MODULE 2: Foundational Research: Understanding your

market & consumer behaviour

Chapter 4.3 & 4.4 MR data

Ch. 7.2 Foundational research U&A

4.3 QUALITATIVE RESEARCH DATA

Qualitative - small groups, open-ended questions, explores ideas (“Why do people
dislike this product?”)
Quantitative - big surveys, lots of numbers, focuses on measurable facts (“What
percentage of people dislike this product?”)

• Quantitative - large samples

• Qualitative - smaller groups
• Qualitative research allows for interaction (clarifying unclear responses)

When to Use Qualitative Research

Standalone project - ideal for identifying problems (product packaging issues) when
quantitative methods are too expensive or time-constrained

Pre-step to Quantitative Research - helps refine survey questions or identify topics to

include in surveys

Post-Quantitative Research - can deepen understanding of survey results or explore

issues uncovered in quantitative analysis
Why is Qualitative Research Useful?

• Qualitative research is ideal for situations where there is little prior knowledge
("what we don’t know that we don’t know").
• Time and budget constraints must be considered.

Methods: focus groups, in-depth interviews, ethnographic studies, and unstructured

online data ("social listening")

Focus Groups

Qualitative research method where 6 to 10 participants are brought together in a

comfortable setting to discuss predetermined topics
A focus group also need the following:
 - Moderator: person who leads the session, asks questions, and ensures
discussions stay on track

- Discussion Guide: list of topics or questions prepared by the client

- Recording Equipment: sessions are often (video) recorded, the moderator
reviews the recordings, summarizes the discussions, and interprets key insights

Often focus groups are conducted in person, it is also possible to conduct focus group
online

Purpose: Focus groups are suitable for exploring topics requiring group discussion
and creativity. They encourage participants to build on each other's ideas.

Recruitment:
- Participants should feel comfortable speaking in a group
- Moderators must ensure balanced participation, avoiding dominance by one
individual
- If the topic is personal or complex, depth interviews might be a better alternative
to gather diverse perspectives

Analysis often begins during the session, as moderators adapt the conversation based
on real-time observations.

Focus groups are great for topics that lend themselves to group discussion and being
explorative.

Individual Depth Interviews

When to Use:
- Suitable for sensitive topics where social desirability bias or stigma might
influence responses in a group setting (political preferences, abortion, racial/
gender equality, luxury goods consumption).
- Respondents may feel more comfortable expressing genuine feelings in a one-on-
one setting

Potential Challenges - respondents may still provide socially desirable answers even
in individual settings

Types of Interviews:

• Semi-Structured Interviews:
- Predetermined topics and questions guide the discussion.
- Follow-up questions depend on the respondent's initial answers.
• Unstructured Interviews:
 - Only the general topic(s) are decided in advance.
- The interview is flexible, aiming to minimize interviewer bias.
Interview Style:
- Open and non-intrusive.
- Interviewers use tools like silence, open-ended questions, and minimal bias to
encourage honest responses.

The Laddering Interview Technique

A specialized type of individual-depth interviewing.

Based on the "means-end-chain" framework to understand how product features
relate to personal values.

Concept:
- Products have features (brand, price, engine power for a car).
- Consumers have values (security, enjoyment, sense of belonging).
- Laddering interviews connect features to values, helping understand why
consumers prefer certain attributes.

Process:

Identify Important Attributes - determine which product features matter most to

the consumer

Explore Preferences for Attributes - ask why the consumer prefers a specific level
of an attribute ( a strong car engine)
Iterative Probing (Laddering) - continuously ask "why" questions to uncover
deeper motivations, moving from product benefits to emotional or personal values

Integrate Findings - combine individual ladders across respondents to create a

hierarchical value map, showing connections between attributes, benefits, and
values

Outcome
- This technique is repeated for all attributes
- The results for one consumer form "ladders" (connections between features and
values)
- Combining ladders from multiple respondents creates a hierarchical value map

Ethnographic Research
Here researches spend time in a new cultural setting, the goal is to get an in depth
understanding of this culture

There is no a specific set of questions that have been identified beforehand

Social Listening

Involves several online qualitative research approaches:

- Online Focus Groups: similar to in-person focus groups

- Online Research Communities (MROC): market research communities where
participants engage in discussions and share insights over time
- Online Consumer-Generated Data

Purpose - helps researchers understand consumer opinions and behavior in digital

environments.
Market research Online Communities (MROCs)

Private online communities (like a private Facebook group) where members provide
feedback via surveys, comments, or discussions on firm-posted ideas or product
concepts

Duration - can last from weeks to months

Benefits - rapid feedback and iterative testing of ideas.

