Mr course module 06
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This document provides a summary of lessons from a short course in market research taught by Ray Poynter. The lessons covered include analyzing quantitative data, quantitative analysis techniques such as cross-tabs and factor analysis, and pricing research methods like concept testing, MaxDiff, and conjoint analysis. The document lists the chapter topics and dates for each lesson in the course and provides contact information for the instructor.
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Mr course module 06
- 1. A short course in Market Research with Ray Poynter (English language) Lesson 06 Friday, 25 July Ch. 11, Analyse Quantitative Data Ch. 12, Quantitative Analysis Techniques Ch. 06, Pricing Research @RayPoynter ray.poynter@thefutureplace.com
- 2. Dates and Modules 01 Thu 3 July Introduction The context for market research Communicating results 02 Tue 8 July Quantitative research Writing questionnaires 03 Thu 10 July Qualitative research Analysing qualitative data 04 Tue 15 July Major applications of research Mobile market research 05 Thu 17 July Emerging research methods Communities Social media research 06 Tue 22 July Fri 25 July How to analyse quantitative data Quantitative analysis techniques Pricing research 07 Thu 24 July B2B (business to business) International research Political polling 08 Tue 29 July Research ethics, Guidelines and laws Current areas of sensitivity Questions from new researchers
- 3. QUANTITATIVE ANALYSIS & TOOLS Part A
- 4. Discovering or Predicting? In one project you can normally only do one of these. Discovering (exploring) – For example data about Smartphone habits, preferences, favourites. – Discover segments, areas of agreement, areas of difference. Predicting (confirming/quantifying) – How big are the segments? – To what extent would 1 hour more battery, or $50 off the price, increase intention to buy?
- 5. Cross-tabs Question: Are you enjoying this book? Age Gender Total 16-24 25-34 35 + Male Female Base 300 100 100 100 150 150 Yes 205 50 75 80 100 105 68% 50% 75% 80% 67% 70% No 95 50 25 20 50 45 32% 50% 25% 20% 33% 30% Cross-tabs do not exist in the academic or theoretical model of market research!
- 6. Where to Start? 1. Look at the total column, get the big picture. 2. Check the data, e.g. the distribution of the data on the scales: 3. Look at the cross-tabs to see who is different from the total, and then explore how and why.
- 7. Cross-tabs Question: Are you enjoying this book? Age Gender Total 16-24 25-34 35 + Male Female Base 300 100 100 100 150 150 Yes 205 50 75 80 100 105 68% 50% 75% 80% 67% 70% No 95 50 25 20 50 45 32% 50% 25% 20% 33% 30%
- 9. Correlation
- 11. What is Segmentation? • Putting people or things into groups – E.g. Young vs old Students/workers/unemployed/retired Rock/pop/R&B • Cluster analysis is one way of making segments – Cluster analysis uses patterns in the data to put people into clusters • Other approaches – Perceptual mapping, key metrics (e.g. 80:20), cross-tabs, decision trees, and latent class
- 12. MaxDiff - Consider the following Which attribute of supermarket is most important? – Wide range of fresh fish – Wide range of fresh meat – Wide range of fresh fruit – Wide range of frozen food – Plenty of parking – Packs your bags for you – Carries bags to the car for you – Had trolleys that run straight – Has a loyalty scheme – Never have to wait more than 5 minutes at the tills – Bakes its own bread – Has good air conditioning – Etc…… Which crime / anti-social activity is the most serious? – Riding without a ticket on the bus – Being drunk in a restaurant – Being drunk whilst driving a car – Failing to declare your earnings accurately to the tax man – Stealing a car – Stealing a bicycle – Threatening somebody with a gun – Threatening somebody with a knife – Etc….
