Market Research Studies - A study presentation

Submitted By Group 4 Diwyesh Anjan (1211094) Priyanka Singh (1211126) Amit Kumar Pandit (1211167) Anubhav Tiwary(1211171) Pushpendu Kumar (1211285) Abhash Chauhan (1211321)

Market Research An overview

Definition : Systematic gathering, recording, and analysis of qualitative and quantitative data about issues relating to marketing products and services.
Existing Markets New Products Market Research can show the likelihood of adoption of new products New Markets Market Research can show un-met needs and provide an understanding of unfamiliar market

Existing Products

Market Research can measure customer satisfaction to find out how to maintain a competitive edge

Market research can find new territories for products or services

A strategic framework for market research in business expansion Market Research Process
Defining the problem and objectives Distinguish between the research type needed e.g. - exploratory - descriptive - causal Developing the research plan Decide on - budget Collecting the information Information is collected according to the plan (N.B. it is often done by external firms) Analyzing the information Statistical manipulation of the data collected (e.g. regression) or subjective analysis of focus groups Presenting the findings Overall conclusions to be presented rather than overwhelming statistical methodologies

- data sources - research approaches - research instruments - sampling plan

- contact methods

Role of Market Research in Product Life Cycle

Market assessment studies Needs analysis Pricing research Competitor research

Channel Analysis Promotional research Customer satisfaction Use & attitude surveys

Brand positioning Needs based segmentation

Market assessment studies Acquisition & diversification strategies

Secondary research plays an important role at the beginning of the lifecycle Primary research plays an important role throughout the lifecycle

Type of Market Research

Source Objective

Primary Collection of data specifically for the problem or project in hand

Secondary

Exploratory

Descriptive

Casual

Based on data
previously collected for purposes other than the research in hand (e.g. articles, government stats etc.

Preliminary data
needed to develop an idea further. E.g. outline concepts, gather insights, formulate hypothesis

Describe an
element of an ideas precisely e.g. who is the target market, how large is it, how will it develop

Test a cause and

effect relationship e.g. price elasticity. Done through experiment

Type of Market Research Contd..

Methodology

Qualitative
Type of Question Sample Size Probing Small

Quantitative
Simple Large

Information /Respondent
Questioners Skill Analysts Skill Type of Analysis Ability to replicate Areas probed

High
High High Subjective, Interpretative Low Attitudes, Feelings, Motivation

Low
Low High Statistical High Choices, Frequency, Demographics

Decision Framework

Low

Amount of qualitative evidence

High

Large-scale surveys or experiment High Amount of quantitative evidence Small scale projects

Multi-phase or multi-component research Focus groups and depth interview

Low

Applying Market Research..

Market Research

Problem Identification Research Market Demand Research Market Share Research Image Research Market Characteristics Research Sales Analysis Research Forecasting Research Business Trends Research

Problem Solving Research Segmenting Research Product Research Pricing Research Promotion Research Distribution Research

Demand Estimation Market Research

Deciding the attractiveness of market to enter

Strategic Decision

Decision for production and supply level of products I. If supply is more than demand it will lead to reduced prices and profit margin II. If supply is less than demand it will account for lost sales

Decision for target segment and continuity of a product

Demand Estimation
Demand estimation consists of following three dimensions

Space World Country Region

Time
Demand forecast for short medium and long term

Space
Demand for each level of geography

Product
Product wise demand for company and industry
Item Line Sales Company Industry Product Sales

Territory Customer Short Run Medium Run Long Run Time

It involves identifying Market Potential market Available market Target market Penetrated market

Demand research also gives answer for Market share Market penetration Share penetration

Demand Estimation Market Research Contd..

