Basic tips of Market research - done as part of group activity in MBA

1. Market Research Studies

2. Overview
Measurement Metrics
Classification of Research Design
Research Techniques
Data analysis
Applications of market research

3. 1) Market Research
Importance
Maintain competitiveness over competitors.
What is it?
The systematic gathering and interpretation of information
about individuals or organizations using statistical and
analytical methods and techniques of the applied social
sciences to gain insight or support decision making. [ICC/ESOMAR
(2008), International Code on Market and Social Research]

4. Marketing Metrics
Marketers face increasing pressure to defend their expenses. Researchers in marketing
have warned that the inability of the marketing department to demonstrate its
contribution to company performance weakens its position in relation to other
departments.
[Ambler, T. (2000), “Marketing Metrics,” Business Strategy Review,11, 59–66_and J. Roberts (2006), “Beware the Silver Metric:
Marketing Performance Measurement Has to Be multidimensional,” Marketing Science Institute]
The Marketing Science Institute (MSI 2008) defines marketing metrics as “performance
indicators that senior management uses (or should use) to monitor and evaluate the
progress – specifically marketing performance – of a business or business unit.”
•
To redeem marketing from this crisis of confidence, much call for more research
regarding the outcome measuring marketing has been made.
[Lehmann, D.R. (2004), “Metrics for Making Marketing Matter,” The Journal of Marketing]

5. Book: Marketing Metrics: The Definitive Guide to Measuring Marketing
Performance
by Paul W. Farris, Neil T. Bendle, Phillip E. Pfeifer , David J. Reibstein
Marketing Metrics
Share of Hearts, Minds, &
Markets: Customer perceptions,
market share & competitor
analysis
Margins & Profits: Revenues,
Cost Structures, Profitability
Product & Portfolio Mgmt:
Measures of Trial, growth,
Cannibalization, brand equity
Customer Profitability: Value of
individual customers &
relationships
Sales Force & Channel Mgmt:
Sales force organization,
performance, compensation.
Distribution coverage & logistics
Pricing Strategy: Price sensitivity
& optimization
Promotions: temporary price
promotions, coupons, rebates &
trade allowances
Advertising media & web
metrics: Reach, frequency, rating
points, impressions
Marketing & Finance: Economic
Value Added (EVA), WACC, etc

6. 2) Classification of Research
Problem Identification & Problem Solving
Research
Types of Design
Exploratory : provides insights into and
comprehension of an issue or situation
Descriptive : used to describe characteristics of a
population or phenomenon being studied. It
does not answer questions about
how/when/why
Causal : to determine the cause underlying a
given behavior. It finds the cause and effect
relationship between variables
Sources of Data
Primary Data : conducted from scratch. It is
original and collected to solve the problem in
hand:
Secondary Data : data published previously and
usually by someone else

7. Methods of Research
[Marketing Research: An Applied Orientation 2006 (5th Edition) by Naresh Malhotra]
Qualitative - generally used for
exploratory purposes — small
number of respondents — not
generalizable to the whole
population — statistical
significance and confidence not
calculated — examples include
focus groups, in-depth
interviews, and projective
techniques
Quantitative - generally used to
draw conclusions — tests a
specific hypothesis - uses
random sampling techniques so
as to infer from the sample to
the population — involves a
large number of respondents —
examples include surveys and
questionnaires.
Questioning Observations
Ethnographic studies — by
nature qualitative, the
researcher observes social
phenomena in their natural
setting — observations can
occur cross-sectionaly
(observations made at one
time) or longitudinally
(observations occur over
several time-periods) -
examples include product-use
analysis and computer cookie
traces.
Experimental techniques - by
nature quantitative, the
researcher creates a quasi-
artificial environment to try to
control spurious factors, then
manipulates at least one of the
variables — examples include
purchase laboratories and test
markets

8. 3) Techniques
Commercial Eye Tracking
Concept Testing
Cool-hunting
Demand estimation
Brand Association Research
Ad Tracking
Brand Equity