Drawbacks
- Limited representativeness due to small, pre-selected samples
- Participants may not represent the broader customer population

Online consumer generated data

Observational data scraped from the internet, including product ratings, reviews, and
consumer discussions about brands or categories

Key Features
- Unobtrusive (researchers donʼt influence consumer responses)
- Data is timestamped, allowing for historical analysis
Requires cleaning and structuring before analysis
 QUANTITATIVE RESEARCH DATA

" we know what we don't know.”

Surveys

Surveys - standardised questions with fixed answer options for all respondents.
They can be administered in person, via online links, or as device-agnostic links
(usable on desktops, smartphones, and tablets).

Advantage: Captures younger audiences better.

Disadvantage: Answering on smartphones can feel tedious.

+ of Surveys:

- Efficiency - large-scale data collection offers representative results

- Comparison - standardised questions allow comparison across groups (70% of
men preferred the brand vs. 56% of women)
- Interrelationships: Quantitative surveys help analyze variable relationships

Challenges - response-style biases (social desirability, extreme responses) can arise.

Recommendations for Surveys:

- Avoid leading questions ("To what extent do you agree...?")

- Avoid double-barreled questions ("Do you agree the service was fast and solved
problems?")
- Use simple language
- Pre-test surveys to minimize errors and ensure flow
- Randomise the order of statements when rating attributes to avoid order effects
- Align questions with the survey's purpose ("What will this data be used for?")
- Ensure respondents can realistically answer (recalling coffee brands bought 6
months ago is unlikely)
- Be mindful of biases, such as social desirability or halo effects.

Popular Survey Types in Marketing:

- Usage and attitude surveys

- Customer satisfaction surveys
- Brand surveys
- Tracking surveys
- Market segmentation surveys

Transactional Data
Is the result of transaction e.g sales.

This data represent behaviour, this is used in the estimation of marketing mix models;
such models give us insights into whether the firmʼs marketing is working

4.4.3 Experiments

Experimental data - result of an experimental set-up to test specific variables

E.G Amazon can test the effect of product reviews on sales by varying the number of
reviews displayed (zero, five, or ten) over different periods and comparing sales data
from each condition

7.2 U&A RESEARCH

Usage and Attitude (U&A) research - method companies use to better understand
their market category or discover new opportunities for growth. Focuses on habits,
practices, and consumer perceptions.

It helps businesses develop strategies to grow their market presence, refine their
brand positioning, and create targeted marketing campaigns.

It seeks to answer questions:

- Who are your competitors?
- Who are your consumers?
- Why are people using your product/brand?
=> Develop strategies for growth, improve targeting, and refine brand positioning.

Applications
- Market Opportunities - identify unmet consumer needs or address barriers like
price, availability, or brand perception
- Brand Insights - gain understanding for rebranding, product positioning, and
targeted marketing
- Consumer Behavior - explore usage occasions, motivations, and emotional
contexts

Key difference between U&A and segmentation? In segmentation research we

assume that our target is diverse

The Typical U&A Study

Purpose: Understand user and attitude (U&A) patterns in markets

Key Aspects
- Surveys are often long (45+ minutes), but mobile surveys should be kept under
20 minutes for better accuracy.
- Longer questionnaires lead to random answers from respondents trying to finish
quickly.

Focus on the 5 W’s:

• Who: Is using the product or not?

• What: Are they consuming (brand, flavor)?
• When: Are they consuming (time of day)?
• Where: Is the consumption happening?
• Why: Do they consume (taste, energy boost)?

