The Bystander Effect

Market Research is closely tied to the studies of psychology. The basis of market research is to understand why consumers make the choices they do, and their thought processes/ influences. A psychology theory that fascinates me is the bystander effect. This is the theory that when someone is in distress and there are lots of people around, nobody helps because they think someone else will. Watch the video below and see how this is true, but also the light of hope there is for society to change this theory.

So, how does this connect to marketers and market research? The major lesson that connects to the business world is the power of influencers. People will not normally do something until they see other people doing that action. Those people who do react first are known in the business world as innovators. They are the first to buy and try the newest products then tell their friends about them. Many companies have identified these innovators in their target market and have given them the product for free in hopes that his/her friends will purchase the product. This has been proven to be pretty successful when the innovator is passionate about the product.
While market research and psychology are two different industries, there are so many lessons to be learned from psychology that can help improve a company’s marketing strategy!

GutCheck!

Here is another example of how powerful the internet is for any company to get valuable information for very little cost. GutCheck is one the latest tools companies are using to hold focus groups over the internet. It allows market researchers to interview people one on one via an instant messenger platform, or do an entire group on the instant messenger platform. One of the largest challenges with focus groups is that there are always one or two people who will dominate the conversation. This tool allows market researchers to talk to everyone individually and get the most out of all of their participants. 

Another huge factor is diversity in geographic locations. Unless marketers are willing to spend the money to do focus groups across the country, the group is not very representative of the country. This could potentially skew the results of the focus group. Lastly there is costs. As the video below mentions it costs on average $700 per participant, whereas GutCheck is $40 per participant.

The only downside to this website is, the participants are actively online and willing to participate. Which means there might be a demographic/ psychographic that may be missing from this area. However, every tool has their downsides, its up to the market researcher to fill in the missing pieces with other tools!

To learn more about GutCheck check out their website at gutcheckit.com

Using Social Media for Market Research

As we know or can probably guess, social media has opened the doors to a two way road between marketers and consumers. Marketers can no longer push a message on the consumers without hearing feedback as well as consumers have a much stronger voice in the online world which forces companies to be more proactive and communicate with their customers in this online Community. Below is a video I found that shows social media is an asset to another department of the marketing group: the market research folks-

  As David C Skul of Relativity an internet market firm says in the video- social media is a great way to converse with customers as well as get very detailed demographic information. A profile can tell the market researcher so much information that it helps them narrow down who to talk to, or who is talking about their products in the social media world. 
   A company might think they need to target 14-19 year old males who play video games, however through research on social media sites like FaceBook and Twitter, that company may realize their actual market is 17-24 year old males who are active members of a community. This understanding will allow companies to market to their actual audience and connect with that audience. 

Next in Line- The Mystery Shopper

The mystery shopper technique was developed in the 1940's by companies that wanted to know what the customer experience was in their stores. It was started by banks to ensure the tellers were being honest and ethical when dealing with any of the customers. Since then it has evolved to become a popular way of collecting data from consumers and help improve the quality of customer service. Now instead of just making sure employees are representing the company in a good light, they use mystery shoppers to share their experiences shopping in the store. For example, what caught their eye, how they felt about the set up, how the prices are displayed, how many employees were present at the store. As we know in the eye of the market researcher, the customer is an always changing topic. To answer difficult questions like this, the best way is to send a mystery shopper in with these questions in mind and to report back their feelings. The reason they are a mystery shoppers is because if the store knew they were coming in, it would skew the results and feelings of the shopper. When the employees don't know they will act like they normally do. This is a great way to keep control over the experiment. 
I really like this kind of technique because the mystery shopper is a consumer so they are giving genuine insights as to what their experiences are and how they think the company can improve. Like social media, this is market research's form of communicating with the consumers/public. 

A different way of looking at the data

    Ever get bored of the same old pie chart or graph to represent the data found? While going through my Google Reader today, I found a really cool article about market research companies starting to show data in a unique way! Check out the images below:

Poll results of Danish Opinion about wearing religious symbols in public professional jobs. (38% think its unethical for women to go to work with the head piece, 42.5% think its unethical for school teachers and educators to wear traditional Islamic headpieces at schools, 46% think its unethical for nurses and doctors to wear Islamic headpieces, and 66% think its unethical for judges to wear traditional head pieces.) Flowing Data

     This image represents the amount of changed behavior Danish people have experienced due to gang related crime. For more visual representations check out Behance Network's website

I am more interested in figures that are displayed in a unique way than just the traditional pie chart or graph. Wouldn't you agree?

