CLOSEDEND QUESTIONS NAME DESCRIPTION
A. CLOSEDEND QUESTIONS NAME DESCRIPTION
Dichotomous
A cluestion offering two answer choiees.
Multiple choice
A question offering three or more choiees.
Likert scale A statement with which the respondent shows the amount of agreement or disagreement.
Re man tic A scale is inscribed between two bipolar words, and the respondent selects the point differential
that represents the direction and intensity of his or her feelings.
Importance scale A scale that rates the importance uf some attribute from 'not at all important' to 'estremely important'.
Rating scale
A scale that rates some attribute from 'poor' to 'excellent'.
Intentiontobuy scale A seale that describes the respondent's intention's to buy.
B. OPENISND QUESTIONS NAME
DESCRIPTION
Completely unstructured A question that respondents can answer in an almost unlimited number of ways. \Vbrd association Words arc presented, one at a time, and respondents mention the first word that comes
to mind.
Sentence completion Incomplete sentences are presented, one at a time, and respondents complete the sentence Story completion
An incomplete story is presented, and respondents arc asked to complete it. in me the following thoughts and feelings.' .Vote complete the story.
Picture completion A picture of two characters is presented, with one making a statement. Respondents are asked to identify with the other and fill in the empty balloon.
Thematic Apperception A picture is presented, and respondents are asked to make up a story about what they Tests (TAT)
think is happening or may happen in the picture.
Developing Information • 337
338 • Chapter S Market Information and Marketing Research
Figure 8.3
Ninety types of demand measurement ( 6 x 5 x 3 )
and total sales); five different apace levels (customer, territory, country, region, world); and three different time levels (short range, medium range and long range).
Each demand measure serves a specific purpose. A company might forecast shortrun total demand for a product as a basis for ordering raw materials, plan ning production and borrowing cash. Or it might forecast longrun regional demand for a big product line as a basis for designing a market expansion strategy.
Defining' the Market
Market demand measurement calls for a clear understanding of the market involved. The term market has acquired many meanings over the years. In its original meaning, a market is a physical place where buyers and sellers gather to exchange goods and services. Medieval towns had market squares where sellers brought their goods and buyers shopped for goods. Markets still dominate retailing in the Third World and remain in many towns, but most of today's buying and selling occurs in shopping areas.
market
To an economist, a market describes all the buyers and sellers who transact The set of all actual and
over some good or service. Thus the softdrink market consists of sellers such as potential buyers of a
CoeaCola, PepsiCola, Tango and Lilt and all the consumers who buy soft drinks. product or service.
The economist's interest is the structure, conduct and performance of each market.
Indus try To a marketer, a market is the set of all actual and potential buyers of a ,4 group of firms which
product or service. A market is the set of buyers and an industry is the set of offer a product or L'kus.s
sellers. The size of a market hinges on the number of buyers who might exist for a of products that are
clout substitutes far each particular market offer. Potential buyers for something have three characteristics;
other. The set of all
interest, income and access.
sellers of a produce or Consider the consumer market for Finnish Tunturi exercise cycles. To assess service.
its market, Tunturi must first estimate the number of consumers who have a potential interest in owning an exercise bike. To do this, the company could
Defining the Market • 339
Potential market
Availably market
Qualified available n
Potential market
Served market Penetrated market
A. Total market
B. Potential market
Figure 8.4
Levels oC market definition
contact a random sample of consumers and ask the following question: 'Do you potential market have an interest in buying and owning an exercise bike?' If one person out of ten
The set of consumers says yes. Tunturi can assume that 10 per cent of the total number of consumers
'who profess sonic level would constitute the potential market for exercise hikes. The potential market is
of interest in a the set of consumers who profess some level of interest in a particular product or
particular product or service.
service. Consumer interest alone is not enough to define the exercise hike market.
Potential consumers must have enough income to afford the product. They must available market
he able to answer yes to the following question: 'Would you pay Fmkl ,000 for an The set o/consumers voho have interest,
exercise hike?' The higher the price, the lower the number of people who can income and access to a answer yes to this question. Thus market size depends on both interest and
panivuliir produce or income.
scrvice. Access barriers further reduce exercise hike market size. If Tunturi has no
distributors for its products in some areas, potential consumers in those areas are qualified available not available as customers. The available market is the set of consumers who
market have interest, income and access to a particular product or service.
The set of consumers Tunturi might restrict sales to certain groups. Excessive repetitive exercise
izho have interest, can damage young children, so sale of exercise hikes to anyone under 12 years of
income, access and age may be discouraged. The remaining adults make up the qualified available
qualifications for a particular product or
market the set of consumers who have interest, income, access and qualifica tions for the product or service.
Tunturi now has the choice of going after the whole qualified available market
served market (target
or concentrating on selected segments. Tunturi's served market is the part of the
market)
qualified available market it decides to pursue. For example, Tunturi may decide The pan of the qualified to concentrate its marketing and distribution efforts in northern Europe, where
available market that the winter nights are cold and long. This becomes its served market.
the company decides Co Tunturi and its competitors will end up selling a certain number of exercise
pursue. hikes in their served market. The penetrated market is the set of consumers who
have already bought exercise bikes. penetrated market Figure 8.4 brings all these market ideas together using hypothetical numbers.
The set of consul?!crs who have already
The bar on the left of the figure shows the ratio of the potential market all inter bought a particular ested persons to the total population. Here the potential market is 10 per cent.
product or service. The bar on the right shows several possible breakdowns of the potential market.
340 • C/icipter 8 Market Information and Marketing Research
The available market those who have interest, income and access is 40 per cent of the potential market. The qualified available market those who can meet
the legal requirements — is 50 per cent of the available market (or 20 per cent of the potential market). Tunturi concentrates its efforts on 50 per cent of the quali fied available market the served market, which is 10 per cent of the potential market. Finally, Tunturi and its competitors have already penetrated 50 per cent of the served market (or 5 per cent of the potential market).
These market definitions are a useful tool for marketing planning If Tunturi is unsatisfied with current sales, it can take a number of actions. It can expand to other available markets in Europe or elsewhere. It can lower its price to expand the size of the potential market. It can try to attract a larger percentage of buyers from its served market through stronger promotion or distribution efforts to current target consumers. Or it can try to expand the potential market by increasing its advertising to convert noninterested consumers into interested consumers. Concern over heart diseases means that many middleaged people who have avoided exercise for years are being encouraged to do more. Perhaps Tunturi can work through the health industry to attract these.
Measuring Current Market Demand
Marketers need to estimate three aspects of current market demand: total market demand; area market demand; and actual sales and market shares.