4.4+Market+Research

Page 1: Introduction

Purpose of Market Research (MR)
- Ad Hoc: One-off research conducted as necessary.
- Continuous: Ongoing activities aimed at discovering customer opinions, beliefs, and preferences.
Generic Types of Market Research: Two primary categories.

Objectives:
- Gather up-to-date information.
- Inform marketing strategies and assess reactions.
- Compare competitors and make predictions.
Key Questions to Address:
- Are customers likely to buy the product?
- Which market segments show interest?
- What price are customers willing to pay?
- How frequently are customers likely to purchase?
- Which brands are viewed as competitors?
- What promotional methods are most effective?
- Where and how should products be sold?

Methods Continued:
- Surveys
  - One-to-one discussions.
  - Interviews and small discussion groups.
  - Consumer panels and focus groups to observe behaviors and responses.
- Observations

Survey Types:
- Self-completed surveys
- Personal interviews
- Postal surveys
- Phone interviews
- Online surveys

Principles for Effective Surveys:
- Focus on clear objectives to gather relevant data.
- Employ a mix of closed and open-ended questions for quantitative and qualitative analysis.
- Avoid jargon and technical terms to enhance comprehension.
- Example Questions:
  - "How much do you like Coca-Cola?"
  - "Which brand of cola do you prefer?"

Market Analysis Sources:
- Market Research Firms
- Competitor Analyses
- Trade Publications
- Academic Journals
- Government Publications (e.g., census, inflation).
- Media Articles (newspapers, books, documentaries).
- Internet resources encompassing all the above.

Ethical Considerations:
- Avoidance of deceitful practices.
- Transparency and disclosure in research methodologies.
- Ethical treatment of research participants.

Key Terms:
- Population: The entire group of interest.
- Sample: A subset of the population chosen for research.

Definition: Sampling based on segmentation; group respondents by shared characteristics.
Example: Sample 200 females and 300 males aged 45-60.
Advantages: More reliable findings, cost-effective.
Disadvantages: Potential for non-representative samples and sampling errors.

Definition: Every individual in the population has an equal chance of being chosen for the sample.

Definition: The process of dividing the population into homogeneous subgroups before sampling.
Example: Often used in political surveys.

Scenario: Management wants to assess the timing of the school day.
Demographics of 100 teachers:
- 40 full-time males
- 30 full-time females
- 10 part-time males
- 20 part-time females
Question: Calculate the stratified sample of 30 from each group.

Calculation Steps:
- Full Time Males: 40% of 30 = 12
- Full Time Females: 30% of 30 = 9
- Part Time Males: 10% of 30 = 3
- Part Time Females: 20% of 30 = 6
- Total: 30 staff members sampled.

Definition: A method where existing participants suggest additional respondents to increase sample size.
Common Usage: Seen in sectors like finance and health insurance.
Advantages: Cost-effective and easy access to participants' contacts.
Disadvantages: Potential for extreme bias based on lifestyle similarities.

Definition: A cost-effective sampling method where geographical areas (clusters) are selected to gather feedback.
Application: Useful when travel time or costs are prohibitive.

Types of Errors:
- Sample Design Errors: Problems in how the sample is structured.
- Non-Sampling Errors: Human errors, mistakes in processing.
- Sampling Errors: May occur if sample size is too small or not representative, or if inappropriate methods are used, leading to biases.