3rd Module
3rd Module
3rd Module
ENTREPRENEURSHIP
UNIT 3:
Market Research and Customer Development
INTRODUCTION
Entrepreneurs are creatively interested in new opportunities. They are constantly seeking for
novel or unusual ideas to test if they can succeed in the marketplace. This distinguishes entrepreneurs
from regular businessmen whose main goal is to profit from the creation, acquisition, and sale of
things.
Entrepreneurs provide value by launching brand-new goods or services or developing more
efficient manufacturing processes. These could be new product features added to current ones or
product design innovation. They may also experiment with enhancing their operational capability by
utilizing new technology that will increase their productivity, improve their economies, and perhaps
give them the opportunity to achieve unmatched superiority. They might also think about extending
their reach by developing new markets or enhancing the size of already-existing markets.
Entrepreneurs have the potential to completely transform the current business paradigm by
making it obsolete by introducing innovative technology, processes, and systems.
MARKET RESEARCH
The procedure of determining whether a new product or service is feasible, through research
done in-person with potential clients.
It is also regarded as the process of evaluating a new service or product's viability through
research with potential customers. It enables a business to research the target market and receive
consumer feedback regarding interest in the good or service.
The process of market research can be carried out through surveys, customer interaction,
interviews, product testing, and focus groups.
The goals of market research are to comprehend the market for a specific good or service,
observe audience reaction, and meet customers' specific needs with a good or service. The information
gathered from conducting market research can be used to tailor advertising and other marketing efforts.
WHY DOES EVERY BUSINESS NEED MARKET RESEARCH?
Marketing research is the most efficient way to get insight into consumer behavior,
competitors, and overall market condition. The main goal of marketing research is to collect
information that helps your business take essential decisions.
The 4 most crucial importance of marketing research are given below:
1. Competition: Market research helps a company to gain information about its
competitor’s behavior. It will give you full insights into the strengths and weaknesses of your
competitors and give an idea of what price point you will choose for your products and services.
2. Customers: By conducting marketing research, you can create profiles of your
customers and build up an understanding of their buying habits and how much they’re willing to
spend. Most importantly, you can learn what will make someone use your product or service over a
good competitor.
3. Opportunities: Marketing research gives you insights into your consumer’s buying
habits and spending patterns. So, by conducting marketing research, you can collect information on
complementary products and services.
4. Forecast: Local and national economy influences every small and large business.
Performing marketing research with consumers gives the business an overview of whether they are
optimistic or scared about the direction of the economy. It also helps businesses to make adjustments
according to economic conditions.
CUSTOMER SEGMENTATION
The practice of dividing a company's customers into groups that reflect similarity among
customers in each group. The goal of segmenting customers is to decide how to relate to customers in
each segment in order to maximize the value of each customer to the business.
This segment is also called “clustering”, or grouping the customers according to what they
have in common.
Which Determines which segment of the market must be studied; this must
the market segment that the entrepreneur is eyeing.
When Determines the time and timing of the research. This critical for
entrepreneurs whose product or service will be offered to a time
constrained market such as office workers.
Where Pinpoint the relevant location of the market.
1. Primary Research:
Primary research is a process where a business interacts with its consumers or employs a
third party to do relevant studies and collect data
In the previous period, marketing research has been a daunting concept for brands because
they don’t quite know where to start or how to deal with vast amounts of data. In the modern
era, the evolution of technology has meant that brands have access to basic, and easy-to-use
tools to solve the exact problem. As a result, businesses are more positive about their own
projects and data, with the extra benefit of observing the insights that appear from this research
in real-time.
FOCUS GROUPS
Note: There are a few other types of interviews you can consider as well. The three most
common options are:
• Structured interviews: The questions are predetermined in both topic and order.
• Semi-structured interviews: A few questions are predetermined, but other questions
aren’t planned.
• Unstructured interviews: None of the questions are predetermined.
A benefit of focus groups is that your hypotheses can be open-ended. You can be open to a wide
variety of opinions, which can lead to unexpected conclusions.
Step 3: Determine your focus group questions
The questions that you ask your focus group are crucially important to your analysis.
Take your time formulating them, paying special attention to phrasing. Be careful to avoid
leading questions, which can affect your responses.
