Questions
qoxsi1000
document.pdf
Workbook1| 30/07/2015 careersaustralia.edu.au
1
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BSBMKG506
Plan market
research
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Contents
Introduction .................................................................................................... 4
1 Identify market research needs ...................................................................... 5
1.1 Communicate role of market research in enterprise operations to relevant
personnel ..................................................................................................... 5
1.2 Identify contribution of market research to enterprise activity ................ 7
1.3 Analyse enterprise planning and performance documentation to determine
research needs ............................................................................................. 9
1.4 Consult relevant personnel to determine research needs ..................... 12
1.4.1 Legal and Ethics ............................................................................. 12
1.5 Develop statement of market research needs ..................................... 16
2 Defining market research objectives ............................................................. 18
2.1 Draft research objectives ................................................................. 18
2.2 Undertake preliminary project scoping ............................................... 24
2.3 Consult with relevant personnel on draft research objectives to ensure
relevant and useful information is gathered .................................................... 27
2.4 Review and finalise draft objectives in light of scoping parameters ........ 29
3 Define data gathering approaches ................................................................ 30
3.1 Identify types of data required to inform objectives ............................ 30
3.1.1 Quantitative or qualitative ............................................................... 30
3.2 Determine combinations of types of data to best inform objectives ....... 31
3.3 Identify and evaluate suitable data gathering methods ........................ 32
3.3.1 Developing questions ...................................................................... 33
3.4 Identify data sources ...................................................................... 37
3.4.1 Validity and reliability ...................................................................... 37
3.5 Quantify required data .................................................................... 38
3.6 Identify and evaluate suitable data processing methods ...................... 41
3.6.1 Effective data sampling ................................................................... 41
3.6.2 Data processing and analysis ........................................................... 42
3.6.3 Methods of analysis ......................................................................... 43
3.7 Make decisions on data types, combinations, gathering methods, sources,
quantities and processing methods ................................................................ 43
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3.7.1 Developing conclusions .................................................................... 43
4 Develop market research plan ...................................................................... 45
4.1 Estimate resources and timelines required for market research projects 45
4.2 Determine feasibility of market research ............................................ 45
4.3 Prepare market research plan for approval ......................................... 46
4.4 Obtain approval to implement plan from appropriate personnel ............ 47
4.4.1 Consultation ................................................................................... 48
4.4.2 Marketing research report ................................................................ 48
Conclusion .................................................................................................... 49
Appendix A - Legislation in Australian business .................................................. 50
Appendix B: The marketing mix ....................................................................... 56
Appendix Project plan template ....................................................................... 74
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Introduction
Unit outline
This unit describes the performance outcomes, skills and knowledge required to plan
market research by identifying market research needs, defining market research
objectives, identifying data gathering approaches and developing a market research plan.
This unit applies to individuals in a non-market research organisation who conduct
market research planning at a managerial level. While market research planning can
be undertaken as part of a broader role, it does require a good general knowledge of
market research principles and practices, and a detailed understanding of the
organisation's operations, objectives and the application of market research.
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1 Identify market research needs
Market research should not be an academic exercise of assembled facts and figures.
Good market research entails finding out what actually drives a market – and how to
get the best out of it.
The market research process involves four important steps:
Step 1 Define the problem and the research objectives
Step 2 Develop the research plan for collecting information
Step 3 Implement the research plan – collect and analyse the data
Step 4 Interpret and report on the findings
1.1 Communicate role of market research in
enterprise operations to relevant
personnel
Making effective marketing decisions means managers need useful information
about, what they need to know, who they need to involve and other information on
areas that impact on the business:
Once you have identified your information and why you need to know this
information, how it can help you. It is important to communicate the role of market
research to the organisation.
Market research involves fully understanding what problem the business faces (or
question needs to be answered) and what the cost is of not pursuing the new idea,
product or service. Market research can save the organisation money by allowing
decisions to be more informed and calculating the risks of taking advantage of the
new initiative or idea, or of not taking it. Market research helps to avoid the case of
guessing what customers feel, believe or want.
Information about
•Customers
•Competitors
•Regulatory bodies
•External and internal environmental factors
•Technological developments
•Economic, social, political and regulatory environments
Stakeholders
•Clients
•Customers
•Enterprise/business owners
•Managers and supervisors
•Suppliers
Information on
•Industry best practice
•Competitors
•Future predictions and strategic directions
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Throughout this unit we will discuss the following two case studies:
Case study
Jenny’s cleaning business Massively Clean
Small cleaning business with growing
numbers of clients.
Franchise business providing all types of
domestic and commercial cleaning.
Jenny needs to communicate with her staff
and her customers to make sure they are
happy with her service, her prices and her
products.
How will she know this?
She can ask them? Ask her staff and other
people what they think of her service.
Massively Clean spends a great deal of
money on market research. They
understand how their competitors work and
run customer satisfaction surveys all the
time. Their CEO fully supports the
importance of research but needs to see
results for the cost of research and the time
commitment.
Jenny needs to involve the people who work
for her to help with the information
regarding feedback. Jenny may not see the
value in the gathering of information and
miss an opportunity to improve and grow
her business.
Constant monitoring of all marketing
activities is essential in business. Massively
Clean needs to monitor the feedback they
receive to be on the lookout for
opportunities to improve.
Why does market research help your business? It provides information and
knowledge and intelligence to inform all your marketing decisions. The true value in
the gaining of market information lies with the Customer Insights gained. That is;
the fresh understanding of the customer and market needs derived from this
information that leads to the creation of stronger creation of customer value and
therefore better customer relationships.
Example Imagine you are having a few people over for dinner and you really want
to impress them; two of them are vegetarians (the most important two,
the ones whose approval means the most to you) and you are preparing a
beautiful ‘Reef and Beef’ meal. The people that are the most valuable to
you are not going to be interested and feel neglected. By asking a few
questions prior to the dinner about dietary requirements you would have
known to prepare a beautiful vegetarian meal for them. This is market
research, finding out what the market wants so you can supply it to them.
Massively Clean specialises in Residential Cleaning but have been
considering entering the Commercial Cleaning market. Market research
would give them the information they need to develop an appropriate
strategy, however; initially it would give them the knowledge required
to judge if there was the market potential in the commercial sector to
support a new player, how long they’d expect to take to become viable
and if there were any ‘holes’ in current service delivery that would give
them greater potential for success.
Who you involve in this process depends on the organisation and its size.
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Jenny’s cleaning business is a small enterprise so you would most likely
only be involving Jenny in the market research communication and
planning. Who do you think you might need to include aside from the
CEO in Massively Clean? Marketing Manager? Accounts? Team Leaders
or Middle Managers? Why would you need to communicate with these
stakeholders?
How you communicate with your team will depend on the organisation size and how
the individual personnel need to be communicated with.
Example The CEO of Massively Clean may be very busy in meetings. He may like
to be emailed the meeting content first and his calendar booked for
more formal meetings, or he may be a very hands-on manager and
prefer to meet face to face informally to discuss issues. An option may
be to involve senior management team before approaching the CEO.
When determining the most appropriate communication method ask, and make a
plan that everyone is happy with and works for them and for the organisation.
1.2 Identify contribution of market research
to enterprise activity
We have already discussed the fact that marketing intelligence involves the collection
of information relating to:
Competitors
Technological developments
Customers
Internal personnel
Suppliers
Resellers
It involves the gathering of everyday information about developments in the marketing
environment, performing analyses on the information and then distributing it to the
managers who need it. But where does the information come from? Market research
relies on gathering information from within the business and from sources external to
business. What problems might be associated with relying on internal information only?
This could close off potential new ideas, what you competition is doing? What your
customers want and how their behaviour is changing? Business needs to consider both
internal and external information in their planning.
To demonstrate the benefit of market research to your organisation it is important to
identify the role it can play and how it can help you achieve your goals and the
direction for the whole business.
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Case study
Jenny’s cleaning business Massively Clean
Jenny has no real competition, she has as
much work as she can handle why does she
need to conduct market research?
There is a major competitor who is
developing a new loyalty system for their
customers. It is gaining popularity and
impacting on the business outcomes for
Massively Clean
What if someone else opens up in her area
and she is unaware of any dissatisfaction of
her customers?
What happens if Massively Clean is unaware
of this, or not interested?
In both of these cases the role of market research is vital and the contribution needs
to be identified in relation to the specific business.
Example Massively clean may wish to research how their customers feel their
competitor’s loyalty program could be improved and release their own
‘improved’ version.
Jenny’s cleaning may wish to gauge satisfaction of her customers, research
what improvements could be made such as quality of work, customer
service satisfaction levels or potential for new products or services.
Internal sources
Files paper or electronic - product, customer, supplier or team databases
Reports - Annual Reports, project reports, and sales reports
Intranet including industry news, processes, policies, procedures and
performance information
Internal sources also include talking to other staff within the organisation
External sources
Government departments or agencies such as Australian Bureau of Statistics
Peak bodies and representative associations - employer groups and trade unions
Various media including newspapers, magazines, trade journals, and internet
Libraries are also an excellent source of information
Areas to consider for your organisation:
The industry landscape – what does your business do and how do you fit into
the industry?
Competitor profiles – What do you need to know about your competitors?
Other information to help you make your predictions and test your theories.
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1.3 Analyse enterprise planning and
performance documentation to determine
research needs
Planning and performance documentation refers to organisation plans,
correspondence, financial reports, sales information, and other internal reports. What
information do we have that can be used to determine our market research needs?
What does your organisation aim to achieve through their operations? If the business
has an overall aim to achieve a particular level of profitability your market research
needs to reflect how it will be consistent with that aim. If another aim is to increase
the social impact of the organisation by sponsoring a charity or providing medical
research in the name of another cause, this will need to be considered in the
planning for research needs. Use this information when determining your research
needs.
Market research methodologies
The type of information you wish to gather or, indeed, the reasons for the gathering
of the information will influence the research methods you use. Budget can also have
a large influence on where you gather information and may limit you to more
fundamental processes to remain within budget. For example your budget may limit
your ability to outsource you data mining processes.
There are two types of data sources, Primary and Secondary and two different types
of information (data) that can be gathered; Quantitative or Qualitative.
When accessing information you will have to make judgements about whether particular
information is relevant to your research task. Does this source tell me more about my
topic? Have similar considerations been made when conducting previous research?
There are two broad types of information, primary and secondary.
Primary information
Provides factual reporting or accounts of the issue you are researching. It comes
from first- hand experience and has not yet been analysed or changed. Examples:
Records of conversation, Invoices, statements, signed contracts etc., Census data,
Minutes from meetings, Emails, faxes or letters, Diaries or diary notes.
Primary data refers to information gathered for a specific purpose. It consists of
information collected for a specific purpose and is collected via three main methods:
Surveys – gathering information by interviewing a number of people by using a
questionnaire by the researcher in person, by telephone, by mail, fax or online
Observation – collecting data by observing respondents’ actions
Organisation plans
Financial reports Sales
information Feedback and
correspondence
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Experimentation – gathering information by simulating the real market
situation for example focus groups – unstructured open ended questions or
field trials – trialling samples and following up with a questionnaire/survey
Secondary data information gathered previously for some other purpose. The
information already exists for example internal records and statistical analysis
conducted by the Australian Bureau of Statistics (ABS) at the time of the census. This
gathers information about every household in Australia. The next census is scheduled to
be run in 2016. Other statistical sources and research information are available from a
variety of sources depending on the information your organisation needs, there are
dozens of commercial research houses that sell data to subscribers for example.
Secondary information provide reflection, review and interpretation of information
after the events.
Textbooks and biographies
Correspondence - faxes, memos and emails that report on events or actions
Databases - library catalogues/reports using information from these
Sales records - monthly forecasts and targets achieved
Forms - insurance and membership forms
Invoices - from suppliers to debtors
Personnel records - personal details, salary rates and training needs
Correspondence - what do we already know from letters of support, of complaint?
Emails with information which is helpful to and provide support for your initiative or
reasons to not continue as originally planned.
Internal records - information gathered from sources within the company. The
benefit of using internal records is that they can usually be obtained quickly and can
help understand the historic, current and future direction of the business. Consider:
Financial statements, records of sales and orders, costs and cash flows
Reports on production schedules, stock movements and inventories including
storage and issues with logistics
Capabilities to do with production and supply
How does the new concept fit with the risk management of the organisation?
Reseller/customer reactions and competitor activities
Service quality levels and reported service difficulties
A database of customer demographics, psychographics and buying behaviour
Large organisations produce large amounts of information, keeping track of it all is
difficult. The information must be sorted and analysed well if it is to be of benefit.
How do we determine the research needs for an organisation? We have identified the
importance of being aware of changes that can impact on the business. What
information will help? What specific information and intelligence can inform our
research needs?
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Competitor’s performance is an important factor in research - understand:
Customer attitudes in relation to the competition, what are they?
Patterns of use of competitors products, are the competition selling more than
we are? Why?
The importance of identification of strengths and weaknesses of your
competition. This allows you to consider the direction we need to take to
safeguard our business
How aware are your customers of the market, innovation and changes?
Consumer research can help you as a business to:
Understand the profile of your customers
Identify changes in behaviour and buying patterns?
Understand the status of your customer, are they current, past or potential
Work with the marketing mix to understand attitudes to location, price
Developing detailed customer profiles (understanding and knowing the
consumer)
Identify changes in customer’s behaviours and attitudes
Identify customers who have not used products/services for some time
Identifying demand for products/services at other geographical locations
The marketing mix is referred to as the four Ps. These four areas impact on your
business and need for market research:
Marketing information systems consist of people, equipment and procedures to
gather, sort, analyse, evaluate and distribute needed, timely and accurate
information to marketing decision-makers.
What information do I really
need?
Too much information can be as harmful as too little.
Is this the right information to inform the decision I want
to make?
Price
•Attitudes towards prices by customers and the marketplace
•Testing other strategies
•Identify costs and alternative pricing strategies
Place
•Attitude to existing and new locations
•Opportunity to join others to distribute information
•Demand of your cusomters in your existing locations
Product
•Competitors products in comparison
•Customer attitudes to product, features, packaging, presentation
•Understand where the product is in the life cycle
Promotion
•How effective is advertsing currently running?