In Table 7.I we show the type of survey questions that are often part of a U&A study

A typical U&A study consists of several key components:

1. Screening Section: ensures the right respondents are selected. If the individual
doesn’t meet the criteria, the survey may terminate here

2. Brand-Specific Questions: measure the respondent’s familiarity with and

perceptions of different brands, include assessing brand awareness (unaided or
 aided), consideration, preference, and usage; without prompts (unaided
awareness) or choose from a list (aided awareness)

3. Brand Perceptions: respondents asked to evaluate brands on specific

perceptions

4. Importance of Product Attributes: explores which features matter most to

respondents (organic, its price, packaging design)

5. Category Usage and Consumption Patterns: detailed questions about

respondents' consumption habits

6. Motivations and Attitudes: why respondents use the product and their overall
attitudes towards it

7. Demographic and Media Usage Data: U&A studies collect demographic

information such as marital status, household income, and whether they have
children
Purpose - U&A studies collect a broad range of data to understand consumer
purchasing behavior, motivations, attitudes, and feelings about the product category
and competitors

Surveys Versus Diaries

Researchers use various tools to improve data accuracy while keeping questionnaires
concise.

A common approach is combining surveys with diaries.

Diaries - reduce the need for lengthy surveys, but fewer respondents may complete
them, resulting in smaller sample sizes.

• Why Diaries Are Preferred: more accurate than recall surveys. People often
can’t accurately remember details about their consumption habits over weeks;
it lets respondents log each consumption moment in real-time, often using
mobile apps for convenience.

• Accuracy in Usage Research: help calculate total usage reliably

Analysis

Tabulating Data - after fieldwork, researchers process data to find insights. U&A
research often produces lengthy data tables.

A common mistake - translating every table into PowerPoint slides, which can result
in overwhelming presentations without a clear story.

Effective Analysis Approach:

- Review the data to find key insights
- Develop a narrative by discussing findings with stakeholders
- Only include insights that support the narrative in the presentation
Additional Analyses:
- Segmentation Analysis
- Brand Equity Analysis
- Category Driver Analysis
Importance vs Fulfillment Chart (Figure 7.4):
This chart identifies gaps between what consumers consider important and their
unmet needs, helping companies identify opportunities for improvement.

Loyalty Ladder/Brand Funnel (Figure 7.5):

This measures brand performance at different stages

1. Awareness (Total Aided Awareness)

2. Ever Use
3. Past 6-Month Use (P6M Use)
4. Most Often Used Brand (BUMO)
Brand Association Mapping (Figure 7.6):
This tool visualises how different brands are associated with specific attributes. For
example:
- Brand C: Associated with discounts and promotions.
- Brand D: Associated with high quality and attractiveness.
 WEEK 2.4
Ch. 3 Insights
Ch. 7.3 Foundational research Segmentation

CHAPTER 3: Deliverables, communication and activation

FIGURE 3.1 The Engagement Model

QUALITY OF DELIVERABLES

Before starting a project, the client and marketing researcher agree on the format of
deliverables (results to be presented).

Deliverables - how the agreement between the client and the marketing researcher is
going to go e.g in what format the results will be delivered to the client. Common
formats include: power point, insights summaries, excel files

Common Deliverable Formats:

- PowerPoint (PPT) Deck - most common format, focusing on results that address
the business problem
- Insights
- Excel File - detailed results, often used in segmentation studies.
 - Interactive decision-support Tools
Only include results that clarify the business problem or research question

Ensure the following when presenting results:

1. Insights are clearly derived from raw data and analyses.

2. Stakeholders are informed and can understand these insights.
3. Insights and results are seen as credible.
4. Data, analyses, and insights are presented in a compelling story format to
inspire action.

Extracting Insights

Executives often complain about overwhelming amounts of data presented in reports,

making it hard to identify key insights that impact business decisions

Insights are more influential than raw data or statistical results (regression
coefficients).

The role of the marketing researcher - craft a compelling story, making the most
important findings easy to locate and actionable.

Consumer Insights - thoughts, facts, data, or analysis that lead to a deeper

understanding of a business challenge. Insights create urgency (tension) to rethink or
act on a business problem.

Key Elements of Insights:

- Insights should highlight tension and urgency in consumer problems
- Formulating tension: Use the “I/consumers … but … therefore …” framework to
describe a consumer’s current challenge and its impact

Great insights spark innovation by providing a clear understanding of why customers

behave a certain way.

Causality - crucial for innovation (correlation between ice cream sales and forest
fires in summer doesn’t indicate causation)

Insights reveal the "why" behind consumer decisions

Features of Insights:

1. They differ in value - some insights have major financial implications; others
may be smaller but collectively significant.
2. They differ in terms of how specific or broad they are - some insights suggest
specific actions; others are broad and may require contextualisation.

