#7 marketing research ch.5
TRANSCRIPT
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Marketing Research &Forecasting
Chapter 5
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The Situation Firm began by offering
classically styled, high-
quality leather handbags. Women needed only two
purses in brown or black.
Mid-1990s: sales slowed.
Consumer preferences
changed as more womenentered the workforce.
Designer bags madeCoachs look plain.
Coach
Research Revamps Strategy
Case Study
Researchs Role Method: Interviews 14,000
women annually. Watches
trends for market voids. Key research findings:
1) desire for fashionpizzazz in handbags.2) Usage voids.
New products are createdto fill voids (wristlets,fabric bags, Signature line,etc.).
Sales and earnings grow.
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Definition of Marketing
Research
Marketing Researchis . . . .
the process of defining a marketing problem or opportunity,
systematically collecting and analyzing information, and
recommending actions to improve an organizations
marketing activities.
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Limitations
Data is always out of date. Management usually wants research
yesterday to make a point.
Doesnt tell you what to do. Is scientific & objective
(numbers).
Only as good as the data gatherer & preparer. Shortcuts cut costs butadd risks.
Research is difficult to assess:
a. lacks follow up authority
b. management may not be qualified to interpret and react
accordingly.
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Market Research Process
Defineproblem
and
research
objectives
Developplan
to
collect
data
Implement,collect
and analyze
data
Interpretand
report
findings
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The Marketing Research Process
Marketing research:
Systematic design, collection, analysis, and reporting
Data relevant to a specific marketing situation facing the
organization A multi-step, purpose-driven process
Measure effectiveness of marketing actions, sales potential,
try to understand consumer behaviour
Can be done by company personnel or contracted out to
outside companies
Figure 5.2
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The Marketing Research Process (continued)
Defining the problem and research objectives:
Helps to know what you are looking for!
Can be the most difficult step in the process
Need to distinguish between symptoms and problems
Exploratory research: p.170
Research conducted to gather information to
Help better define problems and opportunities
Secondary research, focus group discussions and depth
interviews are commonly used for this purpose
Figure 5.2
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The Marketing Research Process (continued)
Descriptive research:
Research conducted to better describe marketing problems,
situations, or markets, such as :
Demographic characteristics of markets, attitudes of
consumers, and market potential for a product
Surveys and personal interviews are commonly used Causal research:
Research to test hypothesis about cause and effect
relationships.
Figure 5.2
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The Marketing Research Process (continued)
Developing the research plan:
Translating the research objectives into specific information
needs
Research plan presented in a written proposal for approval
Secondary data:information that already exists, having been
collected for another purpose ( see Table 5.1 p.172) Internal data, academic, and commercial sources
Faster and cheaper than primary data collection, but may
not be in a suitable form for decision making
Helps to see what work has already been done in the area
Figure 5.2
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The Marketing Information System
Assessing information needs:
Remember, the objective is to make better marketing
decisions
Must consider needs of all users
Must balance information wants
with decision making needs and
feasibility (and costs) of offering it The value of information comes
from its use, not its existence
Developing information:
Internal data Marketing intelligence
Marketing research
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Developing Information
Internal data:
Information collected from different sources within the
company, and stored within the organizations information
system
Accounting system
Operations/production
Sales reporting systemPast research studies
Internal data is cheap, quick,and easy
May not be in a usable form forthe decision to be made
May be too much informationto sort through
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Developing Information
Marketing intelligence:
Systematic collection and analysis of
Publicly available information
About competitors and market developments Proactive approach to keeping
track of what is going on within
the organizations marketing
environment
Sources:employees, customers,trade shows, websites, marketing
communications, suppliers,
resellers, professional information
services, and dumpster diving
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Types of Marketing Information
Secondary data
Facts and Figures Already recorded
prior to the project
Primary data
Facts and Figures Newly collected for
the project
Internal data (inside the firm) Financial statements, research
reports files, customer letters,sales call reports, andcustomer lists
External data (outside the firm) Statistics Canada reports, trade
association studies, and
magazines, business periodicals,and commercial reports
Observational data
(watching people) Mechanical and electronic
approaches
Personal approaches
Questionnaire data
(asking people) Idea generation through in-depth
interviews and focus groups
Idea evaluation through mail,
telephone, and personal surveys
Data Facts and figures
pertinent to theproblem
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Market Research Process:
Develop the Research Plan
Advantages of
Secondary Data
Less time to obtain
Lower cost than
primary research
Alternate means of
access to information Benefit from
resources of others
Potential Problems
With Secondary
Data
May not be:
Relevant
Accurate
Current
Impartial
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Primary Data Sources (see p.174 Table 5.2)
1. Survey:a. Personal interview ( Molson Beer survey on Campus)b. Telephone
c. Mail
d. Focus groups, consumer panels, expert panels
e. Internet
2. Observation:
a. Audit (store & warehouse)b. Simple, direct (via consumer panel)
c. Contrived event
d. Mechanical
3. Experimentation:a. Psycho galvanometer (lie detector)
b. Pupilometer (eye direction camera)
c. Perceptoscope (pupil dilation)
d. Tachistoscope
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Pros & Cons: Surveys1. Surveys: Low cost & quick.
