Marketing Research

1. Marketing Research

2. Definition • The systematicgathering, recording and analyzing of data about problems relating to the Marketing of goods and services. -American Marketing Association • Systematic problem analysis, model-building and fact-finding for the purpose of improved decision-making and control in the marketing of goods and services‘. -Kotler

3. The function which links the consumer, the customer, and public to the marketer through INFORMATION

4. Used to identify and define market opportunities and problems Generate, refine, and evaluate marketing performance Monitor marketing performance Improve understanding of marketing as a process Redefining Marketing Research Information

5. Classification of Marketing Research Problem Identification Research • Research undertaken to help identify problems which are not necessarily apparent on the surface and yet exist or are likely to arise in the future. Examples: market potential, market share, image, market characteristics, sales analysis, forecasting, and trends research. Problem Solving Research • Research undertaken to help solve specific marketing problems. Examples: segmentation, product, pricing, promotion, and distribution research.

6. Problem Identification Research Problem Solving Research Market Potential Research Market Share Research Market Characteristics Research Sales Analysis Research Forecasting Research Business Trends Research Segmentation Research Product Research Promotion Research Distribution Research A Classification of Marketing Research Marketing Research

7. PRODUCT RESEARCH SEGMENTATION RESEARCH • Test concept • Determine optimal product design • Package tests • Product modification • Brand positioning and repositioning • Test marketing • Control score tests • Determine the basis of segmentation • Establish market potential and responsiveness for various segments • Select target markets • Create lifestyle profiles: demography, media, and product image characteristics Problem Solving Research

8. PROMOTIONAL RESEARCH • Optimal promotional budget • Sales promotion relationship • Optimal promotional mix • Copy decisions • Media decisions • Creative advertising testing • Evaluation of advertising effectiveness • Claim substantiation $ALE 0.00% APR PRICING RESEARCH • Pricing policies • Importance of price in brand selection • Product line pricing • Price elasticity of demand • Initiating and responding to price changes Problem Solving Research

9. DISTRIBUTION RESEARCH Determine… • Types of distribution • Attitudes of channel members • Intensity of wholesale & resale coverage • Channel margins • Location of retail and wholesale outlets Problem Solving Research

10. Basic research • Basic research is also called fundamental or pure research. As the name itself refers, Basic Research is of basic nature which is not carried out in response to a problem. It is more educative, towards understanding the fundamentals and aim at expanding the knowledge base of an individual or organization. It does not have any commercial potential.

11. Applied research • Applied Research on the other hand is carried out to seek alternate solutions for a problem at hand. Applied research is done to solve specific, practical questions; its primary aim is not to gain knowledge. It specifies possible outcomes of each of the alternatives and its commercial implications. • Applied research can be carried out by academic or industrial institutions. Often, an academic institution such as a university will have a specific applied research program funded by an industrial partner interested in that program. Electronics, informatics, computer science, process engineering and drug design are some of the common areas of applied research.

12. Applied research can further be divided into: • Problem-solving research: It involves research oriented towards a crucial problem facing the organization which may be issue specific. • Ex: How do we improve the communication skills of our employees? • Problem-oriented research: The research is oriented towards a crucial problem facing the organization. It is undertaken inside the organization or by an external consultant on its behalf. This research is conceptual in nature and newer innovative techniques of problem-solving are applied.

13. Scope of Marketing Research • Marketing research can be used in: • Product Management: One of the major scope of marketing research is to manage the current products and new products. In product management Marketing Research is helpful in • Competitive Intelligence – To understand the competitive product strategy. • Pre-launch strategy for new products • Test Marketing – To monitor the performance of the brand by launching in a select area and then taking it across the country. In other words it is a small-scale product launch used to determine the likely acceptance of the product when it is introduced into a wider market. • Concept testing - to test the acceptance of a concept by target consumers.

14. Sales analysis: Marketing research is used to study the sales trend and make suitable strategies when required. It is used to • Assess market potential • Estimation of demand for a product • Market share estimation • Study seasonal variation for a product • Market segmentation studies • Estimate size of the market • Need analysis to find out where the product fits in • Corporate Research: Marketing Research is used to analyze the corporate effectiveness. Some examples are:

15. Assessing the image of the company • Knowledge of the company activities • Advertising Research: Advertising is an arena in which Marketing Research is extensively used. Some scope are: • Readership feedbacks – Mainly carried out for newspapers and magazines • Advertising Recall – To assess the recall of television or other advertising and thereby assess its effectiveness. • Syndicated Research: This is compiled by agencies on a regular basis and sold to organizations on subscription basis.

