1Market Research by NC GHGUE

Marketing Research

N.C.GHUGE

The Marketing Research Industry: The Marketing Research Industry: Evolution of the IndustryEvolution of the Industry

• Charles Coolidge Parlin is known as the “father of marketing research.”

• Parlin conducted the first continuous marketing research in the early 1900s for the Curtis Publishing Company.

• The purpose of Parlin’s research was to increase advertising for The Saturday Evening Post magazine.

Growth of the Need for Marketing ResearchGrowth of the Need for Marketing Research

• The Industrial Revolution led to manufacturers producing goods for distant markets.

• Manufacturers needed to know about far away consumers.

• This led to the growing need for marketing research.

• Marketing research is the function which links consumers and the consumer to the organization through information- Information used to identify and define marketing problems; generate, refine, and evaluate marketing actions;monitor marketing performance; and improve our understanding of marketing as a process.”

Why do market research?

• Shift from production to customer-orientation

• Declining cost of unit information (digital age)

• Increase intensity of competition

• Globalization

• Technology and commercialization

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Why do market research?

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Opportunities

Through market research, Marriott Hotels discovered an opportunity to create a hotel chain that would serve business travelers at moderate prices.

After the target market was identified, Marriott spent 2 years developing the ‘marketing mix’ for its new target market.

‘Marketing mix’ is the unique blend of product/service, pricing, promotion, and distribution strategies that aim to make the product successful in the specific target market.

The end result was the latest addition to the Marriott product line:Courtyard by Marriott.

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External Marketing Environment

Some external factors may exist that are out of control of managers. This may affect the marketing mix over time.

When USA-based Domino’s Pizza entered the Japanese market it faced the problem that normal US-style home delivery pizza was not widely accepted in that culture.

Through conducting market research Domino’s Pizza was able to develop a successful product to the Japanese market that was acceptable to the culture there.

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Importance to Management

UPS Delivery service company has always assumed that on-time delivery was the most important concern to customers.

As such its market research only focused on asking customers if they were pleased with delivery times.

When UPS began asking broader questions, they discovered that customers wanted more interaction with drivers, and drivers that were more willing to chat.

UPS began training drivers according to these needs and the results were improved customer satisfaction.

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Global Research

Sony Corporation uses market research to develop strategy for its Sony and Aiwa brands.

Aiwa-brand products are lower price and appeal to younger customers, also the functions of Aiwa products will be limited.

This allowed Sony to develop and sell these simple products without affecting the Sony brand name which focuses on multi-function and high performance products.

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Applied Research and Basic Research

Applied Research – Marketing research done to better understand the market, find out why a strategy failed, or to reduce uncertainty in management decision making.

Basic Research – Marketing research done to expand knowledge, but is not aimed at a specific problem. In the long run, basic research helps us understand more about the world we live in.

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Decision to conduct Marketing Research or not?

Low resources – small companies would sometimes not have enough money to conduct market research.

Research results would not be useful.

The opportunity has passed – if the product is in the late maturity or decline stage of the product life cycle (e.g. black and white T.V.’s).

Information already exists – prior marketing research studies may have been conducted in the past.

Cost of conducting marketing research outweighs the benefits.

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Market Research opportunitiesMARKET MARKET SIZESIZE

SMALL PROFIT MARGINSMALL PROFIT MARGIN LARGE PROFIT MARGINLARGE PROFIT MARGIN

SmallDo NOT conduct marketing research

Maybe conduct marketing research. Learn all you can from existing information prior to making decision to conduct research.

Large Maybe conduct marketing research. Learn all you can from existing information prior to making decision to conduct research.

YES conduct market research.

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The Internet effect on Marketing Research

Provides rapid access to business intelligence, allowing faster decision making.

Improves a firm’s ability to respond quickly to customer needs and market shifts.

Reduces labour and time intensive research activities.

Internet databases available online – census data. Help with target demographics e.g. High-Average Income levels in a particular area may help Market research for a company wishing to open a jewellery shop.

