Download Market Information Systems

Market Information
Systems
Market Research & How it is
Conducted
Market Research

In this section you will discover
• What market research is
• Why market research is important
• Who uses market research
• The value of technology
• Different types of research
• Limitations of research
Marketing Research
Links the public to the marketer
through information
 Marketing information is used to:

• Identify market opportunities
• Solve marketing problems
• Implement market plans
• Monitor market performance
Marketing Research

Research is all methods used to
gather information, analyze it &
report on it
• Kellogg's could use it to launch a new
cereal, Hilton to gauge customer
satisfaction
Marketing Research

Since customers accept only about
10% of new products, knowing likes
and dislikes is crucial
• Will help to minimize risk & potential
losses
• Will help to capitalize of product and
company strengths
Why is research important?

Businesses need to know what the
current & future trends are
• Where customers like to shop
• What media they go to for information
• How much customers will spend

Keep track of competition
• What Company X is selling and for how
much
Research takes time

Some companies will spend years on
developing products
• Stouffers spent 13 years creating Lean
Cuisine

Testing product and packaging designs and
conducting pilot sales in large cities
Who uses Market research?

Small businesses (under $5 mil) do
informal research, usually by
employees or owner
• Simple surveys with no specialized
department

Larger companies have formal
research departments
• Alternatively, they could outsource the
research
Big bucks in research
Over $3 billion annually

0.2
1
1.1
5.7
Consumer nondurables
1.4
Media
3.4
Pharamaceuticals
3.6
32.7
4.4
Gov't
Telecom
Consumer Durables
4.6
Automobiles
Financial Services
6
Retailers
Hospitality
Entertainment
Political
17.2
18.7
Other
Who uses Market Research?
Consumer product companies
 Media outlets
 Federal Government
 Trade Organizations
 Retails
 Anyone who wants to better
understand the wants and needs of
consumers

What now?
After collecting all kinds of data, it
needs to be sorted and stored
 Market Information Systems

• Set of procedures & methods that
regulates, generates, stores, analyzes
and distributes information for use in
marketing decisions
Market Information Systems

These systems typically rely heavily
on internal data
• Sales reports, inventory lists

Other forms include
• Competitor records
• Customer profile data
• Government data
• Third party research
Technology at its finest

Bar code scanners
• Are most often used to help with
inventory management
• Can be used to gather P.O.S. data on
types of products purchased together to
help with promotions

Valued customer cards
• Adds identity to products

Allows marketers to gather personal data
Databases

A collection of related information
about a topic
• L.L. Bean maintains a customer catalog
• American Express has a detailed system
Address
 What you buy
 Where you eat
 How much you spend
 Uses it to send special perks to members

More data

Data harvesting
• Collecting all possible information

Companies often turn around and
sell databases to other companies
• A bank may sell lists of mortgages to
mortgage insurers
• No consumer permission is needed
• Government has begun to step in and
protect consumers
Difficulties Arise

Very costly
• Need computer systems and trained
personnel

Can be overwhelmed by the amount
of data
• Must prioritize, just because you can get
it, doesn’t mean you should
Liar, Liar

Researchers often find people are
less than truthful
• A focus group of bald men insisted they
were not bothered being bald, but they
always wore hats

New technology is using brain waves
and skin sensations to detect
misrepresentations
Types of Research
Attitude
 Market
 Media
 Product

Attitude Research
Also called opinion research
 Determine how people feel about
products, ideas, companies
 Gallup is one of the largest and most
respected organizations
 Random Sampling

• 10% of a population is typically large
enough
Market Research
Gathering & analyzing data related to
marketed goods and services
 Concerned with size, location &
makeup of market
 Need to gather before product is
introduced and frequently thereafter

• Ford’s focus on younger customers
• Cadillac’s revival
Market Research
Goal is to investigate & define target
markets
 Data, existing and projected, help to
identify trends and prepare company

• Not 100% reliable – generalized study

Sales and Economic forecasting
Sales Forecasting

Attempt to make an educated guess
at future sales
• Total market sales are calculated, then a
share is predicted
• Share based on previous company sales
Economic Forecasting
Attempt to predict future conditions
 Federal agencies collect information
on new homes, inflation, money
supply & price indexes
 Woods & Poole Economies, Inc. give
projections for MSAs through 2020

• Metropolitan Statistical Area
Media Research
Media selection & frequency
 Measures effectiveness of message
and placement
 Includes demo-,psycho-, and
geographic information
 Print
 Broadcast
 Online

Print
Tested on recall, communication &
persuasiveness
 Ability to change beliefs, attitudes or
intended behavior
 Uses consumer panels

• Focus Groups
• Typically a cross section of society –
teens, seniors, minorities, etc.
Broadcast Media

Arbitron Ratings Co. – largest radio
survey company
• Uses diaries to gauge tune ins
• Includes station and program details

Nielson Media Research, Inc.
• Uses a sample of 5000 homes
• Homes equipped with meters that
monitor programs
Online Advertising
Agencies use mock & live situations
to test recall or web advertising
 Favorite methods

• Pop-ups
• Pop-unders
• Cookies
Product research
Centers on product & package design
and usage & acceptance of products
 New product acceptance

• Utilize test markets


Could be risky due to leaks of new products
to competition
Existing products
• Question both industry and consumers
Limitations

Limited by time
• Often decisions need to be made before
enough data has been collected

Limited by capital
• Companies often do not want to invest
enough for a in-depth study

Limited by information
• Even the most expansive studies will not
find all variables or will return too much
information