Fundamentals of Market Research

1. Fundamentals of Market Research Prof. Neha Yadav

2. What is Market Research? • It is a systematic and objective identification, collection, analysis, dissemination and use of information for the purpose of improving decision making related to the identification and solution of problems and opportunities in marketing.

3. Role of Marketing Research LEVEL 1 (Strategic) LEVEL 2 (Tactical)

4. Ethical Considerations in Market Research • Any information collected for the purpose of marketing research from a respondent should not be misused for any other purpose. • Badgering or forcing respondents to answer a questionnaire or certain questions is not a good professional practice. A better approach is to explain the necessity of asking a question and let the respondent decide further. • Confidentiality of the responses in good faith must be ensured. • Questions of personal nature which could embarrass the respondent, must be given an opportunity to think about it and refuse to participate. • Marketing researcher’s foremost responsibility is to accurately reflect the respondent’s replies in report. The report must not be based on preconceived ideas of the researcher.

5. Classification of Market research

6. Market Research Process • Step 1: Problem Identification • Step 2: Development of an Approach to the Problem • Step 3: Research Design Formulation • Step 4: Fieldwork or data Collection • Step 5: Data Preparation and Analysis • Step 6: Report Preparation and Presentation

7. Problem Identification & Developing an Approach

9. One day I received a phone call from a research analyst who introduced himself as one of our alumni. He was working for a restaurant chain in town and wanted help analyzing the data he had collected while conducting a marketing research study. Chain Restaurant Study

10. When we met, he presented me with a copy of the questionnaire and asked how he should analyze the data. My first question to him was, What is the problem being addressed? Chain Restaurant Study

11. When he looked perplexed, I explained that data analysis is not an independent exercise. Rather, the goal of data analysis is toPROVIDE INFORMATION RELATED TO THE PROBLEM COMPONENTS. Chain Restaurant Study

12. I was surprised to learn that he did not have a clear understanding of the marketing research problem and that a written definition did not exist. So before going any further, I had to define the marketing research problem. Once that was done, I found that much of the data collected was not relevant to the problem. In this sense, the whole study was a waste of resources. A new study had to be designed and implemented to address the problem defined. Chain Restaurant Study

13. MANAGEMENT DECISION PROBLEM • Should a new product be introduced? • Should the advertising campaign be changed? • Should the price of the brand be increased? MARKETING RESEARCH PROBLEM • To determine the preference and purchase intentions for the proposed new product • To determine the effectiveness of the current advertising campaign • To determine the price elasticity of demand and impact on sales and profits of various levels of price changes

14. Components of Approach Objective/Theoretical Framework • Research should be based on objective evidence and supported by theory. • Theory is conceptual scheme based on foundational statements called axioms. • Objective evidence is gathered by compiling relevant findings from secondary sources (supported by empirical findings) • In other words, it is called the literature review based on which the framework of research can be based.

15. Analytical Models: • Verbal Model, Graphical Model, Mathematical Model Research Questions: • RQs are refined statements of the specific components of the problem. • Each problem component can be again broken down into sub components. Ex: To measure customer satisfaction towards fast food industry Ambience, Quality of food, Staff, Cleanliness and Hygiene, Price Questions on each component can be asked from the respondent.

16. Hypotheses: • It is an unproven statement about a phenomenon that interests a researcher. • It is the possible answer to the research questions. COMFORT FOOD REAL RESEARCH Ex: RQ1: What foods are considered to be comfort foods? H1: Potato Chips are considered to be comfort foods. H2: Ice creams/Chocolates/ Soups are considered to be comfort foods. RQ2: When do people eat comfort foods? H3: People eat comfort foods when they are in good mood. H4: People eat comfort foods when they are in bad mood.

