8
CHAPTER
Market ing Research and
Sales Forecast ing
Chapter Objectives
1 Describe t he
development of t he
market ing research
f unct ion and it s
major act ivit ies.
2 Explain t he st eps in
t he market ing
research process.
3 Dist inguish bet ween
primary and
secondary dat a and
ident if y t he sources
of each t ype.
4 Explain t he dif f erent 6 Explain t he
sampling t echniques
challenges of
used by market ing
conduct ing market ing
researchers.
research in global
market s.
5 Ident if y t he met hods
by which market ing 7 Out line t he most
researchers collect
import ant uses of
primary dat a.
comput er t echnology
in market ing
research.
8 Ident if y t he major
t ypes of f orecast ing
met hods.
CHAPTER 8 Market ing Research and Sales Forecast ing
• Marketing research Process of collecting and using
information for marketing decision making.
• Marketers use data from a variety of sources to
understand customers, target customer segments, and
develop long-term customer relationships.
• Research is the primary source of information used
to make effective marketing decisions.
CHAPTER 8 Market ing Research and Sales Forecast ing
THE MARKETING RESEARCH FUNCTION
• Research is central to understanding effective customer satisfaction and
customer relationship programs.
DEVELOPMENT OF THE MARKETING RESEARCH
FUNCTION
• First organized marketing research conducted in 1879 by N.W. Ayer.
• Second milestone was founding by Charles C. Parlin in 1911 of the
nation’s first commercial research department at Curtis Publishing, publisher
of The Saturday Evening Post.
• Counted Campbell’s Soup cans in the garbage in selected
Philadelphia neighborhoods to persuade that company to advertise
with the publication.
• Research methods grew more sophisticated in the 1930s with better
sampling techniques and greater accuracy.
• Computer technology has significantly advanced market research.
CHAPTER 8 Market ing Research and Sales Forecast ing
WHO CONDUCTS MARKETING RESEARCH?
• Size and form of research often tied to corporate structure.
• Many firms outsource research needs.
• Major U.S. marketing research firms include ACNielsen
and Arbitron.
Syndicat ed Services
• Organizations that regularly provide a standardized set
of data to all customers.
Full-Service Research Suppliers
• Firm that conducts complete marketing research projects.
Limit ed-Service Research Suppliers
• Firm that specializes in a limited number of activities, such as conducting
field interviews or performing data processing.
CHAPTER 8 Market ing Research and Sales Forecast ing
CUSTOMER SATISFACTION MEASUREMENT
PROGRAMS
• Firms often focus on tracking satisfaction levels of current customers.
• Also analyze partial or complete dissatisfaction to identify problem areas
that need attention.
• Organizations may outsource these studies or conduct them themselves.
• Example: Environmental Protection Agency has posted a customer
satisfaction questionnaire on its Web site.
CHAPTER 8 Market ing Research and Sales Forecast ing
THE MARKETING RESEARCH PROCESS
• Usually follows a ______-step process.
DEFINE THE PROBLEM
• Well-defined problems are half-solved.
• Avoid _______ symptoms with problem itself.
• Loss of market share is a symptom;
reason for the loss is the problem.
• Evaluate firm’s marketing ______ and possible
changes to the marketing environment.
CHAPTER 8 Market ing Research and Sales Forecast ing
CONDUCT EXPLORATORY RESEARCH
• Exploratory research Process of discussing a
marketing problem with informed _______ both
within and _______ the firm and examining
information from secondary sources.
Using Int ernal Dat a
• Research from customer _______ and
demographic data.
• Sales analysis can compare expected
sales with ______ sales and be analyzed in a
variety of ways, such as by customer type,
sales method, and others.
• A _________ data provides information about
financial issues.
• Marketing cost analysis evaluates expenses for
a variety of costs.
CHAPTER 8 Market ing Research and Sales Forecast ing
FORMULATE A HYPOTHESIS
• A tentative explanation for some _______ event.
• Sets the stage for more in-depth research.
CREATE A RESEARCH DESIGN
• A master ______ or model for conducting research.
• Must ensure it will measure what researchers
intend to measure.
COLLECT DATA
• Secondary data P _______ published information.
• Primary data Information collected __________
for the investigation at hand.
• Primary costs ______ to gather but can be much
more valuable.
