MGT 252

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MGT 252
Lecture 4 Marketing Research Maggie Wenjing Liu
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Todays Agenda

• Term project group (deadline next Wednesday), or
  I will assign you.
• Study guide cases
• What is marketing research?
• The marketing research process
• Six stages
• Marketing research systems
• Mid-term

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Dee-Lite-Ful Donuts

• Best Method
• Using secondary data from statistics canada,
  etc.
• Census data
• Second Best Method
• Observation could be the next best bet.
• Surveys would seem much too expensive and
  elaborate for whats required.

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A restaurant concept

• Best Method
• Test marketing is about the only way to really
  try out this one.
• a pilot store.
• Second Best Method
• Perhaps a focus group with a mockup would work.

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Mikes Expedition Outfitters

• Best Method
• A real opportunity to use scan data from the
  checkout provided the stores have it and will
  share it.
• Second Best Method
• Observation, in the form of watching shoppers
  and talking with sales staff in the stores could
  also work here.

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Fortisimos Supermarkets

• Best Method
• Observation seems to work.
• He can watch and note how the display works in
  different locations, if people stop to look at it
  and how it is performing.
• Second Best Method
• Depending on what is in the display, he may be
  able to relocate it and track the scanner data as
  people buy from it.
• This would give more objective data on what was
  actually being sold.

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Why Do We Need Information?

• Understand Customers
• Competitive pressure
• Expanding markets
• The cost of mistakes
• Market complexity

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Recall Marketers tasks
Look for Opportunities Consumer Competition Com
pany (Uncontrollable 3Cs)
Implement Positioning Product Price Promotion
Place (Controllable 4Ps)
Segmenting Targeting Positioning (STP)
Feedback, Evaluation,
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Product in your term project

• What kind of information do you need know about
  the your product?
• Will people buy it?
• Who will buy? Where?
• Will I make a profit?

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What is Marketing Research?

• Marketing research is the process of specifying,
  assembling, and analyzing information used to
• identify and define marketing opportunities and
  problems
• generate, refine and evaluate marketing actions
• monitor marketing performance
• improve understanding of marketing as a process

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Marketing research process
1. Define the objective
2. Conduct situational analysis
3. Conduct informal investigation
Further study needed?
End project and report results
No
Yes
4. Plan and conduct formal investigation
5. Analyze data and report results
6. Conduct follow-up
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1. Define the Objective

• Types of Research Objectives

• Exploratory
• Research
• Define the problem suggest hypotheses

Descriptive Research Describe things, such as
market potential, demographics, attitudes, etc.
Causal Research Test hypotheses about
cause--effect relationships
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1. Define the Objective

• Describing/defining a problem
• e.g., sales were up but market share down
• Solving a problem
• BE CLEAR ABOUT THE OBJECTIVE
• -unclear objectives lead to conflict and
  confusion

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Examples of Marketing Research Projects
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2. Conduct Situational Analysis

• Get background information to help refine the
  research problem
• Collect secondary data about company and its
  environment
• (Youve seen this before)
• Determine a hypothesis an educated guess
• The hypothesis provides a research problem for
  the investigators which can be tested
  scientifically.
• This is the hardest partwhat is it you want to
  know?

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3. Conduct Informal Investigation

• Gather readily available information from people
  inside and outside the company.
• Purpose
• to determine if further study is necessary
• Often not necessary.

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4. Plan Conduct Formal Investigation

• Research Design
• the process of creating, executing, analyzing
  and reporting on a project
• Prepare a form for collecting dataprimary or
  secondary.
• Consider question wording and response format
• Layout and sequence of questionnaire is important
• Plan sample to ensure it is representative.
• Collect the data.
• Analyze data and present a report on it
• Show what results tell you about research
  objectives.
• Follow up to see what use data served

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Typical Problems in Wording Questions
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Typical Problems in Wording Questions
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Even More Problems in Wording
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Even More Problems in Wording
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4. Plan Conduct Formal Investigation

• Internal sources
• Financial statements, researchreport files,
  customer letters,sales call reports, etc.

• Secondary data
• Facts and Figures
• Recorded for another purpose

• External sources
• Census reports, tradeassociation studies,
  periodicals,commercial reports, etc.