•What alternatives can be offered?
•Test and compare alternatives
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Is the information available? You may want to find out about competitor advertising
spending, but the information may not be in the public
domain
Are the benefits of having the
information worth the costs
of obtaining it?
The value of information comes from its use.
What impact will the information have on product and
brand profitability, and therefore, is the cost of obtaining it
justified?
1.4 Consult relevant personnel to determine
research needs
Once we have analysed our data and information to determine our research needs
we need to involve those personnel who:
Have an interest in the research and its outcomes
Who will be impacted by the research and outcomes
Who have a responsibility to manage the business
Who are involved in the process of running the business, setting goals and
achieving the overall direction the business wants to achieve
In larger organisations there may be entire departments dedicated to this process. In
smaller businesses there will be fewer people involved but their input is just as
important. Who would be relevant in your organisation?
Case study
Jenny’s cleaning business Massively Clean
Jenny needs to understand for herself and
her staff what needs to be done. What do
they need to understand in order to achieve
the overall goals?
Marketing managers, CEO’s, operational
managers and high level marketing
personnel will be involved in determining
the research needs for the organisation.
Jenny may need to work with an external
agency to achieve her market research
needs. Often small business needs support
in these specialist areas.
It is important that the results are
communicated through the organisation and
information gathered from staff and internal
customers. Don’t under estimate the
information your personnel can contribute.
When considering research needs and the personnel to assist with the process. It is
vital to seek advice regarding the legal and ethical responsibilities organisations have
in terms of gathering information for market research. As with all legislation there
are penalties for noncompliance and it is important for business people to be aware
of their legal and ethical responsibilities.
1.4.1 Legal and Ethics
Anti-Discrimination Legislation
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Over the past 30 years Commonwealth, state and territory governments have introduced
anti-discrimination law to protect people from discrimination and harassment.
The following laws operate at a federal level and the Australian Human Rights
Commission has statutory responsibilities under them:
Age Discrimination Act 2004
Australian Human Rights Commission Act 1986
Disability Discrimination Act 1992
Racial Discrimination Act 1975
Sex Discrimination Act 1984
Commonwealth laws and the state/territory laws generally cover the same grounds
and areas of discrimination. However, there are some 'gaps' in the protection that is
offered between different states and territories and at a Commonwealth level.
Privacy legislation Privacy Act 1988
The Privacy Act regulates 'information privacy'. The Information Privacy Principles
(IPPs) are the base line privacy standards which the Australian and ACT government
agencies need to comply with in relation to personal information kept in their
records. The National Privacy Principles (NPPs) are base line privacy standards which
some private sector organisations need to comply with in relation to personal
information they hold. All health service providers in the private sector need to
comply with these principles.
10 NPPs regulate how private sector organisations manage personal information. They
cover the collection, use and disclosure, and secure management of personal information.
They also allow individuals to access that information and have it corrected if it is wrong.
NPP 1:
Collection
Describes what an organisation should do when collecting personal
information, including what they can collect, collecting from third parties
and, generally, what they should tell individuals about the collection.
NPP 2: Use +
Disclosure
Outlines how organisations may use and disclose individuals' personal
information. If certain conditions are met, an organisation does not always
need an individual's consent to use and disclose personal information.
There are rules about direct marketing.
NPPs 3 + 4:
Info Quality
+ Security
An organisation must take steps to ensure the personal information it
holds is accurate and up-to-date, and is kept secure from unauthorised
use or access.
NPP 5:
Openness
An organisation must have a policy on how it manages personal
information, and make it available to anyone who asks for it.
NPP 6:
Access +
Correction
Gives individuals a general right of access to their personal information,
and the right to have that information corrected if it is inaccurate,
incomplete or out-of-date.
NPP 7:
Identifiers
Generally prevents an organisation from adopting an Australian
Government identifier for an individual (e.g. Medicare numbers) as its own.
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NPP 8:
Anonymity
Where possible, organisations must give individuals the opportunity to do
business with them without the individual having to identify themselves.
NPP 9:
Trans-border
Data Flows
Outlines how organisations should protect personal information that they
transfer outside Australia
NPP 10:
Sensitive
Information
Sensitive information includes information such as health, racial or ethnic
background, or criminal record. Higher standards apply to the handling of
sensitive information.
Source: http://www.privacy.gov.au
Australian Consumer Law (ACL)
Superseded the Trade Practices Act when it commenced in January 2011.
Since then, Australia has one national law for fair trading and consumer protection -
the Australian Consumer Law. This means Australian consumers and businesses have
the same rights and obligations wherever they are in Australia.
The ACL fulfils key reforms in the Council of Australian Government’s National
Partnership Agreement to Deliver a Seamless National Economy, and will help to
reduce regulatory complexity and duplication for businesses and consumers.
http://www.consumerlaw.gov.au/content/Content.aspx?doc=home.htm
The ACL includes a national:
Unfair contract terms law covering standard form consumer contracts
Law guaranteeing consumer rights when buying goods and services
Product safety law and enforcement system
Law for unsolicited consumer agreements covering door-to-door sales and
telephone sales
Simple national rules for lay-by agreements
New penalties, enforcement powers and consumer redress
Fair trading is covered by the main federal law, Competition and Consumer Act 2010
(CCA). It makes sure that trading is fair for your business and your customers.
The CCA covers most aspects of the marketplace: dealings with suppliers,
wholesalers, retailers, competitors and customers. It deals with unfair market
practices, industry codes of practice, mergers and acquisitions of companies, product
safety, collective bargaining, product labelling, price monitoring, and the regulation
of industries such as telecommunications, gas, electricity and airports.
The Australian Competition and Consumer Commission (ACCC) administers the CCA.
It promotes good business practices for a fair and efficient marketplace. Go to the
ACCC External Site website for information about federal competition, fair trading
and consumer protection laws.
http://www.business.gov.au/business-topics/selling-products-and-services/fair-
trading/Pages/fair-trading-laws.aspx
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Consumer protection is governed by state and territory laws (in the form of a Fair
Trading Act in most cases). Familiarise yourself with the laws in your region.
See your state or territory fair trading offices for advice on business rights and
obligations under fair trading laws. If you're unsure how fair trading laws apply to
your situation, think about seeking independent legal advice.
Codes of Conduct and Ethics
ACMA Australian eMarketing Code of Practice
The eMarketing Code of Practice has been developed to establish comprehensive
industry rules and guidelines for the sending of commercial electronic messages with
an Australian link in compliance with the Spam Act 2003.
The Code’s rules and guidelines provide practical and specific guidance in relation to
the sending of messages in the context of current eMarketing practices.
The Code also provides a framework by which industry can handle complaints about
spam as well as monitoring industry compliance. Source: www.acma.gov.au
ADMA Direct Marketing Code of Practice
Was developed to set standards of conduct for direct marketers, minimise the risk of
breaching legislation, promote a culture of best practice, serve as a benchmark in
settling disputes and increase business and consumer confidence in doing business
with ADMA members who are bound by the provisions of the Code.
The future expansion of direct marketing depends on the players conducting their
business in a fair, honest and ethical manner, both in dealings with other businesses
and consumers. Only by doing so can the reputation of the industry be enhanced so
that consumer demand continues to grow.
Source: http://www.adma.com.au/comply/code-of-practice/
Research ethical considerations
Harm – will proposed research harm participants -physically, mentally, socially
Free choice – do participants have free choice to participate or stop participating?
Informed consent – have participants been fully informed of their requirements
before agreeing to participate?
Plagiarism – have the researchers properly acknowledged their sources?
Privacy – have the researchers properly protected the privacy of participants?
Honesty – have the researchers been honest with participants of the research?
In market research, ethical danger points include:
Invasion of privacy
Stereotyping
Stereotyping occurs because any analysis of real populations needs to make
approximations and place individuals into certain groups. If conducted irresponsibly,
stereotyping can lead to a variety of ethically undesirable results. In the American
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Marketing Association Statement of Ethics, stereotyping is countered by the obligation
to show respect (‘acknowledge the basic human dignity of all stakeholders’).
But in today’s society, is this enough?
1.5 Develop statement of market research
needs
What is market research?
Market research involves finding out about things you need to know such as import
duties, regulations, distribution channels, market size and growth, competition,
demographics and local production – so you can assess market opportunities and the
costs of capturing them.
Gathering this information is usually straightforward and helps you understand how a
market operates. The most valuable element of market research is information about
‘market feel’. How will your product or service compete in the environment where
you will be doing business?
Source: http://www.austrade.gov.au/Market-research-MR/default.aspx
Market research involves the systematic design, collection, analysis and reporting of
data relevant to a specific marketing situation facing an organisation. It is used to:
Identify and define marketing opportunities and problems
Generate, refine and evaluate marketing actions
Monitor marketing performance
Improve understanding of the marketing process
Your statement of research needs involves a few important steps.
Define objectives
•What do you need answers for?
•What questions do you need the research to address?
Define your
customers
•Who are they (age, income, sex, etc)
•What do they want or need?
•What do they believe?
What factors will affect your research?
•Internal factors
•External factors
•How do they relate to you and your business?
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Case study
Jenny’s cleaning business Massively Clean
Jenny may have an overall desire to be the
largest privately owned cleaning company in
the state! If this is the case then everything
Jenny does with her business needs to drive
that objective.
The objective for Massively Clean may be to
recruit more franchisees and to increase
market share by 20% in the next two years.
Jenny may need to spend money on
establishing a loyalty program so she can
reward her customers for referrals. Is this a
good idea for her business? Market research
may answer this question for her?
What could stop this from happening? The
market research may be needed to answer
this question?
The research questions could be around
identifying obstacles in the way. Or ideas to
increase the chance of this happening.
Jenny may learn from her research that her
customers would prefer a discount on their
service as a reward rather than a cash
bonus. This knowledge will inform her of the
values and beliefs of her customers.
Earlier ideas have merit, or so CEO believes.
Is the business willing to invest large
amounts of money without making sure?
Find out what your customers want first.
Internal factors may involve process issues
which cause problems for administration of
many parts of the business.
External factors may be a down turn in the
local economy affecting disposable income.
Does the internal environment for
franchisees support the objectives?
Externally it will be important to understand
how the competition manage? What are
they doing that may impact on Massively
Cleans goals?
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2 Defining market research objectives
2.1 Draft research objectives
Often the hardest, most important step in the process involves the marketing
manager and research team working together. Careful problem definition and
identifying the issues at hand is essential for ensuring the right research is carried
out. Once these issues have been identified, research objectives can be set.
You must clearly understand the purpose of the research before you can start:
What are you trying to achieve?
What type of research should you conduct?
What are the ‘terms of reference’ for your research?
The ‘terms of reference’ define the scope and purpose of the research, what will be
included and excluded from the research, considerations and organisational
requirements of the project or process.
There are three types of research typically used in a business environment:
Descriptive research
Seeks to describe the current situation
Is often called a situation or environmental appraisal
Is usually conducted in conjunction with other research
Census research is descriptive research
Explanatory research
Seeks to explain patterns, relationships and trends that have been observed
An aim of explanatory research is often to identify the cause of actions, which
is difficult to do. Causality is difficult to establish. Just because A increases at
the same time as B decreases, does not prove a relationship between the two.
The purpose of establishing causality is to predict actions or behaviours.
Evaluative research
Seeks to determine the success or effectiveness of policies, practices,
strategies, products
This will often include exploratory research
Examples include surveys, interviews, focus groups and process mapping
Research areas of interest to business include:
Clients and potential clients
Staffing and performance
Competitors and pricing strategies
Products and sales performance
Trends in business affecting strategy
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Information technology
Researchers need a clear idea of what the objective is. Is it to solve a problem, or
even to determine if there is, or has been a problem?
Objectives of the research process may include:
Situational analysis
Comparative analysis
Hypothesis testing
Identification of trends
Process mapping
Situational analysis - involves obtaining information about the organisation and its
business environment. It allows you to study an event or situation in detail to place
it in its wider context and determine how to change or improve it. This kind of
information can be gained by:
Interviewing internal staff
Analysing the company, its market, its competition and the industry in general
Situation analyses or diagnoses can be represented in a number of ways.
A matrix form
Overlapping circle chart (Venn Diagram)
Relational mind map
Matrix
Venn diagram - Shows the relationship between the various elements represented.
Qualitative methods of presenting and analysing information.
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Mind maps were popularised by author and consultant, Tony Buzan. They use a
two-dimensional structure, instead of a list format conventionally used to take notes.
Mind maps are more compact than conventional notes. They help you make
associations easily, and generate new ideas. If you find out more information after
drawing a mind map you can easily integrate it with little disruption.
More than this, mind mapping helps you break large projects or topics down into
manageable chunks, so you can plan effectively without becoming overwhelmed or
forgetting something important.
A good mind map shows the ‘shape’ of the subject, the relative importance of
individual points, and the way in which facts relate to one another. This means that
they're very quick to review, as you can often refresh information in your mind just
by glancing at one. In this way, they can be effective mnemonics - remembering the
shape and structure of a mind map can give you the cues you need to remember the
information within it.
Consumer
• What do our customers need?
Brand
• What do we offer as value to our customers?
Retailer
• We need to sell more and bring our customers back
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Comparative analysis - The process of analysing separate items, situations or
events and then comparing them with each other.
People do this all the time when they shop, for example, for food or clothes. They look at
two bottles of fruit juice and compare them before making a decision about which one to
buy. For instance, are they the same size; is one sugar-free; what price are they?
Hypothesis testing
A hypothesis can be defined as an assumption or proposition that a researcher
makes about some characteristic of the population being investigated. The
researcher needs to determine whether research results are significant enough to
conclude something about the population under investigation.
Marketing hypothesis testing process
A hypothesis is a statement, belief or assumption. It may or may not be true. For
example if your business want to begin to import women’s shoes for work. You may
decide that your research hypothesis is:
‘Women don’t want to wear imported shoes to work because they are not readily
available.’
