1. Chapter Objectives Marketing Research and Sales Forecasting CHAPTER 8 1 2 4 6 7 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. 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. 5 3 8

2. CHAPTER 8 Marketing Research and Sales Forecasting Marketing research Process of collecting and using information for marketing decision making. Marketers use data from a variety of sources to understand customers, target customer segments, and develop long-term customer relationships. Research is the primary source of information used to make effective marketing decisions.

3. CHAPTER 8 Marketing Research and Sales Forecasting WHO CONDUCTS MARKETING RESEARCH? Size and form of research often tied to corporate structure. Many firms outsource research needs. Major U.S. marketing research firms include ACNielsen and Arbitron.ACNielsenArbitron Syndicated Services Organizations that regularly provide a standardized set of data to all customers. Full-Service Research Suppliers Firm that conducts complete marketing research projects. Limited-Service Research Suppliers Firm that specializes in a limited number of activities, such as conducting field interviews or performing data processing.

4. CHAPTER 8 Marketing Research and Sales Forecasting THE MARKETING RESEARCH PROCESS Usually follows a six-step process. DEFINE THE PROBLEM Well-defined problems are half-solved. Avoid confusing symptoms with problem itself. Loss of market share is a symptom; reason for the loss is the problem. Evaluate firm’s marketing mix and possible changes to the marketing environment.

5. CHAPTER 8 Marketing Research and Sales Forecasting 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 Research from customer surveys and demographic data. Sales analysis can compare expected sales with actual sales and be analyzed in a variety of ways, such as by customer type, sales method, and others. Accounting data provides information about financial issues. Marketing cost analysis evaluates expenses for a variety of costs.

6. CHAPTER 8 Marketing Research and Sales Forecasting FORMULATE A HYPOTHESIS A tentative explanation for some specific event. Sets the stage for more in-depth research. CREATE A RESEARCH DESIGN A master plan or model for conducting research. Must ensure it will measure what researchers intend to measure. COLLECT DATA Secondary data Previously published information. Primary data Information collected specifically for the investigation at hand. Primary costs more to gather but can be much more valuable.

7. CHAPTER 8 Marketing Research and Sales Forecasting INTERPRET AND PRESENT RESEARCH INFORMATION Present in a format that allows managers to make effective judgments. Researchers and end users must collaborate to ensure effectiveness of research. Reports must be clear and concise. Must explain technical terminology.

8. CHAPTER 8 Marketing Research and Sales Forecasting MARKETING RESEARCH METHODS SECONDARY DATA COLLECTION Secondary data comes from many sources. Can be internal data or external data. Government Data Nation’s most important source of marketing data. U.S. Census provides data about very small segments, as few as 1,500 people.U.S. Census TIGER system overlays topographic features—such as railroads, highways, and rivers—with census data such as household income.TIGER State and city governments also provide valuable data.

9. CHAPTER 8 Marketing Research and Sales Forecasting Private Data Variety of sources: Trade associations. Business and trade magazines. Information gathered from scanning technology. Increasing use of radio-frequency identification for inventory control. Online Sources of Secondary Data Online databases. Research aggregators acquire, catalog, reformat, segment, and resell premium research reports. Examples: Datamonitor and eMarketer.DatamonitoreMarketer Internet discussion groups, chat rooms, and newsgroups.

10. CHAPTER 8 Marketing Research and Sales Forecasting SAMPLING TECHNIQUES Sampling Process of selecting survey respondents or research participants. Population or universe—total group of people a researcher wants to study. Researchers rarely sample the entire population. Probability sample Sample that gives every member of the population a chance of being selected. Simple random sample—every member of relevant group has equal opportunity to be sampled. Stratified sample—randomly selected subsamples of different groups are represented in the total sample. Cluster sample—researchers select subgroups from which they sample. Nonprobability sample Sample that involves personal judgment somewhere in the process. Convenience sample—an accidental sample.

11. CHAPTER 8 Marketing Research and Sales Forecasting PRIMARY RESEARCH METHODS Choice of method depends on the issues under study and the decisions marketers need to make.

12. CHAPTER 8 Marketing Research and Sales Forecasting Observation Method Researchers view the overt actions of subjects being studied. Example: Counting the number of cars that pass by a potential restaurant location. Use increasingly sophisticated ways of tracking behavior. Electronic devices that measure media consumption. In response to digital video recording, Nielsen Media Research has changed the way it reports television viewership. Videotaping consumers is gaining acceptance. Interpretive Research Interpretive research Observational research method developed by social anthropologists in which customers are observed in their natural setting and their behavior is interpreted based on an understanding of social and cultural characteristics; also known as ethnography, or “going native.”

13. CHAPTER 8 Marketing Research and Sales Forecasting SURVEY METHOD Researchers must ask questions to get information on attitudes, motives, and opinions. 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 phone usage is rare. Personal Interviews Allow researchers to obtain detailed information and ask follow-up questions. May use mall intercepts, interviews conducted in shopping malls.

14. CHAPTER 8 Marketing Research and Sales Forecasting Focus Groups Focus group Simultaneous personal interview of a small group of individuals, which relies on group discussion about a certain topic. Encourage general discussion of a selected topic. Valuable for exploratory research, such as new product development. Drawback is potential lack of honesty due to peer pressure. Researchers are experimenting with online focus groups. Mail Surveys Cost-effective means that allows respondents anonymity. Response rates typically lower than for personal interviews and are time- consuming. May be subject to bias through self-selection.

15. CHAPTER 8 Marketing Research and Sales Forecasting Fax Surveys Limited household use makes getting a good sample difficult. Federal junk fax law limits fax transmissions for commercial purposes. Online Surveys and Other Internet-Based Methods Allows researchers to speed the survey process, increase sample sizes, ignore geographic boundaries, and dramatically reduce costs. Marketers are experimenting with Web questionnaires and electronic bulletin boards. No standard has developed for measuring Web use. Some software can monitor a user’s viewing habits and display targeted banner ads.

16. CHAPTER 8 Marketing Research and Sales Forecasting Watch Mitsubishi Video Watch Mitsubishi’s “See What Happens” ad campaign, designed to drive traffic to a Web site (http://www.seewhathappens.com) where consumers can examine product test results. Does what you read at the site constitute marketing research? VIDEO