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Environment & Market Research

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Understand the purpose of Market Research

The course objective

Research methodologies and techniques

The process of market research

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Whats Market Research?

Phillip Kotler defines market research as the systematic design of collecting, analyzing and reporting of data and findings relevant to a specific marketing situation facing the organization Its simply the means of providing a Marketer with market and marketing information the bridge between the Marketer and the business environment consumers, competition and other stakeholders
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Purpose of Market Research

Reduce risk/uncertainty in marketing strategy planning
knowledge of Market help in making right decision information about the market needs to guide business decisions, set strategies and monitor the implementation The cost of failure for organizations may mean redundancies and financial losses E.g entering a new market/launching product/advert?

Understanding the market environment and changing trends

Companies exist in a rapidly changing environment. The change is likely to be either positive or negative and market research aids the marketer to respond appropriately to the changes - take advantage of positive changes and shield brands from threatening negative changes e.g Changing consumer environment needs, aspiration and attitude hence need to continuously produce products/services to meet needs Changing business environment trends in industry/performance of competition Changing technological environment Changing political and economic environment

Knowledge/information Management
Marketer is surrounded by a lot of information sales team, friends customers etc but is it trustworthy/accurate? Market research aids in collecting accurate, objective and relevant information for better decision making E.g sales team think brand doing well since selling but is it true vis-a vis industry performance

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Types of Research
Broadly there are two distinct categories of research desk research and primary research Desk Research
Involves collection/compilation of information from existing sources/secondary information meaning the information was not compiled for the purposes of current needs Is fast and less expensive But likely to be obsolete, unreliable and irrelevant to the research problem Sources of information may include, internet, library, government records, internal reports, syndicated studies, directories, trade associations and press

Primary Research
It involves gathering fresh information from the market Information is defined by a specific problem under investigation Information likely to be accurate and relevant to the objective of study It is the most widely used type in Market research

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Primary Market Research methods
There are two main research methodologies

Quantitative

Quantitative research supplies a number to anything that can be measured. It produces hard data that can be defended or challenged It is based on a sizeable sample that is statistically drawn. strength -the results are conclusive and Marketers can therefore use them to make business decisions Limitations - it cannot stand on its own because there is need to first understand the parameters of measurements which are generated through qualitative research. Quantitative research are mainly preceded by qualitative studies Because of the large numbers of interviews they tend to be expensive and take longer to complete Many organizations in Kenya are therefore tempted to use qualitative method which is considered cheaper

Qualitative

Mainly used when the researchers want to obtain deep understanding of why and how something is happening Involves small sample of people Discussions are long and unstructured and require considerable skill to draw out relevant information Strength - produce rich /insightful data through probing into peoples subconscious mind on needs, attitude and opinion. Limitations - the samples are small hence no attempt to measure responses is made so results though quite insightful are not conclusive Results likely to be subjective- leading questions and subjective interpretation of results Inability for most qualitative researchers to empathize with consumers

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Data Collection methods

Qualitative

Quantitative

Identify : Key Issues

Measure : Research parameters e.g Performance/ Importance

Focus groups - 6-10 respondents Takes 11/2 2 hrs In-depth Interviews one to one For heterogeneous sample/sensitive Topics/people with time constraints Consumer emersions spending time With consumers to observe behaviour

Face-to-face interviews most used in Kenya Telephone interviews - refusals E-mails low response rate Post office low response rate Panels/diaries Used on retail Audits and media - BBC
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Both quantitative and qualitative methods are supplementary results especially in consumer research are complete when both methods are used. E.g in a customer satisfaction study, At the end of a qualitative phase, we obtain :
In depth researcher understanding of the service process A listing of what customers see as key attributes A detailed understanding of customer vocabulary

What we do not get and has to be derived from a quantitative phase is :

How well the company and its competitors perform on each attribute Which attributes matter to the customers The relative importance the customers place on each attribute
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The market research process. What's the Marketers responsibility in the process? 6 main steps