Through your research you may decide that the research problem (or question to be
answered) is:
Why don’t shoes businesses stock imported shoes for work.
There are several stages for testing a hypothesis. Very simply they revolve around:
Comparing performance
between sources
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When considering the example above our research objectives could include:
What women will make up our target market for work shoes
What advertising will reach them, why are the competition failing?
What message will appeal to our audience and compel them to act?
Do the existing shoes have problems for Australian women?
Has there been a change in overall shoe buying habits?
How does price affect our customers?
Are the products available in the wrong place?
Identification of trends
Trends can be defined as patterns or general directions, courses or tendencies. Eg:
The population of koalas in a newly established National Park has been monitored
and found to be steadily increasing since the Park’s creation.
Sometimes, based on past trends, it may be possible to attempt to predict (forecast)
future trends. Redirecting or forecasting trends in the marketplace requires the
collection of solid research data.
We could take our example of the women’s shoes and track the trends in women’s
shoe sales over the past five years we may notice a change in buying patterns.
Identification of trends example
Evaluate assumptions
State the hypothesis
Set goals Observe
investigate research
ProposeMeasureAnalysis
A declining performance trend
An improving performance
trend
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Process mapping
To map a process you need to identify and record all the separate parts of the
particular process, creating a map (or outline) that shows you how the process
happens. Process mapping is useful when you need to understand how or why
something happens so that you can change or improve the process. An example of a
process map could be this one for developing a new product:
When you define your research objectives, make sure that:
You clearly understand what you are trying to achieve
They are realistic and achievable
You have discussed them with your manager or other colleagues, if required
Your manager or other colleagues agrees with them
They are consistent with organisational requirements for conducting research
They are linked to expected improvements to the business
Case study
Jenny’s cleaning business
Jenny wants understand why people spend money on cleaning? How can she get
more people to employ her?
Her hypothesis might be:
‘Only families with both parents working are interested in cleaners.’
She may want to understand the relationship between income and time and cleaning
Her research objectives may then include:
Do families of working parents employ cleaners more often than families
where one parent is at home or working part time?
Who makes up her target market? What do they believe?
Has there been any trends in the cleaning industry?
Is there any relationship between commercial cleaning and domestic cleaning?
Are their new competitors?
Determine opportunities
Generate ideas
Test Evaluate and improve
TestCreate modelTestLaunch
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Do customers prefer private businesses to franchises?
Are the prices comparable between areas, private and larger companies?
Should single cleaners work alone or do two people make for a better result?
Jenny will make these decisions in combination with research and the information she
already has, her own figures from internal records, any feedback from her customers,
comments made by others and her own observations.
2.2 Undertake preliminary project scoping
How do you determine what you will include with this market research? In the same
way as you manage any other project, it is important to determine what you will and
will not include in the scope of this specific market research process.
To effectively deliver the outcomes of the research on time and to budget, it’s
possible to treat market research as a project.
Key project management principles to be included in market research planning are:
Consultation and stakeholder involvement - important at every stage of your
research project, plan your consultation and engagement strategy early,
stakeholders can make significant contributions when formulating research
objectives, project scope and identifying good sources of valid and reliable
data relevant to your project
Resources and development of time lines, budgets and other implementation
plans
Gaining of approvals
Needs analyses
Scoping practices
In terms of project management it is important to manage the research of our
market (and the questions we need answered) in a systematic way. In the appendix
we have a Project Plan template that may help you with your planning.
Initiating
•Project brief
•Project charter
•Scope – what will be covered in the process, the extent of the project
•Out of scope a complete list of what will not be covered
Planning
•Project management plan
•Risk, change, resources
•Obtain approvals
Executing
•Execute tasks defined in the plan
•Implement procurement, quality, risk management plans
•Manage project team
Controlling
•Measure project performance
•Manage changes to project
•Monitor risks and quality
Closing
•Obtain final acceptance for the project
•Release project resources
•Conduct post implementati on review
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We now need to have our market research questions answered in a way that helps
us. The research objectives need to be stated very clearly. We will have done this in
previous steps.
Now, continue to plan your research. Different marketing problems (questions to be
answered) need different information and research outcomes to answer the
questions. It is not a one size fits all approach.
This process involves identifying possible sources of information, methods of
collecting the information and considering legal and ethical issues. Assess the scope
of the work involved when the research request is received.
Consider various factors including whether the request is part of your normal
workload, or a new initiative. If you are unfamiliar with the subject matter, you may
need extra time and this must be factored into the timeline.
‘Terms of reference’ - always plan your research within the boundaries of your
organisational requirements. These may include:
Quality assurance and/or procedure manuals
Security and confidentiality requirements
Legal and organisational policy, guidelines and requirements
Codes of conduct and ethics
WHS procedures
Business and performance plans
When we refer to ‘scope’ we refer to the extent or range of view, application, or
operation. The scope for the market research project refers to the operation of our
organisation and the context of our research objectives.
Now we need to define the terms of reference or the scope of the project. Before we
can do this we need to understand:
What resources are required?
External market research required if any?
Possible research locations or methodologies?
OUT OF SCOPE
it is not a concern nor is it critical to your
success
IN SCOPE
applies to your project and is critical to your
success
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Sample sizes and nature of samples?
Time constraints and availability for research?
Resources refer to the human, physical and financial resources. How many hours
need to be dedicated to the process? Is the benefit worth the investment? What
financial cost will be attached to the process? At this stage the cost benefit analysis
comes into its own.
When you define your research objectives, make sure that:
You clearly understand what you are trying to achieve
They are realistic and achievable
You have discussed them with your manager or other colleagues, if required
Your manager or other colleagues agrees with them
They are consistent with your organisation’s requirements for conducting
research
They are linked to expected improvements to the business
There are software applications which help management with these processes; the
need for this depends on the size of the organisation and the specific requirements
for the research. Smaller organisations may choose to employ or outsource this
research from a time point of view. They may not have time or expertise to complete
the research within their own organisation.
Case study
Jenny’s cleaning business Massively Clean
Jenny has a small staff and she knows how
to clean. She may be better to outsource
her market research to make sure she can
concentrate on doing what she does best.
Remember she still needs to attend to
booking, customer satisfaction, supervision
Massively Clean has a marketing
department with skilled staff in the area of
market research. They are more than
capable of conducting the necessary
research. They still need to identify the
resources required, the research methods.
Financial
•The money available to a business for spending on the project
Human
•The resource that resides in knowledge, skills, and motivation of people, usually within the organisation but increasingly is becoming an outsourced commodity
Time
•Both the timeframe that the project must be completed by, and the amount of time that can be committed to it in man-hours
Technology
•Software packages or hardware products that can assist in the collection, storage, analysis or dissemination of the research
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and management of staff, not to mention
financial bookkeeping duties!
An external specialist will be experienced
and specific in their approach, it most likely
be cheaper and certainly more effective.
Where, when and how they plan to conduct
the research including time frames.
They may wish to conduct research into the
need for franchisees in the area of regional
Australia. What will they cover in this scope?
What will they not cover?
NB: Jenny may be very good at market
research and her needs may be very simple.
In this case she can do her own research
very simply. It is not true that small
businesses should not or cannot do their
own research.
NB: Business may use a combination of
approaches to get the results they desire.
How to conduct research? The process for conducting research is:
Where will I find the information?
How will I access it?
What technology will I need to use?
How much and what sort of information do I need?
Additional questions you could consider to help to structure your research could be:
Do I need to establish the facts and or include background information?
Do I need specialist information such as statistical or scientific data?
Do I need to provide expert opinion?
Do I need to explain an issue or area, such as a legal requirement?
Now determine your research strategy. What sources of information you should
choose and how you should conduct your research? Consider:
The time you have available
The type of data required
The expectations of interested parties
The resources you have available
The overall research objectives
2.3 Consult with relevant personnel on draft
research objectives to ensure relevant and
useful information is gathered
Your process and research problem (question to be answered) will have identified the
relevant personnel or stakeholders; it will have identified the questions to be
answered in order to meet the objectives set by the organisation. Your draft research
objectives will be defined based on these factors. Now gathering relevant and useful
information must be determined.
If this is not done correctly resources will be wasted and the outcome not successful.
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The relevant personnel usually involve the marketing team and support team
(administration, finance, customer service, etc.).
Consultation involves developing excellent communication skills with the people who
are identified as stakeholders as well as those who can provide the research
(information) you desire. Consider the importance of being able to communicate
effectively to gain the results you need:
Interpersonal skills
Life skills we use every day to communicate and interact with other people,
individually and in groups. People who have worked on developing strong
interpersonal skills are usually more successful both professionally and personally.
Examples of good interpersonal skills include:
Questioning to clarify details that pertain to the process
Listening, summarise and repeat to be sure of your information
Verbal communication: Clarity of speech, remaining calm and focused, being
polite and following basic rules of etiquette will aid effective verbal communication.
The words we use as well as the tone of voice.
Non-verbal communication: When we communicate, non-verbal cues can be as
important, or in some cases even more important, than what we say. Look at body
language and body movements; posture; eye contact; proxemics (closeness and
personal space).
Listening skills: Listening is the ability to accurately receive and interpret messages in
the communication process. Listening is not the same as hearing. Hearing refers to the
sounds you hear, listening requires more than that: it requires focus. Pay attention to
the story and how it is told. If you are talking you cannot be listening!
Reflecting: Even if you have excellent listening skills the only person who can tell
you if you have understood correctly or not is the speaker. Reflect on the message
and clarify with the speaker if you have understood them correctly. Ask them if what
you have heard is what they have said.
Clarifying: This involves offering back to the speaker the essential meaning, as
understood by the listener, of what they have just said. Checking for understanding
will avoid areas of confusion and misunderstanding. Think of the number of times
you have misunderstood, not asked for clarification and then gone off on a tangent.
Your approach to others will determine your success levels in gaining the information.
Poor interpersonal skills Highly skilled in interpersonal skills
Could be younger Older people have more experience by virtue of
their age, this does not mean they are sensible!
Communication skills may be basic, they
may be reasonably good at listening
Communication skills are well developed.
Practiced and skilled listeners’.
Assertive behaviour may need developing Assertive, remember this is not aggressive
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Not persuasive or confident to clarify or
reflect,
Highly persuasive, tactful and diplomatic
Lacking confidence to approach variety of
people
Have confidence to approach a range of people
Communication is vital in this process. You need to understand who to communicate
with, how often and in what way. What do they need to know? What is important to
share and what is the most convenient method of sharing this important information.
You may choose to use a communication matrix like this one below. It helps
coordinate the approach for all your stakeholders and lets everyone else in your
team know where you are up to and who needs what and when!
Role Project responsibility Skills required
Number
of staff
required
Estimated
start date
Duration
required
2.4 Review and finalise draft objectives in
light of scoping parameters
Remember, your primary responsibility is to improve the business (or to meet the
objectives as defined by the organisation) therefore your research objectives must
have a clear link to this responsibility.
Do your objectives for market research fit with the resources, the needs of the
organisation and the definition of the problem (or question you need the answer to)?
Discussion should involve all relevant personnel, including persons experienced in
the research methods you intend to use. The knowledge and information will help
ensure the research undertaken does what you need it to.
Positive brand image
Greater customer satisfaction and
Loyalty
Target market, competition and
environment
Improved organisational performance
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3 Define data gathering approaches
3.1 Identify types of data required to inform
objectives
Data analysis is the process in which raw data is organised so useful information can
be extracted from it. The process of organising and thinking about data is critical to
understanding what the data does and does not contain.
There are a variety of ways in which people can approach data analysis, and it is
very easy to manipulate data during the analysis phase to push certain conclusions
or agendas. It is important to pay attention when data analysis is presented, and to
think critically about the data and the conclusions which were drawn.
Remember to always be mindful of:
Data validity
Data reliability
Data relevance
Types of data can include, but is certainly not limited to:
Formal or informal comments, feedback from clients, customers staff etc.
Government statistics
Industry planning information
Qualitative quantitative data
Sales figures
SWOT analysis of competition and your own business in relation to the needs
of the research
Remember from section 1, there are two types of data sources, Primary and
Secondary and two different types of information (data) that can be gathered;
Quantitative or qualitative.
When accessing information you will have to make judgements about whether particular
information is relevant to your research task. Does this source tell me more about my
topic? Have similar considerations been made when conducting previous research?
There are two broad types of information, primary and secondary. Both primary and
secondary information can be qualitative or quantitative.
3.1.1 Quantitative or qualitative
Interpreting data requires one of two approaches. Quantitative or qualitative.
Quantitative Qualitative
Quantitative research is conclusive,
and takes a more logical, data-led
approach.
Qualitative research is exploratory. It
is used when we do not know what
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Due to the specific nature of
quantitative data it is particularly
useful for assessing performance of
the individual, the team and the
organisation.
Generates numerical data or
information which can be converted
into numbers.
Rates the likelihood as a probability or
frequency of the risk using numerical
weighting e.g. 1 in 200 cases will
exhibit this behaviour.
Quantitative data can be verified and
manipulated statistically.
expect, and need to define or develop
an approach to the problem.
It focuses primarily on the issues of
interest, looking at how people feel,
what they think and why they make
certain choices.
Generates non numerical data.
Rates the likelihood using words and
alphabetical ratings e.g. Extremely
likely = A.
Examination of non-measurable data
such as reputation, brand image, or
feelings people may have. E.g. Rate
risk in terms of low, medium or high,
or not important, important or very
important.
Goals Counting and classifying.
Constructing statistical models and
figures to explain outcomes.
Narrow hypothesis and conclusive
research.
Describing and explaining.
Complete and detailed descriptions
Whole picture with exploratory
research.
Instruments
for data
gathering
Questionnaires, surveys,
measurements, audits, points of
purchase, click-streams.
Trend analysis can only be
successfully interpreted using
‘quantitative’ style questions that
provides you with information based
on multiple choice, rank in order or
measurements such as frequency.