16. The Marketing Research Process

17. The Marketing Research Process: 11 Steps • Step One: Establishing the Need for Marketing Research • Step Two: Defining the Problem • Step Three: Establishing Research Objectives • Step Four: Determining Research Design • Step Five: Identifying Information Types and Sources • Step Six: Determining Methods of Accessing Data

18. Step Seven: Designing Data Collection Forms • Step Eight: Determining Sample Plan and Size • Step Nine: Collecting Data • Step Ten: Analyzing Data • Step Eleven: Preparing and Presenting the Final Research Report

19. Step One: Establish the Need for Marketing Research • Marketing Research is not needed when the: • required information is already available • decisions need to be made now • organization can’t afford the research • costs outweigh the value of the research

20. Step Two: Define the Problem • The most important step in the marketing research process is defining the problem.

21. Step Three: Establish Research Objectives • What information is needed in order to solve the problem?

22. Step Four: Determine Research Design • Exploratory Research: collecting information in an unstructured and informal manner • Descriptive Research: refers to a set of methods and procedures describing marketing variables • Causal Research (experiments and other approaches): allows isolation of causes and effects

23. Step Five: Identify Information Types and Sources • Secondary Data: information that has been collected for some purpose other than the research at hand • Primary Data: information that has been gathered specifically for the research objectives at hand

24. The Marketing Research Process Step Six: Determine Methods of Accessing Data • Secondary Data: accessing data through sources such as the Internet and library • Primary Data: collecting data from participants through methods such as telephone, mail, online, and face-to-face (quantitative), and observation studies and focus groups (qualitative)

25. Step Seven: Design Data Collection Forms • The design of the data collection form that is used to ask or observe and record information in marketing research projects is critical to the success of the project. • It is easy to write a set of questions but very difficult to construct a questionnaire. • General types of “instruments” (forms) • Questionnaires • Observation Study forms (protocols)

26. The Marketing Research Process Step Eight: Determine Sample Plan and Size • Sample plan: refers to the process used to select units from the population to be included in the sample • Sample size: refers to determining how many elements (units) of the population should be included in the sample

27. The Marketing Research Process Step Nine: Collect Data • Sound data collection is very important because, regardless of the data analysis methods used, data analysis cannot “fix” bad data. • Nonsampling errors may occur during data collection. These are related to poor design and/or execution of the data gathering. • Sampling errors may occur based purely on chance

28. The Marketing Research Process Step Ten: Analyze Data • Data analysis: involves entering data into computer files, inspecting data for errors (data cleaning), running tabulations (frequencies), and conducting various statistical tests

29. The Marketing Research Process Step Eleven: Prepare and Present the Final Research Report • Findings are presented, often by research objective, in a clear and concise way. • The need for a good report cannot be overstated. It is the report, and/or its presentation, that properly communicates the results to the client.

30. What is a Marketing Information System (MIS)? A marketing information system consists of people, equipment, and procedures to gather, sort, analyze, evaluate, and distribute needed, timely, and accurate information to marketing decision makers.

31. Objectives • Understand the importance of information to the company. • Know the definition of a marketing information system and be able to discuss its subparts. • Learn the steps in the marketing research process.

32. Objectives • Learn how companies analyze and distribute marketing information. • Realize the special issues some marketing researchers face, including public policy and ethical issues.

33. Characteristics of Marketing Information System • Information- Accurate, continuous flow to all • Scientific base with the help of OR techniques • Future Oriented • Ongoing Process • It provides pertinent information, collected from sources both internal and external to the company, for use as the basis of marketing decision making.

