Consumer Research.pptx

Consumer Research
 The marketing concept states that, to be successful, a company must
understand the needs of specific groups of consumers (i.e. target markets)
and then satisfy these needs more effectively than the competition.
 The satisfaction of consumer needs is delivered in the form of the
marketing mix, which consists of the so-called ‘4 Ps’: product, price, place
and promotion.
 Marketers who have a thorough understanding of the consumer decision-
making process are likely to design products, establish prices, select
distribution outlets and design promotional messages that will favorably
influence consumer purchase decisions.

 The field of consumer research developed as an extension of the field of
marketing research.
 Just as the findings of marketing research are used to improve managerial
decision-making, so too are the findings of consumer research.
 Marketers realize that the more they know about their target consumers’
decision making process, the more likely they are to design marketing
strategies and promotional messages that will favorably influence these
consumers.
 Marketers recognize that consumer research is a unique subset of
marketing research, which merits the use of specialized research methods
to collect customer data.
Consumer Research

THE CONSUMER RESEARCH PROCESS
The major steps in the consumer research process include:
1. defining the objectives of the research,
2. collecting and evaluating secondary data,
3. designing a primary research study,
4. collecting primary data,
5. analyzing the data, and
6. preparing a report on the findings.

Developing research objectives
 The first step in the consumer research process is to define carefully the
objectives of the study.
 Is it to segment the market for plasma television sets?
 To find out consumer attitudes about online shopping ?
 To determine what percentage of households use email ?
 It is important for the marketing manager and the researcher to agree at the
outset on the purposes and objectives of the study to ensure that the
research design is appropriate. A carefully thought-out statement of
objectives helps to define the type and level of information needed.

 For example, if the purpose of the study is to come up with new ideas for
products or promotional campaigns, then a qualitative study is usually
undertaken, in which respondents spend a significant amount of time face
to face with a highly trained professional interviewer-analyst who also
does the analysis. Because of the high costs of each interview, a fairly
small sample of respondents is studied; thus, the findings are not
projectable to the marketplace.
 If the purpose of the study is to find out how many people in the
population (i.e. what percentage) use certain products and how frequently
they use them, then a quantitative study that can be computer analyzed is
undertaken. Sometimes, in designing a quantitative study, the researcher
may not know what questions to ask. In such cases, before undertaking a
full-scale study, the researcher is likely to conduct a small-scale
exploratory study to identify the critical issues to include in the data
collection instrument (e.g. questionnaire).
Developing research objectives

Collecting secondary data
 A search for secondary data generally follows the statement of objectives.
Secondary information is any data originally generated for some purpose
other than the present research objectives. It includes findings based on
research done by outside organizations, data generated in-house or earlier
studies, and even customer information collected by the firm’s sales or
credit departments. Locating secondary data is called secondary research
(Original research performed by individual researchers or organizations to
meet specific c objectives is called primary research .)
 Secondary research findings sometimes provide sufficient insight into the
problem at hand to eliminate the need for primary research.
 Most often, they provide clues and direction for the design of primary
research.

 Syndicated Data Because it is often very costly to collect primary data,
many companies routinely purchase syndicated data on consumption
patterns. Syndicated data are data of interest to a large number of users that
are collected periodically and compiled and analyzed according to a
standard procedure, then sold to interested buyers.
 Customer Profitability and Lifetime Value Data
 The widely cited ‘80/20 rule’ states that, generally, a relatively small
percentage of all customers (20 per cent) accounts for a disproportionately
large portion of the company’s sales and profits (80 per cent).
 Many companies are now developing systems that will identify highly
profitable customers as quickly as possible and are targeting those
customers with special offers to buy even more of the company’s products
and services

 Such systems stem from the collection and analysis of internal secondary
data, such as past customer transactions, letters from customers, sales call
reports, warranty cards, and data on the frequency and duration of
customer interactions. Based on these data, knowledgeable marketers
compute customer lifetime value (CLV) profiles for various customer
segments.
 The CLV can be computed from customer acquisition costs (the resources
needed to establish a relationship with the customer), the profits generated
from individual sales to each customer, the costs of handling customers
and their orders (some customers may place more complex and variable
orders that cost more to handle), and the expected duration of the
relationship.

