BUS 620 Week 2 Assignment

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Chapter 3

Market Research: Identifying Market Opportunities

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Learning Outcomes

By the end of this chapter, you should:

Understand how the Ansoff matrix model and SWOT analysis can be used to iden�fy and evaluate new market opportuni�es. Recognize how PESTEL analysis is used in the process of environmental scanning and analysis. Recognize how the prac�ce and process of market research is shaped by the ul�mate goal of improving customer sa�sfac�on. Know the steps involved in the marke�ng research process and recognize when research should and should not be conducted.

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Ch. 3 Introduction This chapter inves�gates the basic applica�ons of market research and the market research process. Bringing together two themes from the previous chapters, we begin by looking at ways to apply market research methodologies to the search for new opportuni�es to be�er sa�sfy buyers. The Ansoff matrix model specifies four alterna�ve routes to iden�fying new product and market prospects. The sec�on that follows inves�gates the role of macro- and micro-environmental analysis in providing the prac�cal, func�onal informa�on required to shape and refine the organiza�on’s marke�ng strategies. The concluding sec�ons of Chapter 3 provide an in-depth examina�on of how market research studies are planned and executed. Topics include research design, data collec�on, analysis, and the presenta�on of the research findings.

* * *

One of America’s largest manufacturers of children’s toys provides a highly regarded day care program for its employees. With the parents’ knowledge and consent, the company uses this se�ng as a product development and concept tes�ng laboratory. Behavioral studies on how preschoolers interact with toys and with each other are rou�nely conducted in this realis�c environment. Children’s responses to different colors, shapes, and sounds are tested, and the results are used to make toys more appealing to their peers.

On the last day of "Terrible Timmy’s" �me in the program, his mom was thanking the day care staff for having looked a�er her son for the previous three-and-a-half years, even though he can be "quite a handful" at �mes. "Oh no," protested one of the research staffers. "He’s been just great! Fantas�c track record on sound and color preferences especially," she gushed enthusias�cally. "Are you planning any more?"

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Dell has withstood the market turmoil through successful promo�ng and growth strategies and by taking many market opportuni�es available to them.

Associated Press

3.1 Market Opportunities and Growth Strategies The American Marke�ng Associa�on defines market research as "the systema�c gathering, recording, and analyzing of data with respect to a par�cular market, where market refers to a specific customer group in a specific geographic area" (2011). Market research, or marke�ng research (terms used interchangeably throughout this text), provides managers with cri�cally important insights into the customers they serve. As noted previously, decision makers need access to the best possible informa�on about prospec�ve buyers in order to create value in the minds of the consumers and deliver on promises of customer sa�sfac�on. Since percep�ons of value are rooted primarily in subjec�ve impressions, one of the most basic goals of market research is to provide managers with an understanding of how consumers perceive compe�ng brands or bundles of benefits within the market.

Making sound marke�ng strategies at all levels of the organiza�on requires thorough and reliable informa�on about customers. Informa�on derived from the careful execu�on of well-designed market research studies can be used to iden�fy new marke�ng opportuni�es and direct the development of growth strategies.

In most industries and markets, growth is an essen�al strategic goal for many reasons. Economies of scale in produc�on, distribu�on, and promo�on o�en give the largest-selling brands cost advantages over compe�tors. With cost advantages come opportuni�es to enforce retail price leverage. Alterna�vely, confronted with the entrance of large new compe�tors or slowing rates of market growth, a minimum level of sales growth may be required to survive an industry-wide shakeout. The la�er was evident as market demand for personal computers in the 1980s leveled off and the total number of compe�tors shrank from 832 to 435 companies (Day, 1997). Only those firms with substan�al market share were equipped to survive the extended wave of price cu�ng and panicked selling that followed. Several successive cycles of booms and busts have con�nued to eliminate compe�tors in this industry over the past two decades un�l only a few dozen remain, dominated by big brands like Apple, Dell, and Hewle�-Packard.

The pursuit of sales growth and new market opportuni�es may also stem from other pressures such as the need to diversify the exis�ng product por�olio or the decision to pursue the compe��ve advantages that come with market leadership. The range of mo�ves for seeking growth also necessarily includes management’s obliga�ons to shareholders and other investors. Overall, few firms in the increasingly compe��ve global marketplace are not pursuing new market opportuni�es and growth as part of their core mission.

Think About It

Market leadership refers to a company that holds the highest market share in a given product market. It is a desirable posi�on to hold for compe��ve reasons not directly related to economies of scale.

What kinds of advantages would market leadership provide for technology-focused companies like Sony, Apple, or Nokia?

Strategic planning and analysis enables marke�ng managers to evaluate new market opportuni�es as well as growth strategies for exis�ng SBUs. As we have already seen, techniques rooted in the Boston Consul�ng Group matrix model assist managers in deciding how best to manage the collec�on of SBUs under their direc�on. The strategic value of this approach is dependent on the reliability of the market research informa�on.

Two techniques commonly used by marke�ng managers to find and evaluate new marke�ng opportuni�es are the Ansoff matrix and SWOT analysis.

The Ansoff Matrix Model

The Ansoff Product/Market Opportunity Matrix is an analysis tool used to iden�fy new growth strategy op�ons. First introduced by Igor Ansoff in 1957, it explicitly recognizes that new concepts must originate from one of four possible product/market combina�ons. The results from an Ansoff matrix analysis are a set of new ideas for alterna�ve growth strategies that must be subjected to more-thorough inves�ga�on and detailed assessment. The four general classes of product/market growth strategy op�ons iden�fied by this process are described in Figure 3.1. These strategies include market penetra�on, market development, product development, and diversifica�on.

Figure 3.1: Ansoff Product/Market Opportunity Matrix

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The Ansoff Product/Market Opportunity Matrix iden�fies growth strategy op�ons from four possible product/market combina�ons.

The crea�on of Bayer’s low-dose aspirin allowed the company access to an en�rely new market and to customers with specific needs without changing their product.

Bayer HealthCare LLC

Market Penetra�on Strategy

Market penetra�on strategy describes those ini�a�ves that seek to increase sales of the firm’s exis�ng products or services to its current markets. In one sense, it is about doing business as usual, but compe�ng more aggressively and effec�vely. This can o�en be accomplished through more-compe��ve pricing and promo�onal strategies and tac�cs. By necessity, this requires capturing market share from one or more compe�tors. In comparison to the other three alterna�ves for growth, this is generally regarded as a low-risk op�on for growing the business.

