Marketing Research 4.04

Marketing Research Obtaining information about the preferences, opinions, habits, trends, and plans of potential customers. Helps to determine what customers want and need.

Why is Research Important? 1. Make costly mistakes if don’t know what customers are buying. 2. Plan for the future.

Why is Research Important? 3. Helps to anticipate or solve problems in the marketplace. 4. Helps a company keep track of what is happening in its markets.

Purpose of Research

Types of Marketing Research 1. Advertising Research Focuses on the effectiveness of the advertising message and the effectiveness of media placement.

2. Product Research Evaluate product design and acceptance, competitive products, package design, and product usage.

Market Research 1. Studies customer behavior (customer analysis) to gather information about customer attitudes.

Market Research 2. Studies the behavior of a consumer market (market analysis) to investigate the potential markets for a product and to define the target market.

Sales Research The study of sales data to determine the potential sales for a product and to solve problems related to future sales.

The Marketing Research Process Step 1 - Define the Problem Identify and clearly state what the problem is and what can be done to solve the problem. Determine which problems are the most important to solve at a given time.

Step 2 – Research Approach Collect and examine information in terms of the problem being studied. Primary data can be used and/or Secondary data can be used.

Step 3 – Collect and Analyze Data Compiling, analyzing, and interpreting the results of primary and secondary data. The results of each question can be clearly read and interpreted.

Step 4 - Recommend Solutions to the Problem. Solutions are usually presented in a well written report. Recommendations must be clear and supported by the research data.

Step 5 - Applying the Results The required form of action is decided upon and put into place.

The Marketing Research Process Set objectives Define research Problem Assess the value of the research Construct a research proposal Specify data collection method Specify techniques of measurement Select the sample Data collection Analysis of results Present in a final report

Types of Data Primary data: Data obtained for the first time and used specifically for the particular problem or issue under study; collected by the business. Secondary data: Data already collected for some purpose other than the current study; already exists, desk research.

Market Research Primary Research First hand information Expensive to collect, analyze and evaluate Can be highly focused and relevant Care needs to be taken with the approach and methodology to ensure accuracy Types of question – closed – limited information gained; open – useful information but difficult to analyze

Primary Research

Secondary Research

Internal Sources Company Accounts Internal Reports and Analysis Stock Analysis Retail data - loyalty cards, sales data, etc.

External Sources Federal Government Statistics (i.e. census, labor dept, etc.) Local: Chamber of Commerce, Economic Development, City & County Government, etc. Trade publications Commercial Data - Gallup, Mintel, etc. Household Expenditure Survey Magazine surveys Other firms’ research Research documents – publications, journals, etc.

Data Collection Methods Primary data can be obtained by: - Survey observation experiment Secondary data can be obtained by a number of agencies. - Internet Sources - US and Government Sources - Specialized Research Companies - Business Publications and Trade Organizations

Data Sampling When designing a survey, marketers must determine the number of people to include in their survey. Population: The entire target group of people under study. Sample: Part of the target population that represents it accurately. Sampling - studying part of a ‘population’ to learn about the whole Bias: Inaccuracies introduced into the results due to errors in measurement, coverage, and nonresponsive. Error: Determined by the sample size with respect to the population. The greater the sample size, the lower the margin of error.

Sampling Methods

Sampling Methods 1. Random Samples – equal chance of anyone being picked May select those not in the target group – indiscriminate Sample sizes may need to be large to be representative Can be very expensive

2. Stratified or Segment Random Sampling Samples on the basis of a representative segment Still random but more focused May give more relevant information May be more cost effective

3. Quota Sampling Again – by segment Not randomly selected Specific number on each segment are interviewed, etc. May not be fully representative Cheaper method

Sample selected from multi-stage sub-groups 6. Snowball Sampling 4. Cluster Sampling Primarily based on geographical areas or ‘clusters’ that can be seen as being representative of the whole population 5. Multi-Stage Sampling Sample selected from multi-stage sub-groups 6. Snowball Sampling Samples developed from contacts of existing customers – ‘word of mouth’ type approach!

Quantitative data – statistics based on numbers – 56% of 18 year olds drink alcohol at least four times a week - doesn’t tell you why, when, how Qualitative data – subjective and personal; more detail – tells you why, when and how!

Marketing Research Techniques Interviews - qualitative face-to-face telephone postal questionnaire Attitude measurement – qualitative, quantitative know/believe about an act/object feel about an act/object behave towards an object or act

Likert scale - quantitative strongly agree agree neither agree nor disagree disagree strongly disagree Projective techniques - qualitative sentence completion psychodrama (yourself as a product) friendly martian (what someone else might do)

Group discussion and focus group - qual Postal research questionnaires - qual Diary panels - sources of continuous data - qual In-home scanning - hand-held light pen to scan barcodes - quan Telephone research - either Observation - qual home audit direct observation In-store testing - qual

American Marketing Association What is MKIS? “MKIS (MIS) is a set of procedures and methods for the regular, planned collection, analysis and presentation of information for use in marketing decisions” American Marketing Association

The components of a computerised MKIS Data Bank Statistical Bank MKIS Display unit Marketing Manager Model Bank

The components of a computerised MKIS Data bank - raw data e.g historical sales data, secondary data Statistical bank - programmes to carry-out sales forecasts, spending projections A model bank - stores marketing models e.g Ansoff’s matrix, Boston Matrix Display unit - VDU and keyboard

Advantages of Market Research focus attention on objectives forecasting, planning and strategic development reduce risk in new product development Communicates image, vision, etc. Globalization makes market information valuable

Disadvantages of Market Research Information only as good as the methodology used Can be inaccurate or unreliable Results may not be what the business wants to hear! May stifle initiative and ‘gut feeling’ Always a problem that we may never know enough to be sure!

Research Trends Global Marketplace Business Management Due to increased international competition, US companies must improve or change products frequently to hold on to customers. Product quality and customer satisfaction are keys to business success and research that measures these qualities are the fast form of marketing research. Business Management Many businesses are using internal and external information to improve business operations.

Research Limitations Money Time Customers saying one thing and doing another

Market Research