Ch. 4 - Market Research

Question 1

Market Research

Answer 1

Research conducted by companies to answer the following questions:
- What do my customers want?
- What are my competitors doing?

Question 2

Why do companies perform market research?

Answer 2

Companies need an understanding of why consumers behave the way they do. Using this information, they can improve their performance in the marketplace

Question 3

Market Research Process

Answer 3

1. Define problem & research objectives
2. Design research plan to collect information
3. Collect data
4. Analyze data and develop consumer insights
5. Determine action plan

Question 4

Why is it important to identify the correct problem to research?

Answer 4

Failing to identify the right problem will render the rest of the market research process questionable

Question 5

What are the 3 research objectives companies use for market research?

Answer 5

• Exploratory
• Descriptive
• Causal

Question 6

Exploratory Research Objective

Answer 6

To gather preliminary information that will help define problems and suggest hypotheses

Question 7

Descriptive Research Objective

Answer 7

To describe problems, situations, or markets. Can gather information about people’s knowledge, attitudes, preferences, or buying behaviour

Question 8

Causal Research Objective

Answer 8

To test hypotheses about cause-and-effect relationships

Question 9

Primary Data

Answer 9

Consists of information collected for the specific purpose at hand

Question 10

What is the main con of collecting primary data?

Answer 10

It takes more time and money to collect

Question 11

Secondary Data

Answer 11

Existing data that is readily available at a relatively low cost

Question 12

What is the main con of collecting secondary data?

Answer 12

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)

Question 13

What are the primary research decisions that must be made before carrying out research?

Answer 13

• Research Technique (Which)
• Sample (Who)
• Contact Method (What)
• Research Instrument (How)

Question 14

Observational (Research Technique)

Answer 14

Collecting data without interacting with people (simply observing people’s behaviours)

Question 15

Social Listening (Research Technique)

Answer 15

Observing people’s online behaviour (no interaction)

Question 16

Ethnographic (Research Technique)

Answer 16

Interacting with people by living with them and watching their behaviour

Question 17

In-depth Interviews (Research Technique)

Answer 17

One-on-one interviews (one researcher interviews one consumer). Includes verbal interaction between the researcher and the consumer, and probing questions

Question 18

Focus Groups (Research Technique)

Answer 18

An informal interview session of 6-10 participants and a moderator. These sessions yield diverse and unexpected insights

Question 19

Projective Techniques (Research Technique)

Answer 19

Good for understanding consumers’ motivation and emotions. These techniques are interpretive. Includes:
- Word Association Tests
- Sentence Completion Tests
- Drawing
- Storytelling

Question 20

Surveys (Research Techniques)

Answer 20

Written research questionnaires that generally collect descriptive data. Surveys are the most commonly used market research technique.

Question 21

Experiment (Research Techniques)

Answer 21

Study cause-and-effect relationships between variables

Question 22

Independent Variables

Answer 22

What you manipulate (cause variables)

Question 23

Dependent Variables

Answer 23

What you measure (effect variables)

Question 24

Control Variables

Answer 24

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)

Question 25

Quasi-experiments

Answer 25

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

Question 26

Sampling

Answer 26

Process of selecting survey respondents or research participants

Question 27

Probability Sample

Answer 27

Sample that gives every member of the population a known chance of being selected. Includes: - simple random sampling - stratified sampling - cluster sampling

Question 28

Non-probability Sample

Answer 28

Arbitrary grouping that produces data unsuited for most standard statistical tests.

Question 29

What mechanical devices are used in research?

Answer 29

- People Meters - Supermarket Scanners - Galvanometer - Eye Cameras - Neuromarketing

Question 30

Eye-Tracking (using eye cameras for market research)

Answer 30

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

Question 31

Neuromarketing

Answer 31

Two ways to measure brain activity: - EEG - fMRI

Question 32

Electroencephalography (EEG)

Answer 32

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)

Question 33

Functional Magnetic Resonance Imaging (fMRI)

Answer 33

Record blood flow in the entire brain. Can be used to determine which part of a person's brain was activated.

Question 34

What are the issues associated with focus groups

Answer 34

- Peer Pressure/Social Influence - Demand Effects - Issues with generalizability of insights

Question 35

Peer Pressure/Social Influence (Focus Groups)

Answer 35

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)

Question 36

Demand Effects (Focus Groups)

Answer 36

Arises when participants answer according to what they think the researcher wants

Question 37

Generalizability of Focus Groups

Answer 37

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

Question 38

What are the issues of using projective techniques for market research?

Answer 38

- They are time consuming and expensive - Hard to interpret

Question 39

What is the biggest issue with using surveys for market research?

Answer 39

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

Question 40

Simple Random Sampling

Answer 40

Choose a member of the population randomly. Every member of the population has an equal chance of being selected.

Question 41

Stratified Sampling

Answer 41

Separate the population into different groups based on characteristics people share and randomly choose people from each group

Question 42

Cluster Sampling

Answer 42

Divide the population into different clusters (e.g. neighbourhoods, districts), and then randomly select some of these clusters as your sample