Section 5 - Market Research, Segmenting, Targeting, Positioning Flashcards
Step 1 in the Research Process: Identify the information requirement
What information do I need to start the research process? What questions will I need to ask that will allow me to ‘segment’ my research data? Product Life Cycle matters here. If it is unknown or early in the PLC you must use indirect secondary data, if it is late and known substantial secondary data is available.
Step 2 in the Research Process: Redefine the information requirement while addressing the SRC issue.
You have to get over your own SRC and help management get over theirs, and evaluate a foreign culture as different instead of right vs. wrong. This will enhance management’s willingness to conduct market research and limit home-country bias and prepares them for unexpected results.
Step 3 in the Research Process: Choose a geographic range.
Will the market be: an economic region, a country, a province/state, a city or neighbourhood, town or village. This is determined by time and budget restrictions.
Step 4 in the Research Process: Collect secondary data.
Internal sources: company records, staff,
External sources: trade journals, government sites, third-party sources (especially for economic or transparency scoring). Note: govt. data is biased to enhance positive aspects and minimize negative ones.
Step 5 in the Research Process: Assess the time/investment needed to acquire the missing data.
What is the information worth vs. what it will cost to collect?
What will the company gain with this information, is substitution possible, and what will it cost if the data are not collected (in terms of a knowledge gap)?
Step 5 in the Research Process: Design the research method and collect that data.
Common options: survey, focus group, observation.
Observation of purchasing patterns and repeat behaviour is more accurate, useful, and honest than surveys.
Use multiple indicators; do not rely on one set of data, but be aware of ‘diminishing returns’ beyond three reliable independent sources.
Use proven tools to save time and money, but customize them specific to the industry, product, or culture.
Problems of Gathering Primary Research
A lack of willingness to respond.
Incomplete and out-of-date govt. population statistics.
No accurate maps of population centres, so no cluster samples can be developed.
Questions translated incorrectly makes answering them impossible.
Literacy issues make written questionnaires useless.
Different dialects make a national questionnaire survey useless.
Data Collection Methods
Surveys, consumer panels, focus groups, observation, etc.
Step 7 in the Research Process: Analyze the data (based on the initial information requirement)
Segment the data and use graphic models to present the data. Remember positioning models with the four section positioning matrix.
Statistical techniques to predict outcome variations based on altering controllable variables.
Latent Market vs. Incipient Market
Latent market: an undiscovered segment that will demand the product when they are educated and it is made available.
Incipient market: an undiscovered segment that is not yet ready for the product but based on economic, demographic, political, or sociocultural trends, it will demand the product in the near future.
Step 8 in the Research Process: Interpretation and Presentation
Your report must clearly address Step 1 and clearly provide the information being sought by the executive. They want graphical summaries, not raw data. And will the executive understand the report (from a technical as well as a cross-cultural perspective)?
International Segmentation
International segmentation: the process to identify customer preferences and categorize them in terms of cultural characteristics.
Targeting
Evaluating all segments with intent to identify positively to your products and services.
Positioning
How to present your product or service to the chosen segment (in terms of preferences based on your research and segmentation). How consumers see your product. You need to find a balance between what customers want, what the competition does best, and what you do best. This is how you present yourself to the chosen segment.
Pre vs. Post-Internet Assumptions
Pre-Internet Assumptions: Every country is different; cultural preferences are consistent; sub-cultures aren’t really a thing; clustering national markets that are beside each other is helpful.
Post-Internet Assumptions: identical segments exist in different countries and multiple segments exist in each country, and you must research sub-cultural preferences for highest quality research.
