CHAPTER 2

ENTREPRENEURIAL
OPPORTUNITIES AND
SELECTION PROCESS

3)Market Study Procedures

2.3.1 Market Research Questionnaire
Design Best Practices
     
A researcher’s ability to design an appropriate measurement scale does not by itself provide
guarantee that relevant data will automatically collected. Therefore, understanding what involves
in building a questionnaire becomes utmost important for a researcher and manager.
Most problems in the field of marketing research are complex in the nature and require primary
data collection. In such cases, a questionnaire becomes a potent tool for collecting primary data.
A questionnaire is characterized by two main objectives. First, it must convert the information
required by managers in a format of questions. Second, the questions asked must be created in a
format in which respondent will understand it and be willing to answer them.
Incomplete interviews seldom provide any useful insights and therefore the researcher must strive
for reducing respondent disengagement as much as possible. A well-designed questionnaire
would generally overcome the problem of disengagement.
 
Some of the best practices for questionnaire designing are as follows:
1. Selection of interview method: 
The type of interviewing method (personal/telephone/online) plays an important role in
questionnaire design. For example, in personal interview situations, respondents are able to see
the questionnaire and interact in person with the interviewer. This provides an opportunity to ask
varied questions involving complexities because instant feedback mechanism is available. Due to
the personal interaction, it is also possible sometimes to ask lengthy questions. In telephone
interviews, because the respondent cannot see the questionnaire it is quite hard to ask complex
and lengthy questions. Therefore, the questions should be short and to the point involving little
complexity. In online surveys, respondent tries to tackle each question on his or her own and
hence it is recommended that the questions be kept simple.
 
2. Determination of question composition:
Once the information is specified in the researchable format and the interview method is decided,
the next stage for the researchers will be to determine what kind of question are they going to ask
to the respondents.
There are two major types of question structures:
 Open-ended questions (also called unstructured questions), and
 Close-ended questions (also called structured questions)
Closed-ended questions should be preferred for surveys, because they help in achieving higher
response rates. Responses to closed-ended questions can also be easily analysed statistically. On
the other hand, Open-ended questions are typically used in exploratory studies where the topic of
research is fairly new or unknown. In other regular studies, close-ended questions should be
minimised given the inconvenience of analysing text responses.
 
3. Determination of individual question content:
Each individual question is unique from its content perspective and therefore must be treated with
caution in the development process. Using components such as words, order, tenses and so on,
each question attempts to fulfill the overarching research objectives. One of the most important
components of any question is words. Researchers have to be very clear in the choice of words
which can easily be understood in the correct manner by respondents. If the researchers and
respondents do not assign the same meaning to the used words, the response will be biased.
There are several other considerations before researcher decides the final question. Once the
question is developed researchers need to ask ‘Is this question necessary?’ ‘Does it fulfill the part
of the research objective as desired?’ Sometimes it is possible that a single question might not
suffice a phenomenon to be studied and may require more than one question. For example,
instead of asking from a retailer about his monthly sales (which he would be reluctant to answer),
a researcher is better off asking following 2 questions:
 What is the average daily sale of your store?
 What is the most selling price range?
4. Developing question order, form and layout:
The question order, format and layout can have a significant impact on respondent engagement.
Questionnaire with unclear order, format and layout generally get very low response rate and in
turn become costly exercise.
The questionnaire can be divided in three main parts generally:
 Forward and opening questions;
 Generic information questions; and

 Specific information questions.

Forward and opening questions are highly important in gaining respondents’ trust and making
them feel comfortable with the study. It also improves the response rate among the respondent if
they find it worthwhile and interesting. Questions pertaining to opinion can give a good start to
most questionnaires as everyone likes to give some opinion about issues at hand. At times, when
it is necessary to qualify a respondent (i.e. determine if they are part of the defined target
population), opening questions can act as qualification questions, like for example, for a study
which require only respondents of age group of 30 & above, an opening question about age can
be a qualifying question.
 
Generic information questions are divided into two main areas: classification information
questions and identification information questions. Most socioeconomic and demographic
questions (age, gender, income group, family size and so on) provide classification information.
On the other hand, respondent name, address, and other contact information provide identification
information. It is advisable to collect classification information before identification information
as most respondents do not like their personal information collected by researchers and this
process may alienate the respondent from the interview.
 
Specific information questions are questions directly associated with the research objectives.
They mostly involve various scales and are complex in nature. This type of questions should be
asked later in the questionnaire after the rapport has been established between the researcher and
the respondent.
 
