Chapter 5
Prof. Richardson
MKTG 116
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Chapter 5
Introduction
Business which have “extra information” are
more competitive.
The process of developing information
through Market Research is becoming more
complicated and is greatly enhanced and
improved by using advanced
telecommunications (e-mail, fax, internet etc.)
Prof. Richardson
MKTG 116
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Chapter 5
“The quality of marketing planning decision
depends on the quality of the information on
which they are based” p. 76
Garbage In = Garbage Out
good market info = good marketing planning
Prof. Richardson
MKTG 116
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Chapter 5
good market info = good marketing planning
There are many sources of Market Info
•customer complaints
•sales-force reports
•government statistics
•industry reports … and ...
Prof. Richardson
MKTG 116
Page 76
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Chapter 5
Marketing Research
The systematic gathering, recording,
and analyzing of data about problems
relating to the marketing of goods and
services.
Page 76
Prof. Richardson
MKTG 116
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Chapter 5
Marketing Research
The critical task of the Marketing
Manager is DECISION MAKING. P. 77
Marketing Research helps provide
good information to help in decision
making.
Prof. Richardson
MKTG 116
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Chapter 5
Marketing Research
The information gathered during
Marketing Research can help:
• develop sales forecasts
• design new products, based on customer opinion
• create attractive packaging
• guide advertising plans
Page 77
Prof. Richardson
MKTG 116
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Chapter 5
Marketing Research
Where do you get the info?
A. you can do it yourself by making
someone in the company responsible
for doing the research
B. you can hire an outside agency that
specializes in Market Research
Page 78
Prof. Richardson
MKTG 116
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Chapter 5
Marketing Research
Where do you get the info?
B. you can hire an outside agency that specializes
in Market Research
There are 2 types of outside agencies
1. Full Service Research Supplier
2. Syndicated Service
Page 78
Prof. Richardson
MKTG 116
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Chapter 5
Marketing Research
There are 2 types of outside agencies
1. Full Service Research Supplier
They will will handle all aspects, conduct
interviews, send out questionnaires, do telephone
polls etc. and provide a detailed report explaining
all aspects of your potential customer base.
Page 78
Prof. Richardson
MKTG 116
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Chapter 5
Marketing Research
There are 2 types of outside agencies
2. Syndicated Service
These types of companies gather various types of
information and sell it (usually in subscription
form) to clients that have regular needs.
• Restaurants can buy statistical information on
eating habits and spending patterns
• Clothing companies can buy information on
demographics and seasonal buying patterns as
well as trend information.
Page 78
Prof. Richardson
MKTG 116
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Chapter 5
6 Steps in the
Market Research
Process
1.
2.
3.
4.
5.
6.
Page 79
Prof. Richardson
MKTG 116
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Chapter 5
Problem Definition
You have to first know what you are looking
for - this is not always so easy.
If your new chocolate bar isn’t selling well,
you don’t automatically do market research
on the “taste” - because maybe the reason
has to do with the packaging.
Page 78
Prof. Richardson
MKTG 116
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Chapter 5
Exploratory Research
Often described
as looking before
you start looking
“Learning about the problem area and
beginning to focus on specific areas of
study by discussing the problem with
informed sources within the firm
(a process often called situation analysis)
and with knowledgeable others outside
the firm (the informal investigation).”
Page 79
Prof. Richardson
MKTG 116
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Chapter 5
Exploratory Research
One of the important things to do is review the
existing situation to determine how things came to
be that way - this is an important part of the
Exploratory Research and is one of the reasons
why companies hire outside agencies.
It is difficult for a company to “look at itself”
Page 80
Prof. Richardson
MKTG 116
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Chapter 5
After the problem has been defined
(Step 1), and an exploratory
investigation (Step 2) has been
conducted,
it is possible to then formulate a
Hypothesis (Step 3)
Prof. Richardson
MKTG 116
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Chapter 5
Hypothesis
Stage 3
“A tentative explanation about the
relationship between variables as a
starting point for further testing.” Page 81
TEXT
The way of thinking about how something works and using your original “guess” as a starting point
for further investigation
WTGR
Prof. Richardson
MKTG 116
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Hypothesis
Chapter 5
Prof. Richardson
MKTG 116
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Chapter 5
Research Design
Stage 4
The Research Design should be a plan for
testing the Hypothesis.