17. Research Design • Framework or Blueprint for conducting the Market Research • It details the procedures necessary for obtaining the information needed to structure or solve the problems. • Foundation for conducting the project. • Components or tasks involved: • Design exploratory, descriptive and or causal phases • Define information needed • Specify measurement and scaling procedures • Construct and pretest questionnaire • Specify sampling process and sample size • Develop a plan of data analysis

18. Research Design Formulation Contd…..

20. Table 3.1 Exploratory Conclusive Objective: Character-istics: Findings/ Results: Outcome: To provide insights and understanding Information needed is defined only loosely. Research process is flexible and unstructured. Sample is small and non-representative. Analysis of primary data is qualitative Tentative Generally followed by further exploratory or conclusive research To test specific hypotheses and examine relationships Information needed is clearly defined. Research process is formal and structured. Sample is large and representative. Data analysis is quantitative Conclusive Findings used as input into decision making Exploratory & Conclusive Research Differences

21. Comparison between the research designs

22. Exploratory Design-Qualitative • Direct • Focus group Interviews • In Depth Interviews 2. Indirect • Projective Techniques a) Association Techniques b) Completion Techniques c) Construction Techniques d) Expressive Techniques Exploratory Design- Secondary Data

23. Uses of Exploratory Research • Formulate a problem or define a problem more precisely • Identify alternative courses of action • Develop hypotheses • Isolate key variables and relationships for further examination • Gain insights for developing an approach to the problem • Establish priorities for further research

24. Methods of Exploratory Research • Survey of experts (discussed in Chapter 2) • Pilot surveys (discussed in Chapter 2) • Secondary data analyzed in a qualitative way (discussed in Chapter 4) • Qualitative research (discussed in Chapter 5)

25. Use of Descriptive Research • To describe the characteristics of relevant groups, such as consumers, salespeople, organizations, or market areas • To estimate the percentage of units in a specified population exhibiting a certain behavior • To determine the perceptions of product characteristics • To determine the degree to which marketing variables are associated • To make specific predictions

26. Methods of Descriptive Research • Secondary data analyzed in a quantitative, as opposed to a qualitative, manner (discussed in Chapter 4) • Surveys (Chapter 6) • Panels (Chapters 4 and 6) • Observational and other data (Chapter 6)

27. Cross-Sectional Designs • Involve the collection of information from any given sample of population elements only once • In single cross-sectional designs,there is only one sample of respondents and information is obtained from this sample only once. • In multiple cross-sectional designs, there are two or more samples of respondents, and information from each sample is obtained only once. Often, information from different samples is obtained at different times. • Cohort analysis consists of a series of surveys conducted at appropriate time intervals, where the cohort serves as the basic unit of analysis. A cohort is a group of respondents who experience the same event within the same time interval.

28. Longitudinal Designs • A fixed sample (or samples) of population elements is measured repeatedly on the same variables • A longitudinal design differs from a cross-sectional design in that the sample or samples remain the same over time

29. Sample Surveyed at T1 Cross- Sectional Design Same Sample also Surveyed at T2 Sample Surveyed at T1 Longitudinal Design Time T1 T2 Cross-Sectional vs. Longitudinal Figure 3.6 Cross Sectional vs. Longitudinal Designs

30. Table 3.4 Evaluation Criteria Cross-Sectional Design Longitudinal Design Detecting Change Large amount of data collection Accuracy Representative Sampling Response bias - - - + + + + + - - Note: A “+” indicates a relative advantage over the other design, whereas a “-” indicates a relative disadvantage. Relative Advantages and Disadvantages of Longitudinal and Cross-Sectional Designs

31. Uses of Causal Research • To understand which variables are the cause (independent variables) and which variables are the effect (dependent variables) of a phenomenon • To determine the nature of the relationship between the causal variables and the effect to be predicted • METHOD: Experiments

32. Types of Errors

33. Surrogate Information error - Respondent Selection Error - Inability Error • Measurement Error - Questioning Error - Unwillingness Error • Population Definition Error - Recording Error • Sampling Frame Error - Cheating Error • Data Analysis error

34. -End of Session- (Reading: Chapters 1 to 5, Marketing Research by Naresh Malhotra, 5th Edition, Pearson Publication)