MARKETING RESEARCH TOOLS

Presented by:

De Vera, Care Esther

 LEARNING OBJECTIVES

1. Determine the importance of marketing research

2. Identify the cluster analysis for segmentation studies

3. Know what is perceptual mapping

 MARKETING RESEARCH

• process of determining the viability of a new service

or product through research conducted directly with
potential customers

• can be done through surveys, product testing, and

focus groups

• a critical component in the research and development

of a new product or service
 Face-to-Face Interviews

DEVELOPMENT OF
MARKET RESEARCH
Phone Research Online Market Research
 IMPORTANCE OF MARKET
RESEARCH FOR CUSTOMER INSIGHT

• Market research can help you assess key trends to

anticipate how the market may change.

• Market research done well helps you plan your

strategy.

• Market Research can also measure the effectiveness of

your own marketing.
It is a marketing concept that breaks down into
segments the customers based on similarities in
taste, demand and preference. Each segment is
composed of individuals who think on similar lines
and have the same interests.
 4 BASIC TYPES OF MARKET SEGMENTATION

 Age
 Personality traits
 Gender
 Hobbies
 Ethnicity
 Income Demographic Psychographic  Life goals
segmentation:  Values
 Level of education segmentation:  Beliefs
 Religion The who The why  Lifestyles
 Profession/role in a company

 Spending habits
 Purchasing habits
 Country Geographic Behavioral  Browsing habits
 Region  Interactions with the brand
 City
segmentation: segmentation:  Loyalty to brand
 Postal code The where The how  Previous product ratings
CLUSTER ANALYSIS

It is a statistical method used to group similar

objects into respective categories. It can also be
referred to as segmentation analysis, taxonomy
analysis, or clustering. The goal of performing a
cluster analysis is to sort different objects or data
points into groups in a manner that the degree of
association between two objects is high if they
belong to the same group, and low if they belong to
different groups.
DIFFERENT TYPES OF CLUSTER ANALYSIS

• Hierarchical cluster

• K-Means Cluster

• Two-Step Cluster
 HIERARCHICAL CLUSTER

• It 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.

• This is the most common method of clustering. This approach also works with
variables instead of cases. Hierarchical clustering can group variables together in a
manner similar to factor analysis.
 Cluster 1: High scores Cluster 2: Medium scores Cluster 3: Low scores
Cluster 1a: Cluster 1b: Cluster 2a: Cluster 2b: Cluster 3a: Cluster 3b:
high variety high variety medium variety medium variety low variety low variety
high accuracy low accuracy high-med medium high-med high accuracy
high EPV high EPV accuracy accuracy accuracy low EPV
high-med EPV med-low EPV medium EPV
Germany France India Norway China Canada
Ireland Spain Italy UK Brazil Australia
Russia Sweden New Zealand Netherlands
Denmark Japan Korea
Finland USA

The cluster analysis is used as a complementary method for validating and supporting previous results, as well as
for providing a better insight into the differences in information uses in different countries. While the various
indices indicate the ranking of countries in terms of different information uses, cluster analysis allows a more
specific look at the similarities and differences between countries, thus identifying groups of countries with similar
information searches.
The illustration shows the results of a
hierarchical cluster analysis of countries
based on the three indices.28 The horizontal
axis shows the distance between each
cluster using the Ward method, in which six
clusters were identified with an optimal
number of 2–5 countries in each.

Legend:

Cluster 1: High scores Cluster 2: Medium scores Cluster 3: Low scores

Cluster 1a: Cluster 1b: Cluster 2a: Cluster 2b: Cluster 3a: Cluster 3b:

high variety high variety medium medium low variety low variety
high low variety variety high-med high
accuracy accuracy high-med medium accuracy accuracy
high EPV high EPV accuracy accuracy medium low EPV
high-med med-low EPV
EPV EPV
 K-MEANS CLUSTER

This method is used to quickly cluster large datasets.

Here, researchers define the number of clusters
prior to performing the actual study. This approach
is useful when testing different models with a
different assumed number of clusters.
As can be seen from the figure above, we start with a definite number for the number of required cluster (in this case
k=2). The algorithm takes 2 random seeds and maps all other data points to these two seeds. The algorithm re-iterates till
the overall penalty term is minimized.
TWO STEP CLUSTER
This method uses a cluster algorithm to identify groupings by performing pre-clustering
first, and then performing hierarchical methods. Two-step clustering is best for handling
larger datasets that would otherwise take too long a time to calculate with strictly
hierarchical methods.
Essentially, two-step cluster analysis is a combination of hierarchical and k-means
cluster analysis. It can handle both scale and ordinal data, and it automatically selects
the number of clusters.
PERCEPTUAL MAP

• It is a visual representation of the perceptions of customers or potential customers about specific

attributes of an organization, brand, product, service, or idea..

• Perceptual maps are useful for any organization that wants to identify gaps in the market, monitor their
own products, or look for potential partners or takeover/merger targets.
An example of perceptual map based on customer’s preferences about different brands of chocolates
ATTRIBUTE- BASED TECHNIQUE

This approach usually employs several multivariate

that require respondents to provide evaluations of
specific attributes, which are used to derive an
overall evaluation of the brands and spatial
dimensions along which brands are positioned.

Three types of attributes:

• Features
• Functions
• Benefits
MULTIDIMENSIONAL
SCALING

• It is a visual representation of distances or dissimilarities between sets of objects.

“Objects” can be colors, faces, map coordinates, political persuasion, or any kind
of real or conceptual stimuli .

• Objects that are more similar (or have shorter distances) are closer together on
the graph than objects that are less similar (or have longer distances).
Multidimensional scaling also serve as a dimension reduction technique for high-
dimensional data.
Multidimensional scaling uses a square,
symmetric matrix for input. The matrix shows
relationships between items. For a simple
example, let’s say you had a set of cities in
Florida and their distances.
The very simple example above
shows cities and distances, which
are easy to visualize as a map.
However, multidimensional scaling
can work on “theoretically” mapped
data as well. The method could be
used to uncover the answers to a
variety of questions about people’s
viewpoints on political candidates.
This could be achieved by reducing
the data and issues (say,
partisanship and ideology) to a two-
dimensional map.
THANK YOU!