AD 446 Marketing Research-The Nielsen Company

Fall 2012-13

zlem HESAPI

(office:IB 514) ozlem.hesapci@boun.edu.tr

Analysis...Synthesis...All punished! Either exiled or executed

Socrates (470-399 BC)

Plato (428-347 BC)

The Greek philosopher. His students included Plato and Aristotle The Greek philosopher He believed that a philosophical compartment toward life would lead one to being just and ultimately happy The Greek philosopher and tutor to Alexander the Great. A Polish astronomer, proposed the heliocentric model that all the planets, including the earth orbited the sun. The Italian mathematician, constructed the first telescope and confirmed Copernicuss view of universe.

Aristotle (384-322 BC)

Nicolas Copernicus (1473-1543)

Galileo Galilei (1564-1642)

Are you aware that we are all surrounded by researches?

Consider Relevant Information

The truly successful managers and leaders of the [twenty-first] century willbe characterized not by how they can access information, but how they can access the most relevant information and differentiate it from the exponentially multiplying masses of non-relevant information.

P.Drucker

Department Store

One day I received a phone call from a research analyst.

What is the problem?

He was working for a I found that much of department store chain and the data collected was not relevant to the data wanted help analyzingthe problem. The whole he had collected while study was a waste of resources. A new conducting a marketing designed and implemented study had to be research study. the problem defined. to address

Then

WHAT IS RESEARCH?
Process of

organized, systematic, controlled, empirical, critical

investigation into a specific problem with the objective of finding answers or solutions

Characteristics of Research Methodology

1. 2. 3. 4. 5. 6. 7.

Research requires a specific plan of action (or procedures) Research originates with a question problem Research is guided by the research question(s) and often by hypotheses Research usually divides the principal problem into more manageable subproblems. Research demands a clear articulation of a goal Research is based on facts called data Research requires measurable data in attempting to resolve the problem initiated by the research.

HALLMARKS of SCIENTIFIC RESEARCH

Purposiveness:

having a definite aim and purpose

Testability:
Replicability:

applicability of testing methods

consistent findings when repeated

Precision

and Confidence: closeness to reality and probability of being correct

scope of applicability in different settings

Generalizability:

Parsimony:

Simplicity in explaining

COST
Research Expenditures
Delay of Marketing Decision

VALUE

Possible Disclosure of Information to Rivals Possible Erroneous Research Results Lack of resources to conduct quality research

Decreased Certainity
Increased Likelihood of a Correct Decision Improved Market Performance and Resulting Higher Profits

Research findings cannot be implemented Research objectives are unclear Research question cannot be answered Knowledge already exists Decision has already been made

WHAT IS THE VALUE of RESEARCH?

The difference between expected value with information and expected value without information

WHEN TO CONDUCT RESEARCH ?

In general, research should be conducted only when the benefits exceed the costs!

Determining When to Conduct Marketing Research

Time Constraints
Is sufficient time available before a managerial decision must be made?

Availability of Data
Yes Is the information already on hand inadequate for making the decision? Yes

Nature of the Decision

Is the decision of considerable strategic or tactical importance? Yes

Benefits vs. Costs Does the value of the Yes research information exceed the cost of conducting research? No Conduct Marketing Research

No

N o

No

Do Not Conduct Marketing Research

RESEARCH IS LIKE INSURANCE!

Both involve paying a fee to reduce risk... Neither one prevents disaster!

TYPES OF RESEARCH

"Basic research " seeks to expand our knowledge of fundamental relationships, with no specific application in mind. "Applied research" seeks to address a specific, immediate problem.

Most research conducted in the market is applied! Research

Problem Identification Research

Problem Solving Research

Market Potential Research Market Share Research Market Characteristics Research Sales Analysis Research Forecasting Research Trends Research

Segmentation Research

Product Research Promotion Research Distribution Research Pricing Research


PRODUCT RESEARCH SEGMENTATION RESEARCH Determine the basis of segmentation Create lifestyle, demography, media usage profiles Establish market potential and responsiveness for various segments Select target markets Test concept Determine optimal product design Test marketing Package tests Product modification

Brand positioning and repositioning

DISTRIBUTION RESEARCH Determine Types of distribution channel

PROMOTIONAL RESEARCH Optimal promotional budget Optimal promotional mix Copy decisions Media decisions

