Introduction to Marketing Research

Role of Marketing Research in Management Decision Making

Learning Objectives
To review the marketing concept and the marketing mix. To comprehend the marketing environment within which managers must make decisions. To define marketing research. To understand the importance of marketing research in shaping marketing decisions. To learn when marketing research should and should not be conducted.

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Because Marketing Research is part of Marketing we should understand:

What is marketing? What is the marketing concept? What is marketing strategy?

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What is Marketing?
Marketing has been defined by the AMA as an organizational function and a set of processes for creating, communicating and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders.
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What is the Marketing Concept?

The Marketing Concept is a business philosophy that holds that the key to achieving organizational goals consists of the companys being more effective than competitors in creating, delivering, and communicating customer value to its chosen markets.

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What is Marketing Strategy?

A Marketing Strategy consists of selecting a segment of the market as the companys target market and designing the proper mix of the product/service, price, promotion, and distribution system to meet the wants and needs of the consumers within the target market.
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Learning by Doing: Lets Apply Marketing to

a Restaurant
Target market segment? Marketing strategy Location? Menu? Prices? Type? Advertising?
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Restaurant Marketing Decisions

What if you owned a restaurant located near Rizvi college? What would be your marketing strategy? How certain are you that you made the right decisions?

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Restaurant Marketing Decisions

What if the restaurant was located near a university in a foreign country like China, Thailand, Italy, Iceland, or Peru? What would be your decisions? How certain are you that you made the right decisions now? So, whats going on?.....??
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Key Point
To practice marketing; to implement the marketing concepts; to implement marketing strategy, managers must make decisions. Many decisions require additional information and marketing research is needed in order to supply that information.
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We need Marketing Research to:

Make the right decisions to Implement marketing Practice the marketing concept and Make the right decisions to select the right marketing strategy

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What is Marketing Research?

Marketing research is the process of designing, gathering, analyzing, and reporting information that may be used to solve a specific marketing problem with respect to a particular market,{where market refers to a specific group in a specific geographic area}, and make a particular marketing decision, and then communication of the results of this analysis to the management.
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What is Marketing Research? AMA definition

Marketing research: the function that links the consumer, customer, and public to the marketer through information information used to identify and define marketing opportunities and problems; generate, refine, and evaluate marketing actions; monitor marketing performance; and improve the understanding of marketing as a Ch 1 process.

The Proactive Role of Marketing Research

A proactive management:
alters the marketing mix to fit newly emerging patterns in economic, social, and competitive environments new opportunities develops a long-run marketing strategy

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What is the purpose of Marketing Research?

To link the consumer to the marketer by providing information that can be used in making marketing decisions

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Purpose

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Why Research?
Research focuses & organizes information. It ensures that such information is timely and permits leadership to: Reduce business risks Spot current and upcoming problems in the environment Develop plans of action Measure satisfaction/dissatisfaction Assess abilities & weakness Analyze effectiveness, gaps and voids See what the competition is doing Benchmark best practices

1. 2. 3. 4. 5. 6. 7. 8.
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What can Market Research answer?

1. Who are the major customers and competitors? 2. What kind of people are they? 3. What do they want from a product? 4. Why are they buying what they are buying? 5. How have they been treated in the past by us & others? 6. What do they think of us & others? 7. Are our image building programs working
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Critical Components
Know thy self Know the customer Know the market Know them sneaky competitors Know the industry Know what you dont know !!!

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Advantages of Market Research

Helps focus attention on objectives Aids forecasting, planning and strategic development May help to reduce risk of new product development Communicates image, vision, etc. Globalisation makes market information valuable (HSBC adverts!!)

