Chapter 29 Conducting Market Research

Objectives  Explain the steps in designing and conducting market research  Compare primary and secondary data  Collect and interpret marketing information  Identify the elements in a marketing research report  Design a marketing research survey

Section 29.1 The Market Research Process

Step 1: Defining the Problem  “Problem definition” occurs when a business clearly identifies a problem and what is needed to solve it. That is a business identifies a research question and the information that is necessary to answer it.  Example: A convention and resort center that wants to know if its staff, services, and facilities are meeting the needs of the guests. The business needs this info to continually improve its services as a a resort and convention destination.

Step 1: Defining the Problem (Objectives)  Objectives are used to develop the actual questions that will be included in the research instrument.  Example: Objective: Determine guest satisfaction with facilities. Question: On a scale of 1 to 5, with 1 being poor and 5 excellent, how would you rate the following resort facilities?

Step 2: Obtaining Data  “Data” means facts.

Step 2: Obtaining Data (Types of Data)  “Primary data” are data obtained for the first time and used specifically for the particular problem or issue under study.  “Secondary data” have already been collected for some purpose other than the current study.

How Are Secondary Data Obtained  Internet Sources – Internet websites allow companies to capture secondary data for free.  U.S. and State Government Sources – government agencies collect data regarding population, demographics, specific markets, industries, products, economic news, export information, and legislative trends.  Specialized Research Companies – these companies “sell” demographic data, 5 year forecasts consumer purchase information, business data, and census data.

Advantages of Secondary Data  The greatest advantage of secondary data is that they can be obtained easily, because the data are on the Internet; in corporate, public, and college libraries; or available for purchase through syndicated services.

Disadvantages of Secondary Data  There are two major disadvantages with secondary data. First, the existing data may not be suitable for the problem being studied. Secondly, secondary data may be inaccurate.

How Are Primary Data Obtained?

The Survey Method  The “survey method” is a research technique in which information is gathered through the use of questionnaires.  It is the most frequently used method of collecting primary data.

The Survey Method (Sample)  A “sample” is a part of the target population that represents it accurately.

Technological Methods  Survey research can be conducted through online surveys and focus group chat sessions on the Internet.

Interviews  Personal Interview - involves questioning people face to face.  Group Interview – focus group interviews involve 8 to 12 people brought together to evaluate advertising, a particular product, package design, or a specific marketing strategy under the direction of a skilled moderator.

The Observation Method  The “observation method” is a research technique in which the actions of people are watched and recorded either by cameras or by observers.

Mystery Shopping  Mystery shopping is an observation method used to view the interaction between customers and employees.

Point of Sale Research  Point of sale research is a powerful form of research that combines natural observation with personal interviews to get people to explain buying behavior.

The Experimental Method  The “experimental method” is a research technique in which a researcher observes the results of changing one or more marketing variables, while keeping the other variables constant under controlled conditions.

Step 3: Analyzing The Data  “Data Analysis” is the process of compiling, analyzing, and interpreting the results of primary and secondary data collection.

Analyzation  Question: How would you rate the quality of service provided by ABC Grocery?  Rating Men Women Excellent 30% 60% Good 15% 10% Average 20% 20% Fair 20% 5% Poor 15% 5%

Data Mining  Data Mining is a computer process that uses statistical methods to extract new information from large amounts of data.

Step 4: Recommending Solutions To The Problem  Conclusions drawn from research are usually presented in an organized and well written report.  Recommendations must be clear and well supported by the data.

Research Report  A typical research report includes the following:  Title Page  Acknowledgments of people that assisted in the research  Table of contents  List of tables, figures, charts, and graphs  Introduction (includes the problem under study, its importance, definitions, limitations of the study, and basic assumptions).  Review of the research information (including the results of any secondary data reviewed).  Procedures used (research techniques – primary data)  Findings  Recommendations  Summary and conclusions  Appendixes  Bibliography

Step 5: Applying The Results  The research effort has been a success if decisions made as a result, lead to increased profits through better sales, increased efficiency, or reduced expenses.  Why/How would decisions that lead to increased customer satisfaction be beneficial? ______________

Section 29.2 The Marketing Survey

The Marketing Survey - Objectives  Design a marketing research survey.  Administer a marketing research survey.

Key Terms  Validity  Reliability  Open-ended questions  Forced choice questions (closed questions)

Reliability  Reliability exists when a research technique produces nearly identical results in repeated trials.

Writing Questions  Open-ended questions ask respondents to construct their own response to a question.  Forced-ended questions ask respondents to choose answers from possibilities given on a questionnaire.

Yes/No Questions  Yes/no questions are most often used as “filter” questions to guide respondents to answer only those questions that apply.

Multiple Choice Questions  Multiple choice questions give the respondent several choices.  Why would this be an important research tool? _____________

Rating Scale Questions  The following is an example of a rating questionnaire:  How would you rate your reception by the front desk staff? Helpfulness Check In Excellent Good Fair Below Avg.

Administering The Questionnaire  In Person Surveys – questionnaires that are not mailed should have a brief explanation of the survey’s purpose.  Incentives – many questionnaires offer incentives to encourage people to participate.  An example is __________________.