Location of retail and wholesale outlets

Attitudes of channel members

Creative advertising testing

Evaluation of advertising effectiveness

PRICING RESEARCH

Pricing policies
Product line pricing Price elasticity of demand Initiating and responding to price changes

RESEARCH PROCESS
1- Establish a need for information 2- Specify Research Objectives, Decision Problems , Research Problems 3- Specify Information Needs and the Associated Research Design 4- Determine Sources of Data 5- Develop Data Collection Forms 6- Design the Sample 7- Collect, Process, and Analyse the Data 8- Present the Results

1-Establish a need for information

RESEARCH PROCESS

What

is the purpose of the study? to identify a problem / opportunity? to solve a problem? information is needed to make the decision? research be conducted?

What

Should

Continuum of Marketing Research Sophistication

Intuition-Centered Decision Making

Research-Centered Decision Making

CHARACTERISTICS OF VALUABLE INFORMATION

REDUCES UNCERTAINTY HELPS FOCUS DECISION MAKING

RESEARCH PROCESS
1- Establish a need for information 2- Specify Research Objectives, Decision Problems , Research Problems 3- Specify Information Needs and the Associated Research Design 4- Determine Sources of Data 5- Develop Data Collection Forms 6- Design the Sample 7- Collect, Process, and Analyse the Data 8- Present the Results

2-Specify Research Objectives, Decision Problems , Research Problems

A problem simply indicate an interest in an issue where finding the right answers might help to improve situations. It does not necessarily mean that something is seriously wrong with a current situation!

The formulation of the problem is often more essential than its solution

Albert Einstein

PROBLEM DEFINITION
Before defining the problem you should be able to answer the following questions: What is the purpose of the research? How much is already known? Is additional background information necessary? What is to be measured ? How? Can the data be made available? Can a hypothesis be formulated?

The Problem Statement

The

problem statement should be expressed as a problem--a matter of doubt, difficulty, or dissatisfaction the answer or solution to which is not immediately evident.
The

problem should be stated in a way that convinces the researcher that its solution will leave the world a better place in which to live.
The

statement of the problem should clearly describe the problem that will be addressed by the proposed study
It

should be clear as to what is included in the problem and what is not included in the problem.

Decision Problem vs. Research Problem

. .

.
. . . . . .

Should a new product be introduced?

To determine consumer preferences and atitudes for the proposed new product

Should the advertising campaign be changed

To determine the effectiveness of the current advertising campaign

.
.

Proper Definition of the Research Problem

Research Problem
Broad Statement

Specific Components

Look at the migros case in 1st lecture!

RESEARCH PROCESS
1- Establish a need for information 2- Specify Research Objectives, Decision Problems , Research Problems 3- Specify Information Needs and the Associated Research Design 4- Determine Sources of Data 5- Develop Data Collection Forms 6- Design the Sample 7- Collect, Process, and Analyse the Data 8- Present the Results

TYPES of DATA

Secondary Primary

Data

Data

SECONDARY DATA

HISTORICAL ALREADY ASSEMBLED NEEDS NO ACCESS TO SUBJECTS

Classification of Secondary Data

Secondary Data

Internal

External

Ready to Use

Requires Further Processing

Published Materials Literature

Computerized Databases

Syndicated Services

INTERNAL DATA as Secondary Source

ACCOUNTING INFORMATION SALES INFORMATION BACKORDERS CUSTOMER COMPLAINTS DATA WAREHOUSE

etc...

EXTERNAL DATA

as Secondary Source

CREATED, RECORDED, OR GENERATED BY AN ENTITY OTHER THAN THE RESEARCHERS ORGANIZATION

Published/Online Secondary Data How to find?

Books,

journals( published online)

bookstores, libraries, e books

http://www.ideefixe.com/vitrin/default.asp http://www.amazon.com http://library.bilgi.edu.tr/ http://www.mediacatonline.com http://www.marketingturkiye.com

Census

(Government Statistical Instititute TUIK) http://www.tuik.gov.tr/ http://www.worldbank.org/data/

Chambers

of Commerce http://www.tr-ito.com/ITOPortal/mainIE.html
Directories

of Trade Associations http://www.arastirmacilar.org/

http://www.rv.org.tr/ http://www.rd.org.tr/

Databases http://globaledge.msu.edu/ibrd/ibrd.asp
National

- local newspapers

http://radikal.com.tr http://milliyet.com.tr
International

newspapers http://www.washingtonpost.com/ http://www.nytimes.com/ etc........

