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Glossary of Market Research Terms


Market Research has some specialized terms that you must know the meaning of in order to be able to understand the market research reports. It is also fundamental for management to know these terms to be considered knowledgeable in certain sectors such as advertising, research, and computers. Here is a short checklist of the basic terms that you should become familiar with.

Attitude Statements
Cluster Analysis
Conjoint Analysis
Demographics
Demography
Desk Research
Family Life Cycles
Forecasting
Geodemographics
Image Statements
Market Mapping
Market Segmentation
Marketing Information System
Modelling
Multivariated Techniques
Paired Comparison Test
Psychographic Analysis
Regression Analysis
Sample
Sampling
Trade-off Models


Attitude Statements
A psychological concept designed to evaluate and investigate values, beliefs and motives for different forms of behavior. Developing statements to describe your company, its products and services compared with those of your competitors provides the means of creating a control or standard. Consumers can be asked wheter they agree or disagree with the attitudes and following the changes in time.

Cluster Analysis
A technique for establishing whether a group of people have similar attitudes or characteristics, which help to define or confirm subsegments of a market. It is a technique of multivariate analysis, that identifies groups of individuals that have similaries and differences from each other. This technique helps define which types of products suit different types of of consumer, and also helps determine whether communications can be developed for reaching specific market segments.

Conjoint Analysis
A method for evaluating consumer preferences among product concepts, which vary in respect to several attributes. It is based on asking people to rank product concepts they most and least prefer. Use of this analysis helps to develop data on how certain types of customers have a preference for purchasing and using certain types of products. It will help define what is the ideal for customers because of how well the product meets their needs.

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Demographics
Sex, age, and social grade are the key parts of the classification data in research, and comprise the demographics of the market being researched. It is fundamental for defining a market initially to know who are the currect and potential customers are. Customers are not a homogenous mix. There are different cultures and regional languages, and they vary from recent arrivals to established generations. Demographics comprises selected characteristics of a population (age and income distribution and trends, mobility, educational attainment, home ownership and employment status, for instance) for purposes of social studies. It is also used in marketing, marketing research, opinion research, political research, and the study of consumer behaviour.

Demography
The science that studies the characteristics of human populations, such as size, growth, density, distribution, and vital statistics. The term demography should not be confused with demographics, which comprises selected characteristics of human populations and population segments, especially when used to identify consumer markets.

Desk Research
Desk research is based on the use of secundary data, collecting published information relevant to the markets and products of your interest. Collecting this information may be important for understanding markets and can help in the design of survey research, specially in preventing survey duplicating the collection of data that is already available.

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Family Life Cycles
Stages in the development of families, such as young sigles people, young couples, family early stages, couples with children, family at home, mid-life stage, older people without children, and the late stage.

Forecasting
Estimating the ocurrence of an event in the future. It may also be a prediction mode using a mathematical model, or an extrapolation made from curent trends. Forecasting is important as a techenique in a defined market, which can be tracked by monitoring key facts, habits, and activities of the market that is being analyzed. Forecasting is particularly useful as a way to evaluate products and product performance in when the design or formulation is changed to alter the sales or the market.

Geodemographics
A method of classifying households based on the multivariate analysis of data from the Population Census. The practical application of geodemographics classifications is frequently based on on computer matching of addresses to district classifications by means of the postcode or zipcode. Geodemographics is useful in direct marketing, retail planning, development of promotions, and specific marketing activities for monitoring markets or ethnic groups.

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Image Statements
Consumers perceptions and impressions of a company, a product, or a service expressed in a clear way are called image statements. They are useful for establishing how close to, or how far away, the ideas, concepts, and strategies are from consumer needs.

Market Mapping
A market map which shows the relative positions of the products in the market, and consumer characteristics. It is the most effective method for resuming the findings of attitude research. There are two main applications for market mapping. One is to draw up, literally, the structure of a market and to add to the map the facts about each level of the market, such as sales volume, the classification of customer types and other data. This technique is very good for understanding a market more clearly. The second application is to use the results of survey research and to plot them in the form of a map showing the relationship between defined customer types and the attitudes as they are described, or listing the product attributes as rated by the customers. This second technique is good for developing a product or a communications strategy in sophisticated markets where it is important to develop strategies to respond to consumers changing and demanding needs, in order to counter competitive threats.

Market Segmentation
To divide a market using classifications or market facts. A very important marketing technique, market segmentation is a key tool before and after performing market research. It allows customer types and their various needs to be analyzed, interpreted and monitored effectively. It assists in understanding how the market divides and how the customers behave in different ways to meet their different needs.

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Marketing Information System
MIS for short, refers to all the information available to management, together with the hardware for its processing, storage, and retrieval. Reports from all departments, market research, and market intelligence are all part of the MIS, or Management Information System.

Modelling
A model is a summary of observations, including mathematical models. Modelling is a way of imitating or copying the market forces and testing out changes in the market, then observing the effects that result. This technique is particularly effective in product and service research. Modelling allows to anticipate market changes and move quickly once the effects of your competitors activities are reproduced and analyzed in the model.

Multivariate Techniques
These are techniques that examine the relationship among a number of variables. They include analysis of variance, multi-regression, factor and principal component analysis, cluster analysis and dicriminant analysis.These techniques are applied to survey analysis and provide management with the opportunity to product and communication planning.

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Paired Comparison Test
This is a test to compare two products ors samples, with the purpose of getting a user or buyer to discriminate between them or to identify changes or improvements. It is an important technique for developing data to identify users and buyers attitudes to competitors products and establishing perceived benefits of your own products.

Psychographic Analysis
A segmentation technique that classifies people into groups based on their behavior or attitudes. This application is becoming more and more important as because it helps to classify and group customers in a market, reflecting their needs based on their preferences and buying habits. It helps to make communications more direct and relevant, and to make market analysis more realist in the context of getting to know the customer.

Regression Analysis
A statistical method of calculating an equation which is applied to a set of bivariate or multivariate observations. It is a useful technique for analysing different market segments to identify whether any of the subgroups of customers have any similarities in behavior, attitudes or preferences.

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Sample
A representation of the whole, whose purpose is to enable the investigation of the characteristics of the population. It is comprised of parts or subsets of the population being researched. Survey research depends on getting this right, as a survey completed with the wrong type of population is worthless.

Sampling
The technique for selecting a sample. It depends on setting up a sampling frame and identifying sampling units, which comprise a population. Survey research is only successful if the sampling is completed correctly and well.

Trade-off Models
A technique to discover the most attractive combination of attributes for a product or service, by the respondent expressing a preference for one or another alternative. It is an important technique for understanding clearly why people buy, how they evaluate whether the product or service that is offered corresponds with their needs, and the way in which they decide on making the purchase.

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