MNM3025

Chapter 1

Factors contributing to the development of market research

 Shift from production oriented to marketing oriented economy

 Change in the class structure of economics
 Shift in emphasis from price to non-price competition
 Expansion of the production process
 Increase in discretionary buying power
 Increasing differentiation in supply
 High cost of marketing
 Emergence of the professional manager

5 Reasons why research should be conducted or not

 Time limits
 Data availability
 Nature of the decision
 Value of research data
 Availability of resources

4 Factors on selecting an external researcher

 Credibility
 Competence
 Capacity
 Cost

4 Guidelines on ethical treatment of respondents

 Do not harm the respondent

 Do not deceive the respondent
 Respondents should be willing and informed
 Data should be held in confidence

Chapter 2

Preliminary steps in marketing research

1. Define the nature and extent of the marketing problem or opportunity

2. Develop hypothesis
3. Formulate a comprehensive research problem
4. Set research objectives
5. Determine the research design and prepare research proposal
6. Collect secondary data

Formal marketing research

1. Select the method of primary data collection

2. Design the questionnaire
3. Design the sample
4. Conduct the investigation
5. Process the data
6. Analyse the data
7. Interpret the results and compile research report

The marketing research process

1. Define the problem

2. Identify the research objectives
3. Determine the research design
4. Collect the secondary data
5. Select the method of primary data collection
6. Design the questionnaire
7. Design the sample plan
8. Conduct the investigation
9. Prepare and process the primary data
10. Analyse the primary data
11. Interpret the results and compile the research report

Secondary data
Advantages:
 Collected with less effort than primary data
 Enhances collection of primary data
 It can be more accurate than primary data
 It provides comparative data that makes for more illuminating
interpretation on primary data

Disadvantages
 Secondary data does not often apply to the specific problem investigated
 Accuracy is questionable
 It dates quickly
 Different sources define and classify terms and definitions differently
 Secondary data uses different measures

Steps for collecting secondary data

1. Specify data requirements

 2. Determine which data will be obtained internally – specify format for
reporting
3. Seek external sources – libraries, trade publications, data service
directories and trade associations
4. Obtain secondary data
5. Scrutinize validity – evaluate collection organisation – consider objectives
of the original study – appraise (methods employed, definitions and
classifications and currency)
6. Identify data that must be obtained from primary sources instead

Online computer searches

 Web addresses
 Subject directories
 Search engines
 Newsgroups / mailing lists
 Browsing
 Consulting virtual reference libraries

Evaluation external data

 Purpose
 Accuracy
 Consistency
 Credibility
 Methodology
 Bias

Primary data collection

 Survey
 Experimental
 Observation

Survey characteristics
 Based on a specific, logical and formal procedure
 Selects units of the population without preference
 Contains units of investigation of the investigated population
 Aimed at the present
 Data is original
 Obtained from a sample of the population
 Obtained by interviewers who act as mediators
 Primarily, respondents own opinion
 Collected quickly

Limitations
 Cost of personal interview is high
 Limited time availability
 Suggested it may be artificial
 May not be truthful
 Respondents may not be available
 Respondents may not be relevant

Errors
 Sample errors – sample size
 Systematic errors – sample design errors – measurement errors
(response errors, non-response errors, interviewer errors, administrative errors)

Survey method
 Personal interviews – door to door, mall intercepts and executive
interviews
 Telephone interviews
 Mail surveys
 internet surveys

Personal interviews
Advantages
 Personal contact
 Use of visual material
 More lenient than other methods
 Opportunity to explain
 Literacy not essential
 Sample is more representative

Disadvantages
 High unit costs
 Heterogeneous simulation
 Intensive control essential
 Time limit
 Commitment of respondent
 Limited geographical cover

Telephone interviews
Advantages
 Speed
 Unit cost relatively low
 Geographical cover
 Not limited by literacy level
 Effective checking possible
 Technical presentation done quickly
 Response rate good
Disadvantages
 Only people with private telephones may be contacted
 Length limited
 Commitment of respondent
 Suspicion in some respondents

Mail surveys
Advantages
 Unit cost relatively low
 Homogenous simulation
 Geographical cover
 Freedom of the respondent
 Speed
 Easy and quick processing

Disadvantages
 Level of representation
 Impersonal
 Limited to literate people
 Public negativity towards questionnaires
 Lack of control
 Addresses must be available beforehand

Internet surveys
Advantages
 Easy an quick delivery
 Quick and convenient responses
 Cheaper
 Targeted
 Convenient for respondents
 Appeal to respondents
 Interviewer bias is eliminated
 Auto data capture and analysis

Disadvantages
 Confidentiality concerns
 Anonymity not guaranteed
 Junk mail factor
 Potential for sample errors
 Limited access to internet

Choosing the appropriate survey method

 representativness of the sample

 response rate
 Rate of refusal
 Anonymity
 Use of visual techniques
 Control
 Financial implications
 Target group
 Nature of the questions