3 Technique of estimating demand
Methodology Conducted at shopping centers Conducted by trained interviewers Sample Questionnaire: How much your monthly consumption would change if price of rose by 10% Your income increase by 20% Advertising expenditure doubles Competitor reduced price by 2% Advantages Only way to obtain information about possible consumer response Especially useful if a firm is thinking of introducing a new product or changing the quality of an existing one The only way that the firm can test consumer reaction is to directly ask them, since no other data are available Challenges Some time consumers are unable or unwilling to provide accurate information In this case manager is not able to estimate the market demand Consumer survey needs to be replaced by observational research It refers to gathering of information on consumer preferences by watching them buying and using goods

Consumer Survey

Consumer Clinics

This is laboratory experiments Participants are given a sum of money to spend it in simulated stores to see the reaction. Stores differ in terms of Price of product Packaging of product Product displays etc.

Participants have the incentive to purchase the commodities they want the most This method is more realistic than consumer survey, because in this we are observing the actual market behavior

Participants know that they are in artificial situation and being observed So, they are not likely to act normally The sample of participants must necessarily small High cost of running the experiment Inference or results from small sample are questionable

Market Experiment

Conducted in the actual market place In several markets following parameters are changed Commodity price Packaging Amount of promotion Firm can also determine the effect of age ,sex, education, income etc

Validity of the results can be established by conducting it on a large scale Consumers act /behavior is normal as consumers are not aware that they are part of an experiment

High cost affect the scale of experiment Experiment is conducted for short period Inference or results about entire market over extended period are questionable Irregular factors such as strike or bad weather seriously effect the result Competitors could try to sabotage the experiment by changing prices

Positioning Research
Objectives of Research Identification and analysis of competitive products in the market Identification of determinant attributes and measuring their significance to the user Identification of the products and other rival products current position in the market Creation of a competitive positioning map Importance and need of Research Category membership should be determined first, i.e. other products that compete in the same market Determinant attributes define the products benefits ,value to the user, and associations with the product consuming process and consumer consumers evaluate your products and the competing products according the most significant determinant attributes

Positioning Research Answers the following Question What are our relative (to our competitors) strengths and weaknesses? How do consumers see our product? What do they think about us? What is our image? What is our competitive advantage? (how are we better than or different from the competition) Who are our customers? Are our selling points being relayed to the right mix of consumers? Can we target our product to other markets by emphasizing other benefits?

Positioning Research- Consumer Decision Model

Product attributes define consumer perceptions Consumers abstract several pieces of information on product characteristics into perceptual attributes. Based on these perceptions, consumers develop preferences and make purchase choices subject to situational constraints. Various analytical methods such as multiple determinant analysis, factor analysis, MDS and conjoint analysis have been used to model these relationships The model assumes that the heterogeneity in product perceptions and preferences can be linked to differences in individual characteristics arid ground variables. This assumption facilitates identification of homogenous consumer segments Choice Preferences Product Characteristics Product Attributes Consumer Decision Model

Individual characteristics: influence product

attributes and preferences Situational factors: influence preferences and choice Price: influence Product Attributes and choice

Positioning Research Methodology and Tools

Positioning Base Research Evaluate positioning assumptions and prior market structure studies, market segmentation information, branding research, client and competitive advertising, and competitive brand name architecture. build hypotheses regarding the strength of comparative brands, their brand equity, acceleration of brand power and how consumers view the marketplace far reaching interviews with client management, field sales, product development and customer service staff. Positioning Qualitative Research: A non-directive design and style , combined with projective interviewing techniques to uncover buyer perceptions of the brand choices, and their differentiation qualities. The focus here is to uncover the language about the choice dimensions on which buying decisions are made. Positioning relies upon a solid segmentation and market definition analysis Continue the qualitative exploration with a larger sample using an online qualitative time extended method which combines both qualitative and quantitative assessments. Positioning Quantitative Market Survey Test hypotheses developed from the Positioning Qualitative Surveys related to segmentation, strength of segment dimensions, and category perceptions and buyer attitudes. Screen positioning concepts using concept statements and appeal ratings to assess qualities of positioning distance, or differentiation power

Steps in the positioning exercise:

