2.

Stages and design of market research

Market Research 1

Alfredo Rodríguez Fuertes

Faculty of social and legal sciences

“Aún los llamados hallazgos casuales se deben
comúnmente a alguna idea directriz que la experiencia
no sancionó, pero que tuvo virtud, no obstante, para
llevarnos a un terreno poco o nada explotado. Si se me
perdonara lo vulgar del símil, diría que en estas
materias sucede lo que con las personas conocidas, que
aparecen en la calle entre la multitud de transeúntes en
el preciso instante en que pensamos en ellas, por la
razón bien sencilla de que, cuando en ellas no
pensamos, pasan cerca de nosotros sin percatarnos de
su presencia. Impulsados por la hipótesis, acaso
ocurrirá sorprender en los hechos diversa cosa que lo
buscado, pero mejor es esto que no encontrar nada,
que es justamente lo que sucede al mero impasible
contemplador de los fenómenos naturales.
Como dice Peisse, “el ojo no ve en las cosas más que lo
que está en el espíritu”. Inútil será recordar que todos
los grandes investigadores han sido fecundos creadores
de hipótesis. Con profundo sentido se ha dicho que
ellas son el primer balbuceo de la razón en medio de las
tinieblas de lo desconocido, la sonda tendida en el
misterioso abismo, el puente, en fin, aéreo y audaz que
junta la playa familiar con el inexplorado continente.”
Santiago Ramón y Cajal (1852-1934)
Los tónicos de la voluntad
Even so-called accidental discoveries typically owe
something to a guiding idea not sanctioned by
experience, to an idea with the virtue of leading us to
poorly explored or uncharted territory. Pardon the
common simile, but it is worth repeating that what
happens under these circumstances is like what
happens when an acquaintance appears in the street
among the crowd—at the very moment we are
thinking of him. Of course he would have passed by
unnoticed if we hadn’t been thinking of him. Catalyzed
by a hypothesis, we may ªnd something in the data that
we were not looking for, but this is better than finding
nothing at all—which is precisely what happens to the
entirely passive observer of natural phenomena.
As Peisse has said, “The eye only sees what it is looking
for in things, and it looks only for what lies in the mind
in the form of ideas.”
One shouldn’t need reminding that all great
investigators have been prolific hypothesis generators.
It has been said with deep conviction that hypotheses
are the first murmurings of reason in the darkness of
the unknown; the sounding instrument lowered into
the mysterious abyss; in short, the high, lofty, and
audacious bridge connecting the familiar shore with the
unexplored continent.”
Santiago Ramón y Cajal (1852-1934)
Advice for a Young investigator
THE MARKETING RESEARCH PROCESS

Determine information needs and

1. Problem definition transform the decision problem in the
research problem and set goals.

Specify data to collect, use technique,

2. Development of research design methodology, sampling plan, schedule
and budget.

Collection of data using the market

3. Field work / Gather data Research techniques (surveys, groups)

Includes the tasks of coding, debugging

4. Preparation and analysis of data
of the data and further analysis.

The final report should be directed to a

5. Prepare and present the report person unfamiliar with the terms of
research.
Stages in the research process

What to research?
EXERCISE
Soluble cocoa brand:
• Loss of market share
• Lower growth rate than its main competitors
• Sales forecasts not reached
• Current customers are being lost
• Sales force pressures for price reductions or promotions

What could be
happening with this
product?
Marketing Research within a changing environment. 3rd ed. Hair, Bush & Ortinau. McGraw Hill
Stages in the research process

Determine the methodology

Research Design: Three Possible Designs

1. Investigation 2. Investigation
Exploratory Descriptive

3. Investigation
Causal
 Types of research design

1. Exploratory 2. Descriptive 1. EXPLORATORY INVESTIGATION

research Research

3. Research
Causal

 Its purpose is to collect information, both primary and secondary, using

unstructured formats. Arguably the least scientific of the three design.
 It is used to simplify or classify problems or opportunities, and is not
intended to provide conclusive information for decision making.
 The techniques that are most frequently used in this type of research with
the focus group or the in-depth interview.
Exploratory research applications

• Formulate a trouble or define it so plus

precise
• Identify possible alternatives from
performance
• Establish hypothesis
• Isolate variables fundamental and possible
relations for its analysis later
• To win knowledge for deepen on the trouble
• Establish priorities for phases later
Exploratory research techniques

• Interviews to experts
• Qualitative analysis from secondary
sources
• Qualitative research techniques
 Types of research design

1. Exploratory 2. Descriptive 2. DESCRIPTIVE RESEARCH

research Research

3. Research
Causal

 Uses scientific methods or procedures to collect information and create

structures that allow describing characteristics (eg attitudes, intentions,
purchasing behavior ...) of a specific target group.
 This type of research design is appropriate when the research objectives
include determining possible relationships between marketing variables
and the problem under study.
 The researcher looks for answers to the questions: Who, What, When,
Where and How.
 Provides information on customers, competitors, target markets,
environmental factors, etc.
Descriptive research applications

• Describe features from groups relevant, What by

example customers, vendors, organizations or areas
of the market.
• Estimate the percentage from components of a
group that may show a determined behaviour.
• Evaluate the perception of the features of a
product.
• Decide the degree from relationship between
marketing variables.
• Carry out predictions concrete.
Descriptive research techniques

• Qualitative analysis from secondary

sources

• Surveys

• Panels

• Observation
 Types of research design

1. Exploratory 2. Descriptive 3. CAUSAL INVESTIGATION

research Research

3. Research
Causal

 It serves to collect information and create structures that allow

the person who has to make decisions to establish cause-effect
relationships between two or more variables.

