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SM 1.51 MARKETING MANAGEMENT
May 1999
Lecture 3
Part 3
RESEARCHING AND SELECTING MARKETING
OPPORTUNITIES
Marketing Research and Analysis
Market Segmentation, Targeting and Positioning
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Marketing Research and Analysis
1. Aims and Scope of Marketing Research2. Marketing Research Method (The Research Process)
3. Market Research
4. Information Sources
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Scope of Marketing Research
1. Product Studies
new product development
new uses for existing product packaging problems
2. Distribution Analysis
modes of market coverage and channel comparisons retail buying policies
reseller selling and merchandising methods
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Scope of Marketing Research
3. Pricing Research and Analysis
market price compatability
discounting policies price positioning
4. Promotional Research
media research: coverage, rates, etc. measuring ad-effectiveness, ad-testing
awareness and ad-recall research
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Scope of Marketing Research
5. Economic and Business Research
research and analysis of market shares sales analysis
forecasting of general economic trends
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2. Marketing Research Method
The Research Process (6 steps)
Define the problem Design a suitable research procedure
Selecting the sample
Execute the research work (Data collection)
Process the data collected
Reach conclusions and report the findings
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1. Define the problem
The problem (or aim) of the particular piece of research
must be clearly defined.
Marketers must decide exactly what they want to know,
and set down a precise, specific problem to be solved
by the research.
2. Design a suitable research procedure
The next step is to design an appropriate research
procedure:
to select the tools and method best suited to achievingthe specific aim or resolving the problem defined in
Step 1
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3. Selecting the sample
A sample is a segment of the population selected to
represent the population as a whole.
Ideally, the sample should be representative so that
the researcher can make accurate estimates of the
thoughts and behaviours of the larger population. Designing the sample size calls for 3 main decisions:
- First, who is to be surveyed (sampling unit)
- Second, how manypeople should be surveyed
(sample size)- Third, howshould the people in the sample be
chosen (sampling procedure)
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4. Execute the research work (Data collection)
Step 4 is to execute the secondary and/or primary
research.
Data collection involves 2 types of data -
- secondary data (equally important data that already
exists.
- primary data (fieldwork)
5. Process the data collected
The fifth step is to assemble, collate, and analyse the
data.
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6. Reach conclusions and report the findings
Finally, conclusions must be drawn from the research
findings.
These must presented in a clear, business-like report
which makes it easy for people to act on the findings.
The formal report is an important record for the
organisations data bank.
It should contain the major findings, conclusions, and
recommendations for action.
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3. Market Research
Definition and Scope of Market Research
Market Research seeks data concerning thematching of markets and products and the formation
of offers and strategies appropriate to those markets
and products
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The Aim of your Market Research should be to find
out:
what goods and services people are likely to buy
if you already have an idea for a product or service,
are people really likely to buy it what changes to make to a product to better suit the
market
where, when, and how often customers will buy
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The Aim of your Market Research should be to find
out:
how products or services should be presented
how many potential customers there are in a givenarea
what sort of people these are
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3 Main Market Research Questions
Does a market exist?
If so, what is the size and composition?
What offer(s) should be made to it and how are
they best presented
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1. Does a market exist?
Aim is to acquire factual evidence that every new
launch will meet and fill a customer want.
2. Market size
Reliable estimates rest on adequate research of several
factors such as
total number of customers in the overall market
the number of those customers the firm can reach
with an offer
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Market size
the approximate value after researching
- the average price expected to be paid for a product- relevant customer buying patterns - seasonality,
frequency, and size of normal purchase
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3. Customer Profile
3 broad categories
Demographic - age groups, income range, sex,occupation, household size
Geographic - region, city size, diversity of settlement
(urban, suburban, rural, remote)
Psychographic - life style, social class, culturalbackground, ethnic background
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4. Information Sources (Sources of primary and
secondary data)
3 Major information sources:
what people say
what people do
what people have done
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a) What people say
Direct - questioning actual and potential customers
Indirect - expert opinions from professionals in
contact with relevant markets
Disadvantages
problem of designing appropriate samples and
survey methods
respondent and interviewer biases
at times, data can be misleading
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b) What people do
Informal observation of shoppers by marketing staff
Customer flow studies
Studies of behavioural patterns by specialists
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Primary Data Methods (Field Research)
1. Surveys
2. Observation
3. Experiment
1. Surveys
Personal interview
Mail survey Telephone
Group discussion
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Some pointers on Questionnaires
Close ended or Open ended or Both
Wording the questions (should be clear and simple)
Rating scales - 2 types
1. Likert Scale - asks respondents to indicate their
degree of agreement with each statement presented
to them
eg. Reebok tennis shoes are expensive
Strongly Agree/Agree/Undecided/Disagree/Strongly Disagree
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Some pointers on Questionnaires
2. Semantic Differential - requires respondents to
indicate the position of their response along a
continuum (from one extreme to another) for each of
the several characteristics.
Eg. Reebok tennis shoes
Expensive 7 : 6 : 5 : 4 : 3 : 2 : 1 : Inexpensive
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Comparison of Typical Characteristics of the
3 Survey Methods
Refer to T1
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Group discussion or focus group interview
involves loosely structured interviews with groups of
6 to 10 people who focus on a product. During a
group dynamics session, individuals give theircomments and reactions to new product ideas or
explain why they buy (or do not buy) certain items.
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2. Observation
the systematic recording of behaviour, objects, or
events as they are witnessed
3. Experiment
a research design that allows the investigator to
change one or two variables while observing the
effects of these changes on another variable
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c) What people have done
information that already exist
Sources of secondary data
company records, previous reports, sales records
government statistics
libraries - trade and academic journals, magazines,
etc.
commercial market research reports
newspapers - business press
trade associations
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Secondary Data (Desk Research)
1. Advantages
they are almost always less expensive
they can be obtained rapidly, ie. timely
2. Disadvantages
secondary data is previously collected data and is,
therefore old and possibly out dated
some data is collected only periodically
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Secondary Data (Desk Research)
data may not have have been collected in the form
preferred
users of secondary data may not be able to assess
its accuracy
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Factors to consider when collecting data
impartiality - make sure that you are very fair in
collecting the data. No biasness in the data and the
results and conclusions
validity - make sure it is representative, properly
sampled
reliability - make sure it is from proper sources,
should be checked especially for secondary data
homogeneity - consistency in the collection of thedata
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Potential value of marketing research
should exceed its estimated cost
Refer to T2
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END OF LECTURE 3
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