Download Chapter 7

CHAPTER 7
Turning
Marketing
Information
into Action
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
©2
7-1
After reading this chapter you should
be able to:
• Identify the four-step marketing research
approach leading to marketing actions.
• Describe how secondary and primary data are
used in marketing, including the uses of
questionnaires, observations, experiments, and
panels.
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
©2
7-2
8-5
After reading this chapter you should
be able to:
• Be able to identify and correct typical problems
in designing questions for a questionnaire.
• Understand how information technology
enables information systems to be used
to link massive amounts of marketing
information to meaningful marketing actions.
• Recognise alternative methods to forecast
sales and use the lost-horse and linear trend
extrapolation methods to make a simple
forecast.
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
©2
7-3
The Role of Marketing Research
•
To place marketing research in perspective, we can
describe:
1. what it is,
2. some of the difficulties in conducting it and
3. the four steps marketing executives can use in conducting
marketing research.
•
What Is Marketing Research?
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
©2
7-4
What Is Marketing Research?
• Marketing research is the process of defining a
marketing problem and opportunity, systematically
collecting and analysing information, and
recommending actions to improve an organisation’s
marketing activities.
• Although marketing research isn’t perfect at
predicting consumer reaction, it can reduce risk and
uncertainty to help marketing managers take more
effective marketing actions.
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
©2
7-5
Why Good Marketing Research Is
Difficult
• Often marketing researchers face difficulties in asking
consumers questions about new, unknown products.
• Imagine if you, as a consumer, were asked about
your personal hygiene habits.
• Even though you knew the answer, would you reveal
it?
• When personal or status questions are involved, will
people give honest answers?
• A task of marketing research is to overcome
difficulties like these and obtain as much information
as needed to make reasonable estimates about what
consumers will or won’t buy.
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
©2
7-6
Four-Step Marketing Research
Approach
•
•
1.
2.
3.
4.
Marketers have tried to improve the results of their
research by using more formal, systematic
approaches such as that shown in Figure 7–1.
This four-step sequence starts with:
defining the problem carefully.
developing a research plan for collecting the most
appropriate information to try to solve the problem.
Collecting the relevant data and finally;
Developing a report to management that converts
the data into findings and recommendations.
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
©2
7-7
The Marketing Research Process
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
©2
7-8
Boy with Fisher-Price toy
How do you do marketing research with kids?
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
©2
7-9
Concept Check
1. What is marketing research?
2. What are the four steps marketing researchers use to help
develop marketing actions?
3. 1. Marketing research is the process of defining a
marketing problem an opportunity, systematically
collecting and analysing information, and
recommending actions to improve an organisation’s
marketing activities.
4. 2. The four-step sequence is: (1) define the
problem; (2) develop a research plan; (3) collect the
relevant data; and
(4) develop a report that converts data into findings
and recommendations.
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
©2
7 - 10
Step 1: Define the Problem
• The first part of defining a problem involves two key
elements:
– setting the research objectives and
– identifying possible marketing actions suggested by the
research.
• Set the Research Objectives
– Objectives are specific, measurable goals the decision
maker seeks to achieve in solving a problem.
• Identify Possible Marketing Actions
– Effective decision makers develop specific measures of
success, which are criteria used in evaluating proposed
solutions to the problem.
– Different research outcomes- based on the measure of
success—lead to different marketing actions.
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
©2
7 - 11
Step 2: Develop the Research Plan
•
1.
2.
•
The second step in the marketing research process involves:
identifying the data needed for marketing decisions.
determining how to collect the data.
Identify Data Needed for Marketing Decisions
–
–
•
Often marketing research studies amass large amounts of data
that are interesting but irrelevant for marketing decisions.
So the study must focus on collecting data that help managers
make a clear choice.
Determine How to Collect Data
–
–
Determining how to collect useful marketing research data is often
as important as actually collecting the data.
Two key elements in deciding how to collect the data are concepts
and methods.
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
©2
7 - 12
Concept Check
1. How do research objectives relate to marketing actions?
2. What is the difference between concepts and methods?
1. Research objectives are specific, measurable goals the
decision maker seeks to achieve in solving a problem.
Marketing research is then conducted to identify possible
marketing actions.
Those implemented can be compared to the objectives to
assess their success.
2. Concepts are ideas about products or services whereas
methods are the approaches that can be used to collect data.
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
©2
7 - 13
Step 3: Collect Relevant Information
•
•
•
•
Collecting enough relevant information to make a
rational, informed marketing decision sometimes
simply means using your knowledge to decide
immediately.
At other times it entails collecting an enormous
amount of information at great expense.
Figure 7–2 shows how the different kinds of
marketing information fit together.
Data, the facts and figures related to the problem,
are divided into two main parts:
1. secondary data
2. primary data.
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
©2
7 - 14
Primary and Secondary Data Collection
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
©2
7 - 15
Secondary Data
•
•
Secondary data are facts and figures that have
already been recorded before the project at hand.
Secondary data is divided into two parts—internal
and external secondary data.
1. Data that have already been collected and exist inside the
business firm or other organisation are internal secondary
data.
2. Published data from outside the organisation is external
secondary data.
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
©2
7 - 16
Oral-B
How do you do
marketing research
on this product?
