Information about Market Research
Market research is the process of systematic gathering, recording and analyzing of data about customers, competitors and the market. Market research can help create a business plan, launch a new product or service, fine tune existing products and services, expand into new markets etc. It can be used to determine which portion of the population will purchase the product/service, based on variables like age, gender, location and income level. It can be found out what market characteristics your target market has. With market research, companies can learn more about current and potential customers.
The purpose of market research is to help companies make better business decisions about the development and marketing of new products. Market research represents the voice of the consumer in a company.
A list of questions that can be answered through market research:
With market research one can get some kind of confirmation that there is a market for one's idea, and that a successful launch and growth are possible.
For starting up a business there are a few things that should be found out through market research in order to know if your business is feasible. These are things like:
Examples of market information questions are:
The market size is more difficult to estimate if you are starting with something completely new. In this case, you will have to derive the figures from the number of potential customers or customer segments. [Ilar 1998]
But besides information about the target market you also need information about your competitor, your customers, products etc. A few techniques are:
Figure 1 is the meta-process model of market research. The model shows every activity that must be performed. And every activity has a few sequential activities. Every sequential activity is connected with an arrow which implies that these activities need to be carried out in a pre-defined order.
Before these 4 steps are discussed it is important to make a few comments about these steps. First although the list does strongly imply an orderly step-by-step process, it is rare that a research project follows these steps in the exact order that they are presented in the figure. Market research is more of an interactive process whereby a researcher, by discovering something in a given step, may move backward in the process and begin again at another step [Market research 2006] Finding some new information while collecting data, may cause the researcher to establish different research objectives. In the following the different market research steps are described.
Defining the problem is the single most important step in the market research process. A clear statement of the problem is a key to good research. A firm may spend hundreds or thousands of dollars doing market research, but if it has not correctly identified the problem, those dollars are wasted. In our case it is obvious that the problem here is setting up a business. But even if this is clear, you still need to know what exactly you need to know to make the new business a success and what specific related to the product is difficult to find out. Problems that may be encountered are: it is unknown what potential markets there are, what customer groups are interested in your products, who the competitors are? After formulating your problem, you need to formulate your research questions. What questions need to be answered and which possible sub-questions do you have.
With the problem or opportunity defined, the next step is to set objectives for your market research operations. Research objectives, related to and determined by the problem formulation, are set so that when achieved they provide the necessary information to solve the problem. A good way of setting research objectives is to ask, “What information is needed in order to solve the problem?" Your objective might be to explore the nature of a problem so you may further define it, or perhaps it is to determine how many people will buy your product packaged in a certain way and offered at a certain price. Your objective might even be to test possible cause and effect relationships. For example, if you lower your price, how much will it increase your sales volume? And what impact will it have on your profit?
Clear objectives can lead to clear results. An example of this is a situation at Camaro/Firebird. Auto manufacturers are sometimes criticized for creating expensive vehicles with unwanted features and technologies that do not meet the needs of the target market. To avoid this trap engineering team of this company turned to market research to evaluate how changes in performance and fuel economy would affect sales volume and customer satisfaction. It turned out that customers were willing to pay more for greater performance if the car also offered simultaneous increases in fuel economy. [Burns 2001]
The problem description, the research question, sub questions and the research objectives are part of an overall document problem description.
After describing and formulating the problem and the objectives, the next step is to prepare a detailed and realistic time frame to complete all steps of the market research process. If your business operates in cycles, establish target dates that will allow the best accessibility to your market. For example, a holiday greeting card business may want to conduct research before or around the holiday season buying period, when their customers are most likely to be thinking about their purchases. [Market research 2006]
Descriptive research refers to a set of methods and procedures that describe marketing variables. Descriptive studies portray these variables by answering who, what, why and how questions. These types of research studies may describe such things as consumers’ attitudes, intentions, and behaviours, or the number of competitors and their strategies.
Causal research design is conducted by controlling various factors to determine which factor is causing the problem. It allows you to isolate causes and effects. By changing one factor, say price you can monitor its effects on a key consequence such as sales. Although causal research can give you a high level of understanding of the variable you are studying, the designs often require experiments that are complex and expensive.
Information source
Secondary data help identify the problem; better define problem; develop an approach to problem; fomulate an appropriate research design; answer certain research questions and test some research hypotheses; Interpret primary data more insightfully.
