Market Research

Methods of primary and secondary market research:

Primary research is the gathering of first-hand data that is specific to a firm's needs.
You could use: surveys or observation to collect information.

Secondary research is information collected from second-hand sources such as Google, reference books, government statistics or market intelligence reports.

Quantitative research means research using pre-set questions among a large enough sample size to provide statistically valid data.

An example would be using a questionnaire to question 200 people in a particular market segment.

Qualitative research is in-depth research into the motivations behind consumer behaviour or attitudes. It may include the use of focus groups.

My focus group:
Should a television company commission a programme where viewers send in video clips of food eating contests.



Sampling: choosing a group of respondents selected to be representative of the target market as a whole.

Excellent link: Click on the picture.

Sampling: Simple random, convenience, systematic, cluster, stratified:

Quota sampling:

The choice of sampling method and size of the sample will be influenced by:

-the finance available
-the nature of the product
-the risk involved
-the target market

What method of sampling and what sample size would you have used before bringing this product to market?

Niche and mass marketing:
Mass marketing is attempting to sell a product or service to the 'average' customer, the whole market.

Advantages:

Cost effective because of economies of scale, proven to work, a business can build a very powerful brand.

Colgate has 45% share of the world market for toothpaste.

Disadvantages: not personal, assumes everyones values, beliefs and needs are the same, lower profit margins.

Niche marketing: this involves targeting a product at a small, perhaps tiny segment of the market.

The A380 is the largest passenger plane in the world.

Imagine that you could afford to buy one.

How would you design the interior? 

Advantages of niche marketing:
Initially there is not that much competition.
It’s unlikely that large companies are going to focus their efforts on exploring such a small segment, so a small company can have real chances in becoming successful.
Being among the first in a specific area gives you a competitive advantage.
You can create highly personalised promotion that target your exact audience.

Disadvantages:
If the market is poorly targeted then potential clients will not know about the product or service.
If there are only a few potential customers the product or service may not be viable.
If the niche proves to be profitable then larger firms may move into the market.

Market segmentation - analysing a market to identify the different types of consumer. The main ways a market can be segmented are:

Demographically e.g. by age, social class or sex

Psychographically (by attitudes and tastes)

Geographically, by region.

My Blubbr game:
Click on the picture.

Market Segmentation

Perception:

A belief or opinion, often held by many people and based on how things seem.

Need:

To have to have something, or to want something very much.

Are perceptions always right?

Click on the picture:

What perceptions are being used here?



Perception / Need: Value or quality

The customer’s perception of the price charged is an important determinant of the final pricing decision. 

McDonalds classifies its products into 3 categories namely the branded affordability (BA), branded core value products (BCV) and premium (Pr).

Branded affordability:

Branded core value:

Premium:

How is this demonstrated on their website. Look here.

This has been done to satisfy consumers with different perceptions of the importance of price or quality.

Perception / Need: to eat a healthy diet
Click on the picture.

Are the following needs real or perceived?

Market Segmentation

McDonalds market segmentation in the US:

Mass marketing: here, the seller mass produces, mass distributes, and mass promotes one product to all buyers.  

In the very beginning, McDonald’s offered just one type of hamburger to everyone. 

Mass marketing leads to lowest costs and prices and create the largest potential market.

Product-variety marketing: here, the seller produces two or more products that have different features, styles, qualities, sizes…

McDonald’s produced the Big Mac to offer variety to buyers rather than appealing to different market segments. 

Product-variety marketing supports that consumers seek variety and change over time.

Target marketing: here, the seller identifies market segments, selects one or more of them, and develops products and marketing mixes for each. 

 Methods of market segmentation:

Companies may divide the market into different geographic units such as nations, countries, regions, cities…

A company may decide to operate in one or more geographic locations but it must pay attention to the geographical differences in needs and wants.

E.g. McDonald’s serve corn soup in Japan, pasta salads in Rome, wine in Paris...

http://www.mcdonalds.co.jp/ 

Demographics:

Age and life-cycle: needs and wants change with age, that is why, a company may use different marketing approaches for different age and life-cycle groups.

Gender

Income

Psychographic segmentation

This is based on lifestyle

Behavioural segmentation