Identification and analysis of competitive products in the market Identification of determinant attributes and measuring their significance to the user identification of the products and other rival products current position in the market

Tools/techniques used
quantitative approach- consumer survey

discussion group- association of words, completion of the sentence, completion of a short story, drawing test, subject perception test, role playing test. target segment survey likert scale semantic differential scale, staple scale, attribute assessment scale, fixed sum scale

Positioning Research studies

Consumer survey The consumer survey provides information on: (1) the level of brand awareness ; (2) brand purchase intentions i (3) shopping habits Consumer panel This study provides the total unit sales for each segment; the relative size of each segment; and the market shares, based on units sold, for each brand in each segment Semantic scales Semantic scales describe how consumers perceive the marketed brands. Respondents are asked to rate each brand along each physical characteristic on a scale from 1 to 7 according to the way they perceive the brand. The study also provides the ideal ratings of each segment for each physical characteristic. Finally, it provides the importance of each characteristic, in other words, the weight each characteristic holds in the buying decision. Multidimensional scaling of brand similarities and preferences It provides a map showing the similarities and differences between marketed brands on three different dimensions. Two brands close to one another on the map are perceived as being similar

Conjoint analysis This study is rather complex and expensive and is therefore not always made available to participants. It provides the utilities a real number between from 0 to 1 of various levels for each of the four most important physical characteristics and for each segment. High utilities, for instance close to 1, demonstrate high consumer preferences for the corresponding physical levels

Product introduction market research

1.

Identify and define research Objective:

To develop and create new product To extend the current product offerings

Objective selection: Idea generation:

a) b) Consumer research:
Identify customer needs and wants Inviting suggestion from consumers and employees Market growth and size Level of competition Market trends No. of competitors Competitors product offerings

Market research:

c)

Competitors research:

Idea screening:
a) b) Analyses of gathered information Business analysis
Cost of the product (raw material cost, production cost and other OH costs) Expected Profitability

Product introduction market research contd..

2. Concept testing:
Testing on the sample of targeted customer Analyze whether customer understand product idea customers willingness of acceptance and reaction for new product

3. Product development :
Take necessary step to produce and distribute (includes production department, marketing department, finance, advertising department ) Produce small scale for test marketing based on the inputs

4. Test marketing:
Introduce product on a very small scale among targeted sample Analyses of consumer feedback a) if feedback is positive than introduce the product b) if not then finding out the reasons and reintroduce after making necessary changes c) still the reactions are negative then drop the plan

5. Commercialization :
Introduce the product on large scale Invest in advertising and other tools of marketing

6. Review market performance:

Profit sales Consumer satisfaction Post sale service

Market research methodology for product introduction

1. Staggered comparison test:
In the staggered comparison test, the respondent is first given one product and is asked to give his opinion about the same. Later on, he is asked to try a second product and give his opinion on that product. this method use for to get consumer response accurately.

2.

Paired comparison test:

Consumer offered two identical product but differs slightly. It helps in identifying the consumer response

3.

Non-directive method:
Information is collected from the respondents by providing them product without any prior information

Conclusion: Product market research helps in reducing the risks and maximizes return on investment for the company.

Pricing Market Research

When to use the pricing research: Introducing a new product to the market For an existing product What will be the effect of price change If price is increase/decrease, what will be the change in market share of the product To whom the firm will lose the market share Gauge the quality of the product High price for high quality products Types of Pricing Market Research Direct methods Based on Willingness to Pay estimation Consumers are directly asked about their willingness to pay for a particular product through an open ended question, e.g. What is the highest price you would be willing to pay for product X? Advantages: Easy to collect the data Little knowledge required from respondents Suitable for new products Disadvantages: Respondents generally overstate their price sensitivity Not very useful when the new product concept is unusual

Pricing Market Research Contd..

