Ch. 4 - Market Research Flashcards
Market Research
Research conducted by companies to answer the following questions:
- What do my customers want?
- What are my competitors doing?
Why do companies perform market research?
Companies need an understanding of why consumers behave the way they do. Using this information, they can improve their performance in the marketplace
Market Research Process
- Define problem & research objectives
- Design research plan to collect information
- Collect data
- Analyze data and develop consumer insights
- Determine action plan
Why is it important to identify the correct problem to research?
Failing to identify the right problem will render the rest of the market research process questionable
What are the 3 research objectives companies use for market research?
- Exploratory
- Descriptive
- Causal
Exploratory Research Objective
To gather preliminary information that will help define problems and suggest hypotheses
Descriptive Research Objective
To describe problems, situations, or markets. Can gather information about people’s knowledge, attitudes, preferences, or buying behaviour
Causal Research Objective
To test hypotheses about cause-and-effect relationships
Primary Data
Consists of information collected for the specific purpose at hand
What is the main con of collecting primary data?
It takes more time and money to collect
Secondary Data
Existing data that is readily available at a relatively low cost
What is the main con of collecting secondary data?
The data is not collected specifically for your research objective. The data you need for your research objective might not exist (you need to collect primary data instead)
What are the primary research decisions that must be made before carrying out research?
- Research Technique (Which)
- Sample (Who)
- Contact Method (What)
- Research Instrument (How)
Observational (Research Technique)
Collecting data without interacting with people (simply observing people’s behaviours)
Social Listening (Research Technique)
Observing people’s online behaviour (no interaction)
Ethnographic (Research Technique)
Interacting with people by living with them and watching their behaviour
In-depth Interviews (Research Technique)
One-on-one interviews (one researcher interviews one consumer). Includes verbal interaction between the researcher and the consumer, and probing questions
Focus Groups (Research Technique)
An informal interview session of 6-10 participants and a moderator. These sessions yield diverse and unexpected insights
Projective Techniques (Research Technique)
Good for understanding consumers’ motivation and emotions. These techniques are interpretive. Includes:
- Word Association Tests
- Sentence Completion Tests
- Drawing
- Storytelling
Surveys (Research Techniques)
Written research questionnaires that generally collect descriptive data. Surveys are the most commonly used market research technique.
Experiment (Research Techniques)
Study cause-and-effect relationships between variables
Independent Variables
What you manipulate (cause variables)
Dependent Variables
What you measure (effect variables)
Control Variables
What you hold constant (e.g. demographics, personality). Usually everything but your independent variables. You can hold demographics and personality constant by using random assignment (randomly assign participants to experiment groups)
Quasi-experiments
Used to study cause-and-effect relationships without random assignment. Thus, the researcher has control over some, but not all variables. Some conclusions can be made, but with less certainty than true experiments. Quasi-experiments are common in the field, where you have less control than in a lab
Sampling
Process of selecting survey respondents or research participants
Probability Sample
Sample that gives every member of the population a known chance of being selected. Includes:
- simple random sampling
- stratified sampling
- cluster sampling
Non-probability Sample
Arbitrary grouping that produces data unsuited for most standard statistical tests.
What mechanical devices are used in research?
- People Meters
- Supermarket Scanners
- Galvanometer
- Eye Cameras
- Neuromarketing
Eye-Tracking (using eye cameras for market research)
Useful for companies to understand:
- What you look at/what you don’t look at
- How long you look at certain elements
- Path your eyes take
- Whether consumers look at something multiple times
Neuromarketing
Two ways to measure brain activity:
- EEG
- fMRI
Electroencephalography (EEG)
Records electrical activity along the scalp and neuron activity. It does not say what parts of the brain were activated (fMRI is needed for this)
Functional Magnetic Resonance Imaging (fMRI)
Record blood flow in the entire brain. Can be used to determine which part of a person’s brain was activated.
What are the issues associated with focus groups
- Peer Pressure/Social Influence
- Demand Effects
- Issues with generalizability of insights
Peer Pressure/Social Influence (Focus Groups)
People may not respond in the same way they would in an in-depth interview (they might lie to fit in with the other participants)
Demand Effects (Focus Groups)
Arises when participants answer according to what they think the researcher wants
Generalizability of Focus Groups
Results from focus groups are often not generalizable to the whole population since a focus group is not guaranteed to be representative of the whole population
What are the issues of using projective techniques for market research?
- They are time consuming and expensive
- Hard to interpret
What is the biggest issue with using surveys for market research?
It is difficult to design a good questionnaire. You need to be careful about how you word questions, the response format you use (open-ended or close-ended), and the order you ask questions
Simple Random Sampling
Choose a member of the population randomly. Every member of the population has an equal chance of being selected.
Stratified Sampling
Separate the population into different groups based on characteristics people share and randomly choose people from each group
Cluster Sampling
Divide the population into different clusters (e.g. neighbourhoods, districts), and then randomly select some of these clusters as your sample
