CHAPTER 5: MARKETING RESEARCH

1. CHAPTER 5: MARKETING RESEARCH Hudson Rogers Florida Gulf Coast University

2. MARKETING INFORMATION SYSTEM • Marketing has three main sub-systems: • 1) Internal Accounting System – provides financial data • 2) Marketing Intelligence System – supplies data about what is currently taking place • 3) Marketing Research System – formal information gathering and analyzing process

3. MARKETING RESEARCH • Marketing Research is the systematic design of data collection, analysis, and reporting of data and findings relevant to a specific marketing situation facing the company.

4. MARKETING RESEARCH PROCESS • 1) Define Problem & research objectives. •  2) Develop the Research Plan • 3)  Collect the Information • 4) Analyze the Information • 5) Present the Findings

5. CHARACTERISTICS OF GOOD MARKETING RESEARCH • Research may have to overcome many problems chief of which are: • 1. Narrow Conception of Marketing Research – some managers view research as act finding without clearly defined problems rather than information gathering • 2. Uneven Caliber of Researchers – marketing research is not a clerical activity. • 3. Late and Erroneous Results – managers need timely results that are accurate, takes time and money. • 4. Intellectual Differences - difference in style between managers and researchers can get in the way

6. OVERCOMING PROBLEMS • Rely on: • 1) The scientific method - helps objectivity • 2)  Research Creativity – quality of researcher. • 3)  Use of multiple methods – helps reliability 4)   Interdependence of explicit model and data – select data gathering and research model best suited to analyzing the problem. • Consider the cost versus the information when marking marketing research decisions. This is really a trade off.

7. TYPES OF RESEARCH • Exploratory –you do not have a precise problem formulation or do not know the problem. Mostly qualitative, lacks formal design. Should not be used for decision-making. Secondary data, experts, focus groups • Conclusive Research – These are used for decision making. Does not show cause and effect & you never know all the alternatives. Descriptive (describes characteristics of thing studies), Case History, statistical methods (set objectives, formal design, representative sample, quantitative data gathered and analyzed, reliability). • Causal Research

8. DATA SOURCES • Secondary Data • Focus Groups • Interviews • Experts • Knowledgeable Persons (Psych Tests) to get at underlying motivations • Surveys (Mail, Telephone, E-mail, Mall) • Simulations • Case Histories

9. DATA COLLECTION • Sampling: • Non-Probability – convenience, quota, snowball, judgment, shopping mall. • Probability – Systematic data collection process: simple random, stratified, cluster, area, multi-stage, proportional

10. DATA ANALYSIS • Descriptive Analysis • Cross Tabulations • Analysis of Variance (ANOVA) • T-Test • Regression Analysis • Discriminant Analysis

11. DEMAND MEASUREMENT • Potential Market – set of consumers who indicate a sufficient level of interest to something offered in the marketplace • Available Market – consumers with interest, income, and access to a given product. • Qualified available Market – consumers with interest, income, access and qualification to purchase a given product

12. DEMAND MEASUREMENT (Cont’d) • Target Market– (served market). Target market is the set of consumers that the firm wishes to go after with its marketing effort. • Penetrated Market – set of consumers actually buying the firm’s product.  If not satisfied with current sales, a firm can take actions geared toward affecting the target market, or the potential market. • Market Demand – number of units that will be sold to a defined customer group in geographic area for a defined period of time under a defined marketing program. To modify demand seek to adjust any or all of the “defined” factors on which the total volume is based.

13. DEMAND MEASUREMENT • 1.  Market demand • 2.  Market forecast • 3.  Market potential • 4.  Company demand • 5. Company sales forecast • 6.  Company sales potential

14. ESTIMATING CURRENT DEMAND • Estimating current demand • 1.   Total market potential • 2.   Area market potential: • a)  Market-buildup method • b)  Multiple-factor index method • 3.  Estimating industry sales and market shares a)                  a) identifying competitors and estimating their sales

15. ESTIMATING FUTURE DEMAND • Estimating Future Demand – All forecast are built upon three information bases (1) what people say they will do (2) what people do, and (3) what people have done.

16. ESTIMATING FUTURE DEMAND (Cont’d) • Five main ways to assess future demand: • 1)  Survey of Buyer Intentions – determine what buyers are likely to do under certain conditions. • 2)  Composite of Sales Force Opinion – ask sales representatives to estimate their future sales and sum the individual estimates to arrive at the firms forecast • 3) Expert Opinion/Delphi Method – ask the experts what they think • 4)  Past-Sales Analysis – use time series analysis, statistical demand analysis or econometric analysis to predict. • 5) Market Test Method – observing what buyers do in a test market & using information to project to wider market.