Conducting Marketing
Research and
Forecasting Demand
Donna Sia, Rhea Jardin, Shelle Caiga
MBA Standard
April 7, 2012 w w w .
yo u r we bs i te
. c o m

1. Defining Marketing Research
2. Developing the research plan
3. Metrics for measuring good marketing productivity
4. Assessing ROI of marketing expenditures
5. Measuring and Forecasting Demand w w w .
yo u r we bs i te
. c o m

Marketing research is…
– Can lead to the success of a brand or a product.
– By producing insight into the customer’s attitudes and buying behavior w w w .
yo u r we bs i te
. c o m

Marketing Research is the…
Systematic design Collection Analysis
Reporting of data and findings relevant to a specific marketing situation facing the company.
w w w .
yo u r we bs i te
. c o m

Marketing Research Process involves…
1.Defining the problem
& objectives
2.Developing the 3.Collecting research plan information
4.Analyzing the information
5.Presenting the findings 6.Making the decision w w w .
yo u r we bs i te
. c o m

Developing the Research Plan
1. Data Sources
2. Research instruments
3. Research approach
4. Sampling plan
5. Contact methods w w w .
yo u r we bs i te
. c o m

Developing the Research Plan
Researchers can gather:
Primary Data
– Data freshly gathered for a specific purpose or for a specific research project
Secondary Data
– Collected for another purpose and already exist somewhere w w w .
yo u r we bs i te
. c o m

Developing the Research Plan
Marketing Research can be approached in many ways:
Observation
Focused Group
Survey Research
Behavioral Data Experimentation w w w .
yo u r we bs i te
. c o m

Developing the Research Plan
The following research instruments are used to collect data:
Questionnaires
Qualitative Measures
Technological Devices w w w .
yo u r we bs i te
. c o m

Step 2:
Developing the Research Plan
Some popular Qualitative Research approaches are…
Word association
Projective techniques
.
Laddering
Brand Personification Visualization w w w .
yo u r we bs i te
. c o m

Developing the Research Plan
1) Sampling plan unit: Who should we survey?
2) Sample size: How many people should we survey
3) Sampling procedure: How should we choose the respondents?
w w w .
yo u r we bs i te
. c o m

Step 2:
Developing the Research Plan
Probability and Non probability Samples:
Probability Sample
1) Simple random sample
2) Stratified random sample
3) Cluster Sample
Non probability Sample
1) Convenience sample
2) Judgment sample
3) Quota sample w w w .
yo u r we bs i te
. c o m

Developing the Research Plan
Contact Methods:
Telephone Interview
Personal Interview
Online Interview Mail Questionnaire w w w .
yo u r we bs i te
. c o m

Characteristics of good marketing research
Scientific Method
Research creativity
Multiple methods
Interdependence of models and data
Value and cost of information
Healthy skepticism
Ethical marketing w w w .
yo u r we bs i te
. c o m

Measuring Marketing
Productivity
-Marketing Metrics
External
Awareness Market share Relative price Consumer
Satisfaction
& Loyalty
Number of complaints
Distribution Total number of customers w w w .
yo u r we bs i te
. c o m

Marketing Mix Model
Internal
Awareness & commitment to goals
Active support Resource adequacy
Desire to learn
Willingness to change
Freedom to fail w w w .
yo u r we bs i te
. c o m
Autonomy

Marketing Dashboards to improve effectiveness and efficiency
Customer Metrics Unit Metrics Cash-flow w w w .
yo u r we bs i te
. c o m
Brand

Custome r
Metrics
Hierarchy of Effects
Satisfaction
/
Experience
Attitude/Behavior
Segment Margin
Marketing Measurement
Pathway
Technically Sound but Ad-hoc Efforts
Across Multiple Measurement Silos
Unit
Metric s
Products/
Category Sales
Cash-
Flow
Metrics
Program &
Company ROI
Marketing Cost/
Unit
Margin
Optimization
Media Mix
Models
Initiative Portfoli
Optimization o w w w .
yo u r we bs i te
. c o m
Brand Metrics
Metrics
Brand Imagery/
Attributes
Equity Drivers
Financial
Valuation

