PM

Market Research - Lecture 4 Notes

Market Research: Purpose and Scope

  • A business activity that discovers information of use in making marketing decisions.
  • Essential component of understanding the market.
  • Should contribute to improved performance.

The Marketing Process and the Role of Market Research

  • The marketing process involves understanding, creating, communicating and delivering an offering for exchange of value.
  • Steps: Understand → Create → Communicate → Deliver (and exchange value).
  • Market research informs many types of decisions, including:
    • Market segmentation
    • Sales performance
    • Product decisions
    • Price decisions
    • Promotion decisions
    • Place (distribution) decisions

Marketing Information System

  • Market intelligence sources:
    • Sales representative reports
    • Customer service reports
    • Customer complaints/compliments
    • Competitor actions
    • Environmental changes
  • Market research steps:
    • Problem (opportunity/threat/issue)
    • Research design
    • Data collection
    • Data analysis
    • Findings
  • Internal reports:
    • Accounting reports
    • Sales reports
    • Production reports
    • Distribution reports
  • Information flow and decision making:
    • Query → Information → Information → Information
    • Decision support system feeds Plans/Strategies → Decisions → Outcomes
    • Marketing managers use information to develop plans and make decisions

Big Data and Insight

  • Big data has changed marketing practice; improvements and links are continually expanded.
  • Linking data informs decision making; systems help people understand complex data.
  • By understanding what people do and when, where and why, we can build explanations that:
    1) Describe people’s current behaviour
    2) Identify trends
    3) Identify changes in behavioural patterns over time
    4) Identify opportunities and areas for action

Big Data in Practice

  • A lot of online businesses generate big data naturally.
  • Examples include: user watch history, search queries, time spent scrolling/watching, demographic and internet-based behaviour, browsing behaviour.

Insight

  • As data volume grows, the need for insight grows as well.
  • UK National Social Marketing Centre definition: insight is a piece of understanding that guides strategy.
  • Insight is generated from a combination of analytics and market research plus the deep understanding that moves and motivates people.

Components of Market Research

  • The Five Market Research Components:
    1) Defining the research problem
    2) Designing the research methodology
    3) Collecting data
    4) Analysing data and drawing conclusions
    5) Presenting the results and making recommendations

Market Research Considerations

  • Before undertaking market research, consider:
    • Relevance
    • Timing
    • Availability of resources
    • Need for new information
    • Cost-benefit analysis
  • Ethics in market research:
    • Market researchers have an ethical responsibility to their clients or employers and to participants in the research.

Defining the Research Problem

  • The question the market research project is intended to answer; must be clearly specified to enable marketing decisions.
  • As research proceeds, the original questions may be redefined.
  • Setting a good research problem is important.
  • The decision maker is aware of only 10% of the true problem, which can lead to wrongly defining the research problem (90% submerged).
  • Marketers often prepare a market research brief outlining the problem and specific information required:
    1) Research problem
    2) Information required
    3) Timeframe
    4) Budget
    5) Any other conditions of the project

Market Research Example: Old Spice / Axe

  • Example context: Old Spice repositioning and brand evolution over time.
  • Case discusses how Old Spice repositioned for a younger target market.
  • Focus on the role of research in understanding how to reposition brands with changing demographics.

Designing a Research Methodology

  • Detailed methodology guides the research project and addresses the research problem.
  • Multiple approaches are possible; how you frame the research question determines the type of research method.

Research Methodology Types

  • Exploratory research: Gathers more information about a loosely defined problem.
  • Descriptive research: Solves a well-defined problem by clarifying characteristics of phenomena.
  • Causal research: Tests whether a variable causes a specific outcome while holding other variables constant.
  • Hypothesis: A tentative explanation that can be tested.

Research Methodology Examples for Old Spice

  • Descriptive research required: How does Old Spice reposition itself for a younger target market?
  • Exploratory research: How do we reposition Old Spice from being an old man’s brand?
  • Causal research: Will one-to-one sales activities increase positive perceptions of Old Spice among 12–24 year olds?

Data Types

  • Primary data: Data collected specifically for the current market research project.
  • Secondary data: Data originally gathered for a purpose other than the current problem; information already available.
  • When possible, learn from available data sources to avoid unnecessary data collection.

Market Research Example: Using Secondary Data First

  • Found that 60% of toiletries buyers were women.
  • Instead of launching male-centric ads, the campaign “Man Your Man Could Smell Like” (Feb 2010) targeted a different demographic; Isaiah Mustafa featured.

