1. MARKETING RESEARCH: FROM INFORMATION TO ACTION
CHAPTER
MARKETING RESEARCH: FROM INFORMATION TO ACTION

2. AFTER READING THIS CHAPTER YOU SHOULD BE ABLE TO:
Identify the reason for doing marketing research.
Describe the four-step marketing research approach leading to marketing actions.

3. AFTER READING THIS CHAPTER YOU SHOULD BE ABLE TO:
Describe how secondary and primary data are used in marketing, including the uses of questionnaires, observations, experiments, and panels.
Describe three approaches to developing a sales forecast for a company.

4. TEST SCREENINGS: LISTENING TO CONSUMERS TO REDUCE MOVIE RISKS
What’s in a Movie Name?

5. TEST SCREENINGS: LISTENING TO CONSUMERS TO REDUCE MOVIE RISKS
The Risks in Today’s Blockbuster Movies

6. THE ROLE OF MARKETING RESEARCH
What is Marketing Research?
Why Good Marketing Research is Difficult
Four-Step Marketing Research Approach

7. Fisher-Price How do you do marketing research with kids?

8. FIGURE 8-1 Four-step marketing research approach leading to better marketing actions

9. 1. What is marketing research?
Concept Check
1. What is marketing research?
A: Marketing research is the process of defining a marketing problem and opportunity, systematically collecting and analyzing information, and recommending actions.

10. Concept Check
2. What are the four steps marketing researchers use to help develop marketing actions?
A: The 4 steps are: (1) define the problem; (2) develop the research plan; (3) collect relevant data; and (4) develop a report to management that converts the data into findings and recommendations.

11. STEP 1: DEFINE THE PROBLEM
Set the Research Objectives
Identify Possible Marketing Actions
Measures of Success

12. Toys of the Year How do you discover “hot toys” and why are good forecasts important?

13. Fisher-Price How do you identify data needed for marketing actions?

14. STEP 2: DEVELOP THE RESEARCH PLAN
Identify Data Needed for Marketing Actions
Concepts
Methods
New-Product Concept
Sampling
Statistical Inference

15. 1. How do measures of success relate to marketing actions?
Concept Check
1. How do measures of success relate to marketing actions?
A: Measures of success are criteria or standards used in evaluating proposed solutions to the problem. Different research outcomes—based on the measures of success—lead to different marketing actions.

16. 2. What is the difference between concepts and methods?
Concept Check
2. What is the difference between concepts and methods?
A: Concepts are ideas about products or services, whereas methods are the approaches that can be used to collect data.

17. STEP 3: COLLECT RELEVANT INFORMATION
Data
Secondary Data
Primary Data

18. FIGURE 8-2 Types of marketing information

19. STEP 3: COLLECT RELEVANT INFORMATION
Secondary Data: Internal
Product Sales
Salesperson Reports
Secondary Data: External
Census Bureau
Business Periodicals
Trade Associations
Online/Internet
Advantages and Disadvantages of Secondary Data

20. 1. What is the difference between secondary and primary data?
Concept Check
1. What is the difference between secondary and primary data?
A: Secondary data are facts and figures that have already been recorded before the project at hand, whereas primary data are facts and figures that are newly collected for the project.

21. 2. What are some advantages and disadvantages of secondary data?
Concept Check
2. What are some advantages and disadvantages of secondary data?
A: Advantages include time savings, low cost, and a greater level of detail.
Disadvantages are that the data may be out of date, the definitions or categories may not be right, and not being specific enough for the project.

22. STEP 3: COLLECT RELEVANT INFORMATION
Primary Data: Observing Behavior
Mechanical, Electronic, and Personal Observation
Observational Data
Nielsen Media Research: Meter/Diary
Mystery Shopper

23. FIGURE 8-3 Nielsen ratings of the top 10 network primetime television series for the 2004–2005 season through September 18, 2005

24. Nielsen Media Research “People Meter” What kind of primary data is collected?
The “people Meter” collects observational data.

