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Developing a research plan

Marketing research is a systematic process of analyzing data which involves conducting research to support marketing activities, and the statistical interpretation of data into information. This information is then used by managers to plan marketing activities, gauge the nature of a firm’s marketing environment and to attain information from suppliers.

A distinction should be made between marketing research and market research. Market research pertains to research in a given market. As an example, a firm may conduct research in a target market, after selecting a suitable market segment. In contrast, marketing research relates to all research conducted within marketing. Market research is a subset of marketing research.

Marketing researchers use statistical methods (such as quantitative researchqualitative researchhypothesis testsChi-square testslinear regressioncorrelation coefficientsfrequency distributionsPoisson and binomial distributions, etc.) to interpret their findings and convert data into information.[58]

Research process[edit]

Marketing research spans a number of stages, including:

  • Define the problem
  • Develop a research plan
  • Collect the data
  • Interpret data into information
  • Disseminate information formally in the form of a report

Segmentation[edit]

Main article: Market segmentation

Market segmentation consists of taking the total heterogeneous market for a product and dividing it into several sub-markets or segments, each of which tends to be homogeneous in all significant aspects.[59]

Purposes[edit]

Market segmentation is conducted for two main purposes, including:

  • A better allocation of a firm’s finite resources
  • To better serve the more diversified tastes of contemporary consumers

A firm only possesses a certain amount of resources. Accordingly, it must make choices (and appreciate the related costs) in servicing specific groups of consumers.

Moreover, with more diversity in the tastes of modern consumers, firms are noting the benefit of servicing a multiplicity of new markets.

Overview[edit]

Market segmentation can be defined in terms of the STP acronym, meaning Segment, Target, Position.

Segment[edit]

Segmentation involves the initial splitting up of consumers into persons of like needs/wants/tastes.

Four commonly used criteria are used for segmentation, which include:

  • Geographical (a country, region, city, town, etc.)
  • Psychographic (e.g. personality traits or lifestyle traits which influence consumer behaviour)
  • Demographic (e.g. age, gender, socio-economic class, education, etc.)
  • Behavioural (e.g. brand loyalty, usage rate, etc.)

Target[edit]

Once a segment has been identified, a firm must ascertain whether the segment is beneficial for them to service.

The DAMP acronym (meaning Discernable, Accessible, Measurable and Profitable) are used as criteria to gauge the viability of a target market. The elements of DAMP are:

  • Discernable – how a segment can be differentiated from other segments.
  • Accessible – how a segment can be accessed via Marketing Communications produced by a firm
  • Measurable – can the segment be quantified and its size determined?
  • Profitable – can a sufficient return on investment be attained from a segment’s servicing?

The next step in the targeting process is the level of differentiation involved in a segment serving. Three modes of differentiation exist, which are commonly applied by firms. These