Unwillingness to answer or unreliability of sample is common.
Certain leading questions or poorly constructed ones may influence answers. A great deal of time is spent studying the content, and wording of questions.
Personal interview: expensive, but high response rate. A large amount of data can be collected.
projective tests can be used.
Telephone: cheap & fast. Least amount of data collected.
hours of phoning are limited.
Mail: slow, inflexible, good control, but low response rate.
Focus groups: panels can be local or national.
They can yield info as to : who bought, or used according to age, sex, familysize, income, etc.
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Pros & Cons: Observation
2. Observation: some bias may exist on behalf of consumers who know that they are being
observed or on behalf of observers who make the data fit their objectives.
Audit: no bias (inventory turnover)
made famous by A.C. Neilson.
Simple, direct: watching the movement of people in a store.
It gives us an idea for layout and design.
Contrived event: setting up an event to find (special item on bottom shelf in far corner)
Mechanical: cameras, audiometers, etc.
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Pros & Cons: Experimentation
3. Experimentation: expensive, unnatural, unrealistic setting, but
completely objective.
Psychogalvanometer: (lie detector machine) to illicit someresponse, we examine sweat on hand, body temperature, etc.
Pupilometer:(eye camera) to find out what part of advertisementattracts the eye.
Perceptoscope:pupil dilation reveals level of boredom.(ie. Atropine for the belladonna effect)
Tachistoscope:measures speed at which ideas are perceived, (Adsmessage clarity).
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Contact Methods (p.176 Table 5.3)
Source: Adapted with permission from Marketing Research: Measurement and Method,
7th ed., by D.S. Tull and D.I. Hawkins, MacMillan Publishing Company, 1993
Table 6.3
Mail Telephone Personal Online
Flexibility Poor Good Excellent Good
Quantity of data collected Good Fair Excellent Good
Control of interviewereffect
Excellent Fair Poor Fair
Control of sample Fair Excellent Fair Poor
Speed of data collection Poor Excellent Good Excellent
Response rate Poor Good Good Good
Cost Good Fair Poor Excellent
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Research Features
Question & answer techniques:
Direct
Open ended Comparison
Rating scales
Projective tests
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Typical Problems in Wording Questions
PROBLEM SAMPLE QUESTION EXPLANATION
Leading question
Ambiguous question
Unanswerable
question
Two questions
in one
Why do you like Wendys fresh meat
hamburgers better
than those of competitors made with
frozen meat?
Do you eat at fast-food restaurants
regularly?
YesNo
What was the occasion for youreating your first hamburger?
Do you eat Wendys hamburgers and
chili?
YesNo
Consumer is led to make
statement favoring Wendys
hamburgers
What is meant by word
regularly-once a day, once a
month, or what?
Who can remember the
answer? Does it matter?
How do you answer if you
eat Wendys hamburgers but
not chili?
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Typical Problems in Wording Questions
PROBLEM SAMPLE QUESTION EXPLANATION
Non exhaustive
question
Non mutually
exclusive
answers
Where do you live?
At homeIn dormitory
What is your age?
Under 2020-4040 and over
What do you check if you
live in an apartment?
What answer does a 40-year
old check?