9. Ad Tracking
In-market research that monitors a
brand’s performance including
brand and advertising awareness,
product trial and usage, and
attitudes about the brand versus
their competition
Can be done continuously (a few
interviews every week) or it can be
“pulsed,” with interviews conducted
in widely spaced waves (ex. every
three or six months)
Methodology: Respondent is either
shown a brief portion of a ad and is
asked 3 significant questions:
Do you recognize this ad?
(recognition measure)
Please type in the sponsor of this ad.
(unaided awareness measure)
Please choose from the following list,
the sponsor of this ad. (aided
awareness measure)
[ Young, Charles E., The Advertising
Research Handbook, Ideas in Flight,
Seattle, WA, April 2005 ]
Some data the post-test provides:
•Top of mind awareness
•Unaided brand awareness
•Aided brand awareness
•Brand fit
•Brand image ratings
•Brand trial
•Repeat purchase
•Frequency of use
•Purchase intent
•Price perceptions
•Unaided advertising awareness
•Aided advertising awareness
•Unaided advertising message recall
•Aided advertising message recall
•Aided commercial recall
•Ad wear out
•Promotion awareness and usage
•Market segment characteristics
•Media habits
•Lifestyle/Psychographics
•Demographics

10. Brand Equity
 Describes the value of having a
well-known brand name, based
on the idea that the owner of a
well-known brand name can
generate more money from
products with that brand name
than from products with a less
well known name, as consumers
believe that a product with a
well-known name is better than
products with less well known
names
[
Brand
Equity Ten
(Aaker) [1]
Brand
Equity
Index
( Moran)[2]
• Marketing Communications Agency surveys
consumers' perspectives along four dimensions:
• Differentiation: The defining characteristics of the
brand and its distinctiveness relative to
competitors.
• Relevance: The appropriateness and connection of
the brand to a given consumer.
• Esteem: Consumers' respect for and attraction to
the brand.
• Knowledge: Consumers' awareness of the brand
and understanding of what it represents
Brand Asset
Valuator
(Young &
Rubicam)[2]
• 10 attributes can be used to assess its strength.
• Differentiation, Satisfaction or Loyalty, Perceived Quality,
Leadership or Popularity, Perceived Value, Brand
Personality, Organizational Associations, Brand
Awareness, Market Share, and Market Price and
Distribution Coverage
Product of three factors:
•Effective Market Share is a weighted average. It represents
the sum of a brand's market shares in all segments in which
it competes, weighted by each segment's proportion of that
brand's total sales.
•Relative Price is a ratio. It represents the price of goods
sold under a given brand, divided by the average price of
comparable goods in the market.
•Durability is a measure of customer retention or loyalty

11. Brand Association Research
Identifying the network of strong, favorable, and unique brand associations in consumer
memory
[Aaker, David A. (1996), Building Strong Brands . New York: The Free Press]
Consumer mapping : Eg. Zaltman’s Metaphor Elicitation Technique (ZMET), which uses qualitative
research techniques to identify key brand associations and then uses in-depth interviews with
respondents to uncover the links between these brand associations (Zaltman and Coulter 1995).
[Christensen, Glenn L. and Jerry C. Olson (2002), “Using the Zaltman Metaphor Elicitation Technique (ZMET) to Map Consumers’
Mental Models,” Psychology & Marketing ]
Analytical mapping: produces brand maps using analytical methods. Eg. Network analysis,
which uses consumer perceptions about brands and derives the structure of brand associations
through network algorithms
[Henderson, Geraldine R., Dawn Iacobucci, and Bobby J. Calder (1998), “Brand Diagnostics: Mapping Branding Effect Using
Consumer Associative Networks,” European Journal of Operational Research]

12. Commercial Eye Tracking
Heat Maps: ‘hot’ zones designate where the users
focused their gazes with a higher frequency.
The process of measuring
either the point of gaze or the
motion of an eye relative to the
head. Instead of asking people
to recall their reactions or
describe their cognitive
engagement, eye tracking lets
you see it, in real time.
It minimizes recall errors and
the social desirability effect,
and reveals information
conventional research methods
normally miss. Eye tracking
gives essential benefits in all
areas of advertising; online,
print, TV, and out-of-home
media.

13. Concept Testing
[Moore, William L. (1982). Concept Testing. Journal of Business Research]
To evaluate consumer response
to a product idea prior to the
introduction of a product to the
market or used to generate
communication designed to alter
consumer attitudes toward
existing products.
Used for assessment of potential
creatives.
Performed using field surveys,
personal interviews and focus
groups, in combination with
various quantitative methods, to
generate and evaluate product
concepts.