Indirect methods More realistic & accurate than Direct methods Would you buy this product at Rs. 100?
No At Rs. 90 No Done: Wont buy at lower price Yes At Rs. 95 ? No At Rs. 105 ? Yes At Rs. 110 Yes Done: Will buy highest at Rs. 110

Gabor-Granger approach: It determine the highest

price a respondent is willing to pay for a given product

Variation of the GG model is to simply ask respondents the highest price they would agree to pay and the lowest price they would find acceptable before suspecting a poor quality product Advantages: Simple and easy to complete the data collection and analysis

Useful for pricing situations that are later in the

product development cycle and the customers have a clear idea about the range of prices to use

Disadvantages: Bias towards overstating prices Lack of context for customers

Market Research for Pricing Strategy

Van Westedorp (VW) Price Sensitivity Models Extension of Gabor-Granger approach. Also known as Psychological price Modeling Focused on finding an acceptable price as a quality indicator; takes into account concerns about low prices possibly indicating low quality as well as high pricing Process: Four indirect questions to calibrate price: Cheap: at what price does this product start to seem cheap to you Expensive: at what price does this product start to seem expensive to you Too Cheap: at what price does this product become too cheap, that is, so cheap that you would question its quality and not buy it? Too Expensive: at what price does this product become too expensive, that you would not consider buying it? Plot a graph of cumulative frequencies for each question find marginal cheapness and marginal expensiveness Area between these two points is the acceptable price for most customers Advantages: avoid imposing price points on respondents best suited for pricing situations that are very early in the product development cycle and the client doesnt really have a clear idea of the price range to play in simple and easy to complete Disadvantages: overstate their price sensitivity results can be unstable as even small changes in the sample can results in large changes in the price curves, and the range of acceptable prices can be quite large Extended VW model to overcome the shortcomings of VW model

Market Research for Pricing Strategy

Product/Price mix model Discrete Choice Model (DCM) Consumers make decisions based on the competitive differences among the attributes given Process: Respondents are asked to choose among competing products at different prices The prices and/or product attributes are changed and respondents are asked to choose again. With these data, a model is then built to predict the likelihood that a person will choose a specific product given the relative prices of the products in the test Respondents are shown multiple scenarios at a time (task) and asked to pick the one they would choose/purchase Advantages: It is more realistic approach as it include actual choices people face in stores Easy to administer and can capture interactions more efficiently Disadvantages: Too many attributes to handle generally more than 8 at a time Results are based on certain assumptions, like the same level of awareness and distribution, which may not be realistic some times Other Methods* Value Maps Conjoint analysis

http://blog.verint.com/8-pricing-research-techniques

New Trends in Market Research

Data Collection Self Reporting Data Mining Google Analytics Amazon Predictive Recommendation Observational Research I know how you behaved SMS Surveys Smartphone Surveys Location Awareness Mobile Ethnography Text Messaging Service & Voting Data Analysis Shift in Approach

Focus on what customer actually want rather than what they think they want

How do think you will behave ? Latest Technique in Market Research Mobile Market Research Methods

Use of Android, iOS, Windows based application like OpinionMeter, iOpinionSurveys Use GPS to trigger question or track movemen over time . E.g. Survey at Petrol Pump Use of location awareness to understand behavior, habits and lifestyle of subjects

Virtual Shopping

Idea is to replicate a real situation for research subjects & observe behavior Use of virtual store simulation to mimic a shopping experience for a participants Use for testing retail issues like product placement, store layout, packaging etc. Use of tools like Skype, instant messaging and share whiteboarding to conduct variety of traditional market research techniques using new technology. Useful for gathering people from broader geographies

Online Collaboration Tools

Heart Rate Monitoring Respiration Monitoring Biometric Market Research Techniques Skin & Muscle Activity Brain Activity Eye Tracking
Public opinion is measured by aggregating searches and mentions on-line. By developing a system such as Mass Opinion Business Intelligence, companies can gauge their share of opinion as well as the valence of the mention. Members of the panel are contacted and assigned an internet chat room wherein questions about products or services are asked No control of researcher, open communities where consumer can express their opinions. Use of brand/fan page through facebook, twitter,Flickr. Use of LinkedIn for B2B research Closed communities that recruits members for a particular study and interest. Members are invited to discuss topics based on their interest and for the purpose of meeting others with similar interest.

