Types of Market Research

8/3/2019 Types of Market Research

1/13

Types of market researchMarket research generally Involves some form ofData collection and can be Classified as either primary Research or secondaryResearch.

Primary research (also known as field research) Involves the collection of Originaldata for a specific Purpose and is normally Collected directly from the source.Examples of primary research include surveys, focus groups, consumer panels

and interviews.

Advantages of primary research Because the research is original, the results gathered will generally be morerelevant to the needs of the business which commissioned the research. Since primary research involves the collection of new information for a specific

purpose the data should be more accurate and up to date.

Disadvantages of primary research Primary research often takes a long time to plan and carry out effectively. This can bea particular problem in fast changing markets where firms need accurate informationquickly. Primary research generally requires a great deal of marketer involvement andtherefore can be very expensive to carry out.

Secondary research (also known as desk research) involves the processing ofdata that has already been collected. To collect secondary data, market researchers willconsult previously published material such as government reports, press articles orprevious market research projects.

Advantages ofsecondary research Secondary research is often quicker to complete than primary research. Inrecent years the development of the internet has made accessing secondary

data much simpler. Secondary research is much cheaper than field research, since the data used insecondary research has been collected already for some other purpose.


2/13

Disadvantages of secondary research

The main disadvantage of secondary research is thatprevious studies may not have targeted the exact issuethat the current research requires and therefore the datamay be of limited use. Secondly, even when the secondary data is relevant tothe current study it may be out of date and therefore theresults achieved may be inaccurate. One further problem associated with secondary data isthat the data may be biased as it has been collected bysome other group. It is important when using secondarydata that this potential bias in the data is considered.

Process of market research

Step 1: Problem Definition

The first step in any marketing research project is to define the problem. In

defining the problem, the researcher should take into account the purpose of the

study, the relevant background information, what information is needed, and how

it will be used in decision making. Problem definition involves discussion with thedecision makers, interviews with industry experts, analysis of secondary data, and,

perhaps, some qualitative research, such as focus groups. Once the problem hasbeen precisely defined, the research can be designed and conducted properly.

Step 2: Development of an Approach to the Problem

Development of an approach to the problem includes formulating an objective or

theoretical framework, analytical models, research questions, hypotheses, and

identifying characteristics or factors that can influence the research design. This

process is guided by discussions with management and industry experts, casestudies and simulations, analysis of secondary data, qualitative research andpragmatic considerations.

'Step 3: Research Design Formulation


3/13

A research design is a framework or blueprint for conducting the marketing

research project. It details the procedures necessary for obtaining the required

information, and its purpose is to design a study that will test the hypotheses of

interest, determine possible answers to the research questions, and provide the

information needed for decision making. Conducting exploratory research,

precisely defining the variables, and designing appropriate scales to measure them

are also a part of the research design. The issue of how the data should be obtained

from the respondents (for example, by conducting a survey or an experiment) must

be addressed. It is also necessary to design a questionnaire and a sampling plan toselect respondents for the study.

More formally, formulating the research design involves the following steps[1]

:

1. Secondary data analysis

2. Qualitative research3. Methods of collecting quantitative data (survey, observation, andexperimentation)

4. Definition of the information needed5. Measurement and scaling procedures6. Questionnaire design7. Sampling process and sample size8. Plan of data analysis

Step 4: Field Work or Data Collection

Data collection involves a field force or staff that operates either in the field, as in the case ofpersonal interviewing (in-home, mall intercept, or computer-assisted personal interviewing),

from an office by telephone (telephone or computer-assisted telephone interviewing), or through

mail (traditional mail and mail panel surveys with prerecruited households). Proper selection,training, supervision, and evaluation of the field force helps minimize data-collection errors.

