1. Marketing Research Process
Marketing Decisions
Marketing Research Process
Chapter 3
MBA Term II
Fall 2017

2. Topics The Marketing Research System The Marketing Research Process
Forecasting and Demand Measurement
The Marketing Research System
The Marketing Research Process
Marketing Decision Support System

3. Measures of Market Demand
Methods of segregating the market for demand measurement:
Potential Market: Set of customers with a sufficient level of interest in a market offer, but not sufficient enough to create a market till they have the required level of income and access to the product.
Available Market: Set of customers who have interest, income and access to a particular offer.
Target Market: Part of the qualified available market the company decides to sell to/serve.
Penetrated Market: Set of customers who are already buying the company’s products.
Target Market: Groups of customers who qualify to become part of the available market that the company decided to serve.

4. Demand Measurement
Companies can prepare as many as 90 different types of demand estimates for six different product levels, five space levels, and three time periods. Each demand measure serves a specific purpose
Product item: Sunsilk; Product Form: Shampoo; Product Line: Haircare; Company Sales: Unilever; Industry sales: FMCG; All sales: Total Sales

5. Vocabulary for Demand Measurement
Market Demand
Market forecast
Market potential
Company demand
Company sales forecast
Company sales potential

6. Market Demand
Market demand for a product is the total volume that would be bought by a defined customer group in a defined geographical area in a defined time period in a defined marketing environment under a defined marketing program.
Market demand functions show the relationship between the market demand and the level of industry marketing efforts and expenditure.

7. Market Forecast It is a core component of the market analysis.
It projects the future numbers, characteristics, and trends in the target market.
Only one level of industry marketing expenditure actually happens.
The market demand corresponding to that level of the marketing effort and expenditure is known as the market forecast.
Market forecast only shows expected market demand, not the maximum market demand.

8. Market Potential
This is the limit approached by market demand as industry marketing expenditures approach infinity for a given marketing environment.
Market potential is the entire size of the market for a product at a specific time.
Market potential is usually measured either by sales value or sales volume.
Example: Market for automobiles is higher in prosperity than recession.

9. Company Demand
Company’s estimated share of market demand at alternative levels of company marketing effort in a given time period.
Company demand depends upon how the company’s products, services, prices and communications are perceived by the customers relative to the competitors.
A company’s sales levels are deeply affected by the marketing expenditure level, marketing mix and marketing effectiveness.

10. Company Sales Forecast
The company sales forecast is the expected level of company sales based on a chosen marketing plan and an assumed marketing environment.
Two other concepts are important here:
Sales Quota: Sales goal or target set for a product line, company division, or sales representatives.
Sales Budget: This is an estimate of the expected volume of sales, primarily for making current purchasing, production and cash flow decisions.

11. Company Sales Potential
This is company sales limit approached by company demand as company marketing effort increases relative to that of competitors.
It is the maximum level of sales a company can expect to achieve in the forecast period with its present and planned levels of marketing effort and expenditure and the given set of market conditions.

12. Estimating Current Demand
Total market potential is the maximum sales available to all firms in an industry during a given period, under a given level of industry marketing effort and environmental conditions.
A common way to calculate the TMP is by multiplying potential number of buyers by the average quantity each purchases, times the price.
TMP: Potential number of buyers X Average quantity purchased by a buyer X the price

13. Estimating Current Demand
Area Market Potential: Calculating to find out the total sales potential for a particular city, region, area or country.
Two major methods to calculate AMP:
Market build up method:
The market-buildup method calls for identifying all the potential buyers in each market and estimating their potential purchases. It produces accurate results if we have a list of all potential buyers and a good estimate of what each will buy.
Multiple factor index method: Also to do with calculating the Brand Development Index which is a ratio of brand sales to category sales expressed in percentage terms. (BDI)

14. Estimating Future Demand
All forecasts are built on one of the three information bases:
What people say: Involves surveying the opinions of buyers or people close to them such as dealers and traders. This can be done with the help of three methods:
Survey of buyers intentions
Composites of sales force opinions
Expert opinion
What people do: Putting a product into a test market to measure the reaction of the buyers.
3. What people have done: Involves analyzing the past buying behavior of consumers.

15. The Marketing Research System
Marketing research is the systematic design, collection, analysis, and reporting of data and findings relevant to a specific marketing situation facing the company.

16. Types of Marketing Research Firms
Syndicated service research firms
Firms gather consumer & trade information, which they sell for a fee e.g. ACNielsen, National Council For Applied Economic Research (NCAER)
Custom marketing research firms
They design & carry out research studies for various clients based on specific briefs.
Specialty-line marketing research firms
These firms provides specialized research services such as developing a research brief, collecting field data, preparing data analyses & reports for other firms.