25. American Idol What determines if a TV show stays on the air?

26. FIGURE 8-4 Nielsen//NetRatings of the top 10 Internet websites for September 2005

27. Mystery Shopping How is this marketing research?

28. Oral-B, Scotch-Brite, and Skechers How would you do marketing research on these products.?

29. STEP 3: COLLECT RELEVANT INFORMATION
Primary Data: Questioning Consumers
Questionnaire Data
Idea Generation Methods—Coming Up with Ideas
Individual Interviews
TRU “Me” Exercises
Depth Interviews
“Cool Hunters”
Focus Groups

30. Mforma How does this firm generate design ideas?

31. Focus Group and Facility Why collect primary data this way?
Focus groups enable marketers to hear and watch consumer reactions to a firm’s and its competitors’ products.

32. TRU “Me” Exercise snapshot: Mavin Why collect primary data this way?

33. STEP 3: COLLECT RELEVANT INFORMATION
Primary Data: Questioning Consumers
Idea Evaluation—Testing an Idea
Types of Surveys
Personal Interview
Mail
Telephone
/Fax/Internet

34. FIGURE 8-A Comparison of three kinds of surveys
Marketing researchers must be aware of the trade-offs when collecting primary data through the three main types of questionnaires.

35. FIGURE 8-5 Typical problems in wording questions

36. STEP 3: COLLECT RELEVANT INFORMATION
Primary Data: Panels and Experiments
Panel
Experiment
Drivers
Test Markets
Advantages and Disadvantages of Primary Data

37. How might early marketing research have been done?
Wal-Mart Supercenter
How might early marketing research have been done?

38. Concept Check
1. What is the difference between observational and questionnaire data?
A: Observational data are facts and figures obtained by watching, either mechanically or in person, how people actually behave. Questionnaire data are facts and figures obtained by asking people about their attitudes, awareness, intentions, and behaviors.

39. A: personal interview survey
Concept Check
2. Which survey provides the greatest flexibility for asking probing questions: mail, telephone, or personal interview?
A: personal interview survey

40. 3. What is the difference between a panel and an experiment?
Concept Check
3. What is the difference between a panel and an experiment?
A: A panel is a sample of consumers or stores from which researchers take a series of measurements over time. An experiment involves changing a variable in a customer purchase and seeing what happens.

41. STEP 3: COLLECT RELEVANT INFORMATION
Making the Most of Information Technology
Information Technology
Data Mining

42. FIGURE 8-6 Today’s marketing managers use information from many marketing factors to increase the sales of their products or brands

43. Consumer Purchasing Products Why is data mining so important?

44. STEP 4: DELIVER THE FINAL REPORT
Analyzing the Data
Presenting the Findings
Making Recommendations

45. What findings can be developed from data mining?
Tony’s Pizza
What findings can be developed from data mining?

46. FIGURE 8-7 Presenting findings to Tony’s marketing manager that lead to recommendations and actions

47. FIGURE 8-7A Presenting findings to Tony’s marketing manager

48. FIGURE 8-7B Presenting findings to Tony’s marketing manager

49. FIGURE 8-7C Presenting findings to Tony’s marketing manager

50. FIGURE 8-7D Presenting findings to Tony’s marketing manager

51. Concept Check
1. What is data mining?
A: Data mining is the extraction of hidden predictive information from large databases to find statistical links that suggest marketing actions.

52. Concept Check
2. In the marketing research for Tony’s Pizza, what is an example of (a) a finding and (b) a marketing action?
A: (a) Figure 8-7A shows a finding that depicts annual sales from 2002 to (b) Figure 8-7D shows a finding (the decline in pizza sales) that leads to a marketing action to develop an ad targeting children 6 to 12 years old.

53. SALES FORECASTING TECHNIQUES
Judgments of the Decision Maker
Direct Forecast
Lost-Horse Forecast
Surveys of Knowledgeable Groups
Survey of Buyers’ Intentions Forecast
Salesforce Survey Forecast

54. How might marketers forecast sales through 2009?
Wilson Tennis Racket
How might marketers forecast sales through 2009?

55. SALES FORECASTING TECHNIQUES
Statistical Methods
Trend Extrapolation
Linear Trend Extrapolation

56. FIGURE 8-8 Linear trend extrapolation of sales revenues of Xerox, made at the start of 2000

57. 1. What are the three kinds of sales forecasting techniques?
Concept Check
1. What are the three kinds of sales forecasting techniques?
A: They are: (1) judgments of the decision maker, (2) surveys of knowledgeable groups, and (3) statistical methods.

