Industrial Market Research

Consumer Market research studies the buying habits of people Industrial Market research investigates the market for products sold by one business to another

Industrial Market Research

Consumer MR

Business MR

Primary data Secondary data Experimental and Descriptive or survey method observational method Non-technical for data collection Technical factors assessed Large sample size due to Small sample size large universe Defining respondents difficult Easy definition of respondents Individuals and households Time constraints and limited accessability to respondents Easy accessability of respondents for data collection

Scope of Business MR
Development of Market Potential Market share analysis Sales Analysis Forecasting Competitor Analysis Benchmarking New product acceptance and potential

Business trend analysis

Sales quota determination

Market Research Process

Define research objective 1 Information needed 2 Identify sources Of information 3 Techniques for Acquiring info 4 Gather & process information

Data analysis & interpretation 6 7 Report & communicate

MR Process

Design elements:

Secondary or primary or both in sequence Sampling plan Q design (if applicable) Field work Tabulation From published sources and internal records SIC: Standard Industrial Code (exim.indiamart.com)

Secondary search:

STANDARD INDUSTRIAL CODE (INDIA)

Division D: Manufacturing Major Group 33: Primary Metal Industries Major Group 34: Fabricated Metal Products, Except Machinery And Transportation Equipment Major Group 35: Industrial And Commercial Machinery And Computer Equipment Major Group 36: Electronic And Other Electrical Equipment And Components, Except Computer Equipment Major Group 37: Transportation Equipment Major Group 38: Measuring, Analysing, And Controlling Instruments; Photographic, Medical And Optical Goods; Watches And Clocks Major Group 39: Miscellaneous Manufacturing Industries

STANDARD INDUSTRIAL CODE (INDIA)

Major Group 35: Industrial And Commercial Machinery And Computer Equipment Industry Group 351: Engines And Turbines Industry Group 352: Farm And Garden Machinery And Equipment Industry Group 353: Construction, Mining, And Materials Handling Industry Group 354: Metalworking Machinery And Equipment Industry Group 355: Special Industry Machinery, Except Metalworking Industry Group 356: General Industrial Machinery And Equipment Industry Group 357: Computer And Office Equipment

STANDARD INDUSTRIAL CODE (INDIA)

Industry Group 356: General Industrial Machinery And Equipment 3561 Pumps And Pumping Equipment 3562 Ball And Roller Bearings 3563 Air And Gas Compressors 3564 Industrial And Commercial Fans And Blowers And Air Purification 3565 Packaging Machinery 3566 Speed Changers, Industrial High-speed Drives, And Gears 3567 Industrial Process Furnaces And Ovens 3568 Mechanical Power Transmission Equipment, Not Elsewhere Classified 3569 General Industrial Machinery And Equipment, Not Elsewhere

Forecasting Process

Identifying forecasting objectives

Short-range (3 to 6 months); Mid-range (1 to 2 years) and Long-range (>2 years) General economy forecast Industry sales forecast Company sales forecast Sales forecast for the product lines

Forecasting Process

Determining independent and dependent variables Developing forecasting procedure Select forecast analysis method

Sales Forecasting Methods

Qualitative:
Experts opinion Delphi Method Survey of buyers expectation Sales force composite method Historical analogy method for new products

Time Series Analysis

Nave or simple method based on rate of change of sales of previous periods Free hand or Graphic method Method of semi averages

Method of moving averages

Method of least square Using seasonality index (Decomposition method)

Exponential smoothing method

Correlation analysis Regression analysis

Hypothesis Testing
The purpose of hypothesis testing is to determine whether a claimed (hypothesized) value for population parameter should be accepted based on sample evidence. Null Hypothesis: H0 : is the hypothesized parameter value which is compared with the sample result.
While formulating H0 usually the words no, not or same will be part of the hypothesis.

Alternative Hypothesis: H1 or Ha : is accepted only if the null hypothesis is rejected. Select desired level of significance (0.01, 0.05 or 0.1 corresponding to confidence coefficients of 99%, 95% or 90% respectively) and tolerable error level

Hypothesis Testing
Type I error: If the 5% level of significance is used, there is probability of 0.05 of rejecting the null hypothesis, when it is in fact true. This is called Type I error. Type II error: occurs if the null hypothesis is not rejected, and therefore accepted, when it is in fact false. Consequences of decisions in hypothesis testing is given in next slide Statistical decision is not necessarily is a managerial decision

Hypothesis Testing
Consequences of decisions in Hypothesis Testing

Possible states Possible Decision Null hypothesis true Null hypothesis false Type II error (-Beta error) Correctly rejected

Accept null hypothesis Correctly accepted Reject null hypothesis Type I error (Alpha error)

Market Research Application

ANOVA Correlation and Regression Discriminant Analysis Factor Analysis Cluster Analysis Multi-dimensional Scaling (MDS) Conjoint Analysis Perceptual Mapping

Market Research Application

ANOVA Independent variables are nominal scales Dependent variables are continuous Used analysing design of experiments

Market Research Application

Correlation and Regression Used for sales estimates Explains causation Establishes degree of association between quantitative data

Market Research Application

Discriminant Analysis Assigns objects to groups Selects, classifies and predicts Used for identifying potential/nonpotential customer or low-risk/highrisk customers

Market Research Application

Factor Analysis Reduction of variables Factor extraction Used for establishing purchase criterion Classifies attributes

Market Research Application

Cluster Analysis Combines similar objects Segmentation application

Market Research Application

Multi-dimensional Scaling (MDS) Used for brand positioning Attribute based similarity/dissimilarity based

Market Research Application

Conjoint Analysis Used for product design and pricing Works on utility levels

Market Research Application

Perceptual Mapping Attribute based Extension of discriminant analysis