Measure a subjects response to stimuli ( e.g. TV Commercial) ,provide valuable data that a subject might not be able or willing to express verbally

Pattern Recognition

Consumer Panel Social Media Market Research Social Network

Market Research Online Communities (MROC)

References
Pricing Models in Marketing Research by Stan Lipovetsky, Shon Magnan, Andrea Zanetti Polzi (Scientific Research) http://blog.verint.com/8-pricing-research-techniques

Example: Nivea deodorant : pearl and beauty

1. Objective: To introduce new deodorant in the market called pearl and beauty for young women(in Germany , France and U.K.) Secondary and primary research
Consumer usage and attitude study External study of fragrance houses

Findings:
women desired attractive and neat skin Women cared about the body odor No specific product in market which addressing the underarm beauty and care

2. Concept testing: for finding out the consumer preference research conducted within the target segment (18-35 year old women, beauty oriented, look for product for extra benefits)
Created product concepts which describes the product benefits Following are the some criteria: Deodorant category performance measure Product attributes specific to the new product and Nivea core values Product needed to relevant and motivate customer to purchase

Research team also tested for various name ideas and packaging, design and color style

Example: Nivea deodorant : pearl and beauty

3. Product development:
developed the product at small scale based on the inputs

4. Test marketing:
De-branded sample proposed to sample customers to avoid bias Customer used for two weeks and gave positive feedback and they were willing to replace their current deodorant

5. commercialization:
Research to check whether advertisement positivity supporting and communicating the message. Do advertisements stands out properly Conducted qualitative research on advertisements ideas

6. Review performance:
Continuous consumer tracking Monitor the sales effectiveness and profits

Positioning Research Example-Spider Chart

Opening an new upscale restaurant in La Buena, CO 1: Identifying positioning attributes Following seven attributes were identifed : Cuisine type , price range, food quality, service levels, dcor, hospitality and serving size.except for cuisine type others can be rated on a scale of 1 to 10. The example assumes all attributes of equal importance 2. Performing the Research Telephone researchers ask respondents (residents living in up-scale neighborhoods and military officers on base) torecall the last three restaurants they visited and to rank the attributes of each 3. Analysis of data The first analysis arranges comparative data along rating scales, consolidated to reveal commonality and singularity of ratings for each attribute. Each restaurant is represented by a different color and line configuration 4: Sample of an individual restaurant analysis Data for any of the seven restaurants identified for analysis(the red dotted plot) can be compared to both the average of all seven restaurants ( the solid blue plot) and with the range mid-point (5 and less on thescale represented by the grey area). It allow us to describe how customers perceive this restaurant.

Different coloured dotted lines on the spider chart indicates different restaurant This consolidated plot is a bit intimidating and confusing on first look, but it does provide an overall picture of the competitors. It basically shows no particular attributes have been ignored by at least one establishmen

Positioning Research Example-Spider Chart

5: Analysis of upscale cuisine type restaurants The three cuisine type A restaurants have many attributes in common. Every attribute is occupied by at least one establishment at a rating of 7 or higher. There is a slight shift toward mediocre performance when looking at serving size and hospitality 6: Discovering unoccupied positions and/or new categories Pairing attributes may reveal promising combinations that identify unoccupied positions. . The examples below demonstrate three such situations. The plots on previous pages helped determine which pairs might bare fruitful investigation. Each axis represents an attribute. The American restaurants are represented by red Xs, foreign cuisine by blue Os. A potential position for a new entry is represented by a red circle enclosing an X. The grey circle around the red circle represents the magnitude of the differentiation from the new business in relation to its nearest American competitor (Its radius is half the distance to the nearest American competitor).