MKTG 2p91 Chapter 4

Chapter 4 Market Research
Knowledge Is Power
•Successful market planning depends upon informed decision making provided by
market research
–Developing marketing objectives
–Selecting target markets
–Positioning products
–Developing 4 Ps strategies
•Information is the fuel that runs the marketing
Disruption and Market Research
•Marketing research ethics refers to taking an aboveboard approach in conducting
market research that does no harm to the participant.
–Privacy issues
–Confidentiality and anonymity issues
–Risk management and data security
–Conducting data under the guise of research to create a database for future
New market- joint venture- need to research themselves
Mature market- look at competitors
The Marketing Information System (M I S)
•A process that determines what information marketing managers need, and then
gathers, sorts, analyzes, stores, and distributes relevant and timely marketing
information to users.
•Three components
–Four types of data
–Computer hardware and software
–Output for marketing decision makers
Internal Company Data System
•Information generated from within the company, often through their intranet and
marketing dashboards
–Used to produce reports on sales and marketing activities
–Includes sales records: who buys what in what quantities at what intervals
–Commonly accessed by marketers via secure intranets
Walmart scanning
Marketing Dashboard
•A comprehensive display and access system providing company personnel with upto-the-minute information necessary to make decisions.
•May provide
–Data on actual sales versus forecasts
–Progress on marketing plan objectives
–Price competition
Distribution channel effectiveness
Predict up to 30 days ahead→ forecasting
Market Intelligence System
•Information about what’s going on in the world that is relevant to their business
•Gathered via monitoring of everyday data sources, and observations
–Salespeople are key to sourcing this information
–Information may come from mystery shoppers, speaking with buyers, trade shows,
purchasing, or using reverse engineering
Market product to them- only company that did this
Opening up new factory, need machines
Marketing Decision Support System (M D S S)
•When information provided by an M I S is still inadequate.
•A firm may create a Marketing Decision Support System (M D S S) by adding data
analysis and interactive software that allows marketing managers to access the M I
S data and conduct their own analyses.
•The M D S S also includes
–Statistical software tools
–Modeling software tools
M I S, M D S S, and Customer Insights
•To make good decisions, marketing managers need timely access to quality
–A firm’s M I S stores and analyzes data from a variety of sources
–A firm’s M D S S makes it easier to access the M I S and find answers to specific
“what-if” questions
Universities, colleges, and schools often have their own M I S that is important
in recruiting, keeping, and graduating students. Suppose your university hired
you to lead its customer insights team. What are some examples of useful
questions your M I S and M D S S systems might answer?
Evidence-Based Decision Making in Marketing (1 of 2)
Evidence-Based Decision Making in Marketing (2 of 2)
Figure 4.2 Steps in the Market Research Process
Step 1: Define the Research Problem
•Specify the research objectives
–What questions will the research attempt to answer?
•Identify the consumer population of interest
–What are the characteristics of the consumer group(s) of interest?
•Place the problem in an environmental context
–What factors in the firm’s internal and external business environment might
influence the situation?
Step 2: Determine the Research Design
•Once the problem is isolated, the next step is to determine a “plan of attack”
–A research design is a plan that specifies what information marketers will
collect and what type of study they will do
•Research designs fall into two categories:
–Secondary research uses secondary data that was collected for some other
purpose than the problem at hand
–Primary research collects primary data from respondents
Research with Secondary Data
•Does information already exist?
•Trade associations compile data
•Secondary data can save time and money
Figure 4.3 Market Research Designs
Exploratory Research
•Exploratory research is useful for:
–Gaining better understanding of problem
–Identifying new opportunities
–Providing the information needed for future research
•Often qualitative in nature
–Depth interviews
–Focus group
–Market research online community (M R O C)
–Case studies
Causal Research
•Causal research
–Attempts to identify cause-and-effect
–Often involves experiments
Independent and dependent variables
Sales of beer and diapers are correlated, but does one cause the other? What
do you think? How could you find out?
Step 3: Choose the Method to Collect Primary Data
•Primary data collection falls into two broad categories
–Surveys involve some kind of interview or other direct contact with
respondents who answer questions.
–Observation is where researcher records consumer’s behavior
•Use of new technologies
Observational Methods
•Data collection approach in which researcher records consumer behaviors,
often without their knowledge
–Personal observation
–Unobtrusive measures
–Mechanical observation
§People Meters/Portable People Meters
§Eye tracking
Heat maps
Online Research
•Two major types of online research
–Gathering info from online surfing (e.g., cookies)
–Gathering info via online sources (e.g., hash tag searches)
•Netnography combines the internet and ethnography
•Predictive technology uses shopping patterns of large numbers of people to
determine which products are likely to be purchased based on previous purchases.
Bounce Rate
•Bounce rate is a measure of how many visitors come to a page on a website
and leave without viewing any other pages.
Step 4: Design the Sample (1 of 2)
•Probability sampling
–Each member of the population has some known chance of being included
§Simple random sample
§Systematic sampling procedure
§Stratified sample
–Researchers obtain more accurate results when they carefully design and
implement good sampling techniques.
Step 4: Design the Sample (2 of 2)
•Non-probability sampling
–A sample in which personal judgment is used to select respondents (e.g.,
surveying random individuals at your favorite restaurant)
–Convenience samples
–Quota samples
Step 5: Collect the Data
•The quality of research conclusions depends on the quality of the data.
•Challenges to gathering data in foreign countries
–Cultural issues
–Language issues
Ex. Translate from english to foreign language and then back to english →
much is lost
Step 6: Analyze and Interpret the Data
•Data must be analyzed and interpreted to be meaningful!
•Tabulation and cross-tabulation are most frequently used method of analysis.
•Tabulation: Arranging the number and percentages of responses to each question
in a table or other summary form to get a broad picture of overall response
•Cross-tabulation: Exploring data by sub-groups in order to see how results vary
across categories