Marketing Research

By:
Alona Cordero
Donna Fe C. Baylon
Maribel B. Encabo
Marketing Research
 Marketing research is the systematic
gathering, recording and analyzing of data
about problems relating to the marketing
of goods and services.

 Market research will give you the data you

need to identify and reach your target
market at a price customers are willing to
pay.
 Marketing research focuses and organizes
marketing information. It permits
entrepreneurs to:
 Spot current and upcoming problems in the current
market
 Reduce business risks
 Identify sales opportunities
 Develop plans of action
Market Research
 Successful marketing requires timely and
relevant market information.

 An inexpensive research program, based on

questionnaires given to current or prospective
customers, can uncover dissatisfaction or
possible new products or services.
 Marketing research is not a perfect science. It
deals with people and their constantly changing
feelings and behaviors, which are influenced by
countless subjective factors.

 To conduct marketing research, you must gather

facts and opinions in an orderly, objective way to
find out what people want to buy, not just what
you want to sell them.
 Market research will identify trends that
affect sales and profitability.
 Population shifts
 Legal developments
 The local economic situation should be monitored to
quickly identify problems and opportunities

 Keeping up with competitors' market

strategies also is important.
 Every small business owner
must ask the following
questions to devise effective
marketing strategies:
 Who are my customers and potential
customers?
 What kind of people are they?
 Where do they live?
 Can and will they buy?
 Am I offering the kinds of goods or services they
want at the best place, at the best time and in the
right amounts?
 Are my prices consistent with what buyers view as
the product's value?
 Are my promotional programs working?
 What do customers think of my business?
 How does my business compare with my
competitors?
 Why do market research?
 People will not buy products or services they do not
want.

 Learning what customers want and how to present it

drives the need for marketing research.

 Small business has an edge over larger businesses in

this regard.
 Small business owners have a sense of their customers'
needs from years of experience, but this informal information
may not be timely or relevant to the current market.
How to do market research
 Analyze returned items.
 Ask former customers why they've switched.
 Look at competitors’ prices.
 Formal marketing research simply makes this familiar
process orderly. It provides a framework to organize
market information.
Market research - the process
 Market research can be simple or complex.
 You might conduct simple market
research.
 Example: Questionnaire in your customer bills
to gather demographic information about your
customers
 You might conduct complex research.
 Example: Hiring a professional market
research firm to conduct primary research to
aid in developing a marketing strategy to
launch a new product
 Regardless of the simplicity or complexity
of your marketing research project, you'll
benefit by reviewing the following seven
steps in the market research process.

1 3 5 7
2 4 6
Step 1: Define Marketing Problems
and Opportunities
Opportunity  You are trying to launch a new
product or service.

Problem
 Awareness of your company and its
products or services is low.
 The market is familiar with your
Problem company, but still is not doing
business with you.

Problem
 Your company has a poor image
and reputation.
 Your goods and services are not
Problem reaching the buying public in a
timely manner.
Step 2: Set Objectives, Budget
and Timetables
Objectives

 Explore the nature of a problem so you may

further define it.

 Determine how many people will buy your product

packaged in a certain way and offered at a certain
price.

 Test possible cause- and effect- relationships.

 For example, if you lower your price by 10 percent, what
increased sales volume should you expect?
 What impact will this strategy have on your profit?
Budget
 Your market research budget is a portion of your
overall marketing budget.

 Allocate a small percentage of gross sales for the

most recent year to use on market research.
 It’s usually about 2 percent for an existing business.

 Planning to launch a new product or business?

 You may want to increase your budget to as much as 10
percent of your expected gross sales.

 Other methods include analyzing and estimating the

competition's budget and calculating your cost of
marketing per sale.
Timetables

 Prepare a detailed timeline to complete all

steps of the market research process.

