Chapter 1

1. Chapter 1 PART ONE The Marketing Research Process

2. Chapter Objectives After reading this chapter, you should be able to: • Understand the nature and scope of marketing research. • Explain the role of marketing research in business management decision-making. • Discuss the types and roles of research suppliers. • Explain the importance of ethical behaviour • Appreciate the components of the marketing research process. • Learn about the process used for defining the marketing research problem. • Discuss the background and environmental factors affecting the definition of the research problem. • Clarify the distinction between the management decision problem and the marketing research problem.

3. Chapter Objectives (cont’d) Understand the link between the research problem and the research design. Understand the importance of clearly specifying the information required from research. Define the elements of the research brief. Understand the relationship between the research brief and the research proposal.

4. Definition • Marketing Research (MR) is the systematic and objective identification, collection, analysis, and dissemination of information for the purpose of assisting management in decision- making related to the identification and solution of problems and opportunities in marketing.

5. MR and Decision Making MR should produce information that is: • Relevant • Accurate • Reliable • Valid • Timely

6. Problem Identification Research Identifies problems not yet apparent Often undertaken for survival and long term growth of the company Problem Solving Research Used once the problem has been identified Used in making decisions to solve problems Classification of MR

7. Examples of Problem Identification Research • Market potential research • Market share research • Image research • Market characteristics research • Sales analysis research • Forecasting research • Business trends research

8. Examples of Problem Solving Research • Segmentation research [lifestyle, demographics] • Product research [concepts, packaging] • Pricing research [price elasticity, price line pricing] • Promotion research [advertising effectiveness, sales promotion] • Distribution research [location of retail outlets]

9. MMIS and DSS Marketing Management Information System • A formalised set of procedures for generating, analysing, storing, and distributing information to marketing decision makers on an ongoing basis. [invoices, annual reports, previous research] Decision Support Systems • Integrated system including hardware, communications network, database, model base, software base and the DSS user that collects and interprets information for decision making.

10. Marketing Management Information System Structured problems Use of reports Rigid structure Information displaying restricted Can improve decision making by clarifying raw data Decision Support Systems Unstructured problems Use of models User-friendly interaction Adaptability Can improve decision making by using “what if” analysis MMIS vs DSS

11. Marketing Research Process Marketing or business definition problem or opportunity  Development of an approach and specifying research objectives  Research design formulation  Field work or data collection  Data preparation and analysis  Report preparation and presentation

12. Ethics in Marketing Research • Address whether action is right or wrong, good or bad • Most ethical decisions have extended or long term effects • Ethical decisions are rarely black and white • Alternatives have both positive and negative outcomes

13. Stakeholders in MR Respondents Public Client Researcher

14. Unethical Practices Problem definition • Using surveys as a guise for selling or fundraising • Following personal agendas of the researcher or client • Conducting unnecessary research Approach to the problem • Soliciting proposals to gain research expertise without pay • Using findings and models for specific clients or projects for other projects

15. Unethical Practices cont. Research design • Formulating a research design more suited to the researcher’s rather than the clients needs • Using secondary data that are not applicable • Disguising the purpose of the research • Not maintaining anonymity of respondents • Disrespecting privacy of respondents • Misleading questions • Embarrassing or putting stress on respondents • Using measurement scales of questionable reliability and validity • Designing overly long questionnaires or sensitive questions • Using inappropriate sampling procedures and sample size

16. Unethical Practices cont Fieldwork • Increasing the discomfort level of respondents • Following unacceptable fieldwork procedures Data Preparation and analysis • Identifying and discarding unsatisfactory respondents • Using statistical techniques when the underlying assumptions are violated • Interpreting the results and making incorrect conclusions and recommendations Report Preparation and Presentation • Using incomplete, biased and inaccurate reporting

17. Code of Professional Behaviour Code of Professional Behaviour covers: • Responsibilities to respondents • Researchers’ professional responsibilities • Researchers’ and Clients mutual rights and responsibilities

18. Importance of Defining the Problem • Problem definition involves stating the general problem and identifying the specific components of the marketing research problem. • Critical in setting the directions for all subsequent phases of the marketing research process. • Inadequate problem definition is a leading cause of failure of marketing research projects.

19. Case: Where did Coca-Cola go wrong? • Coca-Cola conducted blind taste tests in the early 1980s to determine consumer taste preferences. • Results indicated that consumers preferred a sweeter product, similar to Pepsi Cola. Coca-Cola introduced the new taste Coke and named it “New Coke” and discontinued the original Coke. • In less than 3 months, New Coke was discontinued after customer outrage that the original Coke was removed. • It has been suggested that Coca-Cola narrowly defined the research problem. • Coca-Cola failed to measure the emotional attachment and loyalty to the existing brand name and its effect on subsequent purchase and consumption behaviour. Source: Shields, M.J. 1985 ‘Coke Fizzles, Fails to Factor in Customer Loyalty’, Adweek, 15 July, p.8.

20. The Problem or Opportunity Audit • Management decision problems and marketing research problems encompass both problems and opportunities. • Conduct a problem audit to understanding the origin and nature of the problem. Discussion with decision maker should uncover: • Symptoms • Alternative course of action • Background information • Suspected causes and possible solutions • Anticipated consequences • Corporate culture of the organisation

21. The Problem or Opportunity Audit (cont) Symptoms • Declining sales • Decline in profits • Losing market share • Inability to meet sales forecasts • Low traffic • Dissatisfied customers Management

22. The Problem or Opportunity Audit (cont) Possible Causes • Low-quality product or service • Incorrect pricing • Inappropriate distribution channels • Low awareness of company or brands • Poor image of the company • Unmotivated sales force Researcher

23. MDP and MRP Management Decision Problem (MDP) • What the decision maker needs to do? • Action oriented eg. Should the advertising campaign be changed? Marketing Research Problem (MRP) • What information is needed and how that information can be obtained effectively and efficiently? • Information oriented eg. To determine the effectiveness of the current advertising campaign