Market Research
Market Research
● TYPES OF CUSTOMERS:
○ Customers - People who are already rendering services or consuming the products.
○ Target Customers - People that are possible to be pursued to use the products.
○ Potential Customers - People who have the potential to be interested in the services and products but
have not yet purchased.
● Marketing - Satisfying needs profitability
● Market - Customers/buyers
● Needs - Basic human requirements
● Wants - Needs that become specific
● Demands - Willingness and desire to buy back up by buying power
● Marketing Mix (4 P’s of Marketing):
○ Product
○ Price
○ Place
○ Promotion
● Market Research:
○ The process of determining the viability of a new service or product through research conducted directly
with potential customers
○ Allows a company to discover the target market and get opinions and other feedback from consumers
about their interest in the product or service
WHAT IS MARKET RESEARCH?
● Intuitive Decisions
○ Based on feeling and prior knowledge
○ Made automatically and instinctively
● Market Research - Provides data based on supported facts
WHEN IS MARKETING RESEARCH NEEDED?
● Good market research requires much more than just creativity and technical tools. It requires research!
○ Who needs it?
○ Who wants it?
○ Where should it be sold?
○ What price should be set?
○ How would people know about the product/service?
○ Are there any competitors?
● We will conduct a market research when a business needs to make a marketing decisions
○ Typical Situations:
■ Introduce new products/services
■ Change existing products
■ Location for new store
■ Where/when/how to advertise?
WHEN TO START MARKET RESEARCH?
● Before starting a new business, you need to answer the following questions:
○ Is there any need for my product or service?
○ What kind of person is most likely to buy my product or service?
○ How am I going to find those customers?
○ Is a competitor already meeting their needs?
○ Can I offer something the competitors can’t?
○ Will finding those buyers cost more than the profit margin will allow?
○ Is there a profit margin?
● When introducing a new product or service without a research, you could:
○ End up with a warehouse full of products that remain unsold
○ Face a discouraged staff whose calls are constantly rebuffed by customers
○ Find yourself facing competing products you were unaware of
○ Drain money from your more successful operations
○ Damage your company’s reputation
● If you own an existing business, you need to know:
○ How customers or potential customers perceive your products or services
○ How that perception changed overtime
○ If there’s a new untapped market for your existing product or service you could provide
○ Is your existing customer base is ready for a new product or service you could provide
○ If your price are in line with current needs
○ If there’s a new technology which could enhance or destroy your business
○ If the members of your target market are aging, growing, younger, getting richer and poorer
○ If the competitor are meeting needs and you are not
HOW DO YOU DO IT?
● Market research is a process of asking questions or finding existing information about the market, your
competition and potential customers. You need to answer questions such as:
○ What kind of person is most likely to buy my product
○ Are there enough of those people for me to make money?
○ How can I reach those potential buyers?
○ Is someone else already fulfilling my potential customers?
○ Then:
■ Process the data
■ Analyze the data
■ Convert data into information
■ Develop strategy
STEPS IN MARKET RESEARCH:
● Determine the problem/set objectives
● Collect information
● Tabulate the data
● Analyze the data
THE FOUR BASIC PURPOSES OF MARKET RESEARCH:
● Analyzing The Market:
○ Market analysis research helps you assess the market potential of a new product, service, or business
○ Helps you choose sites for a new business
○ Market Analysis can answer questions such as the following:
■ What groups of people are present in the market?
■ Are there enough members of my target market group to make the business worthwhile?
■ How large is the potential market?
■ Realistically, how much of that potential can I capture?
■ Who are my likely customers?
■ Where will my customers come from?
■ Who are the competition’s customers?
■ How can I attract more customers?
■ What is the best location for my business?
● Analyzing The Market’s Response To Your Products and Services:
○ This kind of analysis is intended to calculate the product’s or service’s potential in the market
○ This can be conducted prior the launch of a product or service
○ Product or service studies answer questions such as the following:
■ Who are the best customers for my products and services?
■ How much and how often do they buy?
■ What will they pay for my product, and the rate, can I make a profit?
■ What are their needs for the products and service?
■ How do my products and services meet their needs?
■ How are my customers changing?
■ Can I alter the products or service to better meet their needs?
● Analyzing The Effectiveness of Your Advertising or Promotion:
○ This research will help you develop a message that will get your customer’s attention & sell them your
goods or services.
○ Here’s what you can find out with an advertising or promotional study:
■ What advertising or promotional message will get the best results from my customers?