This strategy can be referred to as the Wizard of Oz approach since the character of Dorothy eventually found happiness right in her own backyard. That is, because this approach is focused on serving exis�ng customers with exis�ng products, it should be as familiar as your own backyard. (There’s no place like home.) In addi�on, the organiza�on is likely to have current, accurate informa�on on customers and compe�tors, minimizing the need for addi�onal research. For companies that are commi�ed to achieving the highest possible levels of customer sa�sfac�on, the market penetra�on strategy represents the most a�rac�ve path to building incremental sales.

Market Development Strategy

Market development strategy refers to those growth ini�a�ves that are intended to increase sales by introducing exis�ng products to new markets or new market segments. These new markets may be based on differences in geography, demographics, lifestyles, or behavioral characteris�cs such as benefits sought or purchase occasion. Though the products remain unchanged, other elements of the marke�ng mix may need to be adjusted to sell to the new target segments. This could include the establishment of new distribu�on channels, crea�on of new promo�onal messages, or revisions to pricing policies. In contrast to market penetra�on strategies, this approach to increasing sales requires the organiza�on to acquire an understanding of new buyers’ needs. Unfortunately, market research efforts targe�ng unfamiliar segments of the market are o�en more expensive and subject to more ini�al design errors than ongoing studies aimed at current customer groups.

The poten�al success of market development strategies may rest substan�ally on core competencies within the company that relate to technical knowledge or exper�se in the crea�on of superior goods and services. However, if a firm’s unique competencies relate primarily to its superior knowledge of current customer groups and their needs, then product development strategies may provide be�er opportuni�es for growth.

Consider the case of Bayer’s market development strategy. For more than a century, the company’s core product, aspirin, had been sold primarily as a medicine for the relief of minor pains and fever. However, when clinical research determined that a daily low dose of aspirin can reduce the risks associated with stroke and heart a�ack, the company responded by introducing several heart care brand extensions (e.g., Aspirin Regimen Low Dose). Without altering the core product in any way, Bayer successfully introduced new uses to new markets.

Following the introduc�on of its heart care line, Bayer also introduced Heart Health Advantage—a non-aspirin product designed to extend the brand’s strong reputa�on for high-quality medicines to new lines. Subsequent product line extensions of this type that provide new products to exis�ng markets are categorized within the Ansoff matrix as part of product development strategy.

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Product Development Strategy

Product development strategy entails selling new products to the organiza�on’s current customer base. In contrast to market development, the focus here is on altera�ons and modifica�ons to the product element of the marke�ng mix to improve its fit with the exis�ng buyer segments’ preferences. These changes could include revisions to a company’s core product, func�onal changes in product packaging, new branding strategies, or extensions of an exis�ng product line. A company that possesses a thorough and in�mate understanding of how the current value proposi�on sa�sfies its current customers with its current products is more likely to be successful in efforts to sell new product concepts to these markets. O�en the most profitable new opportuni�es to sa�sfy exis�ng customers originate with the customers themselves. Both formal and informal research on clients’ needs and preferences helps companies keep pace with important shi�s in target market preferences.

Product development strategies o�en require firms to extend their unique core competencies far outside their tradi�onal markets. Though Bayer, for example, has remained a leader in over-the-counter pharmaceu�cals, it has also aggressively pursued numerous prescrip�on drug opportuni�es within its exis�ng health care product markets. These include treatments for hypertension and respiratory infec�ons.

The Arm & Hammer brand also provides good examples of product development strategy over the past 25 years. It has introduced a wide range of new products that serve the needs of those segments that were ini�ally cul�vated via the firm’s market development strategies in the 1970s. These new extensions of the brand name included an extensive array of fabric care (e.g., detergents, fabric so�eners) and personal hygiene products (e.g., toothpaste, teeth whitening systems).

Diversifica�on Growth Strategy

Diversifica�on growth strategy involves introducing new products into new markets. The obvious disadvantage to this approach is that the firm has no previous product or market experience to build upon. In many instances, customer acceptance depends on the company’s ability to leverage a recognizable brand name to new customer segments. This strategy represents the polar opposite of market penetra�on and is certainly the most risky, as it requires the company to enter unfamiliar markets with products with which it has no prior experience. Consequently, it also has the most poten�al for sales growth. Some firms will either acquire outside SBUs or create a strategic alliance with an outside manufacturer to reduce the risk inherent in this type of strategy. In this way, they are effec�vely buying their way into new markets.

Since diversifica�on strategy does not aim to leverage either market- or product-related dis�nc�ve competences related to the firm, it is some�mes regarded as a financial strategy more than the pursuit of new marke�ng opportuni�es. Ul�mately, however, the responsibility for making new acquisi�ons work belongs to the marke�ng func�on of the organiza�on.

Think About It

Starbucks has created a powerful, widely recognized brand iden�ty.

Has it leveraged the power of this brand to pursue either markets or product development strategies?

What possibili�es remain untapped?

The Ansoff matrix is a poten�ally valuable tool for iden�fying growth strategies. The four cells of the matrix are exhaus�ve in terms of specifying the four possible sources of new growth opportuni�es defined by market and product characteris�cs. The op�ons uncovered by using this framework are, necessarily, only star�ng points. Subsequent evalua�on, refinement, and tes�ng of concepts is required to fully evaluate the profit poten�al of par�cular customer, market, or product strategies. A preliminary assessment of a new strategic concept’s viability can be determined by the applica�on of SWOT analysis.

The SWOT Analysis

SWOT is an acronym for strengths, weaknesses, opportuni�es, and threats. SWOT analysis is a strategic planning method used to inves�gate how internal, company-specific factors (strengths and weaknesses) and environmental factors external to the firm (opportuni�es and threats) will impact the pursuit of a specific marke�ng venture. These ventures are typically a new product or service, o�en discovered through the applica�on and analysis of the Ansoff matrix.

The SWOT analysis model is based on the premise that a thorough understanding of the strengths, weaknesses, opportuni�es, and threats related to a given proposal can provide marke�ng managers with insight into the feasibility and poten�al problems associated with introducing a new product or service. The ul�mate objec�ve of a SWOT analysis is to provide users with an accurate and realis�c assessment of the situa�on facing the firm with respect to a specific market opportunity, enabling them to decide whether to proceed with the concept or abandon the plan.

SWOT is a very flexible and adaptable analy�cal technique. However, the process can be only as rigorous and the results only as valid as the informa�on used to construct the parameters of the analysis. Many managers do not recognize the poten�al value of SWOT analysis as a research-driven technique. Rather, they see it exclusively as a fairly casual brainstorming exercise that lets mul�ple par�es provide input on a proposal on an informal basis. However, more disciplined applica�ons of the SWOT technique, including custom-ordered market research, can provide much more managerially useful and reliable results.

