Download Chapter 8

Part 3: Target Market
Selection
8. Marketing Research DecisionSupport Systems, and Sales
Forecasting
9. Market Segmentation, Targeting,
and Positioning
10. Relationship Marketing,
Customer Relationship
Management (CRM), and One-toOne Marketing
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Chapter 8
Marketing
Research,
Decision-Support
Systems, and Sales
Forecasting
Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved.
Chapter Objectives
1.
2.
3.
4.
5.
6.
7.
8.
9.
Describe the development of the marketing research function
and its major activities.
Explain the steps in the marketing research process
Distinguish between primary and secondary data and identify
the sources of each type.
Explain the different sampling techniques used by marketing
researchers.
Identify the methods by which marketing researchers collect
primary data.
Explain the challenges of conducting marketing research in
global markets.
Outline the most important uses of computer technology in
marketing research.
Explain how the use of information technology, particularly
marketing decision support systems (MDSSs), can enhance and
refine market research and it’s impact on decision making.
Identify the major types of forecasting methods.
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The Marketing Research Function
 Marketing research: the process of collecting and
using information for marketing decision-making
 Development of the Marketing Research
Function
First organized marketing research project done
by N.W. Ayer in 1879
First commercial research department in the
U.S. established by Charles C. Parlin for the
Curtis Publishing Co. in 1911
Parlin counted soup cans in garbage to
convince the Campbell soup Company that
working-class families would buy canned soup
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 Who Conducts Marketing Research
The size and organizational form of the
marketing research function is typically
tied to a given company’s structure
Many firms depend on independent
marketing research firms
Syndicated Services
Organizations that regularly provide
a standardized set of data to all
customers
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Full-Service Research Suppliers
Organizations that contract with
clients to conduct complete marketing
research projects
Limited-Service Research Suppliers
A marketing research firm that
specializes in selected activities like:
 Field or telephone interviews
 Data-processing
 Focus groups
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Customer Satisfaction Measurement
Programs
Procedure for measuring customer
feedback against customer satisfaction
goals and developing a plan of action
for improvement
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The
Marketing
Research
Process
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 Step 1: Define the Problem
Avoid confusing symptoms of a problem with
the problem itself
The problem(s) should be agreed upon by
all concerned parties
Doing so helps to keep everyone concerned
in agreement and to keep the project
focused on solving the problem(s)
Doing so also helps to prevent the all-toocommon tendency to spend resources
attempting to answer “interesting, but not
necessary” questions
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 Step 2: Conduct exploratory research
An Informal investigation seeking to discover
the cause of a problem by discussing it with
informed internal and external sources
Company records such as sales and profit
analyses
Competitive data
Using Internal Data
Sales records, Financial statements, and
Marketing cost analyses
Sales analysis
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 Step 3: Formulate a Hypothesis
Hypothesis: a tentative explanation for
some specific event – a statement about
the relationship among variables that
carries a clear implication for testing this
relationship
Sets the stage for more in-depth research
by further clarifying what researchers need
to test
Not all marketing research tests specific
hypotheses
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 Step 4: Create a Research Design
Research design: a series of decisions
that, taken together, comprise a master
plan or model for conducting marketing
research
Must ensure that the study will measure
what the marketer intends to measure
Must also ensure an appropriate selection
of respondents
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 Step 5: Collect Data
Secondary data is data from previously
published or compiled sources (e.g. Census
data)
Almost always less expensive to gather
Less time is usually necessary to locate
and use it
Primary data refers to data collected for the
first time specifically for a marketing research
study
Can provide richer, more detailed
information than secondary data
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 Step 6: Interpret and Present Research
Information
Findings must be presented to decisionmakers in a format that allows them to make
effective judgments
Cardinal rule of presenting marketing
research requires that it assists decisionmaking rather than being an end in itself
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 The Research Report and Presentation:
Linking the Study and the Research User
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Marketing Research Methods
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 Secondary Data Collection
Government Data
Nation’s most important source of
marketing data
Most frequently used government statistics
Census information available at no charge
TIGER System: Topographically
Integrated Geographic Encoding and
Referencing System
The system combines topographic
features like railroads, highways, and
rivers with census data such as
household income figures
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 Secondary Data Collection
Private Data
Encyclopedia of Associations
Urich’s Guide to International Periodicals
Sales & Marketing Management’s Annual
Survey of Media Markets
Dialog’s ABI/Inform
CompuServe’s Knowledge Index
Find/SVP’s FindEx, the Directory of
Market Research Reports, Studies, and
Surveys
Starch Readership Reports
A. C. Nielsen’s SalesNet
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 Secondary Data Collection
Online Sources of Secondary Data
Cyberspace sometimes simplifies the
search for secondary data
A Web-based research project can cost
less, and can yield significantly faster
results than offline research
Caveat Emptor should guide Internet
searches for secondary data
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 Sampling Techniques
Sampling: the process of
selecting survey respondents or other
research participants
Population (universe): total group
that researchers want to study
Census: a collection of data on all
possible members of a population or
universe
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Probability sample: sample that gives every
member of the population a known chance of
being selected
Simple random sample
Stratified sample
Cluster sample
Non-probability sample: arbitrary grouping
that produces data unsuited for most standard
statistical tests
Convenience sample
Quota sample
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 Primary Research Techniques
Observation Method
Researchers actually view, or watch, the
overt actions of the research subjects
Useful in helping to understand how
consumers actually behave in certain
situations
Can be as simple as counting passing
