MARKETING

RESEARCH
 • Marketing research is the systematic
gathering, recording and analyzing of data
about problems relating to the marketing of
goods and services.
MARKETIN
G • Market research will give you the data you
RESEARCH need to identify and reach your target market
at a price customers are willing to pay.
 MARKETING RESEARCH
• Marketing research focuses and
organizes marketing information. It
permits entrepreneurs to:

• Spot current and upcoming problems

in the current market
• Reduce business risks
• Identify sales opportunities
• Develop plans of action
 MARKET RESEARCH
• Successful marketing requires timely and
relevant market information.

• An inexpensive research program, based on

questionnaires given to current or prospective
customers, can uncover dissatisfaction or
possible new products or services.
 MARKET RESEARCH

• Marketing research is not a perfect science. It deals with people

and their constantly changing feelings and behaviors, which are
influenced by countless subjective factors.

• To conduct marketing research, you must gather facts and

opinions in an orderly, objective way to find out what people
want to buy, not just what you want to sell them.
 MARKET RESEARCH
• Market research will identify trends that affect sales and
profitability.
• Population shifts
• Legal developments
• The local economic situation should be monitored
to quickly identify problems and opportunities

• Keeping up with competitors' market strategies also is

important.
Every small business owner must ask
the following questions to devise
effective marketing strategies:

• Who are my customers and

potential customers?
• What kind of people are they?
• Where do they live?
• Can and will they buy?
 Every small business owner must ask
the following questions to devise
effective marketing strategies:

• Am I offering the kinds of goods or services they want at the best place, at the
best time and in the right amounts?

• Are my prices consistent with what buyers view as the product's value?

• Are my promotional programs working?

• What do customers think of my business?

• How does my business compare with my competitors?

 WHY DO MARKET RESEARCH?

• People will not buy products or services they do not want.

• Learning what customers want and how to present it drives the need
for marketing research.

• Small business has an edge over larger businesses in this regard.

• Small business owners have a sense of their customers' needs from years of
experience, but this informal information may not be timely or relevant to the
current market.
 HOW TO DO MARKET
RESEARCH
• Analyze returned items.

• Ask former customers why they've switched.

• Look at competitors’ prices.

• Formal marketing research simply makes this familiar process orderly.

It provides a framework to organize market information.
 Market Research
Methodologies
In order to aid the manager in gathering relevant market
information, there are several market research
methodologies using scientific approaches that can be
employed.

Sales Data Mining

Focus Group Discussion
Observation Technique
Survey Research
Sales Data Mining

This research methodology extracts

frequency using relevant data
variables to come up with results in
order to specifically identify the
market.
Example:

A researcher observed and recorded the following data in a store selling hotdogs
1. Boy, aged 10, bought 2 hotdogs, 2pm
2. Girl, aged 8, bought 1 hotdog, 4pm
3. Man, aged 26, bought 3 hotdogs, 1pm
4. Couple, aged 30, bought 2 hotdogs, 8am
5. Boy, aged 14, bought 5 hotdogs, 3pm
6. Three girls, aged 18, bought 6 hotdogs, 6pm
7. Girls, aged 5, asked mom to by her 1 hotdog, 11am. Mom, aged 27, bought 1 hotdog for
herself
8. Twin boys, aged 7, asked their older brother to buy them 4 hotdogs, 12nn. Older brother
aged 14, bought 2 hotdogs for himself
9. Two teenagers, boy & girl, aged 15, bought 2 hotdogs, 1 pm
10. Five children (2 girls, 3 boys), aged 9, bought 5 hotdogs, 12nn
11. Man, aged 27, bought 2 hotdogs, 9am
12. Woman, aged 30, bought 3 hotdogs, 10am
13. Three boys, aged 13, bought 5 hotdogs, 4pm
In market research, gathered data can be presented in several
ways for a more comprehensive visual presentation. This can
be through frequency table, histogram, frequency polygon or
pie chart.
Frequency table organizes data into group of values according to most
logical characteristics.

