The Importance of Market Research 1
The Importance of Market Research
Michele Morehouse
University of Phoenix
MKT/441
Norma Atkinson
The Importance of Market Research 2
Overview
Marketing research is a viable source to help create new products and create a brand.
Organizations that use marketing research will use different types of marketing research. Each type of
marketing research method has a specific importance and role for every organization.
Market Research
Market research is a systematic process of collecting, recording, and analyzing of data about
customers, competition and market places. The purpose of market research is to examine all
information in regards to the market and consumer trends in order to make the most effect marketing
decisions for marketing activities. Marketing research is conducted through the use of different
research designs, such as exploratory research, descriptive research and casual research. The
components of marketing research are primary and secondary research, sampling plan, questionnaire
design, field work, and analysis (Altius Directory 2009). Unless combined with judgment, experience,
intuition, and expectations marketing research can be time consuming.
Starbucks'
Starbucks' is a leading specialty retailer, which was established in 1971. With over 5,000
locations Starbucks’ positions their products relatively simply. Starbucks' focus is on quality and
experience over price.
Starbucks' marketing research revolves around not only the product, but the needs of the
customer. The typical customer, especially those who are working have the need to go straight into the
store and straight out as quickly as possible. Starbucks' uses the two types of marketing research, which
are consumer research and business to business research.
Starbucks' Market Research Methods
One way Starbucks' conducts marketing research is through the use of a brand checkbook. The
purpose of the brand checkbook is the help evaluate if the marketing activity is going to be a positive or
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negative impact. The marketing activities are broken down into brand credits and brand debits. Brand
credits are considered positive impacts, while a brand debit indicates a negative impact for a potential
marketing activity. The questions that Starbucks' market researchers need to ask are, Does the
marketing activity respect the intelligence of Starbucks customers?: Can Starbucks expertly deliver on
all promises made to customers in the proposed activity?: Will Starbucks employees be excited and
motivated by the activity?: Will customers view the marketing activity as being clever, original,
genuine and authentic? (Moore 2006). These questions help break the marketing research of new
marketing activities down as to determine their potential and impacts that are associated with them.
Demand Estimation and Test Markets
Starbucks store locations are positioned individually based on specific locations. Starbucks uses
marketing research, such as demand estimation and test marketing. Demand estimation is used to
determine the approximate level of demand for the product. Test marketing is the demographic group
used to gauge the viability of a product within a specific region. The flexibility of Starbucks’
positioning attributes to the success of the company.
Ad Tracking
Recently, in 2008 BBDQ North America picked up the Starbucks’ account. The chairman of
BBDQ North America David Lubers stated, “conventiontial advertising is not the way to go,” and
Starbucks’ spokeswoman Lara Wyss says a brand slogan is “unlikely.” Since Starbucks' does not have a
defined brand slogan how do they implement the use of ad tracking? (Petrecca, L, Howard T., &
Horovitz 2008).
Ad tracking is an important market research technique because of the continuous market
research used to monitor a brand, such as Starbucks’ performance. This includes using measures, such
as brand awareness and brand preferences. Starbucks’ implements all three measures to monitor their
performance.
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Brand awareness is the extent to which the public is aware of a product. Starbucks' implemented
a unique way to build brand awareness. During the 2005 Christmas season Starbucks' implemented the
use of advertising in disguise. An individual whom was hired by Starbucks’ would drive around with a
Starbucks’ coffee cup fixated to the roof of his or her car. If an individual noticed the coffee and
thought the Starbucks’ employee had left it on the roof of the car they would respond, “Yes, I know.
Happy Holiday’s from Starbucks’!” (Hawk 2005). The use of brand awareness through this idea is an
effective use of viral marketing.
Aside from brand awareness brand preference is the deliberate decision to choose one brand
over another. Starbucks’ like another company cannot truly change an individual mind. They can use
mudslinging against competitors, such as Dunkin Donuts to fixate the idea of Starbucks’ into a
potential customer’s mind.
Customer Satisfaction Research
Customer satisfaction research is an area of marketing research, which focuses on customers
perceptions. In 2003, there was a market research study conducted, which indicated that Starbucks was
not meeting customer expectation in terms of service. In order to meet customer expectations,
Starbucks had planned to increase customer satisfaction. The company debated a plan that would
increase the amount of labor in stores, which increases the speed of service (Moon, Y. & Quiech, J.
2003). This plan had impacted the bottom line. The effect which was at that time unclear was a positive
impact despite the current economic situation faced now six years later. Without the increase in
operations the long-term bottom line would have suffered. The use of customer satisfaction research
has allowed Starbucks to meet the expectations of customers and provide effective service.
Brand Audits
Brand auditing provides an analysis of Starbucks’ brand and the brand management and
marketing effectiveness. Starbucks’ is analyzed based on their global presence, innovations, revenues
The Importance of Market Research 5
and profits, reliance on the United States market, beverage innovations, and international operations.
These factors are strengths and weaknesses that have been addressed based on the brand audits that are
conduct to ensure the brand’s effectiveness.
Starbucks’ global presence is measured through over 8,500 retail store locations. The global
presence helps the company analyze the strength of brand recognition and identifying the strength of
their current customer base and potential customer base.
Through the use of innovations, Starbucks’ delivers new products relatively quickly is
considered a competitive advantage over Dunkin Donuts. Revenues and profits increase based on the
performance of Starbucks’ to meet the expectations of customers. Through meeting the expectations of
customers, brand recognition and consumer loyalty became a strong base for analyzing the increase in
revenues and profits. In 2003 and 2004 recorded increases of growth occurred because of the new
business ventures that Starbucks’ undertook (Brand Audit 2009).
Reflections
Marketing research has allowed and will continue to allow Starbucks’ the opportunity to analyze
customers, competition, and market places. Starbucks’ strives to integrate all data collected to help
determine the most effective market decision to make. Through different market research outlets
Starbucks’ collects data that will allow for new product development that will support the effective
market decisions.
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References:
Altius Directory (2009), Market Research, Retrieved September 9, 2009 from
http://www.altiusdirectory.com/Business/market-research.html
Brand Audit (2009) Starbucks the Brand, Retrieved September 10, 2009 from
http://brandaudit2.wordpress.com/swot-analysis/
Hawk, T (2005), Flickr: Confrontational Marketing-Building Brand Awareness in a Saturated
Market, Retrieved September 10, 2009 from
http://www.flickr.com/photos/thomashawk/71100997/
Moon, Y. & Quiech, J. (2003), Harvard Business; Starbucks: Delivering Customer Service,
Retrieved September 10, 2009 from http://imran.szabistisb.edu.pk/Contempory%20Mkt%20sp08/starbucks.pdf
Moore, J. (2006), Marketing Profs: Strong Brands Always Have More Brands Credits Than
Debits: A Starbucks Lesson, Retrieved September 9, 2009 from
http://www.marketingprofs.com/prinr.asp?source=/6/mooreJohn3.asp
Petrecca, L, Howard T., & Horovitz (2008), USA Today: Ad Track: Tell us your favorites of ’08;
got a Starbucks’ slogan?, Retrieved September 10, 2009 from
http://www.usatoday.com/money/advertising/adtrack/2008-11-30-adtrackstarbucks_N.htm
The Importance of Market Research 7