Chapter 2

2. Chapter 2 Marketing research

3. 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 Lecture objectives

4. 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 Introduction

5. 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 International marketing research

6. 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 Marketing information systems

7. Figure 2.1 The hospitality marketing information system

8. 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 –internal

9. 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 Sources of information –external

10. 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 Secondary (or desk) data collection

11. 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 Primary data collection

12. 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 Qualitative data

13. 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 data

14. 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

15. Exit surveys Mystery customer audits Telephone (including mobile phone) surveys Online surveys Omnibus surveys Quantitative research methods

16. 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 questions allow 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 Closed and open questions

17. Figure 2.2 Le Meridien customer questionnaire

18. Figure 2.2 (cont) Le Meridien customer questionnaire

19. Figure 2.3 Malmaisoncomment card

20. 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 Marketing research process

21. 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 Online research

22. 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 Criticisms of marketing research

23. Altinay, L. and Paraskevas, A. ( 2008 ). Planning Research in Hospitality and Tourism. Butterworth-Heinemann. Bowie, D. and Buttle, F. (2011).,Hospitality Marketing: Principles and Practice. Butterworth-Heinemann. Brown, S. ( 2001 ). Marketing: The Retro Revolution. Sage. Chaffey, D., Ellis-Chadwick, F., Johnston, K. and Mayer, R. (2009 ). Internet Marketing: Strategy, Implementation and Practice ( 4th ed. ). Pearson Education. Daymon, C. and Holloway, I. ( 2002 ). Qualitative Research Methods in Public Relations and Marketing Communications. Routledge. Saunders, M. K., Thornhill, A. and Lewis, P. ( 2009 ). Research Methods for Business Students ( 5th ed.). Financial Times/Prentice Hall. Usunier, J. C. and Lee, J. ( 2009 ). Marketing Across Cultures (5th ed.). Financial Times/Prentice Hall . References and further reading