Market & Marketing Research

Dr. Vesselin Blagoev

MBA2010-11

Lecture Objectives
By the end of the lecture, you should be able to:

Define the differences between market and marketing research Understand the role and use of MR information in marketing Explain the elements of a MIS and stages of the MR process

Marketing research defined

Definitions of MR
Marketing Research is the function that links the consumer, customer, and public to the marketer through information... used to identify and define marketing opportunities and problems; generate, refine and evaluate marketing actions; monitor marketing performance; and improve understanding of marketing as process. Marketing research specifies the information required to address these issues, design the method for collecting information, manages and implements the data collection process, analyses the results, and communicates the findings and their implications. (McDaniel, Jr. & Gates, 2010)

Definitions of MR
www.mrs.org.uk

Marketing Research is: the collection and analysis of data from a sample of individuals or organisations relating to their characteristics, behaviour, attitudes, opinions or possessions. It includes all forms of marketing and social research such as consumer and industrial surveys, psychological investigations, observational and panel studies
Market Research Society (1997) - UK

Definitions of MR
Chisnall (2005)
there was originally a difference between the scope of activities [covered by market and marketing research] The responsibilities of market research extend comprehensively, whereas marketing research is limited to findings out information about the market for a particular product. but this narrow view restricts the focus for the purposes of marketing as a wider management function. MR should be: applied, scientific, pragmatic, objective, impersonal, factual

MR definition summary
Market Research aims to describe and analyse markets (size, structure, growth etc) Marketing Research covers a much broader range of topics - customers, products, competitors, channels, suppliers etc. Strictly speaking, Marketing Research is broader than Market Research

Information
Most marketers dont need more information, they need the right information and the managers need to be able to determine how to use this information appropriately and effectively so as to enhance performance.
Kotler, Wong, Saunders and Armstrong (2005); Similar point argued by McDaniel, Jr. & Gates (2010), Malhotra (2010) and Keegan and Green (2011)

Do you agree with this? Why?

Short cut
Marketing research is the systematic and objective search for and analysis of information relevant to the identification and solution of any problem in the field of marketing
Armstrong and Kotler (2011), Malhotra (2010)

Definition
Systematic:

It is planned, following a sequence of logically ordered steps, starting with problem definition and ending with its use in problem solution Data are collected using scientific methods and are analyzed using proven statistical processes

Objective:

Marketing Research

Problem-Identification Research

Problem-Solving Research

Market Potential Research Market Share Research Image Research Market Characteristics Research Sales Analysis Research Forecasting Research Business Trends Research

Segmentation Research Product Research Pricing Research Promotion Research Distribution Research

Malhotra (2010, p.40)

Types of market

Potential market
Consumers have some stated interest in a product or service.

Available market
Set of consumers who have the interest, income and access to the product or services.

Qualified available market

Set of consumers who have the interest, income, access and qualifications for a particular product or service.

Served or target market

Part of the qualified market that the company decides to pursue.

Penetrated market
Set of consumers that have already bought a particular product or service.

Measuring market demand

The

total market demand is the total volume of a product or service that would be bought by a defined consumer group in a defined geographic area, in a defined time period in a defined marketing environment under a defined level and mix of industry marketing effort.

Measuring market demand

Kotler, Wong, Saunders and Armstrong (2005)

Types of demand
The

primary demand is the total demand for all brands of product and services. The selective demand is a specific demand for a given brand of product.

Estimating market demand

Q= n x q x p Where
Q = total market demand n = number of buyers in the market q = quantity purchased by an average buyer per year p = price of an average unit

Forecasting future demand

Environmental forecast

Inflation, Unemployment, Interest rates, Consumer spending and saving, Business investment, Government expenditure. What is currently happening? Buyers intentions, Composite of sales force opinions, Expert opinion. Test market method. Time series analysis, Leading indicators, Statistical demand analysis, Information analysis.

Industry forecast

Company sales forecast

Forecasting future demand

Kotler, Wong, Saunders and Armstrong (2005)

Sources of information
Internal

records Marketing intelligence Competitor intelligence Marketing research

MR Research Dimensions

Continuous versus Ad hoc

On-going research One-off

Qualitative versus Quantitative

Why? (motivations, attitudes, behaviours) How many, how often?

Secondary versus Primary

Data that already exists and was collected for another purpose Data collected for the specific purpose at hand

Get a research method

Primary collection methods

Primary data can be collected in 4 ways: observational research focus-group research survey research experimental research 2 main research instruments used are: questionnaires (open-end and closed-end) mechanical instruments

e.g. Eyetracking of screen use on internet/TV

Marketing Research Step1

1. Defining the problem and research objectives Exploratory research Gathering preliminary information that will help to better define problems and suggest hypotheses. Descriptive research Defining marketing problems, situations or markets, such as the market potential for a product or the demographics and attitudes of consumers. Causal research Marketing research to test hypotheses about cause and effect relationships.

Marketing Research Step 2

2. Developing the research plan for collection of information Determining information needs Secondary data: information that already exists, having been collected for another purpose. Primary data: information collected for the specific purpose at hand. Qualitative research Exploratory research used to uncover consumers motivations, attitudes and behaviour. Quantitative research Research data which involves interviews from a sufficient volume of customers to allow statistical analysis.

