CHAPTER 8 Marketing Research & Sales Forecasting

MARKETING RESEARCH FUNCTION n Focus on determining: – market potential – market share – market characteristics

Classification of market research companies n Syndicated services: give info to all customers n Full service suppliers: performs all research n Limited service suppliers: parts of research

n MIS: Marketing Information Systems n MDSS (Marketing Decision Support System) – computer software that helps users obtain & use info tomake marketing decisions

6 Steps in Marketing Research 1. PROBLEM DEFINITION – is it a symptom or a problem? Ex. Our sales are down. “Well Defined Problem is Half Solved” 2. EXPLORATORY RESEARCH n Investigate 3. FORMULATE HYPOTHESIS – tentative explanation for some event

4. RESEARCH DESIGN – Master plan to get a direct test of the hypothesis 5. DATA COLLECTION – Secondary Data: less time and money but could be obsolete or irrelevant – Primary Data: detailed, exact, valid but costly and time consuming

How to Collect Primary Data 1. Observational method: watch people 2. Survey method – Telephone interviews: cheap & convenient n bias to people who have phones – Mail surveys: cost effective & anonymous but returns are very low – Fax surveys – Personal interviews: good method n most time consuming & expensive n mall intercepts good alternative

– Computer interviews n faster gathering & analysis of data n respondents may be more truthful than face to face n very biased to computer users – Focus group interviews n 8 to 12 people brought together to discuss a subject of interest

SAMPLING TECHNIQUES n one of the most important aspects of marketing research, if sample wrong - results will be wrong

CLASSIFICATION OF SAMPLES 1. Probability Sample n each member has an equal chance of being selected 2. Nonprobability Sample n arbitrary ones not subject to statistical tests

6. Interpretation and Presentation – clear, concise reports directed to management, not other researchers

n QUALITATIVE FORECASTING – subjective sales forecasts - based on opinions not historical fact 1. JURY OF EXECUTIVE OPINION -combines & avg outlooks of top company executives 2. DELPHI TECHNIQUE n seeks opinion of experts outside the firm & used to predict long-term issues

3. SALESFORCE COMPOSITE n what do the salesforce believe (Bottom up approach) 4. SURVEY OF BUYER INTENTIONS n mail in questionaires, telephone polls, & personal interviews

n QUANTITATIVE FORECASTING – more scientific approach 1. MARKET TESTS n gauge consumer responses to a new product 2. TREND ANALYSIS n analyze historical relationship btw sales & time

3. EXPONENTIAL SMOOTHING – more sophisticated trend analysis that assigns a weight factor to each year of sales data