3. They differ in terms of how validated they are - they must be tested for
relevance and accuracy.

4. Insights are malleable - they can lose relevance over time; they are not static.

Making the Results and Insights Easy to Find

Creating and presenting insights effectively ensures that clients and stakeholders can
easily understand and act upon the results of a study.

While clients are closely involved throughout the project, the challenge - making the
findings accessible to decision-makers within the organisation who were not directly
engaged.

Here are 3 strategies to address this:

• Internal Emails - sending internal emails is a simple way to inform a broad

audience

• Marketing Research Portals - developing a research portal (online)—is

another approach. This portal stores all studies, questionnaires, raw data, and
final reports, researchers must ensure the portal is user-friendly

• Stakeholder Communication Strategy - tailoring communication methods to

different groups:
- Tier-1 stakeholders - regular one-on-one interactions
- Tier-2 stakeholders - group meetings with smaller teams
- Wider audience - use email digests summarising monthly insights, linking to
detailed reports

• Broader Updates
- Quarterly updates to executives provide an overview of significant findings and
actionable insights
- These summaries help elevate the perceived value of the marketing research
function

3.2.3 Perceived Credibility of the Results

PERCEIVED CREDIBILITY- risk the decision maker takes if they act on your
recommendation – the key question here is... WHAT IF WE ARE WRONG?!

Information usage risk - when companies use research to make decisions, there’s
always a risk that the results might not be completely accurate.

For example, the "New Coke" failure happened despite lots of research because the
research itself had flaws.

To reduce this risk, researchers need to show how the study was done and be honest
about its strengths and weaknesses. This means being transparent about:

1. Who was included in the study

2. How the data was prepared
3. What methods were used to analyse the data
4. Any limitations of the research, such as incomplete data

Triangulation - using multiple pieces of evidence to get a complete and balanced

picture. For example, combining different kinds of data might not be "perfect
science," but it still provides useful insights if its limitations are explained.

When companies don’t understand the limitations of research, they might:

• Misuse the findings

• Make decisions based only on the easiest-to-find data

By being transparent, researchers help decision-makers use the results responsibly

and avoid potential mistakes.
QUALITY OF COMMUNICATIONS

Creating an Inspiring Story

Great story has a structure and a context (data in the story to make it come alive),
and they inspire us to act.

1n this section, we will discuss the element in more detail and how we can apply
these 3 rules to our market research reports.

3.3.2 Structure: The Pyramid Principle

The key to making a compelling presentation - using a clear structure, and one
highly effective approach is the Pyramid Principle - principle focuses on delivering a
message like a story—structured, logical, and easy to follow.
In marketing research, your report should follow a narrative: starting with a problem,
presenting insights, and ending with actionable recommendations that "resolve" the
tension.

Common Problem - including too much data

The golden rule is: less is more. A sharper, more focused report is more likely to
keep your audience engaged and lead to action.

The Pyramid Principle

The Pyramid Principle helps structure your report.

- Key Message: starts with the main answer to the research question or the core
recommendation.
- Supporting Insights: 3-7 insights directly back up the key message. Each should be
critical to the argument (any information that doesn’t directly support the main
recommendation should go into the appendix or supporting documents)
- Supporting Facts: added under each insight to strengthen the narrative.

The Rule of Three

Humans tend to remember things in threes. When presenting insights:

• Aim for 3 key points. If you have more than three, try clustering similar points.
• If you have fewer than three, revisit your data to identify a third important
insight.

Context
Once you have structured your story and selected data from your primary research,
you can add contextual insights - insights gained from everything around you that is
not the primary study you are conducting for your client.

These insights come from external, trustworthy sources and are not part of your
primary research. They provide additional depth and help explain trends, consumer
behaviors, or competitive environments.

Contextual insights include information from:

- Competitors' advertising or products
- Market shares, sales data, and demographic trends
- Industry reports, financial news, and online behavioral data
- Academic journals, management consultants, or population statistics

Sources of Contextual Data

Figure 3.5 highlights various sources for contextual data, such as:

How to Collect Contextual Data

One of the most effective ways to collect this data is by "living your client’s brand":

1. Visit stores
2. Look at your client’s advertisements
3. Purchase and try out the product yourself
4. Study competitors’ websites
Contextual insights help bring your report to life and can be used in several ways:

• To set up your story in the introduction by providing industry trends or

competitor financial data to frame the problem
• To strengthen your findings with real-world examples
• To provide case studies that demonstrate successful or unsuccessful strategies

This combination of primary research and contextual data creates a compelling

narrative.