34. Need for Marketing Information System • Complexity of Marketing • Competitor Analysis • Demand Forecasting • Better understanding of the consumer • New Innovation • Economic Indicators • Planning of resources

35. Components of marketing Information System

36. Kotler Model of MKIS Marketing Information System Assessing Information Needs Developing Information Internal Records Marketing Intelligence Marketing Managers Analysis, Planning, Implementation, Control Marketing Environment Target Markets, Marketing Channels, Suppliers, Competitors, Publics, Macro-environment Forces Distributing Information DecisionSupport Marketing Research Marketing Decisions and Communications

37. Internal Marketing System • Detailed reports on Orders, Sales, Prices, Inventory Levels, Payables and so on • Marketing Intelligence System • Marketing research is focused, Market intelligence is not • Unfocused Scanning -The manager, by virtue of what he/she reads, hears and watches exposes him/herself to information that may prove useful. Whilst the behavior is unfocused and the manager has no specific purpose in mind, it is not unintentional • Semi-Focused Scanning -Again, the manager is not in search of particular pieces of information that he/she is actively searching but does narrow the range of media that is scanned. For instance, the manager may focus more on economic and business publications, broadcasts etc. and pay less attention to political, scientific or technological media.

38. Informal Search -This describes the situation where a fairly limited and unstructured attempt is made to obtain information for a specific purpose. For example, the marketing manager of a firm considering entering the business of importing frozen fish from a neighboring country may make informal inquiries as to prices and demand levels of frozen and fresh fish. • Formal Search -This is a purposeful search after information in some systematic way. The information will be required to address a specific issue. Whilst this sort of activity may seem to share the characteristics of marketing research it is carried out by the manager him/herself rather than a professional researcher.

39. Marketing Decision Support System .. a coordinated collection of data, systems, tools andtechniques with supporting software and hardware by which an organization gathers and interprets relevant information frombusiness and environment and turns it into a basis for marketing action. -Kotler

40. Marketing Decision Support System ... a set of statistical tools and decision models with supporting hardware and software available to marketing managers to assist them in analyzing data and making better marketing decisions. -Dyer and Forman

41. Characteristics of DSS • DSS offer users flexibility, adaptability, and a quick response • DSS allow users to initiate and control the input and output • DSS operate with little or no assistance from professional programmers • DSS provide support for decisions and problems whose solutions cannot be specified in advance • DSS use sophisticated analysis and modeling tools

42. Identifying DSS Problem • Problems should be identified by users • There must be a body of data to work with and analyze • The problem must be one for which no simple formula provides a solution • There must be some systematic way of thinking about the problem that a DSS can automate or assist • The problem must be important enough to engage the time and energy of management groups ranging from first line supervisors to senior management

43. DSS Database Components of DSS Internal Records Marketing Intelligence Marketing Research DSS Software System Decision Models OLAP Tools Data Mining Tools User Interface Interactive Quick response (Adapted from Laudon and Laudon)

44. Data Management Data acquisition, storage and retrieval Data Analysis Finding and analyzing relationships between variables Decision Analysis Prioritization and choice amongdecision alternatives Levels of DSS Level 1 Level 2 Level 3

45. DSS Level 1 – Data Management • Tools • Database • Database management system (DBMS) • Query facilities • Report writers • Document and image management system

46. DSS Level 1-Data Management • The difficulties • The amount of data increases exponentially • Data are scattered through out organizations and are collected by many individuals using several methods and devices • Only small portions of an organization’s data are relevant for specific decisions • An ever-increasing amount of external data needs to be considered in making decisions

47. DSS Level 2 – Data Analysis • Basic data analysis tools • Spreadsheet • What-if analysis • Goal seeking analysis • Sensitivity analysis • Graphical tools • Statistical tools

48. DSS Level 2-Data Analysis • OLAP (online analytical processing) tools • Access very large amounts of data • Analyze the relationships between many types of business elements • Involve aggregated data • Compare aggregated data over time periods • Present data in different perspectives • Involve complex calculations between data elements

49. DSS Level 3 -Decision Analysis • Nature of Marketing criteria • Quantitative criteria • Monetarye.g. $ sales value, costs, contribution • Non-monetarye.g. sales growth rate, market share • Qualitative criteriae.g. image, satisfaction

50. DSS Level 3 -Decision Analysis • Difficulties in decision making • Human cognitive limitations • Short term memory (7+2) • Scaling technique • Need to combine different scales • No scales for qualitative factors