MGMT 252

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MGMT 252
Lecture 3 Managing Marketing Information
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Todays Agenda

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

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What is Marketing Research?

• Marketing research is the systematic and
  objective identification, collection, analysis,
  and dissemination of information, undertaken to
  improve decision making related to identifying
  and solving problems in marketing.

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Two Types of Marketing Research

• Problem Identification Research
• Market Potential, Market Share, Brand image,
  Forecasting, Business Trend
• Problem-Solving Research
• Segmentation Research
• Product Research
• Promotion Research
• Distribution Research

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Examples of Marketing Research Projects

• concept test evaluates new product or
  advertising ideas
• copy test tests advertising content
• price responsiveness studies tests how customers
  will respond to various price levels
• market-share analysis
• segmentation studies
• customer satisfaction studies monitor how
  customers feel about products and service

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Marketing research process
1. Define the Problem
2. Developing an Approach to the Problem
3. Formulating a Research Design
4. Doing Field Work or Collecting Data
5. Preparing and Analyzing Data
6. Preparing and Presenting the Report
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1. Define the Problem

• Defining a problem
• Understanding the purpose of the study
• Understanding the background issues
• E.g. the company growth rate is low.
• Discuss with decision makers, interviews with
  industry experts, analysis of secondary data,
  conducting focus groups analysis.

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Example Subaru of America

• Management problem What can Subaru do to expand
  its share of the automobile market?
• To conduct market research need to define the
  problems more precisely
• Q.1 What needs do buyers of passengers cars,
  station wagons, and SUV seek to satisfy?
• Q.2 How well do existing automobile product
  offerings meet these needs?

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2. Developing an Approach to the Problem

• Formulating an analytical framework and models,
  research questions.
• Determine a hypothesis an educated guess
• The hypothesis provides a research problem for
  the investigators which can be tested
  scientifically.

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3. Formulating a Research Design

• A framework or blueprint for conducting the
  marketing research
• Details procedures needed to obtain the required
  information.
• Conducting exploratory research, precisely
  defining the variables, designing appropriate
  scales to measure them.
• How to obtain the data survey or experiment
• Design questionnarie

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4. Doing Field Work or Collecting Data

• Field work involves personal, telephone, mail, or
  electronic interviewing
• Proper selection, training, supervision, and
  evaluation of the field force are essential

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5. Preparing and Analyzing Data

• Data Processing
• Editing, coding, transcribing of collected data.
• Analyze using different statistical techniques
• Interpreted the results, find conclusions related
  to the marketing research questions
• 6. Preparing and presenting the report.

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Source of information

• First, select sources of information
• Secondary data
• information already collected for another purpose
• If use secondary datadesigning the
  questionnaire, planning the sample, and
  collecting data are done for you. But make sure
  they are done right!
• Primary data
• information collected for the specific purpose at
  hand

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Source of information

• Sources of secondary data
• internal sources
• balance sheets, sales figures, customer DB
• government publications
• statistics Canada
• periodicals and books
• Canadian trade index, Advertising age
• commercial data
• A.C. Nielsen, IRI
• internet

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Pros and Cons of Secondary Data

• 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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Primary Data

• 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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Survey

• 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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Personal Interview

• 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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Telephone Survey

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

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Mail Survey

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

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Internet Survey

• 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

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Qualitative Research

• 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
• Hard to quantify the results

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Focus Group Interview

• Qualitative research (cont.)
• Focus group interview
• Loosely structured group discussion led by
  interviewer
• The discussion is observed or videotaped
• Best for preliminary research
• Individual depth interview similar interview
  with a single person
• Difficult to understand without seeing it, so we
  have a video.

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Obervational Method

• Observational method
• Types
• personal observation
• mechanical observation (e.g., scanner data)
• 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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Experiment

• Experiment
• Tests the effects of variables in a controlled
  situation
• Example test of two different versions of
  advertisements in two different cities
• Advantages
• control
• Disadvantages
• unrealistic settings (laboratory experiments)
• Expensive (real experiments)

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Questionnaire

• 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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Questionnaire

• 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) economy 4) war on terrorism
• --- 70 endorsed war on terrorism

• Same question in open-ended format
• How can we get out of Iraq?

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Sample selection

• Survey and questionnaire design
• Choosing a sample
• Samples need to be as representative as possible,
  ideally randomly chosen from the population of
  interest
• Sample size must be large enough to have
  confidence in the resultsdepends on situation
• Poorly chosen samples lead to biased results

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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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Sample

• 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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Sampling

• 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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Summary

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