MARKETING RESEARCH

Marketing Research: Definition and Purpose

Many definitions of Marketing Research: Marketing research is the systematic design, collection, analysis and reporting of data and findings relevant to a specific marketing situation facing the company. [Philip Kotler]

the systematic gathering, recording and analyzing of all data about problems relating to the marketing of goods and services. [The American Marketing Association]

 -Formal communication link with the environment

to provide accurate and useful information for better decision making. -Systematic process of specifying, collecting, analyzing data, and interpreting.

 Basic Purpose of Marketing Research

Marketing research reduces uncertainty or error in decision-making. The information collected by conducting marketing research is used for problem solving and decision making in various areas of marketing.

The quality of marketing planning decision depends on the quality of the information on which they are based

Garbage In = Garbage Out

good market info = good marketing planning

good market info = good marketing planning

There are many sources of Market Info:customer complaints sales-force reports government statistics industry reports

Marketing Research
The systematic gathering, recording, and analyzing of data about problems relating to the marketing of goods and services.

Marketing Research
The critical task of the Marketing Manager is DECISION MAKING.

Marketing Research helps provide good information to help in decision making.

Marketing Research
The information gathered during Marketing Research can help:

develop sales forecasts

design new products, based on customer opinion create attractive packaging guide advertising plans

Marketing Research Where do you get the info?

A. you can do it yourself by making someone in the company responsible for doing the research
B. you can hire an outside agency that specializes in Market Research

Marketing Research
Where do you get the info? B. you can hire an outside agency that specializes in Market Research

There are 2 types of outside agencies

1. Full Service Research Supplier

2. Syndicated Service

Marketing Research
1. Full Service Research Supplier They will handle all aspects, conduct interviews, send out questionnaires, do telephone polls etc. and provide a detailed report explaining all aspects of your potential customer base.

Marketing Research
2. Syndicated Service

These types of companies gather various types of information and sell it (usually in subscription form) to clients that have regular needs.
Restaurants can buy statistical information on eating habits and spending patterns Clothing companies can buy information on demographics and seasonal buying patterns as well as trend information.

Application of MR
Marketing research activities can be divided into four main strategic categories:
Market Analysis
Identifying and evaluating opportunities Competitive Analysis

Market Segmentation
Analyzing market segments and selecting target markets

Marketing Strategy Design

Planning and implementing a marketing mix

Analyzing Marketing Performance

6 Steps in the Market Research Process

1. 2. 3. 4.

5.

6.

Problem Definition
You have to first know what you are looking for - this is not always so easy. If your new chocolate bar isnt selling well, you dont automatically do market research on the taste - because maybe the reason has to do with the packaging.

PROBLEM SOLVING PROCESS

GOAL

WHAT NEXT

DEFINE

WHAT WHEN WHERE

COMPARE

COMPARE

TEST

TEST

ANALYZE

ANALYZE WHY HOW

Exploratory Research

Often described as looking before you start looking

Learning about the problem area and beginning to focus on specific areas of study by discussing the problem with informed sources within the firm (a process often called situation analysis) and with knowledgeable others outside the firm (the informal investigation).

Exploratory Research
One of the important things to do is review the existing situation to determine how things came to be that way - this is an important part of the Exploratory Research and is one of the reasons why companies hire outside agencies. It is difficult for a company to look at itself

After the problem has been defined (Step 1), and an exploratory investigation (Step 2) has been conducted, it is possible to then formulate a Hypothesis (Step 3)

Hypothesis

Stage 3

A tentative explanation about the relationship between variables as a starting point for further testing. TEXT The way of thinking about how something works - and using your original guess as a starting point for further investigation WTGR

Hypothesis

Research Design

Stage 4

The Research Design should be a plan for testing the Hypothesis.

A series of advance decisions that, taken together, make up a master plan or model for conducting the investigation.

Research Design

Collecting Data Stage 5

Collecting Data is often the expensive stage because it may involve paying people to make telephone calls, or hiring students to takes questionnaires to malls and ask shoppers to answer questions. This is time consuming as well as costly

Collecting Data
Primary Data
Data being collected for the first time.

Stage 5

Secondary Data
Previously produced or published matter.

Collecting Data
Secondary Data
Internal
- eg. company sales records

Stage 5

External
Previously published matter. (govt statistics, reports, newspaper articles etc.)

Collecting Data
Secondary Data
External - Government Sources

Stage 5

http://WWW.StatCan.CA/english/Pgdb/Economy/econom.htm http://WWW.StatCan.CA/english/Pgdb/People/Population/demo05.htm
The Canadian government produces so MUCH data from census and business reports that it is published in report. Some of these reports are free, some can be bought, and some customized information can be bought at a high price.