Marketing Measurement
Pathway
Customer
Metrics
Unit
Metrics
Cash-Flow
Metrics
Brand Metrics
Metrics
Hierarc of Effe hy cts
Products/ Result: Program &
Hundreds of reports but very
Brand
Att
Imagery/ ributes
Satisfac
Experie tion/ nce
Little knowledge integration or learning
Marketing Cost/
Unit
Media Mix
Models
Attitude/Behavior
Segment Margin
Margin
Optimization
Initiative Portfolio
Optimization
Financial
Valuation w w w .
yo u r we bs i te
. c o m

Forecasting Demand and
Measurement
Purpose:
– Identify market opportunities
How:
– Measure and forecast size, growth and profit potential of market opportunities
Who:
– Marketers are responsible for preparing sales forecast which are based on estimates of demand.
w w w .
yo u r we bs i te
. c o m

Major Concepts in Demand
Measurement
1. MarketDemand
2. Company Demand
• Demand function
• Sales forecast
• Potential w w w .
yo u r we bs i te
. c o m

Ninety Types of Demand
Measurement w w w .
yo u r we bs i te
. c o m

The Measures of Market
Demand
Ways to break down the market:
1. Potential Market
2. Available Market
3. Target Market
4. Penetrated market w w w .
yo u r we bs i te
. c o m

Market Forecast and Market
Potential
Market Forecast
– Market demand corresponding to the level of
Industry marketing expenditure.
Market Potential
– Is the limit approached by the market demand as an industry marketing expenditures approach infinity for a given marketing environment.
w w w .
yo u r we bs i te
. c o m

Marketing Demand as a function of Marketing
Expenditure
Market potential, Q2
Market forecast, Q
F
Planned expenditure
Market minimum, Q
1
Industry Marketing Expenditure w w w .
yo u r we bs i te
. c o m

Marketing Demand as a function of Marketing
Expenditure
Market
Potential
(prosperity)
Prosperity
Market
Potential
(recession)
Recession
Industry Marketing Expenditure w w w .
yo u r we bs i te
. c o m

Market Demand and Company
Demand
Market Demand
– total volume that would be bought….
A defined Marketing Program by a defined customer group in a defined geographical area in a defined time period in a defined marketing environment w w w .
yo u r we bs i te
. c o m

Market Demand and Company
Demand
Company Demand
– Is the company’s estimated share of market demand at alternative levels of company marketing effort at a given time period w w w .
yo u r we bs i te
. c o m

Company Sales Forecast a nd Sales Potential
Company Sales Forecast
– Is the expected level of company sales based on a chosen marketing plan and an assumed target market
Company Sales Potential
– is the sales limit approached by company demand as a company marketing effort increases relative to that of competitors w w w .
yo u r we bs i te
. c o m

Estimating Current Demand
Marketing executives would like to estimate..
1. Total Market Potential
2. Area Market Potential
3. Total Industry Sales and Market share w w w .
yo u r we bs i te
. c o m

Estimating Current Demand
Total Market Potential is the
Marketing effort and environment maximum amount of sales available to all the firms in an industry w w w .
yo u r we bs i te
. c o m during a given period

Estimating Current Demand
Area Market Potential
Estimating market potential of different
Marketing effort and environment maximum amount of sales in an area (city, state or nation) during a given period w w w .
yo u r we bs i te
. c o m

Estimating Current Demand
The 2 Major Methods of assessing area market potential are…
1. Market-Build-up Method
– Identify all the potential buyers in each market and estimate their potential purchases
2. Multiple-Factor Index Method
-assigning weights to different factors (income, sales, population, buying power) w w w .
yo u r we bs i te
. c o m

Estimating Current Demand
Calculating the Brand Development
Index:
BDI Territory Percent of
US Brand
Sales
Seattle, CA 3.09
Portland, OR 6.74
Boston, MA 3.49
Toledo, OH 0.97
Chicago, IL 1.13
Baltimore,
MD
3.12
Percent of
US Category
Sales
2.71
10.41
3.85
0.81
0.81
3.00
(a/b) x100
114
65
91
120
140
104 w w w .
yo u r we bs i te
. c o m