The actual design of the research instrument, the data collection form that is used to ask and record the information is critical to the success of the project. There are two basic methods to collect information: by asking questions or by observing. The most common research instrument is the questionnaire. There are two types of forms: structured and unstructured. Structured questionnaires list close-end questions. These include multiple choice questions which offer respondents the ability to answer "yes" or "no" or choose from a list of several answer choices. Close-end questions also include scales refer to questions that ask respondents to rank their answers at a particular point on a scale. Unstructured questionnaires have open-ended questions. Respondents can answer in their own words.
To gain a lot of feedback cost-effectively more and more market research agencies are using online survey tools, where people are asked to fill in a form on the internet. There is a danger however that this methodology will skew the sample and exclude those without internet access, those at the lower end of the socio-economic spectrum, older people and those with literacy difficulties. Alternative methods of data collection include automated telephone surveys - also called IVR surveys - as well as the traditional but more expensive methods such as face to face or in person interviewing or postal surveys.
Data analysis is needed to give the raw data any meaning. The first step in analyzing the data is cleaning the data. This is the process of checking the raw data to verify that the data has been correctly entered into the files from the data collection form. After that the data have to be coded. This is the process of assigning all response categories a numerical value. For example males = 1, females = 2. After that the data can be tabulated, which refers to the actual counting of the number of observations that fall in to each possible response category.
Data can also be collected on a smaller scale to obtain more qualitative data. One frequently used form of qualitative data collection is the focus group. Focus Groups are generally comprised of a small selection of the target audience. The participants are then queried and the discussions are guided by a moderator. The group is often recorded and/or viewed by the marketing team or others via a two-way mirror or closed circuit system. Focus group companies exist worldwide. Some specialize in certain industries, such as the legal community, while others provide more general services.
..... Click the link for more information.
The purpose of market research is to help companies make better business decisions about the development and marketing of new products. Market research represents the voice of the consumer in a company.
A list of questions that can be answered through market research:
- What is happening in the market? What are the trends? Who are the competitors?
- How do consumers talk about the products in the market?
- Which needs are important? Are the needs being met by current products?
With market research one can get some kind of confirmation that there is a market for one's idea, and that a successful launch and growth are possible.
Market research for business planning
Market research is for discovering what people want, need, or believe. It can also involve discovering how they act. Once that research is complete it can be used to determine how to market your specific product. Whenever possible, try to reduce risks at the earliest possible stage. For example you could carry out market research early on and not wait until you are almost ready to enter the market. If early market research reveals that your business idea has real potential, you can use this information in planning the build-up of your business. [Ilar 1998]For starting up a business there are a few things that should be found out through market research in order to know if your business is feasible. These are things like:
- Market information
Examples of market information questions are:
- Who are the customers?
- Where are they located and how can they be contacted?
- What quantity and quality do they want?
- What is the best time to sell?
- What is the long-term or historical price data over a number of years?
- What is the expected production in the country?
- Is there more demand for one product or another? Etc.
- Market segmentation
The market size is more difficult to estimate if you are starting with something completely new. In this case, you will have to derive the figures from the number of potential customers or customer segments. [Ilar 1998]
But besides information about the target market you also need information about your competitor, your customers, products etc. A few techniques are:
- Customer analysis
- Competitor analysis
- Risk analysis
- Product research
- Advertising research
Perform market research
This chapter introduces the steps involved in the market research process. It also provides you with a brief preview of each of the steps necessary to conduct a market research effort. As you can see in figure 1, the market research process has 4 basic steps. These steps include:- Defining the research problem
- Establishing the research design
- Collecting and analyzing data
- Formulate findings
Figure 1 is the meta-process model of market research. The model shows every activity that must be performed. And every activity has a few sequential activities. Every sequential activity is connected with an arrow which implies that these activities need to be carried out in a pre-defined order.
Before these 4 steps are discussed it is important to make a few comments about these steps. First although the list does strongly imply an orderly step-by-step process, it is rare that a research project follows these steps in the exact order that they are presented in the figure. Market research is more of an interactive process whereby a researcher, by discovering something in a given step, may move backward in the process and begin again at another step [Market research 2006] Finding some new information while collecting data, may cause the researcher to establish different research objectives. In the following the different market research steps are described.
