Introduction to Marketing Research

1. Introduction toMarketing Research

2. Marketing Research Defined The systematic and objective process of generating information for aid in making marketing decisions

3. Marketing Research Types Basic Research (Problem identification research) Applied research ( Problem solving research)

4. Basic Research • Attempts to expand the limits of knowledge • This research will help to identify the problems exists or likely to arise in the future.

5. Basic Research Example • Checking whether students spent time in SNS affects their academic performance?

6. Applied Research • Conducted when a decision must be made about a specific real-life problem

7. Applied Research Example • Should McDonalds add Italian pasta dinners to its menu? • Marketing research told McDonald’s it should not • Should Procter & Gamble add a high-priced home teeth bleaching kit to its product line? • Research showed Crest Whitestrips would sell well at a retail price of $44

8. Using Marketing Research • We can use Marketing Research to: • Identify & Evaluate Opportunities • Analyze Market Segments • Select Target Markets • Plan & Implement Marketing Mixes • Analyze Marketing Performance • Performance Monitoring Research

9. Marketing Research Problem Identification Research Problem-Solving Research Market Potential Research Market Share Research Market Characteristics Research Sales Analysis Research Forecasting Research Business Trends Research Segmentation Research Product Research Pricing Research Promotion Research Distribution Research A Classification of Marketing Research

10. SEGMENTATION RESEARCH • Determine the basis of segmentation • Establish market potential and responsiveness for varioussegments • Select target markets • Create lifestyle profiles:demography, media, and product image characteristics PRODUCT RESEARCH • Test concept • Determine optimal product design • Package tests • Product modification • Brand positioning and repositioning • Test marketing • Control score tests Problem-Solving Research

11. PROMOTIONAL RESEARCH • Optimal promotional budget • Sales promotion relationship • Optimal promotional mix • Copy decisions • Media decisions • Creative advertising testing • Evaluation of advertising effectiveness • Claim substantiation 0.00% APR PRICING RESEARCH • Pricing policies • Importance of price in brand selection • Product line pricing • Price elasticity of demand • Initiating and responding to price changes $ALE Problem-Solving Research

12. DISTRIBUTION RESEARCH Determine… • Types of distribution • Attitudes of channel members • Intensity of wholesale & resale coverage • Channel margins • Location of retail and wholesale outlets Problem-Solving Research

13. The Marketing Research Process • Define the Problem • Develop an Approach to the Problem • Type of Study? Exploratory, Descriptive, Causal? • Mgmt & Research Questions, Hypotheses • Formulate a Research Design • Methodology • Questionnaire Design • Fieldwork • Prepare & Analyze the Data • Prepare & Present the Report

14. Step 1: Define the problem • Management decision problem • Marketing research problem

15. Management Decision Problem Vs. Marketing Research Problem Management Decision ProblemMarketing Research Problem Should a new product be introduced? To determine consumer preferences and purchase intentions for the proposed new product.  Should the advertising To determine the effectiveness campaign be changed? of the current advertising campaign. Should the price of the To determine the price elasticity brand be increased? of demand and the impact on sales and profits of various levels of price changes.

16. Marketing Research Problem Broad Statement Specific Components Proper Definition of the Research Problem

17. Department Store Project Problem Definition In the department store project, the marketing research problem is to determine the relative strengths and weaknesses of Tesco Lotus, vis-à-vis other major competitors, with respect to factors that influence store patronage. Specifically, research should provide information on the following questions. 1. What criteria do households use when selecting department stores?2. How do households evaluate Tesco Lotus and competing stores in terms of the choice criteria identified in question 1?3. Which stores are patronized when shopping for specific product categories?4. What is the market share of Tesco Lotus and its competitors for specific product categories?5. What is the demographic and psychological profile of the customers of Tesco Lotus ? Does it differ from the profile of customers of competing stores?6. Can store patronage and preference be explained in terms of store evaluations and customer characteristics?