Interviews, focus groups,
observation, In-depth interviews, and
participation/observation.
Tools that are useful include mind
maps, brainstorming.
Information derived from qualitative
data (text) on its own may not be all
that useful for trend analysis.
Types of
data
Numbers, tables. Words, images objects, graphs.
Objective. Seeking precise
measurements and analysis of
concepts.
Subjective. Researchers seeks to
understand human behaviour and
why we make the choices we do.
The decision which type of research to use is, of course, dependant on what you are
aiming to achieve with your research. If you want to use numerical information to
support your theory then use quantitative, if you need to explain why something is
the case then use qualitative. In order to analyse market trends, you need to ensure
the correct research is used.
3.2 Determine combinations of types of data
to best inform objectives
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Good research usually uses a combination of all source types, but the sources will
depend on the purpose of your research. As part of your research proposal, you
should have identified a range of sources of information and methods of collecting
that information.
Gathering data to help market research needs can come from:
Internal organisation records
o Sales records
o Customer feedback questionnaires
Marketing intelligence
o Market trends
o Competition SWOT analysis
Secondary marketing research
Primary marketing research
Combinations of data will support each other.
Example Massively Clean only referred to the government statistics regarding the
number of commercial premises in a postcode they may get a false idea
of the number of businesses they could approach. Some of those
businesses may have government contracts in place, some may use
another contractor and not be happy with their service. Using the
government data in conjunction with a survey or focus group of a cross
section of possible businesses who would need commercial cleaners
may provide a more worthwhile result.
Make sure your objectives are clear and think very carefully how you will answer
your research questions? What information do you need from what sources?
Consider how customer surveys could support the results of a competitor analysis.
What information do you need is the question? More than one source to support your
information will make it all the more valid.
3.3 Identify and evaluate suitable data
gathering methods
There are numerous methods in which to obtain data, best practice principles state
that a variety of these methods should be used in collecting your research data.
Example Massively Clean may use bulk surveys and questionnaires to their
customers and the general public and use these results to formulate
their focus groups, etc. Or they may use their observations to create
focus groups and then finally create questionnaires to enable numeric
quantification of their research.
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3.3.1 Developing questions
Authors, Burns and Bush believe there are five ‘should’ and eleven ‘should nots ‘of
question wording.
Should
The question should be focused on a single issue or topic
The question should be brief
Internet
•Australian Bureau of Statistics
•Google, Bing, Yahoo
•Industry web sites
•Be specific in your searches to avoid frustrating and inefficient results.
•Eg: a drink marketer googling 'enhanced water products' would come up with 13.5 million results
Case studies
•What has happened in other companies/ states/countries, relevant to your industry or objectives?
•Refer to Marketing April/May 2015 page 54 for the A2 Milk Company case study
•Based on surveys and scientific research the A2 Milk company created the 'Thank You A2' campaign
•Using such a case study could influence other marketers with similarsituations in varying markets
Focus groups
•Contextualised brainstorming
•Can show a product/service and obtain immediate feedback prior to going to market
•Can market test demographic responses to market concept
•Conducted by a trained moderator
Literature Searches
•Industry magazines/journals
•Marketing text/journals
•Industry texts/resource books
Surveys and questionnaires
•Plan what to measure
•Formulate questions to obtain required data
•Decide on order and wording of questions and layout of survey
•Test survey for omissions and ambiguity, using a small sample size
•Correct issues and pre-test again if necessary
Face to face interviews
•Plan what to measure
•Formulate questions to answer data requirements
•Exceptional way to gain direct feedback without 'group think'
Observation
•Data can be gained internally
•Observe relevant people, actions and situations
•Eg: Fisher and Paykel have established a lab in which it can observe the interaction of children and their toys
Discussion groups
•Can be formal or informal
•Can risk 'group think' where a dominant personality directs the rest into a certain way of responding
•Obtains observable data efficiently
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All respondents should interpret the question the same way
The question should use the respondent's core vocabulary
The question should be grammatically simple, in a sentence if possible
Should nots
Assume criteria that are not obvious
Be beyond the respondent's ability or experience
Use a specific example to represent a general case
Ask respondent to recall specifics when only generalities will be remembered
Require the respondent to guess a generalisation
Ask for details that cannot be related
Use words that overstate the condition
Have ambiguous wording
Be ‘double-barrelled’ (asking two questions at the same time)
Lead the respondent to a particular answer
Have ‘loaded’ (use of subtle emotional appeal) wording or phrasing
Source: Alvin C. Burns, 2009. Marketing Research (6th Edition). 6 Edition. Prentice Hall.
These are the main types of questions:
Open ended questions
are sometimes known as
unstructured questions.
Allows respondents to reply in their own words. No pre-set
choices of answers and the respondents can decide whether
to provide brief one-word answers or more detailed and long.
Multiple choice questions Provide respondents with a choice of predetermined
responses to a question. Respondents are asked for one
answer that correctly expresses their viewpoint or all
applicable response.
Dichotomous question The dichotomous question is an extreme form of multiple-
choice question as only two choices are offered. For
example: yes / no; spray on / roll on; cash /credit; etc.
Closed questions Ask respondents to make one or more choices from lists of
possible responses such as: date of birth, gender etc.
Structured (scale)
questions
Use rating scales where the respondent is given a continuum
of labelled categories that represent a range of responses.
Advantages and disadvantages of using open ended and multiple choice questions?
Open ended questions:
Advantages Disadvantages
A wider range of responses can be obtained Do not suggest alternative answers
Respondents often prefer this type of
freedom
They may also misinterpret the type of
information requested
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The categories are not respecified therefore
lacks any influence in the response
These questions are difficult to summarise
when tabulating the responses
Weighted towards more educated people
Multiple choice questions:
Advantages Disadvantages
Offer alternatives, tabulating is
simplified
Bias can occur due to order of alternative answers
with respondents tending to choose the first
answer on the list (if they have no strong feelings
on a particular question)
This questioning method enables quick
answers and therefore has increased
appeal to potential respondents
Limited choices of responses
Regardless of the type of question used, there should be an opportunity for
respondents to provide an answer to every question. If numerous questions are left
blank because the respondents felt the answers provided did not apply to their
situations, the study's findings will be weakened.
Sequencing and layout decisions
The format and order of questions should be set out to gain and maintain the
respondents' cooperation and also to make it easy for the interviewer to administer.
Four basic guidelines for sequencing a questionnaire are:
Open the interview with an easy and non-threatening question
Questionnaires should flow smoothly / logically from one question to the next
With most topics you should start with broad, general questions and move
toward the more specific
Sensitive questions should not be placed at the beginning of the questionnaire
Remember in preparing a questionnaire YOU must decide:
What questions to ask
The type of the questions
The wording of the questions
The ordering of the question
What assumptions you make
Each question should be considered very carefully before it is used to see that it
contributes to the research objectives.
Source: Kotler P. et al-Marketing 7th edt. p225
Remember that the purpose of the survey is to gather information that meets your
research purpose. You need to present your research information in a way that is
useful in the decision making process. Ensure that your survey allows for suitable
presentation of this information.
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Why should we use one or other of these methods? What are the particular
advantages and disadvantages of data collection?
Method of
collecting data
Advantages Disadvantages
Online
questionnaires
Instant results.
Cost is reasonable.
Able to aim questions to anyone
in any area.
Easy for the user.
Generic unbiased questioning
possible.
Unreliable as to respondent’s motive
and who is actually responding. Does
the respondent understand the
question?
Limited by the confines of the site
features.
Samples dependant on availability not
directed to target audience.
Questions can be too general and not
useful at generating results.
Main
questionnaires
Relatively cheap to administer.
Allows anonymous responses.
Responses may not be forthcoming or
take a long time to be returned.
Does the respondent understand the
question? Unreliable as to
respondent’s motive and who is
actually responding.
Telephone
surveys
Cheap.
Fixed questions can ensure non
biased questioning.
Can direct geographically.
Consumers sick of having calls to
their home. May be unwilling to
participate.
Puts respondents on the spot.
Do not call lists compromise options.
Observation Can be done by managers on
the job.
Cheap costs.
Able to discern responses to
various in-house ideas and
initiatives.
Recording may be unreliable or non-
existent.
Biased observers may contaminate
the sample.
Limited experience with own business.
Focus groups Great way to generate ideas and
opinions.
Respondents can feed off each
other and be valuable
contributors.
Well-chosen groups can provide
good outcomes and new ideas
and perspectives.
May have difficult members in the
group who dominate or refuse to
contribute. Can contaminate the
results.
Need to be sure the group is not
hand-picked to provide answers
already known or expected.
Literature
existing
Reliable and valid sources of
research can provide excellent
low cost information.
May be slightly removed from your
needs, can provide skewed
information if inexperienced in
interpretation.
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Much of the hard work has been
done and information is
available readily to support
other sources of research.
Can take time to understand the
original purpose and how it relates to
your problem.
3.4 Identify data sources
Sources of information vary and can be classified as either internal or external
Internal includes
Organisational files, reports and/or surveys
Work intranet and other organisational material
Other staff
External includes
Government departments and publications
Representative associations such as employer bodies, institutes, unions and
professional associations
Newspapers and magazines (especially industry specific)
Television, radio and/or internet
Local and specialist libraries
Common methods of collecting information include
Interviewing colleagues/customers
Obtaining information from other organisations
Accessing previous file records
Observing and listening
Checking written material including referrals and client files
Questioning (in person or via indirect means)
Undertaking internet research
Checking research provided by others (in journals)
3.4.1 Validity and reliability
Information sources need to be evaluated for their validity and reliability.
Validity the ability of a scale to measure what it is supposed to.
Reliability the degree to which measures are free from error and yield consistent results.
Note that Validity = Accuracy and Reliability = Consistency
Example Wikipedia. Is it a valid source? Is it a reliable source? Potentially no.
Why? Wikipedia is a community content website. Any member of the
public can contribute content to the website so there is a chance that
the content is not valid or reliable
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When assessing validity and reliability consider:
The nature of the organisation undertaking the research
The purpose of the research and the sponsors of the research
The number and types of respondents involved in the research
The research instrument used to collect the information
3.5 Quantify required data
Analysis of your research in terms of what statistical information is presented is a
common and powerful exercise. Statistical analysis allows the researcher to view
data to determine trends, frequency, relationships and commonality.
Most statistical methods used in business are known as inferential statistics. That is,
using a sample to infer the results across the rest of the population. If one group of
people behave/think this way, then it’s likely that everyone else will.
Commonly used statistical analysis measures:
Mean, median and mode
Variance and standard deviation
Probability
Testing hypotheses
Correlation
Regression analysis (to predict future results)
Mean median and mode
The mean (or average) of a set of data values is the sum of all of the data values
divided by the number of data values.
The median of a set of data values is the middle value of the data set when it has been
arranged in ascending order. That is, from the smallest value to the highest value.
The mode of a set of data values is the value(s) that occurs most often.
Variance and standard deviation: are measures of how spread out a distribution
is. They measure how variable a group of results are. Standard deviation is a
measure of how spread out your data is. Computation of the standard deviation is a
bit of a process.
Compute the mean for the data set
Compute the deviation by subtracting the mean from each value
Square each individual deviation
Add up the squared deviations
Divide by one less than the sample size
Take the square root
http://www.robertniles.com/stats/stdev.shtml
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Example You are being asked to look at a local coffee shop. The owner wants to
make some decisions about the business and doesn’t know where to
start. Among other things you decide to survey 10 people about the
coffee and take a score out of five. You get your results and find that
the mean is three.
5 5 5 4 3 3 2 1 1 1 total 30 Mean 3
You do however need to understand the spread of these figures. The
results mean something quite different given that there are a few fives
and ones. Finding the standard deviation shows us how spread out the
numbers are. This helps us determine what is really going on. If you
only relied on the mean, three, you would think things were fine,
slightly above average. Ones however suggest problems, knowing the
spread is very useful. You can obviously see the spread on such a small
sample, but imagine you surveyed 10 000 coffee drinkers.
Variance = the average squared deviation of each number from its mean
Probability - the measure of how likely it is for something to happen.
Testing hypotheses - A hypothesis is an assumption or proposition that a
researcher makes about some characteristic of the population being investigated?
What is the problem?
What is your expectation?
Create a model to measure the data against
Use your model to guide data collection
Compare your expectation with the information at hand (data)
Use the data to modify your model
Use the information and model to make predictions about the hypothesis
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Correlation: the degree and type of relationship between two variables in which
they vary together over a period of time.
For example, the Grade Point Average (GPA) achieved at school in relation to the
hours of television watched.
Regression analysis
Predicts the outcome of an event (the dependent variable) based on interactions
between other related drivers (the explanatory variables). It is important to note
that it is difficult to be sure as to what are explanatory variables (or causal), and
what happen to be coincidence. Causality is difficult to establish. Just because A
increases at the same time as B decreases, does not prove a relationship between
the two.
For example, you can reasonably predict sales volumes by looking at marketing
expenditure and the number of sales representatives your company employs. As
marketing expenditure and sales rep numbers increase, you can reasonably expect a
corresponding increase in sales volume.
What performance hypotheses did you come up with?
Does this mean that salary, gender or tenure cause performance? No, not
necessarily. There are many possible explanations for the suggestions of
relationships. For example:
Barbara gets paid more than anyone else in the group. She may be the Sales
Director, and therefore have more responsibilities as well as a smaller sales
region than the rest of the team
Janet, while earning the least amount and has the second lowest performance
%, may only work part time
Henry may have the region with the largest client base, and therefore does
not need to work particularly hard to make sales
You will need to make assumptions when analysing the data you gather. Part of the
research process is ‘sanity checking’ your assumptions with others. Peer and expert
review is critical to your success.
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When checking your assumptions validity, ask yourself…
Can I demonstrate a clear relationship between the data and my conclusions?
Is there any other explanation for this relationship?
Can I explain how I came to my conclusion?
Do my assumptions relate to my research objectives?
