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Module 4

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Ryerson University
MKT 100
Brynn Winegard

Module 4: Understanding Buyer Behaviour Definitions Private information: a firm profits from unique information and insights it has about production techniques & trade secrets Exploratory research & data collection: undertaken when the problem or research question is still fuzzy & management wants additional information before undertaking further research Descriptive survey research: typically used to describe customers, small #s or large #s by survey research Cross sectional research: studies a “cross-sectional” sample of customers responses @ a specific point in time Longitudinal research: involves the repeated measurement of the same customers & addresses customer responses over a period of time Cause & effect research: explore the question “Does X cause Y?” Qualitative research: methods such as observation & in-depth interview with customers, suppliers, and middlemen Survey research: involves the sampling & surveying of a population of customer using a carefully prepared set of questions Probability sample: sample where all the respondents in the population or segment to be studied have a known (non-zero) chance of being chosen to be in the sample from the population/segment being studied Convenience sample: sample that is gathered from a convenient pool of customers or potential customers Psychographics: attitudes, opinions, interests, hobbies & passions Key Points  Listening to the customer processes requires: o Common sense  Ex. Eliminating # of people between the designer & customer in produced development research o Experts to undertake customer research o Common commercial sense to asses relative utility  Knowledge of your customers is ultimate market power RESEARCHING CUSTOMERS Why do marketing research?  Plan o How should we launch this product? o What will customers think? o How should we advertise? o Exploratory research  Troubleshoot o Why are consumers angry? o Why is not one buying the product? 1 o Descriptive research  Internet is changing customer search & shopping behaviour  Private info about customer behaviour is powerful driver of competitive success & profitability  Knowledge is power principle  economic theory of imperfect competition  Track customer satisfaction & dissatisfaction  returns & customer complaints o A lot of what modern market research is about  Special consumer research studies: o Tests product concepts in new product development o Global markets where company has never operated & products need to be redesigned  Market research typically includes the following: o Problem definition/Question to be Answered (the most difficult step) o Research design o Data collection o Data analysis & interpretation o Presentation of results o Informal study  Identifies the real problem & frames questions to be addressed  Developed research plan & design addresses the question Types of Research  Exploratory research & data collection o Includes:  Study of internal records  Customer complaints  Financial analysis trends  Discussions w/ distributors & suppliers  Descriptive survey research o Gathers descriptive profiles of customers o Used to measure customer satisfaction o Study product uses o Segment customers  Cross-sectional research o Ex. If business students were asked: “how satisfied are you with the college or business?”  Longitudinal research o Always undertaken in modern company customer database mining to measure changing customer purchase behaviour, channel use, satisfaction & profitability  Cause-and-effect research o This applied research is done on the metrics dashboards of managers o Effects of price  on sales & the effect of TV advertising campaign spending on sales 2 QUALITATIVE CONSUMER RESEARCH  Ethnography  the way of life of people  Understand how the customer uses the product or service r described  Voice of customers is not heard clearly enough throughout the organization  has less impact on informal & formal decision-making o Organization is less market oriented  Motivational research o Explains the deeper meaning & significance of the product in their lives o Reaps rich insights & rewards when done by skilled field researcher & interpreters o Take photos that describe how consumers use product  May create a view that customers r more interested in a product than they really are Customer Visits Focus Group Research  Used to test: o Products & product concepts o Advertising creative & political messages o Observed by managers thru one-way mirrors/recording  Purpose is to learn about beliefs, attitudes, preferences & behaviour of target customers SURVEY CONSUMER RESEARCH  Studies & categorizes variation in buyer values o Lifestyles, product usages, benefits sought & beliefs about product performance  2 major issues in survey research:  Sampling & questionnaire design Probability Sampling  Advantage: o Greatly reduce the potential for sampling error showing up in the results o Cost effective than surveying the whole population  Convenience sample o Ex. Survey 200 adults intercepted in a shopping mall by a research firm that rents a facility in the mall Sampling Problems  Risk of non-response error or participation bias, which occurs when a particular customer group is under or overrepresented in a sample  Households are tired of being duped by sales pitches that pretend to be a market research study online & offline Online market research  Source of info & online conversations about customer beliefs, feelings & preferences can be found in customers renew sites & social networking 3 1. Increased the quality of the research by reducing errors in several search processes 2. Reduced costs by 20-50% 3. Sped up the process  from taking weeks to days 4. Comparative studies suggest that online open ended questions elicit a l
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