THE MARKET RESEARCH PROCESSChapter 29.1

5 Steps of the Market Research Process

1. Define the Problem

2. Obtaining Data

3. Analyzing Data

4. Recommending Solutions

5. Applying the Results

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

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

Obtaining Data

Secondary 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

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

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

Secondary Data

Easily obtained

No or low cost

Saves time and

money

Data may not be

suitable for the

problem under study

Can be inaccurate

Advantages Disadvantages

Ways to collect Primary Data The Survey Method

The Technological Method

Interviews

The Observation Method

The Experimental Method

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

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

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

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• Inexpensive• Reaches large audience• Respondents find them

less intrusive

• Successful response rate is only 10%

• Incentives can increase results

Internet Survey

• Quick• 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

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

The Observation Method

Point-of-Sale Research – combines natural observation with personal interview People can explain their

buying behavior

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

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

Step 4: Recommending Solutions to the Problem

Conclusions drawn form research are usually presented in an organized report

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.

Market Research Flow Chart

• Determine research questions and

• Determine how to solve it

Define the Problem

• Secondary Data• Primary Data

Obtain Data

• Implement

changes• Monitor results

Apply Results

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