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
©2
7 - 17
Concept Check
1.
2.
3.
What are data?
What is the difference between secondary and primary data?
What are some advantages and disadvantages of secondary
data?
1.
Data are the facts and figures related to the problem, and are divided
into two main parts: secondary data and primary data.
2.
Secondary data are facts and figures that have already been recorded
before the project at hand, whereas primary data are facts and figures
that are newly collected for the project.
3.
Advantages: time savings, low cost, and a greater level of detail.
Disadvantages: data may be out of date, the definitions or categories
may not be right, and not being specific enough for the project.
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
©2
7 - 18
Primary data
•
The two principal ways to collect new or primary
data for a marketing study are:
1. observing people and
2. asking them questions.
•
•
Both can be accomplished in a variety of ways.
Observational methods include:
– Mechanical and electronic observation
– Personal observation
•
Asking Questions
– Surveys/questionnaires.
– Focus groups
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
©2
7 - 19
Focus Group Interviewing Room
Why are focus groups better than or not as good
as individual interviews?
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
©2
7 - 20
Weight Watchers Example
• How might a company
like Weight Watchers
collect primary and
secondary information
on consumers who
wanted to lose weight?
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
©2
7 - 21
Concept Check
1. A mail questionnaire asks: ‘Do you regularly eat pizza?’
What is the difficulty with this question?
2. Which survey provides the greatest flexibility for asking
probing questions:
– mail, telephone or personal interview?
3. What is the difference between a panel and an experiment?
1. The word “regularly” is ambiguous. It means different things to
different people.
2. Personal interview survey.
3. A panel is a sample of consumers or stores from which
researchers take a series of measurements.
An experiment involves changing a variable in a customer
purchase and seeing what happens.
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
©2
7 - 22
Making the Most of Information
Technology
• The Internet and the PC provide a gateway to
exhaustive sources of information on the competition,
the market and the consumer.
• Sources feeding this database range from internal
data about sales and customers to external data from
marketing research services such as TV ratings.
• Information technology involves designing and
managing computer and communication networks
that can store and process data.
• Such systems make data accessible to managers
who can query a system to analyse information in
various ways and with the results make effective
marketing decisions.
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
©2
7 - 23
Step 4: Deliver the Final Report
• Marketing data and information have little value
unless they are translated into findings and
recommendations that lead to marketing actions for
the marketing managers.
• How do we prepare the work so that managers can
use it to support actions?
• Step 4 in the marketing research approach involves
delivering a useful report to marketing managers by:
– Analysing the data,
– Presenting the findings
– Making recommendations
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
©2
7 - 24
How did it go at Tony’s Pizza’s?
• How are sales going?
• To see how marketers at
Tony’s Pizza assessed this
question and the reasons
why they came up with this
ad, read the text.
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
©2
7 - 25
Concept Check
1. How does data mining differ from traditional marketing
research?
2. In the marketing research for Tony’s Pizza, what is an
example of (a) a finding and (b) a recommendation?
1. Marketing research develops a hypothesis about a variable and
then collects data to see if it’s true. In contrast, data mining
extracts hidden predictive information already collected and
stored in databases.
2. (a) Figure 7-6A shows a finding that summarises annual sales
from 1999 to 2002. (b) Figure 8-6A shows a finding that leads
to a recommendation would be to develop an ad that targets
children 6 to 12 years old.
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
©2
7 - 26
Sales Forecasting Techniques
• The term sales forecast refers to the total sales of a
product that a firm expects to sell during a specified
time period under specified environmental conditions
and its own marketing efforts.
• Forecasting or estimating potential sales is often a
key goal in a marketing research study.
• Good sales forecasts are important for a firm as it
schedules production.
• Three main sales forecasting techniques are often
used:
1. judgments of the decision maker,
2. surveys of knowledgeable groups and
3. statistical methods.
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
©2
7 - 27
Wilson Tennis Racquets
How might marketers forecast sales thru 2010?
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
©2
7 - 28
7
Sales Forecasting Techniques
1. Judgments of the decision maker:
–
–
Probably 99 per cent of all sales forecasts are simply the judgment
of the person who must act on the results of the forecast—the
individual decision maker.
A direct forecast involves estimating the value to be forecast
without any intervening steps.
2. Surveys of knowledgeable groups
–
Two common groups that are surveyed to develop sales forecasts
are prospective buyers and the firm’s salesforce.
3. Statistical methods.
–
–
The best known statistical method of forecasting is trend
extrapolation, which involves extending a pattern observed in past
data into the future.
When the pattern is described with a straight line, it is linear trend
extrapolation.
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
©2
7 - 29
Concept Check
1. What are the three kinds of sales forecasting techniques?
2. How do you make a lost-horse forecast?
3. What is linear trend extrapolation?
1.
They are (1) judgments of the decision maker, (2) surveys of
knowledgeable groups, and statistical methods.
2. Start with the last known value of the item being forecast, (2)
list the factors that could affect the forecast, (3) assess whether
the factors have a positive or negative impact, and (4) make
the final forecast.
3. Linear trend extrapolation involves extending a pattern
observed in past data as a straight line into the future to
generate the forecast values for a specific time period.
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
©2
7 - 30
Finish
• Questions?
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
©2
7 - 31