 Establish target dates that will allow the best

accessibility to your market.
 For example, a holiday greeting card business may want
to conduct research before or around the holiday season
buying period, when its customers are most likely to be
thinking about their purchases.
Step 3: Select Research Types,
Methods and Techniques
 Two types of research are available:
 Primary research is original information gathered
for a specific purpose.
 Secondary research is information that already
exists somewhere.
Secondary Research

 Secondary research is faster and less

expensive than primary research.
 Gathering secondary research may be as
simple as making a trip to your local
library or business information center or
browsing the Internet.
 It utilizes information already published.
 Surveys, books, magazines, etc.
Secondary Research Cont.
 Localized figures provide better information
as local conditions might buck national
trends.
 Newspapers and other local media are helpful.
 Many sources of secondary research material
are available. It can be found in:
 Libraries
 GALES' Directory is available at any public library.
 Colleges
 Trade and general business publications and
newspapers
 Trade associations and government agencies are
rich sources of information.
Example of Secondary Research
 An article may show how much working
mothers spent on convenience foods last
year.
 If you were thinking about selling a
convenience food, this information would
show you what kind of market there is for
convenience foods.
 It doesn’t show you how much they are willing
to spend on your particular product.
Primary Research
 Primary research can be as simple as
asking customers or suppliers how they
feel about a business, or as complex as
surveys conducted by professional
marketing research firms.
 Examples of primary research are:
 Direct-mail questionnaires
 On-line or telephone surveys
 Experiments
 Panel studies
 Test marketing
 Behavior observation
 Primary Research
 Primary research is divided into reactive and
nonreactive research.

 Nonreactive
 Observes how real people behave in real market situations
without influencing that behavior

 Reactive research
 Includes surveys, interviews and questionnaires
 This research is best left to marketing professionals, as
they usually can get more objective and sophisticated
results.
Primary Research Cont.
 Those who can't afford high-priced marketing
research services should consider asking
nearby college or university business schools
for help.
Step 4: Design Research Instruments
 The most common research instrument is the
questionnaire. Keep these tips in mind when
designing your market research
questionnaire.
 Keep it simple. Include instructions for answering all
questions

 Begin the survey with general questions and move

toward more specific questions.

 Design a questionnaire that is graphically pleasing and

easy to read.
 Before printing the survey, ask a few people to
complete the survey and give feedback.

 Mix the form of the questions for different

sections of the questionnaire
 Scales
 Rankings
 Open-ended questions
 Closed-ended questions

 The form or way a question is asked may

influence the answer given. Questions are in two
forms: closed-end questions and open-end
questions.
Closed-ended questions

 Types of closed-ended questions include:

 Multiple choice questions
 “Yes” or “No” questions

 Scales refer to questions that ask respondents to

rank their answers or measure their answer at a
particular point on a scale.
 For example, a respondent may have the choice to rank
his/her feelings toward a particular statement. The scale
may range from "Strongly Disagree" "Disagree" and
"Indifferent" to "Agree" and "Strongly Agree."
Open-ended questions
 Respondents answer questions in their own
words.

 Types of open-ended questions include:

 Word association questions ask respondents to state the
first word that comes to mind when a particular word is
mentioned.
 Fill-in-the blank
 For example, a question might read:
“When I eat toast and jelly, I use
_____brand of jelly and it usually
costs about ________ per jar.
Step 5: Collect Data
 To obtain clear, unbiased and
reliable results, collect the data
under the direction of experienced
researchers.

 Before beginning data collection,

You must to train, educate and
supervise your research staff.
 Untrained staff conducting primary
research will lead to interviewer bias.
Step 5 Cont.

 Stick to the objectives and rules associated with

the methods and techniques you have set in
Step 2 and Step 3.

 Be as scientific as possible in gathering your

information.
Step 6: Organize
and Analyze the Data
 Once data has been collected, it needs to be
cleaned.

 Cleaning research data involves editing, coding

and tabulating results.
 Start with a simply designed research instrument or
questionnaire.
 Look for data focusing on immediate market needs.
 Rely on subjective information only as support for
more general findings of objective research.
 Analyze for consistency; compare the results of
different methods of your data collection.
 Look for common opinions that may be counted
together.
 Read between the lines. For example, combine U.S.
Census Bureau statistics on median income levels for
a given location and the number of homeowners vs.
renters in the area.
 Step 7: Present and Use Market
Research Findings
 Once marketing information is
collected and analyzed, present it in
an organized manner to the decision
makers of the business.
 You may want to report your findings in
the market analysis section of your
business plan.
 You may want to familiarize your sales
and marketing departments with the data
or conduct a companywide informational
training seminar using the information.
Assess Available Information

 Assess the information that is immediately

available.

 You may have the information you need to

support your marketing plan without doing
extensive market research.

