Download Marketing Research

Market &
Marketing Research
Dr. Vesselin Blagoev
MBA’2010-11
Lecture Objectives
By the end of the lecture, you should be able to:
Define the differences between market
and marketing research
 Understand the role and use of MR
information in marketing
 Explain the elements of a MIS and
stages of the MR process

Marketing research
defined
Definitions of MR
“Marketing Research is the function that links the
consumer, customer, and public to the marketer
through information... used to identify and define
marketing opportunities and problems; generate,
refine and evaluate marketing actions; monitor
marketing performance; and improve understanding of
marketing as process. Marketing research specifies
the information required to address these issues,
design the method for collecting information, manages
and implements the data collection process, analyses
the results, and communicates the findings and their
implications.” (McDaniel, Jr. & Gates, 2010)
Definitions of MR
www.mrs.org.uk
Marketing Research is: “the collection
and analysis of data from a sample of
individuals or organisations relating to
their characteristics, behaviour,
attitudes, opinions or possessions. It
includes all forms of marketing and
social research such as consumer and
industrial surveys, psychological
investigations, observational and panel
studies”
Market Research Society (1997) - UK
Definitions of MR
Chisnall (2005)
“… there was originally a difference between the
scope of activities [covered by market and marketing
research]… The responsibilities of market research
extend comprehensively, whereas marketing
research is limited to findings out information about
the market for a particular product.”
× but this narrow view restricts the focus for the
purposes of marketing as a wider management
function.
 MR should be: applied, scientific, pragmatic,
objective, impersonal, factual
MR definition summary
Market Research aims to describe and
analyse markets (size, structure, growth
etc)
 Marketing Research covers a much
broader range of topics - customers,
products, competitors, channels, suppliers
etc. Strictly speaking, Marketing Research
is broader than Market Research

Information
“Most marketers don’t need more
information, they need the right
information and the managers need to be
able to determine how to use this
information appropriately and effectively
so as to enhance performance.”
Kotler, Wong, Saunders and Armstrong (2005);
Similar point argued by McDaniel, Jr. & Gates (2010),
Malhotra (2010) and Keegan and Green (2011)
Do you agree with this? Why?
Short cut
Marketing research is the
systematic and objective
search for and analysis of
information relevant to the
identification and solution of any
problem in the field of marketing
Armstrong and Kotler (2011), Malhotra (2010)
Definition
 Systematic:
It is planned, following a
sequence of logically ordered steps,
starting with problem definition and
ending with its use in problem solution
 Objective:
Data are collected using
scientific methods and are analyzed
using proven statistical processes
Marketing Research
Problem-Identification
Research
•Market Potential Research
•Market Share Research
•Image Research
•Market Characteristics
Research
•Sales Analysis Research
•Forecasting Research
•Business Trends
Research
Problem-Solving
Research
•Segmentation Research
•Product Research
•Pricing Research
•Promotion Research
•Distribution Research
Malhotra (2010, p.40)
Types of market

Potential market
• Consumers have some stated interest in a product or
service.

Available market
• Set of consumers who have the interest, income and access
to the product or services.

Qualified available market
• Set of consumers who have the interest, income, access
and qualifications for a particular product or service.

Served or ‘target’ market
• Part of the qualified market that the company decides to
pursue.

Penetrated market
• Set of consumers that have already bought a particular product
or service.
Measuring market demand
 The
total market demand is the total
volume of a product or service that
would be bought by a defined
consumer group in a defined
geographic area, in a defined time
period in a defined marketing
environment under a defined level
and mix of industry marketing effort.
Measuring market demand
Kotler, Wong, Saunders and Armstrong (2005)
Types of demand
 The
primary demand is the total
demand for all brands of
product and services.
 The selective demand is a
specific demand for a given
brand of product.
Estimating market demand

Q= n x q x p
 Where
• Q = total market demand
• n = number of buyers in the market
• q = quantity purchased by an
average buyer per year
• p = price of an average unit
Forecasting future demand

Environmental forecast


Industry forecast


Inflation, Unemployment, Interest rates,
Consumer spending and saving, Business
investment, Government expenditure.
What is currently happening?
Company sales forecast



Buyers’ intentions, Composite of sales force
opinions, Expert opinion.
Test market method.
Time series analysis, Leading indicators,
Statistical demand analysis, Information
analysis.
Forecasting future demand
Kotler, Wong, Saunders and Armstrong (2005)
Sources of information
Internal
records
Marketing intelligence
Competitor intelligence
Marketing research
MR Research Dimensions

Continuous versus Ad hoc
On-going research
 One-off


Qualitative versus Quantitative
Why? (motivations, attitudes, behaviours)
 How many, how often?


Secondary versus Primary
Data that already exists and was collected for
another purpose
 Data collected for the specific purpose at hand


Get a research method
Primary collection methods
Primary data can be collected in 4 ways:
 observational research
 focus-group research
 survey research
 experimental research
 2 main research instruments used are:
 questionnaires (open-end and closed-end)
 mechanical instruments

• e.g. Eyetracking of screen use on internet/TV
Marketing Research Step1
1. Defining the problem and research objectives
• Exploratory research
• Gathering preliminary information that will help to
better define problems and suggest hypotheses.
• Descriptive research
• Defining marketing problems, situations or
markets, such as the market potential for a
product or the demographics and attitudes of
consumers.
• Causal research
• Marketing research to test hypotheses about
cause and effect relationships.
Marketing Research Step 2
2. Developing the research plan for collection of
information
• Determining information needs
• Secondary data: information that already exists,
having been collected for another purpose.
• Primary data: information collected for the
specific purpose at hand.
• Qualitative research
Exploratory research used to uncover consumers’
motivations, attitudes and behaviour.
• Quantitative research
Research data which involves interviews from a
sufficient volume of customers to allow statistical
analysis.
Marketing Research Step 3
3. Presenting the research plan
• Outline of research construct.
• Summarised written proposal.
Marketing Research Step 4
4. Implementing the research plan,
collecting and analysing the data
• Interpreting and reporting the findings.
• Present the relevant data so that the
information can be used to make meaningful
decisions.
• Team effort between marketers and
researchers and joint responsibility.
Table 9.6 Types of question
Table 9.6 Types of question (continued)
Table 9.6 Types of question (continued)
Demand estimation