A series of advance decisions that, taken
together, make up a master plan or model for
conducting the investigation.
page 81
Prof. Richardson
MKTG 116
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Chapter 5
Research Design
http://www.reinartz.com/mark4338/CLASS_4/sld007.htm
Prof. Richardson
MKTG 116
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Chapter 5
Collecting Data Stage 5
• Collecting Data is often the expensive
stage because it may involve paying
people to make telephone calls, or
hiring students to takes questionnaires
to malls and ask shoppers to answer
questions.
• This is time consuming as well as costly
Prof. Richardson
MKTG 116
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Chapter 5
Collecting Data
Stage 5
Primary Data
Data being collected for the first time.
Secondary Data
Previously produced or published matter.
Page 81
Prof. Richardson
MKTG 116
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Chapter 5
Collecting Data
Stage 5
Secondary Data
Internal
- eg. company sales records
External
Previously published matter.
(gov’t statistics, reports, newspaper articles etc.)
Page 83
Prof. Richardson
MKTG 116
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Chapter 5
Collecting Data
Stage 5
Secondary Data
External
- Government Sources
http://WWW.StatCan.CA/english/Pgdb/Economy/econom.htm
http://WWW.StatCan.CA/english/Pgdb/People/Population/demo05.htm
The Canadian government produces so MUCH data
from census and business reports that it is published
in report. Some of these reports are free, some can be
bought, and some customized information can be
bought at a high price.
Page 83
Prof. Richardson
MKTG 116
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Chapter 5
Collecting Data
Advantages of Secondary Data
Page 84
1. less expensive
2. less time
Prof. Richardson
MKTG 116
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Chapter 5
Collecting Data
Advantages of Secondary Data
Page 84
1. It is usually less expensive than Primary Data - and
if the purpose if just to determine a general trend, then
for many situations, Secondary Data is O.K.
2. It takes less time to find Secondary Data (compared
to doing new studies) and therefore you answer your
questions more quickly, and get on with the business.
Prof. Richardson
MKTG 116
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Chapter 5
Collecting Data
Limitations of Secondary Data
Page 85
1. Obsolete
2. Fit - relevance
Prof. Richardson
MKTG 116
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Chapter 5
Collecting Data
Limitations of Secondary Data
Page 85
1. Obsolete - date it was produced may be old - this
is why some companies pay for new Primary Data
2. Fit - relevance. Some Secondary Data is too vague
to answer the questions
- therefore you need new Primary Data that is more
specific
Prof. Richardson
MKTG 116
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Chapter 5
Collecting Data
Stage 5
Primary Data
Data being collected for the first time.
1. Observation
2. Survey
• Telephone
• Mail
• Personal Interview
3. Controlled Experiment
Page 85
Prof. Richardson
MKTG 116
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Chapter 5
Collecting Data
Stage 5
Primary Data
Data being collected for the first time.
1. Observation
• overt - watching how customers shop, what they
look at, the features they like, asking for postal codes,
counting cars
- often used to evaluate how good some advertising is
• covert (technical eg. Hidden camera, POP
computerized information)
Page 85 ~ 86
Prof. Richardson
MKTG 116
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Chapter 5
Collecting Data
Primary Data
Stage 5
Data being collected for the first time.
2. Survey
• Telephone - inexpensive and fast
- they are the majority of primary marketing
research used by big marketing research
companies
• Mail - costs less, and more detailed questions
can be asked, can be used in geographic
segments
• Personal Interview - the best method, but most
expensive
Page 86
Prof. Richardson
MKTG 116
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Chapter 5
Collecting Data
Primary Data
Stage 5
Data being collected for the first time.
2. Survey
• Personal Interview
- FOCUS GROUPS are a special type of personal
interview
• typically 8 ~ 12 people are shown something,
then asked for comments
• typically used in preparing TV commercials
Page 88
Prof. Richardson
MKTG 116
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Chapter 5
Collecting Data
Stage 5
Primary Data
Data being collected for the first time.
3. Controlled Experiment
- not used very often due to costs, but sometimes
done by people who need to answer difficult
questions
- the most common method is test marketing a target
market segment, then look at the results and see what
works, and what didn’t work
Page 88
Prof. Richardson
MKTG 116
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Chapter 5
Collecting Data
Stage 5
Primary Data
Data being collected for the first time.
3. Controlled Experiment
- Sometimes TEST products are used in cities like
Calgary and Winnipeg, and then not followed up, so
people there have a chance to use totally new
products not available elsewhere
- eg. Winnipeg was the first city to try variable sizes of
plastic soft drink bottled
Page 88 ~ 89
Prof. Richardson
MKTG 116
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Chapter 5
Collecting Data
Test Marketing
The selection of areas considered reasonably
typical of the total market, and introducing a
new product to these areas with a total
marketing campaign to determine consumer
response before marketing the product
nationally.
