Market research

Market research is the process of systematically gathering, recording and analyzing data and information about customers, competitors and the market. Its uses include to help create a business plan, launch a new product or service, fine tune existing products and services, and expand into new markets. Market research can be used to determine which portion of the population will purchase a product/service, based on variables like age, gender, location and income level.

Market research is generally either primary or secondary.[1] In secondary research, the company uses information compiled from other sources that appears applicable to a new or existing product. The advantages of secondary research are that it is relatively cheap and easily accessible. Disadvantages of secondary research are that it is often not specific to your area of research and the data used can be biased and is difficult to validate. Primary market research involves testing such as focus groups, surveys, field tests, interviews or observation, conducted or tailored specifically to that product.

A list of questions that can be answered through market research:

* What is happening in the market? What are the trends? Who are the competitors?
* How do consumers talk about the products in the market?
* Which needs are important? Are the needs being met by current products?

Market research for business planning

Market research is for discovering what people want, need, or believe. It can also involve discovering how they act. Once that research is complete it can be used to determine how to market your specific product.

For starting up a business there are a few things that are important:

* Market information

Market information is making known the prices of the different commodities in the market, the supply and the demand. Information about the markets can be obtained in several different varieties and formats.

Examples of market information questions are:

1. Who are the customers?
2. Where are they located and how can they be contacted?
3. What quantity and quality do they want?
4. What is the best time to sell?

* Market segmentation

Market segmentation is the division of the market or population into subgroups with similar motivations. Widely used bases for segmenting include geographic differences, personality differences, demographic differences, use of product differences, and psychographic differences.

* Market trends

The upward or downward movements of a market, during a period of time. The market size is more difficult to estimate if you are starting with something completely new. In this case, you will have to derive the figures from the number of potential customers or customer segments. [Ilar 1998]

But besides information about the target market you also need information about your competitor, your customers, products etc. A few techniques are:

* Customer analysis
* Choice Modeling
* Competitor analysis
* Risk analysis
* Product research
* Advertising research

Ad Tracking:

Ad tracking, also known as post-testing or ad effectiveness tracking is continuous in-market research that monitors a brand’s performance including brand and advertising awareness, product trial and usage, and attitudes about the brand versus their competition.

Depending on the speed of the purchase cycle in the category, tracking can be done continuously (a few interviews every week) or it can be “pulsed,” with interviews conducted in widely spaced waves (ex. every three or six months).

Since the researcher has information on when the ads launched, the length of each advertising flight, the dollars spent, and when the interviews were conducted, the results provide an accurate rear-view mirror look at the marketplace and how it was affected by the advertiser’s marketing messages and decisions. (Young, p. 191)

Contents
* 1 Purpose of Ad Tracking
* 2 Methodology
* 3 Measures
* 4 See also
* 5 References
* 6 Relevant Terms

Purpose of Ad Tracking

The purpose of ad tracking is generally to provide a measure of the combined effect of the media weight or spending level, the effectiveness of the media buy or targeting, and the quality of the advertising executions or creative. Some newer forms of online tracking, separate the issues of the quality of the creative component from the quality of the media buy and instead focus on the relative performance of ads versus the competitive ads that are airing at the same time. All forms of tracking data are used to provide inputs to Marketing Mix Models which marketing science statisticians build to estimate advertising return on investment (ROI).

Methodology

Some ad tracking studies are conducted by telephone while others are conducted on the Internet. The two approaches produce very different measures of advertising awareness because the interviews tap into consumer memories of advertising using fundamentally different measures, recall versus recognition.

For example, with an Internet study, the respondent can be shown a few memorable, de-branded still images from the TV ad or a de-branded version of a print or Internet ad and then answer three significant questions.

1. Do you recognize this ad? (recognition measure)
2. Please type in the sponsor of this ad. (unaided awareness measure)
3. Please choose from the following list, the sponsor of this ad. (aided awareness measure)

A telephone survey does not allow for visuals. Verbal descriptions are very difficult to provide for mural ads or for a campaign that has several ads featuring the same character(s) in the same situation with only slight changes. Telephone is not considered a flexible enough methodology to be used in all situations.

Measures

Here is a list of some of the data a post-test might provide:

* Top of mind brand awareness
* Unaided brand awareness
* Aided brand awareness
* Brand fit
* Brand image ratings
* Brand trial
* Repeat purchase
* Frequency of use
* Purchase intent
* Price perceptions
* Unaided advertising awareness
* Aided advertising awareness
* Unaided advertising message recall
* Aided advertising message recall
* Aided commercial recall
* Ad wear out
* Promotion awareness and usage
* Market segment characteristics
* Media habits
* Lifestyle/Psychographics
* Demographics

A/B testing:

A/B testing is a method of advertising testing by which a baseline control sample is compared to a variety of single-variable test samples. A classic direct mail tactic, this method has been recently adopted within the interactive space to test tactics such as banner ads, emails and landing pages.

Employers of this A/B testing method will distribute multiple samples of a test, including the control, to see which single variable is most effective in increasing a response rate or other desired outcome. The test, in order to be effective, must reach an audience of statistical significance.

