Chapter 4 Market research and information systems

1. Presentation prepared by Robin Roberts, Griffith University and Mike Spark, Swinburne University of Technology

2. Chapter 4Market research and information systems

3. Chapter Objectives • Understand the role of market research in the marketing process • Apply the market research process • Explain the funnel-based approach to data collection • Employ the appropriate method of gathering data to address the research problem Chapter 4

4. Chapter Objectives • Employ ethical market research practices • Explain how international considerations impact the market research process Chapter 4

5. Chapter 4

6. The importance of market research Market research is the: Systematic design, collection, interpretation, and reporting of information to help marketers solve specific marketing problems or take advantage of marketing opportunities Chapter 4

7. Market research at Virgin Blue Dial-Up Broadband Darren Wright - National Marketing Manager - Virgin Blue Chapter 4

8. The importance of market research Dial-Up Broadband Neil Paterson, Director of Sales & Marketing, Sofitel Hotel, Gold Coast Chapter 4

9. The importance of market research Dial-Up Broadband Bruce White, Director of Marketing, Story Bridge Adventure Climb Chapter 4

10. The benefits of market research There are many benefits to conducting market research: • Helps firms stay in touch with customers’ changing attitudes and purchase patterns • Aids in the development of marketing mixes • Assists in better understanding market opportunities • Helps determine the feasibility of a particular marketing strategy Chapter 4

11. Will Surf City Squeeze succeed in the Australian market? What are the key issues that should be researched? Dial-Up Broadband Chapter 4

12. Why has Stuck on You used market research? Dial-Up Broadband Chapter 4

13. The five steps of the market research process Chapter 4

14. 1. Locating and defining research problems Focusing on uncovering the nature and boundaries of a situation or question related to marketing strategy or implementation • Normally follows departures from normal or expected marketing results • Focuses on identifying and defining potential market opportunities • Marketers and researchers must define the nature and scope, and probe below the superficial symptoms Chapter 4

15. 2. Designing the research project Research Design is the overall plan for obtaining the information needed to address a research problem or issue. This step includes formulating a hypothesis. Hypothesis • A tentative explanation for an observation, phenomenon or scientific problem that can be tested • Several hypotheses can be developed during an actual research project Chapter 4

16. Types of research Exploratory Research • Research conducted to gather more information about a problem or to make a tentative hypothesis more specific Descriptive Research • Research conducted to clarify the characteristics of certain phenomena to solve a particular problem Causal Research • ‘Cause and effect’ research Chapter 4

17. Research reliability and validity In designing research, market researchers must ensure that research techniques are both reliable and valid Reliability • When a research technique produces almost identical results in repeated trials Validity • When a research method measures what it is supposed to measure Chapter 4

18. 3. Collecting Data Data must be collected to help prove or disprove the research hypothesis. Types of data include: Primary data: • data observed and recorded or collected directly Secondary data: • data compiled both inside and outside the organisation for some purpose other than the current investigation Chapter 4

19. Using the services of market research firm Dial-Up Broadband Peter Kenny - Managing Director Colmar Brunton Market Research Chapter 4

20. How does a market research firm use secondary data? Dial-Up Broadband Peter Kenny - Managing Director Colmar Brunton Market Research Chapter 4

21. Funnel-based approach todata collection Chapter 4

22. Sources of secondary data Marketers often begin the data collection phase by gathering secondary data from both internal and external sources Internal sources • Sales reports, by geographical area, product or product line, accounting information • Competitive information External sources • Magazines and newsletters • Trade and industry associations • On-line and government databases (e.g. ABS) • External market share measurement systems Chapter 4

23. Data collection techniques of a market research firm Dial-Up Broadband Peter Kenny- Managing Director Colmar Brunton Market Research Chapter 4

24. Marketing information systems MIS – A marketing information system is a framework for the ongoing collection, structuring and management of information from internal and external sources Concentrates on: • Data storage and retrieval • Computer capabilities • Management’s information requirements Chapter 4