Defining the research problem
The step defining the research problem consists of 2 main steps: (1) formulating the problem and (2) establishing research objectives.Defining the problem is the single most important step in the market research process. A clear statement of the problem is a key to good research. A firm may spend hundreds or thousands of dollars doing market research, but if it has not correctly identified the problem, those dollars are wasted. In our case it is obvious that the problem here is setting up a business. But even if this is clear, you still need to know what exactly you need to know to make the new business a success and what specific related to the product is difficult to find out. Problems that may be encountered are: it is unknown what potential markets there are, what customer groups are interested in your products, who the competitors are? After formulating your problem, you need to formulate your research questions. What questions need to be answered and which possible sub-questions do you have.
With the problem or opportunity defined, the next step is to set objectives for your market research operations. Research objectives, related to and determined by the problem formulation, are set so that when achieved they provide the necessary information to solve the problem. A good way of setting research objectives is to ask, “What information is needed in order to solve the problem?" Your objective might be to explore the nature of a problem so you may further define it, or perhaps it is to determine how many people will buy your product packaged in a certain way and offered at a certain price. Your objective might even be to test possible cause and effect relationships. For example, if you lower your price, how much will it increase your sales volume? And what impact will it have on your profit?
Clear objectives can lead to clear results. An example of this is a situation at Camaro/Firebird. Auto manufacturers are sometimes criticized for creating expensive vehicles with unwanted features and technologies that do not meet the needs of the target market. To avoid this trap engineering team of this company turned to market research to evaluate how changes in performance and fuel economy would affect sales volume and customer satisfaction. It turned out that customers were willing to pay more for greater performance if the car also offered simultaneous increases in fuel economy. [Burns 2001]
The problem description, the research question, sub questions and the research objectives are part of an overall document problem description.
After describing and formulating the problem and the objectives, the next step is to prepare a detailed and realistic time frame to complete all steps of the market research process. If your business operates in cycles, establish target dates that will allow the best accessibility to your market. For example, a holiday greeting card business may want to conduct research before or around the holiday season buying period, when their customers are most likely to be thinking about their purchases. [Market research 2006]
Selecting and establishing research design
The step selecting and establishing research design consists of 3 main steps: (1) select the research design, (2) identify information types and sources and (3) determine and design research instrument.Select the research design
As stated earlier, every research project and every business is different. Still, there are enough commonalities among research projects to categorize them by research methods and procedures used to collect and analyze data. There are three types of research design:- Exploratory research design -
- Descriptive research
- Causal research
Descriptive research refers to a set of methods and procedures that describe marketing variables. Descriptive studies portray these variables by answering who, what, why and how questions. These types of research studies may describe such things as consumers’ attitudes, intentions, and behaviours, or the number of competitors and their strategies.
Causal research design is conducted by controlling various factors to determine which factor is causing the problem. It allows you to isolate causes and effects. By changing one factor, say price you can monitor its effects on a key consequence such as sales. Although causal research can give you a high level of understanding of the variable you are studying, the designs often require experiments that are complex and expensive.
Identify information types and sources
There are two types of information available to a market researcher: primary data and secondary data. Primary data is original information gathered for a specific purpose. Secondary data refers to information that already exists somewhere and has been collected for some other purpose. Both types of research have a number of activities and methods of conducting associated with them. Secondary research is usually faster and less expensive to obtain than primary research. Gathering secondary research may be as simple as making a trip to a local library or business information center or browsing the Internet. There are already a lot of statistics about different businesses that can be used for this research.Information source
Secondary data help identify the problem; better define problem; develop an approach to problem; fomulate an appropriate research design; answer certain research questions and test some research hypotheses; Interpret primary data more insightfully.
Determining and design research instrument
After determining which type(s) of information are needed, the methods of accessing data must be determined. There are several different methods of collecting data. These methods include telephone surveys, mail surveys, personal interviews or group surveys.The actual design of the research instrument, the data collection form that is used to ask and record the information is critical to the success of the project. There are two basic methods to collect information: by asking questions or by observing. The most common research instrument is the questionnaire. There are two types of forms: structured and unstructured. Structured questionnaires list close-end questions. These include multiple choice questions which offer respondents the ability to answer "yes" or "no" or choose from a list of several answer choices. Close-end questions also include scales refer to questions that ask respondents to rank their answers at a particular point on a scale. Unstructured questionnaires have open-ended questions. Respondents can answer in their own words.
