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Fundamentals of Market

Research
Prof. Neha Yadav

What is Market Research?


It is a systematic and objective

identification, collection, analysis,


dissemination and use of information for
the purpose of improving decision making
related to the identification and solution of
problems and opportunities in marketing.

Role of Marketing Research


LEVEL 1
(Strategic)

LEVEL 2
(Tactical)
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Ethical Considerations in Market


Research
Any information collected for the purpose of marketing

research from a respondent should not be misused for any


other purpose.
Badgering or forcing respondents to answer a questionnaire
or certain questions is not a good professional practice. A
better approach is to explain the necessity of asking a
question and let the respondent decide further.
Confidentiality of the responses in good faith must be
ensured.
Questions of personal nature which could embarrass the
respondent, must be given an opportunity to think about it
and refuse to participate.
Marketing researchers foremost responsibility is to
accurately reflect the respondents replies in report. The
report must not be based on preconceived ideas of the
researcher.
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Classification of Market
research

Market Research Process


Step 1: Problem Identification
Step 2: Development of an Approach to the

Problem

Step 3: Research Design Formulation


Step 4: Fieldwork or data Collection
Step 5: Data Preparation and Analysis
Step 6: Report Preparation and Presentation
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Problem Identification &


Developing an Approach

Management Decision
Problem

Marketing Research Problem

Asks what the Decision maker


needs to do

Asks what information is needed


and how it should be obtained

Action Oriented

Information Oriented

Focuses on Symptoms

Focuses on underlying causes

Chain Restaurant Study


One day I received a
phone call from a
research analyst who
introduced himself as
one of our alumni.
He was working for a
restaurant chain in town
and wanted help
analyzing the data he
had collected while
conducting a marketing
research study.
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Chain Restaurant Study

When we met, he presented me with a copy of the


questionnaire and asked how he should analyze
the data. My first question to him was,

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Chain Restaurant Study


When he looked
perplexed, I
explained that data
analysis is not an
independent
exercise.

Rather, the goal of data analysis is to PROVIDE


INFORMATION RELATED TO THE PROBLEM
COMPONENTS.
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Chain Restaurant Study


I was surprised to learn that he did
not have a clear understanding of
the marketing research problem
and that a written definition did not
exist. So before going any further,
I had to define the marketing
research problem.

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Once that was done, I found that


much of the data collected was not
relevant to the problem. In this
sense, the whole study was a waste
of resources. A new study had to be
designed and implemented to
address the problem defined.

MANAGEMENT DECISION PROBLEM


Should a new product be introduced?
Should the advertising campaign be changed?
Should the price of the brand be increased?
MARKETING RESEARCH PROBLEM
To determine the preference and purchase
intentions for the proposed new product
To determine the effectiveness of the current
advertising campaign
To determine the price elasticity of demand
and impact on sales and profits of various
levels of price changes
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Components of Approach
Objective/Theoretical Framework
Research should be based on objective evidence
and supported by theory.
Theory is conceptual scheme based on
foundational statements called axioms.
Objective evidence is gathered by compiling
relevant findings from secondary sources
(supported by empirical findings)
In other words, it is called the literature review
based on which the framework of research can
be based.
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Analytical Models:
Verbal Model, Graphical Model, Mathematical Model
Research Questions:
RQs are refined statements of the specific
components of the problem.
Each problem component can be again broken down
into sub components.
Ex: To measure customer satisfaction towards fast food
industry
Ambience, Quality of food, Staff, Cleanliness and
Hygiene, Price
Questions on each component can be asked from the
respondent.
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Hypotheses:
It is an unproven statement about a phenomenon
that interests a researcher.
It is the possible answer to the research questions.
COMFORT FOOD REAL RESEARCH
Ex: RQ1: What foods are considered to be comfort
foods?
H1: Potato Chips are considered to be comfort foods.
H2: Ice creams/Chocolates/ Soups are considered to
be comfort foods.
RQ2: When do people eat comfort foods?
H3: People eat comfort foods when they are in good
mood.
H4: People eat comfort foods when they are in bad
mood.

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Research Design
Framework or Blueprint for conducting the Market

Research
It details the procedures necessary for obtaining the
information needed to structure or solve the problems.
Foundation for conducting the project.
Components or tasks involved:
1.Design exploratory, descriptive and or causal phases
2.Define information needed
3.Specify measurement and scaling procedures
4.Construct and pretest questionnaire
5.Specify sampling process and sample size
6.Develop a plan of data analysis
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Research Design Formulation

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Contd..

