The Consumer Research Process CHAPTER TWO Copyright 2010 Pearson Education, Inc.

The Importance of the Consumer Research Process Marketers must understand customers to design effective marketing strategies: – Right products – Right prices – Right Promotional messages – Right distribution Marketers understand customers through consumer research: – Secondary Research – Primary research (qualitative – quantitative) 2Chapter Two Slide

Steps of consumer Research Process 3Chapter Two Slide

Developing Research Objectives Defining purposes and objectives helps ensure an appropriate research design. A written statement of objectives helps to define the type and level of information needed. Examples of objectives:  Selection of specific segment to be studied.  Knowing the consumer attitudes regarding online shopping  Determining the percent of households shop for food online. 4Chapter Two Slide

Secondary Data Data that has been collected for reasons other than the specific research project at hand. (Includes internal and external data). 5Chapter Two Slide

Types of Secondary Data Internal Data Data generated in-house May include analysis of customer files, accounts data, or salespeople reports, …etc. External Data Data collected by an outside organization Includes federal government, periodicals, newspapers, books, search engines Commercial data is also available from market research firms 6Chapter Two Slide

Designing Primary Research first: Qualitative Research 7Chapter Two Slide Qualitative Research methods Depth Interviews Focus Groups Projective Techniques Looking-in Qualitative research relies on the collection of qualitative data. It is extremely helpful in identifying consumer’s attitudes, thoughts, and beliefs about your product. Final report is narrative. Because qualitative methods generally use small samples, qualitative research techniques are often followed by quantitative processes. e.g. Getting new ideas of product line extension

Qualitative Collection Methods 1- Depth Interview Also called one-on-one interview Usually 20 minutes to 1 hour provides important information for targeting, positioning, and product design Interviewer will often probe consumers to get more information (see following slide for probing examples) Session is usually recorded (video – audio) 8Chapter Two Slide

Probing Options for Interviews 9Chapter Two Slide

Qualitative Collection Method 2- Focus Group Small groups: 8-10 participants Lasts about 2 hours Respondents are recruited through a screener questionnaire (see following slide for a screener questionnaire example) Advantage: respondents interact with each other and build off of each other’s comments Disadvantage: participants might not always be honest and are less willing to expose private thoughts and personal views due to the presence of other members Always taped or videotaped to assist analysis 10Chapter Two Slide

Screener Questionnaire 11Chapter Two Slide This is an example of a screener questionnaire for the research done for a food manufacturer and marketer. The participants would be screened and then invited to participate in the focus group. The purpose of it is to ensure that the appropriate individuals are invited to participate in the research study.

Qualitative Collection Method 3- Projective Techniques Research procedures (tests) designed to identify consumers’ subconscious feelings and underlying (not obvious) motivations Consist of a variety of disguised “tests”. In many situations, the research purpose is disguised and the respondent simply knows they are answering questions for a researcher not about themselves. 12Chapter Two Slide

Common Projective Exercises Description Word Associations The researcher has a list of words, some of them to be studied and some just as “filler.” The researcher asks the respondent(s) to react, one-at-a time, to each word by stating or (in a focus group setting) writing on a pad the first word that comes to mind, and to explain the link. Sentence Completion The researcher has a series of incomplete sentences that the respondent(s) needs to complete with a word or phrase. Photo/Visual for Storytelling The researcher creates/selects a series of photos of consumers, different brands or products, range of print ads, etc., to serve as stimuli. The respondents are asked to discuss or tell a story based on their response to a photo or some other visual stimulus. Role PlayingIs quite similar to storytelling; however, instead of telling a story, the participant(s) will be given a situation and asked to “act out” the role(s), often with regard to a product or brand, or particular selling situation. 13Chapter Two Slide

Qualitative Collection Method 4- Looking-In Look at information on social media, including blogs and discussion forums regarding the products and brands. Methodology to capture consumers’ experiences, opinions, forecasts, needs, and interests. Marketers can use this information to develop new products, introduce new features, and to gain a better understanding of their customers’ needs and wants. 14Chapter Two Slide

Designing Primary Research second: Quantitative Research 15Chapter Two Slide Quantitative Research methods Observation Experimentation Survey (questionnaires) Quantitative research relies primarily on the collection of quantitative data for statistical analysis and reporting. Unlike qualitative research, findings can often be generalized to larger populations. Quantitative research helps marketers “predict” future needs, trends, and levels of satisfaction and are heavily used in research. e.g. percent of consumers who use a particular product?

Data Collection Methods 1- Observational Research In observational research, the researcher does not interact with the subject but watches their actions and behavior. Helps marketers gain an in-depth understanding of the relationship between people and products by watching them buying and using products. very helpful in uncovering problems with a product as well as to gain ideas for product improvements and new products development. 16Chapter Two Slide

Data Collection Methods Mechanical Observational Research Uses mechanical or electronic device to record consumer behavior or response (e.g. store camera) usage of barcode scanners at stores will help provide data to the retailers and brand managers Consumers’ increased use of highly convenient technologies will create more records for marketers (e.g. using credit cards online) 17Chapter Two Slide

Data Collection Methods 2- Experimentation Can be used to test the relative sales appeal of many types of variables. An experiment is usually controlled with only some variables manipulated at a time while the others are constant. Test markets are conducted on a single market area. Experimentation can be conducted in laboratories or in the field. 18Chapter Two Slide

Data Collection Methods 3- Survey methods MailTelephonePersonal Interview Online CostLowModerateHighLow SpeedSlowImmediateSlowFast Response rateLowModerateHighSelf-selected Geographic flexibility ExcellentGoodDifficultExcellent Interviewer biasN/AModerateProblematicN/A 19Chapter Two Slide

Attitude Scales 20 Asked to agree or disagree with a statement Easy to prepare & interpret Simple for consumers Likert scales Includes bipolar adjectives (good/bad), (like, dislike) Relatively easy to construct and administer Semantic differential scales Measures likelihood consumers will act a certain way Easy to construct and administer Behavior intention scales Items ranked in order of preference in terms of some criteria (e.g. quality, price, product design) It enables marketers to identify areas of improvement Rank-order scales Chapter Two Slide

Sampling and Data Collection Samples are a subset of the population used to estimate characteristics of the entire population. A sampling plan addresses: – Whom to survey – How many to survey – How to select them Researcher must choose a probability or nonprobabililty sample. Chapter Two Slide21

Data Analysis and Reporting Findings The responses from qualitative research are analyzed in addition to the results of the quantitative research Once all the data is analyzed, The final step of the research process is to combine qualitative and quantitative findings in a final report Final report includes executive summary, body, tables, and graphs. 22Chapter Two Slide