To gain a lot of feedback cost-effectively more and more market research agencies are using online survey tools, where people are asked to fill in a form on the internet. There is a danger however that this methodology will skew the sample and exclude those without internet access, those at the lower end of the socio-economic spectrum, older people and those with literacy difficulties. Alternative methods of data collection include automated telephone surveys - also called IVR surveys - as well as the traditional but more expensive methods such as face to face or in person interviewing or postal surveys.
Collecting and analyzing data
Data collection is usually done by students . They are employed by field data collection companies to collect primary data. A choice has to be made between collecting the data yourself or hiring an external office who are specialized in interviews.Data analysis is needed to give the raw data any meaning. The first step in analyzing the data is cleaning the data. This is the process of checking the raw data to verify that the data has been correctly entered into the files from the data collection form. After that the data have to be coded. This is the process of assigning all response categories a numerical value. For example males = 1, females = 2. After that the data can be tabulated, which refers to the actual counting of the number of observations that fall in to each possible response category.
Data can also be collected on a smaller scale to obtain more qualitative data. One frequently used form of qualitative data collection is the focus group. Focus Groups are generally comprised of a small selection of the target audience. The participants are then queried and the discussions are guided by a moderator. The group is often recorded and/or viewed by the marketing team or others via a two-way mirror or closed circuit system. Focus group companies exist worldwide. Some specialize in certain industries, such as the legal community, while others provide more general services.
See also
- Marketing research
- Marketing research mix
- Business Plan
- List of marketing research firms
- Healthcare marketing research
- Market Segmentation
- Positioning
- Focus group
- Online panel
- Coolhunting
- Primary research
- Secondary research
References
- Arinze, B. “Market planning with computer models: A case study in the software industry.” Industrial marketing management, Volume: 19, Issue: 2 (May 1990), pp: 117-129
- Cornish, S. L. “Product Innovation and the Spatial Dynamics of Market Intelligence: Does Proximity to Markets Matter?” Economic Geography. Volume: 73, Issue 2 (April 1997), pp: 143-165.
- Davis, R.E. (1993). Experience: The role of market research in the development of new consumer products. Journal of product innovation management. Volume: 10, pp: 309-317
- Mullins, J.W. (1998). New product development in rapidly changing markets: an exploratory study. Journal of product innovation management. Volume: 15, pp: 224-236
- Berry, T. (2004): Hurdle: The book on business planning - Millennium Edition. Eugene, OR: Palo Alto Software.
- Burns, A.C., & Bush, R.F. (2001). Marketing research. London: Prentice-Hall
- Ilar, D.; Kienhuis, H.; Kubr, T.; Marchesi, H.(1998). Starting Up: achieving success with professional business planning, McKinsey & Company, inc Switzerland.
External Links
- Market Research Business Resource Library
- The Market Research Society More information from the Market Research Society
- Market Research Portal More resources about market research
customer is someone who makes use of or receives the products or services of an individual or organization. The word historically derives from "custom," meaning "habit"; a customer was someone who frequented a particular shop, who made it a habit to purchase goods there, and with
..... Click the link for more information.
..... Click the link for more information.
Competition is the rivalry of two or more parties over something. Competition occurs naturally between living organisms which coexist in an environment with limited resources. For example, animals compete over water supplies, food, and mates.
..... Click the link for more information.
..... Click the link for more information.
market is a social arrangement that allows buyers and sellers to discover information and carry out a voluntary exchange of goods or services. It is one of the two key institutions that organize trade, along with the right to own property.
..... Click the link for more information.
..... Click the link for more information.
business plan is a formal statement of a set of business goals, the reasons why they are believed attainable, and the plan for reaching those goals. It may also contain background information about the organization or team attempting to reach those goals.
..... Click the link for more information.
..... Click the link for more information.
population is the collection of people or organisms of a particular species living in a given geographic area or mortality, and migration, though the field encompasses many dimensions of population change including the family (marriage and divorce), public health, work and the
..... Click the link for more information.
..... Click the link for more information.
In investing, financial markets are commonly believed to have market trends[1] that can be classified as primary trends, secondary trends (short-term), and secular trends (long-term).
..... Click the link for more information.
..... Click the link for more information.
Competitor analysis in marketing and strategic management is an assessment of the strengths and weaknesses of current and potential competitors. Created by Michael Porter competitor analysis focuses on four key aspects: competitor's objectives, competitor's assumptions,
..... Click the link for more information.