3.6 Identify and evaluate suitable data
processing methods
After evaluating questions and information requirements, the next step is to consider
what data sources and methods are likely to yield the necessary information and to
develop a research plan. This requires:
Which existing data sources are suitable
What gaps in information are there and are they critical
Method of information collection
Achievability of the research plan given available resources and timing of the
evaluation
Privacy and ethics approval requirements
3.6.1 Effective data sampling
Data sampling is simply the process of using a small percentage of a total population
to assist you to understand how the entire population might respond. Often,
conducting a comprehensive survey of all staff of a company, all residents of a
suburb, all citizens of a country or even all members of a team is difficult, costly,
time consuming or simply impossible.
Selecting a sample procedure
After determining whether using a sample or a population would be appropriate to
use for our given survey, the next step is to determine what sampling procedure to
use. Selecting a sampling procedure consists of two major groups:
Probability sampling Non-probability sampling
Probability sampling consists of the following procedures:
Simple random sampling – each member of the population has a known and equal
chance of being selected e.g. Lotto, drawing lots.
Systematic sampling – each member has a known but not equal chance e.g.
randomly select a number (1 to 10), if the number 5 is picked, then every fifth
number in the list is selected. (Bias)
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Stratified sampling – the population is divided into strata (group levels). Each
stratum has its common and measurable characteristics (age, income, geographical
area etc.), and a random sample is done for each stratum. (Time-consuming)
Non-probability sampling consists of the following procedures:
Judgment sampling – occurs when a knowledgeable person selects sample
members that they believe are appropriate. (Subjective)
Convenience sampling –based on the researcher’s convenience, i.e. location.
Quota sampling – is similar to the stratified sampling method, whereby, an
appropriate number in each stratum is selected e.g. universities use this system for
some of their courses, such as physiotherapy.
Snowball sampling – is a form of judgmental sampling that is very appropriate
when it is necessary to reach small, specialised populations. Initially a group is
selected (via the judgment sampling method) specifically because they purchased
the product.
To convert your data into a manageable form, sort and summarise so it is easier to
analyse. Ways to do this include drawing attention to key pieces of information by:
Adding notes or comments to data
Highlighting sections of text or figures
Labelling material
Selecting particular sections of data and filing them together
Choosing a few typical examples to describe your larger body of data
Noting critical or important pieces of information
3.6.2 Data processing and analysis
Data analysis is the process where raw data is organised so useful information can
be extracted from it. The process of organising and thinking about data are critical to
understanding what the data does and does not contain. There are a variety of ways
in which people can approach data analysis, and it is very easy to manipulate data
during the analysis phase to push certain conclusions or agendas.
It is important to pay attention when data analysis is presented, and to think critically
about the data and conclusions which were drawn. Remember to always be mindful of:
Data validity The ability of a scale or measure to measure what it is supposed to measure
Data reliability Are measures are error free and therefore yield consistent results
Data relevance The degree to which the information relates to the topic.
Ultimately, poor information will likely result in a poor decision
Raw data can take a variety of forms, including measurements, survey responses
and observations. In its raw form, this information can be incredibly useful, but also
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overwhelming. Over the course of the data analysis process, raw data is ordered in a
way which will be useful.
For example, survey results may be tallied, so that people can see at a glance how
many people answered the survey, and how people responded to specific questions.
In the course of organising the data, trends often emerge, and these trends can be
highlighted in the research report so that readers take note. In a casual survey of ice
cream preferences, for example, more women than men might express a fondness
for chocolate, and this could be a point of interest for the researcher.
Modelling data with the use of mathematics and other tools can sometimes exaggerate
such points of interest in the data, making them easier for the researcher to see.
3.6.3 Methods of analysis
Data sampling is the process of using a small portion of the population to help you
understand how the whole population may react. Examples include political polls,
television ratings data and what housewives think of a new washing powder.
Feedback on results of research you have started from interested parties is
invaluable to make sure your research is relevant and useful. Interested parties can
include managers, decision makers, experts and project owners.
Peer review - Providing results or preliminary findings to your peer group can be as
useful as getting feedback from interested parties. Peers can provide you with
different ideas and insights into your research, and can suggest additional sources of
information.
Review of previous research others have done before you is critical to the success of
nearly all research projects. Whether you use other’s research as a primary source or just
to develop research strategies, it is essential to be careful in choosing past research.
3.7 Make decisions on data types, combinations,
gathering methods, sources, quantities and
processing methods
Choices achievable with available resources
Cost benefit of choices
Are the choices consistent with organisational procedures, policies?
Will the choices satisfy the research objective?
3.7.1 Developing conclusions
In order for your research to be useful, you need to be able to draw some
conclusions. You need to:
Make sense of your research material
Form an opinion about the data gathered
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Develop a line of reasoning
Make recommendations as to what should happen now
You should be able to:
Write your conclusions clearly and succinctly
State how they relate to the research and business objectives
Clearly point to the evidence that your conclusions are logical and based on
the available evidence
State your conclusions objectively and without bias
Data processing options
Your business has a range of options to manage the data processing:
Data processing service experts
Manual or personal methods
Packaged analysis routines or programs
Specialist software packages
It is easy to fall into traps when analysing or processing data yourself, particularly if
you have an interest in the outcome. It is better for the reliability of the analysis to
engage an unbiased third party or to use specialist programs. However, this can be
quite costly.
When deciding which option is right for your research project, it is important to consider:
The budget
Timeframes
Expertise available
Technology available
Purpose of the research
The impact on business and the critical nature of the research
A simple way to analyse the above is a grading system answering key questions:
How easy will it be to implement the research project?
Is the methodology of a sufficiently high quality and credibility?
How useful is the research likely to be?
Are alternative information results available with the same or higher level of
validity and reliability and with lower resource costs?
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4 Develop market research plan
After the objectives have been set, the next step involves:
Determining specific needs
Developing a plan for gathering it efficiently
Presenting the research design in the form of a plan
4.1 Estimate resources and timelines required for
market research projects
Resources required for the effective delivery of your research project will generally
fall into one of four categories:
Financial - money available to a business for spending on the project
Human - the resource that resides in the knowledge, skills, and motivation of
people, usually within the organisation but increasingly is becoming an
outsourced commodity
Time – both the timeframe that the project must be completed by, and
amount of time that can be committed to it - man-hours
Technology – software packages or hardware products that can assist in the
collection, storage, analysis or dissemination of the research
Having a clear understanding of what resources you have, and what resources you
need is critical to ensure that the research objectives are achieved. You cannot
determine the feasibility of your research project without considering these factors.
4.2 Determine feasibility of market research
How easy will it be to implement the recommendations?
How credible are the methodology?
How useful is the research going to be?
Can other results be obtained another way?
A feasibility analysis evaluates research project's potential for success. The following
factors are often assessed:
Technology and system feasibility
This assessment is based on an understanding of technology and system
requirements, to determine whether the business has the expertise to complete the
research project. It’s important to consider any other factors that may impact the
business’s ability to complete the research project. Particular attention should be
paid to the human factor and its relationship to technology and systems. At this
point, the interest is whether the research project is both technically and legally
feasible (assuming moderate cost).
Legal feasibility
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Legal feasibility determines whether the proposed research project conflicts with any
legal requirement. An assessment against the legal and ethical requirements is
conducted at this point to eliminate anything undesirable.
Operational feasibility
Operational feasibility is a measure of how well a proposed research project solves
the problems, and takes advantage of the opportunities identified during scope
definition. It should consider equally the human resources, time and work involved
to ensure it is operationally practicable to conduct the research project or to
outsource it to reduce operational interruption.
Schedule feasibility
Any project will fail if it takes too long to be completed. This means that it is important to
determine whether the proposed project can be completed within a given time period.
Schedule feasibility is a measure of how reasonable the project timetable is. Given our
expertise and workload, are the project deadlines reasonable?
4.3 Prepare market research plan for approval
Considerations for the market research plan can include:
Research approaches (observational, survey, experimental)
Contact methods (mail, telephone, personal interview, online)
Sampling plans (who, how many, how chosen)
Research instruments (questionnaire, mechanical devices).
The research plan/proposal should cover
Current situation appraisal and description of need
Research objectives
o Clearly identify the purpose of your research
o What are you trying to learn from the research?
o Does this meet the organisation’s goals?
Research methods and strategies
o How are you going to research this?
o Will you use personal interviews, questionnaires, focus groups, information
from other organisations or online research?
o The information to be obtained
o The sources of secondary information
o The methods for collecting primary data
• Identification of legal and ethical considerations
o Privacy, discrimination and potential WHS implications
Methods of analysis
o How you are going to analyse your data?
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o What variables will you use to analyse your data?
o List the technology you will use such as Excel spread sheet
The way the results will be used to help decision- making
The key milestones that will be met in the research process
The proposed costs of the research.
Thorough research requires you to think critically about the information you collect,
evaluate its worth and determine how to present it to others.
Market research as a project
To effectively deliver the outcomes of the research on time and to budget, it’s
important to treat it as a project. As market research is often a small scale
endeavour for non-marketing managers, below are the key project management
principles you must include in your market research planning:
Consultation and stakeholder involvement
Resources and development of time lines, budgets and other implementation plans
Gaining of approvals
Needs analyses
Scoping practices
4.4 Obtain approval to implement plan from
appropriate personnel
Gaining approval
There is little point in undertaking a project without having approvals in place. In a
large organisation there may be a lengthy approval process for any expenditure of
this nature. In smaller organisations it may be more informal.
Either way, the authority to go ahead must be secured in order to protect the
interests of the business and to allow for adequate planning and budgeting for the
organisation. Here is an example of a simple approval process that may be used in
smaller organisations:
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Source: http://www.rickgeneva.com/wp/posts/whats-so-hard-about-process-modeling/
4.4.1 Consultation
Consultation with stakeholders is important at every stage of your research project.
As discussed earlier, stakeholders can make significant contributions when
formulating research objectives, project scope and identifying sources of valid and
reliable data relevant to your project.
Plan your consultation and engagement strategy early on. This is important to make
sure they are not forgotten.
4.4.2 Marketing research report
The format of the marketing research report varies with the needs of the
organisation. The report often contains the following sections:
Authorisation letter for the research
Table of contents
List of illustrations
Executive summary
Research objectives
Methodology
Results
Limitations
Conclusions and recommendations
Appendices containing copies of the questionnaires, etc.
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Conclusion
Business is like a holiday! You need plans to make sure you get there on time, to
know where you are going, to be able to afford all the activities, to know what you
want to do and where to go to get the things you want.
Market research is like part of the map for business. It needs to be used with all the
other tools for planning your trip! As a manager you need to be able to conduct
market research yourself or be able to understand the need for it as well as the
results when you arrange for collection of data about your organisation.
In conclusion businesses conduct market research for the following reasons:
Identify potential customers Who will use your product/service? What do they like or
need? Are they single, married, and divorced? How old are
they? Any children? And so on.
Understanding existing
customers
Why do people choose your product over competitors?
What magazines, websites, and books do they read? What
do we need to know about them that we don’t?
Set targets that are realistic From what you have found out you can set targets for
realistic products, growth, new products etc.
Develop strategies to reach
your customers
Once you know these things about your customers you can
make decisions about what you can do to match their
needs with YOUR product or service
Examine and solve business
problems
If you have a problem you can work out how to address it
if you have information. If your sales have fallen you might
find that a new competitor has moved in and you need to
adjust your approach.
Prepare for business
expansion
Proper research will show you the way into new areas for
your business. You would never open a new shop without
knowing whether the location or the services were right for
your market.
Identify opportunities for
your business.
You could find new opportunities for your business. Areas
that are not serviced by your product or not fully serviced.
Changing populations in your area could also lead to
opportunities you didn’t know about until you did your
research.
Knowing this, you need to set your goals for research, find out what information
already exists, do your own research then analyse your results and finally act on the
results of all your hard work.
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Appendix A - Legislation in Australian
business
This document is intended to provide an introduction to some of the most often used
pieces of legislation and issues that affect businesses in Australia. It is by no means
exhaustive and nor should it be used as an instrument to provide legal advice to
others. The document is intended to provide general legislative and regulatory
compliance guidelines relating to business activities. It should be used as a starting
point for your own research into a particular issue. REMEMBER Australian businesses
are obligated to comply with a range of laws.
Legal compliance is mandatory in all business organisations. Non–
compliance is not accepted or tolerated. Ignorance of the law is no excuse!
Legislation is a set of rules, regulations or guidelines passed by an Act of
parliament (State or Commonwealth).
Regulatory requirements are details of a particular Act. Regulations always follow
legislation and set out standards, procedures and guidelines in the compliance of
legislation. These rules and guidelines assist organisations to properly carry out
compliance requirements as per the relevant legislation.
Standards are set by relevant government departments as codes of practice and
industry standards.
General consumer protection laws
Federal government legislation exists to protect consumers, the environment and the
community, as well as to promote fair trading and competition. These laws govern
how businesses interact with their suppliers, customers and other businesses. They
also outline the legal rights of businesses and business owners when conflicts arise.
You must determine which of these affects your business operations.
Managers need to be aware of legislation relevant to their particular managerial
functions and industry. Employers and managers are required to understand legal
compliance issues within their respective organisations and be able to carry out
compliance at all times as part of the management process.
Managers are both professionally and legally accountable for their conduct and work
practices within their parameters. Statutory requirements are legally binding and
managers are required to comply with compliance matters depending on the
requirements of the legislation. A business owner, manager or employee who
contravenes relevant Act and regulations may be liable to criminal penalties and or
civil action. It is also important to note here that if the legal entity of the business
/organisation is a company structure, the business may be separately legally liable.
Government regulations and legislation is dynamic and changing. You must
remain up to date as it is your responsibility.
Often Federal legislation is different to that of each state, make sure you are
compliant with the correct legislation. If you are not sure check!