Table 3.1 Hotdog Sales according to Two-Hour Time Interval

Time Hotdogs Bought
7-8am 2
9-10am 5
11-12nn 13
1-2pm 7
3-4pm 11
5-6pm 6
 Table 3.2 Hotdog Sales Summary
Time Hotdogs Male Female
Bought
12 13-19 20 12 13-19 20
below above below above
7-8am 2 1 1
9-10am 5 2 3
11-12nn 13 7 2 3 1
1-2pm 7 2 1 3 1
3-4pm 11 10 1
5-6pm 6 6
TOTAL 9 13 6 4 7 5

13

20
11
Histogram or bar graph consists of series of
rectangles or “bars.” Each bar is proportional in
width to range of values within a class and
proportional in height t the number of items in a
class.
 HISTOGRAM OR BAR GRAPH
14

12

10

0
Series1

7-8am 9-10am 11-12nn 1-2pm 3-4pm 5-6pm

Frequency polygon is constructed by
marking the frequencies on the vertical axis
with a dot corresponding to the values on the
horizontal axis. These dots are then
connected with a straight line to form a
polygon.
Sold Hotdogs
13

11

7
6
5

0 0
7-8am 9-10am 11-12nn 1-2pm 3-4pm 5-6pm

Sold Hotdogs
Pie chart is a circular graph divided into sections that represent the
relative frequencies or magnitude of the group values. From the
frequency table, gender and age as a variables can be presented through
pie chart.

Gender

Age
Male Female

Children Teenagers Adults

 Survey Research
Survey is the most preferred instrument for in-depth
quantitative research. The respondents are asked a variety
of questions which are often about their personal
information, their motivations, and their behavior.
 Survey Research

Most of the popular type of market survey research is the

Usage, Attitude and Image (UAI) survey, which is intended to
derive market awareness, market size and share, product usage
and preference, customer interest and customer image.
 Focus Group Discussion

FGD is one of the most common qualitative research tools.

It is effective in extracting consumer and non-consumer
experiences regarding products, places or programs.
 Focus Group Discussion

FGD is an interview by a facilitator of a small group that

normally lasts for an hour and a half up to three hours.
 Focus Group Discussion

The number of the respondents per group should range from 6 to 8. If

the number falls below six, the likelihood of generating a momentum
and group dynamics necessary for a good discussion will not happen.
 Focus Group Discussion

However, if the group exceeds 8, it may be too crowded

resulting in the passive participation of some respondents
and a discussion that is not a cohesive.
 Observation Technique

Observation technique is probably one of the best ways of

gathering data about customers in their natural setting without
having to interact or talk to them. One has to simply observe
people as they go about their usual activity such as buying and
using products and services and assess how they behave.
 Observation Technique
Recording the event as it happens may be the best means to capture
the information. However, thee researcher must be discreet so as not
to attract the attention of the one being observed.
Market Research Methodologies

In order to aid the entrepreneur in gathering relevant market

information, there are several market research
methodologies using scientific approaches that can be
employed.

Sales Data Mining

Focus Group Discussion
Observation Technique
Survey Research
 MARKET RESEARCH -
THE PROCESS
• Market research can be simple or complex.

• You might conduct simple market research.

• Example: Questionnaire in your customer bills to gather demographic
information about your customers

• You might conduct complex research.

• Example: Hiring a professional market research firm to conduct
primary research to aid in developing a marketing strategy to launch a
new product
• Regardless of the simplicity or complexity of your marketing
research project, you'll benefit by reviewing the following seven
steps in the market research process.

1 3 5 7
2 4 6
 STEP 1: DEFINE MARKETING
PROBLEMS AND OPPORTUNITIES
Opportunity • You are trying to launch a new product or
service.

Problem • Awareness of your company and its products

or services is low.
Problem • The market is familiar with your company,
but still is not doing business with you.