14. Cool hunting
 To make observations and predictions in changes of new or existing
cultural trends
 Coolhunting is often referred to as "Trend Spotting”
 Provides direct insight into the thoughts and feelings of their target
demographic
 Online surveys, chatrooms, webgroups, consumer-oriented websites
dedicated to coolhunting can be monitored to gather data
[Peter A. Gloor and Scott M. Cooper (2007). Coolhunting: Chasing Down the Next Big Thing. AMACOM Div American Management
Association]

15. Demand Estimation
Consumer
Surveys
• The survey
conducted at a
big shopping
centers by
trained
interviewers
with
sophisticated
questions.
Consumers
questionnaires
provide useful
information to
the firm
Observational
Research
• This refers to the
gathering of
information on
consumer
preferences by
watching them
buying and using
goods.
Consumer
Clinics
• These are
laboratory
experiments in
which the
participants are
given a sum of
money and asked
to spend it in a
simulated stores
to see the react ,
but change the
price of product
in different
stores
Market
Experiments
•Conducted in
the actual
market place.
One way is to
select several
markets with
similar
socioeconomic
characteristics,
Then, record the
response
(purchase) of
consumers in the
different
markets

16. 4) Data Analysis
 Analysis of variance (ANOVA)
The primary purpose of ANOVA is to test for differences between multiple means. Whereas the t-
test can be used to compare two means, ANOVA is needed to compare three or more means. If
multiple t-tests were applied, the probability of a TYPE I error (rejecting a true null hypothesis)
increases as the number of comparisons increases.
One-way, ANOVA examines whether multiple means differ. The test is called an F-test. ANOVA
calculates the ratio of the variation between groups to the variation within groups (the F ratio).
While ANOVA was designed for comparing several means, it also can be used to compare two
means. Two-way, ANOVA allows for a second independent variableand addresses interaction
To run an one-way ANOVA, use the following steps :
- identify the independent and dependent variables
- describe the variation
- measure the difference between each group’s mean and the grand mean
- perform a significance test on the differences
- interpret the results
ANOVA is efficient for analyzing data using relatively few observatiosns and can be used with
categorical variables

17. Factor 1 Factor 2
Variable 1
Variable 2
Variable 3
Column’s sum of square
It is a very popular technique to analyse interdependence. Factor analysis
studies the entire set of interrelationships without defining variables to be
dependent or independent. Factor analysis combines variables to create a
smaller set of factors. Mathematically, a factor is a linear combination of
variables. The technique identifies underlying struture among the variables,
reducing the number of variables to a more manageable set. Factor analysis
groups variables according to their correlation
The factor loading can be defined as the correlations between the factor and
their underlying varaibles. A factor loading matrix is a key output of the factor
analysis
Factor Analysis

18. Each cell in the matrix
represents correlation
between the variable and
the factor associated with
that cell. The square of
this correlation
represents the proportion
of the variation in the
variable explained by the
factor. The sum of the
squares of the factor
loadings in each column is
called an eigenvalue. An
eigenvalue represents the
amount of variance in the
original variables that is
associated with that
factor. The communality is
the amount of the variable
variance explained by
common factors
A rule of thumb for
deciding on the
number of factors is
that each included
factor must explain at
least as much
variance as does an
average variable. In
other words, only
factors for which the
eigenvalue is greater
than one are used.
Other criteria for
determining the
number of factors
include the Scree plot
criteria and the
percentage of
variance criteria
To facilitate
interpretation, the
axis can be rotated.
Rotation of the axis
is equivalent to
forming linear
combinations of the
factors. A
commonly used
rotation strategy is
the varimax
rotation. Varimax
attempts to force
the column entries
to be either close to
zero or one

19. Cluster Analysis
Market segmentation usually is based not on one factor but on multiple factors. Initially,
each variable represents its own cluster. The challenge is to find a way to combine
variables so that relatively homogenous clusters can be formed. Such clusters should be
internally homogenous and externally heterogeneous. Cluster analysis is one way to
accomplish this goal. Rather than being a statistical test, it is more of a collection of
algorithms for grouping objects, or in the case of marketing research, grouping people.
Cluster analysis is useful in the exploratory phase of research when there are no a-priori
hypotheses
Cluster analysis steps :
- formulate the problem, collecting data and choosing the variables to analyze
- choose a distance measure. The most common is the Euclidean distance.
Other possibilities include the squared Euclidean distance, city-block distance,
Chebychev distance, power distance, and percent disagreement
- choose a clustering procedure (linkage, nodal or factor procedures)
- determine the number of clusters. They should be well separated and ideally
they should be distinct enough to give them descriptive names such as professionnals,
buffs, etc.
- profile the clusters
- assess the validity of the clustering