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Internet Surveys - Advantages

Reduced costs.

Personalization – More personalized service for people participating in online surveys.

Higher response rates – email faster than regular ‘snail mail’.

Ability to contact the hard-to-reach – e.g. doctors, top company executives.

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Nature of Marketing

Definition of MarketingDefinition of Marketing

Customer Customer OrientationOrientation

Goal Goal OrientationOrientation

Systems Systems OrientationOrientation

The External Environment:The External Environment:Marketing research is a key means for Marketing research is a key means for

understanding the external environmentunderstanding the external environment..

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Some Other Key points

Market conditions, not the supplier’s cost, usually determine the selling price.

A major objective in conducting marketing research is to determine pricing trends.

When prices are expected to rise, there is a potential buying opportunity now.

When prices are expected to fall, postpone unnecessary purchases until better pricing is evident.

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Determining Market Trends

Market trends influence buying decisions. Timing

Levels of inventory

Sourcing effort

Market trends influence procurement strategies Length of commitment – long term, spot buying.

Cash flow and investment planning.

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Sources of Market Research Information

Experts Other market research Requests for information Internet search engines On-line databases Source lists from other organizations Product literature Trade shows Professional Associations Market Research firms

And many more………..

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The Request for Information

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The Overall Role of Marketing Research

Transparency 1 :THE ROLE OF MARKETING RESEARCH

MARKETING RESEARCH

A FORMAL COMMUNICATION LINK WITH ENVIRONMENT

PROVIDE ACCURATE AND USEFULa) specifyingb) collectingc) analyzingd) interpreting

FORa) planningb) problem-solvingc) control

BETTER DECISION MAKING

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Some types of marketing research

Brand equity research - how favorably do consumers view the brand?Brand name testing - what do consumers feel about the names of the products?Commercial eye tracking research - examine advertisements, package designs, websites, etc by analyzing visual behavior of the consumerConcept testing - to test the acceptance of a concept by target consumersCoolhunting - to make observations and predictions in changes of new or existing cultural trends in areas such as fashion, music, films, television, youth culture and lifestyleBuyer decision processes research - to determine what motivates people to buy and what decision-making process they useCopy testing – predicts in-market performance of an ad before it airs by analyzing audience levels of attention, brand linkage, motivation, entertainment, and communication, as well as breaking down the ad’s flow of attention and flow of emotion. 

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Some more types of marketing research

Customer satisfaction research - quantitative or qualitative studies that yields an understanding of a customer's of satisfaction with a transactionDemand estimation - to determine the approximate level of demand for the productDistribution channel audits - to assess distributors’ and retailers’ attitudes toward a product, brand, or companyInternet strategic intelligence - searching for customer opinions in the Internet: chats, forums, web pages, blogs... where people express freely about their experiences with products, becoming strong "opinion formers"Marketing effectiveness and analytics - Building models and measuring results to determine the effectiveness of individual marketing activities.Mystery Consumer or Mystery shopping - An employee or representative of the market research firm anonymously contacts a salesperson and indicates he or she is shopping for a product. The shopper then records the entire experience. This method is often used for quality control or for researching competitors' products.

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…. And more

Price elasticity testing - to determine how sensitive customers are to price changesSales forecasting - to determine the expected level of sales given the level of demand. With respect to other factors like Advertising expenditure, sales promotion etc.Segmentation research - to determine the demographic, psychographic, and behavioural characteristics of potential buyersOnline panel - a group of individual who accepted to respond to marketing research onlineStore audit - to measure the sales of a product or product line at a statistically selected store sample in order to determine market share, or to determine whether a retail store provides adequate serviceTest marketing - a small-scale product launch used to determine the likely acceptance of the product when it is introduced into a wider marketViral Marketing Research - refers to marketing research designed to estimate the probability that specific communications will be transmitted throughout an individuals Social Network. 

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Review

1. The role of marketing is to create exchanges. What role might marketing research play in facilitating the exchange process?

