Marketing Research
Chapter 1 Introduction and early phases of marketing research 2
Chapter Outline 3
1) Overview 2) Definition of Marketing Research 3) A Classification of Marketing Research 4) Marketing Research Process 4
5) The Role of Marketing Research in Marketing Decision Making 6) Marketing Research and Competitive Intelligence 7) The Decision to Conduct Research 5
8) Marketing Research Suppliers and Services 9) Selecting a Research Supplier 10) Careers in Marketing Research 11) The Role of Marketing Research in MIS and DSS 6
12) The Department Store Project 13) International Marketing Research 14) Ethics in Marketing Research 15) Summary 7
Definition of marketing research The American Marketing Association (AMA) redefined Marketing Research as: The function that links the consumer,customer,&public to the marketer through information- 8
Used to identify and define market opportunities and problems Generate, refine, and evaluate marketing performance Monitor marketing performance Improve understanding of marketing as a process 9
Marketing research Specifies the information necessary to address these issues Manages and implements the data collection process Analyzes the results Communicates the findings and their implications Helps managers use this information to make decisions 10
Marketing research: Is the systematic & objective identification collection analysis dissemination 11
and use of information for the purpose of improving decision making related to the identification and solution of problems & opportunities in marketing. 12
Marketing research involves : The identification Collection Analysis Dissemination use of information 13
❶We identify or define the marketing research problem or opportunity 14
❷Then determine what information is needed to investigate it. 15
(because every marketing opportunity translates into a research problem to be investigated) 16
the terms problem & opportunity Are used interchangeably here 17
❸Next the relevant information sources are identified and a range of data collection methods varying in sophistication & complexity are evaluated for their usefulness. 18
❹The data are collected using the most appropriate method; They are analysed & interpreted & inferences are drawn. 19
finally The findings Implications recommendations Are provided in a format that allows the information to be used for marketing decision making and to be acted upon directly. 20
A classification of marketing research 21
The organizations engage in marketing research for two reasons 22
To identify To solve marketing problems 23
This distinction serves as a basis for classifying marketing research into 24
Fig. 1.1 Marketing Research Problem Identification Research Problem-Solving Research Market Potential Research Market Share Research Market Characteristics Research Sales Analysis Research Forecasting Research Business Trends Research Segmentation Research Product Research Pricing Research Promotion Research Distribution Research 25
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Problem identification research Is undertaken to help identify problems that are perhaps,not apparent on the surface and yet exist or are likely to happen in the future. 29
Examples of problem identification research include: Market potential Market share Brand or company image Market characteristics Sales analysis Short range forecasting Long rang forecasting Business trend research. 30
Problem solving research Is undertaken to arrive at a solution. 31
The finding of problem-solving research are used in making decision that will solve specific marketing problems. Most companies conduct problem solving research. 32
The different types of issues that are addressed by problem-solving research Segmentation research Product research Pricing research Promotion research Distribution research 33
SEGMENTATION RESEARCH Determine the basis of segmentation Establish market potential and responsiveness for various segments Select target markets Create lifestyle profiles: demography, media, and product image characteristics 34
PRODUCT RESEARCH otest concept odetermine optimal product design opackage tests oproduct modification obrand positioning and repositioning otest marketing ocontrol store tests 35
0.00% APR PRICING RESEARCH Pricing policies Importance of price in brand selection Product line pricing Price elasticity of demand responding to price changes $ALE 36
PROMOTIONAL RESEARCH Optimal promotional budget Sales promotion relationship Optimal promotional mix Copy decisions Media decisions Creative advertising testing Evaluation of advertising effectiveness Claim substantiation 37
DISTRIBUTION RESEARCH Determine Types of distribution Attitudes of channel members Intensity of wholesale & resale coverage Channel margins Location of retail and wholesale outlets 38
Problem identification research & Problem-solving research Go Hand in hand And Given marketing research project May combine both types Of research 39
Marketing Research Process Step 1 : Problem Definition Step 2 : Development of an Approach to the Problem Step 3 : Research Design Formulation Step 4 : Fieldwork or Data Collection Step 5 : Data Preparation and Analysis Step 6 : Report Preparation and Presentation 40
Marketing Research Process Step 1: Defining the Problem Step 2: Developing an Approach to the Problem Step 3: Formulating a Research Design Step 4: Doing Field Work or Collecting Data Step 5: Preparing and Analyzing Data Step 6: Preparing and Presenting the Report 41
Step 1: problem definition In defining the problem, the researcher should take into account: the purpose of the study. The relevant background information The information needed How it will be used in decision making 42
Problem definition involves: Discussion with the decision makers Interviews with industry experts Analysis of secondary data (& some qualitative research such as focus groups 43
Once the Problem Has been defined The research Can be Designed And Conducted properly 44
Example New Cook case 45
