Gathering Information and Measuring Market Demand

1
Gathering Information and Measuring Market Demand
Chapter 5
2
The Marketing Research Process
3
Define the Problem and Research Objectives

• Exploratory research to shed light on the real
  nature of the problem and to suggest possible
  solutions or new ideas.
• Descriptive research to ascertain certain
  magnitudes.
• Causal research to test a cause-and-effect
  relationship.

4
Develop the Research Plan

• Data Source
• Research Approaches
• Research Instruments
• Sampling Plan
• Contact Methods

5
Data Source

• Secondary Data the data that were collected for
  another purpose and already exist somewhere.
• Primary Data the data that are freshly gathered
  for a specific purpose or for a specific research
  project.

6
Source of Secondary Data

• Internal Sources
• Government Publication, ex. United Nations,
  ??????.
• Periodical and Books, ex. ??, ??, ????.
• Commercial Data, ex. A. C. Nielsen.
• Online Data, ex. AMA, Bloomberg, Google, TSEC,
  CEOExpress.

7
Research Approaches- Source of Primary Data

• Observation research (???)
• Focus-group research (?????????????????)
• Survey research (???)
• Behavioral data (????)
• Experimental research (????)

8
Observation Research

• Gathering data by observing the relevant actors
  and settings.
• Ex. Is the number of people who are behind you in
  a line affects your waiting patience?

9
Focus-Group Research

• A focus group is a gathering of 6 to 10 people
  who are invited to spend a few hours with a
  skilled moderator to discuss a product, service,
  organization, or other marketing entity.
• Useful exploratory step
• Avoid generalizing the reported feelings of the
  focus-group participants to the whole market.

10
Focus group research in progress
11
Survey Research

• Learn about peoples knowledge, beliefs,
  preferences, and satisfaction, and to measure
  these magnitudes in the general population.
• Best suited for descriptive research

12
Behavioral Data

• Customers actual purchases reflect preferences
  and often are more reliable than statements they
  offer to market researchers.
• Database marketing
• - market-basket analysis (??????)
• - customer profiling (??????)
• Ex. Walmart ? diaper beer
• 7-11 (POS) ? ??? ??

13
Experimental Research

• Capture cause-and-effect relationship by
  eliminating competing explanations of the
  observed findings.
• Most scientifically valid research

14
Research Instruments

• Questionnaires flexibility, the most common
  instrument used to collect primary data.
• - Closed-end easy to interpret and tabulate.
  
• - Open-end more information explanatory
  research.
• Psychological tools laddering techniques, depth
  interviews, ZMET.
• Mechanical devices

15
Sampling Plan

• Sampling units Who is to be surveyed?
• Sampling size How many people should be
  surveyed?
• Sampling procedure How should the respondents be
  chosen?

16
Table 5-3 Probability and Nonprobability Samples
Continued on next slide . . .
17
Table 5-3 Probability and Nonprobability Samples
(Continued)
18
Discussion Question
Can you think of a situation where a
nonprobability based sample would yield better
results than a probability based sample?
19
Contact Methods

• Mail not biased or distorted by interviewers,
  simple and clearly worded question, low response
  rate.
• Telephone quick, interactive, higher response
  rate than mail.
• Personal interview most versatile, expensive and
  require more administrative planning and
  supervision.
• Online interview convenient.

20
Forecasting and Demand Measurement

• Market demand, Market demand function
• Market forecast
• Market potential
• Marketing sensitivity of demand
• Expansible market, Nonexpansible market
• Market penetration index, Share penetration
  index, Product penetration index

21
Forecasting and Demand Measurement

• Company demand
• Company sales forecast
• - sales quota (constructive)
• - sales budget (conservative)
• Company sales potential

22
Estimating Current Demand

• Total Market Potential
• Area Market Potential
• Industry Sales and Market Shares

23
Total Market Potential

• The potential number of buyers The average
  quantity purchased by a buyer The price.
• Ex. TMP of book 100 million 6 10 6
  billion.
• Total population (????), Suspect pool (????),
  Prospect pool (???????)
• Chain-Ratio Method

24
Area Market Potential

• Market-Buildup Method Identify all the potential
  buyers in each market and estimating their
  potential purchases.
• Multiple-Factor Index Method, ex. population,
  disposable personal income, retail sales.

25
Industry Sales and Market Shares

• Industrys Trade Association
• Marketing Research Firm, ex. A. C. Nielsen.

26
Estimating Future Demand

• Macroeconomic forecast ? Industry forecast ?
  Company sales forecast
• What people say survey of buyers intentions,
  composite of sales force opinions, expert
  opinions
• What people do market-test method
• What people have done past-sales analysis