Inspiration to Act

The ultimate goal - inspire stakeholders to act on the insights.

To inspire stakeholders to act, a story must include key elements that enhance its
effectiveness and ensure insights are accepted:
1. Tension - frame insights to highlight a gap between the current state ("what is")
and a better future ("what could be"). This creates urgency and drives action by
addressing challenges or missed opportunities.

2. Relatability- make insights familiar by connecting them to accepted ideas or

known facts. If insights are too unfamiliar, repeat them in different ways to build
acceptance (mere exposure theory).

3. Novelty - highlight new and exciting information to grab attention, as our brains
naturally respond to the unexpected. Avoid presenting only what is already
known.

4. Fluency - ensure clarity and simplicity. Write in an accessible style, using short
sentences and simple words to make insights easy to understand and retain

Enhancing Emotional Engagement - videos, creative formats, mmersive experiences

Recommendations and Power Page

Recommendations differ from insights:

A. Insights - come directly from research and are objective.

B. Recommendations - subjective and based on the researcher’s interpretation of the
insights.

Clients often have more background knowledge about their industry than the
researcher and may challenge the recommendations provided. Even so, clients expect
recommendations because they help guide action, even when the researcher doesn’t
have full knowledge of the company.

It is important to:

1. State that recommendations are based on your judgment and limited

knowledge.
2. Use phrases like:
- “If I were in your shoes...”
- “These insights lead to potential growth opportunities. One way to explore them
is...”

To ensure alignment, consider holding a workshop with the client before finalising
recommendations.

Power Page - high-impact way to present recommendations, appreciated by clients

and often used by management consultants. It focuses on the monetary impact of
recommendations and includes 3 key elements:

1. Visual Summary - picture showing the key insight that drives the
recommendations.
2. Recommendations List - 2-4 actionable recommendations that follow the
MECE principle:
- Mutually Exclusive: No overlap between recommendations.
- Collectively Exhaustive: Together, they cover all possibilities.
3. Financial Impact Graph - graph showing the expected financial impact of
each recommendation.

Executive Summary

Executive Summary - one of the most crucial parts of a report, as many stakeholders
don’t have the time to go through lengthy presentations.

If they only look at 1 page, it should be the Executive Summary.

It should answer two key questions

• "So what?" – Why do these findings matter?
• "Now what?" – What should the client do next?

Key Features of a Good Executive Summary

1. Conciseness:
- It should take no more than 15 seconds for someone to scan
- Use clear sentences to improve readability
 2. Structure:
- Use 3-5 main bullets, each summarising a critical point, with 2-3 sub-bullets.
- Each bullet should function as a future headline
3. Exit Principle:
- Present the key reason upfront in each bullet
- Avoid long sentences

Why It Matters- strong Executive Summary not only improves how findings are
communicated but also enhances the audience’s confidence in the researcher’s
conclusions.

Attention to Detail

The goal - ensure your slides are professional, clear, and visually appealing.

Best Practices for Presentation Design

1. Focus on Visual Appeal -maximizing white space

2. Incorporate Visual Elements
3. Effective Titles
4. Present Data Creatively
5. Relevance to the Audience
• One Insight per Slide:
• Short Titles
• Page Numbers

Advisor Credibility

Messenger (the person presenting the findings) and the message are critical for
effectively communicating results.

Key Qualities That Build Credibility

1. Expertise - the presenter must be seen as an expert in the field.

2. Confidence
 3. Similarity - when the presenter is perceived as similar to the audience, they are
viewed as more trustworthy, which builds acceptance

Trust - vital in identifying and solving the right business problems and ensuring
stakeholders accept the insights.

Trust is built through:

• Open Communication

• Reducing Information Risk

Trust relies on expertise, dependability, and integrity, as well as delivering on

promises. These qualities help ensure stakeholders feel confident in the presenter's
ability to provide actionable recommendations.

