1. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Chapter 7 Marketing Research Decision-Support Systems, and Sales Forecasting

2. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 7-2 In this advertisement H&R Block uses one numerical statistic, generated by Marketing Research, to make a point.

3. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 7-3 The Marketing Research Function Marketing research: the process of collecting and using information for marketing decision-making Development of the Marketing Research Function Development of the Marketing Research Function First organized marketing research project done by N.W. Ayer in 1879 First commercial research department in the U.S. established by Charles C. Parlin for the Curtis Publishing Co. in 1911 Parlin counted soup cans in garbage to convince the Campbell soup Company that working-class families would buy canned soup

4. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 7-4 L'Oreal Kids Using Marketing Research to Match New Products to Potential Customers.

5. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 7-5 Who Conducts Marketing Research Who Conducts Marketing Research The size and organizational form of the marketing research function is typically tied to a given company’s structure Many firms depend on independent marketing research firms

6. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 7-6 Types of questions Marketing Research can help answer.

7. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 7-7 Syndicated Services  Organizations that regularly provide a standardized set of data to all customers

8. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 7-8 Full-Service Research Suppliers  Organizations that contract with clients to conduct complete marketing research projects

9. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 7-9 Limited-Service Research Suppliers  A marketing research firm that specializes in selected activities Customer Satisfaction Measurement Programs  Procedure for measuring customer feedback against customer satisfaction goals

10. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 7-10 The Marketing Research Process

11. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 7-11 Shell Shell Followed the Marketing Research Process to develop its “Count on Shell” Campaign

12. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 7-12 Did eTrade conduct research to establish that there may be a need for their type of service? Based on their success it is safe to assume they did.

13. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 7-13 Step 1: Define the Problem Step 1: Define the Problem Avoid confusing symptoms of a problem with the problem itself The problem(s) should be agreed upon by all concerned parties

14. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 7-14 Step 2: Conduct exploratory research Step 2: Conduct exploratory research An Informal investigation seeking to discover the cause of a problem by discussing it with informed internal and external sources

15. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 7-15 Advertising Guided by Exploratory Research

16. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 7-16 Step 3: Formulate a Hypothesis Step 3: Formulate a Hypothesis Hypothesis: a tentative explanation for some specific event – a statement about the relationship among variables that carries a clear implication for testing this relationship

17. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 7-17 Step 4: Create a Research Design Step 4: Create a Research Design Research design: a series of decisions that, taken together, comprise a master plan or model for conducting marketing research

18. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 7-18 Step 5: Collect Data Step 5: Collect Data Secondary data is data from previously published or compiled sources Primary data refers to data collected for the first time specifically for a marketing research study

19. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 7-19 Step 6: Interpret and Present Research Information Step 6: Interpret and Present Research Information Findings must be presented to decision- makers in a format that allows them to make effective judgments

20. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 7-20 The Research Report and Presentation: Linking the Study and the Research User

21. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 7-21 The film industry is extremely competitive and blunders are costly. In order to enhance the success rate of a film producers can turn to marketing research.

22. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 7-22 How and why can marketing research help to prevent failures of new businesses and new products? Class Discussion

23. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 7-23 Marketing Research Methods

24. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 7-24 Secondary Data Collection Secondary Data Collection Government Data  Nation’s most important source of marketing data  Census information available at no charge

25. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 7-25 Persuading People to Participate in Census 2000

26. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 7-26 Census Agency Advertisement to Help Persuade People to Fill Out Their Census 2000 Forms

27. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 7-27 Secondary Data Collection Secondary Data Collection Private Data  Encyclopedia of Associations provides contact information for trade associations that may have useful data  Other valuable information can be found in:  Urich’s Guide to International Periodicals  Sales & Marketing Management’s Annual Survey of Media Markets  Starch Readership Reports  A. C. Nielsen’s SalesNet scanner data from supermarkets

28. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 7-28 Harris InfoSource One of many providers of secondary data

29. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 7-29 Secondary Data Collection Secondary Data Collection Online Sources of Secondary Data  Cyberspace sometimes simplifies the search for secondary data

30. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 7-30 Bureau of Labor Statistics

31. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 7-31 Sampling Techniques Sampling Techniques Sampling Population Census

32. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 7-32 Probability sample: sample that gives every member of the population a known chance of being selected  Simple random sample

33. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 7-33 Non-probability sample: arbitrary grouping that produces data unsuited for most standard statistical tests  Convenience sample  Quota sample

34. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 7-34 Primary Research Techniques Primary Research Techniques Observation Method  Researchers actually view, or watch, the overt actions of the research subjects

35. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 7-35 Observation research results in new products

36. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 7-36 Survey Method  Telephone Interviews An inexpensive and quick method for obtaining a small quantity of relatively impersonal information

37. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 7-37 Survey Method  Personal Interviews Best means for obtaining detailed information about consumers

38. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 7-38 Survey Method  Focus Groups A Focus Group is an information gathering procedure in marketing research that typically brings together 8 to 12 individuals to discuss a given subject

39. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 7-39 Survey Method  Mail Surveys Cost Effective Provides anonymity that may encourage respondents to give candid answers

40. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 7-40 Survey Method  Online Surveys and Other Internet-Based Methods Growing number of Internet users has sparked interest in going online to conduct surveys... and even focus groups

41. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 7-41 Survey Method  Experimental Method Scientific investigation in which a researcher manipulates test groups and compares the results with those of a control group The most common use to date has been test marketing

42. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 7-42 Dryel Using the Experimental Primary Research Method: P & G Test Marketed Its New Product Category – Dryel Home Dry- cleaning in Columbus, Ohio and in Ireland

43. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 7-43 Conducting International Marketing Research Conducting International Marketing Research As corporations expand globally, they need to gather knowledge about consumers in other countries A major secondary information source is the U.S. Department of Commerce  Foreign Economic Trends and Their Implications for the United States  Overseas Business Reports

44. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 7-44 A firm specializing in Global Marketing Research

45. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 7-45 Testing a Global Advertisement

46. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 7-46 Computer Technology in Marketing Research Data Mining Data Mining The process of searching through computer files to detect patterns The data is stored in a huge database called a data warehouse

47. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 7-47 Sales Forecasting Estimate of company revenue for a specified future period. Qualitative Forecasting Techniques Quantitative Forecasting Techniques

48. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 7-48 Qualitative Forecasting Techniques Qualitative Forecasting Techniques These techniques rely on subjective data  Jury of Executive Opinion  Delphi Technique  Sales Force Composite  Survey of Buyer Intentions

49. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 7-49 Quantitative Forecasting Techniques Quantitative Forecasting Techniques This method uses statistical computations  Test Markets  Trend Analysis  Exponential Smoothing

50. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 7-50 Honda launches a unique vehicle targeting a specific sought after customer segment. Did their marketing research improve their understanding of the needs of this target market?