CHAPTER 8 Market ing Research and Sales Forecast ing
INTERPRET AND PRESENT RESEARCH INFORMATION
• Present in a format that allows managers to
make effective __________.
• Researchers and end users must collaborate to
ensure effectiveness of _______.
• Reports must be clear and concise.
• Must explain _______ terminology.
CHAPTER 8 Market ing Research and Sales Forecast ing
MARKETING RESEARCH METHODS
SECONDARY DATA COLLECTION
• Secondary data comes from many sources.
• Can be internal data or external data.
Government Dat a
• Nation’s most important source of marketing data.
• U.S. Census provides data about very small segments, as few as 1,500
people.
• TIGER system overlays topographic features—such as railroads,
highways, and rivers—with census data such as household income.
• State and city governments also provide valuable data.
CHAPTER 8 Market ing Research and Sales Forecast ing
Privat e Dat a
• Variety of sources:
• Trade associations.
• Business and trade magazines.
• Information gathered from scanning technology.
• Increasing use of radio-frequency identification for inventory
control.
Online Sources of Secondary Dat a
• Online databases.
• Research aggregators acquire, catalog, reformat, segment, and resell
premium research reports.
• Examples: Datamonitor and eMarketer.
• Internet discussion groups, chat rooms, and newsgroups.
CHAPTER 8 Market ing Research and Sales Forecast ing
SAMPLING TECHNIQUES
• Sampling Process of selecting survey respondents or research participants.
• Population—total group of people a researcher wants to study.
• Researchers rarely sample the entire population.
• Probability sample Sample that gives every member of the population a
chance of being selected.
• Simple random sample—every member of relevant group has
equal opportunity to be sampled.
• Stratified sample—randomly selected subsamples of different
groups are represented in the total sample.
• Cluster sample—researchers select subgroups from which they
sample.
• Nonprobability sample Sample that involves personal judgment
somewhere in the process.
CHAPTER 8 Market ing Research and Sales Forecast ing
PRIMARY RESEARCH METHODS
• Choice of method depends on the issues under study and the decisions
marketers need to make.
CHAPTER 8 Market ing Research and Sales Forecast ing
Observat ion Met hod
• Researchers view the overt actions of subjects being studied.
• Example: Counting the number of cars that pass by a potential
restaurant location.
• Use increasingly sophisticated ways of tracking behavior.
• Electronic devices that measure media consumption.
• In response to digital video recording, Nielsen Media Research has
changed the way it reports television viewership.
• Videotaping consumers is gaining acceptance.
Int erpret ive Research
• Interpretive research Observational research method developed by social
anthropologists in which customers are observed in their natural setting and
their behavior is interpreted based on an understanding of social and cultural
characteristics; also known as ethnography, or “going native.”
CHAPTER 8 Market ing Research and Sales Forecast ing
SURVEY METHOD
• Researchers must ask questions to get information on
attitudes, motives, and opinions.
Telephone Int erviews
• Quick and inexpensive way of getting a small
quantity of relatively impersonal information.
• Many people refuse to take part or are reluctant
to give personal information over the phone.
• Not a viable option in international markets where
phone usage is rare.
Personal Int erviews
• Allow researchers to obtain detailed information and ask follow-up
questions.
• May use mall intercepts, interviews conducted in shopping malls.
CHAPTER 8 Market ing Research and Sales Forecast ing
Focus Groups
• Focus group Simultaneous personal interview of a small group of
individuals, which relies on group discussion about a certain topic.
• Encourage general discussion of a selected topic.
• Valuable for exploratory research, such as new product development.
• Drawback is potential lack of honesty due to peer pressure.
• Researchers are experimenting with online focus groups.
Mail Surveys
• Cost-effective means that allows respondents anonymity.
• Response rates typically lower than for personal interviews and are timeconsuming.
• May be subject to bias through self-selection.
CHAPTER 8 Market ing Research and Sales Forecast ing
Fax Surveys
• Limited household use makes getting a good sample difficult.
• Federal junk fax law limits fax transmissions for commercial purposes.
Online Surveys and Ot her Int ernet -Based Met hods
• Allows researchers to speed the survey process, increase sample sizes,
ignore geographic boundaries, and dramatically reduce costs.
• Marketers are experimenting with Web questionnaires and electronic
bulletin boards.
• No standard has developed for measuring Web use.
