Market Information Market Information SystemsSystems

Market Research & How it Market Research & How it is Conductedis Conducted

Market ResearchMarket Research In this section you will In this section you will discoverdiscover• What market research isWhat market research is• Why market research is importantWhy market research is important• Who uses market researchWho uses market research• The value of technologyThe value of technology• Different types of researchDifferent types of research• Limitations of researchLimitations of research

Marketing ResearchMarketing Research Links the public to the Links the public to the marketer through informationmarketer through information

Marketing information is used Marketing information is used to:to:• Identify market opportunitiesIdentify market opportunities• Solve marketing problemsSolve marketing problems• Implement market plansImplement market plans• Monitor market performanceMonitor market performance

Marketing ResearchMarketing Research Research is all methods used to Research is all methods used to gather information, analyze it gather information, analyze it & report on it& report on it• Kellogg's could use it to launch a Kellogg's could use it to launch a new cereal, Hilton to gauge new cereal, Hilton to gauge customer satisfactioncustomer satisfaction

Marketing ResearchMarketing Research Since customers accept only Since customers accept only about 10% of new products, about 10% of new products, knowing likes and dislikes is knowing likes and dislikes is crucialcrucial• Will help to minimize risk & Will help to minimize risk & potential lossespotential losses

• Will help to capitalize of product Will help to capitalize of product and company strengthsand company strengths

Why is research important?Why is research important? Businesses need to know what Businesses need to know what the current & future trends arethe current & future trends are• Where customers like to shopWhere customers like to shop• What media they go to for What media they go to for informationinformation

• How much customers will spendHow much customers will spend Keep track of competitionKeep track of competition

• What Company X is selling and for What Company X is selling and for how muchhow much

Research takes timeResearch takes time Some companies will spend years Some companies will spend years on developing productson developing products• Stouffers spent 13 years creating Stouffers spent 13 years creating Lean CuisineLean Cuisine

Testing product and packaging designs Testing product and packaging designs and conducting and conducting pilot salespilot sales in large in large citiescities

Who uses Market research?Who uses Market research? Small businesses (under $5 mil) Small businesses (under $5 mil) do informal research, usually do informal research, usually by employees or ownerby employees or owner• Simple surveys with no specialized Simple surveys with no specialized departmentdepartment

Larger companies have formal Larger companies have formal research departmentsresearch departments• Alternatively, they could Alternatively, they could outsourceoutsource the research the research

Big bucks in researchBig bucks in research Over $3 billion annuallyOver $3 billion annually

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Media

Pharamaceuticals

Gov't

Telecom

Consumer Durables

Automobiles

Financial Services

Retailers

Hospitality

Entertainment

Political

Other

Who uses Market Research?Who uses Market Research? Consumer product companiesConsumer product companies Media outletsMedia outlets Federal GovernmentFederal Government Trade OrganizationsTrade Organizations RetailsRetails Anyone who wants to better Anyone who wants to better understand the wants and needs understand the wants and needs of consumersof consumers

What now?What now? After collecting all kinds of After collecting all kinds of data, it needs to be sorted and data, it needs to be sorted and storedstored

Market Information SystemsMarket Information Systems• Set of procedures & methods that Set of procedures & methods that regulates, generates, stores, regulates, generates, stores, analyzes and distributes analyzes and distributes information for use in marketing information for use in marketing decisionsdecisions

Market Information SystemsMarket Information Systems These systems typically rely These systems typically rely heavily on internal dataheavily on internal data• Sales reports, inventory listsSales reports, inventory lists

Other forms includeOther forms include• Competitor recordsCompetitor records• Customer profile dataCustomer profile data• Government dataGovernment data• Third party researchThird party research

Technology at its finestTechnology at its finest Bar code scannersBar code scanners

• Are most often used to help with Are most often used to help with inventory managementinventory management

• Can be used to gather P.O.S. data on Can be used to gather P.O.S. data on types of products purchased together types of products purchased together to help with promotionsto help with promotions

Valued customer cardsValued customer cards• Adds identity to productsAdds identity to products

Allows marketers to gather personal dataAllows marketers to gather personal data

DatabasesDatabases A collection of related information A collection of related information about a topicabout a topic• L.L. Bean maintains a customer catalogL.L. Bean maintains a customer catalog• American Express has a detailed systemAmerican Express has a detailed system

AddressAddress What you buyWhat you buy Where you eatWhere you eat How much you spendHow much you spend Uses it to send special perks to membersUses it to send special perks to members

More dataMore data Data harvestingData harvesting

• Collecting all possible informationCollecting all possible information Companies often turn around and Companies often turn around and sell databases to other companiessell databases to other companies• A bank may sell lists of mortgages A bank may sell lists of mortgages to mortgage insurersto mortgage insurers

• No consumer permission is neededNo consumer permission is needed• Government has begun to step in and Government has begun to step in and protect consumersprotect consumers