For marke�ng managers, a rigorous SWOT analysis begins by defining the nature of the specific market opportunity in as much detail as possible. The next step in the process is to iden�fy the internal and external factors that are relevant and important to the success or failure of the proposed new product or service concept. Many of these factors can be uncovered by examining the how the current value chain would enable the company to sa�sfy prospec�ve buyers of this proposed product or service. SWOT analysis requires the user to group the relevant internal and external forces into one of four primary categories:

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SWOT analysis is typically developed by comple�ng the interior cells of a 2x2 matrix where internal company-specific strengths and weaknesses intersect with external opportuni�es and threats.

Which would you rather have: a more rigorous or a more casual approach to SWOT analysis?

RubberBall/SuperStock

Internal Forces

Strengths: These are resources and skills that the company has acquired that specifically relate to the market opportunity being evaluated. Strengths include dis�nc�ve competencies or characteris�cs that give the company an advantage over others in the industry.

Weaknesses: These are factors related to the new opportunity in which the company is regarded unfavorably by consumers, or that make the company par�cularly vulnerable to compe�tors. Weaknesses include features or characteris�cs that leave the company at a disadvantage compared to compe�tors’ products or services.

External Forces

Opportuni�es: These are market-specific situa�ons that would enable the organiza�on to improve sales or profits, with special emphasis on those that others might exploit to gain compe��ve advantage if the organiza�on fails to act upon them.

Threats: These are factors that may endanger or threaten the viability or poten�al value of this new opportunity. In some circumstances, these can be countered to create opportuni�es.

Figure 3.2: SWOT analysis

As shown in Figure 3.2, SWOT analysis is typically presented and o�en interpreted in a 2x2 matrix where the internal company-specific strength and weakness factors are across the top row and the external factors of opportuni�es and threats are presented on the bo�om. This format allows the user to compare and contrast each of these factors against the others. It provides, in a sense, a dynamic and interac�ve checklist of pros and cons by evalua�ng the opportunity being considered against each of the elements iden�fied within the cells of the matrix.

The primary value in developing the 2x2 SWOT analysis matrix is to iden�fy cri�cal intersec�ons between internal and external factors. Some�mes called matching, this is the process of aligning the strengths of the firm with opportuni�es while looking for ways to mi�gate poten�al threats and company-specific weaknesses. This allows managers to render a preliminary determina�on on the feasibility and total market poten�al of the product or service opportunity being evaluated. Of equal importance, the intersec�on of internal weaknesses with external threats should signal managers to seek remedies.

Consider the example of a Dave Ingraham, the young entrepreneur in Chapter 2 who wants to open a small café in the northeastern college town. The SWOT matrix for his proposed coffee shop might look something like the one in Figure 3.3.

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The intersec�on of the poten�al strengths and weaknesses for the proposed café are compared to the opportuni�es and threats posed by the environment in a northeastern college town.

Figure 3.3: SWOT analysis for café

Dave sees the strengths of his concept as providing a good match or fit with the opportuni�es provided by the environment. The most cri�cal matches for him include a good loca�on and student-friendly atmosphere (strengths) that will cater to the needs of a large university popula�on (opportunity). However, he needs to be concerned that the poten�al risks from rising material costs and narrow profit margins (threats) are amplified by his lack of managerial experience (weakness). Hiring expert managers or spending some �me as an employee within this industry would be alterna�ve ways to remedy this mismatch.

Think About It

Based on the SWOT analysis in Figure 3.3 and the descrip�on provided in Chapter 2, what other posi�ve strength-to-opportunity matches do you see for Dave Ingraham’s proposal?

What are the nega�ve weakness-to-threat intersec�ons that will pose a problem for him?

SWOT analysis can be an effec�ve model for evalua�ng new opportuni�es within many marke�ng contexts. Beyond the analysis of new products and services, it can be applied to inves�ga�ng the poten�al a�rac�veness of new distribu�on channels, changes in supplier rela�onships, and SBU acquisi�ons. In every instance, however, the results of a SWOT analysis are not intended to provide a final decision. Concepts that pass this ini�al hurdle then require a more detailed evalua�on and the subsequent development of a complete marke�ng plan.

The SWOT procedure described in this sec�on can be classified as confirmatory analysis in the sense that it seeks valida�on for a specific new product or service proposal. However, SWOT analysis can also be applied in an exploratory analysis. In this case, new market opportuni�es or concepts are not defined prior to assembling informa�on on the company’s general strengths and weaknesses. Opportuni�es and threats from the markets in which they currently operate are used to complete the matrix. The intersec�ons of these forces are then explored to find new poten�al market opportuni�es. This approach is used less o�en in marke�ng contexts since the Ansoff matrix analysis provides many of the same insights.

SWOT analysis is also used in some instances to profile a firm’s compe��ve rivals. This is most frequently done with respect to specific market opportuni�es. If, for example, your firm is contempla�ng the introduc�on of varie�es of flavored peanut bu�er to the adult market, crea�ng separate SWOT matrices for each of your primary compe�tors rela�ve to this new concept may iden�fy some important considera�ons. These could include related market opportuni�es that you had not considered or poten�al threats that you had overlooked. O�en this type of compe��ve assessment will focus on understanding compe�tors’ dis�nc�ve competencies, product differen�a�on, and brand posi�oning strategy.

Think About It

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What problems are you likely to encounter when applying SWOT analysis to new product and service opportuni�es?

In addi�on to those situa�ons discussed here, what other kinds of business situa�ons could be inves�gated using the SWOT analysis approach described in this sec�on?

Do you think this technique would work well in non-business contexts? Explain your answer.

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Marke�ng managers use the PESTEL framework to facilitate a comprehensive scan of the external environment confron�ng the organiza�on. Why do you think it is necessary to consider these factors?

3.2 Environmental Analysis Marke�ng managers are tasked with shaping the elements of the marke�ng mix to fit the preferences and needs of the target market. This process does not, however, take place in a constant or unchanging environment. The dynamic external environment to which decision makers must respond and adapt comprises two dis�nct types of variables. Macro-environmental forces are those uncontrollable external variables that impact all firms within an industry. These include demographic shi�s, prevailing economic condi�ons, cultural trends, and changes in the regulatory environment. The PESTEL framework, discussed in the following sec�on, addresses these macro-environmental forces. Micro-environmental forces are external s�muli that selec�vely and discretely influence each firm uniquely and independently. Though not directly under the control of any single organiza�on, some of these elements of the external environment can be managed and influenced to a significant degree. These micro-environmental forces include the behavior of a company’s suppliers, customers, and channel intermediaries such as independent wholesalers and retailers.

