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Objectives
1. To explore needs behind gathering
marketing information
2. To learn techniques for managing
marketing information
3. To explore environments where
businesses operate
4. To learn procedures for gathering
marketing information using
technology
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What is Marketing Research?
• In order to meet the needs of customers, marketing
managers rely on help from marketing research
– marketing research is taking and analyzing information to
help marketing teams make decisions
– larger companies have their own marketing research
department; smaller ones generally rely on their salespeople
• Ethical issues with marketing research
– deciding whether to withhold certain details about the
research
• often the case when people want to use research for personal
agendas
– masking a sale with the pretense of conducting research
• some political organizations have been known to call someone
to conduct a survey about their political beliefs then call back a
few days later to ask for a donation
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Is Marketing Research Important?
• Close to 90 percent of new products fail in
their market, therefore researching product
markets can be a substantial boost to
businesses
– companies who do not pay attention to consumer
behavior are more likely to make costly marketing
mistakes
– research can provide answers to questions
including:
•
•
•
•
what products to produce
where they should be sold
how they should be promoted
what price to give the products
– helps companies keep track of current and future
trends in the marketplace
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Who Uses Marketing Research?
• Large companies have separate departments
to conduct marketing research; smaller
companies (usually doing less than $5 million
in annual sales) do not have separate
research departments
– both size companies often contract the work with
professional market research companies
– in 1997, $3.3 billion was spent on research
connected to public opinion polls, marketing and
advertising campaigns
– non-profit organizations and government also use
market research
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Marketing Information Systems
• Data collected from research is sorted and stored
within the company for further use
• Marketing Information Systems (MIS)
– an organized way of continually gathering, accessing and analyzing
information marketing managers need to make decisions
• Data usually found in an MIS:
– company records (i.e., results of sales, production schedules,
expenses, supplier data)
– competitors’ records (i.e., product information, prices, market share,
locations)
– governmental data (i.e., price trends, future economic projections,
updated regulations and laws)
– customer data (i.e., results of marketing studies on shopping
patterns, buying behavior, demographics and research on lifestyles
– formal reports conducted for a fee by professional research firms
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MIS Databases
• Advent of computer technology has made collection
and storage of marketing data easier
– bar code scanners at point-of-sale kiosks can instantly collect
and store information on the product just bought and
inventory levels
• Information collected about customers is stored in
computer databases
– one or more sets of data, usually associated with software to
update and query the data
– a simple database may be one file containing many records
with each record containing various fields
• Disadvantages of MIS
– requires a significant amount of time and money
– requires trained personnel to keep an MIS operating
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Kinds of Marketing Research
•
Depend on the problem a company is trying to solve;
four significant areas of marketing research
1. Attitude or opinion research
– research conducted to discover how consumers feel about
certain products, ideas or companies
– example:
•
knowing what people who wear glasses think of corrective
laser eye surgery would be important to a company wanting to
plan a marketing strategy in this product market
The Gallup Organization often gathers people’s opinion on
political issues. The data is randomly collected and the results
are generalized for the entire country. Do you think this method
is successful? Why or why not?
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Kinds of Marketing Research
2. Market research
–
–
systematically conducting research, gathering
records and analyzing information related to
marketing products
generally using market analyses to find data
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•
–
market analyses
•
–
necessary aspect of a product’s life cycle, from the beginning
and throughout the cycle
also used to answer questions about market segment and
pricing
goal is to investigate potential markets for a product and help
define aspects of the target market
sales forecasting
•
•
try to estimate the future sales of a product
total market estimate calculated; then, an individual share
predicted for company
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Kinds of Marketing Research
3.
Media Research
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research focusing on issues around
media frequency and selection
measures the effectiveness of
You are the marketing
advertisements and media
director at General Mills™ and
placement
helped develop the marketing
research conducted to determine
mix for a popular healthwhat form of media or media
conscious breakfast cereal.
mix to use
•
However, the mix has been
request information from the
the same for four years. You
medium of interest to them
want to conduct research to
(e.g., print, broadcast, online)
determine whether the mix is
subscribe to a publication called
still successful or needs
Standard Rate and Data Services,
updating. What resources
which provides rates and information
would you use to do this?
for the advertising industry
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Kinds of Marketing Research
4.