Data

• Observation
• Mechanical and electronicapproaches
• Personal approaches

• Primary data
• Facts and Figures
• Newly collected
• for the project

• Surveys
• Surveys, questionnaires
• Interviews
• Focus groups

Experiments
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4. Plan Conduct Formal Investigation

• Advantages of secondary data
• low cost
• less effort expended process
• less time consuming
• some information can be obtained only from
  secondary data

• Disadvantages of secondary data
• collected for some other purpose
• may not be very accurate
• may be outdated

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4. Plan Conduct Formal Investigation

• Primary data collection process
• Data collection methods
• surveys
• qualitative researchpersonal interviews focus
  groups
• observation
• Experiment
• Design study materials (e.g., questionnaire
  design)
• Sampling
• Data collection

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4. Plan Conduct Formal Investigation

• Survey
• Data collection by asking people questions
• personal interview
• telephone survey
• mail survey
• Internet survey
• Advantages
• large size data, flexibility
• Disadvantages
• errors in questionnaire, expensive, response error

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4. Plan Conduct Formal Investigation

• Survey (cont.)
• Personal interview
• Advantages
• flexible, more information
• Disadvantages
• expensive, time-consuming, interviewer bias
• e.g., shopping mall intercept a convenient,
  low-cost method
• but lacks representativeness

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4. Plan Conduct Formal Investigation

• Survey (cont.)
• Telephone survey
• Advantages
• quickness, cost efficiency
• Disadvantages
• limited amount of information, limited
  accessibility of people,

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4. Plan Conduct Formal Investigation

• Survey (cont.)
• Mail survey
• Advantages
• Comparatively low cost
• Disadvantages
• low response rate
• less control

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4. Plan Conduct Formal Investigation

• Survey (cont.)
• Internet survey
• Advantages
• low costmuch lower even than mail
• Disadvantages
• low response ratelarge response bias
• Data reliabilitydifficult to verify if personal
  information is true
• What are industries where Internet surveys might
  be a good idea?

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4. Plan Conduct Formal Investigation

• Qualitative research
• Types
• individual depth interview
• focus group interview
• Advantages
• resulting data have more depth and richness of
  context
• Disadvantages
• results not necessarily representative of
  population
• ambiguity in results how to take action?

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4. Plan Conduct Formal Investigation

• Observational method
• Types
• personal observation
• mechanical observation
• Advantages
• can have high degree of accuracy, short period of
  time for data collection
• Disadvantages
• unaware of motives, attitudes, or decision
  processes

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4. Plan Conduct Formal Investigation

• Experiment
• Tests the effects of variables in a controlled
  situation
• Example test of two different versions of
  advertisements
• Advantages
• control
• Disadvantages
• unrealistic settings

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Hypothesis will gender in advertisement
influence your attitude to brand?
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Hypothesis will gender in advertisement
influence your attitude to brand?
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Can Questions Shape the Answer?
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Unaided and Aided Questions

• What do you consider to be the most important
  things that children need to prepare them for
  life?
• Good education
• Inheritance
• Moral values
• To think for themselves
• Good friendships
• Others (Please specify)
• _________________________________________________
  __________________________________________________
  ___

What do you consider to be the most important
things that children need to prepare them for
life? ___________________________________________
_________________________
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The Other People Approach
How would you describe your reaction to
President Clintons sex life and the related
scandals? Please check the category that best
describes your own behavior. Fascinated
_____ Mildly Curious _____ Not Interested
_____
How would you describe other peoples reaction
to President Clintons sex life and the related
scandals? Please check the category that best
describes their behavior. Fascinated
_____ Mildly Curious _____ Not Interested
_____


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4. Plan Conduct Formal Investigation

• Questionnaire design
• Wording
• simple, direct, unbiasedno leading questions
• written with respondents in mind
• Order
• first question should create interest if possible
• difficult or personal questions should be asked
  last
• Format
• open-ended questions
• closed-end questions

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4. Plan Conduct Formal Investigation

• Open- vs. close-ended questions
• (asked of Americans) What do you think is the
  most important problem facing this country
  today?
• 1) the energy shortage 2) quality of public
  schools
• 3) legalized abortion 4) pollution
• --- 32 endorsed quality of public schools

• Same question in open-ended format
• --- 1 mentioned quality of public schools

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4. Plan Conduct Formal Investigation

