MKT 421 Week 2 (12 slides excluding first and reference slide)

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Solving the Problem: Five-Step Marketing Research Approach Presentation

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MKT/ 421

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Instructor

Introduction

A a local nonprofit charity has noticed a severe drop in new memberships as well as a decline in repeat membership. Because memberships are the primary source of the foundation’s funding, the decrease in both areas threatens the organization's ability to survive and grow. Therefore, management has decided to implement the five-step marketing approach to increase their understanding of the problem and find possible solutions. To be successful, the research must determine the problem, set research objectives, decide what data is needed, and then choose a method for obtaining the information. After compiling and analyzing the results, the marketing manager can then suggest changes that may optimize the chances of the charity’s future survival and growth.

(University of Phoenix, 2017)

Define the problem and set objectives

Decide what data is needed

Choose a research method

Make recommendations based on the results

Utilize the Five-Step Marketing Research approach

FIVE-STEP MARKETING RESEARCH

The above graphic depicts the five-step marketing approach as a series of steps. As new information or data becomes available, the researcher may go back to previous steps and repeat them. This circular process allows firms to refine the scope and quality of the potential solutions. Additionally, the five-step process may employ multiple data collection methods that include surveys, focus groups, one on one interviews, interception interviews, observation, or a combination of any of these methods or other techniques (Kerin & Hartley, 2017).

The Importance Of Marketing Research

Market research definition

Keeps business focused

Reduces risks

Enables managers to be future oriented & relevant

Permits business growth opportunities

Knowledge is power. And in the modern global market, marketing research is not just helpful; it is essential to be successful. (Fletcher, 2013). Marketing research provides knowledge to industries by alerting them to their strengths, weaknesses, opportunities, and threats by providing detailed information about their market, their product, their audience, the competition, and possible opportunities and threats (Kerin & Hartley, 2017). According to Kerin & Hartley (2017), "Marketing Research is the process of defining a marketing problem and opportunity, systematically collecting and analyzing information, and recommending actions" (p. 206). These processes can improve a firms decision-making capabilities and reduce their level of risk. Such an analysis is important because it keeps the business focused on activities that fulfill their customer value proposition, fostering an increased level of relationship marketing. When companies are acutely attuned to the needs and demands of their clients, they can respond to changes in trends and customer preferences in a timelier fashion. Such detailed input may also allow them to be the first to pursue new growth opportunities. As a result, the company and its products remain relevant and future-oriented and continue to provide added value to their existing and potential customers.

Defining the problem involves three parts

Identifying the problem.

Defining research objectives.

Developing measures of success.

1st Step: Defining the Problem

Per Kerin & Hartley (2017), the first step in the five-step marketing research approach is "defining the problem" (p. 207). Although this step sounds simple, according to Kerin & Hartley (2017), it can actually be a difficult task for marketing researchers. Difficulties arise because what is perceived as the problem may actually turn out to be just a symptom of the problem. For example, the non-profit charity has noticed a decline in memberships. This means a reduction in membership fees is not the problem, it is the symptom of another issue. The decline in income could be the result of an economic recession, employee theft, excessive expenditures, changes in customer preferences, a new competitor, or poor service. It could also be a combination of any of these variables, or it could not be related to any of them at all. Identifying the problem and formulating the research objectives can be quite challenging. The research objectives must be specific enough to gather the correct inputs, but broad enough to encompass all possible contingences. Additionally, these goals must relate to a specific measure of success and be quantifiable. A plan to increase memberships by 25% within the next six months is a better measure of effective implementation than a goal simply to increase the number of members.

2nd Step: Develop the Research Plan

Specify the constraints on the marketing research activity.

Identify the data needed for marketing actions.

Determine how to collect the data.

According to Kerin & Hartley (2017), “The second step in the marketing research process requires that the researcher (1) specify the constraints on the marketing research activity, (2) identify the data needed for marketing actions, and (3) determine how to collect the data” (p. 208). Most facilities do not have unlimited funds or time available to do research. Therefore, the marketing strategy should strive to gather the required information in the most expedient and cost-efficient manner. For example, the charity needs data about customer preferences. This information may include the types of clubs people join, the age of the members, the activities provided, and the level of loyalty to the charity. Each question would strive to discern what is causing the decrease in memberships.

Information about the average age or current and previous members can be obtained from the charities historical data. However, to get information about current preferences and trends, while remaining cost efficient, the marketing manager should conduct surveys, questionnaires, or interviews with current and past members, to address potential problems. The survey or questionnaire can then be distributed by mail, through emails, or on the website of the charity. Each of these methods allows the company to attempt to understand the values of their customers, understanding the cause of the problem, and minimizes the operational costs, making them all viable options for collecting the information that the charity requires.

3rd Step: Collect Relevant Information

The third step involves collecting relevant information. Per Kerin & Hartley (2017), this “includes considering pertinent secondary data (both internal and external) and primary data (by observing and questioning consumers) as well as using information technology and data mining to trigger marketing actions” (p. 229).