Overall, your focus group questions should be:
If you are discussing a controversial topic, be careful that your questions do not cause
social desirability bias. Here, your respondents may lie about their true beliefs to mask any
socially unacceptable or unpopular opinions. This and other demand characteristics can hurt your
analysis and bias your results.
Examples: Focus group questions
If your hypotheses have behavioral aspects, consider asking someone else to be lead moderator
so that you are free to take a more observational role.
Depending on your topic, there are a few types of moderator roles that you can choose from.
• Voluntary response
sampling, such as posting
a flyer on
campus and finding
participants based on
responses
• Convenience sampling of those who are most readily accessible to you, such as fellow
students at your university
• Stratified sampling of a particular age, race, ethnicity, gender identity, or other
characteristic of interest to you
• Judgment sampling of a specific set of participants that you already know you want to
include
Beware of sampling bias, which can occur when some members of the population are more
likely to be included than others.
Number of participants
In most cases, one focus group will not be sufficient to answer your research question. It is likely
that you will need to schedule three to four groups. A good rule of thumb is to stop when you’ve
reached a saturation point (i.e., when you aren’t receiving new responses to your questions).
Most focus groups have 6–10 participants. It’s a good idea to over-recruit just in case someone
doesn’t show up. As a rule of thumb, you shouldn’t have fewer than 6 or more than 12
participants, in order to get the most reliable results.
Lastly, it’s preferable for your participants not to know you or each other, as this can bias your
results.
As a general rule, make sure you are in a noise-free environment that minimizes distractions and
interruptions to your participants.
ONE-TO-ONE INTERVIEWS
This is an in-depth research method that is conducted in the natural settings of the
respondents. This method required observing consumers from their homes. This is where
they can be more comfortable and honest and researchers can directly observe people
using products. It takes a lot of time and is a qualitative research method.
CUSTOMER SURVEYS
Surveys in person, via smartphones, online forms, polls, and using survey software are
hugely informative. It is a list of questions that gives you the best insight into how a
consumer feels using the product or services you provide. This is basically a quantitative
research method.
QUESTIONNAIRES
When designing or constructing the questionnaire, remember the following guidelines (Edralin,
2016)
1. Keep it as simple as possible
2. Make sure it is clearly appealing and easy to read
3. Cluster or block related questions
4. Move from complex to more specific questions
5. Make sure questions are concise and easily nderstood
6. Avoid questions that are difficult to answer
Steps in Developing a Questionnaire for Research
Once the decision has been made to conduct a survey, the marketer and marketing researchers
must agree on the survey objectives, or what information the survey is to collect. In addition to
establishing the goals of the survey, a budget and timetable must be established. Sa social
research, you use you Statement of the Problem.
Telephone Surveys
A telephone survey is another method of survey administration. With this method, potential
respondents are contacted by telephone. The phone numbers are selected using a random dialing
system or other computer techniques designed to ensure the random selection of the respondents
and the most likely time to reach them at home. This method is commonly used in public opinion
surveys. Telephone interviews have a high response rate and the researchers can ask follow-up
questions. They are, however, expensive to conduct. A disadvantage of telephone surveys is that
the research cannot use visual stimuli. Interviewees can be uncomfortable in picking up calls
from new numbers.
Mail Surveys
For mail surveys, the questionnaires are delivered through the mail. Market researchers use two
types of mail surveys: Ad Hoc Mail Surveys and Mail Panels. These questionnaires are self-
administered by the respondent; which is to say, there is no interviewer.
With ad hoc mail surveys, questionnaires are mailed to random people with whom the
researchers have no relationship. These names may have been acquired through purchased
mailing lists. The marketing researchers contact these potential respondents once. Mail panel
surveys are composed of respondents who have been pre-screened. Members of the mail panel
have agreed to participate in regularly administered surveys.
Despite having to pay for postage to and from respondents and the cost of printing of the
questionnaires, mail surveys are relatively inexpensive to conduct. But, mail surveys take a long
time for responses to come back to the researchers and the response rates can be low. Non-
responders are typically not evenly distributed among the sample. Respondents with high income
and high education levels tend not to complete mailed surveys. This unequal distribution of non-
responders can bias the results.
Online Surveys
surveys
delivered through the Internet are
rapidly growing. They offer
advantages, which many
researchers think outweigh some
serious disadvantages.
