Chapter One
The Nature and
Scope of Marketing
Research
Chapter Objectives
• Identify the role of marketing research in
strategic decision making
• Define the process of marketing research
• Identify the three principles for generating
information useful to managers
• Explain why marketing research requires
analysis and interpretation of data
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Chapter Objectives (Cont’d)
• Discuss the relationship between marketing
research and decision making
• Describe the wide variety of applications for
marketing research
• Identify various career opportunities in
marketing research
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Marketing Research at Volvo
The automobile industry is a heavy consumer
of marketing research.
• Conducts approximately 400 marketing
research studies annually.
• Best viewed as part of the new product
development process.
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Research Topics at Volvo
Sales research involves
• Rating customer satisfaction with products
and dealers for both sales and service
• New product design (i.e., trendier car
designs)
• Image studies
• Managing customer relationships
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Exhibit 1.1 Role of Marketing Research in
Strategic Planning and Decision Making
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Marketing Strategy
• Strategic marketing decisions are those
decisions directly related to the marketing of
goods, services, or ideas to specific
customers Those decisions are then
formulated into a Marketing Plan.
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Marketing Plan
• A formal document that specifies the
organization’s resources, objectives, strategy,
implementation, and control efforts in
marketing the specific products
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Basic Components of the Marketing Plan
• Identifying marketing opportunities and
constraints
• Developing and implementing marketing
strategies
• Evaluating the effectiveness of marketing
plans
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Identifying Market Opportunities
and Constraints
• Who are our potential competitors and how strong
are their market positions?
• How satisfied are consumers with current offerings
on the market ? Are there any unmet consumer
needs?
• How is our offering likely to be perceived by
consumers relative to competitors’ offerings ?
Marketing research can help answer these and other
questions of interest to marketers
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Identifying Marketing Opportunities
and Constraints (Cont’d)
• Identify
– Potential customers’ strengths and
weaknesses
– Consumer satisfaction with current market
offerings
– Consumer perceptions of the offer relative to
competitors
• Goal
– Maintain competitiveness
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T.G.I.Friday’s: Using Marketing Research
to Identify New Opportunities
• How the Research Was Conducted
– Formal interviews with customers
– Requesting servers to be observant of
customer likes and dislikes
• Research Showed
– Customers were increasingly looking for
low-carb menu items
– T.G.I Friday’s joined with Adkins
Nutrionals to develop new low carb
menu items
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Marketing Research to Track Product Performance and
Customer Satisfaction of Products and Services
• Research showed
– The primary decision maker was Mom
– Mom was interested in satisfying multiple
demands from the family
• This research led to “4forAll,” a totally new
concept in pizza
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Embracing the Marketing Concept-Need
to Gain a Good Understanding of Customers
• Importance of conducting marketing research
in the early stages of formulating marketing
strategies
– Nokia: N-gage
• Combination of a phone and handheld gaming
system.
• Insufficient research on customers’
expectations.
• As a result it required massive redesign that
allowed competitors like Sony and Nintendo
time to introduce their own products.
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Understanding the
Competitive Environment
• Who competes with Netflix?
– Competitors both inside and outside the movie
rental arena
– How should Netflix react to competitive
threats?
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Developing and Implementing
Marketing Strategies
Develop an Effective Marketing Mix
Product
Promotion
Price
Place
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Developing and Implementing
Marketing Plans
• Volvo – Your Concept Car (YCC)
– Very little research had been conducted on
female car buyers
– Females purchase 49% of new vehicles and
55% of used vehicles
– 400 female respondents assisted Volvo in
understanding the images and features
desired by female car buyers
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Evaluating the Effectiveness of
Marketing Plans
• Controlling, or the Control Function
– Getting feedback from the marketplace
– Taking necessary or corrective actions
• Example Questions
– Is the market share rising/declining/not
moving? Why?
– Who uses the product?
– Are the answers consistent with company
goals?