Estimating Current Demand
Industry Sales and Marketing Shares
– identifying competitors and estimating their sales
– Derive data from: industry trade association
– Buy reports from marketing research (E.g.
Nielsen)
– Industry Data, Competitors Data
– Over-all or Brand by Brand w w w .
yo u r we bs i te
. c o m

Estimating Future Demand
Good forecasting is a key factor in success
Macro econo mic
Industry
Company w w w .
yo u r we bs i te
. c o m

Estimating Future Demand
All forecasts are built on one of the three information bases:
1. What people say. (Survey)
2. What people do (Test Market)
3. What people have done. (Buying History) w w w .
yo u r we bs i te
. c o m

Estimating Future Demand
Survey of Buying Intentions
Forecasting
– Is the art of anticipating what buyers are likely to do under a given set of conditions.
Do you intend to buy a car in the next 6 months?
Purchase probability scale
0.00
0.20
No Chance Slight
Possibility
0.40
Fair
Possibility
0.60
Good
Possibility
0.80
High
Possibility
1.00
Certain w w w .
yo u r we bs i te
. c o m

Estimating Future Demand
Composite of Sales Force Opinion
– Sales representatives
Expert Opinion
– dealers, distributors, suppliers, marketing consultants and trade associations
Past-sales Analysis
– Time series analysis, Exponential smoothing,
Statistical demand analysis (causal factors),
Econometric Analysis
Market-Test Method w w w .
yo u r we bs i te
. c o m

1.Defining the problem
& objectives
Sample plan, Sources, Contact Methods, Instruments
Market and company Demand
2.Developing the research plan
3.Collecting information
Sales Force, Experts, History and Market Sales
Total and Area Market Potential, industry sales & market share
4.Analyzing the information
Customer is happy
5.Presenting the findings
The brand is profitable Employees are satisfied w w w .
yo u r we bs i te
. c o m
6.Making the decision

Conducting Marketing
Research and
Forecasting Demand
Donna Sia, Rhea Jardin, Shelle Caiga
MBA Standard
April 7, 2012 w w w .
yo u r we bs i te
. c o m

Conducting Marketing
Research and
Forecasting Demand
Donna Sia
MBA Standard
April 7, 2012 w w w .
yo u r we bs i te
. c o m

1. Defining Marketing Research
2. Developing the research plan
3. Metrics for measuring good marketing productivity
4. Assessing ROI of marketing expenditures
5. Measuring and Forecasting Demand w w w .
yo u r we bs i te
. c o m

Marketing research is…
– Can lead to the success of a brand or a product.
– By producing insight into the customer’s attitudes and buying behavior w w w .
yo u r we bs i te
. c o m

Marketing Research is the…
Systematic design Collection Analysis
Reporting of data and findings relevant to a specific marketing situation facing the company.
w w w .
yo u r we bs i te
. c o m

Marketing Research Process involves…
1.Defining the problem
& objectives
2.Developing the 3.Collecting research plan information
4.Analyzing the information
5.Presenting the findings 6.Making the decision w w w .
yo u r we bs i te
. c o m

Developing the Research Plan
1. Data Sources
2. Research instruments
3. Research approach
4. Sampling plan
5. Contact methods w w w .
yo u r we bs i te
. c o m

Developing the Research Plan
Researchers can gather:
Primary Data
– Data freshly gathered for a specific purpose or for a specific research project
Secondary Data
– Collected for another purpose and already exist somewhere w w w .
yo u r we bs i te
. c o m

Developing the Research Plan
Marketing Research can be approached in many ways:
Observation
Focused Group
Survey Research
Behavioral Data Experimentation w w w .
yo u r we bs i te
. c o m

Developing the Research Plan
The following research instruments are used to collect data:
Questionnaires
Qualitative Measures
Technological Devices w w w .
yo u r we bs i te
. c o m

