07-Sp09--Market_Research

07-Sp09--Market_Research - University of Southern...

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University of Southern California Marshall School of Business BUAD 307 Lars Perner, Ph.D., Instructor Marketing Fundamentals Spring, 2009 SUMMARY OF CLASSROOM MATERIAL MARKET RESEARCH Market research is often needed to ensure that we produce what customers really want and not what we think they want. Primary vs. secondary research methods . There are two main approaches to marketing. Secondary research involves using information that others have already put together. For example, if you are thinking about starting a business making clothes for tall people, you don’t need to question people about how tall they are to find out how many tall people exist—that information has already been published by the U.S. Government. Primary research, in contrast, is research that you design and conduct yourself. For example, you may need to find out whether consumers would prefer that your soft drinks be sweater or tarter. Research will often help us reduce risks associated with a new product, but it cannot take the risk away entirely . It is also important to ascertain whether the research has been complete. For example, Coca Cola did a great deal of research prior to releasing the New Coke, and consumers seemed to prefer the taste. However, consumers were not prepared to have this drink replace traditional Coke. Secondary Methods . For more information about secondary market research tools and issues, please see the separate handout at http://buad307.com/PDF/Secondary.pdf . Primary Methods . Several tools are available to the market researcher—e.g., mail questionnaires, phone surveys, observation, and focus groups. Please see the chart provided in class and available at http://buad307.com/PDF/ResearchMethods.pdf for advantages and disadvantages of each. Surveys are useful for getting a great deal of specific information. Surveys can contain open- ended questions (e.g., “In which city and state were you born? ____________”) or closed- ended, where the respondent is asked to select answers from a brief list (e.g., “__Male ___ Female.” Open ended questions have the advantage that the respondent is not limited to the options listed, and that the respondent is not being influenced by seeing a list of responses. However, open-ended questions are often skipped by respondents, and coding them can be quite a challenge. In general, for surveys to yield meaningful responses, sample sizes of over 100 are usually required because precision is essential. For example, if a market share of twenty percent would result in a loss while thirty percent would be profitable, a confidence interval of 20-35% is too wide to be useful. Surveys come in several different forms. Mail surveys are relatively inexpensive, but response rates are typically quite low—typically from 5-20%. Phone-surveys get somewhat higher response rates, but not many questions can be asked because many answer options have to be repeated and few people are willing to stay on the phone for more than five minutes. Mall
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This note was uploaded on 05/26/2009 for the course BUAD 307 taught by Professor Morristowns during the Spring '07 term at USC.

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07-Sp09--Market_Research - University of Southern...

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