..... Click the link for more information.
Risk Analysis can refer to:
..... Click the link for more information.
- Risk analysis (engineering)
- Probabilistic risk assessment, an engineering safety analysis
- Risk analysis (Business)
..... Click the link for more information.
Statistics is a mathematical science pertaining to the collection, analysis, interpretation or explanation, and presentation of data. It is applicable to a wide variety of academic disciplines, from the physical and social sciences to the humanities.
..... Click the link for more information.
..... Click the link for more information.
Strategic planning is an organization's process of defining its strategy, or direction, and making decisions on allocating its resources to pursue this strategy, including its capital and people.
..... Click the link for more information.
..... Click the link for more information.
Statistics is a mathematical science pertaining to the collection, analysis, interpretation or explanation, and presentation of data. It is applicable to a wide variety of academic disciplines, from the physical and social sciences to the humanities.
..... Click the link for more information.
..... Click the link for more information.
A focus group is a form of qualitative research in which a group of people are asked about their attitude towards a product, service, concept, advertisement, idea, or packaging.
..... Click the link for more information.
..... Click the link for more information.
Market research is broader in scope and examines all aspects of a business environment. It asks questions about competitors, market structure, government regulations, economic trends, technological advances, and numerous other factors that make up the business environment.
..... Click the link for more information.
..... Click the link for more information.
Definition
The term Marketing Research Mix (or the MR Mix) was created in 2004 and published in 2007 (Bradley - see references). It was designed as a framework to assist researchers to design or evaluate marketing research studies...... Click the link for more information.
business plan is a formal statement of a set of business goals, the reasons why they are believed attainable, and the plan for reaching those goals. It may also contain background information about the organization or team attempting to reach those goals.
..... Click the link for more information.
..... Click the link for more information.
This is a list of marketing research firms. In the case of research groups or conglomerates the location of the headquarters of the parent entity is given.
..... Click the link for more information.
Australia
- OzTAM
- Roy Morgan Research
Canada
- Print Measurement Bureau
..... Click the link for more information.
Market research is the process of systematic gathering, recording and analyzing of data about customers, competitors and the market. Market research can help create a business plan, launch a new product or service, fine tune existing products and services, expand into new markets
..... Click the link for more information.
..... Click the link for more information.
A Market segment is a subgroup of people or organizations sharing one or more characteristics that cause them to have similar product needs.
Market segmentation
..... Click the link for more information.
Market segmentation
..... Click the link for more information.
The term positioning has more than one meaning:
..... Click the link for more information.
- In marketing, see Positioning (marketing)
- In telecommunications, see Positioning (telecommunications)
- In grappling, see Grappling position
- "Positioning"
..... Click the link for more information.
A focus group is a form of qualitative research in which a group of people are asked about their attitude towards a product, service, concept, advertisement, idea, or packaging.
..... Click the link for more information.
..... Click the link for more information.
A focus group is a form of qualitative research in which a group of people are asked about their attitude towards a product, service, concept, advertisement, idea, or packaging.
..... Click the link for more information.
..... Click the link for more information.
a major revision or rewrite and needs further review. You can help!
Coolhunting is a term coined in the early 1990s referring to a new breed of marketing professionals, called coolhunters.
..... Click the link for more information.
Coolhunting is a term coined in the early 1990s referring to a new breed of marketing professionals, called coolhunters.
..... Click the link for more information.
Primary research (also called field research) involves the collection of data that doesn't already exist.
This method of research is always used as the first technique, this can then lead on to Field research.
The term is widely used in market research.
..... Click the link for more information.
This method of research is always used as the first technique, this can then lead on to Field research.
The term is widely used in market research.
..... Click the link for more information.
Secondary research (also known as desk research) involves the summary, collation and/or synthesis of existing research rather than primary research, where data is collected from, for example, research subjects or experiments.
..... Click the link for more information.
..... Click the link for more information.
This article is copied from an article on Wikipedia.org - the free encyclopedia created and edited by online user community. The text was not checked or edited by anyone on our staff. Although the vast majority of the wikipedia encyclopedia articles provide accurate and timely information please do not assume the accuracy of any particular article. This article is distributed under the terms of GNU Free Documentation License.
Herod_Archelaus