Step 5: Data Preparation and Analysis

Data preparation includes the editing, coding, transcription, and verification of data. Each

questionnaire or observation form is inspected, or edited, and, if necessary, corrected. Number or

letter codes are assigned to represent each response to each question in the questionnaire. Thedata from the questionnaires are transcribed or key-punched on to magnetic tape, or disks or

input directly into the computer. Verification ensures that the data from the original

questionnaires have been accurately transcribed, while data analysis, guided by the plan of dataanalysis, gives meaning to the data that have been collected. Univariate techniques are used for

analyzing data when there is a single measurement of each element or unit in the sample, or, if

there are several measurements of each element, each RCH variable is analyzed in isolation. On
http://en.wikipedia.org/wiki/Marketing_research_process#cite_note-Malhotra-0http://en.wikipedia.org/wiki/Marketing_research_process#cite_note-Malhotra-0http://en.wikipedia.org/wiki/Marketing_research_process#cite_note-Malhotra-0http://en.wikipedia.org/wiki/Marketing_research_process#cite_note-Malhotra-0


4/13

the other hand, multivariate techniques are used for analyzing data when there are two or more

measurements on each element and the variables are analyzed simultaneously.[2]

Step 6: Report Preparation and Presentation

The entire project should be documented in a written report which addresses the specific researchquestions identified, describes the approach, the research design, data collection, and dataanalysis procedures adopted, and presents the results and the major findings. The findings should

be presented in a comprehensible format so that they can be readily used in the decision making

process. In addition, an oral presentation should be made to management using tables, figures,

and graphs to enhance clarity and impact.[2]

For these reasons, interviews with experts are more useful in conducting marketing research for

industrial firms and for products of a technical nature, where it is relatively easy to identify andapproach the experts. This method is also helpful in situations where little information is

available from other sources, as in the case of radically new products

Factors Affecting Consumer Behavior

Consumer behavior refers to the selection, purchase and consumption of goods and services forthe satisfaction of their wants. There are different processes involved in the consumer behavior.

Initially the consumer tries to find what commodities he would like to consume, then he selects

only those commodities that promise greater utility. After selecting the commodities, theconsumer makes an estimate of the available money which he can spend. Lastly, the consumer

analyzes the prevailing prices of commodities and takes the decision about the commodities he

should consume. Meanwhile, there are various other factors influencing the purchases of

consumer such as social, cultural, personal and psychological. The explanation of these factors isgiven below.

1. Cultural Factors

Consumer behavior is deeply influenced by cultural factors such as: buyer culture, subculture,

and social class.

Culture

Basically, culture is the part of every society and is the important cause of person wants andbehavior. The influence of culture on buying behavior varies from country to country therefore

marketers have to be very careful in analyzing the culture of different groups, regions or even

countries.
http://en.wikipedia.org/wiki/Marketing_research_process#cite_note-Glazer-1http://en.wikipedia.org/wiki/Marketing_research_process#cite_note-Glazer-1http://en.wikipedia.org/wiki/Marketing_research_process#cite_note-Glazer-1http://en.wikipedia.org/wiki/Marketing_research_process#cite_note-Glazer-1http://en.wikipedia.org/wiki/Marketing_research_process#cite_note-Glazer-1http://en.wikipedia.org/wiki/Marketing_research_process#cite_note-Glazer-1http://en.wikipedia.org/wiki/Marketing_research_process#cite_note-Glazer-1http://en.wikipedia.org/wiki/Marketing_research_process#cite_note-Glazer-1


5/13

Subculture

Each culture contains different subcultures such as religions, nationalities, geographic regions,

racial groups etc. Marketers can use these groups by segmenting the market into various small

portions. For example marketers can design products according to the needs of a particular

geographic group.

Social Class

Every society possesses some form of social class which is important to the marketers becausethe buying behavior of people in a given social class is similar. In this way marketing activities

could be tailored according to different social classes. Here we should note that social class is not

only determined by income but there are various other factors as well such as: wealth, education,

occupation etc.

2. Social Factors

Social factors also impact the buying behavior of consumers. The important social factors are:

reference groups, family, role and status.

Reference Groups

Reference groups have potential in forming a person attitude or behavior. The impact of

reference groups varies across products and brands. For example if the product is visible such asdress, shoes, car etc then the influence of reference groups will be high. Reference groups alsoinclude opinion leader (a person who influences other because of his special skill, knowledge or

other characteristics).