17. The Marketing Research Process
Define the problem, decision alternatives and research objectives
Develop the Research Plan
Collect the Information
Analyze the information
Present the Findings
Make the Decision

18. Define the Problem
Problem definition should not be done too narrowly or too broadly
Too narrow definitions lead to inadequate data or information required to take effective decision.
Clarity on the following two points helps in defining the problem appropriately:
What is to be researched?
Why is it to be researched?

19. Develop the Research Plan
Developing plan to gather the required information
Data sources
Research approach
Research instruments
Sampling plan
Contact methods

20. Develop the Research Plan
Data Sources: Primary data, secondary data or both
Research Approach: Primary data can be collected through five methods:
Observations
Focus Groups
Surveys
Behavioral data
Experiments

21. Develop the Research Plan
Research Instruments:
Questionnaires: Closed ended and open ended
Qualitative measures: Word associations, projective techniques, visualization, brand personification, laddering.
Technological devices: Galvanometers, tachistoscope, skin sensors, brain wave scanners, full body scanners.

22. Closed End Questions
Have you seen any recent ads of Somersby?
Yes No

23. Multiple Choice Questions
Where did you the ads of Somersby?
Newspapers
Facebook
Youtube TV
Websites
Others (please mention)

24. Likert Scale Types Questions
Indicate your level of agreement or disagreement on the following statement:
Somersby is a much better non alcoholic drink, than any other energy drinks:
Strongly disagree
Disagree
Neither agree or disagree
Agree
Strongly agree

25. Question Type: Importance Scale
Hygiene and good service at a hospital is ………to me.
Extremely important
Very Important
Somewhat important
Not very important
Not at all important

26. Question Type: Rating Scale
Grande Hospital’s service is:
Excellent
Very Good
Good
Poor
Very Poor

27. Question Types: Intention to Buy Scales
How likely are you to purchase tickets of Buddha Air if they gave an extra 5% discount while booking tickets online?
Definitely buy
Probably buy
Not sure
Probably not buy
Definitely not buy

28. Question type: Open Ended
What is your overall perception about Buddha Air? Also state any recommendations for the brand, if any.

29. Question Type: Word Association
What is the first word that comes to your mind when you hear the following:
Airlines: ………………………………
Bank: …………………………………..
MBA: ……………………………………

30. Question Type: Sentence Completion
When I think of taking a loan, the most important consideration in my decision is:

31. Question Types: Story Completion
I went to Laxmi Bank a few days back and noticed that they have a separate line for senior citizens while they come in the bank for cash deposits and withdrawal. Seeing this I felt…………. Complete the story.

32. Question Types: Balloon

33. Qualitative Measures Word association
Asks respondents what words come to their mind when they hear the brand’s name.
Projective techniques
Give people an incomplete or ambiguous stimulus & ask them to complete it. (E.g. Bubble Exercises)
Visualization
Requires people to create a collage from magazine photo or drawings to depict their perceptions.
Brand personification
Ask subjects what kind of person they think of when the brand in mentioned. (E.g. Mountain Dew, Pulsar, Lux, Rado)
Laddering
A series of increasingly more specific “why” questions.

34. Questionnaires: Do’s and Dont’s
Ensure questions are free of bias
Make questions simple
Make questions specific
Avoid jargon
Avoid sophisticated words
Avoid ambiguous words
Avoid negatives
Avoid hypotheticals
Avoid words that could be misheard
Use response bands
Use mutually exclusive categories
Allow for “other” in fixed response questions

35. Develop the Research Plan
Sampling Plan:
Sampling Unit: Whom should we survey?
Sample size: How many people should we survey?
Sampling procedure: How should we choose the respondents?

36. Develop the Research Plan
Contact Methods:
Telephone contacts
Personal contacts
Online contacts

37. Collect the Information
The most expensive and prone to errors stage in research.
Marketers may conduct surveys in home, over the phone, via the internet or at a central interviewing location like a shopping mall.
Four major problems arise in surveys:
Some respondents will be away form home or inaccessible and must be contacted again or replaced.
Some respondents may refuse to cooperate.
Some might give biased or dishonest answers.
Some interviewers will be biased and dishonest.

38. Analyze the Information
This is the second last step in the research process.
Findings are extracted and data are tabulated.
Application of some advanced statistical techniques and decision models.
Hypothesis and theories are tested

39. Present the Findings
Findings have to presented in a very understandable and compelling approach.
Researches focus on maximizing the impact of their consumer research findings.
Only those findings that are relevant to the major marketing decisions should be highlighted.

40. Make the Decision
Managers either use the information, store it or discard it.
They can also carry on some more research to validate the previous findings.
Marketing managers make use of Marketing Decision Support System to make decisions about the findings that has been gathered.

41. Marketing Decision Support System (MDSS)
A marketing decision support system is a coordinated collection of data, systems, tools, and techniques with supporting hardware and software by which an organization gathers and interprets relevant information from business and environment and turns it into a basis for marketing action.

42. Next Class!!! Case analysis submission in groups as in VC!!
Short MCQ test on Marketing Research

43. THANK YOU!!!