This method is different than multivariate testing which applies statistical modeling which allows a tester to try multiple variables within the samples distributed.

Advertising research:
Advertising research is a specialized form of marketing research conducted to improve the efficacy of advertising. According to MarketConscious.com, “It may focus on a specific ad or campaign, or may be directed at a more general understanding of how advertising works or how consumers use the information in advertising. It can entail a variety of research approaches, including psychological, sociological, economic, and other perspectives.” [1]

Contents

* 1 History
* 2 Types of Advertising Research
o 2.1 Pre-testing
o 2.2 Post-testing
* 3 Terminology
* 4 References
* 5 Notes
* 6 External links
History

1879 - N.W. Ayer conducts custom research in an attempt to win the advertising business of Nichols-Shepard Co., a manufacturer of agricultural machinery.[2]

1895 - Harlow Gale of the University of Minnesota mails questionnaires to gather opinions about advertising from the public.[2]

1900s - George B. Waldron conducts qualitative research for Mahin’s Adverstising Agency[3]

1910s - 1911 can be considered the year marketing research becomes an industry. That year, J. George Frederick leaves his position as editor of Printer’s Ink to begin his research company, the Business Bourse with clients such as General Electric and the Texas Co. Also in 1911, Kellogg Co.’s ad manager, R.O. Eastman creates the Association of National Advertisers which is now known as the Association of National Advertising Managers. The group’s first project is a postcard questionnaire to determine magazine readership. The results introduce the concept of duplication of circulation. In 1916, R.O. Eastman starts his own company, the Eastman Research Bureau which boasts clients such as Cosmopolitan, Christian Herald, and General Electric.[4]

1920s - In 1922, Dr. Daniel Starch tests reader recognition levels of magazine and newspaper advertisements and editorial content. In 1923, Dr. George Gallup begins measuring advertising readership.[4]

1930s - In 1936, Dr. George Gallup validates his survey methodology by using the same tools polling voters during public elections. This allows him to successfully compare and validate his study's results against the election’s results.[5]

1940s - Post World War II, the U.S. sees a large increase in the number of market research companies.[5]

1950s - Market researchers focus on improving methods and measures. In their search for a single-number statistic to capture the overall performance of the advertising creative, Day-After-Recall (DAR) is created.[6]

1960s - Qualitative focus groups gain in popularity.[7]

1970s - Computers emerge as business tools, allowing researchers to conduct large-scale data manipulations. (Honomichl p.175) Multiple studies prove DAR (Recall) scores do not predict sales. The measure, persuasion, also known as motivation, is validated as a predictor of sales.[8] The measure known as “breakthrough” is re-examined by researchers who make a distinction between the attention-getting power of the creative execution (attention) and how well “branded” the ad is (brand linkage). [9] Herbert Krugman seeks to measure non-verbal measures biologically by tracking brain wave activities as respondents watch commercials. (Krugman) Others experiment with galvanic skin response, voice pitch analysis, and eye-tracking.[10]

1980s - Researchers begin to view commercials as a “structured flow of experience” rather than a single unit to be rated on the whole, creating moment-by-moment systems such as the dial-a-meter.[11]

1990s - Ameritest Research creates Picture Sorts to provide accurate non-verbal measurements in a moment-by-moment system. Picture Sorts results are graphed to visually represent commercial viewers' moment-by-moment image recognition (Flow of Attention), positive and negative feelings (Flow of Emotion), and brand values (Flow of Meaning).[12]

2000s - Global advertisers seek an integrated marketing research system that will work worldwide so they can compare results across countries.[13] For a look at trends predicted for advertising research in the 21st century, see Seven Trends for the Future.

Types of Advertising Research

Research can be conducted to optimize advertisements for any medium: radio, television, print (magazine, newspaper or direct mail), outdoor billboard (highway, bus, or train), or Internet. Different methods would be applied to gather the necessary data appropriately. First, there are two types of research, customized and syndicated. Customized research is conducted for a specific client to address that client’s needs. Only that client has access to the results of the research. Syndicated research is a single research study conducted by a research company with its results available, for sale, to multiple companies. [14]

Pre-testing

Pre-testing, also known as copy testing, is a form of customized research that predicts in-market performance of an ad, before it airs, by analyzing audience levels of attention, brand linkage, motivation, entertainment, and communication, as well as breaking down the ad’s Flow of Attention and Flow of Emotion.[15] Pre-testing is also used on ads still in rough form – e.g., animatics or ripomatics. Pre-testing is also used to identify weak spots within an ad to improve performance, to more effectively edit 60’s to 30’s or 30’s to 15’s, to select images from the spot to use in an integrated campaign’s print ad, to pull out the key moments for use in ad tracking, and to identify branding moments.[16]

Post-testing

Post-testing/Ad tracking studies can be customized or syndicated. Tracking studies provide either periodic or continuous in-market research monitoring a brand’s performance, including brand awareness, brand preference, product usage and attitudes. Advertising tracking can be done by telephone interviews or online interviews—with the two approaches producing fundamentally different measures of consumer memories of advertising, recall versus recognition.