Marketing Research Chapter 5

Reasons to do market research Improves the decision making of businesses Reduces the risk of decision making

Steps to follow in market research Define the problem/concern Obtain data (secondary and primary data) Analyze the data (data analysis) Recommend solutions to the problem Apply the results/prepare the report

Defining the problem Clearly identifying a problem is called Problem Definition –Examples: Are prices in line with competitors? –Are promotion activities effective? –Are my employees performing good customer service?

Obtaining Data Data is collected and examined in terms of the problem or problems. –Secondary data: Data that has been collected for some purpose other than current study. –Can be obtained from internal sources and external sources

Examples of secondary data Internet sources U.S. Government sources: Small Business Administration, U.S. Census Consumer and Business Information Companies- Consumer purchase info. Business and Trade Publications – Business Week, Forbes, Wall Street Journal

Advantages and disadvantages of secondary data Advantages: –Can be obtained easily –Don’t have to spend a great deal of time collecting Disadvantages: –Existing data may not be available for the study –Secondary data may sometimes be inaccurate

Primary data Data that is obtained for the first time and used specifically for the problem or issue under study Survey method – answer questions –Sample: taking a small percentage of the target population to represent the whole population –Random sampling – picking the people to observe at random

Personal Interviews Mall intercept interview – go to a mall and ask people questions about your store Focus group – get a group of people together to evaluate a product, service, or idea Telephone interview – Asking questions over phone: is quick and efficient (low response rate)

Other Survey methods Mail survey – sending surveys in the mail – low response rate, relatively inexpensive Internet survey – are increasing in popularity and sometimes offer free gifts such as a free meal

Observation Method Actions of people are watched and recorded –Mystery shopper: a person acting like a shopper to evaluate salespeople –Natural setting/contrived: analyze in natural setting with hidden cameras Example: Give children toys to play with and see what they play with the most

Observation (cont.) Point-of-sale research: Based on what the customer buys, after the sale they ask them why they bought certain items

Experimental Method Where a researcher observed the results of changing one or more marketing variables while keeping other variables constant –Examples: Package design New promotion –Simulation – Testing the product under ideal conditions (car crash test for safety)

Test Market Having a specific city or geographic are where you conduct a marketing research experiment –KY Fried Chicken having a few of their restaurants in Kentucky and Tennessee be test markets for a new baked chicken

Analyzing the Data The process of compiling, analyzing, and interpreting the results of secondary and primary data collection

Measures of questionnaire When the questions measure what is intended the measure is validity. Reliability is when a research technique produces nearly the same results each time.

Types of questions Questions where the respondent constructs their own response are open- ended questions. –Examples: What are your feelings about the new water park? –What are some different types of shampoos that you use?

Types of Questions Closed Ended Questions – where the respondent has to choose an answer –Would you pay $50 for admission to a The Fray concert? a. yesb. no –Circle the number of times that you eat chicken per week –

Yes/No Questions Use when asking for a response on (1) issue –Was our facility clean? –Was your server courteous?

Multiple Choice Questions Questions that give the respondent several choices Try to include every possible choice that would apply to the question –What is your primary intended use of this product? A. Backpacking B. Camping C. Fishing D. Hunting E. Other _____________________

Rating scale questions Rate a product or a service on a scale –Please rate the following: a. Reservations Excellent Good Average Fair Poor b. Parking Excellent Good Average Fair Poor

Level of Agreement Used when assessing attitudes or opinions Write statements that reflect attitudes or opinions such as: –“I do not like vegetables.” Strongly agree agree neutral disagree strongly disagree –“I am extremely health conscious.” Strongly agree agree neutral disagree strongly disagree

Types of data Numerical data is the easiest to evaluate, you can do graphs and charts. Usually is with closed-ended (forced) questions Non-numerical data is open-ended questions and is harder/more time consuming to analyze, but you get more information

Guidelines for writing questions for questionnaires Keep questions clear and brief Don’t ask questions that suggest answer Avoid any bias Each question should deal with only one concept Use easily understood language Keep it organized and confidential

When administering a questionnaire Have a deadline for completion Have a brief explanation of survey’s purpose Participant selection unbiased Dress appropriately and be polite

Marketing Information Management Process of collecting, storing, and analyzing data to improve marketing decisions and performance of marketing activities –1. Input: Information that goes into system – typically by a computer –2. Storage: Resources used to maintain information (file cabinet, disks, hard drive,etc.)

Marketing Information Management 3. Analysis: summarizing, combining, and comparing information so decisions can be made 4. Output: result of analysis given to decision-making 5. Decision-making: Make your decisions based on information collected

An effective marketing information management system includes all of the following except: A. input B. storage C. selection process D. ouput

What can we do to make our school better is what type of question? A. Filter B. Open-ended C. Closed-ended (forced) D. Data

Information that has already been collected for another purpose is called: A. research data B. secondary data C. primary data D. data analysis

Paul lets his computer pick who will be tested next so that everyone has an equal chance of being chosen. This is an example of A. random sampling B. fair chance C. valid chance D. data sampling

KY Fried Chicken has a new salad that they would like to have their customers try. They decide to put it on their menu in Kentucky and Ohio. This is an example of a A. focus group B. test market C. random sample D. data sample

Kroger has cameras in their stores to record the shopping patterns of their customers. This is an example of ________research. A. observation B. simulation C. test market D. focus group

Product Development Positions President: General organizer/director of procedures. Is in charge of making sure that everyone does their part Market Research Director: In charge of the survey development to make sure that it meets guidelines, also the taste test procedures Product development: In charge of the product design, ingredients, presentation Promotions Director: In charge of promotion of product during taste test