 Weigh the cost of gathering more information

against its potential usefulness. 
Gather Additional Information
 Before considering surveys or
field experiments, look at
currently held information:
 Sales records
 Complaints
 Receipts
 Other records that show where
customers live and work, and
how and what they buy.
Additional Information Cont.
 Credit records are an excellent source of information.
They give information about:
 Customers' jobs
 Income levels
 Marital status

 Employees may be the best source of information

about customer likes and dislikes.
 They hear customers' minor gripes about the store or service
- the ones customers don't think important enough to take to
the owner.
 Employees are aware of the items customers request that you
do not stock.
 They often can supply good customer profiles from their day-
to-day contacts.
CLUSTER ANALYSIS FOR
SEGMENTATION

 Cluster analysis uses mathematical models

to discover groups of similar customers
based on the smallest variations among
customers within each group.
Goal of Cluster Analysis
 The goal of cluster analysis in marketing is to
accurately segment customers in order to achieve
more effective customer marketing via
personalization. A common cluster analysis
method is a mathematical algorithm known as k-
means cluster analysis, sometimes referred to as
scientific segmentation. The clusters that result
assist in better customer modeling and predictive
analytics, and are also are used to target
customers with offers and incentives personalized
to their wants, needs and preferences.
 The process is not based on any
predetermined thresholds or
rules. Rather, the data itself
reveals the customer prototypes
that inherently exist within the
population of customers.
Cluster Analysis
 Cluster analysis or clustering is the task of
grouping a set of objects in such a way
that objects in the same group (called a
cluster) are more similar (in some sense)
to each other than those in other groups
(clusters). It is a main task of exploratory
data mining, and a common technique for
statistical data analysis
 Market researchers use cluster analysis to
partition the general population of
consumers into market segments and to
better understand the relationships
between groups of consumers/potential
customers, and for use in market
segmentation, product positioning, new
product development and selecting test
markets.
 How should I segment the market such
that customers in one segment are similar
enough (i.e have common needs) yet
different enough from other segments to
be treated differently?
 Research Technique: Cluster analysis
(applies to any set of objects, e.g people,
products, places)
What is clustering based
segmentation?
 Segmentation: Manually pulling certain
groups that meet chosen criteria from a
large body of data.
 Clustering: Using machine learning to
identify similarities in customer data.
Example:
 Grouping customers into segments based
on their product preference and price
sensitivity
 Grouping cities based on demographic
similarities so as to select test market for
new products
 Grouping MBA programs at different
schools based on the number of students.
2 APPROACHES OF
CLUSTERING
1. Start with a fixed (“a priori”) number of
segments and calculate the best allocation
of individuals to those segments.
˃ Ķ- means a clustering
(where K= number of clusters you want)

2. Find the “best” number segments such

that the segments meet the criteria (objects
are similar within, and different across
segments) and are managerially useful
(actionable)
Hierarchical clustering
 Hierarchical clustering, also known as
hierarchical cluster analysis, is an
algorithm that groups similar objects
into groups called clusters. The
endpoint is a set of clusters, where each
cluster is distinct from each other cluster,
and the objects within each cluster are
broadly similar to each other.
What is hierarchical clustering in
simple words?
 Hierarchical clustering is a popular method for grouping
objects. It creates groups so that objects within a group
are similar to each other and different from objects in other
groups. Clusters are visually represented in a hierarchical
tree called a dendrogram.
 Example: K-means Clustering
 Main advantage: can be used with large
number of observation
 Let say you have a data on 2 variables
describing customers: Age, Money spent
Step 1:
 Choose the number of cluster’s (based or prior knowledge
of the data, or what is useful managerially)
 Let’s say K= 2
Step 2:
 Specify the cluster seeds (cluster centroid, i.e., average
coordinates of the cluster) could be any random points to
start
Assign each point to a centroid
Step 3 & 4:
 assign points to the new clusters and adjust cluster centroids until
no more changes in assignments are needed i.e., every point is
closest to the center of its cluster
K-means cluster: choosing the number of
clusters
Two options:
1. Based on what is managerially useful,
e.g., if you have 4 managerial sales persons
and you want to assign customers for them
to call on, choose 4 clusters
2. Run the analysis multiple times, adding
one cluster at a time and see how much
“benefit” there is to adding a cluster each
time.
Benefit- reduction in total within-cluster
variation.
Adding more clusters lower this variation
But benefit gets smaller and smaller as K
increases.
The total within cluster variation will always be lower with
more clusters.
PERCEPTUAL MAPPING FOR
POSITIONING
It’s a two-dimensional chart comprising a horizontal
and vertical axis that represents key attributes such as
price, features, and any relevant criteria that can be
used for comparison purposes.
 Positioning studies - are used to understand
customer perception of brands in the
marketplace.

