MARKETING IN TOURISM & HOSPITALITYMarket Research

Week 5&6

Hasna Farook

AIMS

Define market research Explain the need for market research,

primary and secondary research Identify the six stages of a market research

study Describe the techniques and tools used, their

advantages and disadvantages, including desk and field research, questionnaires, observation and focus groups

DEFINITION OF MARKETING RESEARCH Marketing research is the process of planning,

collecting and analysing data relevant to a marketing decision. The results of this analysis are then communicated to management.

Marketing research plays a key role in the marketing system. It provides decision-makers with data on the effectiveness of the current marketing mix and also with insights for necessary changes.

Furthermore, marketing research is a main data source for both management information systems and decision support system. Decision support system is an interactive, flexible computerised information system that enables managers to obtain and manipulate information as they are making decisions

THE ORGANISATION MARKETING INFORMATION REQUIREMENTS

Here is a list of question that managers of marketing projects might need to be answered

Markets who are our customer? What are they like? How are buying decisions made?

Share of the market. What are total sales of our product? How do our sales compare with competitors sales?

Products. What do customers think of our product? What do the do with it? Are our products in growth or in decline stage of their lifecycle? Should we extend our range?

Price. How do our price compare with others: higher, average, lower? Is the market sensitive to price?

Distribution. Should we distribute directly, indirectly or both? What discounts are required?

Sales force. Do we have enough/to many salespeople? Are they conducting the right people? Should we pay commission?

Advertising. Do we use the right media? Do we communicate the right message? Is it effective?

Customer attitudes. What do they think of our product/firm/service delivery?

Competitors activities. Who are our competitors? Are they more or less successful business? Why are they more or less successful?

Environmental factors. What factors impact on market planning.

STRATEGIC QUESTION Another way of viewing information needs in marketing

management is to consider the four key strategic question Where are we now Current sales by product/market, market share by

product/market, competitors market share, customer attitudes and behaviour, corporate image versus competitors image, company strengths and weaknesses

Where do we want to be? Market forecast by segment, environmental changes,

growth capabilities, opportunities and threats, competitor response, new product development/ market potentials

How might we get there? Marketing mix evaluation, buying behaviour, new product

development, risk evaluation, alternative strategic option How can we ensure arrival? Budgets, performance evaluation.

THE STAGES OF THE MARKETING RESEARCH PROCESS

The process includes the following stages, in this order (the process spells DODCAR)

Stage 1 definition: identify and define the opportunity and threat

Stage 2 Objectives: determine precisely what you need to know to deal with the opportunity or threat.

Stage 3 design the research and the methods to be used.

Stage 4 collect data Stage 5 analyse data Stage 6 report findings

STAGE 1 IDENTIFY AND DEFINE THE OPPORTUNITY OR THREAT This heading should remind you of SWOT analysis. An opportunity is something that occurs in the

organisation environment that could be advantageous- a change of law, or a new technology that could be exploited.

A threat is an environmental development that could create problems and stop the organisation achieving its objectives-a new competitor, or an adverse change in buying behaviour.

Define the problem or opportunity and decide what information is needed. Some research is ill-directed and lacking in purpose. It can ask the wrong questions or miss out on vital ones, and this only becomes apparent after the study is completed and the money spent.

STAGE 2 DETERMINE THE OBJECTIVES OF THE RESEARCH Who should be asked the questions? What questions

should be asked? What will be the size and nature of the sample? How should the questionnaire be constructed?. The objectives should relate only to the problem or opportunity. They should be stated carefully, completely and precisely. The SMART approach is useful when determining objectives

They should be specific as possible, vague objectives will lead to uncertain, vague research

They should relate to measurable matters, the objectives should require as much quantification as possible.

They should be attainable with reasonable resources They should focus on results rather than methods. They should be time related: an overall time frame for

research should be agreed.

STAGE 3 DESIGN THE RESEARCH AND THE METHODS TO BE USED The category of research must be first decided upon:

the methods used will depend on that. Research must be exploratory, descriptive or casual

Exploratory research: if your organisation has a completely new idea for a product or service which consumers have been offered before then investigative research will be most appropriate in the first instance

Descriptive research: this aims to describe what is happening now or what has happened over a limited period of time. In another words descriptive research is useful for answering ‘where are we now’ questions.