 It is appropriate when the research objectives include

understanding how certain variables (eg advertising) influence
other variables (eg sales).
 Applications of causal research

• Understand that variables are the cause (variables

independent) and that variables are the effect
(variables dependents) of a determined
phenomenon.

• Decide the nature of the relations between the

variables and predict its evolution

• Methods used  Experiments

Comparison between the three research designs

Exploratory Descriptive Causal

objective To find out ideas or to Describe the market, Determine cause-effect
win knowledge characteristics and relationships
operation

Characteristics Flexible, versatile Determined by the Handle a or plus

anticipate formulation variables independent
May be the first from hypothesis
initiative on the design concrete Control of other
from investigation variables
Design structured
Methods Expert interviews Secondary data analysis Experiments
Pilot surveys quantitatively
Secondary data analysis Polls
qualitatively Panels
Qualitative research Observation
Preparation of a research proposal

1. Objective of the research project

2. Type of study (research design)

3. Definition of the target population and sample size

4. Sample design. Technique and method of data collection

5. Specific research instruments

6. Potential benefits of the study (expected value)

7. Budget

8. Profile of the research team

9. Dummy tables of results

Market research (Hair, Bush, Ortinau). 2nd ed.

 CASE - DEVELOP A RESEARCH PROPOSAL

• We are an oil company with service stations throughout

the country. A few years ago, the company decided to
open a new business:"Gas station stores."
• After a few years from its start-up, the company is not
satisfied with the sales results, and needs to gather
more information through a market study.
• State the possible objectives for this research and
recommend the appropriate type (s) of research design
to meet these objectives.
 Approach to an investigation

1 Problem • Gas station stores don't quite work

• What do we have to do?

2 objectives • Know the current perception of these stores

• Analyze the expectations that customers have
• Identify the offer of products that they should have
• Find out what characteristics you should have

3 Methodology to be used 1.- Qualitative phase:

• Discussion groups (5):
• Population living near a gas station with a store
• Drivers (tourists / urban)
• Urban carriers
• Truckers
• Executives who use the car (“travelers”)
2.- Quantitative phase:
• Telephone interviews with potential clients (400)
• 25% minimum must be drivers
• Madrid, Barcelona, Valencia and Seville
• Estimated duration: 7 minutes
Define research objetives

1. An investment group has heard that importing and distributing yachts in Spain can be a business
opportunity, but it needs more information.

2. Our company wants to launch a product (an appliance) and wants to set the retail price. How can
you find out the distribution margins for these types of products?

3. How can we know the advertising investment made by all the companies that sell shampoo in
Spain and the advertising share of each brand?

4. A soft drink manufacturer is evaluating the possibility of launching an alcoholic beverage with
your brand, how can research help you?

5. Our insurance company has ordered three spots from the advertising agency, and has to make a
decision on which to use in the next campaign that starts in 7 days.

6. A consumer products company is rethinking its pricing policy, but first needs to know the average
prices of the competition.

7. A company wants to enter the insecticide market and before deciding it needs information on
existing brands, sizes, shares, prices, etc.

8. A manager does not know the opinions that his clients have about the products and services they
provide, how can he know them?

9. A political party is proposing the replacement of its current leader, how can one know if it is the
right one? How could the alternatives be valued?
 Possible sources of error in quantitative research

Total error

Random sampling error

Non-sampling error
(sample error)

Failure error
Response error
response

Errors of the Errors of the Errors of the

investigator interviewer respondent

Information replacement Respondent selection Lack of skill error

error error Error due to lack of will
Measurement error Error asking
Error in the definition of the Registration error
population Fraud error
Sampling frame error
Data analysis error

Source: Marketing Research. Malhotra. Pearson Education

54
 Types of errors in market research
Two types of errors appear in research

1 NON SAMPLING ERROR 2 SAMPLING ERROR

It occurs by introducing biases or making It occurs as a consequence of study a sample
mistakes. and not the entire population.
• It cannot be estimated. • It cannot be removed.
• The way to reduce it is by controlling • Yes it can be estimated
every detail of the investigation process. • It depends on the size of the sample.
• ATTENTION: It is larger the larger the • ATTENTION: It is less the more
sample size. homogeneous the population.

Sampling error

Non-sampling error

+ large (total
+ small
population)
Sample size
55
 Errors in quantitative research

• The total error in a variable of interest is the variation between

the average obtained in our research and the average in the total
population.
• The sampling error happens because the chosen sample is not a
perfect representation imperfect of the total population.
• The non-sampling error is attributed to other sources different to
the sampling, like mistakes on the definition of the research
problem, design of the questionnaire, surveying system, sincerity
of interviewee, data preparation or analysis. These mistakes
cannot be quantified as the sampling error.
• The main sources of the non-sampling errors are: 1) the lack of
answer from the interviewee and 2) errors in the answer.

Market research (Hair, Bush, Ortinau) - 2nd ed.

 Errors in quantitative research

• Error by lack from answer arises when any of the

interviewed included in the sample does not provide answer
back (by a negative to collaborate or not find to the person).

• The Error in the answer appears when the interviewed give

inaccurate answers or when their answers are wrong
registered or analyzed. These errors can be done by the
researchers, interviewers or interviewees.

Market research (Hair, Bush, Ortinau) - 2nd ed.