Ended Questions
Open-ended questions are like the questions used with Exploratory Research. Respondents
answer the question using their own words. Open-ended questions to not contain a set list of
answers.
Many questionnaires end with an open-ended question. Here is an example of such a question:
Is there anything else that you would like to tell us about the latest Lenovo thinkpad?
Open-ended questions are much more difficult to edit and code than closed-end questions.
Editors must carefully review and categorize the answers for each open- ended question. (But it
is helpful for gathering insights from consumers. And, just like the open-ended questions asked
in focus groups, the interviewer probes—requests more information from the respondent—to
derive full meaning from a response. Probing means asking follow-up questions like, "What did
you mean by that?" and "Could you tell me more about that?" Probing can be done with
questionnaires administered using face-to-face interviews. But, this takes more time for the
interviewer to complete the interview. Probing open-ended questions are thought to have higher
interviewer bias than closed-ended questions. Interviewer bias occurs when
a respondent consciously or unconsciously modifies his or her answers due to the social style
and personality of the interviewer.
Closed-Ended Questions
These questions are considered categorical questions. They generate nominal level data as the
answers are not numerical and no order is implied. Nominal data merely places the respondents'
answers in one of the listed categories. These categories are mutually exclusive and exhaustive.
The term mutually exclusive means that any possible answer fits in only one category. No one,
for example, can answer that they have a pet dog and they do not have a pet dog. Exhaustive
means that the provided list of responses covers all possible answers. Please Note: the question
on gender is how such questions have been posed historically. With the heightened awareness of
the fluidity of gender, many researchers no longer ask questions about gender using dichotomous
questions.
2. Multiple-Choice Questions
There are two forms of multiple-choice questions: Multiple-Choice and Multiple- Answer.
Which of the following age groups are you in? Check the appropriate box:
Scaled response questions are designed to capture the intensity of a respondent's feelings
and attitudes. Scaled response questions include:
• Graphic Ratings Scales
• Itemized Ratings Scales
• Semantic Differential Scales
• Stapel Scales
• Likert Scales
Good questions are written using proper grammar. They are simply worded. Avoid jargon.
Precision is important. Take a close look at the following question.
This is a bad question because the context for "rely on most" is undefined. What are we talking
about? Sports? Entertainment? Restaurant Reviews? News? This question needs to be rewritten
so that the context is clear.
This is what we call a double-barreled question. The problem with double-barreled questions is
that they are really asking two questions. They confuse respondents and it is impossible for the
researcher to know if the respondent's state of pleasure refers to the ISP's rates or customer
service or both. Never use a double-barreled question. A good researcher would pose two
questions: one on rates and another on customer service.
Researchers can introduce bias by asking leading questions, loaded questions, or imposing
opinions on the respondent.
Leading questions introduce bias because they implicitly suggest a particular answer. Here is
(The students love the entrepreneurship subject. How happy are you while having lectures on
entrepreneurship?)
The problem with this question stems from the words People love working at Google. "
Leading questions often being with a statement like this one. This preface tends to bias the
question because it implies the respondents share an attitude.
3. Loaded Questions:
Loaded questions ask emotionally charged questions or offer a socially desirable answer. They
contain unnecessary assumptions that can distort a respondents answer because they make
presumptions about the respondents attitudes, beliefs, or behavior.
Here is an example of a loaded question:
4. Imposing Assumptions:
Good questions do not impose value judgments on the respondent. The following question
makes an assumption that could distort responses.
Should Josh Mojica continue his excellent new kangkong chips flavor?
The problem with this question is the inclusion of the word "excellent." That word imposes a
value judgment that respondents might not share. Good researchers never impose value
judgments on respondents as they introduce bias.
Problems can occur when researchers ask questions that the respondents are not qualified to
answer. Here is an example of a question that smart phone users are most likely not qualified to
answer and probably have no strong opinions.
Good researchers always consider the respondent's qualifications for answering a question.
Advertising recall tests are designed to see if television viewers remember commercial.
Typically these tests are conducted 24-hours after a commercial airs. A 24-hour delay does not
tax respondents' memories. The research company calls potential respondents, and the
interviewer takes two measurements: unaided recall and aided recall. Here is how the researcher
might ask the questions if the client were Pancit Canton and the commercial ran on Batang
Quiapo.