Family

Buyer behavior is strongly influenced by the member of a family. Therefore marketers are trying

to find the roles and influence of the husband, wife and children. If the buying decision of a

particular product is influenced by wife then the marketers will try to target the women in their

advertisement. Here we should note that buying roles change with change in consumer lifestyles.

Roles and Status

Each person possesses different roles and status in the society depending upon the groups, clubs,

family, organization etc. to which he belongs. For example a woman is working in anorganization as finance manager. Now she is playing two roles, one of finance manager andother of mother. Therefore her buying decisions will be influenced by her role and status.

3. Personal Factors


6/13

Personal factors can also affect the consumer behavior. Some of the important personal factors

that influence the buying behavior are: lifestyle, economic situation, occupation, age, personalityand self concept.

Age

Age and life-cycle have potential impact on the consumer buying behavior. It is obvious that theconsumers change the purchase of goods and services with the passage of time. Family life-cycle

consists of different stages such young singles, married couples, unmarried couples etc which

help marketers to develop appropriate products for each stage.

Occupation

The occupation of a person has significant impact on his buying behavior. For example a

marketing manager of an organization will try to purchase business suits, whereas a low level

worker in the same organization will purchase rugged work clothes.

Economic Situation

Consumer economic situation has great influence on his buying behavior. If the income and

savings of a customer is high then he will purchase more expensive products. On the other hand,

a person with low income and savings will purchase inexpensive products.

Lifestyle

Lifestyle of customers is another import factor affecting the consumer buying behavior. Lifestyle

refers to the way a person lives in a society and is expressed by the things in his/her

surroundings. It is determined by customer interests, opinions, activities etc and shapes his wholepattern of acting and interacting in the world.

Personality

Personality changes from person to person, time to time and place to place. Therefore it cangreatly influence the buying behavior of customers. Actually, Personality is not what one wears;

rather it is the totality of behavior of a man in different circumstances. It has different

characteristics such as: dominance, aggressiveness, self-confidence etc which can be useful to

determine the consumer behavior for particular product or service.

4. Psychological Factors

There are four important psychological factors affecting the consumer buying behavior. These

are: perception, motivation, learning, beliefs and attitudes.

Motivation


7/13

The level of motivation also affects the buying behavior of customers. Every person has different

needs such as physiological needs, biological needs, social needs etc. The nature of the needs isthat, some of them are most pressing while others are least pressing. Therefore a need becomes a

motive when it is more pressing to direct the person to seek satisfaction.

Perception

Selecting, organizing and interpreting information in a way to produce a meaningful experience

of the world is called perception. There are three different perceptual processes which are

selective attention, selective distortion and selective retention. In case of selective attention,

marketers try to attract the customer attention. Whereas, in case of selective distortion, customerstry to interpret the information in a way that will support what the customers already believe.

Similarly, in case of selective retention, marketers try to retain information that supports their

beliefs.

Beliefs and Attitudes

Customer possesses specific belief and attitude towards various products. Since such beliefs and

attitudes make up brand image and affect consumer buying behavior therefore marketers are

interested in them. Marketers can change the beliefs and attitudes of customers by launchingspecial campaigns in this regard.

Stages of Buying Process

Generally, the purchaser passes through five distinct stages in taking a decision forpurchasing a particular commodity. These stages are: (i) need arousal, (ii) information

search, (iii) evaluation behavior, (iv) purchase decision, and (v) post purchase feelings.

(i) Need arousal: The buying process starts with need arousal. A need can

be activated through internal or external stimuli. A need can also be aroused

by an external stimulus such as sight of a new thing in a shop while purchasing

other things.

There is two-fold significance of need arousal stage to a marketing man.

1. First the marketer must identify the drive that might actually or potentially

connect to the product class or brand and make the buyer feel that the product

can satisfy the drive, he feels, and


8/13

2. It also helps recognize that the need levels for the product fluctuate over

time and are triggered by different cues. The marketer can arrange cues to

conform better to the natural rhythms and timing of need arousal.