Marke�ng managers exercise direct control over a limited range of internal resources and decision variables through which they can respond to the threats and opportuni�es posed by the external environment. Primary among these tools are the marke�ng mix variables and managers’ discre�on to iden�fy segments and select target markets. The success of a marke�ng plan hinges on the ability to adapt the marke�ng mix to fit the changing character of both the target market and the larger context provided by macro-environmental forces and trends.

Understanding Forces and Trends: PESTEL Analysis

The process of systema�cally assessing how elements of the external environment will impact a business or market is termed environmental scanning. Factors of par�cular concern to marke�ng managers include those issues and trends that influence the a�tudes and behavior of current and prospec�ve target markets. Other points of concern focus on condi�ons relevant to economies, industries, allied companies (e.g., suppliers), and compe�tors.

Conduc�ng an environmental scan can incorporate a wide range of informa�on sources and research methodologies such as sta�s�cal trend analysis and data mining. However, each varia�on on the process shares the goal of providing managers with relevant informa�on to improve the quality of marke�ng decisions. These decisions include choices about new opportuni�es nested in the strategic alterna�ves of market penetra�on, market development, and product development.

Although there are a number of ways to scan the external environment, among those models with the most comprehensive set of external factors is the PESTEL analysis. PESTEL is an acronym for the six environmental factors iden�fied in the framework shown in Figure 3.4: poli�cal, economic, social, technological, environmental, and legal. These macro-environmental variables o�en appear as the source of opportuni�es and threats in SWOT analysis.

Figure 3.4: PESTEL analysis

Poli�cal Factors

Poli�cal factors are external macro-environmental variables that reflect how government forces impact the compe��ve market as a whole and the company specifically. This category includes trade restric�ons, tax policies, employment regula�ons, and consumer protec�on legisla�on. General poli�cal stability and the

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A youth marke�ng company with several Fortune 500 clients specializes in analyzing "tweens," the group of kids between 8 and 12 years old. A marketer interviews two young girls about their wishes, desires, and dreams as consumers. What does this informa�on offer for the marketers of tween products?

When evalua�ng foreign market opportuni�es, vola�le currency exchange rates add to the risk of new ventures and amplify the need for accurate market research.

istockphoto/Thinkstock

role of government in providing for fair and safe markets can vary widely from one country to the next. Similarly, significance of poli�cal influences on business infrastructure can be substan�ally different when moving from one product category to the next.

Economic Factors

Economic factors make up a category of variables that relate to the prevailing overall condi�on and health of the economy in which target markets exist. Specific variables of concern include gross domes�c product (GDP), discre�onary income, consumer confidence, unemployment, infla�on, interest rates, and currency exchange rates. Each of these factors can have a significant impact on product- and market-level decision making. Interest rates are of par�cular concern to companies in pursuit of growth opportuni�es, because as the cost of borrowing money directly affects a business’s ability to expand. Other economic factors directly impact consumers’ ability to afford the products being sold.

Social Factors

Social factors o�en represent the most important concerns for marke�ng managers because they reflect two cri�cal classes of customer characteris�cs: culture and demographics. Culture embodies the shared beliefs, a�tudes, and values of a society. Demographics describes the sta�s�cal characteris�cs of a popula�on expressed by variables such as loca�on, age, and employment.

The interac�on of marke�ng and culture is a two-way street. Cultural meanings are transferred to products via marke�ng communica�ons, making products more a�rac�ve to consumers who hold

these values. In turn, the symbols and icons of cultures and subcultures establish founda�onal values for many types of product markets. For example, health consciousness is both a value promoted by marketers and a core cultural value shared across many consumer markets. The importance of children’s vitamins to good health and how this is expressed in marke�ng communica�ons connects the adver�ser’s brand-specific message to prevailing cultural norms about caring for one’s family. Similarly, marketers find opportuni�es to sell products at holidays that revolve around cultural rituals that create or affirm specific cultural meanings.

Demographic market characteris�cs assist marketers in understanding how different segments respond to the marke�ng programs as a func�on of personal variables such as age, sex, and income. A�tude research on consumers is o�en �ed to dis�nguishing how different demographic segments feel about a product or service. Marketers rely heavily on demographics because they can be reliable indicators of how different segments perceive product value. They are also used extensively in the analysis of B2C markets because changes in most demographic variables are easily forecast. Free or inexpensive secondary data are readily available from a large number of government agencies and widely accessible online.

"Tween" Market Research

Think About It

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Market demand for recycled electronic components has grown steadily over the past 15 years.

age fotostock/SuperStock

Do demographic factors such as age, sex, income, and family status influence the way we feel about brands? Consider the market for fast food. Some companies emphasize low prices. Others focus on healthy alterna�ves. Some appeal to prospects based on menu-specific features, while others emphasize everything but the food being sold.

Can these differences be �ed to the demographic profile of the target market for these restaurants? Why or why not?

Technological Factors

Although technological factors are variables that impact some markets and businesses far more than others, all marke�ng managers need to be aware of the trends and shi�s in this category. The dimensions of technological change that most o�en influence marke�ng processes include innova�ons in communica�on and channels of distribu�on. Companies at the leading edge of these types of changes can establish compe��ve advantages and create effec�ve barriers to market entry. By pioneering innova�ve systems of interac�ng with customers, processing orders, and distribu�ng products, Amazon.com was able to establish a sustainable compe��ve advantage rooted in brand awareness and scale economies that effec�vely prohibits many firms from compe�ng with the company directly.

Environmental Factors

Environmental factors are primarily long-term ecological concerns that have the poten�al to impact all businesses at some level. These can be local/regional in scope (e.g., water shortages, chronic flooding) or global. Beyond issues associated with climate change, this category includes factors such as responsible waste disposal, pollu�on mi�ga�on, and energy efficiency. A prime example of this trend is green legisla�ve ini�a�ves aimed at reducing landfill wastes from sources such as product packaging and the disposal of electronics. In many jurisdic�ons, "reverse value chain" laws prescribe the standards and processes for the safe recycling of consumer electronics and appliances. Although some industries such as farming and paper products are more directly impacted than others, environmental factors represent emerging growth opportuni�es for many more, as markets are transformed to reflect increasing awareness of business’s role in environmental stewardship.

Legal Factors

Legal factors in the macro-environment include laws and regula�ons intended to control the behavior of business organiza�ons and special interest groups. These include an�trust laws, Occupa�onal Safety and Health Administra�on (OSHA) regula�ons, consumer protec�on statutes, and product safety and health laws. State and local agencies o�en impose specific regula�ons to govern the pricing of consumer necessi�es and natural monopolies such as u�lity companies. Although some business leaders may resent what they regard as the "over-regula�on" of markets and business prac�ces, the objec�ves of maintaining fair standards for the protec�on of consumers and a level compe��ve playing field are generally recognized as valid regulatory goals.