Experimental method
4 methods limiting secondary variance

 Randomisation
 Physical control
 Design control
 Statistical control

Steps for test marketing

 Decide whether test is necessary

 Determine objectives
 Decide who will conduct the test market
 Select test marketing approach
 Choose test and control markets
 Develop procedure for test market
 Decide on duration
 Analyse results

Qualitative data
Choosing data collection method

 Volume and variety of data

 Objectivity and reliability of required data
 Cost and duration

Qualitative research can be used for:

 Pre-piloting quantitative questionnaires

 Exploring new markets
 Diagnostic research and problem solving
 Evaluation
 Creative development

3 Requirements of observation

 Data must be accessible to observation

 The behaviour must be repetitive, frequent or predictable
 The event observed must take place within a reasonably short time span
Observation is strongly recommended if:

 Observation is the only method to gather accurate information

 Data costs and data accuracy makes observation more favorable
 The researcher wants to confirm data from other methods

Advantages

 Observation does not rely on respondents willingness

 Data is observed and recorded as it happens
 Data can be collected from those unable to communicate
 Bias is eliminated
 Observation can provide valuable insight

Dis-advantages

 Findings are limited to observed behaviours

 Observed behaviour is not necessarily normal behaviour
 Time consuming
 Focuses on what occurs in public
 Works best when respondents are unaware

Focus group interviews

Focus groups should:

 Be between 6 and 12 participants

 Be carefully screened
 Relatively homogenous
 Relaxed and conducive
 Be recorded
 Not be too long or too short
 Have a properly trained moderator
 Reward or compensate participants

Advantages

 Cost and speed

 Observation
 Group interaction
 Creativity enhanced
 Controllable
 Non –threatening situation
 In –depth exploration

Disadvantages
 Non-representable sample
 Inconclusive results
 Fear of embarrassment
 Dominant personalities
 Effect of moderator

Conducting focus groups

1. Set research objectives

2. Select and recruit group members
3. Recruit moderators and write moderator outlines
4. Arrange venue for session
5. Analyse findings
6. Write a report and conduct presentation

Importance of the moderator

 Ability to establish connection and listen

 Be flexible
 Be able to control group influences
 Facilitate flow of the discussion

In depth interviews

 Last between 30 mins and 2 hours

 Respondents must be screened
 Interviewer must have communication skills
 Should be recorded
 Be in pleasant surroundings
 Participation must be rewarded

When to use in-depth interviews

 When topic may be embarrassing, stressful or personal

 If analysis needs to be done on complex issues
 Where peer pressure may alter opinions
 Where interviewer needs to gain insight
 where a complex situation exists

Advantages

 Greater detail may be gained one on one

 Probe in more detail
 Interviewer can observe non-verbal communication
 Responses can be linked to an individual
 Interviewer can develop a relationship of trust
 Respondents feel more comfortable discussing confidential things
 No peer pressure
 Easier than a group

Disadvantages

 Costly to administer
 Analysis time is consuming
 Small sample
 Element of subjectivity
 Participants may fatigue
 No group dynamics
 Errors can occur
 Unstructured means it is unscientific

Conducting in-depth interviews

1. Set research objectives

2. Select and recruit interviewees
3. Write interviewer outline
4. Conduct interviews
5. Transcribe and edit interviews
6. analyse findings and write report

Projective techniques

 Association techniques – First word that comes to mind

 Completion techniques – Sentence/story completion
 Constructive techniques – Construct story
 Expressive techniques – Role play

Limitations

 Extremely expensive
 Small samples
 High non-response rate
 Data collection subjective
 Time consuming and complex

Limitations of qualitative

 Not as effective as quantitative

 Not representative of the population
 Can be influenced by dominant individual
 depends heavily on interpretation and understanding

Levels of measurement

 Nominal
 Ordinal
 Interval
 Ratio

Comparative scales

 Paired comparison scale

 Rank order scaling
 Constant sum scaling
 Q sort scaling

Non-comparative scales

 Graphic rating scales / continuous

 Itemised rating scale – lickert scale – semantic differential – stapel scale

Steps in questionnaire design

 Specify information needed

 Determine the type of questionnaire and administration method
 determine content of questions
 Determine question format
 Determine phrasing
 Determine sequence
 Determine layout
 Revise
 Pre test

Validation

 Checkbacks
 Review questionnaire interviewing instructions
 evaluate the reputation of the interviewer

Sampling steps

1. Define population
2. Identify sample frame
3. Select sampling methods
4. Determine sample size
 5. Select sample elements
6. Gather data from designated elements

Sampling methods
Non-probability

 Convenience
 Judgement
 Snowball
 Quota

Probability

 Simple random
 Systematic
 Stratified
 Cluster
 Multistage

Sample size determination

 Blind guesses
 Statistical method – levels of confidence – precision –standard deviation

Research report
A good report meets 4 criteria

 Completeness
 Accuracy
 Clarity
 Conciseness