L3A-MARKET SEGMENTATION
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PeterPreface14e_PPT_Ch02.pptxChapter 2 Marketing Research: Process and Systems for Decision Making
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14 e
Marketing Research
Process by which information about environment is generated, analyzed, and interpreted
Aids decision making and is not a substitute for it
Reduces risks associated with managing marketing strategies
Vital for investigating the effects of various marketing strategies after implementation
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Figure 2.1 - The Five Ps of the Research Process
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Purpose of the Research
Determines why research is needed and what it is to accomplish
By the end of this stage managers and researchers should agree on:
Current situation involving the problem to be researched
Nature of the problem
Anything specific the research is designed to investigate
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Plan of the Research
Details the nature of the research including:
Explanation of sample design and measures
Analysis techniques to be used
Critical issues are whether:
Primary or secondary data are needed
Qualitative or quantitative data are needed
Company will conduct its own research or contract with a marketing research specialist
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Primary versus Secondary Data
Primary data: Collected specifically for the research problem under investigation
Secondary data: Previously collected data that could be used for the problem at hand
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Figure 2.2 - Common Types of Information Available in a Secondary Data Search
Source: Joseph F. Hair, Jr., Mary Wolfinbarger Celsi, David J. Ortinau, and Robert P. Bush, Essentials of Marketing Research, 3rd ed. (Burr Ridge, IL: McGraw-Hill Education, 2013), p. 53
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Qualitative Research
Involves face-to-face interviews with respondents
Designed to develop a better understanding of what they think and feel concerning a research topic
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Types of Qualitative Research
Focus groups: Involve discussions among a small number of consumers led by an interviewer
Designed to generate insights and ideas about products and brands
Long interviews: Conducted by an interviewer with a single respondent for several hours
Designed to find out how individuals perceive products and are influenced by them
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Quantitative Research
Involves systematic procedures designed to obtain and analyze numerical data
Types
Observational research: Involves watching people and recording relevant facts and behaviors
Survey research: Involves the collection of data by means of a questionnaire
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Quantitative Research
Experimental research: Involves manipulating one variable and examining its impact on other variables
Mathematical modeling: Involves developing equations to model relationships among variables
Investigates the impact of various strategies and tactics on sales and brand choices
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Comparison of Data Collection Methods Used in Marketing Research
| Method | Advantages | Disadvantages |
| Focus groups | Depth of information collected Flexibility in use Relatively low cost Data collected quickly | Requires expert moderator Questions of group size and acquaintanceships of participants Potential for bias from moderator Small sample size |
| Mail surveys | Cost-effective per completed response Broad geographic dispersion Ease of administration Data collected quickly | Refusal and contact problems with certain segments Limited depth of response Difficult to estimate nonresponse biases Resistance and bias in collecting income, financial data Lack of control following mailing |
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Comparison of Data Collection Methods Used in Marketing Research
| Method | Advantages | Disadvantages |
| Telephone surveys | Centralized control of data collection More cost-effective than personal interviews Data collected quickly | Resistance in collecting income, financial data Limited depth of response Disproportionate coverage of low-income segments Abuse of phone by solicitors Perceived intrusiveness |
| Personal (in-depth) interviews | More depth of response than telephone interviews Generate substantial number of ideas compared with group methods | Easy to transmit biasing cues Not-at-homes Broad coverage often infeasible Cost per contact high Data collection time may be excessive |
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Comparison of Data Collection Methods Used in Marketing Research
| Method | Advantages | Disadvantages |
| Projective techniques | Useful in word association tests of new brand names Less threatening to respondents for sensitive topics Can identify important motives underlying choices | Require trained interviewers Cost per interview high |
| Mall intercepts | Flexibility in collecting data, answering questions, probing respondents Data collected quickly Excellent for concept tests, copy evaluations, other visuals Fairly high response rates | Limited time Sample composition or representativeness is suspect Costs depend on incidence rates Interviewer supervision difficult |
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Comparison of Data Collection Methods Used in Marketing Research
| Method | Advantages | Disadvantages |
| Internet surveys | Inexpensive, quickly executed Visual stimuli can be evaluated Real-time data processing possible Can be answered at convenience of respondent | Responses must be checked for duplication, bogus responses Respondent self-selection bias Limited ability to qualify respondents and confirm responses Difficulty in generating sample frames for probability sampling |
| Observation | Can collect sensitive data Accuracy of measuring overt behaviors Different perspective than survey self-reports Useful in studies of cross-cultural differences | Appropriate only for frequently occurring behaviors Unable to assess opinions of attitudes causing behaviors May be expensive in data-collection-time costs |
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Company versus Contract Research
Many marketing research firms, advertising agencies, and consulting companies do marketing research on a contract basis
Considerations
Schedules for task completion
Exact responsibilities of all involved parties
Cost
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Performance of Research
Preparing for data collection and actually collecting them
Depends on:
Type of research selected
Type of data needed
Cardinal rule - Obtain and record the maximal amount of useful information subject to the constraints of time, money, and respondent privacy
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Processing of Research Data
Preparation of data for analysis and their actual analysis
Includes editing and structuring data, and coding them for analysis
Analysis techniques depend on:
Nature of the research question
Design of the research
Interpreting and assessing the research results is critical
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Preparation of Research Report
Research report - Complete statement of everything done in a research project
Write-up of all stages
Strategic recommendations from the research
Limitations of the research
Clear and unambiguous report with respect to what was done and recommended
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Figure 2.4 - Eight Criteria for Evaluating Marketing Research Reports
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Limitations of the Research Process
Test marketing: Measures new product sales on a limited basis
Competitive retaliation and other factors are allowed to operate freely
Future sales potential can be estimated
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Limitations of Test Marketing Study Results
Test market areas are not representative of the market
Sample size and design are incorrectly formulated
Pretest measurements of competitive brand sales are not made or are inaccurate
Test scores do not give complete support to the study
Test market products are advertised or promoted beyond a profitable level
Effects of factors that influence sales are ignored in the research
Test-market period is short to determine whether the product will be repurchased
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Marketing Information Systems
Marketing decision support system - Coordinated collection of data, tools, and techniques involving both computer hardware and software
Popular form of marketing information system
Used to gather and interpret relevant information for decision making
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Marketing Decision Support Systems: Requirements
Database management software
Sorts and retrieves data from internal and external sources
Model base management software
Contains routines for manipulating data
Dialog system
Permits marketers to explore databases and use models to produce information
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Marketing Decision Support Systems: Design
Design handles information from both internal and external sources
Internal information - Sales records, inventory data, or expenditure data
External information - Changes in environment that could influence marketing strategies
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