To ensure that the marketing research is as cost-effective as possible, the marketing manager should obtain as much of the information as possible from secondary sources. Such items, can provide information about the age of the current and past members and compare this data to the information from previous years. However, these sources will not inform the management team about changes in customers preferences and perceptions. Therefore, primary data will also need to be collected and compiled. By utilizing a combination of secondary and primary information, the charity can obtain an in-depth view of the changes that have occurred and will obtain verifiable quantitative and qualitative information.

Personal stories from the customers also allows consumers to relate the emotional attachment and loyalty that they once had for the company and the things that have altered these perceptions. This information will help to define the expectations, desires and wants of the consumer. Although each of these data types has advantages and disadvantage, when they are utilized together they tend to provide an accurate assessment of the current market conditions.

4th Step: Develop Findings

The fourth step is to develop findings from the marketing research data collected, including analyzing the data and presenting the findings of the research (Kerin & Hartley, 2017). The massive amounts of data obtained in the previous steps have little value unless they are organized into meaningful information and findings. These results should represent the facts, and not be biased or twisted to conform to the preconceived notions of the researchers. Once the data is sorted, checked for accuracy and correlated, then the findings should be organized into a clear and concise presentation. Managers are responsible for actions, and strong marketing decisions must be based on a clear and precise comprehension of the current market conditions and factors (Kerin & Hartley, 2017). Once the marketing manager for the nonprofit organization receives and correlates the results of the surveys and other data, a pattern of preferences and behaviors may begin to emerge. These trends will showcase the real problem for the team and allow management to formulate knowledgeable and informed plans for the future of the nonprofit organization.

Analyze the data

Present the Findings

5th Step: Solving the Problem

The fifth and last step is to take marketing actions by implementing the action recommendations and then evaluating the results (Kerin & Hartley, 2017).

The company can now formulate marketing campaigns and advertising that attempts to target specific segments of their target audience using the results generated by the five-step marketing approach. For example, the charity might choose to implement advertising that focuses on recent changes in the services and products available that would entice new and younger members to join.

The more mature-age members might respond better to campaigns that reiterate things such as how the charity is still providing for the needs of the community. However, unless these changes are specific to the preferences of the consumer and increase the value and benefits that the customers perceive, there will be little change. The newly acquired data in regards to the community and the potential members must be utilized in a manner that will differentiate this charity from similar clubs in the area.

Systematic analysis does not guarantee that all marketing decisions will produce optimal results (Kerin & Hartley, 2017). However, if the management team continues to monitor the implementation, and assess the decisions that were made as well as the decision making process, they will be able to detect and respond to changes in a more timely manner and they may someday be able to position themselves as the market leader for this type of service and products.

Make Action Recommendations

Implement the Action Recommendations

Evaluate the Results

Two Types of Research Data

Facts and figures that have already been recorded prior to the project at hand.

Advantages

Time savings

Low cost

Greater level of detail

Disadvantages

May be out of date

The definitions or categories might not be quite right for a researcher’s project.

May not be specific enough.

Secondary

Data

As defined by Kerin & Hartley (2017), “Secondary data are facts and figures that have already been recorded prior to the project at hand’ (p. 210). Secondary data of the nonprofit charity would include the historical data and external data such as population figures, unemployment rates, and the current rate of economic growth.

Secondary data offers the advantages of time savings, low cost, and greater levels of detail. However, because secondary data has been recorded prior to the project, this information may be out of date, consist of categories and definitions that do not conform to the needs of the research, or may not be precise enough to the project (Kerin & Hartley, 2017). Although secondary data provides an excellent starting point, it may not precisely address the current market trends or customer preferences, and in most cases, it must be supplemented with some form of primary data.

Two Types of Research Data

Facts and figures that are newly collected for the project by observing people and asking them questions.

Advantages

Flexible

Specific.

Disadvantages

Costly

Time-consuming.

Primary

Data

Primary data is the second type of research data, and consists of facts and figures that are collected to fulfill the research objectives of the current marketing research (Kerin & Hartley, 2017). Primary data can be obtained through methods such as observing people and asking them questions, or by conducting a survey, experiments, mechanical observation, simulations, focus groups, interviews, or case studies (Kerin & Hartley, 2017).

The advantage of primary data is that it is more flexible and it is tailored to the specific needs of the project (Kerin & Hartley, 2017). Primary data provides both quantitative and qualitative information. Therefore, primary data not only provides the numbers needed for the research, it also provides the emotions and logic behind the actions to give more detail and help to determine the why, when and how of a situation. The disadvantage of primary data is that it is more costly and time-consuming to obtain (Kerin & Hartley, 2017).

Including a mix of primary, secondary, quantitative, and qualitative data will allow the researcher to obtain an in-depth knowledge of each variable at play.

Two Alternative Methods

In the case of the nonprofit charity, the marketing manager chose to utilize the five-step marketing approach. Other techniques are available for conducting marketing research such as personal observation and online surveys.