■ What methods or messages will powerfully induce people to buy?
■ Does my advertising or promotion help create the image I want my customers to have when they
think of my products or services?
■ What advertising medium can best reach my customers?
■ Will a combination of media optimize my sale?
● Strategic Planning:
○ This research tracks the growth or decline of existing markets and help you discover what products or
services will be successful in those markets
○ Strategic Planning research is most likely to be conducted by established business
○ The following questions can be answered by this type of study:
■ How are my customers changing?
■ How are all segments of the market changing?
■ What are the fastest growing market groups?
■ Are there products or services they will want that I can deliver?
■ What sales growth can I expect from my existing market?
■ In which departments or new lines of business should I increase my investment?
THE TWO SOURCES OF DATA:
● Primary Sources:
○ The data you generate for your own business
○ It can come from your customers, potential customers, employees, suppliers, consultants, and other
sources you’re involved in
○ You get primary data when you have your customers fill out a survey card, hold a group discussion, when
you talk to your customers directly
○ Cost money to generate
○ Example (Primary Data):
■ From a market response survey conducted for a mall: “The number one reason women shop
at the Adams Mall is convenience.”
■ From advertising analysts study conducted for a metal fabricator: “When asked which metal
fabricating firm they preferred to buy from, engineers named Cincor two to one over Stone
Steelworks.”
● Secondary Sources:
○ The data are already available
○ This includes government census reports, economic and production data, information from news
organizations, surveys by trade associations etc.
○ It comes from sources outside your business
○ While it does not contain specific information about your business, it may contain valuable information
about your potential customers, customers, suppliers and many other things that may affect your
business
○ Example (Secondary Data):
■ From a census report: “4, 200 women ages 18-34 live in Adams City.”
■ From a government trade report: “Profits in the metal fabricating industry rose by 7 percent per
year during the 1980s.”
TWO KINDS OF DATA:
● Quantitative Data:
○ Data that can be expressed as quantities such as:
■ Percentages
■ Numbers
○ This is the type of data you get from questionnaires that ask multiple choice questions or require people
to rank your service on a scale
○ The kind of data you get from economic census reports
● Qualitative Data:
○ The statement “The number one reason women shop at Adams Mall is convenience” is an example of
qualitative data. Fuzzy data about people’s feelings & perceptions
○ There’s no way to turn the statement into numbers
○ The customer’s comments are also an example of qualitative data:
■ “I felt welcome from the moment I arrived at your check-in desk.”
■ “The design isn’t just as sophisticated as it should be.”
■ “Your service stinks.”
■ “I think your store is only for little old ladies.”
UNDERSTANDING DEMOGRAPHICS & PSYCHOGRAPHICS:
● Demographics:
○ This encompasses the statistical characteristics of populations
○ Are statistical data that categorize and group the population by identifying different variables and
subgroups
○ Examples:
■ Age
■ Race
■ Gender
■ Religion
■ Income
■ Schools attended
■ Type of job
■ Daily/weekly/monthly compensation
■ Type of cars owned
■ Credit cards owned
■ Household size
● Psychographics:
○ This is more subtle and describe what groups of people care about, how they feel, what they value, and
how they live
○ Focuses more on the IAD (Interests, Activities, Opinions) of potential market
○ Sample Psychographic Questions:
■ Which of the following is most important to you?
■ How do you like to spend your free time?
■ If you had more time, which of the following would you do?
■ If you had more time, what would you spend more money on?
■ How do you favor making purchases?
■ What interests you?
GETTING TO KNOW YOUR TARGET CUSTOMERS:
● This could probably be the most difficult question a small business owner has to answer
● Many give these as their answers:
○ Men
○ Women
○ Men & Women
○ Business People
○ Working Class
○ Adults
● But your target market may be more specific than those mentioned above
SETTING YOUR RESEARCH DIRECTION:
● Chapter Outline:
○ Brainstorming:
■ Choosing your participants
■ Choosing the facilitator
■ Running the brainstorming session
■ Two things a brainstorming can do:
● Give you further direction for research
● Give you answers to questions
○ Forming your Hypothesis
○ Identifying the information you need
● Brainstorming:
○ Getting a group of creative, articulate people together in a room and letting ideas flow
○ Best way to make sure you have a lot of different ideas for developing your product, service, or company
or to set directions of your research.