 Quantitative Research Designs
 A quantitative research study consists of a research design, the data
collection methods and instruments to be used and the sample design.
Three basic designs are used in quantitative research: observation,
experimentation (in a laboratory or in the field, such as in a retail outlet),or
survey (i.e. by questioning people).
 (i)Observational research
 Is an important method of consumer research because marketers recognize
that the best way to gain an in-depth understanding of the relationship
between people and products is by watching them in the process of buying
and using products.
Collecting Primary data
Quantitative Research Designs and Data Collection Methods

 Mechanical observation uses a mechanical or electronic device to record
customer behaviour or response to a particular marketing stimulus.
( Banks can use security cameras to observe problems customers may have
in using ATMs. ).
 ATM cards, frequency and loyalty cards, automated phone systems and
online shopping, so the electronic records of their consumption patterns
expand. These records are not anonymous, and sophisticated marketers
are beginning to collect them and use them, sometimes almost instantly, to
influence consumption behaviour.
 Marketers also use physiological observation devices that monitor
respondents’patterns of information processing. For example, an
electronic eye camera may be used to monitor the eye movements of
subjects looking at a series of advertisements for various products, and
electronic sensors placed on the subjects’heads can monitor the brain
activity and attentiveness levels involved in viewing each advertisement.

 (ii)Experimentation
 It is possible to test the relative sales appeal of many types of variables
such as package designs, prices, promotional offers, or copy themes
through experiments designed to identify cause and effect. In such
experiments (called causal research), only some variables are manipulated
(the independent variables), while all other elements are kept constant.
 A major application of causal research is test marketing in which, prior to
launching a new product, elements such as package, price and promotion
are manipulated in a controlled setting in order to predict sales or gauge
the possible responses to the product.
 Today some researchers employ virtual reality methods. For example, in a
market test respondents can view supermarket shelves stocked with many
products, including different versions of the same product, on computer
screens, ‘pick up’an item by touching the image, examine it by rotating the
image with a track ball, and place it in a shopping basket if they decide to
buy it. The researchers observe how long the respondents spend looking at
the product, the time spent in examining each side of the package, the
products purchased and the order of the purchases.

(iii) Surveys
 If researchers wish to ask consumers about their purchase preferences and
consumption experiences they can do so in person, by telephone, by post
or online.
 Personal interview surveys most often take place in the home or in retail
shopping areas. Telephone surveys are also used to collect consumer data.
Postal surveys are conducted by sending questionnaires directly to
individuals at their homes. Email surveys are an increasingly popular
alternative to using the postal service as a means of distributing
questionnaires to target consumers. Furthermore, there has been a rapid
increase in the number of consumers who are interested in participating in
online or Internet-based surveys.
 Quantitative Research Data Collection Instruments

 Data collection instruments are usually pre-tested and ‘debugged’ to ensure
the validity and reliability of the research study. A study is said to have
validity if it does, in fact, collect the appropriate data needed to answer the
questions or objectives stated in the first (objectives) stage of the research
process. A study is said to have reliability if the same questions, asked of a
similar sample, produce the same findings.
 Questionnaires
 For quantitative research, the primary data collection instrument is the
questionnaire, which can be sent through the post to selected respondents
for self-administration or can be administered by fi eld interviewers in
person or by telephone.
 Questions can be open-ended (requiring answers in the respondent’s own
words) or closed-ended (the respondent merely ticks the appropriate
answer from a list of options).

 Attitude Scales
 Researchers often present respondents with a list of products or product
attributes for which they are asked to indicate their relative feelings or
evaluations. The instruments most frequently used to capture this
evaluative data are called attitude scales . The most frequently used
attitude scales are Likert scales, semantic differential scales, behaviour
intention scales and rank-order scales.

 The Likert scale
 Is the most popular form of attitude scale because it is easy for researchers
to prepare and to interpret, and simple for consumers to answer. They tick
or write the number corresponding to their level of ‘agreement’ or
‘disagreement’ with each of a series of statements that describes the
attitude object under investigation.
 The scale consists of an equal number of agreement/disagreement choices
on either side of a neutral choice. A principal benefit of the Likert scale is
that it gives the researcher the option of considering the responses to each
statement separately or of combining the responses to produce an overall
score.

