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Determining When to Conduct Marketing Research

Determining When to Conduct Marketing Research. Time constraints Availability of data Nature of the decision Benefits versus costs. Determining When to Conduct Marketing Research. Time Constraints. Availability of Data. Nature of the Decision. Benefits vs. Costs. Is sufficient time

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Determining When to Conduct Marketing Research

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  1. Determining When to Conduct Marketing Research • Time constraints • Availability of data • Nature of the decision • Benefits versus costs

  2. Determining When to Conduct Marketing Research Time Constraints Availability of Data Nature of the Decision Benefits vs. Costs Is sufficient time available? Information already on hand inadequate? Is the decision of strategic or tactical importance? Does the information value exceed the research cost? Conduct Marketing Research Yes Yes Yes Yes No No No No Do Not Conduct Marketing Research

  3. Value versus Costs • Potential Value of a Marketing Research Effort Should Exceed Its Estimated Costs

  4. Value Should Exceed Estimated Costs Costs Value • Research expenditures • Delay of marketing decision and possible disclosure of information to rivals • Possible erroneous research results • Decreased certainty • Increased likelihood of a correct decision • Improved marketing performance and resulting higher profits

  5. Information Reduces Uncertainty I don’t know if we should enter the Australian Market?

  6. Table contains alternatives, states of nature, and consequences

  7. Conditional Probability of Getting Each Test Market Result Given Each State of NatureRead by Row (Zk) within Column (Sj)

  8. Revision of Prior Probabilities in Light of Possible Test Market ResultsSj=State of Nature; Zk=Level of Success in Test

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