- 13. Basic MaxDiff Scaling 1. Wide range of fresh fruit 2. Wide range of frozen food 3. Plenty of parking 4. Packs your bags for you For each card the respondents indicate which is the Most important and which is the Least important 1. Carries bags to the car for you 2. Had trolleys that run straight 3. Has a loyalty scheme 4. Never have to wait more than 5 minutes at the tills 1. Never have to wait more than 5 minutes at the tills 2. Bakes its own bread 3. Has good air conditioning 4. Wide range of frozen food 1. Has a loyalty scheme 2. Plenty of parking 3. Wide range of fresh fish 4. Bakes its own bread Produces a scoring of all the features in a way that can be used to compare, say, USA, Japan, Mexico, and France.
- 14. Most Likely Least Likely 100 Max Diff to test and report logos
- 15. 120GB Disk 15 inch Screen 1MB RAM 120GB Disk 17 inch Screen 2MB RAM 80GB Disk 15 inch Screen 2MB RAM 80GB Disk 17 inch Screen 1MB RAM 120GB Disk 19 inch Screen 512KB RAM 80GB Disk 19 inch Screen 512KB RAM Card Sort Conjoint & DCM (Discrete Choice Modelling) Pair-wise Comparisons (Discrete Choice) 120GB Disk 15 inch Screen 1MB RAM 80GB Disk 17 inch Screen 2MB RAM or 120GB Disk 15 inch Screen 1MB RAM Not Buy Def Buy 1 2 3 4 5 6 7 8 9 10 11 Ratings Conjoint 120GB Disk 15 inch Screen 1MB RAM 100GB Disk 17 inch Screen 1MB RAM or or 80GB Disk 15 inch Screen 2MB RAM None of these or Choice Based (Discrete Choice)
- 16. Conjoint & DCM You need an expert on the team Or, use a specialist third-party
- 17. How to find the key findings/story? • Rely on results that link to the objectives • Focus on ‘need to know’, not ‘nice to know’ • Look for recurring themes and patterns • Turn the numbers into words – The best option is segment A – People using the small branches feel unloved • Don’t report ALL the data in the presentation – Include it as an appendix
- 18. How can I tell correlation from causation? • Correlation does not mean causation. • In Tokyo, on the days when more people carry umbrellas it rains more often – The umbrellas do not cause the rain – The weather forecast causes the umbrellas – And the forecast is caused by the weather • You can’t prove causation from a market research study – The cause has to be identified externally – MR study can quantify the relationship
- 20. If you get causation, this is funny I used to think correlation implied causation, then I went on a course and now I don’t So, the course helped then? Not necessarily.
- 21. Questions?
- 23. Why is pricing research so hard? • 3 key reasons: 1. Pricing seems rational, but shoppers are mostly emotional. 2. People find predicting behaviour in hypothetical situations difficult. 3. People are often unaware of current prices. • If I cut the price of beer by 50%, how much beer would you buy in November? – If I don’t change the price how much beer will you buy in November?
- 24. What do clients typically need from a pricing study? • Brand price elasticity – If they change the price, how much do sales change? • Cross-elasticity – If a competitor changes prices, how does that affect us? • Size of the market – If the price is increased, does the market shrink? – If the price is decreased, does the market grow?
