Market Research

Why and How?

So what is today about?

“It is a capital mistaketo develop before

one has data”

Sir Arthur Conan Doyle

So what is market research?Market research can be

defined as the collection, collation and analysis of data relating to the market and consumption of data.

So who uses it?

I know every successful business, but which sectors use it most?

Spending on Market Research by Sector in the UK

44%

21%

13%

9%

4%4% 5%

Manufacturing Companies

Service companies

Retailers and wholesalers

Ad. agencies

Public sector

Non-ad. research agencies

Other

So who uses it?Right so how much do

businesses spend on this? And do they do it themselves or get professional research

companies to do it?

Market Research Budgets

1 - 2% of company revenue = total budget

of this:

50% - 80% internally

20% - 50% externally

85% of British top 500 companies have internal departments

Outsourced to market research firms

Types of Market Research

By Source

- Primary - Secondary

By Methodology

- Qualitative - Quantitative

Types of Market Research: By Source Primary Collection of data

specifically for the task, product or project.

Secondary Based on data

previously collected for purposes other than the research (e.g. published articles,

government stats, etc ONS, mintel, Keynote etc…)

Types of Market Research: By Methodology

Qualitative Quantitative

Type of Question Probing Simple

Sample Size Small Large

Information per respondent High Low(ish)

Questioner’s skill High Low(ish)

Analyst’s skill High High

Type of analysis Subjective, Objective,

Interpretative Statistical

Ability to replicate Low High

Areas probed Attitudes Choices

FeelingsFrequency

MotivationsDemographics

Benefits of Qualitative Market Research vs Quantitative

Benefit Comment/Example

Cheaper

Probes in-depth

motivations and feelings

Often useful to do before quantitative research

Smaller sample size

Allows researches to observe (through one way mirror) ‘real’ consumer reactions, can understand

Gives the researcher a low time and cost to gain understanding of what to probe in larger scale quantitative research

Population

Is simply every individual that can be included in the research

This is also known as the target population

Asking surveying everyone can be expensive though

Time = Money

Sampling

In most cases it is impractical to survey the whole population.

It would be too costly and too time consuming to gather and process the data (information).

Instead researches take samples of the population

Sampling How?

Samples should be representative, they should have the same characteristics as the whole population

If they are not representative then the results may be inaccurate, wasting time, money and even influencing bad decisions

Example

A survey may be carried out by a food company to find out how many people would buy a new, premium priced pizza.

If they only asked pensioners (old people, older than even Pat) on low incomes, their findings would most certainly predict less demand / revenue.

Because the sample did not accuratelyreflect the whole population. This is called Bias sampling

Bias sampling

This occurs when an individual or party already has a preference or favourite with reference to the questions asked

For example ask Pat what is the best football team in the UK

Sheffield Wednesday’s Football Club

Random Sampling

Every item in the population has an equal chance of being chosen. You could also pull names from a hat.

This is best suited when the preferences of the population are all the same i.e. not gender specific

Although never Bias

Systematic Sampling

A regular pattern is used to choose the sample. Every item in the population is listed, a starting point is randomly chosen and then every x individual is selected. For example, a mixed (male and female) class could be listed and every 3rd student selected

This is may be unrepresentative if a pattern exists in the list. For example, every 3rd student in the above sample may be a girl.

Convenience Sampling

The most convenient sample is chosen which, for a sample of size sixty, could mean the first sixty people you meet.

It is highly likely that this sample would be biased and unrepresentative.

It s cheap though

This guy did not even get

out of bed for it

Stratified Sampling

Also a random method but the sample is divided into strata's or segments based on characteristics

For example spit the population into boys and girls, or age……

Quota Sampling

The population is divided into categories (strata) by age, gender, social class..., and then a sample is chosen from each category. The size of each sample is in proportion to the size of each category within the population.

For exampleYear Group Year 7 - 9 Year 10-11 Year 12-13

Number of girls 480 320 100

If I want a sample of 30 girls, I would choose the number of people to take part from each year as follows:

Year 7-9 480 / 900 x 30 = 16Year 10-11 320 / 900 x 30 = 11 (nearest whole number)Year 12-13 100 / 900 x 100 = 3 (nearest whole number)

Snowball Sampling

Is a highly specialised method of sampling. It involves starting a process with one individual or group and using their contacts to develop the

sample, hence “snowball”

When this is undertaken via email this is also referred to as Viral Marketing or viral research, as like a virus it start with one person and spreads. This is a very effective tool, when used correctly

Cluster Sampling

This involves separating the population into clusters, usually in different geographic areas

A random sample is then taken from the cluster and thought to be representative of the entire population

Issues to consider in questionnaire designSensitivity of questionBias in formulationCultural issuesRepetitionRespondent motivationQuestioner trainingComprehensivenessEase of completion

Careful how you ask the question

Q. Do you approve of smoking whilst working?

A: No

Q. Do you approve of working whilst smoking?

A:Yes

Market Research: Summary

Market Research is usually an integral part of understanding innovations - you ignore it at your cost....

But it must be timely, objective and relevant, otherwise it is worse than useless, leading you down the wrong path

So, be involved as far as you can be, especially up front and don’t let the jargon deter you!

Top 10 market research activities

Market Measurement 18%

New Product development/concept testing 14%

Ad or brand awareness monitoring/tracking 13%

Customer Satisfaction (inc Mystery Shopping) 10%

Usage and Attitude Studies 7%

Media Research & evaluation 6%

Advertising developing and pre-testing 5%

Social Surveys for central/local government 4%

Brand/corporate reputation 4%

Repeat customer Studies 3%

Source: BMRA