MARKETING MANAGEMENT12th edition

4 Conducting

Marketing Research and Forecasting

Demand

Kotler Keller 4-2

Chapter Questions

• What constitutes good marketing research?

• What are good metrics for measuring marketing productivity?

• How can marketers assess their return on investment of marketing expenditures?

• How can companies more accurately measure and forecast demand?

4-3

Build-A-Bear Workshop makes the most of “interactive entertainment retailing”

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Marketing Research Defined

Systematic design, collection, analysis, and reporting of data

and findings relevant to a specific marketing situation facing a company.

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Karmaloop.com

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Types of Marketing Research Firms

Syndicated-service Custom Specialty-

line

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The Marketing Research Process

Define the problem

Develop research plan

Collect information

Analyze information

Present findings

Makedecision

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Step 1

• Define the problem• Specify decision alternatives• State research objectives

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Step 2

Data Sources

ContactMethods

ResearchInstruments

SamplingPlan

Research Approach

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Research Approaches

Observation

Focus Group

Survey

Behavioral Data

Experimentation

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Focus Group in Session

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Research Instruments

QuestionnairesQualitative MeasuresMechanical Devices

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• Avoid negatives• Avoid hypotheticals• Avoid words that could

be misheard• Use response bands• Use mutually exclusive

categories• Allow for “other” in fixed

response questions

Questionnaire Do’s and Don’ts

• Ensure questions are free of bias

• Make questions simple• Make questions specific• Avoid jargon• Avoid sophisticated

words• Avoid ambiguous words

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Question Types - Dichotomous

In arranging this trip, did you contact American Airlines?

Yes No

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Question Types – Multiple Choice

With whom are you traveling on this trip?

No one

Spouse

Spouse and children

Children only

Business associates/friends/relatives

An organized tour group4-16

Question Types – Likert Scale

Indicate your level of agreement with the following statement: Small airlines generally give better service than large ones.

Strongly disagree

Disagree

Neither agree nor disagree

Agree

Strongly agree

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Question Types – Semantic Differential

American Airlines

Large ………………………………...…………….Small

Experienced………………….………….Inexperienced

Modern………………………..………….Old-fashioned

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Question Types – Importance Scale

Airline food service is _____ to me.

Extremely important

Very important

Somewhat important

Not very important

Not at all important

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Question Types – Rating Scale

American Airlines’ food service is _____.

Excellent

Very good

Good

Fair

Poor

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Question Types –Intention to Buy Scale

How likely are you to purchase tickets on American Airlines if in-flight Internet access were available?

Definitely buy

Probably buy

Not sure

Probably not buy

Definitely not buy

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Question Types –Completely Unstructured

What is your opinion of American Airlines?

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Question Types –Word Association

What is the first word that comes to your mind when you hear the following?

Airline ________________________

American _____________________

Travel ________________________

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Question Types –Sentence Completion

When I choose an airline, the most important consideration in my decision is: ________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________.

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Question Types –Story Completion

“I flew American a few days ago. I noticed that the exterior and interior of the plane had very bright colors. This aroused in me the following thoughts and feelings.” Now complete the story. ________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

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Question Types –Picture (Empty Balloons)

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Question Types –Thematic Apperception Test

Make up a story that reflects what you think is happening in this picture.

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Qualitative Measures

Shadowing

Behavior mapping

Consumer journey

Camera journals

Extreme user interviews

Storytelling

Unfocused groups

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Mechanical Devices

Galvanometers

Tachistoscope

Eye cameras

Audiometers

GPS

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Sampling Plan

• Sampling unit: Who is to be surveyed?• Sample size: How many people should be

surveyed?• Sampling procedure: How should the

respondents be chosen?

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Types of Samples

Probability• Simple random• Stratified random• Cluster

Nonprobability• Convenience• Judgment• Quota

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Contact Methods

Mail Questionnaire

TelephoneInterview

PersonalInterview

OnlineInterview

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Characteristics of Good Marketing Research

Scientific methodResearch creativityMultiple methodsInterdependenceValue and cost of informationHealthy skepticismEthical marketing

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Table 4.4 Marketing Metrics

External• Awareness• Market share• Relative price• Number of complaints• Customer satisfaction• Distribution• Total number of

customers• Loyalty

Internal• Awareness of goals• Commitment to goals• Active support• Resource adequacy• Staffing levels• Desire to learn• Willingness to change• Freedom to fail• Autonomy

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Table 4.5 Sample Customer-Performance Scorecard Measures

• % of new customers to average #• % of lost customers to average #• % of win-back customers to average #• % of customers in various levels of satisfaction• % of customers who would repurchase• % of target market members with brand recall• % of customers who say brand is most preferred

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Tools to Measure Marketing Plan Performance

Sales Analysis

Financial Analysis

Expense-to-SalesAnalysis

Market ShareAnalysis

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Sales Analysis

Micro-Sales

Analysis

Sales-VarianceAnalysis

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Market Share Analysis

• Overall market share• Served market share• Relative market share

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Figure 4.2 The Control-Chart Model

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Figure 4.3 Financial Model of Return on Net Worth

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Marketing-Profitability Analysis

Step 1: Identifying Functional Expenses

Step 2: Assigning Functional Expenses to Marketing Entities

Step 3: Preparing a Profit-and-Loss Statementfor each Marketing Entity

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Table 4.6 Simplified Profit-and-Loss Statement

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Table 4.7 Mapping Natural Expenses into Functional Expenses

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Table 4.8 Bases for Allocating Functional Expenses to Channels

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Table 4.9 Profit-and-Loss Statements for Channels

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Distinguishing Types of Costs

Direct Nontraceablecommon

Traceablecommon

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Gladware uses marketing-mix modeling to test advertising effectiveness

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The Measures of Market Demand

PotentialMarket

PenetratedMarket

TargetMarket

AvailableMarket

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Figure 4.4 Ninety Types of Demand Measurement

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Figure 4.5 Market Demand Functions

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Figure 4.5 Market Demand Functions

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Product Penetration Percentage

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Estimating Current Demand

• Total market potential• Area market potential

– Market buildup method– Multiple-factor index method

• Brand development index

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Table 4.10 Calculating Brand Development Index

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Estimating Future Demand

• Survey of Buyers’ Intentions• Composite of Sales Force Opinions• Expert Opinion• Past-Sales Analysis• Market-Test Method

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Purchase Probability Scale

Do you intend to buy an automobile within the next 6 months?

0.00 No

0.20 Slight possibility

0.40 Fair possibility

0.60 Good possibility

0.80 High possibility

1.00 Certain4-56

Marketing Debate

What is the best type of marketing research?

Take a position:1. Marketing research should be quantitative.2. Marketing research should be qualitative.

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Marketing Discussion

When was the last time youparticipated in a survey? How helpful

do you think was the informationyou provided? Could the research

have been done differently?