4. Marketing research After carefully studying this chapter, you should be able to: Define marketing research; Identify and explain the major forms of marketing research; Distinguish quantitative and qualitative data; Explain the use of secondary and primary research; Describe the key methods of data collection; Explain random and quota sampling.

2.1 Marketing research defined The American Marketing Association defines marketing research as: The systematic gathering, recording and analysing of data about problems relating to the marketing of goods and services.

4.1.1 Purpose of marketing research Marketing research provides data that contains information to help managers take decisions. Marketing research does not provide solutions. Research, and researchers, do not take decisions. They plan and carry out the research. It’s the manager who commissions the research that has to decide how to use the data, and how to extract the information he needs.

CATS: C – Cost A – Accuracy T – Time S – Security Constraints of marketing research

Cost The cost of conducting the research must be less than the value of the information provide. Accuracy Inaccurate result will have no value.

Time The research must be completed before the decision must be taken. Security We must not let competitors hear about what we plan to do.

4.2 Types of marketing research Be careful to use the terms carefully: Marketing research describes the range of research that is used by marketing managers. Market research is one of the many types of marketing research.

The systematic analysis of a single market. A market research could provide the following data: Estimated size of the total market. Estimates of the location and size of potential markets. trends and changes. Identification of specific market characteristics. Sales forecasts Market research

There are direct and indirect competitors. Competitor information should include: The strength and weakness of their product offers, resources and key personnel. Pricing, distribution and promotional strategies. Their relationships with suppliers. The speed, timing and reliability of their delivery service Competitor research

4.2.3 Promotional research Promotion can be seen as communication. Promotional research is used to check things like: Target audience identification. How to get a message across to the target audience(s). The number or times to repeat the message. Media cost and effectiveness. The results achieved.

4.2.4 Retail audits Past stocks + Purchases － Present stocks = Sales Count the opening stock = 10,000 Go away. 6 weeks later: Count the deliveries made in the 6 weeks: 2, , , ,200 = 9,450 Total stocks in period = 19,450 Count stock in the shop = 9,235 Deduct from total stock to give sales = 10,215

4.2.5 Other forms of marketing research Distributor research finds out the most cost- effective way of distribution. Pricing research discovers what customers and consumers feel is good value. Product research carries out evaluation of own and competitors product offers. Sales research locates potential new customers.

Remember: The marketing professional specifies the questions that need to be answered. Researchers decided how to carry out the research and which research tools to use in order to provide the answers.

4.3.1 Quantitative data Deals with numbers and hard facts Qualitative data Deals with opinions and subjective issues. Dustbin survey (p.75) Getting facts indirectly (p.75) 4.3 Quantitative and qualitative data

Awareness – Attitude – Action Marketers must first make the customers become aware of the product offer(s). Then the marketers have to try to develop a positive attitude within the minds of customers. Only then will the customer take action The 3As

4.3.4 Measuring feelings and opinions Likert scaling The researcher presents some statements, and ask respondents to say for each statement whether they: 5 – Agree strongly 4 – Agree 3 – Are uncertain 2 – Disagree 1 – Strongly disagree The higher the score the more agreement there is with the statement.

Osgood scaling This rating scales are more open than Likert’s. It uses adjectives that have a universal understanding. Originally Osgood has 20 rating scales (p.77) But researchers can use any adjectives that meet their needs. It can also be done easily (see p.78)

4.4 Secondary and primary research Secondary research looks at data that already exists. is also called Desk research, because it can be done with PCs on our desks. Primary research looks for data that have not been found in the secondary research. is also called Field research, because it is conducted outside the office.

Remember: Always use secondary research first. Then use primary research to fill the information gaps that the secondary research left.

4.5 Data collection The three basic methods for gathering data are: Observation A researcher watches what happens. Experimentation A situation is created and the results measured. Questioning Direct contact, face-to-face, over the phone, by post.

4.6 Random and quota sampling Why sampling? It is not possible to interview every person, so a way must be found to interview only some – yet get results that are reliable. There are various statistical software which can help you with this.

Probability / random sample: First, identify every individual. Then every person has an equal chance of being selected, at random, like in a lottery draw. The problems are: The selected ones may be widespread. It is time- consuming and costly to visit each one. Random sampling is often used in quality control, but not in marketing research.

Quota sample: A quota sample represents the make-up of the whole. See the example on p.82 Quota sampling is widely used in marketing research because it is cost effective and useful. Error: There will always be a degree of error in any research findings. Usually in marketing research this is plus or minus 5%.