Step 2:
Developing the Research Plan
Some popular Qualitative Research approaches are…
Word association
Projective techniques
.
Laddering
Brand Personification Visualization w w w .
yo u r we bs i te
. c o m

Developing the Research Plan
1) Sampling plan unit: Who should we survey?
2) Sample size: How many people should we survey
3) Sampling procedure: How should we choose the respondents?
w w w .
yo u r we bs i te
. c o m

Step 2:
Developing the Research Plan
Probability and Non probability Samples:
Probability Sample
1) Simple random sample
2) Stratified random sample
3) Cluster Sample
Non probability Sample
1) Convenience sample
2) Judgment sample
3) Quota sample w w w .
yo u r we bs i te
. c o m

Developing the Research Plan
Contact Methods:
Telephone Interview
Personal Interview
Online Interview Mail Questionnaire w w w .
yo u r we bs i te
. c o m

Characteristics of good marketing research
Scientific Method
Research creativity
Multiple methods
Interdependence of models and data
Value and cost of information
Healthy skepticism
Ethical marketing w w w .
yo u r we bs i te
. c o m

Measuring Marketing
Productivity
-Marketing Metrics
External
Awareness Market share Relative price Consumer
Satisfaction
& Loyalty
Number of complaints
Distribution Total number of customers w w w .
yo u r we bs i te
. c o m

Marketing Mix Model
Internal
Awareness & commitment to goals
Active support Resource adequacy
Desire to learn
Willingness to change
Freedom to fail w w w .
yo u r we bs i te
. c o m
Autonomy

Marketing Dashboards to improve effectiveness and efficiency
Customer Metrics Unit Metrics Cash-flow w w w .
yo u r we bs i te
. c o m
Brand

Custome r
Metrics
Hierarchy of Effects
Satisfaction
/
Experience
Attitude/Behavior
Segment Margin
Marketing Measurement
Pathway
Technically Sound but Ad-hoc Efforts
Across Multiple Measurement Silos
Unit
Metric s
Products/
Category Sales
Cash-
Flow
Metrics
Program &
Company ROI
Marketing Cost/
Unit
Margin
Optimization
Media Mix
Models
Initiative Portfoli
Optimization o w w w .
yo u r we bs i te
. c o m
Brand Metrics
Metrics
Brand Imagery/
Attributes
Equity Drivers
Financial
Valuation

Marketing Measurement
Pathway
Customer
Metrics
Unit
Metrics
Cash-Flow
Metrics
Brand Metrics
Metrics
Hierarc of Effe hy cts
Products/ Result: Program &
Hundreds of reports but very
Brand
Att
Imagery/ ributes
Satisfac
Experie tion/ nce
Little knowledge integration or learning
Marketing Cost/
Unit
Media Mix
Models
Attitude/Behavior
Segment Margin
Margin
Optimization
Initiative Portfolio
Optimization
Financial
Valuation w w w .
yo u r we bs i te
. c o m

Forecasting Demand and
Measurement
Purpose:
– Identify market opportunities
How:
– Measure and forecast size, growth and profit potential of market opportunities
Who:
– Marketers are responsible for preparing sales forecast which are based on estimates of demand.
w w w .
yo u r we bs i te
. c o m

Major Concepts in Demand
Measurement
1. MarketDemand
2. Company Demand
• Demand function
• Sales forecast
• Potential w w w .
yo u r we bs i te
. c o m

Ninety Types of Demand
Measurement w w w .
yo u r we bs i te
. c o m

The Measures of Market
Demand
Ways to break down the market:
1. Potential Market
2. Available Market
3. Target Market
4. Penetrated market w w w .
yo u r we bs i te
. c o m

Market Forecast and Market
Potential
Market Forecast
– Market demand corresponding to the level of
Industry marketing expenditure.
Market Potential
– Is the limit approached by the market demand as an industry marketing expenditures approach infinity for a given marketing environment.
w w w .
yo u r we bs i te
. c o m

Marketing Demand as a function of Marketing
Expenditure
Market potential, Q2
Market forecast, Q
F
Planned expenditure
Market minimum, Q
1
Industry Marketing Expenditure w w w .
yo u r we bs i te
. c o m