 The semantic differential scale , like the Likert scale, is relatively easy
to construct and administer. The scale typically consists of a series of
bipolar adjectives (such as good/bad, hot/cold, like/dislike, or
expensive/inexpensive) anchored at the ends of an odd-numbered (e.g.
five- or seven-point) continuum.
 Respondents are asked to evaluate a concept (or a product or company) on
the basis of each attribute by ticking the point on the continuum that best
reflects their feelings or beliefs. Care must be taken to vary the location of
positive and negative terms from the left side of the continuum to the right
side to avoid consumer response bias.
 Sometimes an even-numbered scale is used to eliminate the option of a
neutral answer. An important feature of the semantic differential scale is
that it can be used to develop graphic consumer profiles of the concept
under study.


 Semantic differential profiles are also used to compare consumer
perceptions of competitive products and to indicate areas for product
improvement when perceptions of the existing product are measured
against perceptions of the ‘ideal’ product.
 The behaviour intention scale measures the likelihood that
consumers will act in a certain way in the future, such as buying the
product again or recommending it to a friend. These scales are easy to
construct, and consumers are asked to make subjective judgements
regarding their future behaviour.

 With rank-order scales ,
 subjects are asked to rank items such as products (or retailers or websites)
in order of preference in terms of some criterion, such as overall quality or
value for money.
 Rank-order scaling procedures provide important competitive information
and enable marketers to identify needed areas of improvement in product
design and product positioning. Figure 2-3 provides examples of the
attitude scales that are frequently utilized in consumer research.

 Qualitative Research Designs and Data Collection Methods
 In selecting the appropriate research format for a qualitative study, the
researcher has to take into consideration the purpose of the study and the
types of data needed.
 The key data collection techniques for qualitative studies are depth
interviews, focus groups, projective techniques and metaphor analysis.
These techniques are regularly used in the early stages of attitude research
to pinpoint relevant product-related beliefs or attributes and to develop an
initial picture of consumer attitudes (especially the beliefs and attributes
consumers associate with particular products and services).
Qualitative Research Designs and Data Collection Methods

 Focus Groups
 A focus group consists of 8 to 10 respondents who meet with a moderator-
analyst for a group discussion ‘focused’ on a particular product or product
category (or any other subject of research interest). Respondents are
encouraged to discuss their interests, attitudes, reactions, motives,
lifestyles, feelings about the product or product category, usage experience
and so forth.
 Because a focus group takes about two hours to complete, a
researcher can easily conduct two or three focus groups (with a
total of 30 respondents) in one day, while it might take that same
researcher five or six days to conduct 30 individual depth
interviews.
 Focus group sessions are invariably taped, and sometimes
videotaped, to assist in the analysis.

 Respondents are recruited on the basis of a carefully drawn consumer
profile (called a screener questionnaire ) based on specific cations defined
by marketing management and are usually paid a fee for their participation.
 Figure 2-4 presents a portion of a discussion guide that might be used in a
focus group session to gain insights into the attitudes of consumers toward
various mobile phone service providers. The findings would be equally
relevant to the positioning of a new service provider or the repositioning of
an existing provider.

 Projective Techniques
 Projective techniques are designed to tap the underlying motives of
individuals despite their unconscious rationalizations or efforts at
conscious concealment.
 They consist of a variety of disguised ‘tests’ that contain ambiguous
stimuli, such as incomplete sentences, untitled pictures or cartoons, ink
blots, word-association tests and other-person characterizations.
 Projective techniques are sometimes administered as part of a focus group
but more often are used during depth interviews. Because projective
methods are closely associated with researching consumer needs and
motivation

 Metaphor Analysis
 In the 1990s, a stream of consumer research emerged suggesting that most
communication is non-verbal and that people do not think in words but in
images.
 If consumers’ thought processes consist of a series of images, or pictures
in their mind, then it is likely that many respondents cannot adequately
convey their feelings and attitudes about the research subject (such as a
product or brand) through the use of words alone.
 Therefore, it is important to enable consumers to represent their images in
an alternative, non-verbal form – through the use, say, of sounds, music,
drawings or pictures. The use of one form of expression to describe or
represent feelings about another is called a metaphor
 . A number of consumer theorists have come to believe that people use
metaphors as the most basic method of thought and communication.

