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Marketing Research and Sales Forecasting

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1 Marketing Research and Sales Forecasting

2 Objectives Describe the development of the marketing research function and its major activities. Explain the steps in the marketing research process. Distinguish between primary and secondary data, and identify the sources of each type. Explain the different sampling techniques used by marketing researchers.

3 Objectives Identify the methods by which marketing researchers collect primary data. Explain the challenges of conducting marketing research in global markets. Outline the most important uses of computer technology in marketing research. Identify the major types of forecasting methods.

4 Introduction Marketing research - Collecting and using information for marketing decision making

5 Development of the Marketing Research Function
Advertising pioneer N. W. Ayer conducted the first organized marketing research project in 1879 Charles C. Parlin organized the nation’s first commercial research department at Curtis Publishing Research methods grew more sophisticated in the 1930s with better sampling techniques and greater accuracy Computer technology has significantly advanced market research

6 Who Conducts Marketing Research?
Syndicated services - Organization that provides standardized data on a periodic basis to its subscribers Full-service research suppliers - Marketing research organization that offers all aspects of the marketing research process Limited-service research suppliers - Firm that specializes in a limited number of activities, such as conducting field interviews or performing data processing

7 Customer Satisfaction Measurement Programs
Firms focus on tracking satisfaction levels of current customers Analyze partial or complete dissatisfaction to identify problem areas that need attention

8 Figure 10.1 - The Marketing Research Process

9 Define the Problem Defining the problem clearly increases the speed and accuracy of the research process Confusing symptoms of a problem with the problem itself should be avoided A logical starting point in identifying the problem – to evaluate the firm’s target market and marketing mix elements

10 Conduct Exploratory Research
Exploratory research - Process of discussing a marketing problem with informed sources both within and outside the firm and examining information from secondary sources Using internal data Sources of internal data are sales records, financial statements, and marketing cost analyses

11 Conduct Exploratory Research
Sales analysis can compare expected sales with actual sales and be analyzed in a variety of ways, such as by customer type and sales method Accounting data provides information about financial issues Marketing cost analysis evaluates expenses for a variety of costs

12 Formulate a Hypothesis
Hypothesis - A tentative explanation for some specific event Sets the stage for more in-depth research

13 Create a Research Design
Research design - A master plan or model for conducting research Important considerations Marketers must be sure the study will measure what they intend to measure Selection of respondents

14 Collect Data Primary data - Information collected for a specific investigation Secondary data - Previously published information Less expensive Less time consuming Can become obsolete May not be completely relevant

15 Interpret and Present Research Data
Present findings in a format that allows managers to make effective judgments Marketing researchers and research users must cooperate at every stage in the research process Reports must be clear and concise

16 Secondary Data Collection
Comes from many sources Internal data - Sales records, product performance reviews External data - Government records, syndicated research services Government data Nation’s most important source of marketing data Census data provide the most frequently used government statistics

17 Secondary Data Collection
The 2010 U.S. Census - Contains a wealth of valuable information for marketers Private data - Variety of sources Trade associations Business and trade magazines Electronic systems Radio-frequency identification technology

18 Secondary Data Collection
Online sources of secondary data Online databases Research aggregators - Companies that acquire, catalog, reformat, segment, and resell premium research reports Examples: Datamonitor, eMarketer Social networking sites

19 Sampling Techniques Sampling - Process of selecting survey respondents or research participants Population (universe) - Total group of people a researcher wants to study Classification of samples Probability sample Nonprobability sample

20 Probability Sample Sample that gives every member of the population a chance of being selected Simple random sample - Sample in which every individual in the relevant universe has an equal opportunity to be sampled Stratified sample - Sample constructed to represent randomly selected subsamples of different groups within the total sample Cluster sample - Researchers select a sample of subgroups (or clusters) from which they draw respondents

21 Nonprobability Sample
Sample that involves personal judgment in the selection process Convenience sample - Sample selected from among readily available respondents Quota sample - Sample divided to maintain the proportion of certain characteristics among different segments or groups seen in the population as a whole