Step2:development of an approach to the problem includes: Formulating an objective or theoretical framework Analytical models Research questions Hypotheses & identifying the information needed. 46
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Step 3 :research design formulation A research design is a blueprint for conducting the marketing research project. 48
Formulating the research design involves: Definition of the information needed Secondary data analysis Qualitative research Methods of collecting quantitative data Measurement & scaling procedures Questionnaire design Sampling process & sample size Plan of data analysis 49
Step 4 :fieldwork or data collection involves: A field force or staff that operates either in the field (personal interviewing from office by telephone through mail or electronically). Proper selection Training Supervision Evaluation of the field force help minimize data collection errors. 50
Step 5:data preparation and analysis includes: Editing Coding Transcription Verification of data Each questionnaire is inspected or edited or corrected The data from the questionnaires are transcribed onto disks The data are analyzed to derive information related to the components of the marketing research problem Provide input into the management decision problem. 51
Step 6:report preparation and presentation The entire project should be documented in a written report that addresses the specific research questions identified 52
Describes the approach The research design Data collection Data analysis procedures adopted Presents the results & the major findings In addition an oral presentation P:11 53
The role of marketing research in marketing decision making 54
Fig. 1.2 Controllable Marketing Variables Product Pricing Promotion Distribution Assessing Information Needs Customer Groups Consumers Employees Shareholders Suppliers Marketing Research Providing Information Marketing Decision Making Uncontrollable Environmental Factors Economy Technology Laws & Regulations Social & Cultural Factors Political Factors Marketing Managers Market Segmentation Target Market Selection Marketing Programs Performance & Control 55
EXAMPLE: J & J S GENTLENESS COULD NOT HANDLE PAIN 56
J&j is considered to be the world s most broadly based manufacturer of health care products. 57
Despite its success in the industry j&j s attempt to use its company name on baby aspirin proved to be unsuccessful 58
J&j baby products are perceived as gentle but gentleness is not what people want a baby aspirin. 59
Although baby aspirin should be safe genteelness per se is not a desirable feature. 60
Some people perceived that a gentle aspirin may not be effective enough. 61
,marketing managers make numerous strategic & tactical decisions in the process of identifying and satisfying customer needs. 62
These decisions are complicated by interactions between the controllable marketing variables of product pricing promotion & distribution. 63
Further complications are added by uncontrollable environmental factors such as general economic conditions. technology public polices and laws Political environment Competition Social Cultural changes 64
Another factor in this mix is the complexity of the various customer group: Consumers Employees Shareholders suppliers 65
Marketing research helps the marketing manager link the marketing variable with the environment &the customer group 66
Marketing research & competitive intelligence 67
Competitive intelligence (CI) The process of enhancing marketplace competitiveness through a greater understanding of a firm s competitors & the competitive environment. 68
The decision to conduct marketing research 69
This decision Should be guided by a number of consideration including: 1. The costs versus the benefits 2. The resources available to conduct the research. 3. The resources available to implement the research findings 4. Management s attitude toward research 70
Marketing research should be undertaken When the expected value of information it generates exceeds the costs of conducting the marketing research project. 71
Resources Especially time & money are always limited If either time or money is not available in adequate amounts to conduct a quality project The project probably should not be undertaken. 72
The marketing research industry P:17 73
The marketing research industry consists of suppliers who provide marketing research services. 74
Marketing research suppliers and services provide most of the information needed for making marketing decisions. 75
Most of the big suppliers have several subsidiaries and divisions that encompass various areas of marketing research. 76
Research suppliers can be classified as internal or external 77
Internal supplier: Is a marketing research department within the firm. Example: coca cola company Colgate Palmolive ford bank of America maintain in-house marketing research department. 78
External suppliers Are outside firms hired to supply marketing research data 79
External suppliers can be classified. Full-service suppliers Offer the entire range of marketing research services : problem definition questionnaire design sampling data collection-data analysis interpretation-report perpetration& presentation Limited service suppliers 80
Full-service suppliers can be broken down into Syndicated services Customized services Standardized services Internet services 81
Syndicated services Collect information of known commercial value that they provide to multiple clients on subscription basis. 82
Standardized services Are research studies conducted for different client firms but in a standard way. 83
Customized services Offer a wide variety of marketing research services customized to suit a client s specific needs. 84
Internet services Are offered by several marketing research firms, including some that have specialized in conducting marketing research on the internet. 85
Limited-services suppliers Specialize in one or a few phase of the marketing research project. 86
Services offered by such suppliers are classified as field services coding data entry analytical services data analysis branded products. 87