Problem • Your company has a poor image and

reputation.
Problem • Your goods and services are not reaching the
buying public in a timely manner.
 STEP 2: SET OBJECTIVES,
BUDGET AND TIMETABLES
 OBJECTIVES
• Explore the nature of a problem so you may further define it.

• Determine how many people will buy your product packaged in a

certain way and offered at a certain price.

• Test possible cause- and effect- relationships.

• For example, if you lower your price by 10 percent, what increased sales
volume should you expect?
• What impact will this strategy have on your profit?
 BUDGET
• Your market research budget is a portion of your overall marketing
budget.

• Allocate a small percentage of gross sales for the most recent year
to use on market research.
• It’s usually about 2 percent for an existing business.

• Planning to launch a new product or business?

• You may want to increase your budget to as much as 10 percent of your
expected gross sales.

• Other methods include analyzing and estimating the competition's

budget and calculating your cost of marketing per sale.
 WHAT
PERCENTAGE OF
GROSS SALES
FROM AN
EXISTING
A. 2%
BUSINESS
B. 4%
SHOULD BE USED C. 8%
FOR MARKET D. 10%
RESEARCH?
Click to see the answer.
 TIMETABLES
• Prepare a detailed timeline to complete all steps of the
market research process.

• Establish target dates that will allow the best accessibility to

your market.
• For example, a holiday greeting card business may want to conduct
research before or around the holiday season buying period, when its
customers are most likely to be thinking about their purchases.
STEP 3: SELECT RESEARCH TYPES,
METHODS AND TECHNIQUES
• Two types of research are available:
• Primary research is original information gathered for a specific
purpose.
• Secondary research is information that already exists somewhere.
 SECONDARY
RESEARCH
• Secondary research is faster and less expensive than primary
research.
• Gathering secondary research may be as simple as making a trip to
your local library or business information center or browsing the
Internet.
• It utilizes information already published.
• Surveys, books, magazines, etc.
 SECONDARY
• Localized figures provideRESEARCH CONT.
better information as local conditions might
buck national trends.
• Newspapers and other local media are helpful.
• Many sources of secondary research material are available. It can be
found in:
• Libraries
• GALES' Directory is available at any public library.
• Colleges
• Trade and general business publications and newspapers
• Trade associations and government agencies are rich sources of information.
 EXAMPLE OF
SECONDARY RESEARCH
• An article may show how much working mothers spent on
convenience foods last year.
• If you were thinking about selling a convenience food, this
information would show you what kind of market there is for
convenience foods.
• It doesn’t show you how much they are willing to spend on your
particular product.
 PRIMARY RESEARCH
• Primary research can be as simple as asking customers or suppliers
how they feel about a business, or as complex as surveys conducted
by professional marketing research firms.
• Examples of primary research are:
• Direct-mail questionnaires
• On-line or telephone surveys
• Experiments
• Panel studies
• Test marketing
• Behavior observation
 PRIMARY RESEARCH
• Primary research is divided into reactive and nonreactive
research.

• Nonreactive
• Observes how real people behave in real market situations without
influencing that behavior

• Reactive research
• Includes surveys, interviews and questionnaires
• This research is best left to marketing professionals, as they usually can get
more objective and sophisticated results.
 PRIMARY RESEARCH
CONT.
• Those who can't afford high-priced marketing research services should
consider asking nearby college or university business schools for help.
 STEP 4: DESIGN RESEARCH
INSTRUMENTS

• The most common research instrument is the

questionnaire. Keep these tips in mind when designing
your market research questionnaire.
• Keep it simple. Include instructions for answering all questions

• Begin the survey with general questions and move toward more specific
questions.

• Design a questionnaire that is graphically pleasing and easy to read.

• Before printing the survey, ask a few people to complete the
survey and give feedback.