5. Pilot testing the questionnaire
It is advised that a questionnaire should not be used in the field survey without being adequately
pilot tested. A pilot test provides testing of all aspects of a questionnaire including, content,
wording, order, form and layout. The sample respondents selected for the pilot test must be
similar to those who will be included in the actual survey in terms of their background
characteristics, familiarity with the topic and attitudes and behaviors of interest.
Most researchers recommend a pilot test sample between 10 and 20 respondents. If the study is
very large involving multiple stages, a larger pilot test sample may be required.
2.3.2Marketing Research - Sampling
What is sampling? In market research, sampling means getting opinions
from a number of people, chosen from a specific group, in order to find out
about the whole group. Let's look at sampling in more detail and discuss
the most popular types of sampling used in market research.

It would be expensive and time-consuming to collect data from the whole

population of a market. Therefore, market researchers make extensive of
sampling from which, through careful design and analysis, marketers can
draw information about their chosen market.

Sample Design

Sample design covers:

 Method of selection
 Sample structure
 Plans for analysing and interpreting the results.

Sample designs can vary from simple to complex. They depend on the

type of information required and the way the sample is selected.

Sample design affects the size of the sample and the way in which analysis
is carried out; in simple terms the more precision the market researcher
requires, the more complex the design and larger the sample size will be.

The sample design may make use of the characteristics of the overall
market population, but it does not have to be proportionally
representative. It may be necessary to draw a larger sample than would
be expected from some parts of the population: for example, to select more
from a minority grouping to ensure that sufficient data is obtained for
analysis on such groups.

Many sample designs are built around the concept of random selection.
This permits justifiable inference from the sample to the population, at
quantified levels of precision. Random selection also helps guard against
sample bias in a way that selecting by judgement or convenience cannot.
Defining the Population

The first step in good sample design is to ensure that the specification of
the target population is as clear and complete as possible. This is to ensure
that all elements within the population are represented.

The target population is sampled using a sampling frame.

Often, the units in the population can be identified by existing information

such as pay-rolls, company lists, government registers etc.

A sampling frame could also be geographical. For example, postcodes

have become a well-used means of selecting a sample.

Sample Size

For any sample design, deciding upon the appropriate sample size will
depend on several key factors:

1. No estimate taken from a sample is expected to be exact:

assumptions about the overall population based on the results of a
sample will have an attached margin of error
2. To lower the margin of error usually requires a larger sample size:
the amount of variability in the population, ie the range of values or
opinions, will also affect accuracy and therefore size of the sample
3. The confidence level is the likelihood that the results obtained from
the sample lie within a required precision: the higher the confidence
level, the more certain you wish to be that the results are not atypical.
Statisticians often use a 95% confidence level to provide strong
conclusions
4. Population size does not normally affect sample size: in fact the
larger the population size, the lower the proportion of that population
needs to be sampled to be representative. It's only when the
proposed sample size is more than 5% of the population that the
population size becomes part of the formulae to calculate the sample
size

Types of Sampling

There are many different types of sampling methods, here's a summary of

the most common:
Cluster sampling

Units in the population can often be found in certain geographic groups or

"clusters" for example, primary school children in Derbyshire.

A random sample of clusters is taken, then all units within the cluster are
examined.

Advantages
 Quick and easy
 Doesn't need complete population information
 Good for face-to-face surveys

Disadvantages
 Expensive if the clusters are large
 Greater risk of sampling error

Convenience sampling

Uses those who are willing to volunteer and easiest to involve in the study.

Advantages
 Subjects are readily available
 Large amounts of information can be gathered quickly

Disadvantages
 The sample is not representative of the entire population, so results
can't speak for them - inferences are limited. future data
 Prone to volunteer bias

Judgement sampling

A deliberate choice of a sample - the opposite of random

Advantages
 Good for providing illustrative examples or case studies

Disadvantages
 Very prone to bias
 Samples often small
 Cannot extrapolate from sample

Quota sampling

The aim is to obtain a sample that is "representative" of the overall

population.
The population is divided ("stratified") by the most important variables such
as income, age and location. The required quota sample is then drawn
from each stratum.

Advantages
 Quick and easy way of obtaining a sample

Disadvantages
 Not random, so some risk of bias
 Need to understand the population to be able to identify the basis of
stratification

Simply random sampling

This makes sure that every member of the population has an equal chance
of selection.

Advantages
 Simple to design and interpret
 Can calculate both estimate of the population and sampling error

Disadvantages
 Need a complete and accurate population listing
 May not be practical if the sample requires lots of small visits over the
country

Systematic sampling

After randomly selecting a starting point from the population between 1 and
*n, every nth unit is selected.

*n equals the population size divided by the sample size.

Advantages
 Easier to extract the sample than via simple random
 Ensures sample is spread across the population

Disadvantages
 Can be costly and time-consuming if the sample is not conveniently
located

2.3.3Market Survey Definition

Market survey is the survey research and analysis of the market for a particular
product/service which includes the investigation into customer inclinations. A
study of various customer capabilities such as investment attributes and buying
potential. Market surveys are tools to directly collect feedback from the target
audience to understand their characteristics, expectations, and requirements.