Product Research
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–
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research focusing on product design, package design and
product usage
also conducted to collect research on competitive products
helps to measure new product acceptance
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test marketing
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have consumers try a new product and give their opinion;
sometimes used to compare two products
placing a sample of the new product in selected geographic
areas
– people receive test packets of cereal or bars of soap
generally accompanied with a product coupon
– helps to gauge consumer response
research on existing products
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satisfaction surveys gather information on consumer response
to existing products
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Marketing Research Trends
• Business environments are becoming more
global
– resulting in increased international competition
– resulting in attention to product quality and
customer service
• research on these two subjects is becoming the fastest
growing area of market research
– customer relationship management is an important
part in future business success; measured in
continued sales
• achieved through completely understanding customers’
needs and information on how well the company is
meeting those needs
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Five-Step Research Process
• The following are five steps businesses
take when conducting market research
Identifying
solution
early
Defining
problem
Analyzing
situation
Receiving
data
Feedback to previous steps
Interpreting
data
Solving
problem
Source: Basic Marketing: A GlobalManagerial Approach p.218, 1999.
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Five-Step Research Process
1.
Defining the problem
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–
2.
often considered the most difficult step of the process
important to establish objectives for the problem and
prevent more trouble later in the process
Analyzing the situation
–
situation analysis
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can determine what information about the problem already is
available
can be helpful
includes informal talks with informed people inside the
company and middlemen with close connections to customers
includes finding secondary data (already published or
collected data)
includes finding data on the Internet, the richest source of
secondary data
includes finding data in the company’s MIS
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Five-Step Research Process
3. Receiving data
– getting problem-specific data
• once a situation analysis has been conducted and all
forms of already known information is collected,
marketers must plan a formal research project to gather
primary data
– several methods of gathering data
• questioning and observing customers
• conducting focus groups
• conducting surveys through the mail, with the telephone
or Internet
• conducting personal interview surveys
4. Interpreting the data
– after formal research projects are completed, the
collected data must be interpreted
• often done through statistics
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Five-Step Research Process
5. Solving the problem
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–
•
after data has been interpreted and time taken to
review the results, marketing managers can
make decisions regarding the problem
once research process is complete, managers
should be able to apply the results – otherwise it
can indicate poor planning of the entire project
Important caveats:
–
–
the visual layout of this process shows with
arrows the importance of referring back to the
problem and redefining the definition and early
solutions
the process is nonlinear, constantly requiring
steps to be retraced and to rethink about what
has been completed and what will be completed
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Obtaining Data
• Collecting data is the second step in the
research process
• Secondary data
– any type of data already collected for other
purposes but can be used again for other
studies
• Primary data
– data collected for the first time and used
solely for the purpose of a specific study
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Sources of Secondary Data
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Internet Sources
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increased Internet use has led to better
availability and variety of sources
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Hoover’s© online and Fortune© online provide company
profiles, stock quotes and charts
Business and Trade Publications
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often publish secondary data through articles,
reports or books; most have online versions, too
examples:
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Forbes©, Business Week©, The Wall Street Journal© and
Sales and Marketing Management©
American Association for Public Opinion Research,
Council of American Survey Research Organizations
and Marketing Research Association
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Sources of Secondary Data
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Government Sources
– can provide useful information and
statistics about markets, people and
business activities
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data concerning population demographics,
export information, economic news, specific
markets or industries and legislative trends
can be found, free or at a small cost, on the
Internet
– FedWorld© and The Federal Web Locator© are
websites linking to government websites providing
data
– Bureau of Labor Statistics, U.S. Small Business
Administration, U.S. Census Bureau and U.S.
Securities and Exchange Commission
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Sources of Secondary Data
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Information Companies
– are companies growing in number, who
sell secondary data to other businesses
– sell information concerning:
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demographic data, five-year forecasts,
consumer purchasing information, business
data, census information, etc.