● Choosing your participants:
○ Qualities to look for in members of your brainstorming team:
■ Broad-minded - Don’t choose people who are rigid or easily offended
■ Independent - People who can work with minimal supervision
■ Fun-loving - Your people should bat ideas around like a puppy playing with a ball
■ Original - They should give you original slants and observations
■ Prolific - Don’t choose someone who hardly ever speaks. The more ideas you hear, the better.
■ Outgoing - Use people who aren’t afraid of getting up and playing a role or even singing if the
mood is right.
● Choosing the Facilitator:
○ The Facilitator is critical to the success of the session
■ Enthusiastic and unintimidating
■ If business is established, the facilitator should NOT be a CEO
■ Could also be someone outside the company like consultant, supplier, faculty
■ Must be appropriate and knowledgeable to reach your sessions objectives
● Running the Session:
○ Things to do and remember during brainstorming sessions:
■ Gather people who can present ideas in a positive way
■ Appoint a moderator who can subtly guide the discussion
■ Appoint someone who can take notes during the session and prepares the report afterwards
■ Have a general idea of what you want to achieve during the session
■ Set up a chalkboard, market board, or large pad of paper for the moderator to write on
■ Keep the discussion wide open
■ Allow enough time for chemistry to develop and ideas to flow
■ Remember: There’s no such thing as bad idea
● Forming your Hypothesis:
○ Hypothesis is a working assumptions
○ A proposition you will test during the course of your research
○ It gives you a specific direction to go and specific things to look for
○ You begin with a proposition, then collect evidence that proves, disproves, or modifies it
○ Examples of hypothesis:
■ Our talking briefcase will be used primarily by young executives attracted to electronic gadgetry;
while most of these potential users will be male, many of the purchasers will be upscale wives
and girlfriends, buying the cases as gifts.
■ Auto repair shops will subscribe to my proposed 1-800 referral service if they perceive the price to
be affordable and if paperwork can be kept to a minimum
■ Teenagers will purchase a day-glo underwear from my company if it is positioned as being a
radical, rebellious, sexy thing to do.
● Identifying the Information You Need:
○ Supposed you’re working on with example number one you might make a list like this:
■ What age group is most likely to use the briefcase?
■ Is it accurate to assume that most users will be male?
■ What age group is most likely to buy the briefcase?
■ What are the demographics of the typical briefcase purchasers?
■ Are there certain types of business people to whom this briefcase might have a particular
appeal?
■ What will they be willing to pay?
■ Will the case sell better if this is made of leather, vinyl, or some form of a high-tech metal or
plastic?
■ What product name will have the most appeal to the audience?
■ What advertising vehicle will best reach our target audience?
■ What competing products exist?
■ How should we position this case against the competition?
SECONDARY DATA WHAT’S AVAILABLE?
● What kind of data can you expect to find?
○ Secondary data can provide all the answers that you need to launch your new business, products,
services
○ Helps you save money
○ Helps you refine your hypothesis
○ Helps you narrow your list of questions when it’s time to conduct primary research
● Types of Data you can get from Secondary Data:
○ Demographics (Examples):
■ Number of women ages over 65 living in Cavite
■ Total value of corn crops in the country in 2022
■ Average household income in Tagaytay City
■ Number of people who owns more than 2 private vehicles in Dasmariñas City
■ Where can you get these data:
● Published journals
● Trade associations
● Government offices
● Other sources
○ Scientific Study Data (Example):
■ How does coffee affect the work habits of men?
■ What health regimens work best to cure/prevent cancer?
■ What are the types of exercise to prolong life?
○ Media Survey Data - Survey research is the collection of data attained by asking individuals questions
either in person or on paper, by phone or online.
■ Usually conducted by individual media or by professional survey organizations such as Neilsen
and ARBITRON (US)
■ Example Data:
● Number of men aged 18-45 who watch kdrama in a given week?
● Average minutes per day women spend shopping online?
○ Public Polls - It is a human research survey of public opinion from a particular sample. Usually
conducted by magazines, newspapers, TV Networks, online research engines and sometimes by colleges
and universities
○ Determine answers according to the opinion of the people or group
○ Example:
■ Paid Survey
■ Rakuten Insight Survey
■ SurveyView
○ Patent and Trademark Data:
■ Tells you what competitors are doing or plan to be doing in the future
■ You need to check this to make sure that planned product, logo, or name isn’t already someone
else’s property
■ Avoid getting sued
■ Maintained by government agencies like DTI
■ Patent - An exclusive right granted for a new, inventive, and useful product.
