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Chapter 2. Marketing research. Lecture Objectives. After going through this chapter, you should be able to: Explain the role marketing research plays in decision-making in the hospitality industry Identify sources of marketing information available to hospitality organizations
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Chapter 2 Marketing research
Lecture Objectives After going through this chapter, you should be able to: • Explain the role marketing research plays in decision-making in the hospitality industry • Identify sources of marketing information available to hospitality organizations • Define secondary and primary data collection • Explain the differences between qualitative and quantitative research methods • Recognize how bias and sampling errors can distort marketing research findings • Describe how hospitality organizations conduct online research.
Introduction • Managers are paid to make decisions. • The purpose of marketing research is to inform and improve decision-making by reducing uncertainty. • Marketing research can be defined as the systematic gathering and analysis of data to provide relevant information to aid decision-making. • Marketing research is a planned process. • Market research describes the investigation of consumer and organizational markets • Marketing research includes research into all the marketing mix variables and the macro (PESTE) and micro-environments.
International Marketing Research Presents unique problems because of the cultural and technological differences between countries: • Translation difficulties • Variations in customer behaviour because of different cultural backgrounds • Variations in customers’ product knowledge • Difficulties in obtaining comparable samples • Different cultural responses to market research surveys • Differences in the infrastructure
Marketing Information Systems • Hospitality managers need relevant, accurate, current and reliable information to be able to make effective decisions that will influence the future of the business. • Small, single-unit, owner-operated companies rely on informal approaches to data collection and interpretation. • Larger organizations need to develop more sophisticated marketing information systems to ensure that corporate executives understand complex environment • The marketing information system helps marketers to identify trends and plan for the future
Sources of information - internal • Internal information is held by the organization • Accommodation businesses hold a wealth of information about customers because of legal requirements • Information sources include: • Customer records • Guest history • Departmental reports • Marketing and sales reports
Sources of information - external External information can be collected via the Internet and publications including: • International and national government organizations • Marketing research organizations • Publicly quoted companies “Annual Accounts” • Trade associations • Hospitality industry trade press • Financial press • Universities and academic publishers
Secondary (or desk) data collection • Secondary (desk) data are data that have already been collected • It is relatively easy to obtain secondary data since the information has already been published • Limitations to secondary data include: • data have been collected and analysed by another organization • some organizations may deliberately manipulate data • other organizations may have inadvertently introduced bias • information is generally available to competitors • secondary data and analysis can often be ‘dated’ because of the long time between carrying out the research and publishing • the findings
Primary data collection • Primary data consist of original information collected by an organization for a specific purpose. • The data have not been published before. • The organization conducting or commissioning the research determines the research objectives and research questions. • Data are collected directly to provide answers to those questions. • Primary research is usually more costly than the secondary research. • Advantages of primary research include the following: • The ability to frame the research questions to the needs of the organization • Research is current and not dated • Research is confidential • Primary data can enable a hospitality company to gain competitive advantage if competitors are not carrying out similar research.
Qualitative data • Qualitative research aims to provide a deep understanding of people’s contextualized behaviour • It aims to explain how and why people behave in certain ways • Qualitative research in hospitality uses: • Observation • in-depth interviews, • focus groups (also known as group discussions) • qualitative questions in surveys
Quantitative data • Quantitative research uses a wide range of methods to obtain and analyse numerical data • Quantitative research counts numbers, in terms of either volume or value. For example: • the number of customers, passengers, residents, diners, room nights, room occupancy; • restaurant unit’s sales; or a hotel chain’s room sales. • If data are numeric then the research is quantitative
Quantitative research • Quantitative research techniques are founded upon statistical theory • Correct statistical methods are required to reduce possible error and bias • Possible errors include: • Sampling errors • Respondent errors • Investigator errors • Administrative errors • In large surveys, statistical software packages are used to process the quantitative research data.
Quantitative research methods • exit surveys • mystery customer audits • telephone (including mobile phone) surveys • online surveys • omnibus surveys.
Closed and open questions • Closed questions provide a number of alternative answers from which the respondent chooses one answer, for example questions about: • respondent’s age, sex, employment, income • Closed questions use a structured format which creates a data set that can be efficiently analysed using statistical methods. • Closed questions are essential if a quantitative research method is used • Open-ended questions allow respondents to provide their own answers, • Examples include ‘Where would you stay tonight if this hotel was fully booked?’ and ‘How did you feel about the quality of service?’ • Open question allows respondents to use their own words to describe their experience, feelings and opinions. • Qualitative research findings using open questions provide ‘rich’ data • Researchers usually ask a combination of both closed and open questions and combine qualitative and quantitative analysis. Compare Le Meridien and Malmaison in-room customer questionnaires
Marketing research process There are six steps in the marketing research process: • Formulation of research objectives • Development of a research plan • Data collection • Data analysis • Assess the reliability and validity of data • Presentation of findings
Online research • Advantages of online research include: • significant cost savings in the design and administration of questionnaires and discussion groups • the ability to accurately target surveys to current, former or potential customers. • Often, customers are incentivized to participate in online surveys • Post- consumption e-surveys provide customers with a convenient tool to give feedback on service quality and customer satisfaction. • Tools such as blogs and social networking sites are useful to obtain unsolicited such for customer- generated comment • The Internet is available to all sizes of hospitality companies.
Criticisms of Marketing Research • Academics and practitioners have criticized modern marketing research for a number of reasons • The focus on collecting data and performing statistical analysis, which does not provide new insights for the business or inform decision-making • Flawed marketing research methodologies that introduce unacceptable levels of bias or error • The emphasis on research stifles creativity in marketing • Despite these criticisms, major hospitality companies recognize the importance of marketing research and carry out extensive customer and competitor research on a continuous basis
References and Further Reading • Altinay , L. , & Paraskevas , A. ( 2008 ). Planning research in hospitality and tourism, Oxford, UK : Butterworth-Heinemann . • Bowie, D & Buttle, F (2011), Hospitality Marketing: Principles and Practice, Oxford, UK : Butterworth-Heinemann • Brown , S. ( 2001 ). Marketing: The retro revolution . Sage . • Chaffey , D. , Ellis-Chadwick , F. , Johnston , K. , & Mayer , R. ( 2009 ). Internet marketing: strategy, implementation and practice ( 4th ed. ). Pearson Education . • Daymon , C. , & Holloway , I. ( 2002 ). Qualitative research methods in public • relations and marketing communications . Routledge . • Saunders , M. K. , Thornhill , A. , & Lewis , P. ( 2009 ). Research methods for business students ( 5th ed.). Financial Times/Prentice Hall . • Usunier , J. C. , & Lee , J. ( 2009 ). Marketing across cultures ( 5th ed.). Financial Times/Prentice Hall .