Marketers develop new and exciting strategies for upcoming products/services but
there can be no assurance about the success of these strategies. For these to be
successful, marketers should determine the category and features of
products/services that the target audiences will readily accept. By doing so, the
success of a new avenue can be assured.

Most marketing managers depend on market surveys to collect information that

would catalyze the market research process. Also, the feedback received from
these surveys can be contributory in product marketing and feature enhancement.

Market surveys collect data about a target market such as pricing trends, customer
requirements, competitor analysis, and other such details.

Purpose of Market Survey

 Gain critical customer feedback: The main purpose of the
market survey is to offer marketing and business managers a platform to
obtain critical information about their consumers so that existing
customers can be retained and new ones can be got onboard.
 Understand customer inclination towards purchasing products: Details
such as whether the customers will spend a certain amount of money for
their products/services, inclination levels among customers about
upcoming features or products, what are their thoughts about the
competitor products etc.
 Enhance existing products and services: A market survey can also be
implemented with the purpose of improving existing products, analyze
customer satisfaction levels along with getting data about their perception
of the market and build a buyer persona using information from existing
clientele database.
 Make well-informed business decisions: Data gathered using market
surveys is instrumental in making major changes in the business which
reduces the degree of risks involved in taking important business
decisions.
Market Survey Templates
Product Surveys: New products/concept testing survey templates offer questions to
obtain insights about products and concepts. These survey questions are curated by
market research experts and can help in analyzing which kind of products or
features will work in a market.

Conference Feedback Surveys: Conference feedback survey templates provide

questions that can be asked to participants of a conference. An organization
can organize better conferences by implementing feedback received from these
surveys such as enhancing overall conference management, improved IT
infrastructure, better content coverage or other such factors.

Focus Group Surveys: Focus group survey templates can be implemented during
and after the recruitment of the focus group. Gaining insights from a dedicated
group of 8-10 people can be done easily with this existent survey template.  

Hardware And Software Surveys: Hardware and software survey templates offer
editable questions about software product evaluation, hardware product evaluation,
pre-installation procedure, technical documentation quality and other such factors.

Website Surveys: Website survey templates are customizable as per application

and consist of questions pertaining to website customer feedback, visitor profile
information, online retail information etc.

Importance of Market Survey

There are 5 factors that depict the importance of a market survey.

1. Understanding the demand and supply chain of the target market: A

product is most likely to be successful if it is developed by keeping in mind the
demand and supply of the target market. This way, marketers can obtain insights
about market capabilities to absorb new products and concepts to develop
customer-centric products and features.

2. Developing well-thought marketing plans: The World is a target market for an

organization, especially a well-established one. Getting data from the target market
through thorough market research using market surveys and segmentation can be a
source of creating concrete and long-term marketing plans.

3. Figure out customer expectations and needs: All marketing activities revolve

around customer acquisition. All small and large organizations require market
surveys to gather feedback from their target audience regularly, using customer
satisfaction tools such as Net Promoter Score, Customer Effort Score, Customer
Satisfaction Score (CSAT) etc. Organizations can analyze customer feedback to
measure customer experience, satisfaction, expectations etc.  

4. Accurate launch of new products: Market surveys are influential in

understanding where to test new products or services. Market surveys provide
marketers a platform to analyze the scope of success of upcoming products and
make changes in strategizing the product according to the feedback they receive.
5. Obtain information about customer demographics: Customer
demographics form the core of any business and market surveys can be used to
obtain intricate and sensitive details about customer demographics such as race,
ethnicity or family income.

Types of Market Survey with Examples

Multiple types of market surveys are used by enterprises to collect data depending
on the objective of their market research. The information collected can be used to
study various aspects of the market to address topics such as the right time to
launch the product/service, to understand the trends in the market, to measure
customer loyalty, to study their competitors and many more.

There are various types of market surveys out of which we will talk about the top
10 to get information from customers about their demands, expectations and what
they opine about the competitors. Each one of these market surveys has a different
approach and has a marking impact on the various aspects of a business.

In order to conduct various types of market surveys, successful enterprises in

today’s world, use powerful market research survey software to get actionable
market insights through real-time data collection and robust analytics. Following
are the top 10 types of market surveys that are conducted by successful enterprises.

1. Market Surveys for segmentation: An organization can spot existing and

prospective customers and understand why the customers have chosen their
products/services and the prospects have not yet made a purchase. This can lead to
a structured market segmentation and analysis.

2. Market Surveys for exploring various aspects of the target market: Get

information about factors such as market size, demographic information such as
age, gender, family income etc. to lay out a roadmap by considering growth rate of
the market, positioning, and average market share.

