Introduction to Marketing Research

Marketing Research Defined

The systematic and objective process of generating information for aid in making marketing decisions.

Redefining Marketing Research

The American Marketing Association (AMA) redefined Marketing Research as:

The function which links the consumer, the customer, and public to the marketer through INFORMATION

Redefining Marketing Research

Used to identify and define market opportunities and problems
Generate, refine, and evaluate marketing performance

Monitor marketing performance

Improve understanding of marketing as a process

Definition of Marketing Research

Marketing research is the systematic and objective identification collection analysis dissemination and use of information

for the purpose of improving decision making related to the identification and solution of problems and opportunities in marketing.

Marketing Research
Marketing research is the systematic and objective identification, collection, analysis, dissemination, and use of information for the purpose of assisting management in decision making related to the identification and solutions of problems and opportunities in marketing
(Naresh Malhotra)

Marketing and Market Research

Marketing research - is the gathering of information on all activities of marketing Market research - is the gathering of information on a particular market for a product or service
Marketing research has a wider scope than market research

Market Research
Specifies the information necessary to address these issues Manages and implements the data collection process Analyzes the results Communicates the findings and their implications

Classification of Marketing Research

Problem Identification Research
Research undertaken to help identify problems which are not necessarily apparent on the surface and yet exist or are likely to arise in the future. Examples: market potential, market share, image, market characteristics, sales analysis, forecasting, and trends research.

Problem Solving Research

Research undertaken to help solve specific marketing problems. Examples: segmentation, product, pricing, promotion, and distribution research.

Classification of Marketing Research

Marketing Research

Problem Identification Research

Problem Solving Research

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

Segmentation Research

Product Research Promotion Research Distribution Research

Problem Solving Research

SEGMENTATION RESEARCH
Determine the basis of segmentation
Establish market responsiveness for various segments Select target markets Create lifestyle profiles: demography, media, and product image characteristics

PRODUCT RESEARCH
Test concept Determine optimal product design Package tests Product modification Brand positioning and repositioning Test marketing Control score tests

Problem Solving Research

PROMOTIONAL RESEARCH

0.00%

APR

Optimal promotional budget

Sales promotion relationship Optimal promotional mix Copy decisions Media decisions Creative advertising testing Evaluation of advertising effectiveness

PRICING RESEARCH
Pricing policies

Claim substantiation

Importance of price in brand selection Product line pricing

Price elasticity of demand

Initiating and responding to price changes

$ALE

Problem Solving Research

DISTRIBUTION RESEARCH

Determine Types of distribution Attitudes of channel members

Intensity of wholesale & resale coverage

Channel margins Location of retail and wholesale outlets

Scope of Marketing Research

Identify changes in the existing market Build up a knowledge bank Improve market awareness & opportunities Reduce risk and uncertainty Support marketing mix decisions Support marketing planning and controls Improve understanding of marketing Solve ad hoc problems

The Marketing Research Process

Define the Problem Develop an Approach to the Problem
Type of Study? Exploratory, Descriptive, Causal? Mgmt & Research Questions, Hypotheses

Formulate a Research Design

Methodology Questionnaire Design

Fieldwork Prepare & Analyze the Data Prepare & Present the Report

Marketing Research Types Basic research Applied research

Basic Research
Attempts to expand the limits of knowledge Not directly involved in the solution to a pragmatic problem

Basic Research Example

Do consumers experience cognitive dissonance in low-involvement situations?

Applied Research
Conducted when a decision must be made about a specific real-life problem

Applied Research Example

Should McDonalds add Italian pasta dinners to its menu?
Marketing research told McDonalds it should not

Should Procter & Gamble add a highpriced home teeth bleaching kit to its product line?
Research showed Crest Whitestrips would sell well at a retail price of $44

Scientific Method
The analysis and interpretation of empirical evidence (facts from observation or experimentation) to confirm or disprove prior conceptions

Using Marketing Research

We can use Marketing Research to:
Identify & Evaluate Opportunities Analyze Market Segments Select Target Markets Plan & Implement Marketing Mixes Analyze Marketing Performance
Performance Monitoring Research

Identifying and Evaluating Opportunities

Examples Mattel Toys investigates desires for play experiences Home cooking is on the decline. Purchase of precooked home replacement meals is on the rise. Number of investors trading stock on the Internet is growing.

Analyze Market Segments and Select Target Markets

Examples Cadillac investigates buyers demographic characteristics MTV, monitoring demographic trends, learns the Hispanic audience is growing rapidly Sears learns women, age 25-54 with average household income of $38,000, are core customers. Targets this market with "The Good Life at a Great Price. Guaranteed. Sears."