Difficulties AriseDifficulties Arise Very costlyVery costly

• Need computer systems and trained Need computer systems and trained personnelpersonnel

Can be overwhelmed by the Can be overwhelmed by the amount of dataamount of data• Must prioritize, just because you Must prioritize, just because you can get it, doesn’t mean you can get it, doesn’t mean you shouldshould

Liar, LiarLiar, Liar Researchers often find people Researchers often find people are less than truthfulare less than truthful• A A focus groupfocus group of bald men insisted of bald men insisted they were not bothered being bald, they were not bothered being bald, but they always wore hatsbut they always wore hats

New technology is using brain New technology is using brain waves and skin sensations to waves and skin sensations to detect misrepresentationsdetect misrepresentations

Types of ResearchTypes of Research AttitudeAttitude MarketMarket MediaMedia ProductProduct

Attitude ResearchAttitude Research Also called opinion researchAlso called opinion research Determine how people feel about Determine how people feel about products, ideas, companiesproducts, ideas, companies

Gallup is one of the largest and Gallup is one of the largest and most respected organizationsmost respected organizations

Random SamplingRandom Sampling• 10% of a population is typically 10% of a population is typically large enoughlarge enough

Market ResearchMarket Research Gathering & analyzing data related Gathering & analyzing data related to marketed goods and servicesto marketed goods and services

Concerned with size, location & Concerned with size, location & makeup of marketmakeup of market

Need to gather before product is Need to gather before product is introduced and frequently introduced and frequently thereafterthereafter• Ford’s focus on younger customersFord’s focus on younger customers• Cadillac’s revivalCadillac’s revival

Market ResearchMarket Research Goal is to investigate & define Goal is to investigate & define target marketstarget markets

Data, existing and projected, Data, existing and projected, help to identify trends and help to identify trends and prepare companyprepare company• Not 100% reliable – Not 100% reliable – generalized generalized studystudy

Sales and Economic forecastingSales and Economic forecasting

Sales ForecastingSales Forecasting Attempt to make an educated guess Attempt to make an educated guess at future salesat future sales• Total market sales are calculated, Total market sales are calculated, then a share is predictedthen a share is predicted

• Share based on previous company salesShare based on previous company sales

Economic ForecastingEconomic Forecasting Attempt to predict future Attempt to predict future conditionsconditions

Federal agencies collect Federal agencies collect information on new homes, information on new homes, inflation, money supply & price inflation, money supply & price indexesindexes

Woods & Poole Economies, Inc. give Woods & Poole Economies, Inc. give projections for projections for MSAsMSAs through 2020 through 2020• Metropolitan Statistical AreaMetropolitan Statistical Area

Media ResearchMedia Research Media selection & frequencyMedia selection & frequency Measures effectiveness of Measures effectiveness of message and placementmessage and placement

Includes demo-,psycho-, and Includes demo-,psycho-, and geographic informationgeographic information

PrintPrint BroadcastBroadcast OnlineOnline

PrintPrint Tested on recall, communication Tested on recall, communication & persuasiveness& persuasiveness

Ability to change beliefs, Ability to change beliefs, attitudes or intended behaviorattitudes or intended behavior

Uses consumer panelsUses consumer panels• Focus GroupsFocus Groups• Typically a cross section of Typically a cross section of society – teens, seniors, society – teens, seniors, minorities, etc.minorities, etc.

Broadcast MediaBroadcast Media Arbitron Ratings Co. – largest Arbitron Ratings Co. – largest radio survey companyradio survey company• Uses Uses diaries diaries to gauge tune insto gauge tune ins• Includes station and program Includes station and program detailsdetails

Nielson Media Research, Inc.Nielson Media Research, Inc.• Uses a sample of 5000 homesUses a sample of 5000 homes• Homes equipped with meters that Homes equipped with meters that monitor programsmonitor programs

Online AdvertisingOnline Advertising Agencies use mock & live Agencies use mock & live situations to test recall or situations to test recall or web advertisingweb advertising

Favorite methodsFavorite methods• Pop-upsPop-ups• Pop-undersPop-unders• CookiesCookies

Product researchProduct research Centers on product & package Centers on product & package design and usage & acceptance of design and usage & acceptance of productsproducts

New product acceptanceNew product acceptance• Utilize test marketsUtilize test markets

Could be risky due to leaks of new Could be risky due to leaks of new products to competitionproducts to competition

Existing productsExisting products• Question both industry and consumersQuestion both industry and consumers

LimitationsLimitations Limited by timeLimited by time

• Often decisions need to be made Often decisions need to be made before enough data has been collectedbefore enough data has been collected

Limited by capitalLimited by capital• Companies often do not want to invest Companies often do not want to invest enough for a in-depth studyenough for a in-depth study

Limited by informationLimited by information• Even the most expansive studies will Even the most expansive studies will not find all variables or will return not find all variables or will return too much informationtoo much information