Marketing ResearchMarketing Research

Chapter 5Chapter 5

Reasons to do market researchReasons to do market research

• Improves the decision making of businesses

• Reduces the risk of decision making

Steps to follow in market researchSteps to follow in market research• Define the problem/concern• Obtain data (secondary and primary

data)• Analyze the data (data analysis)• Recommend solutions to the problem• Apply the results/prepare the report

Defining the problem Defining the problem

• Clearly identifying a problem is called Problem Definition– Examples: Are prices in line with

competitors?– Are promotion activities effective?– Are my employees performing good

customer service?

Obtaining DataObtaining Data

• Data is collected and examined in terms of the problem or problems.–Secondary data: Data that has

been collected for some purpose other than current study.

–Can be obtained from internal sources and external sources

Examples of secondary dataExamples of secondary data

• Internet sources• U.S. Government sources: Small

Business Administration, U.S. Census• Consumer and Business Information

Companies- Consumer purchase info.• Business and Trade Publications –

Business Week, Forbes, Wall Street Journal

Advantages and disadvantages of Advantages and disadvantages of secondary datasecondary data

• Advantages:– Can be obtained easily– Don’t have to spend a great deal of time

collecting• Disadvantages:

– Existing data may not be available for the study

– Secondary data may sometimes be inaccurate

Primary dataPrimary data

• Data that is obtained for the first time and used specifically for the problem or issue under study

• Survey method – answer questions– Sample: taking a small percentage of the

target population to represent the whole population

– Random sampling – picking the people to observe at random

Personal InterviewsPersonal Interviews

• Mall intercept interview – go to a mall and ask people questions about your store

• Focus group – get a group of people together to evaluate a product, service, or idea

• Telephone interview – Asking questions over phone: is quick and efficient (low response rate)

Other Survey methodsOther Survey methods

• Mail survey – sending surveys in the mail – low response rate, relatively inexpensive

• Internet survey – are increasing in popularity and sometimes offer free gifts such as a free meal

Observation MethodObservation Method

• Actions of people are watched and recorded– Mystery shopper: a person acting like a

shopper to evaluate salespeople– Natural setting/contrived: analyze in

natural setting with hidden cameras• Example: Give children toys to play

with and see what they play with the most

Observation (cont.)Observation (cont.)

• Point-of-sale research: Based on what the customer buys, after the sale they ask them why they bought certain items

Experimental MethodExperimental Method

• Where a researcher observed the results of changing one or more marketing variables while keeping other variables constant– Examples: Package design

New promotion– Simulation – Testing the product under ideal

conditions (car crash test for safety)

Test MarketTest Market

• Having a specific city or geographic are where you conduct a marketing research experiment– KY Fried Chicken having a few of their

restaurants in Kentucky and Tennessee be test markets for a new baked chicken

Analyzing the DataAnalyzing the Data

• The process of compiling, analyzing, and interpreting the results of secondary and primary data collection

Measures of questionnaireMeasures of questionnaire

• When the questions measure what is intended the measure is validity.

• Reliability is when a research technique produces nearly the same results each time.

Types of questionsTypes of questions

• Questions where the respondent constructs their own response are open-ended questions.– Examples: What are your feelings about the

new water park?– What are some different types of shampoos

that you use?

Types of QuestionsTypes of Questions

• Closed Ended Questions – where the respondent has to choose an answer– Would you pay $50 for admission to a The

Fray concert?

a. yes b. no– Circle the number of times that you eat

chicken per week– 1 2 3 4 5

Yes/No QuestionsYes/No Questions

• Use when asking for a response on (1) issue–Was our facility clean?–Was your server courteous?

Multiple Choice QuestionsMultiple Choice Questions

• Questions that give the respondent several choices

• Try to include every possible choice that would apply to the question– What is your primary intended use of this product?

• A. Backpacking• B. Camping• C. Fishing• D. Hunting

E. Other _____________________

Rating scale questionsRating scale questions

• Rate a product or a service on a scale– Please rate the following:

a. Reservations Excellent Good Average Fair Poorb. Parking Excellent Good Average Fair Poor

Level of AgreementLevel of Agreement• Used when assessing attitudes or opinions• Write statements that reflect attitudes or opinions

such as:– “I do not like vegetables.”Strongly agree agree neutral disagree strongly

disagree– “I am extremely health conscious.”Strongly agree agree neutral disagree strongly

disagree

Types of dataTypes of data

• Numerical data is the easiest to evaluate, you can do graphs and charts. Usually is with closed-ended (forced) questions

• Non-numerical data is open-ended questions and is harder/more time consuming to analyze, but you get more information

Guidelines for writing questions for Guidelines for writing questions for questionnairesquestionnaires

• Keep questions clear and brief• Don’t ask questions that suggest answer• Avoid any bias• Each question should deal with only one

concept• Use easily understood language• Keep it organized and confidential

When administering a When administering a questionnairequestionnaire

• Have a deadline for completion• Have a brief explanation of

survey’s purpose• Participant selection unbiased• Dress appropriately and be polite

Marketing Information ManagementMarketing Information Management

• Process of collecting, storing, and analyzing data to improve marketing decisions and performance of marketing activities– 1. Input: Information that goes into system –

typically by a computer– 2. Storage: Resources used to maintain

information (file cabinet, disks, hard drive,etc.)

Marketing Information ManagementMarketing Information Management

• 3. Analysis: summarizing, combining, and comparing information so decisions can be made

• 4. Output: result of analysis given to decision-making

• 5. Decision-making: Make your decisions based on information collected

An effective marketing information An effective marketing information management system includes all of the management system includes all of the

following except: following except:

• A. input • B. storage• C. selection process• D. ouput

What can we do to make our What can we do to make our school better is what type of school better is what type of

question?question?• A. Filter• B. Open-ended• C. Closed-ended (forced)• D. Data

Information that has already Information that has already been collected for another been collected for another

purpose is called:purpose is called:

• A. research data• B. secondary data• C. primary data• D. data analysis

Paul lets his computer pick who will be Paul lets his computer pick who will be tested next so that everyone has an tested next so that everyone has an

equal chance of being chosen. This is equal chance of being chosen. This is an example of an example of

• A. random sampling• B. fair chance• C. valid chance• D. data sampling

KY Fried Chicken has a new salad that they KY Fried Chicken has a new salad that they would like to have their customers try. They would like to have their customers try. They

decide to put it on their menu in Kentucky decide to put it on their menu in Kentucky and Ohio. This is an example of a and Ohio. This is an example of a

• A. focus group• B. test market• C. random sample• D. data sample

Kroger has cameras in their stores to record Kroger has cameras in their stores to record the shopping patterns of their customers. the shopping patterns of their customers. This is an example of ________research.This is an example of ________research.

• A. observation• B. simulation• C. test market• D. focus group

Product Development PositionsProduct Development Positions• President: General organizer/director of

procedures. Is in charge of making sure that everyone does their part

• Market Research Director: In charge of the survey development to make sure that it meets guidelines, also the taste test procedures

• Product development: In charge of the product design, ingredients, presentation

• Promotions Director: In charge of promotion of product during taste test