MARKETING RESEARCH

“ The process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods and services to create exchanges that satisfy individual and organizational objectives.”

McDaniel & Gates

Marketing

What is Research?

Investigation or experimentation aimed at the discovery and interpretation of facts

“The planning, collection, and analysis of data relevant to marketing decision making and the communication of the results of this analysis to management”

McDaniel and Gates

What is Marketing Research?

What functions should be performed to successfully market this product?

What are all the potential research activities needed to support each of these marketing functions?

Why Should Organizations Spend

Money on Market Research?

“TO GUESS IS CHEAP, TO GUESS WRONGLY IS EXPENSIVE”

Marketing research is an investment that produces a return on investment by reducing the possibility of failure and enhancing the success of marketing strategies and decision-making. In a word it reduces risk.

Chinese proverb

How does research achieve reduction in risk?

Why should research be hypothesis driven?

Indigo books has noticed that many customers abandon the shopping process part way through.

What might be the reasons for this?

Product

Price

Promotion

Place

What sort of decisions does management face that require

information (i.e. Marketing research)

A

R

T

ccurate

elevant

imely

What Qualities of the data will be relevant to marketing decision making?

• “How many people like your product?”• Predictive if done correctly• Surveys: Telephone, Mail, Intercept, Internet

What are the Two main types of information?

Qualitative

• “How do people feel about the your product?”• Not predictive of market behavior• Qualify needs, wants, preferences• Focus Groups, In-depth interviews• Ethnography, observational studies

Quantitative

Secondary Research• Existing studies, census data, articles• Internet, library, trade journals• Non-specific and often dated

Primary Research• data originated specifically for the study at hand • Create your own questions and find your own

answers by asking people what they think, feel, know, etc.

• Common methods include: – Focus groups, surveys

What are Two main sources of information?

• Marketing Research

• Customer Databases

• Internal Reporting Systems/ Scanner Data

• The Internet / On-line Sources

What are the Major Sources of Information?

Types Of Research

• Exploratory

• Descriptive

• Causal

Exploratory Research• Initial research conducted to clarify and define

the nature of a problem• Does not provide conclusive evidence• Helps develop hypotheses but does not test

them• Subsequent research expected• Published sources, depth interviews, focus

groups• characterized by its flexibility

Descriptive Research• Describes characteristics of a population or

phenomenon (who, what, where, when, why, and how)

• Some understanding of the nature of the problem

• Tends to be more quantitative than qualitative

• Tests hypotheses and provides conclusive information

• more rigid than exploratory research

Causal Research• Conducted to identify cause and effect

relationships, especially to see how actions now will affect a business in the future

• accomplishes goal through laboratory and field experiments

• For example, if Kellogg’s wants to know what impact on sales a change in package design would have.

• Stores are matched in terms of demographics, location etc. with only the packaging changed.

• Following the research, marketing managers will be able to decide whether changing the package design would be profitable.

Exploratory Research(Unaware of Problem)

“Our sales are declining and we don’t know why.”

“Would people be interested in our new product idea?”

Descriptive Research(Aware of Problem)

“What kind of people are buying our product?

Who buys our competitor’s product?”

“What features do buyers prefer in our product?”

Causal Research(Problem Clearly Defined)

“Will buyers purchase more ofour products in a new package?

“Which of two advertising campaigns is more effective?”

Uncertainty Influences The Type Of Research

COMPLETELY CERTAINABSOLUTE AMBIGUITYCAUSAL ORDESCRIPTIVEEXPLORATORY

Do we really need research? Expensive. Valuable? Benefits versus costs

Nature of the decision Vital?

When should we NOT conduct research: No time or money Insufficient payback Information already available Information too hard to get

Determining When to Conduct Marketing Research

The Bank of Montreal has been trying to sell its services online but finds that new web users are not signing up for services. Management wonders whether or not they should invest in a guided tour.

Should they conduct market research to help them decide?

A guided tour involves a considerable financial risk. There are also concerns about brand image. So they decide to proceed with the research. What do they need to know?