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Review

1. The role of marketing is to create exchanges. What role might marketing research play in facilitating the exchange process?

Exchange is the basic tenet of ‘Marketing’ and ‘Commerce’. It really means a sharing of ‘value’ between two parties, called the buyer and the seller.

Marketing research in the exchange process offers knowledge to help achieve customer satisfaction.

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Review

2. Marketing research has traditionally been associated with manufacturers of consumer goods. Today, both profit and non-profit organizations are using marketing research. Why does this trend exist? Give examples.

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Review

2. Marketing research has traditionally been associated with manufacturers of consumer goods. Today, both profit and non-profit organizations are using marketing research. Why does this trend exist? Give examples.

Over time all organizations have recognized the benefits of conducting marketing research, even governments to have communication with customers/subjects/clients.

Charities may conduct marketing research to better understand who they are targeting for donations what the charitable people would like from the charities regarding how the charity is set-up, distribution, improvements, etc – all this information may lead to increased donations.

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Review

3. Explain the relationship between marketing research and the marketing concept.

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Review

3. Explain the relationship between marketing research and the marketing concept.

One of the aspects of the marketing concept is ‘Customer Orientation’. Marketing research helps the business achieve this through a better understanding of the external environment. As the communication with the customer will always inform us to be orientated towards the consumer.

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Review

4. What differences might you note among marketing research conducted for (a) a retailer, (b) a consumer goods manufacturer, (c ) an industrial goods manufacturer, (d) charitable organization?

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Review

4. What differences might you note among marketing research conducted for (a) a retailer, (b) a consumer goods manufacturer, (c ) an industrial goods manufacturer, (d) charitable organization?

a) Aimed towards consumer preferences and trends.

b) Aimed towards the retailers they supply to and if they are satisfied with their products.

c) What their consumers are concerned about e.g. Boeing developing the ‘dreamliner’ for their customers – the airlines.

d) Research conducted towards the people that donate money – what their preferences are in a charity and how their organization operates.

• Advantages of Market Research– Helps focus attention on objectives

– Aids forecasting, planning and strategic development

– May help to reduce risk of new product development

– Communicates image, vision, etc.

– Globalisation makes market information valuable (HSBC adverts!!)

• Disadvantages of Market Research– Information only as good

as the methodology used

– Can be inaccurate or unreliable

– Results may not be what the business wants to hear!

– May stifle initiative and ‘gut feeling’

– Always a problem that we may never know enough to be sure!

Marketing Intelligence

Market Research

Business Intelligence • BI is the ability to access data from multiple sources

within an organization and deliver it to business users for analysis

• It links the disparate operational systems to the end users of the data, thus creating an environment with free flow of information

• It offers a reliable barometer of the business performance

• It helps to analyze what is behind trends and anomalies in the business

Business Intelligence

Provide data on

Business Intelligence

Financial Intelligence

Marketing Intelligence

Accounting Intelligence

Marketing Research

Management Intelligence

....................

Prospects Customers Competition Products/Markets

Primary Sources Secondary Sources Standardized Sources

Customer Relationship Marketing/ Database Marketing

What is Marketing Intelligence?

Market intelligence (MI) is, “the process of acquiring and

analyzing information in order to understand the market

(both existing and potential customers); to determine the

current and future needs and preferences, attitudes and

behavior of the market; and to assess changes in the

business environment that may affect the size and

nature of the market in future.”

- Cornish S. L

Need for Marketing Intelligence

• Producers have little direct contact with consumers (geographical distance and channel layers).

• Channel has little knowledge about customer attitudes, preferences and changing tastes.

• Need to understand competition, without spying on them.• Management goals involve sales targets and market

share achievement.• Need to identify successful new product developments

early in the process to ensure growth and revenue maximization by finding a balance between costs and prices of products.