The person who conducts the analysis is not always the best one to present findings.
The presenter must:
- Be trusted and persuasive, especially when speaking to senior executives.
- Align with the audience’s preferences and communication style.
The Greek Principles of Persuasion

To effectively communicate insights, 3 classical rhetorical principles—ethos, pathos,

and logos—must be considered

1. Ethos - your personal integrity and competency, demonstrates knowledge and

expertise to make findings believable

2. Pathos - emphatic side, how well you are in alignment with the emotions of
your audience.

3. Logic - reasoning part, how well you structure and make your arguments so
that people believe them to be true

Understanding Your Audience: intuitive Versus Analytical Decision Making

1. Different Presentations for Different Audiences

- Senior executives need concise, high-level insights, often in the form of a one-
page executive summary.
- The challenge arises because researchers don’t always have direct access to
executives. Their insights often pass through layers of middle management,
which can leave out crucial findings.
 2. Role of Intuition in Decision-Making
- Intuition plays a significant role in decision-making.
- Good presentation needs to hit on both the rational and emotional aspects to
influence decisions.
- Example: highly analytical report failed to inspire LinkedIn executives until they
physically visited the study respondents to better understand their context.

4 Key Aspects of Audience Understanding

1. What does your audience care about?

- Stakeholders focus on 3 things: what’s working, what’s not, and opportunities
for growth

2. What’s already on their mind?

- Align findings with the stakeholders’ short-term and long-term priorities.
3. What level of detail is needed?
- The higher the audience’s rank, the less detail they need.
4. What decisions are they responsible for?
- Understand what matters most to your audience's role.
QUALITY OF IMPACT

Translating Insights into Business Growth Ideas

There are four key revenue drivers that affect a company's profit:
1. How man people buy our client's product: Increase the number of people
purchasing the product by targeting new consumer segments or entering new
markets

2. How many times they purchase the product: Encourage existing customers to
buy more frequently by offering additional occasions or increasing product
availability

3. How many product they buy each time: Promote bulk purchases by offering
incentives like "buy two, get one free" deals
4. The price they pay: Enhance the perceived value of the product by adding new
features

The key takeaway - each insight should align with one or more of these drivers to
demonstrate how it can contribute to revenue growth.

From Insights to Action Through Workshops

Workshops - key tools in marketing research to bring insights to life, develop new
ideas, and implement recommendations.
Running a workshop requires preparation both the chef (planning and creating) and
host (delivering effectively).

Key Steps for a Successful Workshop

I. Define the Purpose

II. Plan and Prepare
III. Facilitation Skills - great facilitator understands the business, engages
participants, and ensures the workshop achieves its goals

Tips for Running an Effective Workshop

- Provide clear, simple, and visual instructions
- Embrace constructive conflict, as differing views can spark creativity
- Keep energy high
- Use visuals, sensory elements, and music
- End by discussing next steps

Types of Workshops in Marketing

• "Bringing Insights to Life" Workshops - aim to energise participants and help

them fully understand and experience insights, often used in segmentation studies.

• Ideation Workshops - focus on generating new product ideas based on research

insights, requiring skilled facilitators

• Activation Workshops - business-oriented workshops involve decision-makers

and focus on how to implement and act on research recommendations

Driving Decision Quality

After the results and insights, we need to ensure the actual and the correct usage of
the results.

Factors that affect decision quality:

- Outcome and insights uncertainty and how it is managed

- Having "making good decisions" processes
- Leveraging decision support
Outcome and Insights Uncertainty
Mistakes can happen even when decision-makers use results. There are 2 types of
uncertainty:
 1. Outcome Uncertainty
- When the data or analysis methods are not reliable
- Caused by low-quality data or unreliable models
- Example: If data is incorrect, decisions will be wrong
2. Insights Uncertainty
- When the insights themselves are incomplete, or people interpret them
differently
- Example: people in surveys or focus groups often overestimate how much they
are willing to pay
- Insights need to be tested to avoid relying on assumptions

Making Good Decisions Processes

Insights often don’t reach all decision-makers or may not be used effectively.
To prevent this, there should be a clear process for planning and reviewing decisions.

What to Do
- Create clear plans
- Include relevant insights, consumer trends, and data in these plans

Why It’s Important

- Prevents decisions from being misinterpreted or unused
Reviewing Plans
- Regularly review how insights support plans
- Test approaches on a small scale

Leveraging Decision Support Tools

DSTs - tools (Excel-based models) that make insights easier to access and apply.