Page 88 ~ 89
Prof. Richardson
MKTG 116
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Chapter 5
Collecting Data
The Data Collection Instrument
or, … “getting the info”
“Most of the work in Data Collection depends
on the use of a good questionnaire”
• has to ask questions referring to specific
objectives
• should be pre-tested, if it is new, so you can
make any changes to the questions
Page 89
Prof. Richardson
MKTG 116
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Chapter 5
Sampling Techniques
• Population (universe)
• Probability Sample
• Convenience
• Quota
• Simple Random
• Census
• Nonprobability Sample
• Judgment
• Cluster
• Systematic Technique
Page 90
Prof. Richardson
MKTG 116
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Chapter 5
Sampling Techniques
Population (universe)
• the total group that the researcher wants to study
Page 90
Prof. Richardson
MKTG 116
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Chapter 5
Sampling Techniques
Census
• if the total group is contacted, the results are
known as a census (same term as used when the
government does a census to get information on
the citizens)
Page 90
Prof. Richardson
MKTG 116
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Chapter 5
Sampling Techniques
Probability Sample
• a sample in which every member of the
population has a known chance of being selected
Page 90
Prof. Richardson
MKTG 116
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Chapter 5
Sampling Techniques
Nonprobability Sample
• a sample chosen in an arbitrary way so that each
member of the population does not have a
representative chance to be selected.
Page 90
Prof. Richardson
MKTG 116
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Chapter 5
Sampling Techniques
Convenience Sample
• a sample chosen in an arbitrary way (a
nonprobability sample) so that each member of the
population does not have a representative chance
to be selected. - BECAUSE they just used readily
available respondents/participants
•eg. “CityTV on the street interviews”
Page 90
Prof. Richardson
MKTG 116
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Chapter 5
Sampling Techniques
Judgement Sample
• a nonprobability sample of people with a specific
attribute.
•eg. “CityTV on the street interviews” of people that
DO NOT have political party affiliation - to
determine how they voted, and who would win the
election
Page 90
Prof. Richardson
MKTG 116
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Chapter 5
Sampling Techniques
Quota Sample
• a nonprobability sample that is divided so that
different segments or groups are represented in the
total sample.
Page 90
Prof. Richardson
MKTG 116
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Chapter 5
Sampling Techniques
Cluster Sample
• a probability sample that is used in groups
• used when it is difficult to ask everybody, so they
pick some areas and ask everybody in that area
(cluster)
Page 90
Prof. Richardson
MKTG 116
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Chapter 5
Sampling Techniques
Simple Random Sample
• a probability sample in which everybody has an
equal opportunity of being selected.
Page 90
Prof. Richardson
MKTG 116
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Chapter 5
Sampling Techniques
Systematic Sample
• every 5th, or every “n”th person is selected. An
example is market research people who call every
10th person in the phone book to get an opinion.
Page 90
Prof. Richardson
MKTG 116
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Chapter 5
Marketing Information Systems
For some companies, market knowledge comes in on a
regular basis.
Some stuff is “Data”, and some is “Information”
Data = statistics, opinions in surveys, facts,
predictions etc.
Information = data RELEVANT to the Marketing
Manager in making decisions
Page 91
Prof. Richardson
MKTG 116
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Chapter 5
Marketing Information Systems
The most important thing is
RELEVANCE
Page 91
Prof. Richardson
MKTG 116
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Chapter 5
Marketing Information Systems
The best way to get RELEVANT information is to
establish a systematic approach and have a
planned Marketing Information System
Page 91
Prof. Richardson
MKTG 116
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Chapter 5
Marketing Information Systems
Defn
A set of routine procedures to continuously
collect, monitor, and present internal and
external information on company
performance and opportunities in the
marketplace.
Page 91
Prof. Richardson
MKTG 116
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Chapter 5
Marketing Information Systems
A set of routine procedures - things you do all the
time
to continuously collect, monitor, - always
gathering info
and present - give to the boss
internal and external information - inside the
company, and from primary and secondary sources
on company performance - how you are doing
and opportunities in the marketplace.
Prof. Richardson
MKTG 116
Page 91
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Chapter 5
Figure 5.2 Information Components of a Firm’s MIS
Page 92
Prof. Richardson
MKTG 116
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Chapter 5
Marketing Information Systems
All of this depends on the ability of the
company to use technology to help it be
better than the competition
Prof. Richardson
MKTG 116
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