Valentine's Day Special

   Valentines day is just a day away and the malls are packed with last minute purchases for their loved ones. The National Retail Federation is estimating revenue of $15.7 billion for this year's Valentines Day. Thanks to social media, there were many surveys distributed that people responded to. The results to some of the questions were very interesting. The first survey was done by Joseph, a blogger for Education Insights (Degreeseeker.org blog). Flowers was the number one gift that will be purchased on Valentine's day with a whopping 56.2% of survey takers  intending on buying that for their significant other. The statistic that caught my eye was the one for the question- Are you planning on celebrating Valentine's Day? 41.9% of those surveyed said they were not going to celebrate. I think this number is getting larger each year as companies keep pushing the envelope for how much someone should spend on their significant other. The best reason for not celebrating I have heard is, "I don't need one day to tell you how much I love you"- best reason ever!
      The second survey was conducted by Mashable about love and how people celebrate Valentine's Day. Below is the infographic Mashable created to illustrate the results:

   As we can see sending your significant other something at work is not the best idea, more people want a private celebration of Valentine's Day. Again, flowers are the number one gift that will be given this Valentine's Day so expect to see lots of flowers tomorrow! 

Data Mining to the Extreme

    All around us companies are collecting data about our spending habits, eating habits, and behaviors. This information is then stored in databases in each company. This process is called data mining. Analysts can pick certain things to follow and soon they will identify trends in their customers. For example, they can track how many times ice cream cones are purchased in a store. They organize the data which they then make conclusions about. So with the ice cream, they may notice that more ice cream is sold during the months of July and August. After gaining this knowledge marketers can create campaigns either during this time or in the “low season” to boost sales. There are so many different trackers that companies may follow. The master in data mining would be none other than Wal-Mart. The internet has less than half of the data the Wal-Mart databases hold!

    Wal-Mart tracks all purchases, they have the purchases connected to credit cards when applicable, and with cameras they track how people move about the stores as well as they have ways to obtain information about the customers themselves. Being one of the few places people can go to cash their checks without a bank account. The customers cashing checks must submit their social security number, a driver’s license number and a home address. Additionally, Wal-Mart sees the companies they are working for, the amount of money they cash each week (or month) which gives them even more data about their customers. Wal-Mart made the realization that there was an enormous increase in Strawberry Pop-Tart sales right before a hurricane.
    Data mining is a fantastic tool to understanding the customer in your store as well as what types of customers shop at your store. 

What Do Consumers Really Think?

 Sentiment Analysis is a tool that allows companies to see what people are saying about them. In the past, they have had to do surveys, polls, and focus groups to understand what people think about their company. The only challenge is, people may be biased or not truthful during the survey/interviews which has skewed the results for companies. With social media and people freely saying what they feel, companies can have a better grasp on what people think about them. 
 Sentiments types can be analyzed automatically by different platforms available, it can be analyzed by humans, or a hybrid of both. Once these are analyzed and documented, the program (or people analyzing) can create a report to share that gives everyone in the company a good understanding about what most people are saying about the company. For more in depth information on the analyzing check out a presentation given at the Text Analysis Summit in Boston.
In most cases, companies can alter their marketing strategies to work on common problems they have found through this information, or use things people love about the company in their marketing campaigns.More and more researchers are using this tool. Not only does it filter through data to help researchers understand all the information, it can take in infinitely more information then traditional routes. Below is an example of the easy to read results sentiment analysis can give you-

Want this software? SAS was recently named best Sentiment Analysis Software! Click here to find out more!

Gallup!

One of my favorite places to get information from is Gallup. They have been doing consumer behavior research for 75 years and have become one of the most respected research firms in the country. 
One study they constantly do is the unemployment rating and what people are thinking who are unemployed. This is a study I follow because in just a few short months I will be heading out into the workforce and I like to keep tabs on what is happening out there. Gallup has just reported that the unemployment rate is currently at 9.8% (up by only 0.2%) from last month. This is almost a whole point down from this time last year when the country was at a 10.9% unemployment. The graph below shows the unemployment level over the past year. 

The reason Gallup is one of the most trusted companies is that they give their survey methods and a margin of sampling error (calculates any errors that might have occurred) right on the page. For more information on this report and more articles please visit Gallup's website!

Online Surveys = Best Way to Start Market Research

   Online surveys are easy to make, distribute, and collect data from. On top of all that they are the cheapest form of market research. I believe using online surveys is the best way to start off a research project because you can ask a wide variety of questions. In this exploratory phase they can identify points of interest and focus the rest of their research on those points. So, instead of focusing on economic factors in decision making, they focus in on a social influencer on decision making (ie friends, parents, celebrities influencing a purchase decision). It can also cut down on the amount of research done. It might just take an online survey to determine why everyone has stopped going to a specific store. If everyone said the same thing, then there is no reason to go any further into research than the survey. Which saves money for the company! 

   Greg Timpany of Cvent Survey agrees that online surveys has allowed even the smallest of companies to jump into market research, because it is easy to use and inexpensive. Cvent Survey is a great place to learn about online marketing and how to do it properly (through their blog) as well as they offer a service to companies to do their web surveys for them. Great thing to check out if you are a beginner surveyor!