Defining Research problem

Developing Research design

Gathering information

Analyzing Data

Presenting findings

Decision making

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Problem identification and briefing stage
The problem and objectives of the study should be explicit and clear not too broad or narrow to allow for clear actionable feedback. Its the responsibility of the Marketer to go through a problem, define it, assess and decide what must be acquired to meet the needs of the organization. If the Marketer is not quite clear s/he may invite the expertise of a marketing researcher or research consultant. The Marketer then outlines the problem and objectives in a brief format. The brief should clearly describe problem, objectives, target market, envisaged timelines and action standards that research is envisaged to meet There is usually fear across Marketers that if they give a lot of information to researchers it might bias results- with experienced researchers this does not happen. The researchers on the other hand should ensure they have a clear picture of what the marketer needs to know and if need be ask for a verbal briefing
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Develop research design/plan
This involves formulating a research devise also known as a proposal that will indicate how the researcher proposes to gather all the information needed. Its usually the responsibility of the Researcher to come up with a comprehensive research plan that describes i) The research problem and objectives as an introduction to the understanding of the issues at hand ii) Research approaches to be employed iii) Data collection method and research instruments, iv) Sample definition, size, procedure and scope of the study v) Research timelines and Vi) The project investment/costs required The Marketers responsibility is to ensure that the researcher understands the problem and have formulated a design that will meet all the research objectives before s/he commissions the research. It helps to seek proposal from different firms and award project on merit- price consideration has caused some Marketer to repeat projects

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Data Collection/Fieldwork
This stage involves the actual collection of information from the customers. Its the most expensive part of research and especially for quantitative studies and most prone to errors. Errors may arise in the
identification of the right customers. Interviewers may contact the wrong respondents either due to lack of proper understanding of the target group or by just being dishonest. Some interviewers are also likely to rephrase the questions hence collecting totally different information than was initially intended.

Proper training and practice through dummy and pilot interviews is needed to ensure interviewers are clear on method of recruiting and interviewing. Some research agencies have a quality control team independent of the field department Some Marketers create time and insist on attending the field work to assess the situation
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Data Collection/Fieldwork Cont. Quality control measures at both supervision and independent control team levels
Accompaniment 10-15% by supervisors/Quality control team to ensure that the interviewers recruit right respondents and quality of interviewing is at acceptable levels Back checking 10-15% through telephone or actual visit Ensure interview actually took place and right questions asked Questionnaire checks 100% - supervisors should go through all the questionnaires to ensure all questions asked and routing of questionnaire right For qualitative projects the moderators screens the respondents to ensure they are the right target screening may be by demographics- age, gender, socio-economic orientation, psychographics beliefs, perceptions, attitudes and lifestyles and /or by brand/product usage
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Data Analysis and interpretation
This is the process of extracting findings from the collected data to come up with percentage tabulations on each question or information in case of qualitative project. And whilst Quantitative method mainly uses statistical techniques and soft ware like SPSS, qualitative data is analyzed through content analysis.
Quantitative data analysis process Coding, data capture/entry, data cleaning and processing Qualitative process transcribing tapes, creating information grinds, analysis and interpretation

Its important that the Marketer and the Researcher agree before hand on the deliverables needed. The Researcher should share the findings with the Marketer before the presentation to ensure that all is well to avoid conflicts and disagreements during the presentation

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Presentation of findings/reporting

The reporting of findings may be in form of a presentation or through a workshop where there is more time for interactive discussions
The Marketer will decide who to attend the presentation mainly all key stakeholders e.g for a brand performance study, the Marketing & Brand Manager should attend whilst the sales and distribution teams will need to attend a presentation on retail audit

The findings should clearly and simply answer all the research objectives Reject or accept any hypothesis and Provide recommendations that will describe the way forward. If the findings are not satisfactory extra analysis should be requested until the Marketer is satisfied

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Decision Making/Strategic Planning

This is the responsibility of the Marketer and her or his relevant teams. S/he may weigh the information and depending on the marketing strategy decide whether or not to use the research findings and recommendation
Most research consultants however will be available and willing to assist wherever their expertise is relevant without extra cost to the Marketer

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