Chapter 3 Gathering Information and Measuring Market Demand by Ung Veasna, DBA candidate

1. Chapter 3Gathering Information and Measuring Market DemandbyUng Veasna, DBA candidate

2. Kotler on Marketing Marketing is becoming a battle based more on information than on sales power.

3. Why Research? • The primary job of marketing managers is the design and execution of marketing programme • Before programmes can be designed, the market situation must be understood • In order to understand the market, the manager must have information • Before the marketing manager can have information, there must be data

4. Managers face three important problems in making more effective marketing decisions: • Obtaining the information they need for the flood of data that is available. • Interpreting the information • Determining what action should be taken

5. The Importance of Information • Companies need information about their: • Marketing environment • Competition • Customer needs • Managers don’t need more information, they need better information.

6. Marketing Environment Why Information Is Needed Customer Needs Competition Strategic Planning The Importance of Information

7. Research and Intelligence provide information necessary to clarify the “unknown.”

8. The Benefit of Research • Discovering useful information about your customers, competition and environment • Reduces risk and uncertainty when making decisions • The “eyes” and “ears” of the corporation • Helps you get close to your customers

9. What is a Marketing Information System (MIS)? • A MIS consists of people, equipment, and procedures to gather, sort, analyze, evaluate and distribute needed, timely, and accurate information to marketing decision makers. • The MIS helps managers to: • Assess Information Needs, • Develop Needed Information, • Distribute Information.

10. INTERNAL Data obtained from sources within the firm EXTERNAL Data obtained from sources outside of the firm DATA PRIMARY Data collected for the first time SECONDARY Pre-existing data The MIS and DATA

11. Marketing Information System Components • Internal Records • Marketing Intelligence • Marketing Decision Support Systems • Marketing Research

12. Internal Record Systems • The Order-to-Payment Cycle • Sales Information Systems • Databases, Data Warehouses And Data-Mining • Customer records • Financial statements • Inventory records • Research reports • Credit data

13. The Marketing Intelligence System • A Marketing Intelligence System is a set of procedures and sources used by managers to obtain everyday information about developments in the marketing environment. • Intelligence: ongoing information

14. Marketing Decision Support System Marketing Decision Support System (MDSS) • A computer program - an interface - between the manager and the MIS • Makes it easy to obtain needed information • Makes it easy to analyse the information • May involve marketing models - to show the relationships among different marketing variables

15. Table 3-1: Quantitative Tools Used in Marketing Decision Support Systems See text for complete table

16. Marketing Researchis : a collection, processing and analysis of information on topics relevant to marketing. It begins with problem definition and ends with a reports and action recommendations (Lehmann, Gupta and Steckel 1998)

17. Problem Definition Research Design Primary Data Secondary Data Qualitative Quantitative Data Analysis Create Conclusions & Present A Model of Marketing Research

18. Figure 3-2: The Marketing Research Process

19. The Marketing Research Process • Step 1: Define the Problem, the Decision Alternatives, and the Research Objectives • Step 2: Develop the Research Plan • Data Sources • Research Approaches • Observational research • Focus group research • Survey research • Behavioral data • Experimental research

20. Both Must Be: Relevant Accurate Current Impartial Gathering Information Secondary Primary Information That Already Exists Somewhere. + Obtained More Quickly, Lower Cost. - Might Not be Usable Data. Information Collected for the Specific Purpose at Hand.

21. Experimental Research Using groups of people to determine cause-and-effect relationships (Causal) Observational Research Gathering data by observing people, actions and situations (Exploratory) Survey Research Asking individuals about attitudes, preferences or buying behaviors (Descriptive) Planning Primary Data Collection Research Approaches

22. Sampling Plan • Sampling unit • Sample size • Sampling procedure

23. Probability or Non-probability sampling? Who is to be surveyed? (What Sampling Unit?) Samplerepresentative segment of the population How should the sample be chosen? How many should be surveyed? Sampling Plans

24. Research Instruments • Mechanical Devices • People Meters • Supermarket Scanners • Eye Cameras • Questionnaire • What questions to ask? • Form of each question? • Closed-end • Open-end • Wording? • Ordering?

25. A. Closed-end Questions Name Description Example Dichotomous A question with two possible answers. In arranging this trip, did you personally phone American? Yes No Multiple Choice A question with three or more answers. With whom are you traveling on this flight? No one Children only Spouse Business associates/friends/relatives Spouse and children An organized tour group Likert scale A statement with which the respondent shows the amount of agreement/ disagreement. Small airlines generally give better service than large ones. Strongly Disagree Neither agree Agree Strongly disagree nor disagree agree 1_____ 2 _____ 3_____ 4_____ 5_____ Table 5-2: Types of Questions

26. Collecting the Data Research Plan Processing the Data Analyzing the Data Step 3. Implementing the Research Plan

27. Step 1. Interpret the Findings Step 2. Draw Conclusions Step 3. Report to Management Step 4. Interpreting & Reporting Findings Researcher Should Present Important Findings that are Useful in the Major Decisions Faced by Management.

28. Market Demand Definition • Market demand for a product is the total volume that would be • Bought by a defined customer group • In a defined geographical area • In a defined time period • In a defined marketing environment • Under a defined marketing program

29. Forecasting and Demand Measurement • The Measures of Market Demand Figure 3-3: Ninety Types of Demand Measurement (6X5X3)

30. Sales Forecasting Methods Analysis of market factors Executive Opinion Customer Survey Sales Force Composite Trend Projection

31. Estimating Current Demand • Total Market Potential • 100 mil buyers X 3 books X $10/book • Area Market Potential • Above estimate by city,state,nation • Industry Sales • Market Build-up Method • Market Share • % of industry sales you expect to do.