 Perceptual Map – are the pictures of competing

brands as well as attributes, which together offer
a sense of competitive strength and weaknesses.
  
TWO APPROACHES
 Attribute-based - used to visually display
relevant attributes of the brand or services. The
dataset used for the Attribute Rating method
considers the quantitative or qualitative
evaluation of the attributes of the brand.

Example:
The customers make two kinds of ratings:
1. How does our brand rate on a number of attributes?
2. How important is each of its attributes?
 
Perceptual mapping attribute-based
Conceptual map
(Attribute based) for competitive Analysis
MULTIDIMENTIONAL SCALING (MDS) – simply starts
by asking “How similar are these two brands” for every pair
in the set.
Figure shows that similarities data look like LA Fitness and Gold’s Gym are seen as
the most similar and Gold’s Gym and YMCA are the most different.
FOCUS GROUP FOR CONCEPT
TESTING
The focus group
is a research technique used to collect data
through group interaction on a topic
determined by the researcher.  Thus the
Client determines the focus of the group and
the data comes from the group. Essentially,
it is a group experience. It comprises a
small number of carefully selected people
who are recruited to a group discussion
based on their commonality of experience.
 Most often it is used a vehicle for concept
testing in the early stages of new product
development or when working toward the
development of an ad campaign.
Focus groups have four key
characteristics:
1. They actively involve people - Essentially, it is a
group experience. It comprises a small number of
carefully selected people. The sample size are
smaller running maybe 3 to 4 groups of 8 to 10
customers
2. The people have a commonality of experience -
Focus group participants have a degree of
homogeneity. This similarity is the basis for
recruitment, and indeed, specific requirements
may be necessary for attendance at the group. It
is crucial to identify who can give you the
information you need.
3. They provide in depth qualitative data - Focus groups are
a research method which delivers qualitative data that is
rich in depth and not numerical in nature. Data tends to
be in words, pictures, symbols etc. 

4. Discussion is focused to help us understand what is going

on- The questions in a focus group discussion are carefully
designed to elicit the views of the respondents. A
discussion guide is prepared prior to the group and the
group moderator uses this as the vehicle for discussion.
Careful design of the guide ensures a logical flow of
conversation around the topic area, and ensures a clear
focus for the discussion.
 Moderator – are usually paid to interpret
the session because they are more
experienced in watching focus groups
interact
 Ex.
 Eight plumbers have been invited to discuss domestic showers.
They are talking about trends in bathroom design and how much
influence they have on the final decision about which shower is
finally installed. They go into great detail about the installation
issues and the problems they face with certain types of showers.
The group is being held in a viewing centre and the Client, a
leading European shower manufacturer is watching and listening
first hand through a two way mirror.
Focus groups are essentially group
discussions which rely heavily on the
interaction between group members and
the relationship between the researcher
and the respondents. Focus groups have
been a dominant form of qualitative data
collection in market research
 
Conjoint for Testing Attributes
What Is Conjoint Analysis?
 Conjoint analysis is a marketing research
technique that helps businesses measure
what consumers value most about their
products and services.

 Conjoint analysis is a statistical

analysis and marketing research
technique to measure what consumers
value most about your products and
services.
Conducting conjoint analysis
 When conducting a conjoint analysis, you’ll
determine the features you want to examine,
figure out which customers to survey, and
determine how to reach participants, such as by
mail, over the phone, or online.