58. 2. How do you make a lost-horse forecast?
Concept Check
2. How do you make a lost-horse forecast?
A: (1) Start with the last known value of the item being forecast, (2) list the factors that could affect the forecast, (3) assess whether they have a positive or negative impact, and (4) make the final forecast.

59. 3. What is linear trend extrapolation?
Concept Check
3. What is linear trend extrapolation?
A: Linear trend extrapolation involves extending a pattern observed in past data into the future with a straight line.

60. WHAT’S NEW IN MARKETING RESEARCH?
GOING ONLINE

61. Going Online
1. Click on the “News” link on WorldOpinion’s home page to read about the current news and issues facing the market research industry.

62. Going Online
2. Click on the “The Frame” link, a set of online articles published by Survey Sampling, International.

63. FORD CONSULTING GROUP: FROM DATA TO ACTIONS
VIDEO CASE 8

64. VIDEO CASE 8
Ford Consulting Group

65. VIDEO CASE 8
Ford Consulting Group

66. VIDEO CASE 8
Ford Consulting Group
1. Study Table 1. (a) How does the situation in the Northeast compare with the other regions in the United States? (b) What appears to be the reason(s) that sales are soft? (c) Write a 150-word with attachments to Mark Rehborg, your boss, giving your answers to (b).

67. VIDEO CASE 8
Ford Consulting Group

68. VIDEO CASE 8
Ford Consulting Group

69. VIDEO CASE 8
Ford Consulting Group
2. Study Table 2. (a) What do you conclude from this information? (b) Summarize your conclusions in a 150-word with attachments to Mark, who needs them for a meeting tomorrow with Margaret, the Northeast region sales manager. (c) What marketing actions might your memo suggest?

70. VIDEO CASE 8
Ford Consulting Group

71. VIDEO CASE 8
Ford Consulting Group

72. VIDEO CASE 8
Ford Consulting Group

73. SUPPLEMENTAL LECTURE NOTE 8-1
WHAT IS “TRUTH” IN REPORTING SURVEY RESULTS?
SUPPLEMENTAL LECTURE NOTE 8-1

74. FIGURE 8-B How ethical is this claim in an advertisement that is based on a survey of doctors?
This figure poses the ethical question about reporting survey research results.

75. TWO BASIC APPROACHES TO FORECASTING SUPPLEMENTAL LECTURE NOTE 8-2

76. FIGURE 8-C Top-down forecast: Survey of Buying Power
This figure poses the ethical question about reporting survey research results.

77. FIGURE 8-D Build-up forecast: Apple Computer’s product lines
This figure poses the ethical question about reporting survey research results.

78. WEBSITES OF INTEREST TO MARKETING STUDENTS
IN-CLASS ACTIVITY 8-1

79. Websites of Interest to Marketing Students
American Marketing Association
Career Builder
Business Week
American Advertising Federation
Wall Street Journal
iVillage
AdForum
Pollstar
Yahoo!
Drudge Report
eBay
Google
Marketing: The Core, 2nd Edition
Amazon
FirstGov

80. PEPSI VS. COKE TASTE TEST
IN-CLASS ACTIVITY 8-2

81. New Pepsi Challenge TV Ad

82. Pepsi vs. Coke Taste Test Challenge

83. Marketing Research
Marketing research is the process of defining a marketing problem and opportunity, systematically collecting and analyzing information, and recommending actions.

84. Measures of Success
Measures of success are criteria or standards used in evaluating proposed solutions to a problem.

85. Data
Data are the facts and figures related to the problem, and are divided into two main parts: secondary data and primary data.

86. Secondary Data
Secondary data are facts and figures that have already been recorded before the project at hand.

87. Primary Data
Primary data are facts and figures that are newly collected for the project.

88. Observational Data
Observational data are the facts and figures obtained by watching, either mechanically or in person, how people actually behave.

89. Questionnaire Data
Questionnaire data are the facts and figures obtained by asking people about their attitudes, awareness, intentions, and behaviors.

90. Sales Forecast
A sales forecast refers to the total sales of a product that a firm expects to sell during a specified time period under specified environmental conditions and its own marketing efforts.