Domains of Marketing Intelligence

Pro

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Cu

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Seg

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dec

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Brand and P

ricing

decisions

Keeping stakeholders

happy

Mar

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stim

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benc

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Mar

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Marketing Research

• Marketing Research, a critical part of Marketing Intelligence helps by providing accurate, relevant and timely (ART) information

Links consumer, customer, and public to the marketer

through information used to:

• Identify and define marketing opportunity and

problems

• Generate, redefine and evaluate marketing actions

• Monitor marketing performance

• Improve understanding of marketing as a process (from AMA’s official definition of Marketing Research)

Role of Marketing Research in Managerial Decision Making

Four Stages of Market Planning Process

– Situation analysis

– Strategy development

– Marketing program development

– Implementation

•Performance monitoring•Refining strategies and program

•Define the business scope and served

market segments

•Establish competitive advantages

•Set performance objectives

Situation Analysis

StrategyDevelopment

MarketingProgram

Development

Implementation

•Understand the environment and the market•Identify threats and opportunities•Assess the competitive position

•Product and channel decision•Communication decisions•Pricing•Personal selling decisions

Marketing Planning Process

Situation Analysis

Analysis of

– Market environment

– Market characteristics

– Consumer behavior

Research Approaches

– Organize information obtained from prior studies

(secondary)

– Focus groups

Strategy Development

Market Research Provides Information to Assist Management With Three Critical Decisions:

– What business should we be in?

– How will we compete?

– What are the objectives for the business?

Marketing Program Development

• Programs embrace specific tasks

• Action program usually focuses on a single

objective in support of one element of overall

business strategy

Marketing Program Development (cont.)

Representative Decisions that Draw on Marketing Research:

• Segmentation decisions• Product decisions• Distribution decisions• Advertising and promotion decisions• Personal selling decisions• Price decisions• Branding decisions• Customer satisfaction decisions

Implementation

• Starts with decision to proceed with a new program or strategy

• Set specific measurable objectives for all elements of marketing program

• Shift research focus to :

– "Did the elements achieve their objectives?"

– “Should the marketing program be continued, discontinued, revised or expanded?"

Factors Influencing Marketing Research Decisions

• Relevance

• Type and Nature of Information Sought

• Timing

• Availability of Resources

• Cost-benefit Analysis

Ethics in Marketing ResearchEthics of the Sponsor

– Overt and covert purposes

– Dishonesty in dealing with suppliers

– Misuse of research information

Ethics of the Supplier

– Violating client confidentiality

– Improper execution of research

Abuse of Respondents

– Falsifying answers

Conquering Latino Homes

• Hispanics account for nearly 12.5% of the U.S. population.

• Research shows that Latino households contribute $600 billion

of $1.3 trillion purchasing power of multicultural population.

• In 2003 only 5.1% of total advertising dollars in the United

States was focused on Latinos.

• By 2050, Hispanic population would represent 25% of US

population.

• What do you think the problem is?

• P & G has came out with “Rejuvenating Effects” a gender specific

toothpaste targeting the female customers, who do 82% of the

grocery shopping.

• The flavor and package of the product was decided on the basis of

the results from a customer survey filled out by women.

• Though the product is priced slightly higher than the other brands

P & G hopes to make women think about the toothpaste in the

same light as skin care lotions and shampoo.

P & G Luring Women with their Feminine Toothpaste

Harley Davidson Exploring New Markets

• Problem: Flat domestic scales• Solution:

– In 1999, Harley-Davidson started a rental program which provided a way to hook customers on riding and thereby entice them into buying a motorcycle.

– 40 percent of those enrolled in the program were female and about 30 percent were under the age of 35

• Result:

– Motorcycles rented went up from 401 days in 1999 to a total of 224,134 days worldwide in 2004.

– 32 percent of rental customers surveyed bought a bike or placed an order after renting, another 37 percent were planning to buy one within a year.

– Nearly half of the renters spent more than $100 on Harley-Davidson accessories, such as T-shirts and gloves.

CAREER OPPORTUNITIES IN MARKETING RESEARCH

VP Marketing Research Director / Assistant Director Manager of Marketing Research Senior / Junior Analyst Field Worker / Interviewer Clerical Help