What are some hypotheses as to why users are not signing up? How might they discover which, if any, of these possible reasons is correct?

Assume they discover that the reason was a poor portrayal of the value proposition, I.e.people did not understand why they should use the service. What would be the next step?

Anecdotal evidence suggests that although customers like the performance and comfort of the Ford Crown Victoria, they are not overly enthusiastic about it’s design which has changed little since the last major design change in 1992. Ford has decided to hire an external market research company (i.e. you) to find out how the public are likely to feel about a new design. What steps would you take to provide this information?

19922009

The Marketing Research Process

1. Problem identification

2. specifying what information is required – define research objectives (hypothesis driven)

3. designing the method for collecting information (, exploratory, survey, observation, secondary, experiment)

4. Select sample

5. managing and implementing the collection of data

6. Preparing, analyzing and interpreting the data

7. communicating the findings and their implications.

What is the purpose of the study?What is the relevant background information?Problem definition involves discussion with the decision makers, analysis of secondary data, perhaps, some exploratory researchOnce the problem has been precisely defined, the research can be designed and conducted properlyA decline in sales is a problem, but its underlying cause is what must be correctedTo define the problem, list every factor that may have influenced it, then eliminate any that cannot be measured

1. Define the problem or opportunity

2. specifying what information is required

Ascertain the decision maker’s

objectives

Understand background of the problem

Isolate/identify the problem,

not the symptoms

Determine unit of analysis

Determine relevant variables

State research questions and

objectives

Exploratory: ◦ Initial, unstructured, informal

◦ When you don’t know much

◦ Focus groups, lit review, case study, pilot study, secondary

data, experience survey

Descriptive:◦ Answers who, what, why and how

◦ Surveys, observation

Causal:◦ Relationships between variables

◦ Experiments

3. Determine Research Design

Subjects

◦ Census = all

◦ Sample = portion

Identify target population

◦ Cost vs. generalizability

Identify unit of analysis

◦ Individual, household, community

How will you select subjects?

◦ Probability vs. nonprobability

4. Select Sample

Determine data gathering methods

◦ Secondary data:

Internal records, reports for purchase, library, web

◦ Primary data:

Telephone, web, in person, mail, observation (in person,

electronic)

Properly prepare

◦ Pretest, pilot test, main study

5. Collect Data

• Edit data

• Code data

• Select appropriate analysis method

• Use to summarize findings

• Use to interpret results

– Will the findings hold for the general population?

6. Analyze Data

• SUMMARY:

• What was done and what was found

• Goal: clear, unbiased conclusions

• Write for your audience

7. Prepare Report

The Marketing Research Process

Problem Discovery

Exploratory Research

Selection of the Basic Research Method

Selection of Sample Design

Collection of the Data

The Research Process (cont.)

Editing and Coding

Data Processing

Interpretation of the Findings

Report

Would you talk only to current owners?

Would you talk to only 10 people?

Would it matter if you asked them about the Cadillac Escalade?

Would it matter if you did a multiple regression analysis?

Would you talk only to men?

Marketing research works because, by talking to a relatively small number of people, it is possible to find out about a far larger number.

it only works if you talk to the right number of people

it only works if you talk to the right type of people

it only works if you ask the right questions and

it only works if you analyze the data in the right way.

But…..

Research EthicsThe moral principals and values that govern actions and decisions. They are guidelines on how to act when faced with moral dilemmas.

No harmConfidential or Anonymous?

Full disclosureBefore and after (debriefing)

No deception (passive or active)

No coercionRight of refusal

Identity protectionAnonymity or confidentiality

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

Albert Einstein

The Management Problem versusThe Management Problem versusthe Marketing Research Problemthe Marketing Research Problem

A distinction must be made between the management problem and the marketing research problem.

Management ProblemManagement Problem Marketing ResearchMarketing ResearchProblemsProblems

• Focus on symptoms

• Action oriented

• Focus on causes

• Data oriented