this information can be available in print and
electronic formats
– marketing information companies:
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Information Resources, Arbitron, AC Nielson,
NFO WorldGroup, Audit & Surveys
Worldwide, Opinion Research Corporation
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Secondary Data
•
Advantages of secondary data
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easily obtained through the Internet, in libraries, from
syndicated services
population data is already gathered and easily
accessible from the U.S. Census Bureau – otherwise
a company would have a serious task of collecting
demographic data
Disadvantages of secondary data
–
a lot of secondary data may not be suitable for your
study
•
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if dealing with an innovative product, most secondary
data probably will not apply
can sometimes be inaccurate
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census data is collected every ten years; with
continuing changes, census data can become outdated
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Sources of Primary Data
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Most companies either conduct their
own research projects or hire research
organizations
Collected using three methods:
1. survey methods
2. observation methods
3. experimental methods
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The Survey Method
•
Gathering information through the use
of surveys or questionnaires
– most frequently used method of collecting
primary data
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Considerations when designing a
survey
– how many people will be included
•
either survey entire population (census) or
survey a section of the population (sample)
– a sample is a section of the target population
assumed to resemble the entire population
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The Survey Method
•
Considerations when designing a
survey
– how many people will be included
– what type of survey to use and create the
method of data collection
•
most surveys are often conducted by
telephone, by Internet, in person or by mail
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The Survey Method
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Personal Interview Surveys
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face-to-face interviews usually conducted in a
central location, such as a shopping mall,
sometimes these interviews also are called mall
intercept interviews
focus group interviews are another type of
personal interview
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advantage of personal interviews
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these interviews bring together a small group of people
to evaluate product features; a skilled moderator directs
these interviews
people respond more to personal interviews than to
mail, phone or Internet surveys
disadvantage of personal interviews
•
costs more to conduct personal interview surveys than
other types of surveys
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The Survey Method
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Mail Surveys
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relatively inexpensive way to survey a large
group of people about the product or company
advantages of mail surveys
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•
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pack more of a visual punch with these type of surveys
respondents generally answer truthfully and find these
types of surveys less intrusive in their personal lives
disadvantages of mail surveys
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only a ten percent return rate
–
return rates can be improved by offering incentives with
the mail surveys and pre- and post-survey reminders
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The Survey Method
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Telephone Surveys
– a quick and inexpensive way of reaching
large numbers of people
– advantages of telephone surveys
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compared to other forms of surveys,
telephone surveys cost less
– disadvantages of telephone surveys
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some people feel telephone surveys intrude
on their personal lives and are unwilling to
answer questions by telephone
because of caller ID, some people will not
even answer the telephone if the number is of
someone they do not know
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The Survey Method
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Internet Surveys
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surveying people through Internet technologies; these
can include polls anybody can answer, invitation-only
surveys and research sites protected by passwords
Council of America Survey Research Organization
estimates Internet surveys will comprise 30-50
percent of research volume by 2005
advantages of Internet surveys
•
–
are easily tabulated as soon as a person finishes the
survey
disadvantages of Internet surveys
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this type of survey is limited to those who have Internet
access
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The Observation Method
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Actions of people are watched and
recorded by cameras or observers
– when conducted correctly, observations
can offer better results than surveys
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This method can use either natural or
contrived situations
Mystery shopping disguises researchers as
customers to observe employees.
Companies often hire mystery shoppers to
discover whether their sales employees are
presenting the products and answering
customers’ questions correctly.
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The Observation Method
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Point-of-Sale Research
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a method of observation combining natural
observation with personal interviewing
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this is used to get people to explain their buying
behavior
researchers first observe a customer with a
certain product; then, approach the customer to
ask him/her questions about his/her interaction
with the product
is an effective way to measure buying behavior
because customers are interviewed as soon as
they have purchased or have not purchased the
product
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The Observation Method
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Advantages of observation methods
– faster and less intrusive because people
do not usually know they are being
observed
•
Disadvantages of observation methods
– cannot measure people’s attitudes or
motivations
– can only provide information on what a
person does, not why the person does it
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The Experimental Method
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A method involving observing results of
changing marketing variables, while keeping
other variables constant
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often used when testing packaging design;
researchers observe reactions to each package
design for the same product
Not a frequent method of marketing
research since it is more costly to set up this
these situations
People tend to respond differently under
controlled situations than they do in actual
buying situations
–
can make the collected results less valuable
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Assessment
1. What is marketing research?
2. What data is usually found in a MIS?
A. Consumer data
B. Company records
C. Competitor’s records
D. All of the above
3. (T/F) Information collected about customers is
stored in spreadsheets.
4. What is the five-step process of market research?
5. (T/F) Personal interview surveys are more
expensive than telephone surveys.
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