Casual research: this attempts to identify and establish the relationship between all the variables and determine whether one variable influences the value of others.

STAGE 5 ANALYSE DATA

Once all the questionnaires have been completed, the next stage is to put the data into a computer and sort them into measurable quotas for cross-referencing and analysis. This will be done using statistics (for quantitative data) and other means of analysis and summary (qualitative data) to find out what it reveals.

STAGE 4 COLLECT THE DATA Data can be collected from either primary or secondary

data sources. Primary data is information collected specifically for the

study under consideration. Primary data may be quantitative (statistics) qualitative (attitudes) or observational videos of people browsing in store.

Secondary data is data collected for another purpose not specifically related to the proposed research, for instance all the internal information in the company marketing information system and database, or information such as published research reports, government information, newspapers and trade journals etc.

Data may also be primarily qualitative or quantitative Qualitative research is geared towards gathering non-

numeric information Qualitative seeks to obtain data in numeric form often

using questionnaire and surveys.

Advantages Disadvantages

Primary data 1. Applicable and usable

2. Accurate and reliable

3. Up-to-date

1. Expensive2. Not

immediately available

3. Not as readily accessible

Secondary data 1. Inexpensive2. Easily

accessible3. Immediately

available

1. Frequently outdated

2. Potentially unreliable

3. May not be applicable

STAGE 6 REPORT ON FINDINGS

What does the information mean? Information for its own sake has no purpose. It can be misleading too, and be used to draw wrong conclusions, or ones which suit the ‘tunnel vision’ of some operators. The critical phase of research is the final one, the field survey.

In putting together the research plan, decisions need to be made under the following heading

Data sources Primary data, secondary data

Types of data required Continuous, quantitative, qualitative

Research methods Observation, focus group, survey experiment

Research tools Interviews (semi-structured, unstructured, open and closed question), questionnaires, mechanical tools (video audio)

Sampling techniques (if required)

Sampling unit, sample size, sample procedures

Contact methods Telephone, mail, face-to-face

STUDY ACTIVITY

Describe in detail the six stages of the market research study that a business would undertake in order to discover the needs of its customers. Indicate what the business would do at each of these stages. (20 marks)

ETHICAL AND SOCIAL RESPONSIBILITIES Marketing research aims to collect data about people. Data protection Most developed countries have specific legislation to protect the privacy of

individuals. Many people feel unhappy about their personal details being retained by commercial organisation.

Data protection act 1998

The act is concerned with personal data which is information about living, personal individuals.

The eight data protection principles

Fairly and lawfully processes Processes for limited purposes Adequate, relevant and not excessive Accurate Not kept longer than necessary Processed in accordance with individuals rights Secure Not transferred to countries that do not have adequate data protection laws

INTERNAL AND EXTERNAL SOURCES OF SECONDARY DATA

internal secondary data is usually an inexpensive information source for the company conducting research, and is the place to start for existing operations. Internally generated sales and pricing data can be used as a research source.

There are three main sources of internal data. These are: 1. Sales and marketing reports. These can include such things as: Type of product/service purchased ,Type of end-user/industry

segment , Method of payment, Product or product line , Sales territory, Salesperson, Date of purchase , Amount of purchase, Price, Application by product, Location of end-user.

2. Accounting and financial records. These are often an overlooked source of internal secondary information and can be invaluable in the identification, clarification and prediction of certain problems. Accounting records can be used to evaluate the success of various marketing strategies such as revenues from a direct marketing campaign.

3. Miscellaneous reports. These can include such things as inventory reports, service calls, number (qualifications and compensation) of staff, Also the company’s business plan and customer calls (complaints) log can be useful sources of information.

External data sources There is a wealth of statistical and research data

available today. Some sources are: Federal government Provincial/state governments Statistics agencies Trade associations General business publications Magazine and newspaper articles Annual reports Academic publications Library sources Computerized bibliographies Syndicated services. (if the expense of conducting

their own survey is too great, companies and organisation can obtain general surveys that they can buy into on a shared basis.

DISCUSSION QUESTION

Define market research? What does DODCAR stand for? List the eight data protection principles? What are the four key strategic questions

which organisation have to ask themselves? What is primary research? What is secondary research? Define qualitative research? Define quantitative research? What is the difference between qualitative

and quantitative