Plan and Implement a Marketing Mix

Price: Safeway does a competitive pricing analysis Distribution: Caterpillar Tractor Co. investigates dealer service program. Product: Oreo conducts taste test, Oreo cookie vs. Chips Ahoy Promotion: How many consumers recall the Life Tastes Good. Coca Cola! slogan?

Analyze Marketing Performance

This years market share is compared to last years. Did brand image change after new advertising?

Performance-monitoring Research
Research that regularly provides feedback for evaluation and control Indicates things are or are not going as planned Research may be required to explain why something went wrong

Determining When to Conduct Marketing Research

Time constraints Availability of data Nature of the decision Benefits versus costs

Determining When to Conduct Marketing Research

Time Constraints Availability of Data
Yes

Nature of the Decision

Yes

Benefits vs. Costs

Is sufficient time available?

Information already on hand inadequate?

No

Is the decision of strategic or tactical importance?

No

Yes

Does the information Yes value exceed the research cost?

No

Conduct Marketing Research

No

Do Not Conduct Marketing Research

Potential Value of a Marketing Research Effort Should Exceed Its Estimated Costs
Decreased uncertainty Increased likelihood of correct decision Improved marketing performance and resulting higher profits
Research expenditures Delay of marketing decision and possible disclosure of information to rivals Possible erroneous research results

Value

Costs

ALWAYS Remember

Marketing Research is a tool. It assists marketing managers in their decision making.

IT IS NOT A REPLACEMENT FOR MANAGERIAL JUDGEMENT!!

The Role of Marketing Research

Customer Groups Controllable Marketing Variables Product Pricing Promotion Distribution Assessing Information Needs Consumers Employees Shareholders Suppliers Uncontrollable Environmental Factors Economy Technology Laws & Regulations Social & Cultural Factors Political Factors

Marketing Research

Providing Information

Marketing Decision Making

Marketing Managers Market Segmentation Target Market Selection Marketing Programs Performance & Control

Top U.S. Marketing Research Firms

U.S. rank Organization 2001 2000 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 2 3 4 6 5 7

Headquarters

Web site

8 9 11 11 23 15 14 10 17 18 20 19 22 24 25 21 26 30

VNU, Inc. IMS Health, Inc. Information Resources, Inc. The Kantar Group Westat, Inc. Arbitron, Inc. NOP World US NFO WorldGroup Market Facts, Inc. Taylor Nelson Sofres USA Maritz Research Ipsos J.D. Power and Associates Opinion Research Corp. The NPD Group, Inc. Jupiter Media Metrix, Inc. Harris Interactive, Inc. Abt Associates, Inc. C&R Research Services, Inc. Wirthlin Worldwide Lieberman Research Worldwide Burke, Inc. MORPACE International, Inc. Market Strategies, Inc. GfK Custom Research, Inc.

New York Fairfield, Conn. Chicago Fairfield, Conn. Rockville, Md. New York New York Greenwich, Conn. Arlington Heights, Ill. London Fenton, MO. New York Westlake Village, Calif. Princeton, N.J. Port Washington, N.Y. New York Rochester, N.Y. Cambridge, Mass. Chicago McLean, Va. Los Angeles Cincinnati Farmington Hills, Mich. Livonia, Mich. Minneapolis

vnu.com imshealth.com infores.com kantargroup.com westat.com arbitron.com nopworld.com nfow.com marketfacts.com tnsofres.com maritzresearch.com ipsos.com jdpa.com opinionresearch.com npd.com jmm.com harrisinteractive.com abtassociates.com crresearch.com wirthlin.com lrwonline.com burke.com morpace.com marketstrategies.com customresearch.com

Worldwide research Non-U.S. research Percent revenues* revenues* non-U.S. ($, in millions) ($, in millions) revenues $2,400.00 $1,100.00 45.80% 1,171.00 702 60 555.9 135.6 24.4 962.3 663.2 68.9 285.8 227.5 7.9 3.5 224.1 17.5 7.8 452.9 289.9 64 189.7 33.5 17.7 166.9 16.4 9.8 181.7 54.6 30 204.3 91.4 44.7 128 18.7 14.6 133.6 42.2 31.6 101.7 13 12.8 85.8 17.2 20 75.4 10.5 13.9 62.8 9.4 15 43.6 46.8 7.2 15.4 43.1 4.3 10 45.5 11.2 24.6 48.3 15.9 32.9 31.7 1.5 4.7 29.8 0.9 3.9