Access to State and Commonwealth Acts and regulations can be found online at a
number of sources – Example of a range of internet sites to begin your research
include:
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www.business.gov.au www.comlaw.gov.au/
http://www.oaic.gov.au/freedom-of-information
http://www.fairwork.gov.au/about-us http://www.comcare.gov.au
Issue Legislation Detail correct at time of printing
November 2014
Affirmative
Action
Equal Employment Legislation
Anti-Bullying
Fair work
WHS
Anti-Discrimination
People who believe they're being bullied in
the workplace can apply to the Fair Work
Commission for help in resolving the issue.
Bullying occurs when a person or group of
people, repeatedly behave unreasonably
towards a worker. The behaviour also has
to be deemed a risk to the worker's health
or safety.
Anti-
discrimination
Anti-discrimination is the key diversity
legislation in Australia. There are also
State and territory legislation which
follows the federal Acts. These include:
Disability Discrimination and Other
Human Rights Legislation
Amendment Act 2009
Disability Discrimination
Amendment Act 2005
Equal Opportunity for Women in the
Workplace Act 1999
Fair Work Act 2009
Human Rights and Equal
Opportunity Commission Act 1986
Racial Discrimination Amendment
Act 1980
Sex and Age Discrimination
Amendment Act 2011
Together, they prohibit discrimination on
the basis of:
Gender, sexual preference, political opinion,
trade union activities, colour, race and
ethnicity, social origin, religion, nationality,
family responsibility, irrelevant medical
record, irrelevant criminal history, age,
marital status, carer status, parental status,
breastfeeding, disability, pregnancy
Managers need to ensure that performance-
management processes do not contravene
anti-discrimination legislation. A manager
can be seen to discriminate against
employees when they treat them with a
particular attribute (i.e. age, gender,
parental status, disability) less favourably
than employees without that attribute or
with a different attribute. Employers and
managers are also considered to be acting
in a discriminatory manner if they impose
an employment condition that:
An employee with a particular attribute
cannot comply with
A higher percentage of people without
an attribute can comply with
A higher percentage of people with a
different attribute can comply with
Is universally applied and that people
with an impairment or a disability
cannot meet
Is unreasonable
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Competition
laws/
Consumer laws
Product liability
regulation
Australian Consumer Law (ACL) is set
out in Schedule 2 of the Competition
and Consumer Act 2010. The
standards are enforced by the
Australian Competition and Consumer
Commission (ACCC).
Provides regulations on unfair contract
terms, consumer rights guarantees,
product safety laws, unsolicited consumer
agreements, lay-by agreements and
penalties, and other areas. Further
information see Ministerial Council on
Consumer Affairs: Australian Consumer
Law.
Copyright Copyright Act 1968 which applies the
national law throughout Australia.
The Copyright Law of Australia defines the
legally enforceable rights of Intellectual
Property which includes creators of
creative and artistic works under
Australian law.
Employee
rehabilitation
and
compensation
Safety Rehabilitation and
Compensation Act 1988 The SRC Act
Workers Compensation and
Rehabilitation Act 2003 QLD
The SRC Act 1988 covers:
Commonwealth and ACT public servants
Employees of Commonwealth and ACT
statutory authorities and corporations.
Australian Defence Force members for
injuries before 1 July 2004.
Employees of corporations with a licence
to self-insure under the SRC Act.
The SRC Act provides rehabilitation and
workers’ compensation to employees
covered by the scheme for a work related
injury.
The QLD legislation established a workers
compensation scheme for Queensland
which provides benefits for workers who
sustain injury in their employment, also for
dependants if an injury results in the
workers death.
Employment
contracts
See also
Independent
contractors
This comes under the general law of
contract and determines the legal
relationship between employers and
employees and sets out the terms and
conditions of employment.
Codes of conduct that employees are
required to comply with
Contractual requirements of both
employers and employees under a
contract of employment
Organisational policies that employees
need to observe. These requirements are
generally set out by the human resource
management department
The grounds upon which an employer can
terminate without notice
Period of notice an employee needs to be
given when employment is terminated
with notice
How and when an employee’s
performance will be appraised or reviewed
How the employee will be renumerated
for their work
Many of the legal requirements mentioned
here also refer to employment relations
under the Fair Work Act 2009
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Environmental
Australian Government, state, territory governments, and
local governments jointly administer environmental
protection. There are many pieces of legislation which
apply, check which one applies in your situation. The
following are some examples:
Coastal Protection and Management Act 1995
Waste Reduction and Recycling Act 2011
Environmental Protection Act 1994
Nature Conservation Act 1992
Queensland Heritage Act 1992
Sustainable Planning Act 2009
Water Act 2000 (Chapter 3)
Australian Government legislation governs
the process of assessment and approval of
national environmental and cultural
concerns.
State and territory environmental protection
legislation apply to specific business
activities.
For further information, see
business.gov.au: Environmental legislation.
Ethical
principles
Universal standards of right and
wrong.
Be sure to consult with State
legislation which apply to your relevant
industry.
Each business should have relevant HR
policy and procedures covering this for
their practices.
They detail the kind of behaviour a
company or person with sound ethics
should and should not engage in.
How your character is judged is critical to
success of your business.
Unethical actions will destroy trust and
credibility.
Ethical principles are: Honesty, integrity,
promise keeping, loyalty, fair, caring,
respect for others, legal, commitment to
excellence, leadership, reputation,
accountable, avoiding conflicts of interest,
Freedom of
Information
Freedom of Information Act 1982 The FOI Act provides a legally enforceable
right of access to government documents.
It applies to Australian Government
ministers and most agencies - obligations of
agencies and ministers are different.
FOI allows individuals to see what
information government holds about
them, and to seek correction of that
information if they consider it wrong or
misleading.
Human Rights The Australian Human Rights
Commission Act 1986
Anti-discrimination legislation
Independent
contractors
See also
Emplyment
contracts
Are self-employed and provide a
service to a business.
Often negotiate their own payments
and working arrangements, and can
work for a range of clients at any given
time.
Before entering into a contract, determine
whether someone is classified as an
independent contractor so you can comply
with your legal obligations. Their status
affects their rights and obligations. It's
possible for someone to be an employee for
some work and independent contractor for
other work.
Remember it's illegal to fire, or threaten to
fire, an employee if they don't agree to
become a contractor.
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Industrial
relations reform
Federal – Fair Work Act 2009
State QLD for example QLD Industrial
Relations Act
The Industrial Relations Reform Act allowed
workplace disputes to be settled by
enterprise bargaining between employers
and unions in the workplace. If the dispute
was not settled, the Australian Industrial
Relations Commission could settle it.
Privacy Privacy Act 1988 You need to be aware
of your obligations under the Australian
Privacy Principles (APPs).
Australia has national privacy
legislation, overseen by the Office of
the Australian Information
Commissioner (OAIC) this regulates
how businesses collect, access, and
store personal information and
communication.
There are specific requirements on
management of sensitive information e.g.
medical records.
Legislation applies to a number of different
activities and sectors. Australian states and
territories also have individual privacy laws
that may apply in the workplace and affect
business in each jurisdiction.
A new set of privacy principles was
introduced in March 2014. The principles
cover how a business handles personal
information, including the:
handling and processing personal
information
use of personal information for direct
marketing and disclosing personal
information to people overseas.
Racial
Discrimination
Racial Discrimination Act 1975 Anti-discrimination legislation
Sex
Discrimination
Sex Discrimination Act 1984 Anti-discrimination legislation
Trade Practices Australian Consumer Law Superseded in January 2011
by the Competition and Consumer Act 2010
Unfair or
unlawful
dismissal
The primary piece of legislation relating
to unfair and unlawful dismissal is Fair
Work Act 2009 (Cwlth).
Under this legislation, employees can claim
their dismissal was harsh, unjust/
unreasonable, not a case of genuine
redundancy or the dismissal was not
consistent with the Small Business Fair
Dismissal Code.
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Work Health
and Safety
Workplace Health and Safety Act 2011
Some states still use OHS be sure to
check with your state as to the
particular areas you need to comply.
Under health and safety legislation,
employers have a duty to ensure that
employees' working environments are
safe and pose no threats to their
health and wellbeing in the workplace.
Under this legislation, risks to health and
safety also includes bullying and violence in
the workplace.
Bullying can be defined as repeated,
unreasonable behaviour directed at
employees that poses risk to health and
safety. Performance-management needs to
ensure that in carrying out their duties,
their behaviour cannot be construed as
bullying. Particularly relevant when
addressing poor employee performance.
They should be careful not to:
Verbally abuse employees
Exclude or isolate employees
Set employees impossible tasks or
assignments
Harass employees, psychologically or
otherwise
Intimidate employees
Intentionally withhold information vital
for effective work performance
Assign meaningless tasks to employees
are not job related
Work place
diversity
These federal and state legislations covers workplace diversity and equal opportunity
in Australia:
The Australian Human Rights Commission Act 1986
The Age Discrimination Act
The Sex Discrimination Act 1984
The Racial Discrimination Act 1975
The Racial Hatred Act
The Disability Discrimination Act
The Workplace Gender Equality Act 2012
The Fair Work Act 2009
State-based anti-discrimination and WHS laws
Remember: you need to be aware of your own responsibilities. Legislation changes.
Keep up to date. Non-compliance is not tolerated and ignorance of the law is
no excuse!
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Appendix B: The marketing mix
It refers to the various elements making up the practice of marketing in its totality. Often
referred to as the Four P’s:
Product Quality and features. Why do your customers need what you are selling? What
are the perceived benefits of your product? Product is a good service, idea,
place or person - whatever is for sale whatever we are selling. Considered to
include core - benefits the product offers the customer, actual which is the
physical product and augmented the whole package including warranty,
delivery and after sales options for example.
Price List price, discounts, allowances etc. what will make them part with their
money? What the customer is willing to exchange for the product that they
want. Consider price as well as all the costs, time, social, lifestyle for example.
Place Retailers, locations, warehousing where do your customers go to fulfil their
needs? How available is the product to your customers? This relates to
channels of distribution as well as actual places the product is available from.
Promotion Advertising, personal selling, sales promotions. All activities, actions taken to let
customers know about the product benefits and how this product fits their needs.
The Four P’s are closely linked to the consumers Four C’s:
Product Customer needs and wants
Price Cost to the customer
Place Convenience
Promotion Communication
The extended marketing mix
In recent years, the marketing mix has been extended to include people, process and
physical evidence. This is largely as a result of the marketing of services.
People Important particularly in the marketing of services.
Process Customers migrate to other service providers when the process is not
providing customer value.
Physical evidence Examining every aspect that customers use in their perceptual field to
assess such a service.
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Product
A product is anything that can be offered to a market for attention, acquisition, use or
consumption that might satisfy a want or need. There are many types of products - goods,
services, events, ideas/causes, people, political candidates and parties, locations and so on.
Goods: many products are physical goods e.g. cars, toasters, shoes, books, and televisions.
Goods may be used over an extended period of time (durable products e.g. refrigerators) or
may be consumed in a single usage or short period (non-durable goods e.g. grocery items).
Services: service organisations offer their customers something essentially intangible - the
interaction does not result in the ownership of anything that endures. Services usually involve
high involvement by the consumer and are more personal in nature than consuming physical
goods e.g. a visit to the dentist or doctor, hairdresser, a meal at a restaurant. Services usually
involve synchronous delivery and consumption e.g. a driving lesson, a lecture. They are
perishable once the experience is over (e.g. a concert, a flight etc.) there is no taking it back.
Events: combine elements of physical products with those of services, particularly the
experiential aspects of sporting, entertainment and other staged events delivered over a
period of time. For example, the Olympic Games combines physical goods (food, drinks,
merchandise) with experiences, such as attending one of the events or the Opening and
Closing ceremonies. Events often attract sponsor companies that wish to reinforce positive
buyer attitudes by being associated with the particular event.
Ideas/causes: ideas or social causes can be marketed like other products, in the hope that
the consumer will adopt the behaviour associated with the idea, and promote it to others.
‘If you drink then drive, you’re a bloody idiot.’
‘Kissing a smoker is like kissing an ashtray.’
People: live performances by people/recording artists are products. Because of global television,
sporting stars are products in their own right. They are used to lift the people-drawing power of
the sports they represent and also used as brands to sell and endorse products.
Political candidates and parties: politicians market themselves as well as their political
ideologies and their political parties. We do not ‘buy’ them, but we give them our attention,
Target market
intended position
Price
People
Product
Process
Place
Physical evidence
Promotion
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vote for them and support their policies. Political parties adopt many of the same marketing
research techniques used in the commercial world. Where do politicians campaign these
days? On television? In person? On Facebook? On YouTube?
Locations: visits and experiences to locations are also marketed and ‘sold’ as products.
While consumers do not necessarily assume ownership of them, they buy the experience of
visiting and experiencing that place, and will often consume a range of products associated
with that location.
If someone buys a ticket to the Great Barrier Reef for a holiday, what ‘experience’ might they
be buying? What types of products might they consume while on holiday there?
Product attributes
Developing a product or service involves defining the benefits that will be offered to the
marketplace. These benefits are communicated and delivered by product attributes such as
quality, features and design.
Product quality is the ability of a product to perform its functions. It includes the product’s overall
durability, reliability, precision, ease of operation and repair, and other valued attributes.
How should a product’s level of quality be determined?
Marketers should match quality levels with expectations of the target market or quality levels
of competing products. Quality also relates to the consistency of delivery of quality. Do you
think consumers these days expect quality from every brand? I.e. is quality now a necessity?
Product features are used by marketers as a competitive tool to differentiate your product
from those of a competitor. Often companies begin by offering products without any extra
features - a ‘stripped down’ model and progressively create higher-level models by adding
more features.
What sort of questions might companies ask their customers to determine what new
features they should add to their products?
Which specific features do you like most?
What features could we add to improve the product?
Good design is not just about making a product look good (style), it is also about creating
products that are easy, safe, inexpensive to use and service, and simple and economical to
produce and distribute. For example, Black and Decker’s cordless power tools feature
outstanding design, which contributes to their great success.
Good design can attract attention, improve product performance, cut production costs and
give a product a strong competitive advantage.
Products are further categorised by the level of attributes they contain.