Evaluating Secondary Data

Does the data help to answer questions set out in the problem definition?

Applicability to project objectives

Does the data apply to the time period of interest?

Does the data apply to the population of interest?

Evaluating Secondary Data (continued)

Do the other terms and variable classifications presented apply?

Applicability to project objectives

Are the units of measurement comparable?

Accuracy & cost of the data

If possible, go to the original source of the data?

Evaluating Secondary Data (continued)

Is the cost of data acquisition worth it?

Accuracy of the data

Is there a possibility of bias?

Can the accuracy of data collection be verified?

STRENGTHS of SECONDARY DATA (vs. primary)

cheaper

available quickly easy to obtain

Possible Disadvantages of SECONDARY DATA

it may be:
Not

topic
Not

Available; no prior study on this

Relevant; data may not fit current study different units of measurement different class boundaries or summarization out of date
Not

Accurate; data may simply be wrong

COMMON RESEARCH OBJECTIVES FOR SECONDARY DATA STUDIES

Fact Finding

- Identifying consumption patterns - Tracking trends

Model building

- Estimating market potential - Forecasting sales - Selecting trade areas and sites
- Development of Prospect Lists - Enhancement of Customer Lists

Data Base Marketing

Literature survey!

Why Literature Survey is conducted?

In order not to ignore the important variables related with the problem concerned Testability and replicability of the findings of the current research is enhanced. Avoid the risk of reinventing the wheel

Significancy and relevancy of the problem investigated is revealed to the scientific community.
What variables to consider (parsinomy), why they are important. This helps to construct theoretical framework and develop the hypothesis for testing.

How to make use of Literature Survey?

Theory variable- hypothesis

Theory is a set of (network of) general propositions used to explain the relationships among certain phenomena

Theory variable- hypothesis

Hypothesis is a proposition that is empirically testable. Empirical means that something is verifiable by research.

Theory variable- hypothesis

You need variables for stating propositions and then developing theories. A variable (or construct) is:generalized idea about a class of objects, attributes, occurrences, processes, behavior, attitude eg; Package design, quality, brand image, taste of a product, school failure, achievement, inflation, strike, internet usage, reinforcement, productivity, aggressiveness, conformity, honesty, anxiety, brand equity

VARIABLE

A variable is anything that can take on differing, varying values For.ex- exam score: from 0 to 100 For.ex- motivation: from not at all to very high motivation

Exercise

Decision Problem: Develop a social environment for Bilgi Students Research Problem: Analyse Life Styles Variable / LS: AIO (Activities, Interests, Opinions)
I like a lot of variety in my life. Mostly disagree Somewhat disagree Somewhat agree Mostly agree I follow the latest trends and fashions. Mostly disagree Somewhat disagree Somewhat agree Mostly agree

I often crave excitement. Mostly disagree Somewhat disagree Somewhat agree Mostly agree

Hypothesis: Class Level, Gender, Faculty, Department ~ AIO

TYPES of VARIABLES

Dependent Variable Independent Variable Mediating Variable Intervening Variable

DEPENDENT VARIABLE

It is the primary interest of the researcher. The researchers goal is to explain the variability in the dependent variable.

DEPENDENT VARIABLE Example

A manager is concerned that the sales of a new product launched is not as high as expected. The dependent variable is sales.

INDEPENDENT VARIABLE

It is the one that influences the dependent variable in either a positive or a negative way

INDEPENDENT VARIABLE Example

Dependent variable sales

Independent variable(s) IMC budget price of product package design of product etc....

MEDIATING VARIABLE

Presence of a third variable modifies the originally expected relationship between the dependent and independent variables

MEDIATING VARIABLE Example

Dependent variable sales
Independent variable(s) IMC budget Mediating variable media used for advertisement

INTERVENING VARIABLE

It is one that surfaces between the time the independent variables operate to influence the dependent variable and their impact on the dependent variable

INTERVENING VARIABLE Example

Dependent variable sales Independent variable(s) IMC budget

Mediating variable media used for advertisement

Intervening variable public reaction to the newly announced pollution created by the production process of the product

HYPOTHESIS DEVELOPMENT

Once the variables are identified, a logical reasoning must be done about the relationship among variables. And then this relation must be tested scientifically. Formulating such testable statements is called hypothesis development

HYPOTHESIS DEVELOPMENT Example

H: There is no significant relationship between the imc budget spent for launching the new product and its sales

Exercise Solution

Independent Variable(s): IMC budget price of product package design of product

Dependent Variable: sales

Mediating Variable: Media for advertisement

Intervening Variable: public reaction to the newly announced pollution created by the production process of the product

EXERCISE
A soft drink firm will launch a new brand of beverage in two years time.
In a short time they plan to capture a significant portion of the market and they wonder about the factors of brand loyalty in soft drinks market.

