What is Marketing Research? Why do Organizations Need Market Research?

1. Recap What is Marketing Research? Why do Organizations Need Market Research? What sort of information is needed – generally? Why and When does Marketing Research Work?

2. The Marketing Research Process Step 1: Identify and define the Problem or Opportunity Step 2: Define the Marketing Research Problem Step 3: Specify the Research Design Step 4: Develop the Data Collection Procedure Step 5: Design the Sampling Procedure Step 6: Collect the Data Step 7: Process and Analyze the Data Step 8: Present the Results

3. Step 1: Identify the Problem or Opportunity Management decision Problem asks what the decision maker needs to do? What should/can Subaru do to expand its share of the Automobile market? What do we need to know to identify or define the problem? • History of the problem • Environment in which it is being made (eg legal, competitive, economic, financial, social) • What alternative courses of action are there? • What criteria should we use to decide between alternatives • (e.g. sales targets, market share, profitability, ROI) • What is the timing of the decision? • Who are the decision makers and what are their purposes?

4. Why is it important to clearly define the management decision problem? • Because problem definition sets the course of the entire project • Because the client is paying for the research so both need to know what to expect • Because mistakes made at this level grow into larger, more expensive mistakes later on. • The problem definition process provides guidelines on how to correctly define the marketing research problem • All the effort, time and money spent from this point on will be wasted if the problem is not properly defined.

5. Step 2: Define the Marketing Research Problem A statement of the information needed to make a sound decision • What’s wrong with these statements? • Develop a marketing strategy for the brand. • Improve the competitive position of the firm • Improve the company’s image • What’s wrong with this statement? • How should the company adjust its pricing given that a major competitor has initiated price changes?

6. What are the various needs of automobile users and to what extent do current product offerings satisfy those needs? What information is needed to answer this question? • What needs do buyers of passenger cars, stations wagons, and SUV’s seek to satisfy. Hypotheses? • How well do existing automobile product offerings meet these needs? Hypotheses? • Is there a segment of the automobile market whose needs are not being met? Hypotheses? • What automobile features does this segment in question 3 desire. Hypotheses? • What is the demographic and psychographics profile of the identified segment? Hypotheses?

7. Research Q: Is there an overlap between the features sought by station wagon buyers and buyers of sports utility vehicles Hypothesis 1: The buyers of station wagons rate certain features of SUVs as important Hypothesis 2: The buyers of SUVs rate certain features of station wagons as important

8. Component Analysis – specific information needed make a list of the information that should be collected for each research question and hypothesis E.g. Component 1. needs of buyers of passenger cars operationalized in terms of the attributes or features desired in an automobile Component 1. needs of buyers of SUVs operationalized in terms of the attributes or features desired in an automobile Component 2: Evaluation of passenger cars on desired attributes Evaluation of station wagons on desired attributes Evaluation of SUVs1` on desired attributes

9. The Marketing Problem versus the Marketing Research Problem A distinction must be made between the management problem and the marketing researchproblem. Marketing Research Problems Management Problem • Focus on symptoms • Action oriented • Focus on causes • Data oriented

10. Examples of the Relationship between Decision Problems and Research Problems Decision Problems Research Problems How should we develop a package for a new product Increase market penetration through the opening of new stores Increase store traffic Increase amount of repeat purchasing behavior What should be done to increase market share of product Allocate advertising budget geographically Introduce new product Evaluate effectiveness of alternative package designs Evaluate prospective locations Measure current image of the store Assess current amount of repeat purchasing behavior Determine the relative strengths and weakness of the product with respect to competitors Determine current level of market penetration in the respective areas Test likely acceptance of the new product Assess probable market size and share.

11. 1. Management Decision Problem Should Bank X implement ATM surcharge fees on Consumers who are not customers of the bank but use the Bank's ATMs? 2. Marketing Research Problem Quantify the impact of implementing the new ATM surcharges will have on the ability to attract new customers, retain existing customers, and the impact on ATM usage of non customers. 3. & 4. Marketing Research Objectives & Hypotheses Research Objectives Evaluate the impact of the new fees on the Bank's image Develop a profile of the customers most impacted by the new fee Quantify the potential gain of non-customers that will move to the bank to avoid the fees Determine the expected change in customer behavior if the fees are implemented. Quantify the net financial impact of implementing the fee Hypotheses The Bank's image will be hurt as well as the overall industries image will suffer because it is already seen as greedy and these fees will be another example in the public's view. The impact will be mitigated if all banks implement the fee. The typical ATM user will be younger and have smaller balances. The heaviest users will be those who keep little money with the bank and therefore contribute the least to the bank’s profitability. Some fee-sensitive customers will move to the banks with large ATM networks while others will restrict their ATM usage. However, more customers will change behavior rather than change banks. The overall number of ATM transactions will decrease, especially those at non-bank ATMs and there will be an increase in more expensive Branch transactions A $1 fee on non-bank customers ATM transactions will outweigh the decrease in overall ATM transactions that will be encountered and add additional profits to the bank.

19. Defining the marketing/management problem

20. Step 3: Specify the Research Design • This step involves deciding the type of research that is going to be used and the source of the data. • For example, deciding between exploratory, experimental, or descriptive research

21. Exploratory Research When is it used? • When looking for insights into the problem • To help define hypotheses and key variables • Information needs vague How is it characterized • Research is flexible and unstructured • Findings tentative • Used as building block for more research • e.g. pilot surveys, secondary data, focus groups

22. Descriptive Research What is the Objective? To describe something, e.g. market characteristics What characterizes descriptive research • Problem well understood • Tests specific hypotheses • Formal and structured • e.g. surveys • Large representative samples • Provides a snapshot of the market environment

23. Causal Research What is the objective of causal research? To obtain information regarding cause and effect relationships Characteristics? • Independent variable manipulated in a relatively controlled environment • Main method is experiment • Used to understand which variables are causes (independent variables), and which variables are the effects (dependent variables)

24. Understanding of Problem? Understanding of problem? EXPLORATORY or SECONDARY RESEARCH EXPERIMENT Need to establish causality? Need estimates of prevalence? Objective answers by asking? SURVEY Poor Good Yes No Yes Yes No No FOCUS GROUPS OBSERVATIONAL RESEARCH

25. Step 4: Develop the Data Collection Procedure • Decide whether the data will be collected through surveys, interviews, focus groups, etc. • Step 5: Design the Sampling Procedure • Decide who will be in the sample, how those people are selected, and the size of the sample. • Step 6: Collect the Data • In this step, the researcher goes out and collects the data or a research supplier collects the data.

26. Step 6: Process and Analyze the Data • After collection, the data must be analyzed to see which is appropriate for the problem. Step 7: Present the Results • Create an oral or written presentation of the results of the study.

28. Team One Team Five BJ Katrina Kelly Lyle Chad Project Teams Gene Nic Lisa L Rochelle Denise A Team Two Travis Diana Sharon Michael H Team Five Chris M Julie Jeff Alison Team Three Colin Louis Lindsay Andrew Team Six Greg Duncan Christine Thomas