Marketing Demand as a function of Marketing
Expenditure
Market
Potential
(prosperity)
Prosperity
Market
Potential
(recession)
Recession
Industry Marketing Expenditure w w w .
yo u r we bs i te
. c o m

Market Demand and Company
Demand
Market Demand
– total volume that would be bought….
A defined Marketing Program by a defined customer group in a defined geographical area in a defined time period in a defined marketing environment w w w .
yo u r we bs i te
. c o m

Market Demand and Company
Demand
Company Demand
– Is the company’s estimated share of market demand at alternative levels of company marketing effort at a given time period w w w .
yo u r we bs i te
. c o m

Company Sales Forecast a nd Sales Potential
Company Sales Forecast
– Is the expected level of company sales based on a chosen marketing plan and an assumed target market
Company Sales Potential
– is the sales limit approached by company demand as a company marketing effort increases relative to that of competitors w w w .
yo u r we bs i te
. c o m

Estimating Current Demand
Marketing executives would like to estimate..
1. Total Market Potential
2. Area Market Potential
3. Total Industry Sales and Market share w w w .
yo u r we bs i te
. c o m

Estimating Current Demand
Total Market Potential is the
Marketing effort and environment maximum amount of sales available to all the firms in an industry w w w .
yo u r we bs i te
. c o m during a given period

Estimating Current Demand
Area Market Potential
Estimating market potential of different
Marketing effort and environment maximum amount of sales in an area (city, state or nation) during a given period w w w .
yo u r we bs i te
. c o m

Estimating Current Demand
The 2 Major Methods of assessing area market potential are…
1. Market-Build-up Method
– Identify all the potential buyers in each market and estimate their potential purchases
2. Multiple-Factor Index Method
-assigning weights to different factors (income, sales, population, buying power) w w w .
yo u r we bs i te
. c o m

Estimating Current Demand
Calculating the Brand Development
Index:
BDI Territory Percent of
US Brand
Sales
Seattle, CA 3.09
Portland, OR 6.74
Boston, MA 3.49
Toledo, OH 0.97
Chicago, IL 1.13
Baltimore,
MD
3.12
Percent of
US Category
Sales
2.71
10.41
3.85
0.81
0.81
3.00
(a/b) x100
114
65
91
120
140
104 w w w .
yo u r we bs i te
. c o m

Estimating Current Demand
Industry Sales and Marketing Shares
– identifying competitors and estimating their sales
– Derive data from: industry trade association
– Buy reports from marketing research (E.g.
Nielsen)
– Industry Data, Competitors Data
– Over-all or Brand by Brand w w w .
yo u r we bs i te
. c o m

Estimating Future Demand
Good forecasting is a key factor in success
Macro econo mic
Industry
Company w w w .
yo u r we bs i te
. c o m

Estimating Future Demand
All forecasts are built on one of the three information bases:
1. What people say. (Survey)
2. What people do (Test Market)
3. What people have done. (Buying History) w w w .
yo u r we bs i te
. c o m

Estimating Future Demand
Survey of Buying Intentions
Forecasting
– Is the art of anticipating what buyers are likely to do under a given set of conditions.
Do you intend to buy a car in the next 6 months?
Purchase probability scale
0.00
0.20
No Chance Slight
Possibility
0.40
Fair
Possibility
0.60
Good
Possibility
0.80
High
Possibility
1.00
Certain w w w .
yo u r we bs i te
. c o m

Estimating Future Demand
Composite of Sales Force Opinion
– Sales representatives
Expert Opinion
– dealers, distributors, suppliers, marketing consultants and trade associations
Past-sales Analysis
– Time series analysis, Exponential smoothing,
Statistical demand analysis (causal factors),
Econometric Analysis
Market-Test Method w w w .
yo u r we bs i te
. c o m