Collecting Data
Advantages of Secondary Data
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1. less expensive 2. less time

Collecting Data
Advantages of Secondary Data
Page 84

1. It is usually less expensive than Primary Data - and if the purpose if just to determine a general trend, then for many situations, Secondary Data is O.K. 2. It takes less time to find Secondary Data (compared to doing new studies) and therefore you answer your questions more quickly, and get on with the business.

Collecting Data
Limitations of Secondary Data
Page 85

1. Obsolete 2. Fit - relevance

Collecting Data
Limitations of Secondary Data
Page 85

1. Obsolete - date it was produced may be old - this is why some companies pay for new Primary Data 2. Fit - relevance. Some Secondary Data is too vague to answer the questions - therefore you need new Primary Data that is more specific

Collecting Data
Primary Data
Data being collected for the first time.
1. Observation 2. Survey Telephone Mail Personal Interview 3. Controlled Experiment

Stage 5

Collecting Data
Primary Data
Data being collected for the first time.
1. Observation

Stage 5

overt - watching how customers shop, what they look at, the features they like, asking for postal codes, counting cars - often used to evaluate how good some advertising is covert (technical eg. Hidden camera, POP computerized information)

Collecting Data
Primary Data
Data being collected for the first time.

Stage 5

2. Survey Telephone - inexpensive and fast - they are the majority of primary marketing research used by big marketing research companies Mail - costs less, and more detailed questions can be asked, can be used in geographic segments Personal Interview - the best method, but most expensive

Collecting Data
Primary Data
Data being collected for the first time.
2. Survey Personal Interview

Stage 5

- FOCUS GROUPS are a special type of personal interview typically 8 ~ 12 people are shown something, then asked for comments typically used in preparing TV commercials

Collecting Data
Primary Data
Data being collected for the first time.
3. Controlled Experiment

Stage 5

- Sometimes TEST products are used in cities like Calgary and Winnipeg, and then not followed up, so people there have a chance to use totally new products not available elsewhere - eg. Winnipeg was the first city to try variable sizes of plastic soft drink bottled

Collecting Data
Test Marketing
The selection of areas considered reasonably typical of the total market, and introducing a new product to these areas with a total marketing campaign to determine consumer response before marketing the product nationally.

Collecting Data
The Data Collection Instrument or, getting the info
Most of the work in Data Collection depends on the use of a good questionnaire has to ask questions referring to specific objectives should be pre-tested, if it is new, so you can make any changes to the questions

Sampling Techniques
Population (universe) Probability Sample Convenience Quota Simple Random Census Nonprobability Sample Judgment Cluster Systematic Technique

Sampling Techniques
Population (universe)

the total group that the researcher wants to study

Sampling Techniques
Census

if the total group is contacted, the results are known as a census

(same term as used when the government does a census to get information on the citizens)

Sampling Techniques
Probability Sample

a sample in which every member of the population has a known

chance of being selected

Sampling Techniques
Nonprobability Sample

a sample chosen in an arbitrary way so that each member of the

population does not have a representative chance to be selected.

Sampling Techniques
Convenience Sample

a sample chosen in an arbitrary way (a nonprobability sample) so

that each member of the population does not have a representative chance to be selected. - BECAUSE they just used readily available respondents/participants

eg. CityTV on the street interviews

Sampling Techniques
Judgement Sample

a nonprobability sample of people with a specific attribute. eg. CityTV on the street interviews of people that DO NOT have
political party affiliation - to determine how they voted, and who would win the election

Sampling Techniques
Quota Sample

a nonprobability sample that is divided so that different segments

or groups are represented in the total sample.

Page 90

Sampling Techniques
Cluster Sample

a probability sample that is used in groups used when it is difficult to ask everybody, so they pick some areas
and ask everybody in that area (cluster)

Sampling Techniques
Simple Random Sample

a probability sample in which everybody has an equal opportunity of

being selected.

Sampling Techniques
Systematic Sample

every 5th, or every nth person is selected. An example is market

research people who call every 10th person in the phone book to get an opinion.

Marketing Information Systems

For some companies, market knowledge comes in on a regular basis.

Some stuff is Data, and some is Information

Data = statistics, opinions in surveys, facts, predictions etc.

Information = data RELEVANT to the Marketing Manager in making decisions

Marketing Information Systems

The most important thing is

RELEVANCE

Marketing Information Systems

The best way to get RELEVANT information is to establish a systematic approach and have a planned Marketing Information System

Marketing Information Systems

Defn A set of routine procedures to continuously collect, monitor, and present internal and external information on company performance and opportunities in the marketplace.

Marketing Information Systems

A set of routine procedures
- things you do all the time

to continuously collect, monitor, - always gathering info

and present
- give to the boss

internal and external information - inside the company,

and from primary and secondary sources

on company performance - how you are doing

and opportunities in the marketplace.

Information Components of a Firms MIS

Marketing Information Systems

All of this depends on the ability of the company to use technology to help it be better than the competition