Decision Problem: whether to launch a new brand of beverage. Research Problem: the factors of brand loyalty in soft drinks market.

The research company finds out through the literature that taste, package design, price and availibility are the factors that increase loyalty. And they also read in the literature that recommendation of friends- word of mouth- strengthens this relation.

VARIABLES
INDEPENDENT VARIABLES
-Taste -package design - price -availibility

DEPENDENT VARIABLE
Loyalty to soft drinks

MEDIATING VARIABLE
WOM

Hypothesis

There is a significant relationship between loyalty to soft drinks and package design There is a significant relationship between loyalty to soft drinks and price There is a significant relationship between loyalty to soft drinks and taste There is a significant relationship between loyalty to soft drinks and availibility There is a significant relationship between loyalty to soft drinks and WOM

EXERCISE 2

A Cosmetic Company wants to start a PR campaign in one month time. A celebrity woman will make testimonials with different products of the firm and will make speeches. To make sure of the effectiveness of the campaign they want to frame the content of speeches.

So company aims to learn the most important points to convince the customers prefer their brand.

Decision Problem: whether to start a PR campaign Research Problem: the points of brand preference in cosmetic sector.

The research company finds out through the literature that easy pronounciation of brand name, price, fragrance and color of package are the factors that influence brand preference. And they also read in the literature that, education level of consumers, affect the priority of factors. Besides the attractivenessof celebrity has high impact

VARIABLES
MEDIATING VARIABLE
Attractiveness of celebrity

INDEPENDENT VARIABLES
Easy pronunciation of brand name Price Fragrance Color of pack

DEPENDENT VARIABLE
Brand preference in cosmetics

MEDIATING VARIABLE
Education

EXERCISE

INDEPENDENT VARIABLE(s)
-Demographic variables -Location of internet usage -# of hours/ week spent over Internet -Reason of Internet use -Other media consumption

DEPENDENT VARIABLE Internet Addiction

MEDIATING VARIABLE Gratification of internet use

EXERCISE

INDEPENDENT VARIABLE(s)

DEPENDENT VARIABLE Attitudes Towards an Ad

MEDIATING VARIABLE

Ruling out chance as an explanation

When a variable appears to have an effect on another variable, it is very important to be able to state with confidence that the effect was really due to the variable and not just due to chance.

RESEARCH PROCESS
1- Establish a need for information 2- Specify Research Objectives, Decision Problems , Research Problems 3- Specify Information Needs and the Associated Research Design 4- Determine Sources of Data 5- Develop Data Collection Forms 6- Design the Sample 7- Collect, Process, and Analyse the Data 8- Present the Results

Research Design: Definition

A research design is a framework or blueprint for conducting the research project. It details the procedures necessary for obtaining the information needed to structure or solve research problems.

CRITERIA FOR SELECTING the RESEARCH DESIGN

What To

is the reason of the research?

what extent the result will affect your decision?

Will

it be used for a critical decision? (eg.like investment decision)

What

is the required degree of precision and confidence?

Extent Is

of generalization required.

there sufficient time available for such a research?

What

is the budget allocated for the research?

A Classification of Research Designs

Research Design

Exploratory Research Design

Conclusive Research Design

Descriptive Research

Causal Research

EXPLORATORY RESEARCH when we don't know what is happening?

DESCRIPTIVE RESEARCH to learn about what is happening

CAUSAL RESEARCH to learn why something is happening

....

a given research project may contain elements of all three types of research designs !

Along with research design, the research process must be designed

setting, location for the study, unit of analysis, time horizon

SETTING & LOCATION

Natural setting;

where events normally occur Contrived setting; artificial

And the location

specifically?

Unit of analysis
Individuals Dyads Groups Organisations Cultures

TIME HORIZON

Cross Sectional Longitudinal