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Table 3.1

Exploratory

Conclusive

Objective:

To provide insights and


understanding

To test specific hypotheses and


examine relationships

CharacterInformation needed is defined


Information needed is clearly
istics:
Exploratory
& Research
Conclusive
Research
only loosely.
process is defined.
Research process is formal
flexible and unstructured.
and structured. Sample is large and
Differences
Sample is small and nonrepresentative. Data analysis is
representative. Analysis of
quantitative
primary data is qualitative
Findings/
Results:

Tentative

Conclusive

Outcome:

Generally followed by further


exploratory or conclusive
research

Findings used as input into decision


making

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Comparison between the


researchExploratory
designsDescriptive Causal
Objective

Discover Ideas
and Insights

Describe market Determine


characteristics
cause and effect
or functions

Characteristics

Flexible,
Versatile, Often
the front end of
total research
design

Marked by the
prior
formulation of
specific
hypotheses, pre
planned and
structured
design

Manipulation of
one or more
independent
variables

Methods

Expert surveys,
pilot surveys,
Secondary data
(analyzed
qualitatively),
qualitative
research

Secondary data
analyzed
quantitatively,
Surveys, panels
etc

Experiments

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Exploratory DesignQualitative
1. Direct

Focus group Interviews


In Depth Interviews

2. Indirect
Projective Techniques
a) Association
Techniques
b) Completion Techniques
c) Construction Techniques
d) Expressive Techniques
Exploratory Design- Secondary Data
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Uses of Exploratory Research


Formulate

a problem or define a problem


more precisely

Identify

alternative courses of action

Develop

hypotheses

Isolate

key variables and relationships for


further examination

Gain

insights for developing an approach


to the problem

Establish
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priorities for further research

Methods of Exploratory
Research
Survey
Pilot

of experts (discussed in Chapter 2)

surveys (discussed in Chapter 2)

Secondary

data analyzed in a qualitative way


(discussed in Chapter 4)

Qualitative

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research (discussed in Chapter 5)

Use of Descriptive
Research
To

describe the characteristics of relevant


groups, such as consumers, salespeople,
organizations, or market areas

To

estimate the percentage of units in a specified


population exhibiting a certain behavior

To

determine the perceptions of product


characteristics

To

determine the degree to which marketing


variables are associated

To

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make specific predictions

Methods of Descriptive
Research
Secondary

data analyzed in a quantitative, as


opposed to a qualitative, manner (discussed in
Chapter 4)

Surveys
Panels

(Chapter 6)

(Chapters 4 and 6)

Observational

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and other data (Chapter 6)

Cross-Sectional
Involve the collection of information from any given sample of
Designs
population elements only once

In single cross-sectional designs, there is only one sample


of respondents and information is obtained from this sample
only once.

In multiple cross-sectional designs, there are two or more


samples of respondents, and information from each sample is
obtained only once. Often, information from different samples
is obtained at different times.

Cohort analysis consists of a series of surveys conducted at


appropriate time intervals, where the cohort serves as the
basic unit of analysis. A cohort is a group of respondents who
experience the same event within the same time interval.

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Longitudinal
Designs
A

fixed sample (or samples) of population


elements is measured repeatedly on the
same variables

longitudinal design differs from a crosssectional design in that the sample or


samples remain the same over time

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Cross-Sectional vs.
Longitudinal
CrossSectiona
l Design

Sample
Surveye
d at T1

Sample
Longitudina Surveyed
l Design
at T1
Time
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T1

Same
Sample
also
Surveyed
at T2
T2

Relative Advantages and Disadvantages of


Longitudinal and Cross-Sectional Designs
Table 3.4
Evaluation
Criteria
Detecting Change
Large amount of data collection
Accuracy
Representative Sampling
Response bias

Cross-Sectional Longitudinal
Design
Design
+
+

+
+
+
-

Note: A + indicates a relative advantage over the other


design, whereas a - indicates a relative disadvantage.
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Uses of Causal
Research
To

understand which variables are the cause


(independent variables) and which variables are the
effect (dependent variables) of a phenomenon

To

determine the nature of the relationship between


the causal variables and the effect to be predicted

METHOD:

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Experiments

Types of Errors

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Surrogate Information error - Respondent Selection Error


Measurement Error
- Questioning Error
Population Definition Error - Recording Error
Sampling Frame Error
- Cheating Error
Data Analysis error

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- Inability Error
- Unwillingness Error

-End of Session-

(Reading: Chapters 1 to 5, Marketing Research


by Naresh Malhotra, 5th Edition, Pearson
Publication)

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