25. Using technology to improve marketing information gathering and analysis The evolving telecommunications and computer technology is allowing marketing information systems to cultivate one-to-one relationships with customers, through: Databases • A collection of information arranged for easy access and retrieval Single-Source Data • Information provided by a single marketing research firm (e.g. FlyBuys) Chapter 4

26. Using technology to improve marketing information gathering and analysis The Web and one’s own websites Data mining • The exploration and analysis of large sets of data in order to discover meaningful patterns and rules • Technology is used to gain ‘knowledge discovery from databases’ • The search can have a purpose or simply be exploratory Chapter 4

27. Methods of collecting primary data To gather primary data, researchers use sampling procedures, survey methods, observation and experimentation. Market Research methods: Quantitative research • standardised questions are asked of a number of respondents and the resulting data are given a numerical code Qualitative research • individuals or small groups are questioned at length about some issue Chapter 4

28. Methods of collecting primary data Sampling • Population: all the elements, units or individuals of interest to researchers • Sample: a limited number of units are systematically chosen to represent the characteristics of a total population Types of Sampling • Probability: each element has a known chance for study — random or stratified • Non-probability: an element’s likelihood of study is unknown Chapter 4

29. Selecting a random sample Dial-Up Broadband William Burlace, Director, Media ServicesRoy Morgan Research Chapter 4

30. Probability versus non-probability sampling Dial-Up Broadband Peter Kenny - Managing Director Colmar Brunton Market Research Chapter 4

31. Survey methods Selection of a survey method depends on: • nature of the problem • data needed to test the hypothesis • Resources such as funding and personnel • Mail Survey • Telephone Survey • Online Survey • Personal Interview Survey • In-home / shopping mall intercept interview • Focus-group interview • Telephone depth interview Chapter 4

32. Questionnaire Construction A carefully constructed questionnaire is essential to the success of any survey Open-ended Question What is your general opinion about broadband Internet access for your computer? Dichotomous Question Do you currently have broadband access at home, school or work? Yes ___ No ___ Multiple-choice Question What age group are you in? Under 20 _____ 20-35 _____ 36 and over _____ Chapter 4

34. Observation methods for data collection Overt behaviour is observed by researchers — direct contact with subject is avoided • Physical conditions, subject actions, and demographics are noted • Observations may be combined with same subject interviews • Data gathered may be biased if the person is aware of the observation process, or the observer introduces bias Chapter 4

35. Experimentation An experiment is a research method that attempts to maintain (control) certain variables while measuring the effects of experimental (uncontrolled) variables • Independent variable: acts on the dependent variable • Dependent variable: is affected by variations in the independent variable It is primarily used in market research to improve hypothesis testing Chapter 4

36. 4. Interpreting research findings After collecting data marketers need to interpret the research findings Interpretation is easier if data analysis is planned early in the research process, and evaluated regularly Statistical Interpretation • Analysis of survey data to determine what is typical or what deviates from the average Chapter 4

37. 5. Reporting research findings Marketer must take a clear, objective look at the findings to see how well the gathered facts answer the research question or support or negate the hypothesis Prepare a formal, written document • Summary and recommendations: Short, clear, and simply expressed • Technical report: Contains more detailed information about research methods and procedures and important data gathered Chapter 4

38. Issues in market research The importance of ethical market research: • Professional standards have been established • Australian Market and Social Research Society have developed a code of conduct and guidelines for their members • Many ethical issues have to be considered by market researchers Review Table 4.8 Chapter 4

39. Survey response rates Dial-Up Broadband Michael Sparks, DirectorIntuitive Solutions Market Research Chapter 4

40. Issues in market research International issues in market research • Modification of data-gathering methods to account for regional differences • Use of two-pronged approach to research • Detailed search for and analysis of secondary data • Field research to refine the firm’s understanding of how a local environment will shape or restrict data-gathering about customers Chapter 4

41. Chapter 4