Augmented
•Delivery and credit
•Installation
•Warranty
•After sales service
Actual / secondary
•Brand name
•Features
•Styling
•Quality
•Packaging
Core
•Core benefit or service
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Core product: The problem-solving services or core benefits that consumers are really
buying when they obtain a product. This addresses the question:
What is the buyer really buying?
When designing products, it is critical to identify the core benefits offered by the product to
its consumers.
‘In the factory, we make cosmetics; in the store, we sell hope.’ Charles Revlon of Revlon Cosmetics.
Actual product: A product’s parts, styling, features, brand name, packaging and other
attributes that combine to deliver core product benefits.
Example: A Qantas air ticket from Brisbane to London is an actual product. So are the
Qantas name (brand name), air terminal layout and services, plane seating
configurations, crew uniform styling, booking system (a component of
packaging), features such as in-flight movies, food and beverage
service/quality are carefully combined to deliver the core benefit or service.
Augmented Product: Additional consumer services and benefits built around core and
actual products. For example, some consumers might require greater service levels than
others - Business or First Class, or vegetarian meals. Some expect extra services before the
flight, and so might join the Qantas Club. Some expect extra augmentation through packaged
tours, a Frequent Flyer point’s scheme. These all become important parts of the total product.
The Product life cycle
The product life cycle is the course of a product’s sales and profits during its lifetime. It
involves five distinct stages:
Product development
Introduction
Growth
Maturity
Decline
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The exact shape and length of each stage varies from product to product, and market to market.
Product development
A product concept (idea) is developed into a physical product (prototype) to ensure that the
idea can be turned into a workable product. Prototypes are tested to ensure the product
performs safely and effectively.
Introduction
New product is first distributed and made available for purchase. Consumers of the new
product need to be informed and to try it. Deal with negative/low profits due to low sales and
high distribution and promotion costs. Because the market is not generally ready for product
refinements at this stage, companies produce basic versions of the product.
Growth
If successful, sales will start climbing quickly. New competitors enter the market, introducing
new product features. The market expands, as does the number of distribution outlets. Profits
increase, as promotion costs are spread over a larger volume. Unit manufacturing costs fall.
Product quality and features are improved, new market segments entered, new distribution
channels established, and prices lowered at the right time to attract more buyers.
Maturity
Sales growth slows or levels off. Normally lasts longer than the previous stages, and poses
challenges for the marketer. There are many producers with many products to sell.
Competitors mark down prices, thus reducing profits. Marketers should consider one of the
following strategies:
Market modification - look for new users and segments for current product. Bailey’s Irish
Cream liqueur targeted the 19-25 singles segment with its positioning as a ‘sexy’ drink
Product modification - change a product’s characteristics to attract new users and more
usage e.g. Renault keeps adding new styles and features to its line of compact cars
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Marketing-mix modification - e.g. cut prices, launch a new advertising campaign,
and offer new or improved services to buyers
Decline- in sales.
The company must identify declining products, are they to be:
Maintained - in the hope that competitors will leave the industry
Harvested - reducing costs in the hope sales hold up
Dropped - could sell to another firm or liquidate it at salvage value
Reasons for the decline can be many e.g. technological advances, shifts in consumer tastes,
increased competition, and changes to regulations.
The life cycle can be a useful framework for describing how products and markets work. It
can help in developing good marketing strategies for different stages of the cycle. However,
managers may have trouble using it e.g. identifying what stage their product is at, when it
will move to the next stage, and what factors affect its movement through the stages.
This is a strategy for promoting company growth by offering modified or new
Price
Price refers to the value of the exchange charged for a product or service. You pay rent for
accommodation, tuition for education, a toll on the motorway, interest for the money you
borrow from the bank, and so on.
Price is the only element in the marketing mix that generates revenue; all of the others
(product, promotion and distribution) are costs. Common mistakes made by companies in
setting prices include:
Pricing is cost-oriented
Prices are not revised to reflect market changes
Pricing does not take the rest of the marketing mix into account
Prices are not varied enough for different product items and market segments.
Pricing decisions are affected by a number of factors, Internal (company) and external
(environmental)
Internal Factors
Marketing Objectives
Price is often largely determined by the target market and positioning for the product. The
clearer a firm is about its objectives, the easier it is to set price.
Objectives affecting price
Survival: if a company is facing financial troubles due to over-capacity, heavy competition or
changing consumer wants, they may reduce prices to stay in business.
Current profit maximisation: a company estimates demand and costs at different price levels
and chooses the most profitable price.
Market-share leadership: by setting prices as low as possible, a company hopes to out-sell
the competition.
Product-quality leadership: the objective of highest quality means setting higher prices.
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Example Virgin Mobiles has positioned itself as a company for budget-minded callers, and keeps prices low.
Marketing-mix strategy
Pricing decisions must be coordinated with product design, distribution and promotion
decisions to form a consistent and effective marketing program. Decisions made for other
marketing-mix variables may affect pricing decisions, and vice versa. Price is often largely
determined by the target market and positioning for the product.
Example Fashion houses like Gucci and Armani hold a high-quality position in the
market. They must set their prices high enough to cover high quality materials,
resellers’ high margins and good service.
Yamaha, discovered a market for affordable stereos, and so designed their
product with a lower price in mind.
Costs
The company must cover all costs for producing, distributing and selling the product, and also
deliver a fair rate of return for its effort and risk. Costs are therefore an important element in
pricing strategy. A company has two types of costs i.e. fixed costs and variable costs.
Fixed costs (or overheads) do not vary with production or sales level e.g. rent, heat and
executive salaries.
Variable costs vary directly with the level of production e.g. the costs of wires, plastic,
packaging and other materials that go into producing a calculator. Total costs are the sum of
the fixed and variable costs for any given level of production.
Companies must watch costs carefully, if it costs them more than competitors to produce and
sell their products, they will have to charge a higher price or make less profit. To price wisely,
managers must understand how its costs vary with different levels of production.
Management wants to charge a price that will at least cover the total cost of production at
any given level of production.
Organisational considerations
There could be other issues internally that will affect pricing decisions, every case is different
and needs to be examined thoroughly to make the correct pricing decision.
External factors
Market and demand
Costs set the lower limit of pricing, the market and demand set the upper limit. Buyers balance
the price of a product / service against the benefits of owning it. Before setting prices, marketers
must understand the relationship between price and demand for its product.
Economists recognise four different types of markets, each presenting a different pricing challenge:
Pure
competition
Many buyers and sellers trade in a single commodity. No single buyer or
seller therefore has much effect on the going market price.
Monopolistic
competition
Many buyers and sellers trade over a range of prices rather than a single
market price. Sellers can differentiate their offers and buyers pay
different prices for different products.
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Oligopoly There are only a few sellers who are highly sensitive to each other’s
pricing and marketing strategies. Example if Optus slashes call costs,
Telstra will likely have to do the same.
Pure monopoly There is a single seller- it may be a government monopoly, a private,
regulated monopoly or a private, non-regulated monopoly. They may set
prices quite low to make the product accessible, or quite high to slow
down consumption
When setting prices, the company must consider consumer perceptions of price and how
these perceptions affect buying decisions and demand. Pricing, like other marketing-mix
decisions, must be buyer-oriented. Effective pricing involves understanding how much value
consumers place on the benefits they receive from the product and then setting a price that
fits this perceived value. A demand curve shows the number of units the market will buy in a
given time period, at different price levels that might be set.
In most cases, the higher the price charged for a product, the lower the demand. However, in
the case of luxury goods, sometimes higher prices lead to higher demand amongst the target
market, as they perceive a higher quality product. Most companies try to measure their
demand curves, estimating demand at different price levels.
Marketers also need to understand price elasticity i.e. how responsive demand will be to a
change in price. If demand hardly changes with a change in price, demand is inelastic. If
demand changes greatly, we say the demand is elastic.
What determines the price elasticity of demand?
Buyers are less price-sensitive when the product they are buying is
Unique or when it is high in quality, prestige or exclusiveness
When substitute products are hard to find
When the cost of a product is low relative to their income
If demand is elastic rather than inelastic, sellers will consider lowering prices.
Competitor’s prices and offers
Companies can use competitors’ prices as a starting point for its own pricing strategy. The
company’s pricing strategy may also affect the nature of the competition that it faces.
Example: A purchaser considering buying an Omega watch will evaluate Omega’s price
and value against the prices/values of comparable products made by Seiko,
Tag Heuer etc. If Omega follows a high-price, high margin strategy, it may
attract competition. If it follows a low-price, low-margin strategy, however, it
may stop competitors or drive them out of the market. Basically, Omega will
use price to position its offer relative to competitors.
Other external factors
Economic conditions: inflation, booms, recessions and interest rates all affect both the
costs of producing a product and consumer perceptions of the product’s price and value, and
their ability to purchase.
Other parties: the company should give resellers a fair profit.
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Government regulations: the Trade Practices Act prohibits unfair pricing practices e.g.
predatory pricing. Predatory pricing is where prices are set unreasonably low to force
competitors out of the market.
Pricing approaches
Companies set prices by selecting a general pricing approach that includes one or more of the
following four sets of factors:
Cost-based pricing
Value-based pricing
Competition-based pricing
Relationship pricing
Cost-based pricing
This is the simplest pricing approach; it involves adding a standard mark-up to the cost of
producing the product.
Disadvantages -It ignores current market demand and the competition. Mark-up pricing
only works if that price actually brings in the expected level of sales.
Advantages- Sellers can be more certain about costs than about demand.
Sellers earn a fair return on their investment but do not take advantage of buyers when
buyers’ demand becomes great.
Example Suppose a radio manufacturer had these costs and expected sales:
Variable cost per unit = $10
Fixed costs = $300 000
Expected unit sales = 50 000
The manufacturer’s cost per radio =
Cost per unit = unit variable cost + (fixed cost/unit sales)
= $10 + ($300 000/$50 000) = $16.
There also needs to be a mark-up, in this example use a 20% mark-up
= unit cost/ (1 – desired return on sales)
= $16 / (1 – 0.2) = $20.
Break even pricing (target profit pricing)
This involves setting the price to break even on the costs of making and marketing a product,
or to make the desired profit. Manufacturers should consider different prices and estimate
breakeven volumes, probable demand and profits for each. Much depends on price elasticity
and competitors’ prices.
Breakeven volume = fixed cost/ (unit sell price – unit variable cost)
= $300 000 / ($20 - $10)
= 30 000 units
Value-based pricing
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This approach sets price based on buyers’ perceptions of value rather than on the seller’s
costs. The company uses the non-price variables in the marketing mix to build up perceived
value in buyers’ minds. Price is then set to match the perceived value.
Example Consumers may purchase nachos for $5.50 at the supermarket, $7 at the food
hall, $9.50 at the local restaurant, $15 at a hotel restaurant and $20 at an
upmarket restaurant. Each venue can adjust their price according to the value
of the total experience (the atmosphere, quality of service).
Cost-based pricing is product driven: The company designs what it considers to be a
good product, totals the anticipated costs of producing it, sets a price that covers costs plus a
target profit, and then uses marketing to attract buyers to the product.
Value-based pricing is customer driven: The Company sets its target price based on
customer needs and perceptions of product value. The targeted value and price drive
decisions about product design and what costs can be incurred.
Competition based pricing
When a company sets its price based largely on following competitors’ prices rather than on
company costs or demand, it is called going-rate pricing. When demand elasticity is hard to
measure, companies use this approach as they feel it represents industry wisdom on the
going rate. This approach is also often used when companies bid for jobs. Using sealed-bid
pricing, a company bases its price on how it thinks competitors will price rather than on its
own costs or demand.
The company may price above the market, pricing its products higher than similar
products charged by competitors. IBM price this way because its products are perceived to be
durable, of high quality, state-of-the-art and high serviceability.
The company may price below the market by adding a lower profit per unit or keeping
costs per unit lower than competitors. In this situation, the distinguishing attribute of the
product is its low price e.g. generic supermarket items.
The company might price at the market, establishing prices that reflect the prevailing
market price for a particular type of product.
Relationship pricing
This approach to pricing requires a special approach to pricing that incorporates shared risk
and reward between companies and suppliers.
Example: A company may meet with its suppliers to explore ways of enhancing value to
both businesses, or to reduce production costs.
BHP Billiton has a number of alliance partner customers who they share the
cost, risks and benefits of oil exploration and processing with.
Price adjustment strategies
In addition to the previous approaches to setting prices, companies also apply a variety of
price adjustment strategies to account for differences in consumer segments and situations:
Discount pricing
Segmented pricing
Psychological pricing
Promotional pricing
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Geographic pricing
Discount pricing: a company lowers the regular price of its products:
Cash discounts
Quantity discounts: selling products at a lower cost per unit if the buyer purchases a
given quantity e.g. 6 bottles of wine
Functional discounts: decreasing the price for a reseller who performs certain
marketing activities for other members of the distribution chain
Seasonal discounts and allowances: a special discount offered in the off-season e.g. Air
tickets
Segmented pricing: the company sets different prices for different customers, product
forms, places or times. Nokia will price different mobile phones at different price points
depending on their different functionality.
Psychological pricing: the company adjusts the price to communicate more effectively a
product’s intended position. Expensive (highly priced) suits and other apparel are then
perceived to be of a higher quality. Similar to value-based pricing.
Promotional pricing: the company decides on loss leader pricing (charging less, when
launching a product, in the hope it will lead to a greater quantity of sales and repeat
purchase), special-event pricing and psychological discounting.
Geographic pricing: the company decides how to price to distant customers, choosing from
alternatives like uniform delivered pricing, and zone pricing. Supermarkets and petrol stations
often use this pricing model.
Place
Marketing logistics networks (place) is the system of efficiently and effectively making and getting
products and services to end-users.
It consists of marketing channels. Members of the marketing channel move goods from
producers and suppliers to consumers. Members may include retailers, manufacturers,
warehouses, transport companies, docks and wharves.
Distribution and logistics can add up to 30-40% to a product’s cost. A well planned marketing
logistics program can be a very important tool in competitive marketing.
