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Introduction to Marketing
Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved.
Chapter 5 Objectives
1. Appreciate the importance and
scope of market research and
information systems.
2. View traditional customer research
as a step-by-step decision making
method as prescribed by the market
research process.
Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved.
Chapter 5 Objectives
3. Understand the issues surrounding data
collection, such as the differences
between qualitative and quantitative data
and the importance of sampling and
question design.
4. Appreciate how new technologies are
transforming the market-research
process from a discrete to a continuous
activity.
Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved.
Chapter 5 Objectives
5.
Recognize that market research extends
beyond traditional customer research to
the study of competitors.
6. Explore the growing importance of
conducting channel research and the
methods used to study these channels
and individual trade partners.
Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved.
Marketing Research and Information Systems
• Market research is the eyes and ears of
marketing.
• A company that undertakes quality
marketing research, listens to the
results, and takes action to respond to
the results will flourish.
Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved.
Marketing Research and Information Systems
• Strict adherence to the market research
process is now changing as
technological enhancements have
transformed the research process from
a discrete activity to a continuous
process.
Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved.
Importance and Scope of Marketing Research
and Information
•
Firms that adjust their marketing
strategies to reflect changes in domestic
and international markets faster than
competitors are able to sustain a
competitive advantage.
Objective 1
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Importance and Scope of Marketing Research
and Information
•
A market is made up of many diverse
players, each with its own distinct
interests and behavior.
•
Four Players:
–
–
–
–
Customers
Competitors
Distribution channel members
Regulators who monitor the marketplace
Objective 1
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Importance and Scope of Marketing Research
and Information
•
It is recommended that the study of the
market be divided into four topics:
–
–
–
–
Customer research
Competitor research
Channel research
Public policy research
Objective 1
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Importance and Scope of Marketing Research
and Information
•
Market research is the process of
gathering information pertaining to
customers, competitors, channels, and
public policy for the purpose of specific
decision making.
Objective 1
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Importance and Scope of Marketing Research
and Information
•
Marketing information systems (MIS)
provide organized and continuous data
collection and analysis for the purpose
of providing ongoing marketing
intelligence.
Objective 1
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Customer Research and the Marketing
Research Process
•
The market research process:
1.
2.
3.
4.
5.
Problem definition
Research design
Data collection
Data analysis and interpretation
Presentation of results
Objective 2
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Problem Definition
• The primary objective of the problem
definition stage is to develop the
research question.
• Recognize that a problem exists and
then attempt to define the specific
problem.
• Symptoms versus problems.
Objective 2
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Research Design
•
Research design is the master plan
for the research study.
•
Types of research:
– Exploratory
– Descriptive
•
•
Cross-sectional
Longitudinal
– Causal
Objective 2
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Types of Data
•
Researchers must determine if the
information they need is currently
available from existing sources or if
new research must be conducted.
– Primary data- the generation of new data
that is collected to address specific
market research problems.
– Secondary data- data that already exists.
Objective 2
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Types of Data
•
Secondary Data:
– Internal secondary data- published
records that already exist within the
organization.
– External secondary data- data that
resides outside the firm.
Objective 2
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Research Reliability and Validity
•
Does the research technique
consistently measure the true
opinions and behavior of the
respondent?
– Reliability- a measure of the stability or
consistency of customer responses.
– Validity- the relevance of the measure.
Objective 2
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Data Collection
•
The third step in the market research
process involves data collection.
– Secondary Data
– Primary Data
Objective 3
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Secondary Data
•
Providers of secondary data:
–
–
–
–
–
–
U.S. Census Bureau
American Demographics
The Government Printing Office
The Library of Congress
Statistical Abstract of the United States
Transcripts of industry studies undertaken by
the Federal Trade Commission, the Justice
Department, and the U.S. International
Commission.
Objective 3
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Secondary Data
•
The Web has revolutionized the use
of secondary data in market research
because of its ability to search for
relevant information for a low cost.
Objective 3
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Primary Data: Qualitative Research
•
Basic primary research includes
methods such as:
– Extensive in-depth interviews with
customers
– Customer visits
– Focus groups
Objective 3
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In-depth Interviews and Customer Visits
•
Visits allow the voice of the customer
to be heard, and they make this voice
audible throughout the organization.
•
The voice of the customer is a
structured, in-depth, probing, one-onone situational interview technique
that uncovers both general and
detailed customer needs.
Objective 3
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In-depth Interviews and Customer Visits
•
Hands-on consumer research
•
Observational research
•
Motivational research
Objective 3
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Customer Visits in Business-to-Business
Marketing
•
The customer visit is crucial because
a few key customers often account
for 80 percent of a firm’s business.
Objective 3
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Customer Visits in Business-to-Business
Marketing
•
Planning direct visits with customers:
– Have customer visits arranged by the
sales force.
– Visit 10 to 20 randomly chosen
customers, as well as important
customers who are leaders in adopting
new technology.
– Use jargon only if the customer uses the
same jargon.
Objective 3
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Customer Visits in Business-to-Business
Marketing
– Learn to listen and observe; do not treat
the visit as a sales call.
– Define your research objectives in
advance, and use a discussion guide
based on these objectives.
– Observe the product in use in every
situation.
– If possible, have two or three members
of the team make the visit together.
