MKT Module 4: Understanding Buyer Behavior
1. Research customers
• The market research process typically includes the following logical steps:
1. Problem Definition/Question to be Answered (the most difficult step)
2. Research Design
3. Data Collection
4. Data Analysis and Interpretation
5. Presentation of Results
• Types of Research
Exploratory research: are undertaken when a problem or research
question is still fuzzy and management wants additional information
before undertaking further research. It is likely to include the study of
internal records, customer complaints, financial analysis trends and
discussion with distributors and suppliers.
Descriptive survey research: Typically used to describe customers, either
small number of customers in depth or large amount of customers by
survey research. It typically gathers descriptive profiles of customers and
is used to measure customer satisfaction, study product use and segment
Cause and effect research: Is used to explore the question “Does X cause
Y?” such as the effects of a price decrease on sales and the effect of TV
advertising campaign spending on sales.
2. Qualitative Consumer Research
• Includes methods such as observations and in depth interviews with customers,
suppliers and middlemen. The details of using observational research to
understand how the customer uses the product or service.
• Customer visits
• Focus group research: focus groups are the most common market research method
used today because they are very useful. A focus group consists of a group of 6 to
12 people who focus on a particular question or issue in a free wheeling
discussion for about 2 hours. Often it is also used to test products and product
concepts, advertising creative and political messages.
• Focus groups can be used successfully by following these best practices.
Identify who you want to talk to and the recruit participation.
Choose a moderator who will relate your focus group participants.
Hold a debriefing with the moderator immediately afterwards to obtain her
fresh insights and perspectives.
Note the body language, interest or emotion that accompanies the
It is good to have management in attendance, as new questions can be
passed to the moderator in process. Conduct focus groups until no new insights surface: This sometimes takes
about three to four focus groups, or a lot more.
Take the concept of focus groups a step further and run focus groups with
experts, recruited to participate in high level product development focus
• The purpose of focus groups is to learn the beliefs, attitudes, preferences and
behavior of the target customers.
3. Survey Customer Research
• Probability sampling: A sample where all of the respondents in the population or
segment to be studied have a know (nonzero) chance of being chosen in the
sample from the population/segment being studied.
Simple Random sample: a probability sample where respondents are randomly
chosen from a complete list of the population.
Convenience sample: a sample that is gathered from a convenient pool of
customers or potential customers.
• Sampling problems: The major problems with sampling are the risk of non
response error or participation bias. This occurs when a particular customer group
is overrepresented or underrepresented in a sample.
• Online research: about a third of all consumer market research is now undertaken
Online market research has increased the quality of the research by
reducing errors in several research processes.
Online market research has significantly reduced the cost of research by
Online research has sped up the whole market research process, from
taking weeks to days.
Comparative studies suggest that online open minded questions elicit a lot
richer response and less inhibited responses then open ended questions
asked in mail or telephone surveys.
4. Cultural and Social Influence
• Canadian culture
• Drivers of cultural change
Openness to foreign ideas is the single most important source of new
technology and skills in development countries.
• The effect of income and time pressure on consumer behavior. Leisure time
management has some significant effects on decision making, particularly on
each of the following.:
Risk taking: If consumers are more harried in their work and family life,
then they are less likely to be novelty seekers and innovators when they
Searching and Shopping: Consumers have developed a series of informal
buying rules to save time but still ensure satisfactory purchases. For
example consumers tend to buy quality brand name products, follow the
advise of friends etc. Product Expertise: