1. The Market Research Process
Chapter 29.1

2. 5 Steps of the Market Research Process
Define the Problem
Obtaining Data
Analyzing Data
Recommending Solutions
Applying the Results

3. 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

4. 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

5. Obtaining Data Secondary Data Primary Data
Data that has already been collected
Done before primary data
Primary Data
Data that are collected for the first time
Done only if secondary data does exist to support your question/problem

6. 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

7. 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

8. Secondary Data Advantages Disadvantages Easily obtained No or low cost
Saves time and money
Data may not be suitable for the problem under study
Can be inaccurate

9. Ways to collect Primary Data
The Survey Method
The Technological Method
Interviews
The Observation Method
The Experimental Method

10. 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

11. 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

12. 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

13. Advantages and Disadvantages
Type of Survey
Advantages
Disadvantages
Personal Interview
Easier to get people to respond
Easy to administer
Expensive
Take time to tabulate results
Telephone Interview
Quick
Efficient
Inexpensive
Limited by “Do Not Call Registry”
People are irritated by unwanted calls
Mail Survey
Reaches large audience
Respondents find them less intrusive
Successful response rate is only 10%
Incentives can increase results
Internet Survey
Automatic data entry
Allows for real time data collection, multiple choice and opened ended questions
Limited to people with internet access
Many people dislike receiving uninvited surveys

14. 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

15. The Observation Method
Point-of-Sale Research – combines natural observation with personal interview
People can explain their buying behavior

16. 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

17. 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

18. Step 4: Recommending Solutions to the Problem
Conclusions drawn form research are usually presented in an organized report

19. 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.

20. Market Research Flow Chart
Define the Problem
Determine research questions and
Determine how to solve it
Obtain Data
Secondary Data
Primary Data
Analyze Data
Analyze and interpret data
Does it answer the research question
Recommend Solutions
Organized in a written report
Clear and well supported by data
Apply Results
Implement changes
Monitor results

21. 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