondary data;
1. Business records
2. Government databases
3. Private databases
4. Libraries
5. The Internet
1. Business Records
 Every business collects data
 That data includes;
 Sales records
 Customer data
 Financial statements
 Marketing cost records
 Analyzing company data to find answers to
questions is called ____________________
Data Mining
2. Government Databases
 Statistics Canada collects large amounts of
data about …
 The economy
 Population
 Businesses
 Federal, Provincial, and Municipal
governments also collect data
 Much of this data is available online
3. Private Databases
The following groups collect information in
private databases;
 Businesses
 Market research firms
 Trade associations
 Chambers of commerce
3. Private Databases
 Some businesses develop
_____________________
Industry Publications
 An industry publication is
a magazine or newsletter
that focuses on a specific
industry
 E.g. The Beverage Digest
 Often gathers and
publishes market
information
3. Private Databases
 A _______________________
is an
Trade Association
organization of people in a specific type of
business
 The members of a trade association work
together to help each other succeed
 Often collects data about its members and
its businesses
 Often publishes the data in the association
magazine or newsletter, or on its website
3. Private Databases
 Another source of information are local and
provincial ________________________
Chambers of Commerce
 A Chamber of Commerce is a group of
businesses whose primary purpose is to
promote business in their area
 Often collects marketing information and
information about other businesses in the
area
4. Libraries
Libraries give you access to;
 Databases
 Government data
 Internet sources
 Printed resources
 Such as books, business directories,
magazines, journals, newsletters, and
newspaper articles
5. Internet
 Internet search engines make all types of
market research easier especially in areas of
competitor research
To find marketing information, visit the
following types of websites;
 Trade associations
 Magazine
 Your competitors
Sources of Secondary Data
Source
Examples
Your
business
records
Customer records, sales records,
financial statements, promotional
campaign records
Government
databases
Statistics Canada, Industry Canada,
Office of Consumer Affairs
Private
databases
Marketing research companies, trade
associations, chambers of commerce
Libraries
Books, industry publications
Internet
Search engines, company websites,
trade association websites
Marketing Research
Process
 Marketing research can be conducted
informally
 Read the examples in paragraph 6 on page 97
 Marketing research can also be conducted
formally
 The formal marketing research process is similar
to scientific research
 Both require you to develop a _______________;
Hypothesis
a statement that can be tested and proved either
true or false
Marketing Research
Process
Marketing research can be organized into eight steps.
1. Define the problem
2. Conduct background research
3. State a hypothesis
4. Develop a research plan
5. Collect data
6. Analyze the data
7. Draw conclusions
8. Make recommendations
 See figure 7-7 on page 98
Day 3 Assigned Work
Students please complete the following;
 K & U Questions #8 & 10 on page 104
 Read the Windigo Catering Profile on pages
102 – 103 and answer the 2 corresponding
questions
*** Save As Ch 7 Day 3 in your Unit 2 folder ***
Day 4 Response Journal
In your own words, describe what you believe
a fad is. List a minimum of 3 examples of
products or services that you believe were/are
fads.
***Save As Oct 28 in your Response Journal
Folder***
Trend Research
 One of the major goals of marketing is to
spot business opportunities
 One way to do this is to look for new trends
 In general, a __________
is a direction of
Trend
movement
 A ___________________
is direction of
Marketing Trend
movement of consumer behaviour
 Trend research often combines research on
customers, competition, and opportunity in
order to determine marketing trends
Trend Research
Trend areas of interest to marketers include;
1. Social trends
2. Demographic trends
3. Product trends
 The above trends affect consumer behaviour
 New trends bring new business opportunities
 Businesses that find new trends first are
often the most successful
1. Social Trends
 Social trends are changes in ____________
Society
 Often lead to changes in consumer
behaviour
 E.g. more households consisting of one
person has led to greater need for more
single portion convenient food
2. Demographic Trends
 Demographic trends are changes in the
_______
Size of segments of the ____________
Population
Examples;
 An increase in people over the age of 65
 A growing immigrant population
These trends lead to new consumer needs such as;
 More services for older Canadians
• Health care, snow removal, meal delivery, etc.
 More publications in different languages
3. Product Trends
 Product trends refer to the direction of
development of ____________
Products
 E.g. trend in electronics towards wireless,
trend in TVs towards large flat screens,
and trends in snack foods towards bitesized pieces
3. Product Trends
 A trend and a fad are NOT the same
 A ___________
is a significant change that
Trend
lasts an average of ten years and affects a
large number of people
 A ______
Fad is something that is very popular
for a short period of time then almost or
completely disappears
Trend Researchers
 Some companies specialize in giving
marketing advice to businesses based on
their trend research
 Read the example in paragraph 1 on page
100
Trend Hunters – 2015 Trend
Predictions
Sales Forecasting
 Read paragraph 2 on page 100
 A _______________
Sales Forecast is a prediction of future
sales based on past sales and an analysis of
the market for a specific time period
 Requires a business to evaluate past sales,
review current sales and determine future growth
Sales forecasts may be …
 Quantitative
 based on facts and figures
 Qualitative
 based on judgment
What Is a Sales Forecast?
 Both internal factors (within the company)
and external factors (outside the company)
can impact the sales forecast
 The simplest method for completing a sales
forecast is to use previous sales and add a
percentage of the sales increase
Past
Sales
+
Percentage
increase factor
=
Sales Forecast
Factors Impacting Sales Forecasts
Internal Factors
External Factors
• Inventory shortages
• Economy
• Price changes
• Political events
• Problems with labour • Population changes
• Changes in the
• Weather
distribution channels • Seasonality of the
• Sales force changes
business or product
Is Marketing Research
Always Right?
 Marketing research results can be either useful or
misleading
 E.g. Misleading - customers can change their mind between
the time you did your research and the time your new
product reaches the market
 Sometimes the usefulness of marketing research
depends on the person interpreting the results
Is Marketing Research
Always Right?
Some reasons why market research can be
misleading are:
 Error in estimating target population
 Stating the target market as larger or smaller than it actually
is
 Error in selecting population sample
 E.g. assuming an old telephone directory has all current
business listing, when in reality new businesses will have
moved in and others closed
 Survey errors
 Structure errors (poor questioning) and language errors
(vague, biased or assumes certain knowledge)
Is Marketing Research
Always Right?
 Errors in measurement
 E.g. failure to rotate answers for a question can
create bias, as respondents tend to select the first
few answers from a list and overlook the others
 Errors in data analysis
 E.g. simple math errors (adding numbers up
incorrectly)
 Reporting errors
 Improperly representing the research findings in
the report
Day 4 Assigned Work
Students please complete the following;
 Complete the Fad or Trend? Activity
Worksheet
 Instructions for this activity are posted on ClassNet
under Tasks
 A hard copy of the student worksheet will be
provided to you