Ch 8

The Marketing Research Function

Intro to Marketing Chapter 8

Marketing Research Function

Purpose of research:

• To analyze competition performance

• to gauge acceptance of new products and package designs

• to develop promotional campaigns

Development of the Marketing Research Function

Charles C. Parlin

How has technology affected research?

• It has allowed for storage of more data & simulation for testing.

Marketing Research Process

1. Problem Definition• What is the problem?

For example: sales are dropping, new product is out, or new advertising

2. Exploratory Research• Discover the cause of the problem

For example: Finding out why sales have dropped. Finding out is customers like the new product or advertising

• Using Internal DataAlso called Situational AnalysisSales records, financial statements

Marketing Research Process

3. Formulating Hypothesis

• Guess about the outcome. It can be right or wrong

4. Research Design

• Test designed to see if

hypothesis is right or

wrong

Marketing Research Helped Kraft Develop the Product and Effective Advertising for Its DiGiorno Pizza

5. Data Collection

• Collecting data to test the hypothesis

• Marketing Research Methods

• Secondary: previously published

• Primary: collected for the first time

Interpreting and Presenting Information

Marketing Research is intended to assist in decision making, not be the final say.

Marketing Research Methods

Secondary Data Collection

• Internalexample:sales records

• Externalexample: government

reports, census, Internet, industry publications

• External Secondary Data

Advantages:Less expensive, abundant supplyTakes less time to gather

Disadvantages:May be outdatedMay be collected for a different

purpose so it’s irrelevant

Sampling Techniques

Population or Universe

• Group the researcher wants to study

Census

• If all sources are contacted

Sample• Representative

group• Must be

representative of target market - crucial for pertinent results

• Probability sample - every member has equal chance of being selected (random)

• Non-probability sample- on the street interview

Primary Research Methods

1. Observation MethodFor example: traffic

count, license plate check, supermarket scanners, spies, recording of TV viewing habits, virtual reality

2. Survey Method

• For example: personal interview, phone interview, computer interview, etc.

Survey Method (cont.)• Telephone Interviews

Inexpensive High response rate ConvenientNo picture of item of discussionImpersonalBad ReputationInternationally phone connections are poorCaller ID’s screen callsUnlisted numbers are not reachable

Survey Method (cont.)

Personal Interview

• Often the best method because rapport can be established

• Takes more time and money

• Can explain unclear questions

• Best for international information

Survey Method (cont.)

Focus Groups

• 8-12 people can be too small to be reliable

• Widely used

• Generally video taped for late analysis

Survey Method (cont.)

Mail Surveys

• Cost effective

• Only 40-50% return rate

• Effective for national studies buy not for international ones

• Junk mail reputation

• Based on effectiveness of US Post Office

Fax Surveys

• Novelty

• Faster results than mail

Survey Method (cont.)

Online Surveys

• Fast

• Respondents are more truthful to the computer

• Cannot explain unclear questions

3. Controlled Experiment Method

• Compares test groups to control groups

• Problems with trying to control the variables of real-life situations

• Done in field or lab

Testing a Global Advertisement

TEST MARKETINGMost common method of experimental

data gathering

Introduces a product in a location that matches the target market demographics

Disadvantages • Expensive

• Competitors find about about products

• Some products are too expensive to produce for test marketing (cars)

Conducting International Marketing Research

Language & Cultural Issues

US Government has good sources of information on the other countries