(ii) Information search: After need arousal, the consumer tries to solve it and

gathers the sources and information about the product. Depending upon the

intensity of need, it produces two states of individual. The first state is called

heightened attention when the consumer becomes more receptive to the

information regarding the item he needs. If a consumer needs to purchase a

television, he will pay mere attention to TV ads and the remarks made by

friends and associates about TVs.

If need is more intense, the individual enters a state of active information search and he

tries to collect more information about the product, its key attributes, qualities of

various brands and about the outlets where they are available. There are four consumer

information sources.

(i) Personal sources (family, friends, neighbors etc.)

(ii) Commercial sources (advertisements, salesmen, dealers).

(iii) Public sources (mass media, consumer-rating organizations).

(iv) Experiential sources (handling, examining, using the product).

Identifying the information sources and their respective roles and importance calls for

interviewing consumers about the sources of information and can use the findings to

plan its advertisements.

(iii) Evaluation behavior: Having collected the information, the consumer

clarify and evaluate the alternatives. There is, unfortunately no simple and

single evaluation process used by all consumers or even by one consumer in

all buying situations. The most current process of evaluation is to judge the

product largely on a conscious and rational basis. Various considerations form


9/13

the part of judgment such as product attributes, importance, weights, brand

image, utility function for each attribute, and attitude etc. After evaluation of

various alternatives, he takes the decision to buy.

(iv) Purchase decision: Evaluation behavior leads the consumer to form a

ranked set of preferences. Normally a consumer buys the article, he or she

likes most but there are three more important consideration for taking the

buying decision: (a) attitude of other such as of wife, relatives, and friends, (b)

anticipated situational factors as expected family income, expected total cost

of the product and the expected benefits of the product; (c) unanticipated

situational factors as looks or manner of the salesman or the waybusinessis

carried on.

The marketer must consider these factors and should try to provoke the feeling of risk in

the consumer And attempt to provide information and support that will help him.

(v) Post purchase feelings: After buying and trying the product, the consumer

will feel some level of satisfaction or dissatisfaction and level of satisfaction

depends very much on the expectation and the product's perceived

performance. If the product matches up to his expectations, the consumer is

satisfied; if it exceeds, he is highly satisfied; and if it falls short of expectations,

he is dissatisfied
http://www.openlearningworld.com/books/Consumer%20Behaviour%20and%20Motivation/Consumer%20Behavior%20and%20Motivation/Stages%20of%20Buying%20Process.htmlhttp://www.openlearningworld.com/books/Consumer%20Behaviour%20and%20Motivation/Consumer%20Behavior%20and%20Motivation/Stages%20of%20Buying%20Process.htmlhttp://www.openlearningworld.com/books/Consumer%20Behaviour%20and%20Motivation/Consumer%20Behavior%20and%20Motivation/Stages%20of%20Buying%20Process.htmlhttp://www.openlearningworld.com/books/Consumer%20Behaviour%20and%20Motivation/Consumer%20Behavior%20and%20Motivation/Stages%20of%20Buying%20Process.html


10/13

A five-stage decision-making process in any

purchase

This model is important for anyone making marketing decisions. It forces the marketer to

consider the whole buying process rather than just the purchase decision (when it may be too latefor a business to influence the choice!)

The model implies that customers pass through all stages in every purchase. However, in moreroutine purchases, customers often skip or reverse some of the stages.

For example, a student buying a favourite hamburger would recognise the need (hunger) and go

right to the purchase decision, skipping information search and evaluation. However, the modelis very useful when it comes to understanding any purchase that requires some thought and

deliberation.

The buying process starts with need recognition. At this stage, the buyer recognises a problem or

need (e.g. I am hungry, we need a new sofa, I have a headache) or responds to a marketingstimulus (e.g. you pass Starbucks and are attracted by the aroma of coffee and chocolate

muffins).


11/13

An aroused customer then needs to decide how much information (if any) is required. If the

need is strong and there is a product or service that meets the need close to hand, then a purchasedecision is likely to be made there and then. If not, then the process of information search begins.

