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Marketing Management 2002
What is the Contribution of Market Research for
Efficient Marketing?
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Agenda

• Introduction
• When to use Market Research
• Test Instruments
• Tracking Instruments
• Integrated Intelligence

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GfK Group 2001

• 530 Mio. revenue (10)
• 5000 employees
• More than 120 companies in 50 countries
• No. 6 in the world, in CEE No. 1

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Market Position of GfK Research in 2001 (Only
Consolidated Companies)
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2
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3
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) exception not consolidated in 2001
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"An investment in knowledge always pays the best
interest." Benjamin Franklin (1706-1790), US
politician and natural scientist
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When should Market Research be used?
Increasing Importance of Market Research
Influencibility
Launch of New Products
Paper for Brochure
Choice of Location
Price Product
Price of Competitive Products
Industry and Country Standards
Birthrate
Risk
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When which Instrument?
Life Cycle of a Brand
Sales
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Marketing Decisions

• Distribution?
• What buyers will be reached?
• How satisfied are the buyers?
• Which promotion is effective?
• Must communication be changed?
• Must price be adapted?
• ...

• Does the concept work?
• Development of product?
• Which communication?
• Which price?
• ...

Shall I go into the market?
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When which Instrument?
Each phase in the life cycle of a product has its
own primary market research instruments.
Life Cycle of a Brand

• - Concept Test (a.o.
• Conjoint)
• - Product Test
• Advertising Pretest
• Price Test
• - Micro Test Market / Test Market Simulation

Market Study (Survey)
- Consumer Panel - Retail Panel - Scanner Panel -
Advertising Tracking
Time
Development
Relaunch
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Desk Research (often Internet Investigations)

• Advantages
• low price
• quickly
• But
• not everything available
• often positively coloured
• often no representative samples
• data quality has to be checked by user
• Exception commercial data bases

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www.lebensmittelzeitung.de - Food Retail
Rankings World, Europe, Germany, several
Countries CEE - Top 50 Suppliers with Key
Products - New Products
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www.horizont.de - Advertising Clients - Market
Shares TV Audience - Rankings Agencies - ...
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Test Instruments prior to the Product Launch
Is the product idea interesting for the
consumers? Condition Product idea is describable
Concept Test Product Test Communication
Test Price Test Test of the Market Launch
Does the product offer subjective product
advantages? Condition Finished product available
Can the advertising attract attention? Can it
stimulate to buy? Condition Advertisement
available
Which price leads to which sales? Where are price
hurdles?
Do the components of the marketing mix go
together well ? Does the consumer like the
product?
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Concept Test Central Questions
Tests the attractiveness of the product idea for
the consumer (e.g. buying intention)
Acceptance
Identifies strengths and weaknesses of the concept
Strengths / Weaknesses
Finds out the creditibility of the product idea
Creditibility
Identifies how new and unique the product idea is
from the customer's point of view
Uniqueness
Shows you whether the concept is really relevant
for the consumer resp. will meet important
demands of the consumers
Relevance
Shows you whether the product idea fits to your
brand resp. to your company
Consistency
Optimization and choice of promising concepts
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Concept Test Result Buying Intention
Concept A
Concept B
Concept C
100
10
23
90
28
35
Buying Intention
80
(1) buy in any case
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70
(2) probably buy
(3) maybe, maybe not buy
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(4) probably not buy
39
50
45
(5) definitely not buy
54
40
36
30
23
20
19
14
14
10
11
10
2
4
1
100
100
100
Base (100)
100
Average
2,8
2,3
1,9
1,9
Top 2 Boxes (12)
40
62
82
80
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Concept Test Interpretation
Winner Best chances to become a successful
product. Niche Products Chances for success
in strongly segmented markets. Risk Volume too
low for long-term market success or for a
sufficient distribution.
Generic Products Need strong marketing-support
or USP for being successful. Risk Not really
"new" product. Could be seen by the consumer as
"me-too-"product. Looser Should be neglected,
provided that specific weaknesses could not be
identified and removed.
high
Buying Intention
low
low
high
Uniqueness
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How will the Product be evaluated? The Product
Test

• Target Product evaluation by the customer
• Test designs
• hall test vs. inhome test
• monadic test vs. comparison
• blind test vs. branded test
• several partial tests (taste, handling, package
  etc.)
• Sample approx. 100 to 500 persons
• Product test panels for difficult target groups
• Good result of product testing is for market
  success necessary, but not enough!

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Product Test Blind Test vs. Identifying Test
Brand A
Brand B
Source Chernatony/McDonald 1992
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Which Quality has my Advertising Film?
ADVANTAGE/ACT
Studio test with minimum 125 test
persons Invitation We are talking about early
evening programme at TV
1. Introductary interview (a.o. prefered
brand) 2. Early evening programme Short film
Advertising (T-C-T-C-T-C-T) Short
film 3. Questions about programme 4. Memory
game 5. Early evening programme Short film
Advertising (T- T - T - T) 6. Lottery Which
brands shall be put into the shopping basket,
which will be raffled? 7. Diagnostic questions
Motivational Thrust
Self-Assertion
T Test Spot C Control Spot
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Advertising Pretest AdVantage Results
Self-Assertion in
Quanti- tative Results
Norm
Control Spots
Norm
Test Spot
Motivational thrust in
Analysis of the results of the diagnostic
questions
Qualitative Results
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Price Analysis according to Gabor-Granger Data
Survey

• Four questions
• Which price is appropriate, but still reasonable?
• Which price is relatively high, but still
  acceptable?
• Which price is too high?
• Which price is so low, that doubts about quality
  could rise?
• Use syndicated study (Omnibus) or a product- or
  concept test.

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Price Analysis according to Gabor-Granger
Evaluation I
acceptable region
Point of marginal cheapness Point of marginal
expensiveness
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Price Analysis according to Gabor-Granger
Evaluation II
optimal price
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Price Analysis according to Gabor-Granger

• Good for
• innovative products, no concrete price range
  existing in the consumer's mind
• Products without competitive environment.
• Supplies acceptable region, but no strict price
  elasticities / simulation possibilities.
• Reasonable price (e.g. syndicated study (Omnibus)
  6 T).

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How is my Product placed in the Market?
Panels

• In a panel you find
• ... constant universe
• ... constant sample
• ... constant survey object
• ... constant survey method
• Panels are best choice for the measurement of
  changes!

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Retail resp. Consumer Panel?
Sales Information
Marketing Information
Retail Panel
Consumer Panel
Focus on correlations
Focus on represen- tativity
Product groups for private demands
Product groups for household demands
Traditional Retail Panel
Scanner Panel
Household Panel
Individual Panel
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Method Data Fusion
Basic Situation Two independent data stocks
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Method Data Fusion
Fusion Process
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The integrated Model of Marketing Optimization
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Development in Market Research

• Further internationalizing
• Results must be able to be converted into money
• Instruments are growing together (Integrated
  Intelligence)
• Coverage of new retail forms (eCommerce)
• Use of the Internet as medium