Chapter One

1
Chapter One

• A Decision Making Perspective on Marketing
  Research

2
Why study Marketing Research

• Careers
• Research Organizations (e.g. A.C. Nielsen, J.D.
  Power Associates, IRI, etc.)
• Marketing Business Consultancies (e.g. Arthur
  Andersen, Price Waterhouse, McKinsey Co, etc.)
• Marketing Departments of Businesses
• Academia

3
Situations where MR knowledge is essential

• Your boss wants to introduce a new product and
  calls you for advice.
• Your ad agency wants your business to buy an
  expensive ad campaign.
• Your MR consultants present their findings about
  why your sales are falling. Do you accept their
  reasons?
• Your boss wants to reduce prices and calls you
  for advice.

4
Why study Marketing Research

• Universal belief numbers dont lie
• Increase chances of taking the right decision
• Increase confidence in your recommendations

5
What is Marketing Research?Examples
Gentleness

• Pain Relievers
• Perceptual Map

• Tylenol

Effectiveness

• Bayer

• Advil

• Private-label
• Aspirin

• Nuprin

• Anacin

• Excedrin

6
Definition of Marketing Research

• Marketing research is the
• systematic (pre-planned) and objective
  (measurable)
• identification, collection, analysis, and
  dissemination of information (information goes
  from market to organization)
• for the purpose of improving decision making
  (providing factual basis for taking a decision)
• related to the identification of opportunities
  and solution of problems in marketing.

7
Role of Marketing Research in Managerial Decision
Making

• Four Stages of
• Market Planning Situation analysis
• Process
• Strategy development
• Marketing program development
• Implementation

8
Situation Analysis

• The analysis of the environment in which the
  business operates
• Market (sector-specific e.g. demand and supply,
  production, etc.)
• Economy (e.g. money supply, inflation, BOP,
  interest rates, etc.)
• Consumer and society (buyer behavior, societal
  trends)
• Technology (obsolescence, innovations,
  inventions)
• Legal (laws regulating business)
• Political (govt. attitudes to business and
  specific sectors)
• Natural (effect of natural resources on business)
• Usually focus on trends which impact the
  marketing situation

9
Aspect of business environment?Interested
business?

• Depletion of forest cover
• Increased demand for gasoline in China and India
• Tough vehicle emission laws in California
• Fed drops interest rates by a quarter of a point
• Dow Jones rises by 100 points
• Consumers increasingly prefer to buy online
• Increasing trend in downloading songs from the
  Internet
• Growing popularity of satellite radio
• Increased duties on European cars

10
Case MP3 players

• Identify at least one aspect of the external
  environment I-Pod would be interested in
  researching
• Economic
• Technological
• Buyer behavior
• Market
• Legal

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Situation Analysis Common Marketing Research
Questions

• Describing the market
• How big is the existing market?
• How big is the potential market?
• How fast is the market growing?
• How brand loyal is the market?
• What competitive products exist?
• What is the supply situation in the market?

12
Situation Analysis Common Marketing Research
Questions

• Describing an organizations market position
• What market share does the company hold?
• What market segments exist and which do we serve?
• Who are our primary competitors?
• What opportunities exist with distribution
  channels?

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Situation Analysis Common Marketing Research
Questions

• Describing buyer behavior
• Who are our customers? (i.e., demographic,
  geographic, psychographic segments)
• How do buyers perceive our brand and competing
  brands?
• What is the repurchase rate for our brand and
  competing brands?
• How satisfied are customers with our brand?
• Where do customers buy? When do they buy? Why do
  they buy?
• How much do buyers like our brand?

14
Role of Marketing Research in Managerial Decision
Making

• Four Stages of
• Market Planning Situation analysis
• Process
• Strategy development
• Marketing program development
• Implementation

15
Strategy Development

• Market Research Provides Information to Assist
  Management With Three Critical Decisions
• What business should we be in?
• How will we compete?
• What are the objectives for the business?

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Strategy development Common Marketing Research
Questions

• What business should we be in
• What products should we offer (e.g. Why did Apple
  get into the music business?)
• What technologies should we use (e.g. Should the
  TV industry go the plasma monitors way or the LCD
  way? Sony Betamax or Toshiba VHS?)
• What market segments should we target (e.g. Under
  Armour serious athletes or even casual
  athletes?)
• What distribution channels should we use (e.g.
  Cars dealerships or Internet?)

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Strategy development Common Marketing Research
Questions

• How will we compete
• How do we differentiate ourselves / our product
  from competition (e.g. Should Lacoste be a
  premium brand or a mass market brand?)
• What attributes do consumers consider to be
  important (e.g. toothpaste whitening power or
  cavity protection?)
• How do we compare to competition (e.g. Pepsi and
  Coke who is winning?)

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Strategy development Common Marketing Research
Questions

• What our the business objectives
• Sales Profits
• Market share
• Service objectives (Car dealers low prices or
  turnaround times)
• Customer satisfaction (self-survey or actual
  complaints)
• Attitudes, etc.

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Role of Marketing Research in Managerial Decision
Making

• Four Stages of
• Market Planning Situation analysis
• Process
• Strategy development
• Marketing program development
• Implementation

20
Common Questions

• Segmentation which segment to target (e.g. BMW
  should they introduce an economy car?)
• Product How should the product be positioned
  (Should Apple I-Pod be a premium brand or a mass
  market brand?)
• Distribution exclusive / mass distribution
  (Barbie dolls should be sold exclusively
  through Toysrus or even in Walmart?)
• Advertising what appeals should be used (e.g.
  Dolce Gabbana super low-rise jeans should
  they use over-the-top sex appeal in their ads or
  not?)

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Common Questions

• Personal selling which customers should be
  approached personally (e.g. Epson printers is
  personal selling and option?)
• Price what price should be charged (e.g. should
  Starbucks drop their prices?)
• Branding how can brand loyalty be increased
  (e.g. should Morton salt institute a customer
  rewards program?)
• Customer satisfaction how can it be measured

22
Role of Marketing Research in Managerial Decision
Making

• Four Stages of
• Market Planning Situation analysis
• Process
• Strategy development
• Marketing program development
• Implementation

23
Common questions - Implementation

• Did the marketing program achieve its objectives
  (e.g. did the Aflac duck campaign improve TOMR?
  Attitudes?)
• Should the marketing program be modified,
  continued or terminated (e.g. The Sonic guys
  should the company pull the campaign?)

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Factors Influencing Marketing Research Decisions
Yes
Yes
Yes
Yes
Availability of Data Is the information on
hand inadequate?
Nature of Decision Is the decision of
considerable importance?
Benefits vs. Costs Does the value of the
research exceed the cost?
Time Constraints Is sufficient time available?
Conduct Marketing Research
No
No
No
No
Do not conduct marketing research!