20. 5) Application of market research
Promotional Research
 Promotion has been defined by many marketers as the most significant
of the four Ps of marketing. A marketer may create a great product,
price it reasonably enough and place it in outlets all over the country,
but unless he has promoted it well, or in other words, created an
awareness about all that he has done, the consumer would not even
ask for it
 Promotion refers to all the non-advertising activities carried out to
build awareness or a favourable image about a product or a service.
Typically, promotions include exhibitions, trade fairs, contests and road
shows. Promotion research helps an organisation foresee the outcome
of all such activities it wishes to undertake

21. Advertising Research
 Advertising research derives its importance from the fact that
today, a huge chunk of any organisation's marketing expenditure is
spent on advertising. A good advertisement can do wonders to an
organization’s topline; a bad one can tarnish its image for several
years to come.
 The advent of globalisation has actually left only a nominal
significance for national boundaries. The incorporation of practices
and beliefs typical to foreign cultures has taken place at a rather
fast pace. Our preference for cholle-bhature and idli-dosas has been
subtly replaced by that for burgers and pizzas, thanks to the
McDonaldisation of India. All this has posed a great challenge for
advertisers, and this is precisely where advertising research comes
in handy.

22.  The aim is not to find what customers like, but what they are willing to
pay and so what the optimum price point is to maximise profit or
revenue or market share. There are four main approaches to pricing
research, the Gabor-Granger technique, van Westendorp Price
Sensitivity Monitor, Brand Price Trade-off and Conjoint Analysis (also
known as Discrete Choice Analysis). Some techniques can be used off-
the-shelf and many companies sell branded pricing research packages
that are just a variation on one of these techniques, however selecting
the right technique ultimately depends on what the problem is you are
trying to solve.
Pricing Research

23. Product Research
 Product research is defined as marketing research that yields
information about desired characteristics of the product or service.
The characteristic of a good or service that will satisfy a recognized
need or want, is usually identified. It implements the data collection
process, analyzes the results and gives the findings and their
implications.
Segmentation Research
 Market segmentation is a process by which market researchers identify
key attributes about customers and potential consumers that can be
used to create distinct target market groups. Advertising and Sales
without a market segmentation base is like scattering breadcrumbs to
a product -- most of the effort is simply lost in the context.

24. Distribution Research
 Distribution Research refers to the collection and analysis of information
related to the sales of a product or brand and its distribution through various
retail channels so as to enable the management make better decisions. In depth
distribution research about a brand/product provides information related to
its retail presence, market size and share, sales achieved, how well the
competitor is selling and seasonality of demand.
 Marketing and distribution research is a key means to understand and analyze
the marketing environment and thereby helping eliminate any weak links
present. Distribution research helps gain insights into the following:
 Better management of sales channels with enhanced knowledge
 Better segmentation of distribution within sales channels
 Roles played by intermediaries in the sales process
 Understanding the centers of influence within a sales channel
 The company’s market position within a particular sales channel
 The main intermediaries in a distribution process are agents, wholesalers,
distributors and retailers.

25. Social Media Research
Social Media: a big influencer
in shaping buying habits.
(esp. high value items, high
interaction categories, such
as beauty, fashion)
No better place to
understand consumer’s
recommendations and
ultimately build trust

26. Social Media Research..
Social media
insights can
complement
traditional
customer
satisfaction,
brand loyalty
and trust
surveys by
giving a
different
perspective,
which is based
on the
observation of
spontaneous
and candid
statements by
existing or
prospective
customers
within social
media.
Importance AdvantageStrength It is
retrospective
and, therefore,
does not
require
consumers to
call upon
memories to
relate their
experiences
and
perceptions of
brands
Strength of
the approach
is in its ability
to provide a
robust score
that can be
measured
over time, and
to delve into
explanatory
factors,
therefore
combining the
power of both
quantitative
and
qualitative
research
approaches
Bertrand, G.; Social media research: developing a trust metric in the social age; International
Journal of Market Research Vol. 55 Issue 3; p.333-35

27. Part of group activity during MBA