• Some software can monitor a user’s viewing habits and display targeted
banner ads.
CHAPTER 8 Market ing Research and Sales Forecast ing
Experiment al Met hod
• Least used method.
• Controlled experiment—a scientific investigation in which a researcher
controls or manipulates a test group and compares the results with those of a
control group.
• Most common use is for test marketing—introducing a new product in a
specific area and then observing its degree of success.
• Can be expensive and allow competitors to learn about new products
quickly.
• Alternatives include computer modeling software, regional product
launches, and limiting product to a single retail outlet to allow for careful
evaluation.
CHAPTER 8 Market ing Research and Sales Forecast ing
CONDUCTING INTERNATIONAL MARKETING
RESEARCH
• Follow same basic steps as for domestic marketing research.
• U.S. Department of Commerce offers reports and guides about almost
every country in the world.
• Export America and Overseas Business Reports.
• Researchers must be aware of cultural and legal environments.
• May have to adapt research methods to local conditions.
• Example: Focus groups may be difficult to organize in countries
where violence and kidnapping are common.
CHAPTER 8 Market ing Research and Sales Forecast ing
INTERPRETIVE RESEARCH
• Provides insight into consumer behavior and the ways consumers interact
with brands.
• Researcher spends time studying the culture, called ethnographic research.
• Focus is on understanding the meaning of the product or consumption in
the consumer’s life.
• Cost is higher than other forms of research.
• Captures what consumers actually do, not just what they say they do.
CHAPTER 8 Market ing Research and Sales Forecast ing
COMPUTER TECHNOLOGY IN
MARKETING RESEARCH
MARKETING INFORMATION SYSTEMS ( MIS)
• A planned, computer-based system designed to provide decision makers
with a continuous flow of information relevant to their areas of
responsibility.
• Well-constructed MIS is the company’s nerve center because it continually
monitors marketing environment and provides instantaneous information.
MARKETING DECISION SUPPORT SYSTEMS ( MDSSs)
• Marketing decision support system (MDSS) Marketing information
system component that links a decision maker with relevant databases and
analysis tools.
• Develops raw data into information useful for decision making.
CHAPTER 8 Market ing Research and Sales Forecast ing
DATA MINING
• The process of searching through computerized data files to detect patterns.
• Focuses on identifying relationships that are not obvious to marketers.
• Efficient way to sort through huge amounts of data and make sense of it.
• Example: NACCO Industries uses data mining to scan warranty
claims for common problems.
BUSINESS INTELLIGENCE
• Process of gathering information and analyzing it to improve business
strategy, tactics, and daily operations.
COMPETITIVE INTELLIGENCE
• A form of business intelligence that focuses on finding information about
competitors using published sources, interviews, observations by
salespeople and suppliers in the industry, and other sources.
CHAPTER 8 Market ing Research and Sales Forecast ing
SALES FORECASTING
• Sales forecast Estimate of a firm’s revenue for a
specified time period.
QUALITATIVE FORECASTING
TECHNIQUES
Jury of Execut ive Opinion
• Combines and averages the outlooks of top executives
from such areas as marketing, finance, production,
and purchasing.
Delphi Technique
• Solicits opinions from several people, but it also gathers input from experts
outside the firm rather than relying completely on company executives.
CHAPTER 8 Market ing Research and Sales Forecast ing
Sales Force Composit e
• Develops forecasts based on the belief that organization members closest
to the marketplace offer the best insights concerning short-term future sales.
• Typically works from the bottom up.
Survey of Buyer Int ent ions
• Gathers input through mail-in questionnaires, online feedback, telephone
polls, and personal interviews to determine the purchasing intentions of a
representative group of present and potential customers.
CHAPTER 8 Market ing Research and Sales Forecast ing
QUANTITATIVE FORECASTING TECHNIQUES
Test Market s
• Gauges consumer responses to a new product under
actual marketplace conditions.
• Allows researchers to evaluate the effects of different
prices, alternative promotional strategies, and other
marketing mix variations.
Trend Analysis
• Develops forecasts for future sales by analyzing the
historical relationship between sales and time.
Exponent ial Smoot hing
• Sophisticated method of trend analysis that weighs each year’s sales data,
giving greater weight to results from the most recent years.
CHAPTER 8 Market ing Research and Sales Forecast ing