They offer several benefits:

1. Easy access to huge amount of data

2. Reduces mistakes

3. Simulations - allows testing of hypothetical scenarios to predict outcomes

 Follow-Up

Maintain client relationships and potentially start new projects.

Follow-up research could track brand equity, positioning, or innovation performance

Challenges: Researchers often get busy with new projects and forget to follow up

How to Conduct Follow-Ups:

- Sending a quick email, text message, or making a phone call
- Sharing relevant articles, thoughts, or examples
Many companies document the project’s success in a one-page business case study,
which can:

- Showcase the business issue addressed

- Highlight the research methods and solutions used
- Explain the impact of the recommendations
These case studies can be used in proposals within the organization.

Adding inspiring quotes or impactful client feedback makes the case study more
engaging and credible.
 7.3 MARKET SEGMENTATIONS STUDIES

Purpose - identify groups of customers (segments) with similar needs, behaviors, or

preferences.

Difference From U&A Studies - while both aim to grow a business, segmentation
focuses on understanding how customers differ (heterogeneity) to create more
appealing offerings.

Terminology and Concepts

Market Segmentation - assumes that the target market is heterogeneous, meaning

different segments exist based on needs, attitudes, or behaviors.

To segment the market, we need to decide what variables (factors) to use.

Active Variables - directly used in the analysis to identify segments

Examples
- Consumer needs and wants
- Attitudes and lifestyles
- Behaviors (heavy vs. light users)
- Psychographics (values, personality)
- Demographics (age, income) or firmographics (for businesses)
Passive Variables - not used to create the segments but used later for interpretation

Example - after creating segments, we calculate the average age or income in each
segment to better understand them.

Types of segmentation

1. Needs-Based Segments -based on consumer needs. Example: coffee drinkers

- wants high-quality regular coffee
- wants a mix of regular and decaf at a reasonable price
- prefers flavoured coffee occasionally
2. Behavior-Based Segments - how consumers use or behave with a product.
Example: skincare users
- moisturising daily
- uses products for specific benefits
- uses products for tanning effects
 3. Attitudinal and Psychographic Segments - focus on lifestyle, values, or
attitudes. Example:
- A survey asks how much consumers agree with statements about technology,
health, or personal aspirations
- Responses are grouped to reflect shared attitudes or lifestyles

4. Attribute Importance Segments - based on what consumers value most in a

product’s attributes. Example:
- For coffeemakers, consumers might prioritize brand, price, capacity, or design
5. Demographic/Firmographic Segments - based on demographic (individual)
or firmographic (business) data. Example:
- Age, gender, income, or job title
- LinkedIn uses career stages
- Cigarettes or vitamins can also be targeted by gender or age groups
6. Occasion-Based Segments - situations where a product is used or consumed.
Example: Chocolate consumption: different segments might include people
wanting:
- Energy (black segment)
- A premium treat (purple segment)
- Family sharing (brown segment)
7. People-based segmentation - consumers holistically based on attitudes,
lifestyles, or behaviors (best for communication strategies)

8. Product-Based Segmentation (Multidimensional Scaling) - groups

products based on how consumers perceive their similarity or co-occurrence
(best for finding white spaces and inspiring product innovation)

Choosing the Right Segmentation Type

The choice depends on your objectives

• Advertising strategies: Use attitudinal segmentation
• Repositioning brands: Use occasion- or needs-based segmentation
• Developing new products: Needs-based segmentation is better

Often, multiple types of segmentation are combined to better meet business goals.

The Application of Segmentation

Once a company identifies effective segmentation, they can use the insights for
several purposes:
1. Category Growth - identifying unmet needs or "white spaces" in the market.
Example: chocolate company discovered a segment craving luxury indulgence
and they introduced a premium chocolate

2. Brand Strategy - understanding how different segments use a brand and

comparing it to competitors.

Example: the same chocolate company optimised their portfolio to target

different segments, such as sharing with friends and this led to increased sales

3. Product Development - creating products that match segment needs

Example: beer drinkers worried about calories inspired low-calorie beer brands
with fewer calories

4. Pricing Strategy - adjusting prices to match the sensitivity of different

segments.

