1 ©IRWIN a Times Mirror Higher Education Group, Inc., company 1997 Collecting and Using Marketing Information

2 ©IRWIN a Times Mirror Higher Education Group, Inc., company 1997 Objectives Define marketing research and understand why organizations engage in such research Identify the five steps that are taken in the marketing research process Explain the four key elements used to define a problem: the objectives, constraints, assumptions, and measures of success

3 ©IRWIN a Times Mirror Higher Education Group, Inc., company 1997 Objectives (continued) Understand the types of studies and what research questions each answers Know the different elements of information collection to solve a problem: data source, research approach, research instruments, sampling methods, and contact methods Distinguish between the various contact methods of collecting primary data is used in marketing

4 ©IRWIN a Times Mirror Higher Education Group, Inc., company 1997 Marketing Research …the process of defining a marketing problem and opportunity, systematically collecting and analyzing information, and recommending actions to improve an organizations marketing activities

5 ©IRWIN a Times Mirror Higher Education Group, Inc., company 1997 Why do Marketing Research? u... to reduce the risks associated with managing the marketing mix and long-term planning. u HOW? u... by reducing uncertainty u... to reduce the risks associated with managing the marketing mix and long-term planning. u HOW? u... by reducing uncertainty

6 ©IRWIN a Times Mirror Higher Education Group, Inc., company 1997 Objective of Conducting Marketing Research 100% 0% Amount Possible Accuracy Perfect Information

7 ©IRWIN a Times Mirror Higher Education Group, Inc., company 1997 What Types of Research are American Corporations Doing? Measurement of Market Potential Market Share Analysis Determination of Market Trends MIS Studies of Ad Effectiveness New Product Acceptance/Potential International Studies Social Values and Policies Ecological Impact Studies 25%50%75% 23% 97% 80% 76% 49% 39%

8 ©IRWIN a Times Mirror Higher Education Group, Inc., company 1997 Characteristics of Good Marketing Research Scientific Method Research Creativity Multiple Methods Interdependence of Models and Data Value and Cost of Information Healthy Skepticism Ethical Marketing Scientific Method Research Creativity Multiple Methods Interdependence of Models and Data Value and Cost of Information Healthy Skepticism Ethical Marketing

9 ©IRWIN a Times Mirror Higher Education Group, Inc., company 1997 Five-step approach to making decisions Define the problem Objectives Constraints Assumptions Measures of success Define the problem Objectives Constraints Assumptions Measures of success Step 1 Planning of the research Research type Alternatives Uncertainties Planning of the research Research type Alternatives Uncertainties Collect relevant information Concepts Methods Data Secondary data Primary data Collect relevant information Concepts Methods Data Secondary data Primary data Find a solution Choose best alternative Implement the chosen alternative Find a solution Choose best alternative Implement the chosen alternative Evaluate the results The decision The decision process Evaluate the results The decision The decision process Step 2Step 3Step 4Step 5

10 ©IRWIN a Times Mirror Higher Education Group, Inc., company 1997 Kinds of samples used in marketing research Simple random samples Simple random samples Probability Samples Probability Samples Nonprobability Samples Nonprobability Samples Stratified random samples Cluster samples Cluster samples Convenience samples Convenience samples Judgment samples Judgment samples Quota samples Quota samples All Samples

11 ©IRWIN a Times Mirror Higher Education Group, Inc., company 1997 Types of marketing information Concepts Hypothesis and ideas Concepts Hypothesis and ideas Methods Approaches to help solve the problem Methods Approaches to help solve the problem Secondary data Facts and Figures Already recorded prior to the project Secondary data Facts and Figures Already recorded prior to the project Primary data Facts and Figures Newly collected for the project Primary data Facts and Figures Newly collected for the project Internal data Financial statements, research reports files, customer letters, sales call reports, and customer lists Internal data Financial statements, research reports files, customer letters, sales call reports, and customer lists External data U.S. Census reports, trade association studies, and magazines, business periodicals, and commercial reports External data U.S. Census reports, trade association studies, and magazines, business periodicals, and commercial reports Observational data Mechanical and electronic approaches Personal approaches Observational data Mechanical and electronic approaches Personal approaches Questionnaire data Idea generation through in-depth interviews and focus groups Idea evaluation through mail, telephone, and personal surveys Questionnaire data Idea generation through in-depth interviews and focus groups Idea evaluation through mail, telephone, and personal surveys Data Facts and figures pertinent to the problem Data Facts and figures pertinent to the problem

12 ©IRWIN a Times Mirror Higher Education Group, Inc., company 1997 Plan of the Research Three types of studies: Exploratory Research Descriptive Research Experimental Research Decreasing UncertaintyIncreasing Certainty

13 ©IRWIN a Times Mirror Higher Education Group, Inc., company 1997 Exploratory Research Descriptive Research Experimental Research Unaware of the Problem Aware of the Problem Problem Clearly Defined “Our Sales are declining and we don’t know why?” “What kinds of people buy our product?” “Would buyers prefer this new package design?” “Would buyers be interested in this new product idea?” “What features do buyers prefer in our product?” “Which of these two advertising campaigns is more effective?”

14 ©IRWIN a Times Mirror Higher Education Group, Inc., company 1997 Secondary Data u Advantages –Less expensive –Obtained more easily and rapidly u Disadvantages –could be old and outdated –collected periodically –may be the wrong form –may be innacurate

15 ©IRWIN a Times Mirror Higher Education Group, Inc., company 1997 Primary Data u Advantages –more control over what is gathered u Disadvantages –can be very expensive –subject to investigator’s decisions –can be useful only in specific cases

16 ©IRWIN a Times Mirror Higher Education Group, Inc., company 1997 Comparison of mail, telephone, and personal interview surveys Basis of Comparison Cost per completed survey Ability to probe and ask complex questions Opportunity for interviewer to bias results Anonymity given respondent Mail Surveys Usually the least expensive, assuming adequate return rate Little, since self- administered format must be short and simple None, since form is completed without interviewer Complete, since no signature is needed Telephone Surveys Moderately ex- pensive, assuming reasonable completion rate Some, since interviewer can probe and elaborate on questions Some, because of voice inflection of interviewer Some, because of telephone contact Personal Interview Surveys Most expensive because of interviewer’s time and travel expenses Much, since interviewer can show visuals, probe, establish rapport Significant, because of voice and facial expressions of interviewer Little, because of face-to-face contact