■ 3 Types of Patent:
● Utility
● Plant
● Design
■ Trademark - Protects words and design elements that identify the source of a product (Brands
names & corporate logos)
■ What is Copyright - Protects original works of authorship such as writings, art, architecture and
music.
○ Legal Information:
■ Search for information such as laws and regulations that may affect your product, service or
business
■ Usually published by government agencies at all levels
○ Addresses and Phone Numbers:
■ Available in so many different ways
■ Online
■ Yellow Pages
■ Government agencies
■ Etc
■ If you follow up then it will lead you to more data
○ Information and Business Procedures:
■ Find more information about your plan for your products and services.
■ Find out the procedures that you need to follow so that you will be guided
■ You can find those information through manuals and directories or even to websites
○ Prices and Specifications
CONSUMER BEHAVIOR:
● “Sales determine profit and consumers’ actions determine sales.”
○ The bottomline of every organization’s involvement in business is to make profit which is being
determined by how its market behaves.
● Market - Consists of people with money to spend and the willingness and ability to spend it
● How many times throughout the day do people make product decisions?
○ If you stop thinking about it, many product decisions are made everyday without much thought.
○ “What should I wear? What am I going to do today?”
○ Many product decisions are answered routinely
● What is Consumer Behavior?
○ The study of customers and how they behave while deciding to buy a product that satisfies their needs.
○ A study of the actions of the consumers that drive them to buy and use certain products
○ Understanding consumer buying behavior is most important for marketers as it helps them relate better to
the expectations of the consumers
● “Consumer is the principal and the priority of business”
● Importance of Consumer Behavior:
○ Understanding this is essential for a company to succeed in its current products and new product
launches.
○ Consumers have different thought processes and attitudes towards buying a particular product
○ If a company fails to understand the reaction of a consumer towards a product, there are high chances of
product failure
○ Due to the changing fashion, technology trends, living style, disposable income, and similar other factors,
consumer behavior also changes
● Consumer Differentiation:
○ In marketing, this is a way to distinguish a consumer from several other consumers
○ This helps to make a target group of consumers with the same or similar behavior
○ When a marketer is knowledgeable about the differentiation of each group of consumers, he can design a
separate marketing strategy
● Retention of Consumers:
○ “Consumer behavior is of most importance to marketers in business studies as the main aim is to create
and retain customers” - Professor Theodore Levitt (Kumar, 2004).
○ Consumer behavior is not just important to attract new customers, but it is very important to retain existing
customers as well.
○ When a customer is happy about a particular product, he/she will repeat the purchase.
● Design Relevant Marketing Program:
○ Understanding consumer behavior allows you to create effective marketing strategies.
○ For example: While targeting the kid’s market, you may have to look out for venues such as TV ads,
school programs, and blogs targeting young mothers.
○ You will need to take different messaging approaches for different consumer groups
● Predicting Market Trend:
○ Consumer behavior analysis will be the first to indicate a shift in market trends.
○ By conducting a consumer behavior study, a company saves a lot of resources that might otherwise by
allocated to produce a product that will not be sold in the market
○ For example: In summer, a brand will not waste its resources producing a product that will not sell in
summer. Based on consumer behavior, the company decides on a production strategy that will save on
warehouse costs and marketing costs
● Competition:
○ One of the most important reasons to study consumer behavior is to find out answers to some of
these questions:
■ Is the customer buying from your competitor?
■ Why is a consumer buying from your competitor?
■ What features attract a consumer to your competitor’s products?
■ What gaps are your consumers identifying in your products when compared to your competitors?
● Innovate New Products:
○ Some of the big names such as New Coke, Crystal Pepsi, Colgate Kitchen Entrees, Earring Magic Ken
Doll, and Wheaties Dunk-a-Balls Cereal. Can you see similarities between these products? Yes! They all
failed!
○ Most new products and ideas end up in failure.
○ Companies strive hard to improve the success rate of their new products or new ideas
○ One of the most important ways is to conduct a sound and thoughtful consumer behavior study
● Stay Relevant in the Market:
○ When the world is changing rapidly, the biggest challenge we all face is staying relevant to our target
market’
○ The main reason behind the rapid changes is the ever-changing behavior of our customers
○ Today’s consumers have greater choices and opportunities which means they can easily switch to a
company that offers better products and services
● Improve Customer Service:
○ Consumers require different levels of customer service
○ Understanding the differences within your customer base will help you provide the most appropriate
service for individual needs.