 The Zaltman Metaphor Elicitation Technique (ZMET) relies on visual
images to assess consumers’ deep and subconscious thoughts about
products, services and marketing strategies. In one study about consumer
perceptions of advertising, pre-screened respondents were asked to bring in
to a depth interview pictures that illustrated their perceptions of the value
of advertising. They were asked to bring pictures from magazines,
newspapers, artwork, photos they took especially for the study or from
existing collections, but not actual print advertisements. Each respondent
participated in a two-hour videotaped interview (on average, each
respondent brought in 13 images representing his or her impressions of the
value of advertising).

 The interview used several methods that are part of the ZMET technique to
elicit key metaphors and the interrelationships among them from the
respondents. The interviews were then analyzed by qualified researchers
according to the ZMET criteria. The findings revealed that the ambivalent
respondents had both favorable (e.g. information and entertainment values)
and unfavorable (e.g. misrepresentation of reality) impressions of
advertising; sceptics had mostly negative, but some positive impressions of
advertising; and hostile respondents viewed advertising as an all-negative
force.5 Another application of ZMET is using the instrument to get
consumers’ reactions to fi lm scripts.

Sampling and Data Collection
 An integral component of a research design is the sampling plan.
Specifically, the sampling plan addresses three questions: who to survey
(the sampling unit), how many to survey (the sample size) and how to
select them (the sampling procedure).
 Deciding who to survey requires explicit definition of the universe or
boundaries of the market from which data are sought so that an appropriate
sample can be selected (such as working mothers). Interviewing the correct
target market or potential target market is basic to the validity of the study.
 The size of the sample is dependent both on the size of the budget and on
the degree of confidence that the marketer wants to place in the findings.
The larger the sample, the more likely it is that the responses will reflect
the total universe under study.

 It is interesting to note, however, that a small sample can often provide
highly reliable findings, depending on the sampling procedure adopted.
(The exact number needed to achieve a specific level of confidence in the
accuracy of the findings can be computed with a mathematical formula
that is beyond the scope of this discussion.)
 If the researcher wants the findings to be projectable to the total
population, then a probability sample should be chosen; if it is sufficient
to have the findings ‘representative’ of the population, then a non-
probability sample can be selected. Table 2-5 summarizes the features of
various types of probability and non-probability designs.

 In both qualitative and quantitative research, the research report includes a
brief executive summary of the findings.
 The body of the report includes a full description of the methodology used
and, for quantitative research, also includes tables and graphics to support
the findings. A sample of the questionnaire is usually included in the
appendix to enable management to evaluate the objectivity of the findings.

Conducting a research study
 In designing a research study, researchers adapt the research process
described in the previous sections to the special needs of the study.
 For example, if a researcher is told that the purpose of the study is to
develop a segmentation strategy for a new online dating service, he or she
would first collect secondary data, such as population statistics (the
number of men and women online in selected metropolitan areas within a
certain age range, their marital status and occupations).
 Then, together with the marketing manager, the researcher would specify
the parameters (define the sampling unit) of the population to be studied
(e.g. single, university-educated men and women between the ages of 20
and 45 who live or work within the London metropolitan area).

Conducting a research study
 A qualitative study (e.g. focus groups) might be undertaken first to gather
information about the target population’s attitudes and concerns about
meeting people online, their special interests, and the specific services and
precautions they would like an online dating service to provide.
 This phase of the research should result in tentative generalizations about
the specific age group(s) to target and the services to offer.

SUMMARY
 The field of consumer research developed as an extension of the field of
marketing research to enable marketers to predict how consumers would
react in the marketplace and to understand the reasons why they made the
purchase decisions they did.
 Consumer research undertaken from a managerial perspective to improve
strategic marketing decisions is known as positivism. Positivist research is
quantitative and empirical and tries to identify cause-and-effect
relationships in buying situations. It is often supplemented with qualitative
research.

SUMMARY
 The consumer research process – whether quantitative or qualitative in
approach – generally consists of six steps: defining objectives, collecting
secondary data, developing a research design, collecting primary data,
analyzing the data and preparing a report of the findings. The researcher
must make every effort to ensure that the research findings are reliable
(that a replication of the study would provide the same results) and valid
(that they answer the specific questions for which the study was originally
undertaken).

Consumer Research.pptx

More Related Content

Similar to Consumer Research.pptx (20)

Recently uploaded (20)

Consumer Research.pptx