1.Defining the problem
& objectives
Sample plan, Sources, Contact Methods, Instruments
Market and company Demand
2.Developing the research plan
3.Collecting information
Sales Force, Experts, History and Market Sales
Total and Area Market Potential, industry sales & market share
4.Analyzing the information
Customer is happy
5.Presenting the findings
The brand is profitable Employees are satisfied w w w .
yo u r we bs i te
. c o m
6.Making the decision

Conducting Marketing
Research and Forecasting
Demand
Donna Sia
MBA Standard
April 7, 2012 w w w .
yo u r we bs i te
. c o m

Marketing Management
Submitted to Prof. de Ungria
Shelle Caiga
04.27.2012
w w w .
yo u r we bs i te
. c o m

w w w .
yo u r we bs i te
. c o m

Data
Sources
Research
Approach
Research
Instruments
Contact
Methods w w w .
yo u r we bs i te
. c o m
Sampling
Plan

Etnographic
Behavioral
Data w w w .
yo u r we bs i te
. c o m
Focus Group

Questionnaires: DO’s
Ensure questions are FREE of BIAS
K.I.S.S. (Keep It Short & Simple)
Make it SPECIFIC
No to JARGONS
No to SOPHISTICATED words
No to AMBIGUOUS words w w w .
yo u r we bs i te
. c o m

No negatives
No hypothetical
Questionnaires: DON’Ts
No words that could be misheard
Use response bands
Use mutually exclusive categories
Allow for “other” in fixed response questions w w w .
yo u r we bs i te
. c o m

Word Association
Projective Techniques
Visualization
Brand Personification w w w .
yo u r we bs i te
. c o m
Laddering

w w w .
yo u r we bs i te
. c o m

 Involve random selection
x Doesn’t involve random selection w w w .
yo u r we bs i te
. c o m

MAILS
QUESTIONNAIRES
FACE-TO-FACE
INTERVIEW
PHONE
INTERVIEW
ONLINE
INTERVIEW w w w .
yo u r we bs i te
. c o m

w w w .
yo u r we bs i te
. c o m

Distribution
Awareness
Relative price
Number of complaints
Market share
Total # of customers
Loyalty w w w .
yo u r we bs i te
. c o m
Customer satisfaction

Awareness of goals
Commitment of goals
Active support Desire to learn
Staffing levels Freedom to fail
Willingness to change
Resource adequacy
Customer satisfaction
Autonomy w w w .
yo u r we bs i te
. c o m

An EXEMPLARY
MARKETING RESEARCH will definitely result to an
EXCELLENT CUSTOMER SATISFACTION
Nobody counts the number of ads you run; they just remember the impression you make.
– Bill Bernbach, advertising pioneer and founder of DDB w w w .
yo u r we bs i te
. c o m

Marketing Research and Forecasting
Demand
MARKMA
Submitted to Prof. de Ungria
Rhea G. Jardin
April 27, 2012 w w w .
yo u r we bs i te
. c o m

1. Marketing Research
Characteristics of good Marketing Research
1.
Scientific method
2.
Creativity
3.
Multiple research methods
4.
Accurate model building
5.
Cost-benefit analysis
6.
Healthy skepticism
7.
Ethical focus w w w .
yo u r we bs i te
. c o m

2. Marketing Metrics
A. Short-term results
1.
Sales turnover
2.
Shareholder value
B. Changes in brand equity
1.
Customer awareness, attitudes and behaviors
2.
Market share
3.
Price premium
4.
Number of complaints
5.
Distribution and availability
6.
Total number of customers
7.
Perceived quality, loyalty and retention w w w .
yo u r we bs i te
. c o m

Marketing Metrics
Short term
Sales turnover Shareholder value w w w .
yo u r we bs i te
. c o m

Marketing Metrics
Brand Equity
Distribution and availability
Price premium
Customer awareness, attitudes and behaviors
Number of complaints
Total number of customers
Market share doRE -mi..
so-laTI ON
Perceived quality, loyalty and retention w w w .
yo u r we bs i te
. c o m

Marketing Research and Forecasting
Demand
MARKMA
Submitted to Prof. de Ungria
Rhea G. Jardin
April 27, 2012 w w w .
yo u r we bs i te
. c o m