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Common Views of Marketing Research
•
•
•
•
•
•
•
Gathering data from markets
Conducting customer surveys
Determining the needs of customers
Evaluating customer response to advertising
Gathering sales and market share data of competitors
Testing products in the market place
Estimating the potential sales of product
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Exhibit 1.2 Role of Marketing Research in
the Organization/Business
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Marketing Research Definition
• A set of techniques and principles for
systematically collecting, recording,
analyzing, and interpreting data that can aid
decision makers who are involved with
marketing goods, services or ideas
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Principles of Marketing Research
• Principle #1
– Attend to the timeliness and relevance of
research
• Principle #2
– Define research objectives carefully and
clearly
• Principle #3
– Do not conduct research to support decisions
already made
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Principle # 1: Attend to the Timeliness and
Relevance of Research
• Ford and GM developed extremely
successful SUV’s
• Recent concerns over fuel prices have
changed consumers’ perceptions and
purchase intentions of SUV’s
• Volvo, Porsche and Volkswagen entered the
SUV market in 2004 after significant
investment in R&D conducted prior to the
recent shift in consumers opinions
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Principle # 2: Define Research Objectives
Carefully and Clearly
• Microsoft e-Home devices
– Marketing research demonstrated consumers
acceptance of this concept
– Implementation was stalled because
associated Internet-enabled technologies were
not yet available or just entering the market
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Principle # 3: Do Not Conduct Research to
Support Decisions Already Made
• Sony Mini-disc Players
– Successful product in Japan
– Launched in the US and failed miserably due
to popularity of competing technologies (i.e.,
Apple iPod)
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The Role of Marketing Research in
Analysis and Interpretation
• Marketing Research can be used to identify
“profitable customers” and “not-profitable
customers”
– Profitable Customers: those who are more
likely to spend large amounts of money and
become repeat customers
– Not-Profitable Customers: those who are more
likely to spend less money on each transaction
and might not return
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Importance of Analysis and Interpretation
• Few Customers, Large Volume/per Customer
• Profitable Target
• Large Number of Customers, Low
Volume/per Customer
• Not-Profitable
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Research Results and
Management Decisions
• Kellogg sought foreign
markets in which to
expand
• Latvians prefer a hearty
plate of sausage, cold
cuts,potatoes,eggs, and a
few slices of thick, chewy
buttered bread
• Mexicans and Indians
prefer hot and spicy
breakfasts
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Research Results and
Management Decisions (Cont’d)
• Marketing research conducted by Kellogg did
not forecast enthusiastic response in the
countries—Kellogg decided to pursue these
markets, anyway!
• Kellogg cereals’ appeal is limited to a small
health-conscious group
• Will it work?
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Exhibit 1.3 Marketing Research’s
Relationship to Decision Making Activity
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Marketing Research Applications
•
•
•
•
Gathering data from markets
Conducting customer surveys
Determining the needs of your customers
Evaluating customer response to advertising
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Marketing Research Applications (Cont’d)
• Gathering sales and market share data on
your competitors
• Testing your products in the marketplace
• Estimating potential product sales
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Classification of Marketing Research
• Basic Research: to generate or create
knowledge
– Journal of Marketing articles
• Applied research
– To solve a problem
– To develop strategies for products and
services
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Marketing Services
• Claritas Inc. – Specializes in providing
marketing information to companies
– Key supplier of information containing the
profiles and life-styles of U.S. consumers on a
zip code-by-zip code basis
– Developed an information base by combining
U.S. Census Bureau demographic data with
life-style/attitudinal data generated through
various regional surveys
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How Do You Recruit a Nun?
Marketing Research Comes to the Rescue
• St.Benedictine Convent
– Majority of Sisters 70+ years
– Inability to attract new recruits
• Conducted Focus Groups
– To determine why they were not able to recruit young
members
– Research showed people perceived nuns to have a
dull existence
• Launched new ad campaign
• Recruited an average of three nuns a year
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In-house Marketing Research
• Formal Marketing Department
– Centralized: one marketing department for all
product lines
– Decentralized: separate marketing
departments for individual product lines
– Hybrid : combination of centralized and
decentralized
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External Marketing Research
• Large Commercial Firms
– AC Nielsen provides full service planning
through recommendations
• Small Commercial Firms
– Specialize in one part of the process
– Custom Research Inc. provides marketing
research,customer satisfaction, and database
marketing services
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External Marketing Research (Cont’d)
• Academic Consultants Professors and
students' research projects
• Trade Associations International trade site
(www.fita.org)
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Exhibit 1.4 Illustrative Centralized Marketing
Research Function in a Multibrand Company
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Exhibit 1.5 Illustrative Decentralized Marketing
Research Function in a Multibrand Company
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Exhibit 1.6 Illustrative Mixed-Structure Marketing
Research Function in a Multibrand Company
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MR at BK – Brand Research and
Analysis Department
• Decentralized Function: Four separate groups
within the department help to segment out the
research into areas of specialty
–
–
–
–
Consumer research
Sales analysis group
Competitive/secondary information
Customer satisfaction
• Centralized Function: Director of the department
keeps the 4 groups unified in their goals and task
allocation
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Careers in Marketing Research
• The field of marketing research provides a
vast array of job opportunities ranging from
titles such as
– Data Entry Clerk; Tabulation Specialist;
Programmer
– Interviewer (telephone or field)
– Research Analyst
– Marketing Research Manager/Director
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