Personal observation is a form of qualitative research that offers flexibility and provides the researcher with high levels of usable data, however, obtaining data this way can be costly (Kerin & Hartley, 2017). Another fault with this method is that it reveals what people do and does not offer insight as to why they do it (Kerin & Hartley, 2017).

A second research method is online surveys, a form of qualitative research. The advantage of this approach is that the cost is minimal and the turnaround time is much quicker (Kerin & Hartley, 2017). The disadvantage is that email or online surveys may be blocked by “spam” or “pop-up blockers”, causing a significant portion of the desired demographic to not be able to participate, and those who do complete the survey may be able to do so numerous times, causing the results to be unreliable and biased (Kerin & Hartley, 2017).

Personal observation (Qualitative)

Surveys (email and Internet)(Quantitative)

Useful and flexible

Can be costly and unreliable

Can reveal what people do, it cannot easily determine why they do it.

Low cost and quicker turnaround time

“Spam blockers” delete them, unopened.

“Pop-up blocker” prohibits a browser from opening

Consumers can complete the survey multiple times

Comparing Alternative Approaches to the Five-Step Approach

The five-step marketing approach uses quantitative, qualitative, primary and secondary data through multiple data collection methods such as surveys, focus groups, one on one interviews, telephone surveys, interception interviews, observation, or a combination of these and other techniques. Using multiple methods by the five-step approach tend to be more reliable than those achieved by only utilizing one type of data or one method of inquiry. Of course, using multiple steps does make the Five-Step Approach more time intensive and costly.

Five-Step Marketing Approach is

Tends to produce more reliable and accurate results

Logical progression to determine and analyze the components of a problem

Repetitive: new information can be considered as it becomes available

May show cause and effect relationships

Utilizes multiple data collection methods

What it means to differentiate a service

After obtaining accurate data and information about the current market and trends, developing marketing strategies that will differentiate the charity from their competitors is the next step. Differentiation involves using different marketing mix actions, such as product features and advertising, to help consumers perceive the product or service as being different and better than the competition (Kerin & Hartley, 2017).

Efficient differentiation requires the charity to find a balance between satisfying the wants and demands of the customer and achieving productive and profitable operations, thus creating organizational synergy (Kerin & Hartley, 2017). As a result, increased customer value is achieved by performing corporate functions more efficiently. However, increased organizational effectiveness and customer value are only one part of the equation. The charity must still implement advertising and other actions that showcase their superiority in the marketplace and entice current and future members to continue to invest in their cause. The process can start by changing the entire plan to promote a successful membership rate by combining new ideas and incorporating them into the advertising of the charity to attract new members to the business.

Differentiation will Help Position the Organization

It is possible that there are other similar organizations within the community providing similar services. Differentiation will help to position the non-profit charity as a market leader by changing the customer’s preconceived perceptions of what a local non-profit charity does and offers (Kerin & Hartley, 2017). Due to the insight obtained through their Five-Step research approach, this charity is now acutely attuned to the needs and wants of their target audience, allowing them to focus on promoting their unique attributes which may include things like having the largest dance floor or offering free admissions to museums and zoos.

Research helps to discover what prospective customers want, allowing the non-profit to focus on those issues and increase the relationship marketing between the non-profit charity and their consumers (Kerin & Hartley, 2017). As a result, operations are more productive, there are minimal amounts of wasted time and money, the customer value increases, and the charity establishes a market advantage.

Changes the customer’s perception of the charity.

Increased customer value due to a more precise understanding of the customers wants and needs.

Increased organizational efficiency. Goals are aligned with the “true” needs of the customer. Less wasted money and resources.

Establishes a market advantage.

Conclusion

Five step marketing approach provides a logical system for analyzing a problem.

Increases relationship marketing.

Aligns the goals of the charity with the wants of the members.

Focuses on the company’s differences and unique offerings.

Positions the business for future success.

To avoid potential financial disaster, the non-profit charity utilized the five-step marketing approach to define the problem, collect data about the current market and customer preferences, analyze the information, and implement new strategies that would address the issues. By implementing the five-step marketing research approach, the non-profit charity was able to increase the value and benefits that consumers received and cultivate more efficient and productive operations. The charity was also able to differentiate itself from other similar businesses in the area and create increased value for both the company and the customers, avoiding disaster and increasing the charity’s potential for future success and increased growth.

References

Fletcher, B. (2013). Marketing Research Process: 5 Reasons to Prioritize Research. Retrieved from http://www.marketingprofs.com/opinions/2013/23874/five-reasons-why-market-research-matters-and-five-tips-for-using-it

Kerin, Roger A. & Hartley, Steven W. (2017). Marketing (13th ed.). New York, New York: McGraw-Hill

University of Phoenix. (2017). Solving the Problem: Five-Step Marketing Research Approach Presentation. Retrieved from University of Phoenix, MKT/421 website