3. Market Surveys to probe into purchase procedure: How does a customer

deciding on making a purchase? What are the factors that convert product
awareness into sales? This type of market survey will unveil awareness,
information, free trial, purchase, and repeat.

4. Market Surveys to establish buyer persona: These surveys are to build a

buyer persona by knowing about customer preferences, inclination, and capabilities
of purchasing a product.
5. Market Surveys to measure customer loyalty: What is the degree of loyalty
that the customers have towards and organization? The answer to this question can
be obtained by conducting a market survey.

6. Market Surveys to analyze a new feature or concept: It is essential for an

organization to include market-compliant features and concepts. By carrying out a
market survey to understand which features to launch, will help all the teams
involved in the feature development process to do that with proper research.

7. Market Surveys for competitor analysis: Healthy competition is always good

for an organization’s progress. Market surveys done with the motive of competitor
analysis will produce results about how does the target market weigh the
organization’s products/services in comparison to the others in the market.

8. Market Surveys to understand the impact of sales activities: Sales activities

are the backbone of an organization and it becomes crucial to keep track of these
activities. Market surveys for sales activities will produce a report of the impact of
sales activities, whether their frequency needs to increase or any changes the
audiences think should be inculcated in the sales process.

9. Market Surveys to assess prices for new products/services: Affordability of

products also is an aspect that drives the market for organizations. Price ranges,
product variants to cater multiple price ranges, target customers for each of the
products etc.

10. Market Surveys for evaluation of customer service: Good customer service

can lead to enhanced satisfaction levels among customers. Factors such as time
taken to resolve issues, the scope of improvement, best practices of customer
service etc.

2.3.4 Data Analysis

Data analysis in a market research project is the stage when qualitative data,
quantitative data, or a mixture of both, is brought together and scrutinized in order
to draw conclusions based on the data.

6 Market Research Steps

Step 1 - Articulate the research problem and objectives: Market research begins
with a definition of the problem to be solved or the question to be answered.
Typically, there are several alternative approaches that can be used to conduct the
market research.
Step 2 - Develop the overall research plan: The task of this stage is to determine
the most efficacious way to collect the necessary information.  
Step 3 – Collect the data or information:  At this point, you have to consider how
you're going to obtain the information (meaning, how participants are going to be
contacted whether it's surveys, phone calls, one-on-one interviews, etc.).
Step 4 – Analyze the data or information: Collecting volumes of information can
be overwhelming. At this stage, you need to organize the data and weed out what is
not crucial.
Step 5 – Present or disseminate the findings: From knowing your audience to
knowing what findings are actionable, before releasing your findings, you need to
understand which findings you want to disseminate.
Step 6 – Use the findings to make the decision: Because external consumers of
market research may not use the findings accurately, appropriately, or completely,
you need to consider the attributes of good market research.
Quantitative Market Research Decision Support Tool

The following statistical methods will help you get from A to Z in the research
process.

Multiple Regression - This statistical procedure is used to estimate the equation

with the best fit for explaining how the value of dependent variable changes as the
values of a number of independent variables shifts. A simple market research
example is the estimation of the best fit for advertising by looking at how sales
revenue (the dependent variable) changes in relation to expenditures on
advertising, placement of ads, and timing of ads.
Discriminant Analysis - This statistical technique is used for the classification of
people, products, or other tangibles into two or more categories. Market research
can make use of discriminant analyses in a number of ways. One simple example is
to distinguish what advertising channels are most effective for different types of
products.
Factor Analysis - This statistical method is used to determine which are the
strongest underlying dimensions of a larger set of variables that are inter-
correlated. In a situation where many variables are correlated, factor analysis
identifies which relations are strongest. A market researcher who wants to know
what combination of variables (or factors) are most appealing to a particular type
of consumer, can use factor analysis to reduce the data down to just a few
variables.
Cluster Analysis - This statistical procedure is used to separate objects into
specific groups that are mutually exclusive but also relatively homogeneous in a
constitution. This process is similar to what occurs in market segmentation when
the market researcher is interested in the similarities that facilitate grouping
consumers into segments and also interested in the attributes that make the market
segments distinct.
Conjoint Analysis - This statistical method is used to unpack the preferences of
consumers with regard to different marketing offers. Two dimensions are of
interest to the market researcher in conjoint analysis, the inferred utility
functions of each attribute, and the relative importance of the preferred attributes
to the consumers.
Multidimensional Scaling - This category represents a constellation of techniques
used to produce perceptual maps of competing brands or products. For instance, in
multidimensional scaling, brands are shown in a space of attributes in which the
distance between the brands represents dissimilarity. An example of
multidimensional scaling in market research would show the manufacturers of
single-serving coffee in the form of K-cups. The different K-cup brands would be
arrayed in the multidimensional space by attributes such as the strength of roast,
number of flavored and specialty versions, distribution channels, and packaging
options.