 Then, place a value or ranking on each possible

feature and conduct a business survey with the
selected consumers, asking about the features
and feature combinations they like best. 
 Various services and software can help
you set up and properly evaluate conjoint
analysis data. Software solutions can help
you write survey questions, set up feature
combinations, and run statistical analyses
on the data so you can understand the
results. Popular vendors for conjoint
analysis software include Sawtooth
Software, Survey Analytics, Qualtrics and
XLSTAT.
Benefits of using a conjoint analysis
 Conjoint analysis can benefit a company in
numerous ways. Businesses need to know
their customers as well as possible to
support them with products and services.
Through conjoint analysis, you can
measure actual and perceived preferences
to solidify your place in the market.
Conjoint analysis examples
 A simple example by Optimization Group centers on
how consumers choose a restaurant for dinner. In
this example, the features studied were distance to
the restaurant, relative prices and the restaurant’s
atmosphere. According to Optimization Group,
diners make their decision by subconsciously
weighing the different factors and choosing the
restaurant that best meets their needs. In this
example, the first restaurant is close to the diner
and inexpensive but offers a subpar atmosphere.
The second restaurant may be farther away and
more expensive, but it has an excellent atmosphere.
 “If you chose Restaurant No. 2, the
atmosphere element obviously carried
more weight in your eyes than the other
two elements,” Optimization Group wrote.

For restaurants, this information is critical in

determining how to design their spaces,
what prices to charge, and where ideal
locations are.
How businesses use conjoint analysis
Crucial factors that conjoint analysis can
help determine include product or service
pricing, marketing direction, and research
and development.
Pricing:
 According to an article from Harvard
Business School Online, you can use
conjoint analysis to gauge how much your
customers are willing to pay for your
products or services. Through the
analysis, you can ask users to compare
different features and how they value each
one. You can then set new and accurate
prices based on that evaluation.
Marketing:
When the analysis shows what customers
value most, you can create advertisements
and marketing campaigns that target those
features. Alternatively, if some features
don’t resonate with customers, you now
know to avoid marketing those features and
can even change your products.
Research and development: 
 You can use your analysis to see if there is
enough market for new features or even a
new product type. These findings show
what you should target in your research
and development process.
Scanner Data for Pricing and
Coupon Experiment and Brand
Switching
Scanner data
 Scanner data are digital transaction data
recorded at the cash registers of retail
shops which inform about turnover, sales
and the types of items sold. Scanner data
have the potential to digitise various sets
of statistics and to assure and improve
data quality.
Scanner data in price statistics
 Digital point-of-sale (POS) data of the retail
sector, also referred to as scanner data, are a
promising data source for price statistics.
 In official consumer price statistics, manual price
collection by price collectors in shops or service
enterprises has been supplemented, or in part
replaced, by new forms of price collection. These
include in particular automated price collection on
the internet (web scraping) and the use of
scanner data.
 The use of scanner data makes it possible to
record the prices charged and the quantities sold
in the respective shops for a much longer period
than is currently the case. Generally, prices have
been collected in a specific shop on one day per
month. The increasing number of observations
improves the accuracy and enables additional
evaluations to be made, for example regarding
the price development of organic products.
Coupon Marketing Strategy
 Coupon marketing is a business methodology
used to attract, engage and reward high lifetime
value customers by using different forms of
incentives. While it's widely used to boost short-
term sales, it can also be utilized in customer
relationship management strategies to deliver
better customer experience tailored to each
marketing funnel stage and segment, ultimately
drive business growth.
5 Facts About Coupon Marketing
1. Coupons are more influential than you
know.
2. Coupon marketing is one of the only
measurable forms of marketing.
3. Coupons get you "in".
4. Coupons offer a one-to-one personal
moment.
5. Coupons reach affluent consumers
Brand Switching
 Brand switching is a change in consumer buying
habits in which long-term customers choose to
switch to another brand. You can think of it as
the opposite of brand loyalty, in which the
customer chooses your brand above all others.
Brand switching occurs most often among
customers who generally buy based on brand. It
usually transpires during times of economic
difficulties, either individual or market-wide. 
Why do customers switch brands?
 There are four main reasons for customers
switching brands.
Price
 Loyal customers will continue to buy your brand, regardless
of price—up to a point.
 Customers may switch based on affordability and perceived
value at a given price. What can you do to avoid brand
switching due to price? Start with some market research.
Examine your target market and answer these questions:

1. What is my target customer able to spend on my product?

2. What is my target customer willing to pay for my product?
3. Is my target customer more driven by a lower price or
perceived value?
Don’t stop there. After you answer those three
questions, it’s time for some competitor
research:
 What are competitors charging for comparable
products?
 How do your competitors’ products compare to
mine? 
 Do they offer anything different?
 Is the perceived value of their product better than mine?