Market Research Example: Campaign Outcomes (Old Spice)

  • Nearly 105,000,000 YouTube views
  • 1.2\times 10^{9} media impressions
  • National and international media coverage
  • 27\times follower increase on Twitter
  • 8\times increase in Facebook interaction
  • 3\times increase in website traffic
  • Emmy nomination

Qualitative and Quantitative Research

Qualitative Research

  • Aimed at obtaining rich, deep, and detailed information about attitudes and emotions underlying behavior.
  • Often used for exploratory research.
  • Techniques include interviews and focus groups.

Interviews

  • Depth interviews; researcher-driven.
  • Structured vs. semi-structured formats.
  • More focused and easier to steer; more natural and can lead to unknown discoveries.
  • Potential for interviewer bias in solicitation and interpretation.
  • Relatively long duration.

Focus Groups

  • Group of respondents brought together to discuss ideas, concepts or products; observations and interactions are observed.
  • Great for multiple perspectives; can reveal issues researchers might not foresee.
  • Requires a good moderator; social influence is strong; participants can influence each other.

Quantitative Research

  • Collects information that can be represented numerically.
  • Usually used for descriptive and causal research.
  • Approaches include: surveys, experimentation, observation, and neuroscience.
  • There is a global shift towards quantitative methods.

When to Use Quantitative Research

  • Useful for:
    • Monitoring market size
    • Identifying market patterns and trends
    • Predicting the success of proposed marketing campaigns
    • Tracking customer perceptions for existing products
  • Can be more generalisable than qualitative methods due to larger samples.

Surveys

  • Most common quantitative tool; can be interviewer-led or self-response.
  • Questions designed to elicit relatively closed answers.
  • Susceptible to distortion as reported behavior may diverge from actual behavior.
  • Often suffers from low response rates.

Experiments

  • Involves manipulating variables of interest while holding everything else constant.
  • Used for causal research.
  • Variable of interest = independent variable; outcome variable = dependent variable.
  • Artificial settings may not reflect real life; other unmeasured variables may influence outcomes.

Biometrics (Neuro-marketing)

  • Monitoring physiological responses to stimuli (e.g., heart rate, emotional responses, brain activity).
  • Provides information about actual behavior.
  • Very expensive and invasive; cannot fully explain why.

Managing Research Projects

Managing the Research Project: Overview

  • Data must be collected according to the methods in the research design; ethical practices must be followed.
  • Processes are applied to ensure the design is followed; responses recorded correctly; biases minimized; errors not induced.
  • Data can be stored in-house or outsourced to an agency responsible for data collection, scraping, or mining.

Managing Data Collection: Population, Sampling, Sample

  • Population: All of the things (often people) of interest to the researcher.
  • Sampling: The process of choosing members of the population.
  • Sample: The group chosen for the study.

Sampling Methods

  • Random sampling: Each member of the population has a random chance of being sampled.
  • Stratified sampling: Members are grouped by a characteristic and a sample is drawn from each group.
  • Quota sampling: Population is divided into groups by certain characteristics; researcher selects from them.
  • Convenience sampling: Participants are selected based on availability.

Budgeting and Scheduling

  • Time and financial resources are limited; budgeting and scheduling must be planned to maximize ROI.
  • Budgets can be estimated from likely costs for each phase or by estimating time per phase and applying standard cost estimates.
  • A market research project is a substantial investment.

Project Planning and Control

  • Some phases must precede others; projects must allow revisions as they progress.
  • Not always a linear path from start to finish.
  • Tools to maintain control: Gantt charts and the Critical Path Method (CPM).

Data Cleaning and Analysis

  • After data collection, filter and organize data; perform quality control to eliminate invalid data.
  • Data is cleaned; results are analyzed using appropriate techniques depending on data type.

Data Analysis Techniques

  • Quantitative analysis: Statistical analyses in programs such as R, SAS, SPSS, Excel, Python.
  • Qualitative data: Focus on rich, detailed information; use reduction and coding to extract themes.

Reporting the Findings

  • Findings should be presented concisely and clearly to decision-makers.
  • Common formats include presentations (PowerPoint) or written reports.

The Market Research Process is Continuous

  • Market research is a continuous process.
  • Marketers should evaluate the effectiveness of each marketing activity to optimise impact.
  • High-quality research provides irrefutable evidence of ROI and can build a business case for future projects.

Wrapping Up

  • End of Topic: Prepare for the next tutorial with pre-tutorial activities; check Canvas for updates.