* * *

Each of the PESTEL model’s six factors will be of greater or lesser importance to any given company based on the character of the markets in which it competes. In general, the process of macro-environmental analysis should incorporate as many credible and reliable sources as possible to create a complete picture of relevant trends in the external environment. In many instances, the environmental scan will highlight the need to undertake custom-designed research studies aimed at answering specific ques�ons about markets, customers, or the impact of par�cular marke�ng strategies.

Implemen�ng the PESTEL Analysis

PESTEL analysis is a versa�le diagnos�c tool for helping managers understand the macro-environmental forces that can impact the a�rac�veness of alterna�ve markets. The purpose is to iden�fy those market-specific elements that may posi�vely or nega�vely affect the marke�ng and sale of individual brands. It is o�en applied to the process of evalua�ng interna�onal op�ons for market development. When used in this way, the specific characteris�cs of na�ons are the subject of the analysis.

One approach to implemen�ng a prac�cal PESTEL methodology is to score each op�on using standard measures for each of the six environmental factors iden�fied by this framework. A list of poten�al indicators for each measure is provided in Table 3.1.

Table 3.1: PESTEL factors and indicators

PESTEL FACTORS

INDICATORS

Poli�cal World Bank Governance Indicators, Central Intelligence Agency World Fact Book, Heritage Founda�on Economic Freedom Index, Trade and taxa�on policies

Economic Gross Domes�c Product and GDP per capita, GDP annual growth rate, Net exports, Balance of payments, Current account deficit, Foreign direct investment, Annual rate of infla�on, Interest rates, Currency exchange rates, Unemployment rates

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Social Popula�on demographics, Income and wealth distribu�on (GINI coefficient) Literacy rate, Enrollment in educa�onal programs, Human Development Index (HDI) Score (United Na�ons Development Program)

Technological Global Compe��veness Reports: World Economic Forum, Technological infrastructure: Central Intelligence Agency World Fact Book, Rates of innova�on and technological obsolescence

Environmental Human Development Reports (United Na�ons Environmental Program), Waste and environmental management policies, Clean air, land, and water standards

Legal Transparency Interna�onal, Corrup�on Index: h�p://www.transparency.org (h�p://www.transparency.org) , Legal statutes on compe��on and employee safety, Consumer health and safety laws

Using standard measures that are directly comparable across countries enables analysts to evaluate the a�rac�veness of alterna�ve market entry op�ons. In many situa�ons, managers will develop scorecards to systema�cally organize and analyze the a�rac�veness of alterna�ve new markets on a fixed set of criteria, as shown in Table 3.2.

Table 3.2: New market a�rac�veness scorecard

Country A Country B Country C Country D

Criterion Importance Weight (%)

Ra�ng (1– 10)

Assessment Ra�ng (1–10)

Assessment Ra�ng (1–10)

Assessment Ra�ng (1–10)

Assessment

Poli�cal

Freedom of press 11 8 .88 2 .22 7 .77 6 .66

Civil liber�es 4 5 .2 3 .12 8 .32 5 .2

Economic

GDP per capita 16 10 1.6 4 .64 8 1.28 8 1.28

Foreign direct investment 12 9 1.08 3 .36 9 1.08 4 .48

Social

Median age 7 6 .42 10 .7 7 .49 4 .28

Literacy rate 4 5 .2 9 .36 8 .32 8 .32

Technological

Percentage household Internet access

16 9 1.44 8 1.28 8 1.28 7 1.12

Global compe��veness rank 7 9 .63 2 .14 9 .63 9 .63

Environmental

Percentage plas�cs recycled 4 7 .28 10 .4 6 .24 7 .28

Carbon emissions per household

7 4 .28 9 .63 8 .56 6 .42

Legal

Corrup�on index score 9 8 .72 1 .09 10 .9 8 .72

Government transparency ranking

3 10 .3 2 .06 9 .27 10 .3

Total 100 8.03 5 8.14 6.69

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Many companies use the "store intercept" technique. This technique allows the company to gather customer feedback cheaply and effec�vely.

Blend Images/SuperStock

3.3 Market Research Market research describes a broad array of processes related to the collec�on and analysis of informa�on for the sake of improving market-related decision making. In some instances, the research process can be informal and inexpensive. This would include ac�vi�es ranging from follow- up conversa�ons with recent customers to rou�nely collec�ng data that are posted on the Internet. Alterna�vely, ambi�ous research studies such as in-field market tests or survey research that requires collec�ng data from tens of thousands of subjects can be very expensive. In every instance, however, marke�ng managers need to explicitly recognize the �me and expense associated with the collec�on of market-related data for each type of study and determine whether the value of informa�on exceeds the price.

Applications and Types of Research Studies

For many organiza�ons, collec�ng customer and compe�tor informa�on is an essen�al part of the drive to improve product value and customer sa�sfac�on. Be�er market-related informa�on is always required to make be�er decisions, especially in the face of dynamic and vola�le market condi�ons. For many large corpora�ons, an ongoing program of market research provides feedback to the organiza�on on new opportuni�es, emerging market pa�erns, and changes in the compe��ve environment. Other research ini�a�ves, however, are undertaken on a limited-term basis to provide

specific informa�on to address a specific ques�on.

Whether part of an ongoing research program or a one-�me custom designed study, the possible applica�ons of market research generally fall into one of three categories, which are discussed in turn below.

Iden�fy and Evaluate Marke�ng Opportuni�es

This first category includes research studies focused on finding new market opportuni�es and forecas�ng their financial poten�al. The types of research plans in this set include market segmenta�on studies, demand es�ma�on research, and project feasibility assessment. Both the Ansoff matrix and SWOT analysis can play significant roles in shaping the research process once market opportuni�es have been tenta�vely iden�fied.

Assess Poten�al Consequences of Marke�ng Decisions

Each of the four elements of the marke�ng mix can be the subject of separate or combined market research studies. Assessing the poten�al impact of proposed changes in the 4 Ps is a cri�cal task for marke�ng researchers. Specific types of research in this second category would include new product market tests, compara�ve tests for alterna�ve adver�sing plans, and experimental studies on the effect of price changes across product lines and market segments.

