Presentation on theme: "Market & Marketing Research"— Presentation transcript:
1 Market & Marketing Research Lecture 4Karen KnibbsMarketing Practice – U14210
2 Lecture ObjectivesBy the end of the lecture, you should be able to:Define the differences between market and marketing researchUnderstand the role and use of MR information in marketing decision makingExplain the stages of the MR process and elements of a M(K)IS
3 “Not everything that can be counted counts, and not everything that counts can be counted” Albert Einstein
4 Useful statistics?!!Only one person in two million will live to be 116 or older.Artificial Christmas trees have outsold real ones every year since 1991The hundred billionth crayon made by Crayola was Periwinkle Blue40% of McDonald's profits come from the sales of Happy Meals.On average, 12 newborns will be given to the wrong parents daily.Most lipstick contains fish scales.American Airlines saved $40,000 in 1987 by eliminating one olive from each salad served in first class.Odds of being killed by a dog are 1 in 700,000Copyright issue with music??From 2m29 is ok
5 Definitions of MR I Market Research Society (Sept. 2003) - UK Market Research Society (Sept. 2003) - UKMarket Research is: The application of scientific research methods to obtain objective information on peoples attitudes and behaviour based usually on representative samples of the relevant populations. The process guarantees the confidentiality of personal information in such a way that the data can only be used for research purposes.”2003 new classic version vs. Older version: the “collection and analysis of data from a sample of individuals or organisations relating to their characteristics, behaviour, attitudes, opinions or possessions. It includes all forms of marketing and social research such as consumer and industrial surveys, psychological investigations, observational and panel studies”Providing feedback to clients where personal data drawn when sampling from acustomer database are shown at the interview stage to be inaccurate or out-of-date; Enabling individual complaints or dissatisfactions about customer service raised byrespondents during an interview to be fed back to clients at the respondent’s request; Enabling clients to ensure that their customers are not “over-researched”; Providing information back to clients that can be used to update data items other thanpersonal details.A new categorisation of projects has therefore been introduced to help members deal with theseissues, and understand where the boundaries need to be drawn between “Classic” research andprojects conducted for other purposes. The following chart and accompanying notes describe themain types of data processing categories. These categories re-define the data collectionprocesses used in the market research industry, and clarifies the types and extent of feedback which can or cannot be undertaken or described as confidential market research as covered by the Code of Conduct.
6 Definitions of MR II Kotler & Keller (2006) Marketing Research involves: “the systematic design, collection, analysis, and reporting of data and findings relevant to a specific marketing situation facing the company.”Brassington & Pettitt (2006)Marketing Research: “links the organisation with the environment… and involves specifying the problem [and opportunities], gathering data, then analysing and interpreting… information to identify, define…, generate, refine, and evaluate marketing actions, monitor marketing performance and improve understanding of marketing as a process…. It implements the research plan and [defines how]… the findings and their implications can be communicated.”
7 Definitions of MR III Chisnall (2004) “… there was originally a difference between the scope of activities [covered by market and marketing research]… The responsibilities of marketing research extend comprehensively, whereas market research is limited to findings out information about the market for a particular product.”(Even the textbook gets it the wrong way around and contradicts itself! See page 7!)MR has a wider management focus and utility for the whole organisationMR should be: systematic, applied, scientific, pragmatic, objective, impersonal, factual
8 MR definition summaryMarket Research aims to describe and analyse marketssize, structure, growth etcStrictly speaking, Marketing Research is broader than Market ResearchMarketing Research covers a much broader range of topicscustomers, products, competitors, channels, suppliers etc
9 The Marketing Research Process Baines and Chansarkar (2002), as cited in Baines et al, (2008), p143
10 Major Components of Research Design Baines et al (2008), p153
11 MR Research Dimensions Continuous versus Ad hocOn-going research vsOne-offQualitative versus QuantitativeQual: Why? (motivations, attitudes, behaviours)Quant: How many, how often?Secondary versus PrimaryData that already exists and was collected for another purpose vsData collected for the specific purpose at handQualitative research - the collection of data that are open to interpretation, e.g. peoples’ opinions.Quantitative research - the collection of data that is quantifiable and is not open to the same level of interpretation as qualitative research, e.g. sales figures, market share data, etc.