18. Step 2: Develop an approach to the problem • Objective/Theoretical Foundations • Analytical Model • Research Questions • Hypotheses • Specification of the Information Needed

19. Research Task Role of Theory 1. Conceptualizing Provides a conceptual foundation and understanding of the basic processes and identifying underlying the problem situation. These processes will suggest key dependent key variables and independent variables. 2. Operationalizing Theoretical constructs (variables) can suggest independent and dependent key variables variables naturally occurring in the real world. 3. Selecting a Causal or associative relationships suggested by the theory may indicate whether research design a causal or descriptive design should be adopted. 4. Selecting a The theoretical framework may be useful in defining the population and sample suggesting variables for qualifying respondents, imposing quotas, or stratifying the population (see Chap. 11). 5. Analyzing and The theoretical framework (and the models, research questions and hypotheses interpreting data based on it) guide the selection of a data analysis strategy and the interpretation of results (see Chap. 14). 6. Integrati ng The findings obtained in the research project can be interpreted in the light of findings previous research and integrated with the existing body of knowledge. Role of Theoretical foundations

20. Ex. Kano’s Model of satisfaction One of a popular model used for measuring and analyzing customer satisfaction

21. Technology acceptance Model (TAM) TAM—one of popular information systems theory that models how users come to accept and use a technology; the model suggests that the acceptability of an info system is determined by two main factors: (i) perceived usefulness and (ii) perceived ease of use

22. Theory of reasoned action (TRA) • Person’s behavior (behavioral intention) depends on the person’s attitude about the behavior and subjective norm (the person’s perception that most people who are important to him/her think s/he should or should not perform the behavior in question) • 3 components of TRA: (i) behavioral intention (BI); (ii) attitude (A); and (iii) subjective norm (SN); BI = A + SN

23. Models Ananalytical modelis a set of variables and their interrelationships designed to represent, in whole or in part, some real system or process. Inverbal models,the variables and their relationships are stated in prose form. Such models may be mere restatements of the main tenets of a theory.

24. Awareness Understanding Preference Patronage Graphical Models Graphical models are visual. They are used to isolate variables and to suggest directions of relationships but are not designed to provide numerical results.

25. n å a a x = + y 0 i i = 1 i a a , 0 i Mathematical Models Mathematical modelsexplicitly specify the relationships among variables, usually in equation form. Where y = degree of preference = model parameters to be estimated statistically

26. Components of the Marketing Research Problem Objective/ Theoretical Framework Research Questions Analytical Model Hypotheses Step 3: Development of Research Questions and Hypotheses

27. Research Questions and Hypotheses • Research questions(RQs) are refined statements of the specific components of the problem. • Ahypothesis(H) is an unproven statement or proposition about a factor or phenomenon that is of interest to the researcher. Often, a hypothesis is a possible answer to the research question.

28. RQ & Hypothesis Example • RQ 1: What are the characteristics of online gamers? • Null hypothesis ( Ho): There is no difference between males and females who play online • Alternate Hypothesis (Ha): Males are more into online games than females.

29. Research Proposal • A specific document that provides an overview of the proposed research and its methodology. • Normally includes the description of first 3 steps of a research such as • Purpose of the research • Type of study • Definition of target population and sample size • Data collection methods • Specific research instruments • Potential benefits of the study • Proposed cost of the total research project

30. How to increase the customer loyalty?

31. United Airlines, as other major airlines, had to deal withpassenger loyalty(management decision problem: how to attract more and more loyal passengers). The broadmarketing research problemwas to identify the factors that influence loyalty of airline travelers. At United, Food Is Uniting the Airline with Travelers

32. The basic answer is toimprove service.Exploratory research, theoretical framework, and empirical evidence revealed that the consumers’ choice of an airline is influenced by:safety, price of the ticket, frequent-flyer program, convenience of scheduling, and brand name. At United, Food Is Uniting the Airline with Travelers

33. The problem was that major airlines were quite similar on these factors. Indeed, "airlines offer the same schedules, the same service, and the same fares.” Consequently, United Airlines had to find a way to differentiate itself. Food turned out to be the solution. At United, Food Is Uniting the Airline with Travelers

34. Secondary data, like the J. D Power & Associates' survey on "current and future trends in the airline food industry," indicated that"food service is a major contributor to customers’ loyalty."This survey also emphasized the importance of food brands. At United, Food Is Uniting the Airline with Travelers

35. At United, Food Is Uniting the Airline with Travelers The airline's Marketrak survey told United Airlines that "customers wanted more varied and up-to-date food.” The following research questions and hypotheses may be posed. RQ1 How important is food for airline customers? H1: Food is an important factor for airline travelers. H2: Travelers value branded food. H3: Travelers prefer larger food portions, but with consistent quality. H4: Travelers prefer exotic food.

36. Characteristics that influence the research design included the identification of competing airlines (Delta, American, etc.), factors of the choice criteria (already identified), measurement of airline travel, and loyalty. At United, Food Is Uniting the Airline with Travelers

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

38. 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

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

40. ALWAYS Remember • Marketing Research is a tool. • It assists marketing managers in their decision making. • IT IS NOT A REPLACEMENT FOR MANAGERIAL JUDGEMENT!!