22 Figure 10.2 - Types of Primary Research

23 Observation Method Researchers view the overt actions of subjects being studied Increasingly sophisticated ways for observing behavior are being used Videotaping consumers is gaining acceptance

24 Interpretative Research
A researcher observes a customer or group of customers in their natural setting and interprets their behavior based on an understanding of the social and cultural characteristics of that setting

25 Survey Method Telephone interviews
Quick and inexpensive way of getting a small quantity of relatively impersonal information Many people refuse to take part or are reluctant to give personal information over the phone Not a viable option in international markets where telephone ownership is rare

26 Survey Method Personal interviews
Allows researchers to obtain detailed information and ask follow-up questions Researchers can establish rapport with respondents and explain confusing or vague questions Mall intercepts - Interviews conducted inside retail shopping centers

27 Survey Method Focus group - A small group of individuals brought together to discuss a specific topic Valuable for exploratory research Drawback is the potential lack of honesty due to peer pressure Researchers are experimenting with online focus groups

28 Survey Method Mail surveys Cost-effective and provides anonymity
Lower response rates than for personal interviews Time-consuming May be subject to bias through self-selection Long follow-up time

29 Survey Method Fax surveys Limited households use fax machine
Securing a representative sample of respondents is a difficult undertaking Federal Junk Fax Prevention Act limits fax transmissions for commercial purposes

30 Survey Method Online surveys and other Internet-based methods
Allow researchers to: Increase the speed of the survey process Increase sample sizes Ignore geographic boundaries Reduce costs No industry wide standards define techniques for measuring Web use

31 Experimental Method Least used method
Controlled experiment - Scientific investigation in which a researcher manipulates a test group and compares the results with those of a control group

32 Experimental Method Test marketing - Introducing a new product in a specific area and then observing its degree of success Can be expensive Competitors can learn about new products quickly Some products are not well suited to test marketing Alternatives include Computer-modeling software Regional product launches Limiting a product to a single retail outlet

33 Conducting International Marketing Research
Follow same basic steps as for domestic marketing research Researchers must be aware of cultural and legal environments May have to adapt research methods to local conditions

34 Interpretive Research
Researcher spends time studying the culture Focus is on understanding the meaning of the product or consumption experience in the consumer’s life Captures what consumers actually do, not just what they say they do

35 Computer Technology in Marketing Research
Marketing information systems (MIS) A planned, computer-based system designed to provide decision makers with a continuous flow of information relevant to their areas of responsibility Continually monitors marketing environment and provides instantaneous information

36 Computer Technology in Marketing Research
Marketing decision support systems (MDSSs) Marketing information system component that links a decision maker with relevant databases and analysis tools Develops raw data useful for decision making

37 Data Mining Process of searching through computerized data files to detect patterns Focuses on identifying relationships that are not obvious to marketers Efficient way to sort through huge amounts of data and make sense of it

38 Business Intelligence
Process of gathering information and analyzing it to improve business strategy, tactics, and daily operations Can tell the firm how its own sales operation is doing or what its top competitors are up to

39 Competitive Intelligence
A form of business intelligence Focuses on finding information about competitors using secondary sources Aim is to uncover the specific advantages a competitor has

40 Sales Forecasting Estimate of a firm’s revenue for a specified time period Qualitative forecasting - Use of subjective techniques to forecast sales The jury of executive opinion, Delphi technique, sales force composite, and surveys of buyer intentions Quantitative forecasting - Use of statistical forecasting techniques Test market, trend analysis, and exponential smoothing

41 Table 10.2 - Benefits and Limitations of Various Forecasting Techniques

42 Strategic Implications of Marketing in the 21st Century
Marketing research can help an organization develop effective marketing strategies Marketing research ideally matches new products to potential customers Marketing researchers have a broad range of techniques to collect quantitative and qualitative data

43 GaGa SherBetter Video

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