• Survey and questionnaire design
• respondents assume a scale represents a known
  distribution
• example range of response alternatives

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Reported daily TV consumption in hours
Low frequency alternatives Up to ½ ½
to 1 1 to 1½ 1½ to 2 2 to
2½ More than 2½ High Frequency
alternatives Up to 2½ 2½ to 3 3 to
3½ 3½ to 4 4 to 4½ More than
4½ Schwarz et al. (1985)
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Reported daily TV consumption in hours
Low frequency alternatives Up to ½
7.4 ½ to 1 17.7 1 to 1½ 26.5 1½ to
2 14.7 2 to 2½ 17.7 More than
2½ 16.2 High Frequency alternatives Up
to 2½ 62.5 2½ to 3 23.4 3 to 3½
7.8 3½ to 4 4.7 4 to 4½ 1.6 More
than 4½ 0 Schwarz et al. (1985)
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4. Plan Conduct Formal Investigation

• Sampling
• A sample is a subset of the population selected
  to represent the population as a whole
• Samples should be representative of the
  population
• Sample size
• larger sample gives more reliable results
• small samples are OK when they represent the
  population
• (US presidential election poll sample size of
  1,000)

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4. Plan Conduct Formal Investigation

• Survey (cont.)
• Many potential problems with sampling

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4. Plan Conduct Formal Investigation

• Sampling (cont.) Sampling procedure
• random sampling
• every member of the population has a known
  probability of being included
• convenience sampling
• the researcher selects easiest population members
  from which to obtain information
• lacks the representativeness of the population
• (e.g.) shopping mall intercept

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5. Analyze Data Report Results

• Analyze data and report results
• code data
• perform statistical analysis
• interpret results

6. Conduct Follow-UpHow is your data used?
Effect?
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Marketing Information System (MkIS)

• A system that generates, analyzes, stores, and
  retrieves information for marketing decision
  making
• Benefits of MkIS
• fast information for decision making
• wide variety of data
• the performances of product and markets can be
  monitored

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MkIS limitations

• Managers cant define exactly what information
  they need on a regular basis.
• Cost of operating and updating the MkIS is
  expensive.
• These systems are not suited to the resolution of
  unanticipated problems.
• Risk of information overload. The data can be
  overwhelming and make it difficult to sort out
  the most relevant information.

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Marketing Information System (MkIS)

• MkIS
• collect
• storage
• analysis
• retrieval
• disseminate

Marketing Manager
Information need
Decision-oriented inf.

• Data
• primary
• secondary

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Decision Support System (DSS)

• A combination of data and analytical technique to
  collect, analyze, and interpret information
• Example
• admission to Rotman MBA decision
• .4 (GPA) .2(Work experience) .2(recommendation
  letter) .2(proposal writing)

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Decision Support System (DSS)

• MkIS
• collect
• storage
• ANALYSIS
• retrieval
• disseminate

Marketing Manager
Information need
Decision oriented inf.
DSS

• Data
• primary
• secondary

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Marketing Databases

• MkIS
• collect
• STORAGE
• analysis
• retrieval
• disseminate

Marketing Manager
Information need
Decision oriented inf.
Database

• Data
• primary
• secondary

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how many databases are you a part of?

• How many loyalty or membership cards do you
  have?
• What about online? Do you know about cookie and
  tracker programs?
• How often are you asked for postal code when
  checking in a purchase?
• What do you think is done with that information?
• Data mining

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Summary

• What is marketing research?
• The marketing research process
• Six stages
• Marketing research systems

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Midterm Information

• Covers chapter 1-4 and 6-8
• Feb 14, 8-10am, two hours, WO25
• Closed book. No programmable calculators.
• 50 multiple choice (50 questions)
• 50 short answer, short essay questions, case
  analysis (4-5 questions)

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How to prepare?

• Emphasis is on contents in our slides.
• Cases we discussed in class.
• Questions we debated in class.
• Definitions, figures in textbook.
• Your study guide might help.

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Reminders

• Make sure you go to the section you register to
  take the test
• Bring your student ID card
• Bring a HB pencil and a pen
• Send me your project group list soon, or I will
  assign you to one group.
• Schedule a meeting for discussion

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Next Class Chapter 7-8
Product Planning Services Marketing Case
analysis Textbook Case 3-2 p278