Chapter 4 Marketing Research Idil Yaveroglu Lecture Notes

Marketing Research A marketing plan starts out with a good understanding of consumer needs and wants, as well as competitors, resellers, and other environmental forces. Marketing Information System consists of people, equipment, and procedures to gather, sort, analyze, evaluate and distribute needed, timely, and accurate information to marketing decision makers. The MIS must balance needs against feasibility: Not all information can be obtained Obtaining, processing, sorting, and delivering information is costly

Marketing Information System

Developing Marketing Information Sources of Information: Internal Data: Electronic collections of consumer and market information obtained from data sources within the company network (e.g. accounting, customer service, sales force, operations) Advantages include quick/easy access to information Disadvantages stem from the incompleteness or inappropriateness of data to a particular situation Can be outdated May have to manage a vast amount of information Marketing Intelligence: Systematic collection and analysis of publicly available information about competitors and developments in the marketing environment. Benchmarking, researching on the internet, trade publications, business publications etc. Marketing Research: The systematic design, collection, analysis, and reporting of data relevant to a specific marketing situation facing an organization.

Marketing Research Process

Step 1. Defining the Problem The manager and the researcher must work together. These objectives guide the entire process Exploratory Research: gathers preliminary information that will help define problems and suggest hypothesis Descriptive Research: Marketing research to better describe problems (e.g. demographics/attitudes of buyers, where they are located etc) Causal Research: Tests cause-effect relationships e.g. Does a change in package design lead to an increase in sales?

Step 2. Developing the Research Plan Research plan is a written document which outlines the type of problem, objectives, data needed, and the usefulness of the results. It includes: Secondary data: Information collected for another purpose which already exists Primary data: Information collected for the specific purpose at hand

Sources of Secondary Data Internal company data Internal corporate information External data: Information from trade associations (NAR, NAHB) government agencies www.census.gov Marketing research firms Syndicated data - collected by a third party and sold to industry members (Nielsen - TV ratings, scanner data) Commercial publications News media

Sources of Data Advantages Disadvantages Secondary Data Primary Data Saves time and money if on target Aids in determining direction for primary data collection Pinpoints the kinds of people to approach Serves as a basis of comparison for other data May not be on target with the research problem Quality and accuracy of data may pose a problem May be outdated Primary Data Answers a specific research question Data are current Source of data is known Secrecy can be maintained Expensive Reluctance to participate

Primary Data Collection Research approaches for obtaining primary data include: Observational Research: Involves gathering data by observing relevant people, actions, and situations. It is best suited for exploratory research people watching people Ethnographic research http://www.youtube.com/watch?v=_IEyWX3D77w people watching an activity machines watching people Nielsen ratings Surveys: The most popular technique for gathering primary data. It is best suited for descriptive information. Experiments: Studies cause-effect relationships. It is best suited for causal research. In experiments the researcher manipulates one or more of the marketing mix variables and compares the effect on the experimental group to a control group that did not receive the manipulation Attempt to assess cause-and-effect Laboratory - very controlled environment Taste tests, packaging, ads Field - less control, more generalizability new products (test marketing), new ad campaigns, pricing changes

Contact Methods in Primary Data Mail surveys Telephone surveys Personal interviewing: Individual or focus group Nike Focus Group: http://www.youtube.com/watch?v=0KbMQIv- 4aE&feature=related Barbie Focus Group: http://www.youtube.com/watch?v=cYupqCeRwCQ&featu re=related Online research

Primary Data Sampling Plan Sample: subgroup of population from whom information will be collected Sampling Plan Decisions: Sampling unit – who is to be surveyed? Sample size – how many should be surveyed? Larger samples give better results but cost more Sampling procedure – how should the people in the sample be chosen? Probability samples - Probability sampling involves using precise rules to select the sample such that each element of the population has a specific known chance of being selected. Non-probability samples – usually there is a researcher bias

Errors Associated with Sampling Measurement Error Sampling Error Frame Error Random Error

Step 3: Implementing the Research Plan Data is collected by the company or an outside firm The data is then processed and checked for accuracy and completeness and coded for analysis Finally the data is analyzed by a variety of statistical methods

Step 4: Interpreting and Reporting the Findings The research interprets the finding, draws conclusions and reports to management Managers and researchers must work together to interpret results for useful decision making