Chapter 9: Market Research By: Andrea, Matt, Javier, Ty, and Jordan

What is Marketing Research Marketing research is defined as the process of planning collecting and analyzing data relevant to a marketing decision. Research provides decision makers with data on what is successful in the current market and what needs to be changed in the future.

Three Roles 1. Descriptive: 2. Diagnostic: 3. Predictive: Factual information (past trends) 2. Diagnostic: Explaining data (impact that a change has on sales) 3. Predictive: Determining what to do in the future using information from the descriptive and diagnostic roles

Uses for Managers Allows them to explore various alternatives before determining a marketing strategy Allows them to discover problems and makes changes Helps them determine how to serve customers efficiently

Marketing Research Process Define a problem or opportunity Plan research design and gather secondary information Specify sampling procedure Collect primary data Analyze data found Prepare a report of the data and present Follow up

Identify a problem/opportunity Marketing Research Problem: Determining what information is needed and how to get it in an effective manner Marketing Research objective: Providing insightful decision-making information Management Decision Problem: A broad based problem that uses marketing research in order for managers to take proper action

Gather Secondary Info Secondary Data: Data previously collected for any purpose other than the one at hand (annual reports, product testing results, periodicals, etc.) Benefits of Secondary Data: Saves time and is significantly less expensive than primary data

Research Design After gathering secondary data, researches must make a list of unanswered questions and rank them in terms of importance. Research Design specifies which research questions must be answered and how to analyze the data

Primary Data Primary Data: Advantages: Disadvantages: Information collected for the first time and is used for solving the particular problem at hand Advantages: Helps answer a specific research question, which secondary data cannot do. Disadvantages: Gathering this type of data can cost anywhere from a few thousand dollars to over several million depending on the study.

Types of Survey Research In home personal interviews Mall Intercept Interviews Telephone interviews Mail Surveys Executive interviews Focus Groups

Types of Research Errors Measurement Error Sampling Error Frame Error Random Error

Advantages of the Internet Popularity of Internet survey because of rapid development and real time reporting Dramatically reduce costs but cutting cost by 25-40 percent via electronic surveys Personalized Questions and Data – highly personalized for greater relevance to each respondent’s own situation Improved respondent participation- convenient.  less time consuming and more engaging Contact with the hard to reach individuals such as professionals

Uses of the Internet by Marketing Researchers Methods of Conducting Online Surveys Web Survey: software systems specifically designed for Web questionnaire construction and delivery Survey Design and Web Hosting Sites- survey administered on design sites survey Online Panel Provider:  ready made sample population for a ready-made sample population, pre-recruit people who meet specific criteria

Advantages of Online Focus Groups Better Participation Rates Cost Effective Broad Geographic Scope Accessibility Honestly

Benefits of Web Community Research Engage customer in a space where they are comfortable allowing clients to interact with them on a deeper level Achieve customer- derived innovation Establish brand advocates who are emotionally invested in a companies success Offer real-time results, enabling clients to explore ideas normal time constraints prohibit  

The Role of Consumer- Generated Media in Marketing Research Consumer-generated media (CGM)  are media that consumers generate and share among themselves. Examples include of consumer based media include blogs, message boards, review sites, podcasts

Scanner Based Research Scanner-based research is a system for gathering information for a single group of respondents by continuously monitoring the advertising, promotion, and pricing they are exposed to and the things they buy

Examples of Scanner Based Research Behavior Scan: A scanner-based research program that tracks the purchases of 3,000 households through store scanners in each research market Info Scan: A scanner based sales tracking service for the consumer packaged-good industry

Neuromarketing A field of marketing that studies the body’s responses to marketing stimuli The approach is a fresh attempt to better understand consumers’ responses to promotion and purchase motivations

When Should Marketing Research Be Conducted? Reasons for “not” conducting Marketing Research: When managers have several possible solutions to a problem When the company has extensive market data and understands the characteristics of the target customer and their likes and dislikes. For example after years of Marketing Research and understanding of its customer base, Proctor & Gamble went into National Distribution with it’s Folgers Instant Coffee based on previous Marketing data and an initial taste test. Sara Lee followed the same strategy with its frozen croissants Quaker Oats also introduced its Chewy Granola Bars without conducting additional Marketing Research based on its understanding of the characteristics of its customer base. Sooo….When Should Marketing Research Be Conducted? Marketing Research should be conducted when managers’ perceptions, of the quality and timing of the Market Research information results in a perceived value that is greater than the cost of obtaining it.

CRM Cycle (Customer Relationship Management) Chapter 9 Decision Support Systems and Marketing Research CRM Cycle (Customer Relationship Management) Identify customer relationships Learn who our customers are. Where customers are located. What product & services they use. Leverage customer information Understand interactions with current customer base CRM Cycle Distribute customer info throughout the company Get the right information to the right person in the right place at the right time. Collect data on all types of communication the customer has with the company. Notes: Marketing research has three roles: descriptive, diagnostic, and predictive. Descriptive: What is the historic sales trend in the industry? What are consumers’ attitudes toward a product? Diagnostic: What was the impact on sales after a change in the package design? Predictive: “What if questions,” such as how can descriptive and diagnostic research be used to predict the results of a planned marketing decision? Capture customer data based on interactions Identify best customers Ultimately “get to know” the customer on a personal level. Gather data using information technology Use Data Mining to Identify Profitable & Unprofitable customers Store and integrate customer data using information technology

CRM Example (Amazon) Amazon is the master of CRM: When you buy or even look for a product on Amazon your information is logged into Amazon’s CRM database. Your userid and email are captured in their CRM database What you have bought or looked at online is captured in their CRM database Amazon will relate your inquiry to other customers in their database. They will make suggestions for other products that other customers from their database have bought who have also purchased the product you are interested in. Amazon will periodically reach out to customers in their CRM Database. A few months after making a purchase (a book for example) Amazon will send you an email suggesting that you can sell the book back on their website.

Competitive Intelligence (CI) What is Competitive Intelligence (CI)? Competitive intelligence is the process of ethically obtaining, analyzing, refining and distributing information about competitors, products, and customers to support executives and managers making strategic decisions for an organization. CI can be used as a tool to help overcome a competitors advantage. By identifying and quantifying the advantage By determining how the advantage was achieved Understanding the timing, pricing & specifications of competitors new product introductions.

Competitive Intelligence (CI) cont’d There are many Sources of Competitive Intelligence: The Internet is a very powerful source of CI Company Salespeople Industry Experts CI Consultants Uniform Commercial Code filings Government Agencies Suppliers Periodicals Yellow Pages Trade Shows