Objective 3
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Focus Group Research
•
A focus group is a carefully recruited
group of 6 to 12 people who
participate in a freewheeling, one- to
two-hour discussion that focuses on
a particular subject.
Objective 3
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Primary Data: Quantitative Research
•
Descriptive research, also commonly
referred to as survey research,
involves the sampling and surveying
of a population of customers using a
carefully prepared set of questions.
Objective 3
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Primary Data: Quantitative Research
•
The two major issues in survey
research are sampling and
questionnaire design.
Objective 3
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Sampling
•
To determine if the opinions expressed in
focus groups and in-depth interviews
represent the true opinions, attitudes,
interests, beliefs, and behaviors of the
larger population of customers, market
researchers may survey a sample of the
population.
–
–
Probability Sampling
Non-probability Sampling
Objective 3
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Probability Sampling
•
A probability sample is an umbrella
term that is used to describe
sampling techniques where
respondents have a known (nonzero)
chance of being chosen.
– Simple random samples
– Stratified samples
– Cluster samples
Objective 3
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Non-probability Sampling
•
Non-probability samples are arbitrary
sampling techniques where
respondents have an unknown or
zero chance of being chosen for the
sample.
– Convenience samples
– Quota samples
– Judgment samples
Objective 3
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Sampling Challenges
•
The major problem with sampling is the
risk of non-response error or participation
bias that occurs when a particular
customer group is under- or
overrepresented in a sample.
•
A more general problem is that many
populations have been over-surveyed or
taken in by bogus market research studies
that were merely sophisticated sales
pitches.
Objective 3
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Question Design
•
Market researchers should carefully
compose the questions in a survey so
that they are precise, understandable,
and help reveal the information
required by the researcher.
– Ratio scale
– Interval scale
Objective 3
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Data Analysis, Interpretation and Presentation
of Results
•
During these last two steps of the
market research process, the
collected data must be analyzed,
interpreted and presented to
decision-makers who charged the
researchers with the original task of
investigating the research question
that was generated during the
problem definition stage.
Objective 3
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Technological Enhancements in Customer
Research
•
Technological innovations such as
electronic observation research,
decision support systems, and webbased market research have
revolutionized market research.
Objective 4
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Electronic Observational Research
•
Household panel behavior combined
with geodemographic analysis helps
make predictions about the behavior
of households in different parts of a
city or a county called census blocks.
Objective 4
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Electronic Observational Research
•
Geodemographic analysis is based on two
premises:
–
–
Any two people who live in the same
neighborhood are more likely to share similar
lifestyles and demographic characteristics than
any two people who live far apart.
A number of market research firms have used
cluster analysis on household census data that
has enable them to “label” neighborhoods by
their demographic lifestyles.
Objective 4
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Decision Support Systems
•
A decision support system (DSS) is a set of
computer software programs built into a
user-friendly interface package that helps a
manager make marketing mix decisions.
•
Transaction-Based Information Systems
(TBISs) link, communicate, and process all
of the transactions with a company’s
distributors/customers.
Objective 4
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Web-based Market Research
•
Web-based market research has had a total
quality management effect on management
for the following reasons:
1. Web-based market research has increased the
quality of market research by reducing errors in
the market research process.
2. Web-based market research has significantly
reduced the cost of research by 20-50%.
3. Web-based research has significantly sped up
the whole market research process, from weeks
to days.
Objective 4
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Competitor Research
•
Market share is measured as a
percentage of total industry sales
over a specified time period.
Objective 5
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Competitor Research
•
With research into competition, the
emphasis needs to be placed on
market dynamics, such as who is
introducing new manufacturing,
distribution, and product
development processes into the
market.
– Static thought
– Dynamic thought
Objective 5
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Competitor Research
•
Measures often used as leading
indicators of a likely change in future
sales and profits:
1. Mind share
2. Voice share
3. Research and development share
Objective 5
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Researching the History of the Market
•
A study of the recent history of the
product market identifies the
marketing mix and product
dimensions on which sellers have
competed most strongly to serve the
interests of the resellers and
consumers.
Objective 5
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Researching the History of the Market
•
Michael Porter’s five forces that
shape competition:
–
–
–
–
–
Current competitors
The threat of new entrants
The threat of new substitutes
The bargaining power of distributors
The bargaining power of suppliers
Objective 5
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Auditing Current Competitors
•
Competitive advantage in product
quality and costs can come from one
or more of the following stages in the
added value chain:
1.
2.
3.
4.
5.
Inbound logistics processes
Operations processes
Outbound logistics processes
Marketing and sales processes
Service processes
Objective 5
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Conducting Channel Research
•
Interest in researching channels of
distribution has greatly increased in the
1990’s for at least two reasons:
1. Retailing has become much more competitive
because the market is becoming saturated with
stores.
2. In the next few years Web direct marketing is
predicted by many to gain 10 to 30 percent of
sales in certain product categories.
Objective 6
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Researching the Individual Trade
Customers
•
Once the general channel change audit has
been undertaken, important trade
customers and business partners will have
been identified for further study.
•
The reseller audits require the auditor to
stand back, to assess the changes that
have occurred over the past trading year,
and to explain some of the basic reasons
for predicting longer-term changes.
Objective 6
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