Example: last-minute buyers pay higher fares than those who book early

5. Media and Communication Allocation - personalising communication to

specific segments.

Examples: pet food company targeted cat owners and puppy owners with
different ads.

6. Channel Optimization - focusing on the most relevant distribution channels for

a segment.

Example: beauty company found their fastest-growing segment (young girls)

preferred YouTube and shifted

The Segmentation Marketing Research Process

Challenges of Segmentation Studies

• Stakeholder Familiarity - some stakeholders may not fully understand how

segmentation works
• Unstructured Process - there’s often no clear way to measure whether the
segmentation is effective
• Complex Implementation - developing specific strategies for each segment
requires significant resources
Steps of a Market Segmentation Study (Table 7.2)

Stakeholder interviews

This ensures the segmentation research aligns with their needs

The interviews help decide:
- The specific segmentation tool to use
- A detailed plan for the next phases of the research
Design of the Study

Focuses on creating the structure and methods for the segmentation research.
1. Decide if Qualitative Research is Needed
2. Develop a Survey

Topics to Cover in a Segmentation Survey:

1. Screener, Demographics, and Profiling Metrics

2. Behaviors and Activities: what do consumers do in the product category
3. Needs and Wants
 4. Values and Category Attitudes: questions about general life views or specific
attitudes toward the product category
5. Competitive Landscape: brand awareness, consideration, and perception.

Data collection

General Rule: At least 800 to 1,000 respondents are needed for a robust segmentation
study.
Typically, researchers identify 4 to 5 segments.
To ensure each segment is economically viable, it should represent at least 15% of the
total sample.
This means each segment would ideally include 120–150 respondents, allowing for
accurate analysis.

Common methods:
- One-way ANOVA
- Chi-square analysis
Analysis

Find meaningful market segments that are:

• Similar within each segment

• Different between segments

The best segmentation research exhibits a balanced blend of marketing science,

artful insight, and pragmatic usefulness.

In Table 73 we outline the key steps in segmentation analysis

Characteristics of a Good Segmentation Solution

1. Measurable - segments should be quantifiable in terms of sales value, volume,

or size to allow for accurate strategic planning.

2. Substantial - segments must be large and stable enough to justify marketing

efforts and investment.

3. Accessible - the company must be able to effectively reach and engage the
segment within its marketing capabilities.

4. Differentiable - segments should be internally similar but clearly distinct from

each other to allow tailored marketing without overlap.

5. Actionable - segments must provide practical insights to inform marketing

strategies and deliver measurable outcomes.
Improving Segmentation Solutions

• Add External Data - add information that can be found on social media
 • Use Multiple Sources - link the data to other databases if you make sure that
you can link the data in your questionnaire

Development of the typing tool

Typing tool - predictive model that classifies customers into specific segments based
on their characteristics

Goal - identify a small set of key variables that effectively predict segment
membership

Why is a Typing Tool Important?

• Targeting Advertising
- If membership can be predicted using demographics/media usage, firms know
how to target segments with ads
- Example: Knowing young users spend time on TikTok helps target them with
relevant ads

• Utilising Customer Databases

- If predictor variables (like age, location) exist in the database, the model can
automatically assign customers to segments

• Personalization
- Example: mobile provider used segmentation to identify premium users and
offered them free phone replacements, while casual users had to pay

• Future Surveys
- Once the key variables are identified, they can be included in future surveys,
making it easier to classify respondents into segments

A typing tool ensures segmentation insights are actionable by enabling firms to:

1. Predict segment membership

2. Personalise marketing or services
3. Use existing customer data to apply segmentation effectively

Activation of the Segmentation

Segments are communicated and implemented within the organization.

The goal - ensure that the segmentation insights are understood, actionable, and
embedded into the company’s strategy.

Steps in the Activation Process:

1. Present the Segments to Stakeholders - use interactive methods to "bring

segments to life," such as role-playing scenarios or immersive presentations
2. Embed Segmentation in Business Processes - organization must apply
segmentation insights into marketing, product development, and strategy

The 8 Rules of Successful Segmentation Research:

1. Know the Objectives

2. Involve Stakeholders
3. Choose the Right Approach
4. Start with Qualitative Insights
5. Develop a Balanced Questionnaire
6. Perform Thorough Analysis
7. Bring Segments to Life
8. Embed the Results