Monitor and Improve Marke�ng Processes

The third category o�en involves longitudinal studies. Longitudinal studies require the collec�on of repeated observa�ons of the same variables over extended periods of �me. These are some�mes referred to correla�onal studies when they are used to measure sta�s�cal rela�onships between two or more marke�ng variables (e.g., sales and adver�sing). By tracking the same rela�onships over an extended period of �me, market researchers can iden�fy reliable rela�onships and evaluate variability in sales and customer sa�sfac�on as a func�on of changes in the firm’s marke�ng ac�vi�es. These types of tracking studies can also be useful in evalua�ng customer percep�ons of brand-specific variables such as image, awareness, recall, and preference.

In addi�on to gathering informa�on from sources external to the firm, organiza�ons o�en rely on internal sources of data to help them evaluate ongoing marke�ng programs and diagnose poten�al problems. This type of research on the effec�veness and efficiency of the firm’s marke�ng efforts o�en analyzes data from exis�ng in-house databases. As noted at the close of Chapter 2, these databases typically include informa�on on compe�tors and suppliers, as well as data specific to customers and sales. In many situa�ons, however, marke�ng managers will need to turn to external sources of supply for market research services and data.

Suppliers of Marketing Research

Although an average business may spend between 25 and 50 percent of its annual marke�ng budget on research ac�vi�es (Small Business Encyclopedia, 2011), not every organiza�on has the ability or desire to engage in the collec�on and analysis of data on its own. More than $20 billion is spent each year on marke�ng services around the world. Approximately one-third of the total is spent in the United States alone (Honomichl Global Top 25 Report, 2010).

Commercial research vendors and external service suppliers provide a wide range of market research services to their customers. Full-service suppliers perform all marke�ng research func�ons for the client from the start of the project through its conclusion. This includes custom research designs, data collec�on services, and sta�s�cal analysis of the results. Limited service suppliers typically specialize in the provision of select services. These include online research specialists, companies that sell syndicated data, and firms that specialize in the study of specific markets or marke�ng func�ons.

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The steps involved in the marke�ng research process are not always followed in a strictly sequen�al manner. Some�mes, informa�on acquired at one level of the process will require re- evalua�on.

Figure 3.5: The marke�ng research process

3.4 The Marketing Research Process The formal steps involved in the marke�ng research process are not intended to provide a one-size-fits-all recipe for designing effec�ve studies. The objec�ve of providing a step-by-step approach to the process is to impose a measure of discipline that will ensure an effec�ve and efficient design of the resul�ng study. The six-step model illustrated in Figure 3.5 is intended to answer three basic research ques�ons: What should we be inves�ga�ng? How should we design the study? What will the results reveal? This final ques�on is not intended to force a guess about the specific outcome of the research. Instead, it requires the researcher to be sure that the design of the study is intended to yield the informa�on required to answer the ques�on that was originally posed.

Define the Problem and Research Goals

The star�ng point for any systema�c approach to market research is to specifically define the managerial, market-related problem and translate that problem into a research ques�on. For example, a brand manager for a company that sells dessert toppings may be considering the launch of a line of reduced-calorie toppings. The related research ques�ons might pertain to measures of an�cipated consumer interest or product acceptance.

To provide the best possible guidance for the design of the study, research problems should be defined as narrowly and specifically as possible. If the problem is poorly defined at the outset or the ini�al specifica�on is too vague, the �me expense and direct costs associated with the study will be wasted. A good working defini�on of the research problem to be inves�gated should start with an understanding of the market-related ques�on facing the firm. If the marke�ng manager is not directly overseeing the process, the research director must have a clear understanding of why the informa�on is important and how it will be used. This should enable an accurate transla�on of the problem under inves�ga�on into specific and measurable research objec�ves and metrics.

The defini�on of the problem in this ini�al step is combined with the iden�fica�on of goals simply because the two cannot be fully understood independent of each other. The intent of the research is to provide the informa�on necessary to solve the problem under considera�on. The objec�ves or goals, once understood, determine how the study must be designed to provide the informa�on required to solve the problem.

Specify the Research Design

The ini�al decisions on how the research study should be designed and structured must reflect the nature of the research ques�on being posed. Three classifica�ons are used to iden�fy different types of research designs based on the objec�ves of the research.

Exploratory research collects informa�on about a problem under inves�ga�on in a loosely organized, unstructured, and informal manner. It is o�en used as a form of preliminary research to help define the underlying market-related problem more clearly and specifically. Qualita�ve techniques such as focus groups and depth interviews are rou�nely used for this purpose.

Descrip�ve research inves�gates the research ques�on using methodologies that describe the level or metrics associated with market-related variables. In contrast to purely exploratory research, descrip�ve studies begin with a well-defined research problem. In fact, the researchers need to know the who, what, when, where, why, and how elements of the plan before undertaking any descrip�ve studies. The final product of descrip�ve research is a snapshot of the relevant market based on the characteris�cs selected for study.

Causal research studies examine the nature of cause-and-effect rela�onships between marke�ng variables. The se�ng for causal research studies can be either in the field (e.g., test markets) or in controlled se�ngs such as focus group facili�es or laboratories.

Identify the Information Source by Type

Informa�on that is gathered in response to a par�cular research ques�on is termed primary data. Primary data can be obtained from customers through personal interviews, surveys, or passive observa�on of their behavior. Gathering data through the direct observa�on of customers has several disadvantages over other techniques. It is unable to provide data on indiscernible personal traits such as beliefs, a�tudes, awareness, and mo�va�on. Personal interviews and surveys can typically sample many more people much more quickly. Asking subjects to provide informa�on about themselves, however, also has its limita�ons. Poten�al respondents may decline to par�cipate in the process, or their responses may be inaccurate. It is also possible that the willingness of some people to par�cipate while others refuse can produce biased results based on the composi�on of the compliant sample.

Secondary data is informa�on that has been collected prior to the study for unrelated purposes. Secondary data may be informa�on that is internal to the firm (e.g., sales records) or external (e.g., census data). External secondary data may be either published data or syndicated, commercially available data. Government agencies such as the Bureau of Labor Sta�s�cs and the Census Bureau rou�nely collect and disseminate a great deal of informa�on that is of significant value to marke�ng managers.

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At the Kroger tas�ng center, customers par�cipate in a research study by tas�ng cookie samples and comple�ng a ques�onnaire with feedback. From this feedback, the company will adjust its recipe.

Associated Press

Secondary data have some advantages over primary data. It is already available and rela�vely inexpensive to acquire in contrast to the costs associated with obtaining comparable primary data. The principal disadvantage is that the available data may not accurately address the specific research problem. Consequently, secondary data is o�en used as a supplement to the primary data collected for the specific ques�on under inves�ga�on.