• Mix the form of the questions for different sections of the

questionnaire
• Scales
• Rankings
• Open-ended questions
• Closed-ended questions

• The form or way a question is asked may influence the answer

given. Questions are in two forms: closed-end questions and
open-end questions.
 CLOSED-ENDED
QUESTIONS
• Types of closed-ended questions include:
• Multiple choice questions
• “Yes” or “No” questions

• Scales refer to questions that ask respondents to rank their

answers or measure their answer at a particular point on a scale.
• For example, a respondent may have the choice to rank his/her feelings
toward a particular statement. The scale may range from "Strongly Disagree"
"Disagree" and "Indifferent" to "Agree" and "Strongly Agree."
 OPEN-ENDED
QUESTIONS
• Respondents answer questions in their own words.

• Types of open-ended questions include:

• Word association questions ask respondents to state the first word that
comes to mind when a particular word is mentioned.

• Fill-in-the blank

• For example, a question might read: “When I

eat toast and jelly, I use _____brand of jelly
and it usually costs about ________ per jar.
 STEP 5: COLLECT
DATA
• To obtain clear, unbiased and reliable
results, collect the data under the direction
of experienced researchers.

• Before beginning data collection, You must

to train, educate and supervise your research
staff.
• Untrained staff conducting primary research will
lead to interviewer bias.
 STEP 5 CONT.
• Stick to the objectives and rules associated with the methods
and techniques you have set in Step 2 and Step 3.

• Be as scientific as possible in gathering your information.

 STEP 6: ORGANIZE
AND ANALYZE THE DATA
• Once data has been collected, it needs to be cleaned.

• Cleaning research data involves editing, coding and tabulating

results.
• Start with a simply designed research instrument or questionnaire.
• Look for data focusing on immediate market needs.

• Rely on subjective information only as support for more general

findings of objective research.

• Analyze for consistency; compare the results of different methods of

your data collection.

• Look for common opinions that may be counted together.

• Read between the lines. For example, combine U.S. Census Bureau
statistics on median income levels for a given location and the
number of homeowners vs. renters in the area.
 STEP 7: PRESENT AND USE
MARKET RESEARCH FINDINGS
• Once marketing information is collected and
analyzed, present it in an organized manner to
the decision makers of the business.
• You may want to report your findings in the market
analysis section of your business plan.
• You may want to familiarize your sales and marketing
departments with the data or conduct a companywide
informational training seminar using the information.
 ASSESS AVAILABLE
INFORMATION
• Assess the information that is immediately available.

• You may have the information you need to support your

marketing plan without doing extensive market research.

• Weigh the cost of gathering more information against its

potential usefulness.
 GATHER ADDITIONAL
INFORMATION
• Before considering surveys or field
experiments, look at currently held
information:
• Sales records
• Complaints
• Receipts
• Other records that show where customers live and
work, and how and what they buy.
 ADDITIONAL
INFORMATION CONT.
• Credit records are an excellent source of information. They give
information about:
• Customers' jobs
• Income levels
• Marital status

• Employees may be the best source of information about customer

likes and dislikes.
• They hear customers' minor gripes about the store or service - the ones
customers don't think important enough to take to the owner.
• Employees are aware of the items customers request that you do not stock.
• They often can supply good customer profiles from their day-to-day
contacts.
 DETERMINING WHEN TO
CONDUCT MARKETING RESEARCH

•Time constraints
•Availability of data
•Nature of the decision
•Benefits versus costs
 DETERMINING WHEN TO
CONDUCT MARKETING RESEARCH
Time Constraints Availability of Data Nature of the Decision Benefits vs. Costs
Is the Does the
Information
Is sufficient Yes Yes decision of Yes information Yes Conduct
already on
time
hand
strategic value Marketing
available? or tactical exceed the Research
inadequate?
importance? research cost?

No No No No

Do Not Conduct Marketing Research

 POTENTIAL VALUE OF A MARKETING
RESEARCH EFFORT SHOULD EXCEED ITS
ESTIMATED COSTS
Research expenditures
Decreased uncertainty Delay of marketing
Increased likelihood of
decision and possible
correct decision disclosure of
Improved marketing
information to rivals
performance and Possible erroneous
resulting higher profits research results

Costs
Value