- 25. Approaches • Market – Econometrics, A/B, Test markets • New Concept – Concept test & Van Westendorp • Price structure – BPTO – Conjoint Analysis / DCM (Discrete Choice Modelling)
- 26. Purchase likelihood Likes and dislikes Product substitution Use and purchase frequency MagicBox IMP Adapt WiFi Internet Radio & Media Player Imagine being able to access over 2500 free Internet radio stations worldwide through your own HiFi system? Well now you can with this tricky little IMP Adapt. With this fantastic gadget you can listen to your favourite radio stations from wherever you are in the world so no more having to suss out the best music channels around the globe, you can have your radio stations from home all ready to connect up to any HiFi speakers and away you go! $189.95 Priced Concept Test
- 27. Concept A $20 Concept A $25 Concept A $30 200 200 200
- 28. van Westendorp Price Sensitivity Meter Useful for new product launches 4 Questions: – At what price would you say the offering is INEXPENSIVE/CHEAP/GOOD VALUE? – At what price would you say the offering is EXPENSIVE BUT WORTH CONSIDERING? – At what price would you say the offering is TOO EXPENSIVE TO CONSIDER? – At what price would you say the offering is SO CHEAP YOU WOULD DOUBT THE QUALITY? Either free format prices, or from a pre-coded list – Usually using some technique to avoid price reversals
- 29. van Westendorp Terms • Indifference Point, equal numbers of people consider the offering cheap and expensive • Optimum pricing point, maximizes the number of people who would consider the offering – i.e. the point where the too expensive and too cheap lines cross • Highest reasonable price, equal numbers of people consider the offering too expensive and "not expensive" (the inverse of expensive). At higher prices, decreasing volume overcomes increasing revenue • Lowest reasonable price, equal numbers of people consider the offering too cheap and "not cheap" (the inverse of inexpensive). At lower prices, decreasing revenue overcomes potential volume increases • Range of pricing options, is difference between the lowest reasonable price and the highest reasonable price For your notes
- 30. VW Range of Acceptable Prices
- 31. BPTO – Brand Price Trade-Off Douwe Egberts Continental Freeze Dried 200g £3.17 Cafe Direct Fairtrade Original 200g £3.20 Carte Noire Coffee 200g £2.98 Kenco Rich Dark Roast 200g £2.81 Nescafe Alta Rica 200g £3.57 Nescafe Blend 37 Freeze Dried 200g £3.03 Nescafe Coffee Granules 200g £2.27 Sainsbury's Gold Roast 200g £1.61
- 32. Conjoint / DCM If these were the hotels available to you, which one would you choose? Marriott Room service from 7 to 21 Free high speed internet Near airport $225 Ibis 24 h room service No internet access Centrally located $175 Intercontinental No room service Data port in phone Near business destination $125 Wyndham 24 h room service High speed internet for $20 Near airport $200 I’d not stay at any of these hotels
- 33. Which Pricing Technique to Use? Depends on the objectives and budget Rule 1 – choose simplest/cheapest technique which answers the problem Is the price question the main part of the study or is it an add on? What sort of materials, known products, new concept, ‘outside-the-box’ concept Don’t over promise!
- 35. Feedback for the next lessons? • If you have feedback now, GREAT! • Or, – Email it to ray.poynter@thefutureplace.com
- 36. © The Future Place, 38 South View Rd, Nottingham, NG4 3QL, UK Significant Digits and Decimal Places Ray Poynter Extension Material
- 37. © The Future Place, 38 South View Rd, Nottingham, NG4 3QL, UK Significant Digits • 3 digits? • 2 digits? • 1 digit? • SD ≠ DP
- 38. © The Future Place, 38 South View Rd, Nottingham, NG4 3QL, UK Which is the middle value?
- 39. © The Future Place, 38 South View Rd, Nottingham, NG4 3QL, UK Correlation
- 40. © The Future Place, 38 South View Rd, Nottingham, NG4 3QL, UK R-squared
- 41. © The Future Place, 38 South View Rd, Nottingham, NG4 3QL, UK Money 2SD or 3SD
- 42. © The Future Place, 38 South View Rd, Nottingham, NG4 3QL, UK Spurious Accuracy Sample size = 100 Agreement = 45.67% Sample error at 95% = +/- 10% So – 45.67% – Could be 55.67% – Or, 35.67% The .67 is spurious accuracy 46% would be better
- 43. © The Future Place, 38 South View Rd, Nottingham, NG4 3QL, UK Preserve accuracy in calculations • Display results to 2 or 3 SD • Try to avoid decimals • But – Preserve accuracy in tables and Excel – Combine data by combining counts, not by combining percentages
- 44. © The Future Place, 38 South View Rd, Nottingham, NG4 3QL, UK Key Tips • Minimise the number of numbers • Minimise the number of digits • Don’t repeat symbols unnecessarily (eg % or $) • Avoid decimal places if possible • Positive integers between 0 and 100 are good – Between 0 and 10 is better
- 45. © The Future Place, 38 South View Rd, Nottingham, NG4 3QL, UK Thank you Questions?