Marketing Research Suppliers & Services Fig. 1.5 INTERNAL RESEARCH SUPPLIERS EXTERNAL FULL SERVICE LIMITED SERVICE Syndicate Services Internet Services Field Services Branded Products and Services Standardized Services Customized Services Coding and Data Entry Services Analytical Services Data Analysis Services 88
Selecting a research supplier 89
A firm that cannot conduct an entire marketing research in-house must select an external supplier for one or more phases of the project. 90
The firm should compile a list of prospective suppliers from such sources. 91
When deciding on criteria for selecting an outside supplier a firm should ask itself why? it is seeking outside research support. 92
A firm may not have the technical expertise to undertake certain phases of a project. 93
When developing criteria for selecting an outside supplier A firm should keep some basis in mind. 94
?What is the reputation of the supplier??do they complete projects on schedule??are they known for maintaining ethical standards?are they flexible?are they research projects of high quality 95
?What kind and how much experience does the supplier have??has the firm had experience with projects similar to this one??do the supplier s personal have both technical & nontechnical expertise? 96
In addition to technical skills? Are the personnel assigned to the task sensitive to the client s needs and do they share the client s research ideology?? Can they communicate well with the client? 97
Remember: The cheapest bid is not always the best one. 98
Careers in marketing research 99
Fig. 1.6 Selected Marketing Research Career Descriptions 1-Vice President of Marketing Research: The senior position in marketing research. The vice president (VP) is responsible for the entire marketing research operation of the company and serves on the top management team. This person sets the objectives and goals of the marketing research department. p22 100
2-Research Director: Also a senior position. The research director has the general responsibility for the development and execution of all the marketing research projects. 101
3-Assistant Director of Research: Serves as an administrative assistant to the director and supervises some of the other marketing research staff members. 102
4-(Senior) Project Manager: Has overall responsibility for design, implementation, and management of research projects. 103
5. senior analyst 6. Analyst 7. Junior analyst 8. Fieldwork director 9. Operational supervisor 104
Selected Marketing Research Career Descriptions Fig. 1.6 cont. Vice President of Marketing Research Part of company s top management team Directs company s entire market research operation Sets the goals & objectives of the marketing research department Research Director Also part of senior management Heads the development and execution of all research projects Assistant Director of Research Administrative assistant to director Supervises research staff members Senior Project Manager Responsible for design, implementation, & research projects 105
Selected Marketing Research Career Descriptions Fig. 1.6 cont. Senior Analyst Participates in the development of projects Carries out execution of assigned projects Coordinates the efforts of analyst, junior analyst, & other personnel in the development of research design and data collection Prepares final report Analyst Handles details in execution of project Designs & pretests questionnaires Conducts preliminary analysis of data Statistician/Data Processing Serves as expert on theory and application on statistical techniques Oversees experimental design, data processing, and analysis Junior Analyst Secondary data analysis Edits and codes questionnaires Conducts preliminary analysis of data Fieldwork Director Handles selection, training, supervision, and evaluation of interviewers and field workers 106
The role of marketing research in MIS& DSS 107
A marketing information system is a formalized set procedures for generating analyzing storing & distributing information to marketing decision makers on an ongoing basis. 108
NOTE THAT The definition of MIS is similar to that marketing research except that an MIS provides information continuously rather than the basis of ad hoc research information needs. 109
Decision support systems are integrated systems including: hardware Communications network,database model base software base DSS user (decision maker) 110
Management Information Systems Vs. Decision Support Systems Fig. 1.7 MIS DSS Structured Problems Use of Reports Rigid Structure Information Displaying Restricted Can Improve Decision Making by Clarifying Data Unstructured Problems Use of Models User Friendly Interaction Adaptability Can Improve Decision Making by Using What if Analysis 111
Preparation for a Career in Marketing Research Take all the marketing courses you can. Take courses in statistics and quantitative methods. Acquire Internet and computer skills. Knowledge of programming languages is an added asset. Take courses in psychology and consumer behavior. Acquire effective written and verbal communication skills. Think creatively. Creativity and common sense command a premium in marketing research. 112
International marketing research 113
The untitled state accounts for only 39 percent of the marketing research expenditures worldwide. About 40 percent of all marketing research is conducted in western Europe. 9 percent in Japan Most of European research is done in Germany United kingdom France Italy Spain. 114
With the globalization of markets marketing research has assumed a truly international character & this trend is likely to continue. 115
Marketing Research Associations Online International ESOMAR: European Society for Opinion and Marketing Research (www.esomar.nl) MRS: The Market Research Society (UK) (www.marketresearch.org.uk) MRSA: The Market Research Society of Australia (www.mrsa.com.au) PMRS: The Professional Marketing Research Society (Canada) (www.pmrs-aprm.com) 116