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Market Research
Professor Lawrence Feick
University of Pittsburgh
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Outline
• Definition: what is market research?
• Examples of market research problems
• Who does market research?
• Glossary: types of data, studies, variables
• Focus on focus groups, surveys, observation, experiments
• Sampling
• Market research in 1998
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What is market research?
• Collection and organization of information to be used for marketing decision making
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Examples of market research problems
• Target market selection
• Product studies
• Pricing studies
• Distribution studies
• Promotion studies
• Sales research
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Who does market research?
• Managers or market researchers in the firm producing the product (clients)
• Market research firms (suppliers)
• Advertising agencies (agencies)
• Organizations that produce market research information as a byproduct of other activities
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Source: Advertising Age May 25, 1998
The Largest Market Research Firms 1997
Firm 1997 Revenue 1997 Rank 1996 Rank
A C Nielson Corp $1,392MM(20% US)
1 1
IMS Health $981MM(40% US)
2 2
IRI (InformationResources Inc.)
$456MM(80% US)
3 3
Nielson Media $359MM(all US)
4 4
VNU MarketingInfo. Services
$285(75% US)
5 6
ResearchInternational
$268MM(9 % US)
6 5
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Market research suppliers:types of services
• Custom research
• Syndicated research
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A glossary of research terms
• Types of data
• Types of studies
• Type of variables
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Types of data
• Secondary data– collected for another purpose– there is always relevant data available– sources of secondary data
• Primary data– collected to answer the current question
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Types of studies
• Quantitative– quantity data: amounts, means, percentages– surveys, experiments, observation methods
• Qualitative– richness, depth of understanding– directional, not quantified results– depth interviews, focus groups
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Types of variables
• Independent variable– a variable that has an effect on another– a predictor or explanatory variable
• Dependent variable– a variable that is affected by another
• Examples:– purchase patterns and income
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Focus on: Focus Groups
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Focus groups
• Most frequently used qualitative method
• Involves moderated group discussion
• Typically 1.5 hours
• Example usage: product concept testing, name tests
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Focus on: Surveys
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Surveys
• Data collected by asking questions
• Art and science of asking questions
• Descriptive technique that yields:– averages: potato chip consumption– relationships: is potato chip consumption
related to age? to income?
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Interviewer-administered questionnaires
• Personal interview surveys
• Telephone surveys
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Self-administered questionnaires
• Mail surveys
• Fax surveys
• Computer surveys
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Comparing methods of collecting survey data
Criterion Mail, fax Telephone Personal
Response rate
Cost per completion
Complicated questions
Ability to probe
Avoid question bias
Avoid interviewer bias
Protect respondentanonymity
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Radisson Hotels Customer Satisfaction SurveyRadisson Hotels Customer Satisfaction Survey
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Radisson Hotels Customer Satisfaction SurveyRadisson Hotels Customer Satisfaction Survey
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Architectural DigestArchitectural Digest 1998 Rate Card 1998 Rate Card Survey: First pageSurvey: First page
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Architectural DigestArchitectural Digest 1998 Rate Card 1998 Rate Card Survey: Last pageSurvey: Last page
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Focus on: Observation
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Observation
• Data collected by recording information
• Avoid bias from contact that influences responses
• UPC scanners, Nielson Media’s black boxes, hidden cameras
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Focus on: Experiments
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Experiments
• Involve manipulated independent variables– provide insight into cause and effect
• Data collected with surveys and observation
• Package design tests, ad copy tests, test markets
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Sampling: an aside
• Population
• Census versus sample
• Types of samples– probability samples– nonprobability samples
• Sampling and statistics
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Market research in the late 1990s:
linked data• Supermarkets loyalty cards
– purchase data from scanners
– demographic data from membership
– tailored promotions to members, neighborhoods
• Reader’s Digest direct mail system– tailored mailings based on expected response
and expected profitability
– uses purchase data, survey data, purchased lists
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Market research in the late 1990s:
single source data• Uses a consumer panel• Combines:
– demographics from surveys– observed black box data – observed scanner data
• Provides linkages among:– customer demos, media habits, purchases
• Split cable experiments
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Market research in the late 1990s:
brand anthropology• Developing new ways to understand brand
meaning in consumers– collages– thick description– in-home observation
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Market research: the bottom line
• Market research defined--reprise– Collection and organization of information to
be used for marketing decision making
• Market research, to be useful,– focuses on manager’s problems– answers the right questions– affects decision making