Marketing Research
Turning information into action
What’s in a Movie’s Name?
Three movies’ initial and ultimate titles:
• Shoeless Joe became Field of Dreams
• Teenie Weenies became Honey, I Shrunk the Kids
• 3000 became Pretty Woman
Is research on movie titles expensive? YES IT IS!!
But, what is more expensive? A bad title that can kill a movie and
cost a studio millions of dollars. Big budget films can cost as
much as $70 million.
Market research has resulted in other types of changes to movies
as well.
Marketing Research is . . . .
the process of defining a marketing
problem or opportunity, systematically
collecting and analyzing information,
and recommending actions to improve
an organization’s marketing activities.
The Goal of Marketing Research
Management is faced with many choices
involving possible marketing actions. The goal
of marketing research is to provide
management with actionable information that
will allow managers to make better decisions
and ultimately reduce risk.
Types of Marketing Research
• Techniques
– Surveys
– Experiments
– Observation
• Function
– Exploratory. Preliminary research conducted to clarify the
scope and nature of the marketing problem.
– Descriptive. Designed to describe basic characteristics of a
given population.
– Causal. To identify cause-and-effect relationships among
variables
Marketing Research Process
• Marketing is conducted on the basis of
the scientific method.
– Reliability. The ability to replicate research
results under identical environmental
conditions
– Validity. Whether or not the research
measured what was intended to be
measure.
Marketing Research Process
Step 1
Step 2
Exploratory Research
Survey
Experiment
Observation
Sampling
Step 3
Data collection / Analysis
Step 4
Conclusions / Actions
Exploratory Research
• Secondary and
primary data
• Focus Group. Informal
interview session in
which 6 to 10 persons,
relevant to the research
• Depth interviews are project, are brought
detail individual
together in a room with a
interviews with
moderator to discuss
people relevant to
topics surrounding the
the research project. marketing research
problem.
Research Design
• The basic framework for finding a solution to
the problem.
• Outlines the methods and procedures for
collecting and analyzing the required
information.
• The design includes: source of information to
be used, research methods, sampling plan,
schedule and cost of research.
Research Methods (descriptive
and causal)
• Survey. Is a technique used to generate
primary data by asking people
questions and recording their responses
on a questionnaire.
• Surveys can be conducted by: mail,
telephone, personal interview and
internet
Research Methods (descriptive
and causal)
• Experiment. Involves the manipulation
of an independent variable (cause) and
the measurement of its effect on the
dependent variable (effect) under
controlled conditions.(Market test)
• Observation. Involves watching, either
mechanically or in person, how people
behave.
Data Collection
One method of collecting data in by sampling. There
are two basic ways of sampling from a population:
1. Probability sampling involves using precise
rules to select the sample such that each element
of the population has a specific known chance of
being selected. Probability samples can be very
representative of a particular population.
2. Nonprobability samples may be used when time
and budget are limited. They use arbitrary
judgments to select the sample. With this method
it is not known“how” representative a population
might be.
Conclusions
• Researcher’s job is to interpret the
information and make conclusions with
regard to managerial decision making.
• Management must make a commitment
to act.
• The solution should be monitored to
ensure intended results occur.
Ethical issues
• Failure to report problems with research
results because of incomplete data.
• Reporting only favourable but not
unfavourable results.
• Using deception to collect information.
• Breaching the confidentiality of respondents
and/or personal data if anonymity or
nondisclosure was guaranteed.
Information Technology
Information technology involves
designing and
managing computer
and communication
networks to provide an
information system to satisfy
an organization’s needs for data storage,
processing, and access.
How Marketing Researchers & Managers Use Information
Technology to Turn Information into Action
Customer orders
Customer
characteristics
Inventory
Sales calls
Promotions
Computer and
communication network
Databases
Internal
External
Global sources
Trade associations
Canadian Census
Internet
Single-source services
Models to analyze, organize
interpret, and present data
Queries
- who buys?
- how much?
- why?
Results
Marketing researcher or manager at desktop computer
Market & Sales Forecasting
Market or Industry Potential.
Refers to the
maximum total sales of a product by all firms to a
segment under specified environmental conditions
and marketing efforts
Sales or Company Forecast.
Refers to what one
firm expects to sell under specified conditions for the
uncontrollabe and controllable factors that affect the
forecast.
Two Basic Approaches to Forecasting
Top-Down Forecast
Buildup Forecast
TOP-DOWN
BUILDUP
Top-down forecast
• It involves subdividing an aggregate forecast
into its principal components.
• The “Canadian Markets” survey, published
annually by the Financial Post is a widely
used source to estimate retail sales by region
• The “Buying Power Index” (BPI) calculates
the estimated percent of retail sales of a
particular retail store.
Buildup forecast
• It involves summing the sales forecast
of each of the components to arrive at
the total forecast.
• It is widely used when there are
identifiable components such as
products, product lines, or market
segments.
Specific Sales Forecasting Techniques
Time & Cost
Judgments of the Decision Maker
direct forecast
lost-horse forecast
Survey of Knowledgeable Groups
survey of buyers’ intentions forecast
sales force survey forecast
jury of executive opinion forecast
survey of experts forecast
Statistical Methods
Trend Extrapolation
-
+
Judgments of the Decision Maker
• Direct forecast. Involves estimating the value
to be forecast without any intervening steps
• Lost-horse forecast.
– Starting with the last known value of the item
being forecast
– Listing the factors that could affect the forecast
– Assessing whether they have a positive of
negative impact
– Making the final forecast
Survey of Knowledgeable Groups
• Survey of buyer’s intentions forecast.
Involves asking prospective customers
whether they are likely to buy the product
during some future time period.
• Sales force survey forecast. Involves asking
the firm’s sales force to estimate sales of their
product during some future time period.
• Jury of executive opinion forecast. Involves
asking knowledgeable executives inside the
firm about likely sales of their product.
• Survey of experts forecast. Involves asking
experts on a topic to make a judgment about
some future event
Statistical Methods
• Trend extrapolation. Is the best known
statistical method, involves extending a
pattern observed in past data into future.
• When the pattern is describe with a straight
line, it is known as “Linear Trend
Extrapolation”. To perform a linear trend
extrapolation:
– Plot the sales revenue data from past time periods
– Fit a straight line within these points
– Extend the line to the future time periods to project
future values.
Linear Trend Extrapolation of Sales Revenues of Xerox,
Made at the Start of 1995
26
24
Sales revenue ($ billions)
22
20
Actual values
available before
forecast is made
Linear trend
extrapolation
forecast
18
16
14
Actual values
after forecast
is made
12
10
8
Forecast
6
4
2
Actual
0
1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004