Marketing Research Step 3

3. Presenting the research plan
Outline of research construct. Summarised written proposal.

Marketing Research Step 4

4. Implementing the research plan, collecting and analysing the data Interpreting and reporting the findings.
Present the relevant data so that the information can be used to make meaningful decisions. Team effort between marketers and researchers and joint responsibility.

Table 9.6 Types of question

Table 9.6 Types of question (continued)

Table 9.6 Types of question (continued)

Demand estimation

Estimation of market demand is essential for effective marketing and as illustrated below, demand is measured on a number of levels.

Figure 9.3 Ninety types of demand measurement (6 5 3)

Secondary Sources

Internal sales records, databases, customer feedback, experienced employees Government reports Chambers of Commerce
often available on gov.uk website

Trade Associations
Industry Reports & Country-based reports

e.g. GMID/Euromonitor (available via www.port.ac.uk/library)

Marketing area specific articles/reports

e.g. Promotions

MR: key criterion

MR information has the purpose of supporting marketing decisions Organisations as they grow in size tend to lose close customer contact New markets entered may be geographically distant and unfamiliar New products require research into their potential appeal to customers Communications need researching - are the right messages being given and received Need to think clearly about the issue to be decided, before spending money on MR

Marketing Research in practice

Marketing research is concerned with investigating and understanding buyer behaviour Buying behaviour is merely one element of human behaviour; it is complex and influenced by many factors Motivations may be a mixture of business specific, personal, economic, psychological, sociological and demographic variables Behavioural sciences give insights into consumption

Marketing research in small businesses and non-profit organisations

Often

limited by budgetary constraints, but the following can be accomplished: Observation of market, competitors and industry Secondary data collection Surveys Experiments

Main divisions of MR
Product
Customer Pricing Sales Promotion

Overview of MR divisions
Type Product
Failure, reduced demand, portfolio inequity, lack of USP, poor quality

Customer
Target segment profile, preference, loyalty, Macro/Micro env. issues, habits, motivation

Pricing
Sensitivity, ceiling, match to other mix elements, competition, incentives needed, vs. perception of quality, Costs, profit objectives, mkt/competitive prices, trade /channel vs. consumer prices

Sales
Increasing cost of sales, comparative mkt performance, falling sales, force organisation, distribution methods Value, volume, quantity sold, mkt coverage, latent potential, buyer power

Promotion
Relevant methods to audience, rising costs, reduced exposure/cover age, effectiveness, integration,

Examples of issues needing investigation through MR

Types of info.

Demand, sales, market share, competitive advantage

Demographics, purchase behaviours, level of influence of int./ext. factors

Media usage / availability, readership/ viewer rates, public image, awareness, perceptual positioning, brand strength

Why MR is important

Traditionally, small firms have close links with their customers Large-scale operations have widened the gap between producers and Effective marketing information and research consumers enables an organisation Modern communities to make better decisions are knowledgeable, on the most appropriate experienced and critical market entry and
competitive strategies.

Effective penetration of markets requires specialised and sophisticated approaches to identify, assess and satisfy market demands.

Marketing information system (MIS)

The marketing information system (MIS) is comprised of: people technology procedures to gather, sort, analyse, evaluate and distribute necessary, timely and accurate information to marketing decision makers.

Marketing Information System (MIS)

Effective system of organising, structuring and managing the storage, access and dissemination of market research data

Brassington & Pettitt, 2007

The Marketing Research Process

Brassington & Pettitt, 2007

Useful statistics??

MR in the Marketing Process

MR

information needed at all stages: new product idea generation and product development marketing testing launch implementation brand performance management positioning and repositioning etc

Market research ethics

Increasing consumer resentment has become a major problem in the research industry due to how the market research has been used and abused. Consumers fear researchers may use sophisticated techniques to obtain information that may be intrusive and infringe consumer rights. There is also the fear that the research findings may be manipulated and misinterpreted to suit the company paying for the research. To minimise abuse the research industry has developed broad standards such as ESOMARs International Code of Marketing and Social Research Practice.

Summary

Marketing research aids decision making by providing management with specific kinds of information which should form the foundation of all strategic decision making and tactical planning Marketing Research is vital in identifying, anticipating and satisfying customer needs profitably Accurate information enables intelligent decision making in pursuit of organisational objectives Information must be continuously collected, monitored, analysed and communicated all around the organisation (via a MIS) All businesses can conduct research, whether inhouse or via an external consultancy

Further reading suggestions

Armstrong, G. and Kotler, P. (2011), Marketing, 9th ed., Pearson Cooper, D. & Schindler, P. (2006), Marketing research. Boston: McGraw Hill Keegan, W.J.& Green, M. (2011), Global Marketing, 6th ed., Pearson Kotler, P. & Armstrong, G. (2010), Principles of Marketing, 13rd ed., Pearson Malhotra, N. (2010), Marketing Research. An Applied Orientation, 6th ed. Pearson McDaniel, Jr. C. and Gates, R. (2010), Marketing Research, John Wiley & Sons, 8th ed.