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Reliability & Validity
Reliable: data can be replicated, and is therefore trustworthy,dependable, and consistent. (to footnote your reference sources.)
Valid: logically related conclusion. We must measure what we aresupposed to be measuring. (Is there a logical connectiveness with your project claims? ieif A then B, therefore C may not be true.)
Example: a male panel is asked to judge which group is more attractive:
1. Group X [men with ties]
2. Group Z [females without ties]
Example: garlic around neck will cure your cold in 7 days; otherwise, it will take
one week.
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Market Research Process:
Plan Primary Data Collection
Sampling Plans - three
issues
What is the sampling unit?
What is the sample size?
What is the sampling
procedure?
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The Marketing Research Process (continued)
Sample:
A segment of the population selected for marketing research
To represent the population as a whole
Who should be surveyed? Sampling unit
How many should be surveyed? Sample size
How should they be chosen? Sampling procedure
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Market Research Process:
Types of Samples ( see p.182 Table 5.4)
Probability Samples
Simple random
sample Known chance
Equal probability
Stratified random
sample Mutually exclusive
groups
Random sample drawn
Non-probability Samples
Convenience sample
Select easiest population Judgement sample
Select for accurate
response
Interviewer sets number Quota Sample
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Sampling
Probability sampling: (everyone has a knownprobability of being selected).
A. Random sampling: (every 10th name in the phone book; but not everyoneis listed or has a phone).
B. Stratified sampling: where every major segment of the
population receives a weighted share of importance (furniturestore may be interested in 20-30 year old newly weds instead of empty nesters).
C. Cluster (area) sampling: (random city block; then random
sampling within.) Its cheap and quite good.
Non-probability sampling: (selection of people isbased on researchers judgement).
A. Quota sampling: no randomness. (first 100 people weareyeglasses. Very adequate for exploratory research.)
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Forecastinga. Extending past behaviour
Assumes that past conditions will continue unchanged into
the future. Doesnt react to long run cyclical changes.
b. Anticipating future behaviour
Is much more time consuming and subjective as to which
factors to consider. Initially we may develop a national economic forecast based
upon (GDP, population growth, disposable income, etc.)
This is then used to develop an industry sales forecast, andthen a company, then a product forecast.
Forecasts can be used to provide breakdowns by:1. Geographic region
2. Product type
3. Customer type
4. Commission class, etc.
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Forecasting (continued)
Single factor method:
past or future estimated sales x Z factor = forecast
Multiple factor method:
Same as above, only several factors are used.
population x income group sought x age group sought x share of
market x price of product = total sales potential
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Time Series Analysis
Leading & lagging indicators ie construction starts;business bankruptcies, etc
Economist use the above to help predictseasonal, time, and special trends or
fluctuations in our economy.
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Qualitative & Quantitative Methods
Quantitative methods: Time series, market test
methods, consumption co-efficient, regression analysis,barometric analysis, statistical demand analysis, etc.
Market-Build-up Method = potential buyers Xprobability of purchase.
Market Rating Index (MRI) = area share of retailsales percent of nations population. (IfVancouver has 7.03% of nations sales and 5.77% ofpopulation, its MRI = 122, 7.03 5.77 = 122%)
Chain-Ratio method (which is the opposite of theMarket-build-up method.) Start with more generalmarket information, and then compute more specificinformation.
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Based on Methods
What people say Surveys of buyers
intentions.Composite sales force
opinions.
Expert opinion
What people do Test markets
What people have done
Time series analysisLeading indicators
Statistical demand
analysis
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Qualitative methods:
a. Jury of executive opinion: a group of seasonedveterans give their opinions.
b. Sales force estimates: drawbacks to this may be:1. high turnover of reps. (unfamiliar + unreliable)
2. may not be familiar with economic climate changes.
3. mistrust of such information between sales force andmanagement.
c. Surveys & market tests:surveys of buyers intentions(Gallup, McGraw Hill surveys.)
d. Substitute methods: (Corollary Product Indexes) toapproximate upper & lower limits especially for new
products (pay T.V.)e. Delphi method: experts state their responses.
Information is collected and feedback is given. Newresponses are submitted and the process is repeated. Onechoice finally emerges. (The Pope was chosen in thisfashion.)
Qualitative & Quantitative Methods