A customer can obtain information from several sources:

Personal sources: family, friends, neighbours etc

Commercial sources: advertising; salespeople; retailers; dealers; packaging; point-of-sale

displays

Public sources: newspapers, radio, television, consumer organisations; specialist magazines

Experiential sources: handling, examining, using the product

The usefulness and influence of these sources of information will vary by product and by

customer. Research suggests that customers value and respect personal sources more than

commercial sources (the influence of word of mouth). The challenge for the marketing team is

to identify which information sources are most influential in their target markets.

In the evaluation stage, the customer must choose between the alternative brands, products and

services.

How does the customer use the information obtained?

An important determinant of the extent of evaluation is whether the customer feels involved inthe product. By involvement, we mean the degree of perceived relevance and personal

importance that accompanies the choice.

Where a purchase is highly involving, the customer is likely to carry out extensive evaluation.

High-involvement purchases include those involving high expenditure or personal riskfor

example buying a house, a car or making investments.

Low involvement purchases (e.g. buying a soft drink, choosing some breakfast cereals in the

supermarket) have very simple evaluation processes.

Why should a marketer need to understand the customer evaluation process?

The answer lies in the kind of information that the marketing team needs to provide customers in

different buying situations.

In high-involvement decisions, the marketer needs to provide a good deal of information about

the positive consequences of buying. The sales force may need to stress the important attributes

of the product, the advantages compared with the competition; and maybe even encourage trial

or sampling of the product in the hope of securing the sale.

Post-purchase evaluation - Cognitive Dissonance


12/13

The final stage is the post-purchase evaluation of the decision. It is common for customers to

experience concerns after making a purchase decision. This arises from a concept that is known

as cognitive dissonance. The customer, having bought a product, may feel that an alternativewould have been preferable. In these circumstances that customer will not repurchase

immediately, but is likely to switch brands next time.

To manage the post-purchase stage, it is the job of the marketing team to persuade the potential

customer that the product will satisfy his or her needs. Then after having made a purchase, thecustomer should be encouraged that he or she has made the right decision.

Stages of the Consumer Buying Process

Six Stages to the Consumer Buying Decision Process (For complex decisions). Actual purchasing is onlyone stage of the process. Not all decision processes lead to a purchase. All consumer decisions do not

always include all 6 stages, determined by the degree of complexity...discussed next.

The 5 stages are:

1. Problem Recognition(awareness of need)--difference between the desired state

and the actual condition. Deficit in assortment of products. Hunger--Food.

Hunger stimulates your need to eat.

Can be stimulated by the marketer through product information--did not know

you were deficient? I.E., see a commercial for a new pair of shoes, stimulatesyour recognition that you need a new pair of shoes.

2. Information search--

o Internal search, memory.

o External search if you need more information. Friends and relatives (word

of mouth). Marketer dominated sources; comparison shopping; public

sources etc.

A successful information search leaves a buyer with possible alternatives, the

evoked set.

Hungry, want to go out and eat, evoked set is

o chinese food

o indian food

o burger king

o klondike kates etc


13/13

3. Evaluation of Alternatives--need to establish criteria for evaluation, features the

buyer wants or does not want. Rank/weight alternatives or resume search. May

decide that you want to eat something spicy, indian gets highest rank etc.

If not satisfied with your choice then return to the search phase. Can you think of

another restaurant? Look in the yellow pages etc. Information from different

sources may be treated differently. Marketers try to influence by "framing"

alternatives.

4. Purchase decision--Choose buying alternative, includes product, package, store,

method of purchase etc.

5. Purchase--May differ from decision, time lapse between 4 & 5, product

availability.

6. Post-Purchase Evaluation--outcome: Satisfaction or Dissatisfaction. Cognitive

Dissonance, have you made the right decision. This can be reduced by

warranties, after sales communication etc.

After eating an indian meal, may think that really you wanted a chinese mealinstead.

Types of Market Research

Documents

Transcript of Types of Market Research