Market research
- 1. Market Research Why and How? So what is today about?
- 2. “It is a capital mistake to develop before one has data” Sir Arthur Conan Doyle
- 3. 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.
- 4. So who uses it? I know every successful business, but which sectors use it most?
- 5. 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
- 6. 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?
- 7. 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
- 8. Types of Market Research By Source - Primary - Secondary By Methodology - Qualitative - Quantitative
- 9. 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…)
- 10. 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 Feelings Frequency Motivations Demographics
- 11. 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
- 12. 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
- 13. 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
- 14. 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
- 15. 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 accurately reflect the whole population. This is called Bias sampling
- 16. 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
- 17. 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
- 18. 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.
- 19. 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
- 20. 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……
- 21. 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 example Year 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 = 16 Year 10-11 320 / 900 x 30 = 11 (nearest whole number) Year 12-13 100 / 900 x 100 = 3 (nearest whole number)
- 22. 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
- 23. 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
- 24. Issues to consider in questionnaire design Sensitivity of question Bias in formulation Cultural issues Repetition Respondent motivation Questioner training Comprehensiveness Ease of completion
- 25. 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
- 26. 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!
- 27. 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