12 Qualitative vs. Quantitative Baines et al (2008), p152
13 Primary collection methods Primary data can be collected in 4 ways:observational researchfocus-group researchsurvey researchexperimental research2 main research instruments used are:questionnaires (open-end and closed-end)mechanical instrumentse.g. Eyetracking of screen use on internet/TVSometimes called field research.Is undertaken or commissioned by an organisation for a specific purpose.The required information does not already exist.It is exactly tailored to a problem.Can be expensive and time consuming.Exploratory research - used when little is known about a particular management problem and to discover the general nature of the questions that might relate to it.Descriptive research focuses on accurately describing the variables being considered.Causal research is used when there is a need to determine the nature of a relationship between two or more variables.
14 Secondary Sources e.g.Internal sales records, MIS, Market plans, databases, customer feedback, experienced employeesGovernment reports / Chambers of Commerceoften available on gov.uk websiteProf. bodies / Trade AssociationsMRS, ESOMAR etc..MR Agencies: Industry Reports & Country-based reportsMintel, AC Nielsen, NOP/GfK etc.GMID/Euromonitor (available viaThe internet: sources identified using search engines, blogs and discussion groups.Online marketing area specific articles/reportse.g. promotions: WARC, brandrepublic, CIMSometimes referred to as desk research.Consists of data and information that is already in existence and which can be accessed by the organisation.Can be cheaper and quicker to access than primary research.May provide an organisation with information that it would not otherwise have time to gather.Secondary data may not always be up to date, be applicable to an organisation, or give the full picture.
15 Marketing Research in practice Marketing research is concerned with investigating and understanding buyer behaviourBuying behaviour is merely one element of human behaviour; it is complex and influenced by many factorsMotivations may be a mixture of business specific, personal, economic, psychological, sociological and demographic variablesBehavioural sciences give insights into consumption
16 MR in the Marketing Process MR information needed at all stages:new product idea generation and product developmentmarketing testinglaunch implementationbrand performance managementpositioning and repositioning etc
17 Main divisions of MRProductCustomerPricingSalesPromotion
18 Overview of MR divisions TypeProductCustomerPricingSalesPromotionExamples of issues needing investigation through MRFailure, reduced demand, portfolio inequity, lack of USP, poor qualityTarget segment profile, preference, loyalty, Macro/Micro env. issues, habits, motivationSensitivity, ceiling, match to other mix elements, competition, incentives needed, vs. perception of quality,Increasing cost of sales, comparative mkt performance, falling sales, force organisation, distribution methodsRelevant methods to audience, rising costs, reduced exposure/coverage, effectiveness, integration,Types of info.Demand, sales, market share, competitive advantageDemographics, purchase behaviours, level of influence of int./ext. factorsCosts, profit objectives, mkt/competitive prices, trade /channel vs. consumer pricesValue, volume, quantity sold, mkt coverage, latent potential, buyer powerMedia usage / availability, readership/ viewer rates, public image, awareness, perceptual positioning, brand strength
19 Typical Information Needs for marketing planning Aggregated marketing information in quarterly, annual summariesAggregated marketing information around product/markets (e.g. sales data)Analytical information for decision models (e.g. SWOT, segmentation analyses)Internally focused marketing information (e.g. sales, costs, marketing performance indicators)Externally focused marketing information (e.g. macro and industry trends)Historical information (e.g. sales, profitability, market trends)Future-oriented marketing information (e.g. environmental scanninginformation)Quantitative marketing information (e.g. costs, profit, market share)Qualitative marketing information (e.g. buyer behaviour, competitor strategy information) (Ashill and Jobber, 2001).Baines et al (2008), p160
20 Top 10 Marketing MetricsBaines et al (2008), p332
21 Mars (US) who now own Hershey Kraft (US) who now own Cadbury Useful statistics? IICompanyHershey (US)Mars (US) who now own HersheyCadbury (UK)Kraft (US) who now own CadburyShare of global confectionery market4.6%14.5%10.2%4.7%Source: Stanford & Helyar, (2010), Bloomberg News on businessmirror.com, citing Euromonitor International statistics.Hershey was the biggest US confectioner until 2008, when McLean, Virginia-based Mars acquired Wrigley for $23 billion. Hershey held 4.6 percent of the global confection market in 2008, down from 4.9 percent the previous year, according to Euromonitor International. Closely held Mars held 14.5 percent. Uxbridge, England-based Cadbury had 10.2 percent and Northfield, Illinois-based Kraft 4.7 percent.Bitter taste: Hershey may lose market share as Cadbury slips awayWritten by Duane D. Stanford & John Helyar / Bloomberg NewsSaturday, 23 January :01