Develop a Sampling Plan

The sampling plan refers to those elements of the research design used to select subjects from the research popula�on of interest. The objec�ve is to iden�fy a subset of persons who will reliably represent the whole popula�on. This principle is clearly evident when public opinion pollsters are conduc�ng surveys prior to an elec�on. A small but well chosen sample of the electorate can be used to accurately project the results for the whole popula�on of voters.

Although there are sta�s�cal methods of determining the minimum sample size for any given study, larger samples will yield more reliable results. Consequently, designers must weigh the incremental cost of including more than the minimum number of subjects in the sample against the offse�ng improvement in the sta�s�cal accuracy of the results.

Collect and Analyze the Data

The method of data collec�on is necessarily dependent on the overall research plan. It requires gathering informa�on about customers, compe�tors, and markets by means of a broad range of techniques. Primary data can be collected through test market trials, in-home product tes�ng, focus groups, consumer panels, and surveys. Survey data can be collected in face-to-face mee�ngs, over the telephone, or online. Inaccuracies or errors in the data can result from flaws in the process of collec�ng the informa�on. When using ques�onnaires, for example, the ques�ons must be communicated clearly and free from the use of biased wording.

The process of data analysis usually begins with entering data into files for ini�al review and screening. If data need to be coded or mathema�cally transformed for subsequent analysis, it is usually done at this ini�al stage of the process. Descrip�ve sta�s�cs (e.g., frequencies, means) are created to inspect the data for obvious errors and missing values. Once the data set has been cleaned, sta�s�cal so�ware is used to analyze the results of the study.

Present the Findings

The presenta�on of findings can be done in either a formal or informal format. In each instance, however, a wri�en summary of the study’s results is prepared. Presenta�ons by professional market research firms are typically more formal than those given by an in-house market research staff. Of primary importance in either se�ng is the clear communica�on of the results in a manner that addresses both the specified research objec�ves and the ini�al managerial ques�on that prompted the study. Wri�en reports typically contain an execu�ve summary, a statement of the research objec�ves, an explana�on of the methodology employed, an overview of the sta�s�cal results, interpreta�on of the findings, and the authors’ final recommenda�ons.

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Ch. 3 Conclusion As stated at the outset, one of the most important roles of market research is to provide informa�on that will reduce the uncertainty and risk confron�ng the firm. Consequently, the value of research is greatest when market condi�ons are most vola�le and least certain. The intensity of head-to-head compe��on and instability of consumer preferences are two factors that increase the value of current, reliable market research. However, the rela�ve importance, role, and scope of market research will necessarily differ from one organiza�on to the next.

Organiza�ons that embrace the marke�ng concept recognize that effec�ve market research possesses the poten�al to improve customer sa�sfac�on and brand loyalty. In fact, it is o�en said that market research is the listening part of the dialogue between buyers and sellers that is the process of marke�ng. It is certainly one of the most important means by which organiza�ons can learn about customers' wants, needs, and preferences.

For the most part, marke�ng managers need to understand the essen�al elements of the process well enough to be good clients. First and foremost, this means knowing how to work with professional researchers to assist in the meaningful transla�on of marke�ng problems into research ques�ons. The second most important role of marke�ng managers as consumers of research is to be cri�cal customers. More than the professionals who execute the research studies, managers must recognize that research results are only of value when the informa�on collected is relevant and specific to the challenges facing the organiza�on.

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Ch. 3 Learning Resources

Key Ideas

Cri�cal Thinking Ques�ons

1. It is both logical and readily evident from experience that be�er informa�on leads to be�er decision making. However, most managers rou�nely must make important decisions with far less informa�on than they would like to have. What are the primary reasons for this informa�on gap?

2. Does the pursuit of customer sa�sfac�on drive all market research decisions? If there are excep�ons, what is the ra�onale for making them? 3. Both value and customer sa�sfac�on are subjec�vely experienced. How does this reality limit the u�lity and worth of market research? 4. The chapter argues that growth is an essen�al strategic goal. Is this absolutely true in every circumstance? Can growth take on different meanings depending on the

situa�on facing the firm? 5. It is claimed that the Ansoff Product/Market Opportunity Matrix is exhaus�ve in terms of iden�fying all the possible sources for new growth strategy op�ons. Do

the four product/market combina�ons really cover every possible op�on? 6. The Ansoff matrix iden�fies market penetra�on as a growth strategy. Can this really be considered a new growth strategy or is it just business as usual? 7. Which would be a more expensive strategy to pursue in most situa�ons: market development or product development? Why? 8. The Bayer aspirin products example illustrates both market development and product development strategies in ac�on. Select a service-oriented company with

which you are familiar. How could you apply these two strategies to that organiza�on? 9. Does SWOT analysis work be�er in some situa�ons than others? If so, why? What are the condi�ons under which it is difficult to use?

10. Some managers simply don’t regard SWOT as a serious form of analy�cal tool. Instead, they regard it as only a brainstorming exercise. Can it be valuable as a brainstorming device? Can it be used in both ways to explore the same situa�on or opportunity? What do you miss out on by viewing it only one way and not the other?

11. Marke�ng managers respond to complex and vola�le environments with a limited set of tools over which they exercise direct control. These include the marke�ng mix variables and managers’ discre�on to iden�fy segments and select target markets. Are there circumstances in which companies can exert direct influence over the character of the markets in which they compete?

12. The process of environmental scanning is a more challenging task in some markets and industries than others. Why? Are foreign markets more difficult to track than domes�c markets?

13. When using the PESTEL approach to environmental scanning, some considera�ons could fit into more than one of the six categories. Iden�fy some of these and explain why they tend to span boundaries. Is this likely to be a problem when using this technique?

14. Some of the six macro-environmental variables iden�fied in PESTEL analysis can appear as the source of opportuni�es and threats in SWOT analysis. Provide examples.

15. In PESTEL analysis, social factors o�en represent the most cri�cal concerns for marke�ng managers. Why? 16. Longitudinal studies require the collec�on of repeated observa�ons of the same variables over extended periods of �me. Provide three examples of marke�ng

phenomena that can be measured or evaluated only by conduc�ng longitudinal studies. 17. Under what circumstances would exploratory research be the endpoint of a research study rather than a stepping stone to defining the real underlying marke�ng

problem more clearly? 18. Descrip�ve research describes levels associated with specific market-related variables. It is intended to give managers a snapshot of some aspect of the market in

which they compete. Give three examples of common types of descrip�ve research. 19. Causal research studies examine the nature of cause-and-effect rela�onships between marke�ng variables. Why aren’t all market research studies designed to

demonstrate cause-and-effect rela�onships? Are other types of studies conceptually inferior because they do something less than this?