With that information and consideration of market conditions,

you can set an effective pricing strategy in motion that will
discourage brand switching.
Brand image
 When a brand has been around for a long time, it
can begin to feel dated. People may start to
experience brand fatigue and look for something
new. They’re seeking something that feels new
and fresh—and there are plenty of competitors to
choose from. 
 Brand image is an important factor in keeping
customers interested in your brand. A good brand
image builds trust, equity, and credibility. It also
allows for growth. 
You can discover more and improve
your brand image by:
1. Collecting feedback about your brand
perception
2. Looking for specific, actionable insights
3. Adjusting your brand image and
measuring brand perception again
4. Repeat steps 1–3 as needed
Product innovation or stagnation
 Similar to the effects of brand fatigue, if your
main product offering lacks innovation when
other brands are leaping forward, customers will
brand switch. 
To avoid this happening with your products, you must
start with research to answer these questions:
 Why are customers losing interest in your product?
 Are your competitors offering something new and different?
 Is the latest generation of consumers interested in our
product?
 What do our customers actually want?

Use the collected feedback to make informed

business decisions about upgrades,
improvements, and additions to your products.
Customer service
 Customer service can make or break a
brand. It only takes one bad service
experience for a customer to switch
brands. And when they have what they
consider a bad experience, customers are
very vocal about it in reviews, social
media, and by word of mouth. 
 Good customer service requires:
 Fast response to customer service requests/questions
 Staff training
 Specific training for buyer personas
 Handling different types of complaints
 How to deal with difficult customers
 Putting the right people (those comfortable talking to
customers regularly) in customer service positions
 A clear process for dealing with typical issues, refunds, and
returns
 Understanding that while some customers have legitimate
issues, others will make outrageous demands
Get ahead of brand switching
 The key to getting ahead of brand
switching is market research and brand
switching analysis.
Surveys for Assessing Customer
Satisfaction
What is a customer satisfaction survey?

A customer satisfaction survey is a questionnaire

designed to help businesses understand what their
customers think about their products or services,
their brand, and their customer support. Customer
satisfaction surveys allow companies to improve
products strategically, optimize user experience,
and deliver exactly what the market demands.
4 types of customer satisfaction
surveys
1. Customer Satisfaction Score (CSAT)
Customer Satisfaction surveys usually contain a
simple question with a binary response (e.g., yes/no,
happy face/sad face). They ask things like “Did our
product do what you wanted it to do?”
2. Net Promoter Score (NPS®)
A Net Promoter Score survey asks customers to rate how likely
they are to recommend your company/produ
ct to a friend or colleague on a scale of 0-10. You then compare
your percentage of detractors (0-6 answers) to that of promoters
(9-10 answers) to see where your company stands—the more
promoters you have, the more you can infer people are satisfied
with you.
3. Customer Effort Score (CES)
The Customer Effort Score measures how much effort it takes
for customers to either use your product or fix a problem
through customer support.
A CES question will ask “How easy was it to solve your
problem?,” and customers are typically given a 5-point scale
with options like ‘very difficult’, ‘somewhat difficult’, ‘about as
easy as I expected’, ‘somewhat easy’, ‘very easy'.

4. Milestone surveys
Milestone surveys are questionnaires sent out at key
moments in the customer journey to help understand the user
experience better. A milestone can either be time-based (e.g.,
sending a survey 60-days after signup) or experience-based
(e.g., sending after onboarding is complete).
Final word of advice: 
 by following these steps, you will be able to build
a solid foundation for understanding your
customers, addressing their needs and concerns
on an individual or micro-level, and improving
their overall experience on a larger scale. Of
course, you might not see an immediate increase
in your scores when you start making
improvements, but if you collect solid data and
trust in the process, your scores will improve over
time—and your satisfied customers will ultimately
drive your success.
References:
 https://www.businessnewsdaily.com/6161-conjoint-analysi
s.html
 https://www.destatis.de/EN/Service/EXDAT/Datensaetze/sc
anner-data.html
 https://www.vouchery.io/post/coupon-marketing-strategy-
what-is-coupon-marketing
 https://www.gallimoreinc.com/learn/5-facts-about-coupon-
marketing.php
 https://www.hotjar.com/blog/customer-satisfaction-survey
/
Thank You
and
God Bless