22 Example Metrics – UK smoothies market share by brand by value 2001200320052006% change£m%Innocent3.51611.22747.4608362+220+641PJ Smoothies8.64014.13414.3182519+64+77Own-label9.04214.93615.8202317+66+54Others0.421.231.5+200+150Total21.510041.479.0134.0+93+224Worst depends on definition: others has been consistently lowest sales and percentage, but in 2001, Own-label products held 42% of the market and by 2006, they only held 17%.Which is the worst performing brand?Source: Mintel report - Smoothies market - UK - October (2006)
23 For your assessed presentations in week 6-7: “Research needs – identify types of primary/secondary information needed to get a fuller understanding of the CSF you’ve chosen and environmental forces connected to it”Are the sources credible, reliable, rigorous?Consider which sources your group will use?Primary: what questions need to be asked of whom and how?
24 MR: key criterionMR information has the purpose of supporting marketing decisionsOrganisations as they grow in size tend to lose close customer contactNew markets entered may be geographically distant and unfamiliarNew products require research into their potential appeal to customersCommunications need researching - are the right messages being given and receivedNeed to think clearly about the issue to be decided, before spending money on MRVideo considers marketing research requirements for various elements of the marketing mix for the brand entering US, Brazil, Venezuela and China markets for example.
25 Marketing Information System (MIS) Effective system of organising, structuring and managing the storage, access and dissemination of market research dataBrassington & Pettitt, 2006
26 Rules for Building a MKIS Marketing information systems (MKIS) – a system incorporating ad-hoc and continuous market and marketing research surveys, together with secondary data and internal data sources, for the purpose of decision-making by marketers.1. Get the top management involved2. Set the objective for the system carefully3. Figure out what decisions your MkIS will influence4. Communicate the benefits of the system to users5. Hire and motivate the right people;6. Free the MkIS from accounting domination7. Develop the system on a gradual and systematic basis;8. Run a new MkIS in parallel with existing procedures9. Provide results from the system to users quickly after its initiation;10. Provide information on a fast turnaround basis;11. Tie the MkIS with existing data collection procedures;12. Balance the work of the MkIS between development and operations;13. Feed valid meaningful data into the system not useless information;14. Design a security system to ensure different groups get different access to the information.Baines et al (2008), p161
27 Why MR is importantTraditionally, small firms have close links with their customersLarge-scale operations have widened the gap between producers and consumersModern communities are knowledgeable, experienced and criticalEffective penetration of markets requires specialised and sophisticated approaches to identify, assess and satisfy market demands.Effective marketing information and research enables an organisation to make better decisions on the most appropriate market entry and competitive strategies.
28 SummaryMarketing research aids decision making by providing management with specific kinds of information which should form the foundation of all strategic decision making and tactical planningMarketing Research is vital in identifying, anticipating and satisfying customer needs profitablyAccurate information enables intelligent decision making in pursuit of organisational objectivesInformation must be continuously collected, monitored, analysed and communicated all around the organisation (via a M(K)IS)All businesses can conduct research, whether in-house or via an external consultancy
29 Further reading suggestions Baines, Fill & Page (2008) Chapter 4, as per unit handbook.Brassington & Pettitt, (2006). Principles of marketing. Harlow: Pearson.Chisnall (2004), Marketing Research. Maidenhead: McGraw-Hill.Anon, (2003).The data protection act 1998 & Market Research: guidance for MRS members September Market Research Society. Online pdf access March 1st 2010 from:Doyle, P (2000), Value Based Marketing. Chichester: Wiley.Kotler & Keller, (2006). Marketing management. New Jersey: Pearson International.EuromonitorGMIDMintelMRS.org.uk