If the respondent answers "yes," ask the following question: Do you
The researcher records the names of the brands. If a respondent can identify a brand, this is
called unaided recall.
If the respondent does not have unaided recall of the Diet Coke commercial, ask: Do you
recall seeing any commercials for a carbonated soft drink? If the respondent can recall the
Diet Coke commercial, this is aided recall.
With events that are in the more distant past, people may have a poor recollection of when the
event actually occurred or other details of the event. Two different phenomena threaten the
validity of the response. Telescoping is when a respondent thinks an event happened more
recently than it actually occurred. Squishing occurs when a respondent thinks that an event
happened longer ago that it actually did.
Sometimes a respondent's memory is very clear, yet they do not want to answer a question if
brings up potentially painful or embarrassing memories. Questions about bankruptcy, divorce,
sexual activity, sexual harassment, criminal activity, and health issues fall into this category.
Consider the following question: "Where your parents married to each other when you were
born?" Being a child born out of wedlock is a source of embarrassment for some people. Many
researchers would add a counter biasing statement to this question: Here is how they might
rephrase this question: "Many people are born to parents who were not married to one another at
the time of their birth. Were your parents married to each other when you were born?"
What do you think about the new nike shoes? – walang paa
Not only do researchers spend a lot of time writing and rewriting each question, they also must
devote considerable thought to the logical flow of the questions. When considering the flow of
the questions, researchers want to make certain that they:
1. Avoid responses from unqualified respondents
2. Make respondents feel confortable so they answer the questions honestly
3. Ask questions that provide all the information they need
Part 1: Introduction
Part 2: Initial Screening of respondents
Part 6: Farewell
Part 1: Introduction
The introduction is designed to gain the trust of the potential respondent. Good
introductions:
• Provides the interviewer's name and the name of his or her employer
• Tells the respondents the subject of the interview
• Assures the respondent that he or she will not be sold anything and that their privacy
will be protected
• Tells the respondent how long the survey will take to complete
• If applicable, have the respondent sign a consent form
• Invites the respondent to complete the survey
Here is an example of a screener question for a questionnaire for a marketer of gourmet dog
treats.
After the screener questions, the respondent moves to Part 2 of the questionnaire. In this section,
researchers focus on general questions. Asking general questions before specific questions is
sometimes called the funnel technique. The goal of the research
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in part to is to "warm up" the respondent. Tough questions and questions that can cause
embarrassment are saved until the end of the questionnaire. Asking questions about sensitive
subjects like age, income, and sexual orientation, are typically avoided in the early phases of the
questionnaire. Our reverse mortgage, however, does ask sensitive questions about age and
finances. To soften these screener questions, we gave respondents a review of what a reverse
mortgage is. This review implies that the screener questions are necessary.
With part 4, the questionnaire makes the transition into questions that relate to the research
objectives. These questions are more detailed and often use a ratings scale.
In the case of our questionnaire on the treats dog owners give their dogs, we might focus on the
following questions:
Part 5: Demographics, Psychographics, Usage Behavior And Questions That Might Cause
Embarrassment
Researchers generally place questions at the end of the questionnaire that might cause a
respondent to stop an interview because the it is seen as too intrusive or embarrassing.
Researchers do this to collect usable data before a respondent might halt the interview. The other
reason to place such questions at the end of the survey is that respondents may have developed a
rapport with the interviewer and they may have become accustomed to answer the questions.
Many researchers argue that the end of the questionnaire is an ideal place for collecting the
respondent's demographics, psychographics and usage behavior. But not every researcher agrees.
As we saw with our examples of screener questions, we might need to
collect some demographic, psychographic, and usage behavior information to filter out
unqualified respondents.
Part 6: Farewell
At the end of an interview, the interviewer or the questionnaire itself )if the research is using a
self-administered questionnaire), bids farewell to the respondent. The farewell statement thanks
the respondent for their time, tell the respondent that his or her opinions count, and express the
hope that the interview was a good experience. Here is a standard farewell statement.
"The survey is now complete. I hope you found this experience pleasurable. Thank you for
sharing your opinions. It is only by listening to people like you that our clients can bring
better products to market."