Estimation of market demand is essential for effective
marketing and as illustrated below, demand is
measured on a number of levels.
Figure 9.3 Ninety types of demand measurement (6  5  3)
Secondary Sources



Internal sales records, databases, customer
feedback, experienced employees
Government reports
Chambers of Commerce
• often available on gov.uk website

Trade Associations

Industry Reports & Country-based reports


e.g. GMID/Euromonitor (available via www.port.ac.uk/library)
Marketing area specific articles/reports
• e.g. Promotions
MR: key criterion


MR information has the purpose of supporting
marketing decisions
 Organisations as they grow in size tend to lose
close customer contact
 New markets entered may be geographically
distant and unfamiliar
 New products require research into their potential
appeal to customers
 Communications need researching - are the right
messages being given and received
Need to think clearly about the issue to be decided,
before spending money on MR
Marketing Research in practice




Marketing research is concerned with
investigating and understanding buyer behaviour
Buying behaviour is merely one element of
human behaviour; it is complex and influenced by
many factors
Motivations may be a mixture of business
specific, personal, economic, psychological,
sociological and demographic variables
Behavioural sciences give insights into
consumption
Marketing research in small
businesses and non-profit
organisations
 Often
limited by budgetary
constraints, but the following can be
accomplished:
 Observation of market, competitors
and industry
 Secondary data collection
 Surveys
 Experiments
Main divisions of MR
 Product
 Customer
 Pricing
 Sales
 Promotion
Overview of MR divisions
Type
Examples of
issues
needing
investigation
through MR
Types of
info.
Product
Customer
Failure,
reduced
demand,
portfolio
inequity, lack of
USP, poor
quality
Target segment
profile,
preference,
loyalty,
Macro/Micro
env. issues,
habits,
motivation
Demand, sales,
market share,
competitive
advantage
Demographics,
purchase
behaviours,
level of
influence of
int./ext. factors
Pricing
Sales
Promotion
Sensitivity,
ceiling, match
to other mix
elements,
competition,
incentives
needed, vs.
perception of
quality,
Increasing cost
of sales,
comparative
mkt
performance,
falling sales,
force
organisation,
distribution
methods
Relevant
methods to
audience, rising
costs, reduced
exposure/cover
age,
effectiveness,
integration,
Costs, profit
objectives,
mkt/competitive
prices, trade
/channel vs.
consumer
prices
Value, volume,
quantity sold,
mkt coverage,
latent potential,
buyer power
Media usage /
availability,
readership/
viewer rates,
public image,
awareness,
perceptual
positioning,
brand strength
Why MR is important
•



Effective penetration of
markets requires
specialised and
sophisticated
approaches to identify,
assess and satisfy
market demands.
Traditionally, small
firms have close links
with their customers
Large-scale operations
have widened the gap
between producers and • Effective marketing
information and research
consumers
enables an organisation
Modern communities
to make better decisions
are knowledgeable,
on the most appropriate
experienced and critical
market entry and
competitive strategies.
Marketing information
system (MIS)

The marketing information system
(MIS) is comprised of:
 people
 technology
 procedures
to gather, sort, analyse, evaluate
and distribute necessary, timely and
accurate information to marketing
decision makers.
Marketing
Information
System (MIS)
Effective system
of organising,
structuring and
managing the
storage, access
and
dissemination of
market research
data
Brassington & Pettitt, 2007
The Marketing Research Process
Brassington & Pettitt, 2007
Useful statistics??
MR in the Marketing Process
 MR
information needed at all
stages:
 new product idea generation and
product development
 marketing testing
 launch implementation
 brand performance management
 positioning and repositioning etc
Market research ethics


Increasing consumer resentment has become a
major problem in the research industry due to how
the market research has been used and abused.
 Consumers fear researchers may use
sophisticated techniques to obtain information
that may be intrusive and infringe consumer
rights.
 There is also the fear that the research findings
may be manipulated and misinterpreted to suit
the company paying for the research.
To minimise abuse the research industry has
developed broad standards such as ESOMAR’s
International Code of Marketing and Social
Research Practice.
Summary





Marketing research aids decision making by providing
management with specific kinds of information which
should form the foundation of all strategic decision
making and tactical planning
Marketing Research is vital in identifying, anticipating
and satisfying customer needs profitably
Accurate information enables intelligent decision
making in pursuit of organisational objectives
Information must be continuously collected,
monitored, analysed and communicated all around the
organisation (via a MIS)
All businesses can conduct research, whether inhouse or via an external consultancy
Further reading suggestions






Armstrong, G. and Kotler, P. (2011), Marketing, 9th ed.,
Pearson
Cooper, D. & Schindler, P. (2006), Marketing research.
Boston: McGraw Hill
Keegan, W.J.& Green, M. (2011), Global Marketing, 6th ed.,
Pearson
Kotler, P. & Armstrong, G. (2010), Principles of Marketing,
13rd ed., Pearson
Malhotra, N. (2010), Marketing Research. An Applied
Orientation, 6th ed. Pearson
McDaniel, Jr. C. and Gates, R. (2010), Marketing
Research, John Wiley & Sons, 8th ed.