Key Terms

Click on each key term to see the defini�on.

SLIDE 1 OF 15

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Ansoff Product/Market Opportunity Matrix (h�p://content.thuzelearning.com/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12

A model to assist in the process of iden�fying new growth strategy op�ons. It recognizes new product- and market-related opportuni�es as origina�ng from one of four alterna�ve strategies: market penetra�on, market development, product development strategy, and diversifica�on.

causal research (h�p://content.thuzelearning.com/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12

Studies that inves�gate cause-and-effect rela�onships between marke�ng variables.

confirmatory analysis (h�p://content.thuzelearning.com/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12

Inves�ga�ons seeking valida�on or confirma�on for a specific new product or service proposal.

descrip�ve research (h�p://content.thuzelearning.com/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12

Studies using methodologies that describe the level or metrics associated with market-related variables. The final product of descrip�ve research is a snapshot of the relevant market based on the characteris�cs selected for study.

diversifica�on growth strategy (h�p://content.thuzelearning.com/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12

A component of the Ansoff matrix that involves increasing sales by introducing new products into new markets.

environmental scanning (h�p://content.thuzelearning.com/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12

The process of systema�cally assessing how elements of the external environment will impact a business or market.

exploratory analysis (h�p://content.thuzelearning.com/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12

Open inves�ga�ons undertaken without any prior assump�ons about the validity or feasibility of the proposal under considera�on.

exploratory research (h�p://content.thuzelearning.com/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12

Studies that collect informa�on about a problem under inves�ga�on in a loosely organized, unstructured, and informal manner. They are o�en used as preliminary research to help define the underlying market-related problem more clearly and specifically.

longitudinal studies (h�p://content.thuzelearning.com/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12

These studies require the collec�on of repeated observa�ons of the same variables over extended periods of �me. They are also referred to as correla�onal studies when they are looking for sta�s�cal rela�onships between two or more marke�ng variables.

macro-environmental forces (h�p://content.thuzelearning.com/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12

Uncontrollable external variables that impact all firms within an industry (e.g., prevailing economic condi�ons, cultural trends).

market development strategy (h�p://content.thuzelearning.com/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12

A component of the Ansoff matrix that involves increasing sales by introducing exis�ng products into new markets.

market leadership (h�p://content.thuzelearning.com/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12

A company that holds the highest market share in a given product market.

market penetra�on strategy (h�p://content.thuzelearning.com/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12

A component of the Ansoff matrix that involves increasing sales of exis�ng products to current markets.

market research (h�p://content.thuzelearning.com/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12

4/1/2019 Print

https://content.ashford.edu/print/AUBUS620.12.1?sections=ch03,ch03introduction,sec3.1,sec3.2,sec3.3,sec3.4,ch03conclusion,ch03_eoc&content… 19/20

The systema�c gathering, recording, and analyzing of data with respect to a par�cular market, where market refers to a specific customer group in a specific geographic area.

marke�ng research process (h�p://content.thuzelearning.com/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12

A mul�step procedure designed to answer three research ques�ons: What should we be inves�ga�ng? How should we design the study? What will the results reveal?

matching (h�p://content.thuzelearning.com/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12

The process of aligning the strengths of the firm with new opportuni�es while pursuing ways to mi�gate poten�al threats and company-specific weaknesses.

micro-environmental forces (h�p://content.thuzelearning.com/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12

Uncontrollable external variables that selec�vely and discretely influence each firm uniquely and independently (e.g., behavior of a company’s suppliers and customers).

PESTEL analysis (h�p://content.thuzelearning.com/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12

An environmental scanning approach that examines six classes of external environmental factors: poli�cal, economic, social, technological, environmental, and legal.

primary data (h�p://content.thuzelearning.com/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12

Informa�on that is gathered specifically in response to a par�cular research ques�on.

product development strategy (h�p://content.thuzelearning.com/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12

A component of the Ansoff matrix that involves increasing sales by introducing new products into current markets.

sampling plan (h�p://content.thuzelearning.com/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12

Dimensions of the research design used to select subjects from the research popula�on of interest.

secondary data (h�p://content.thuzelearning.com/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12

Informa�on that has been collected prior to a study for unrelated purposes.

SWOT analysis (h�p://content.thuzelearning.com/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12.1/sec�ons/front_ma�er/books/AUBUS620.12

A strategic planning technique used to inves�gate how internal, company-specific factors and external environment impact the feasibility of new marke�ng ventures. SWOT is an acronym for strengths, weaknesses, opportuni�es, and threats.

Web Resources

This site provides free access to white papers and ar�cles on a wide range marke�ng research techniques. Ar�cles were wri�en by market research professionals to illustrate best prac�ces. h�p://www.decisionanalyst.com/Ar�ndex.dai (h�p://www.decisionanalyst.com/Ar�ndex.dai)

A prac�cal site that provides users with a set of organized procedures to research a company or industry. Links to useful resource and data sites are also provided. h�p://www.virtualpet.com/industry/howto/search.htm (h�p://www.virtualpet.com/industry/howto/search.htm)

This site is designed to provide entrepreneurs with guidance on how to inves�gate and analyze both poten�al customers and compe�tors. It includes a checklist of readily available data sources as well as informa�on on market research methodologies. h�p://edwardlowe.org (h�p://edwardlowe.org)

This website provides a thorough presenta�on on many important aspects of SWOT analysis. It includes useful tools, templates, and worksheets as well as several examples of the technique. Other links on the site include comparable levels of informa�on on the applica�on of the PESTEL analysis methodology. h�p://rapidbi.com/swotanalysis/ (h�p://rapidbi.com/swotanalysis/)

This site provides a concise, yet sophis�cated, introduc�on to the applica�on of the Ansoff Matrix model as a tool for strategic planning. h�p://www.mindtools.com/pages/ar�cle/newTMC_90.htm (h�p://www.mindtools.com/pages/ar�cle/newTMC_90.htm)

4/1/2019 Print

https://content.ashford.edu/print/AUBUS620.12.1?sections=ch03,ch03introduction,sec3.1,sec3.2,sec3.3,sec3.4,ch03conclusion,ch03_eoc&content… 20/20

This site also provides a good introduc�on to the prac�cal applica�on of the Ansoff Matrix, including current examples for each of the four alterna�ve growth strategies. h�p://www.soopertutorials.com/business/marke�ng/1787-intensive-growth-strategies-ansoffs-product-market-expansion-grid-2.html (h�p://www.soopertutorials.com/business/marke�ng/1787-intensive-growth-strategies-ansoffs-product-market-expansion-grid-2.html)