Through marketing logistics network management practices, companies attempt to source
the right inputs (raw materials, components, capital equipment), convert them efficiently into
finished products and dispatch them to their final destinations. Companies can attract
additional customers through offering better service, faster delivery times or lower prices
through logistics improvements.
Marketing logistics network decisions typically involve:
Cycle-time reductions e.g. changing the manufacturing process to make it faster from time
of order to time of receiving the product
Conversion operations locations e.g. placing a manufacturing plant close to the source of
raw materials to reduce costs and time
Purchasing decisions e.g. to make or buy or vertically integrate or network with suppliers
Manufacturing and operations process decisions e.g. product scheduling to produce
larger amounts of a product at one time and thereby reduce costs
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Order processing and costs e.g. outsourcing a call centre overseas where labour is flexible
and costs are lower
Warehouse numbers and costs e.g. improving customer service by placing warehouses in
each capital city to speed up delivery times
Inventory levels and costs e.g. reducing inventory levels and costs by reducing the
amount of storage in warehouses
Transport types and costs e.g. using rail transport instead of road transport to reduce
freight costs
Restructuring the marketing channels used to place products within easy reach of buyers and
end-users.
A marketing channel ‘is a set of interdependent organisations involved in the process of making a
product or service available for use or consumption by the consumer or industrial user.’
Kotler et al (2007).
Members of the marketing channel move goods from producers and suppliers to consumers.
Marketing channel members perform many key functions, including:
Information: gathering and distributing marketing research and intelligence
information about people and forces in the marketing environment, this aids
marketing planning
Promotion: developing and spreading persuasive communications about an offer
Contact- finding and communicating with prospective buyers
Matching: shaping and fitting the offer to the buyer’s needs, including grading,
assembling and packaging
Negotiation: reaching an agreement on price and other terms of the offer so that
ownership or possession can be transferred
Physical distribution: transporting and storing goods
Financing: acquiring and using funds to cover the costs of the channel work
Risk taking: assuming the risks of carrying out the channel work
Channel structures
Each layer of intermediaries that performs some work in bringing the product and its
ownership closer to the final buyer is a channel level. The number of intermediary or channel
levels used indicates the length of a channel. A direct marketing channel has no intermediary
levels. It consists of a manufacturer selling directly to consumers.
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For the producer, greater numbers of levels generally means less control, greater complexity
and more costs. Channels may contain one middleman level. In consumer markets, this is
typically a retailer e.g. Kmart sells televisions, cameras, tyres, furniture, appliances that they
buy directly from manufacturers.
Channels may contain two intermediary levels- typically a wholesaler and a retailer e.g. this
is often used by small manufacturers of food, pharmaceuticals, hardware and other products.
Other channels contain three middleman levels. For example, in the giftware industry, a
jobber buys from wholesalers and sells to smaller retailers who are not generally served by
larger wholesalers.
Are marketing channels also used in marketing services?
Yes! Producers of services and experiences also must decide how they will make their output
available to their target markets. For example, when governments sell services like health
systems, they must determine agencies and locations for reaching widely spread populations.
Vertical Marketing Networks (VMN)
This is a distribution channel structure in which producers, wholesalers and retailers act as a unified
network. One channel member owns the others, has contracts with them or wields so much power
that they all cooperate. The VMN can be dominated by the producers, wholesaler or retailer.
Woolworths in Australia is a good example of a Vertical Marketing Network. They own,
dominate or control, manufacturers, producers, logistics, warehousing and retailers for their
marketing channel.
Horizontal marketing networks
A horizontal marketing network is a channel arrangement in which two or more companies at
one level join together to follow a new marketing opportunity. Companies are able to
combine capital, production capabilities or marketing resources to accomplish more than they
could, working alone.
Manufacturer
Wholesaler
Consumer
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In Victoria’s Goulburn Valley, fruit canners joined forces to market their product overseas
under a single brand name to achieve wider distribution.
Hybrid marketing channel networks - These are multichannel distribution systems in
which a single firm sets up two or more marketing channels to reach one or more marketing
segments.
Example Ingham chicken sells chicken products and portions using its own brand
through large retailers like Coles and Woolworths, and store branded chicken
products to food retailers like McDonalds and KFC and to other independent
fast food operators.
Today, Ingham encompasses a fully integrated farming, primary and further
processing poultry business (operating 10 feed mills, 10 primary plants and six
further processing plants), and a diversified stockfeed business, ingredients for
pet food and stockfeed, a piggery operation and extensive bloodstock breeding
and racing division.
Retailing - refers to all the activities involved in selling goods or services directly to final
consumers for their personal, non-business use.
Types of retail stores
Retail stores come in all shapes and sizes, and new retail types keep emerging. They can be
classified according to one or more of several characteristics:
Amount of service
Product line sold
Relative prices
Control of outlets
Type of store cluster
Different types of retailers use different levels of service:
Retailers can be classified by length and breadth of product assortment:
Specialty stores: carry a narrow product line with a deep assortment within that line e.g.
stores selling sporting goods or furniture or books or electronics.
Department stores: carry a wide variety of product lines, such as clothing, home
furnishings and household goods e.g. David Jones, Myer.
Self-service retailers
•Provide few or no services to shoppers
•Shoppers perform their own ‘locate-compare-select’ process to save money
•This retail structure is used by sellers of convenience goods, such as supermarkets, Kmart, Big W, Aldi, etc.
Limited-service retailers
•Provide only a limited number of services to shoppers
•Hardware chains like Bunnings provide limited, but technically competent, sales assistance for their products
•These types of retailers may also offer additional services such as credit and merchandise return
Full-service retailers
•Retailers that provide a full range of services to shoppers
•These include speciality stores and first-class department stores, where salespeople assist customers in every phase of the shopping process
•They usually carry more specialty items, and provide more liberal returns policies, credit plans, free delivery, home servicing etc.
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Convenience stores: small stores, located near residential areas, open long hours, 7 days a
week, and carrying a limited line of high-turnover convenience goods such as milk and bread
e.g. 7- Eleven.
Mass merchants: carry a large assortment of merchandise such as hardware (Bunnings
Warehouse) or electrical goods and furniture (Harvey Norman) or personal healthcare (Priceline).
Superstores: almost twice the size of a regular supermarket carrying a large assortment of
routinely purchased food and non-food items, and extra services as dry cleaning, photo
developing, cheque cashing, bill paying, car care etc.
Hypermarkets: combine supermarket, discount and warehouse retailing- carrying food,
furniture, appliances, clothing etc. More popular in US than Australia.
Retailers can also be classified according to their prices:
Discount stores: sell standard merchandise at lower prices by accepting lower margins and
selling at higher volume.
Off-price retailers: buy at less than regular wholesale prices and sell at less than retail,
usually carrying a changing and unstable collection of higher-quality merchandise, often
leftover goods e.g. factory outlets.
Catalogue showrooms: sell a wide selection of high mark-up, fast moving, brand-name
goods at discount prices. These include jewellery, power tools, cameras, luggage, sporting
goods, toys etc. They make money by cutting costs and margins to provide lower prices that
will attract a higher volume of sales.
Retailers can also be classified according to ownership structure:
Chain stores: two or more outlets that are commonly owned and controlled employ central
buying and merchandising, and sell similar lines of merchandise e.g. Coles Myer controls 20c
of every retail dollar in Australia. The dominance of retailing turnover by a limited number of
firms has implications for marketers, who have to gain distribution with key retailers if they
are to gain market coverage.
Retailer cooperatives: a group of independent retailers that band together to set up a
jointly owned central wholesale operation and conduct joint merchandising and promotion
efforts e.g. Mitre 10.
Franchise: a contractual association between a manufacturer, wholesaler or service organisation
(a franchisor) and independent businesspeople (franchisees) who buy the right to own and
operate one or more units in the franchise system e.g. Real estate agencies, McDonalds.
According to type of store cluster:
Central business districts (CBDs): are the areas of business at the heart of a city or town,
usually containing department stores, specialty stores, banks, movie theatres etc.
Shopping centres: a group of retail businesses is planned, developed, owned and managed
as a unit e.g. Indooroopilly Shopping Centre.
Wholesaling
Wholesaling includes all activities involved in selling goods and services to those buying for resale
or business use. Wholesalers are firms engaged primarily in wholesaling activity. Wholesalers buy
mostly from producers and sell mostly to retailers, industrial consumers and other wholesalers.
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Why would a producer use wholesalers rather than selling directly to retailers or
consumers?
Because wholesalers are better at performing one or more of the channel functions.
Wholesalers offer a range of benefits:
Selling and promoting - wholesalers’ sales teams help manufacturers reach many small
customers at a low cost. The wholesaler has more contacts and buyers often trust the
wholesaler more than they trust the distant manufacturer.
Buying and assortment building - wholesalers can select items and build assortments of
different products needed by their customers, thereby saving the consumers much work.
Bulk breaking - wholesalers save their customers money by buying in carload lots and
breaking large lots of products into small quantities.
Warehousing- wholesalers hold inventories, thereby reducing the inventory costs and risks
of suppliers and customers.
Transportation - wholesalers can provide quicker delivery to buyers because they are closer
than the producers.
Financing - wholesalers finance their customers by giving credit, and they finance their
suppliers by ordering early and paying bills on time.
Risk bearing - wholesalers absorb risk by taking title (ownership of the products) and
bearing the cost of theft, damage, spoilage etc.
Market information - they give information to suppliers and customers about competitors,
new products and price developments.
Management services and advice - wholesalers often help retailers to train their salespeople,
improve store layouts and displays, and set up accounting and inventory control systems.
Promotion
This is the most commonly recognised aspect of the marketing function. It is the process of
integrating and coordinating available communication channels to deliver a clear, consistent and
compelling message about the organisation and its products or services. The objectives of the
communication may vary: inform, persuade, remind, or reinforce attitudes or perceptions.
In order to develop a compelling message, the sensible marketer:
Identifies the target audience
Determines the response they seek
Selects a message
Selects the appropriate media
Collects meaningful feedback
Identifying the target audience
The target audience affects all decisions when developing your promotion strategy. The
audience might be current users, potential buyers, decision makers, decision influencers,
groups, individuals, special interest groups, general public etc.
What will be said?
How will it be said?
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When will it be said?
Where will it be said?
Who will say it?
Determining the response sought
The marketer uses communications to influence consumer state of mind:
Awareness Product name recognition, or ‘brand awareness’. The message may simply
be repetition of the product name.
Knowledge The goal is to provide the target market with information about the
product or organisation
Liking/
admiring Create favourable emotional responses and connections to product or
organisation.
Preference Build consumer preference by promoting the product’s quality, value,
performance and other features
Conviction Convince the target market that buying the product is the right thing to
do, that it fills a need (previously identified need or not).
Purchase Lead consumers to take the final step, often called the ‘Call to Action’. This
may include a sales promotion such as offering the product at a reduced
price, letting the consumer ‘try before they buy’, or a ‘limited time offer’.
Obviously, the eventual goal is for the consumer to purchase the product; however, there are
other stages the come before the ultimate purchase in the decision making process that the
marketer will attempt to influence.
Selecting a message
The marketer must determine:
What to say – message content
How to say it logically – message structure
How to say it symbolically – message format
For example, in a print ad, the marketer must consider:
Headline
Colour
Illustrations
Placement
Copy
Selecting media
There are five common communication channels used in modern consumer marketing:
Advertising
Public relations
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Personal selling
Sales promotions
Direct marketing
Reviewing media performance
Once the message has been sent, the marketer must obtain meaningful feedback to
determine the success of the communication. Research may include:
Whether the consumers remember the message
How many times they saw it
What points they recall
How they felt about/responded to it
Their past and present attitudes about the product or company
Whether it resulted in a behaviour change
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Appendix Project plan template
This document will work in with your Project Charter, which will be provided by your
Project sponsor giving the details of the project itself.
If you are unsure of any elements of the charter you must ask. To clarify and to
avoid issues with your planning, resources, time and budget.
Depending on the details of your Project Charter you will leave out various elements
if they are not required.
Project Plan
Project name
Date Signature
Project manager
Date Signature
Project sponsor
Date Signature
Document version control Version number and date of issue
Description of change Hint: This helps to keep track of changes in
version. For example if your budget is changed
you will reflect this in the Project Plan and can
indicate this here with a new version number.
The following are definitions of terms, abbreviations and acronyms used in this document.
Term Definition
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1.Project plan
overview
The purpose of the Project Plan is to present the detail required to successfully
execute and control the project, facilitate communication among project
stakeholders, and document approved schedule baselines. The project plan is a
living document and is expected to change over time as more information about the
project becomes available.
2.Critical project
assumptions
The project plan was developed based upon certain key assumptions as noted in the
Project Charter. Any changes to these assumptions may impact the project schedule,
projected costs, the project scope and/or the project quality. These assumptions are:
3.Project work plans Your project work plan can vary depending on the needs and specific
requirements of your project. Some elements may not be needed,
some will need great detail other areas less detail will be required.
3.1 Work breakdown
structure
The work breakdown structure identifies the project’s tasks to provide a framework
for organising and managing the work of the project.
3.2 Project schedule The project schedule includes milestones, task dependencies, task duration, delivery
dates, and staff resources assigned to complete the tasks.
3.3 Project budget The project budget describes cost and budget needed to complete the project tasks.
4. Project control
plans
In this section you will give a brief overview of the control strategies you have put in
place for the project management plan. You will then place a copy of the control
plans in the appendix of this document.
4.1 Communications
plan
This plan outlines how your will communicate with the project stakeholders and the
project team.
4.2 Quality
management plan
Describe how you plan to control the project quality. What quality assurance
activities will be performed during the course of the project? Who will conduct these
activities?
4.3 Change
management plan
Describe how change requests will be processed. Who has authority to approve
scope changes? How will changes be tracked?
4.4 Risk
management plan
Provide a plan to manage project risk. Provide contingency planning and risk
management treatments.
4.5 Procurement plan Explain the project procurement process. Who has authority to expend project
budget? Who will plan and monitor project procurement?