cars or as sophisticated as people
meters recording household TV-viewing
habits
Interpretive Research
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Survey Method
Telephone Interviews
An inexpensive and quick method for
obtaining a small quantity of relatively
impersonal information
Relatively high response rates
Limitations include:
 Only simple, clearly worded questions
draw appropriate responses
 Personal information difficult to obtain
 Respondents can’t view pictures
 Caller-ID
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Survey Method
Personal Interviews
Best means for obtaining detailed
information about consumers
Interviewer can explain confusing or
vague questions
Offer Good Flexibility
Mall intercepts
Limitations:
 Slow
 Expensive
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Survey Method
Focus Groups
A Focus Group is an information
gathering procedure in marketing
research that typically brings together
8 to 12 individuals to discuss a given
subject
Can provide quick and relatively
inexpensive insights
May not produce completely honest
responses to questions
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Survey Method
Mail Surveys
Cost Effective
Provides anonymity that may encourage
respondents to give candid answers
Limitations include:
 Typically low response rates
 Take a long time to conduct
 Questionnaires cannot answer
unanticipated questions that occur to
respondents as they complete the forms
 Complex questions may not be suitable
 Bias from nonresponse
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Survey Method
Fax Surveys
Low response rates and long follow-up
times associated with mail surveys have
spurred interest in the alternative of
faxing survey documents
Faxing provisions may supplement mail
surveys
Or, faxing may be the primary method for
contacting respondents and obtaining
their answers
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Survey Method
Online Surveys and Other Internet-Based
Methods
Growing number of Internet users has
sparked interest in going online to conduct
surveys . . . and even focus groups
Benefits include the lack of geographic
restrictions, faster turn-around time, and
dramatically lower costs
Growth of the Internet is creating a need for
new research techniques to measure and
capture information about website visitors
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Survey Method
Experimental Method
Scientific investigation in which a
researcher manipulates test group(s) and
compares the results with those of a
control group that did not receive the
experimental controls or manipulations
The most common use to date has been
test marketing
Major problem with controlled
experiments comes from the failure to
account for all variables in a real-life
situation
Expensive to conduct
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 Conducting International Marketing Research
As corporations expand globally, they need to
gather knowledge about consumers in other
countries
The basic steps are the same as for domestic
studies, however, face some different
challenges
A major secondary information source is the
U.S. Department of Commerce
Foreign Economic Trends and Their
Implications for the United States
Overseas Business Reports
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Interpretative Research
 Observes a customer or group of
customers in their natural settings and then
interprets their behavior based on an
understanding of social and cultural
characteristics of that setting
Ethnographic
 Focuses on understanding the meaning of
a product or the consumption experience in
a consumer’s life
 Takes time and is expensive
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Computer Technology in
Marketing Research
 Marketing Information System (MIS)
A planned, computer-based system
designed to provide managers with a
continuous flow of information relevant to
their specific decisions and areas of
responsibility
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 Marketing Decision Support System (MDSS)
Consists of computer software that helps
users quickly obtain information and apply
that information in a way that supports
marketing decisions
An MDSS can create simulations or models
to illustrate the likely results of changes in
marketing strategies or marketing conditions
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 Data Mining
The process of searching through computer
files to detect patterns
Focuses on identifying relationships that are
not obvious to marketers
The data is stored in a huge database called
a data warehouse
Can be an efficient way to make sense of
huge amounts of data
Can help create customer profiles, pinpoint
reasons for customer loyalty or the lack
thereof, analyze the potential returns on
changes in pricing or promotion, and sales
forecasts
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 Business Intelligence
Process of gathering information and
analyzing it to improve business strategies,
tactics, and daily operations
 Competitive Intelligence
Form of business intelligence that focuses
on finding information about competitors
using published sources, interviews,
observations by salespeople and suppliers
in the industry, government agencies,
public filings and other secondary sources
including the Internet
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Sales Forecasting
 Estimate of company revenue for a
specified future period.
Qualitative Forecasting Techniques
Quantitative Forecasting Techniques
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 Qualitative Forecasting Techniques
These techniques rely on subjective data
that repots opinions rather than exact
historical data.
Jury of Executive Opinion
Delphi Technique
Sales Force Composite
Survey of Buyer Intentions
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Techniques
Benefits
Limitations
Jury of executive
opinion
Opinions come from executives
in many different departments;
quick; inexpensive
Managers may lack sufficient
knowledge and experience to
make meaningful predictions
Delphi technique
Group of experts can accurately
predict long-term events such as
technological breakthroughs
Time-consuming; expensive
Sales force
composite
Salespeople have expert
customer, product, and
competitor knowledge; quick;
inexpensive
Inaccurate forecasts may result
from low estimates of
salespeople concerned about
their influence on quotas
Survey of buyer
intentions
Useful in predicting short-term
and intermediate sales for firms
that serve only a few customers
Intentions to buy may not result
in actual purchases; timeconsuming; expensive
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 Quantitative Forecasting Techniques
This method uses statistical computations
such as trend extensions, computer
simulations, and economic models.
Market Tests
Trend Analysis
Exponential Smoothing
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Techniques
Benefits
Limitations
Market test
Provides realistic
information on actual
purchases rather than on
intent to buy
Alerts competition to new
product plans; timeconsuming; expensive
Trend analysis
Quick; inexpensive;
effective with stable
customer demand and
environment
Assumes the future will
continue the past; ignores
environmental changes
Exponential
smoothing
Same benefits as trend
analysis, but emphasizes
more recent data
Same limitations as trend
analysis, but not as severe
due to emphasis on recent
data
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