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Decisions that can be guided by market research

1. 2. 3. 4.
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There are four directions a company could look to expand its business. Existing customers existing products Newer markets/customers existing products Expanding product line existing customers New customers new products

High level business questions

Financial problem solving How can we reverse a fall in sales (or achieve an increase in sales)? How can we obtain more profit from the product/service? How can we improve the satisfaction of our customers so that loyalty is improved?
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High level business questions

Meeting opportunities How can we improve our offer to customers (the product/service, the delivery, the guarantees, the service support etc)? What is the optimum price we should charge? How can we segment the market so that we can better satisfy customers needs? What is the best route to market? How can we persuade people to buy our products when they are being tempted in other directions? How can we increase our sales in other territories? Which new products or services could we offer to our customers?

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Classifying Marketing Research Studies

Identifying marketing opportunities and problems Market-demand determination Market segments identification Marketing audits SWOT analysis

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Classifying Marketing Research Studies

Generating, refining, and evaluating potential marketing actions Proposed marketing-mix evaluation testing New-product prototype testing Advertising pretesting

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Classifying Marketing Research Studies

Monitoring marketing performance Image analysisbank image analysis Tracking studies...sales, market shares of all brands in our category Customer satisfaction studies

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Primary Research

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Market Research
Primary Research
First hand information Expensive to collect, analyse and evaluate Can be highly focussed and relevant Care needs to be taken with the approach and methodology to ensure accuracy Types of question closed limited information gained; open useful information but difficult to analyse

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Secondary Research

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Internal Sources
Company Accounts Internal Reports and Analysis Stock Analysis Retail data - loyalty cards, till data, etc.

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External Sources
Government Statistics (e.g.Population Census) Trade publications Household Expenditure Survey Magazine surveys Other firms research Research documents publications, journals, etc.

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Market Research
Quantitative and Qualitative Information: Quantitative based on numbers 56% of 18 year olds drink alcohol at least once a week - doesnt tell you why, when, how Qualitative more detail tells you why, when and how!
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Deciding Whether to Conduct Market Research

In a number of situations it is best not to conduct market research.

A Lack of Resources lack of funds insufficient funds to implement decisions from research

Research Results Would Not Be Useful Clients may be hard-pressed to use the information

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Deciding Whether to Conduct Market Research

Opportunity Has Passed Marketing research should not be undertaken if the opportunity for successful entry into a market has passed. The Decision Has Already Been Made Marketing research may be used improperly.

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Deciding Whether to Conduct Market Research

When Managers Cannot Agree on What They Need to Know to Make a Decision The wrong phenomena might be studied When Decision-Making Already Exists Further research may be redundant and costly When the Costs of Conducting Research Outweigh the Benefits Potential new products with large profit margins may have a greater potential

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The Decision Whether to Conduct Market Research

Market Size Small Profit Margin Large Profit Margin

Small

Cost likely to be greater than benefit;

e.g., eyeglasses replacement screw

Possible benefits greater than cost;

e.g., ultra expensive sportswear

Large

Benefits likely to be greater than costs;

e.g., market for Soaps

Benefits likely to be greater than costs;

e.g.,medical equipment

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Disadvantages of Market Research

Information only as good as the methodology used Can be inaccurate or unreliable Results may not be what the business wants to hear! May stifle initiative and gut feeling Always a problem that we may never know enough to be sure!

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Hot Topics in Marketing Research

Online Marketing Research Growing Consumer/Respondent Resentment Globalization

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Hot Topics Online Marketing Research

Online research: the use of computer networks, including the Internet, to assist in any phase of the marketing research process including development of the problem, research design, data gathering, analysis, and report writing and distribution.

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Hot Topics Growing Consumer/ Respondent Resentment

Marketing research is invasive. Telemarketers and direct marketers have abused marketing research. The government through FTC has instituted a Do not call list. The marketing research industry is so far excluded from the ban of the do not call regulations.
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Hot Topics Globalization

As marketing firms spread globally, so did marketing research firms. According to Jack Honomichl, 48% of U.S. marketing research firms revenues were generated outside of U.S. The top 25 marketing research firms in the world earn 67% of their revenues outside their own country.
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Thank you ! ;-)

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