Chapter 10 © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole.

Chapter 10

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

MARKETING RESEARCH AND SALES FORECASTING

1

2© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Chapter 10 Marketing Research and Sales Forecasting

Objectives

1. Describe the development of the marketing research function and its major activities.

2. Explain the steps in the marketing research process.

3. Distinguish between primary and secondary data, and identify the sources of each type.

4. Explain the different sampling techniques used by marketing researchers.



Objectives

5. Identify the methods by which marketing researchers collect primary data.

6. Explain the challenges of conducting marketing research in global markets.

7. Outline the most important uses of computer technology in marketing research.

8. Identify the major types of forecasting methods.



Introduction

▮ Marketing research - Collecting and using information for marketing decision making



Development of the Marketing Research Function▮ Advertising pioneer N. W. Ayer conducted the first

organized marketing research project in 1879▮ Charles C. Parlin organized the nation’s first

commercial research department at Curtis Publishing

▮ Research methods grew more sophisticated in the 1930s with better sampling techniques and greater accuracy

▮ Computer technology has significantly advanced market research


Chapter 10 Marketing Research and Sales ForecastingWho Conducts Marketing

Research?▮ Syndicated services - Organization that

provides standardized data on a periodic basis to its subscribers

▮ Full-service research suppliers - Marketing research organization that offers all aspects of the marketing research process

▮ Limited-service research suppliers - Firm that specializes in a limited number of activities, such as conducting field interviews or performing data processing



Customer Satisfaction Measurement Programs▮ Firms focus on tracking satisfaction levels of

current customers▮ Analyze partial or complete dissatisfaction

to identify problem areas that need attention



Figure 10.1 - The Marketing Research Process



Define the Problem

▮ Defining the problem clearly increases the speed and accuracy of the research process

▮ Confusing symptoms of a problem with the problem itself should be avoided

▮ A logical starting point in identifying the problem – to evaluate the firm’s target market and marketing mix elements



Conduct Exploratory Research

▮ Exploratory research - Process of discussing a marketing problem with informed sources both within and outside the firm and examining information from secondary sources

▮ Using internal data• Sources of internal data are sales records,

financial statements, and marketing cost analyses



Conduct Exploratory Research

• Sales analysis can compare expected sales with actual sales and be analyzed in a variety of ways, such as by customer type and sales method

• Accounting data provides information about financial issues

• Marketing cost analysis evaluates expenses fora variety of costs



Formulate a Hypothesis

▮ Hypothesis - A tentative explanation for some specific event

▮ Sets the stage for more in-depth research



Create a Research Design

▮ Research design - A master plan or model for conducting research

▮ Important considerations• Marketers must be sure the study will measure

what they intend to measure• Selection of respondents



Collect Data

▮ Primary data - Information collected for a specific investigation

▮ Secondary data - Previously published information• Less expensive• Less time consuming• Can become obsolete• May not be completely relevant


Chapter 10 Marketing Research and Sales ForecastingInterpret and Present Research

Data▮ Present findings in a format that allows

managers to make effective judgments▮ Marketing researchers and research users

must cooperate at every stage in the research process

▮ Reports must be clear and concise



Secondary Data Collection

▮ Comes from many sources• Internal data - Sales records, product

performance reviews• External data - Government records, syndicated

research services

▮ Government data• Nation’s most important source of marketing

data• Census data provide the most frequently used

government statistics




▮ The 2010 U.S. Census - Contains a wealth of valuable information for marketers

▮ Private data - Variety of sources• Trade associations• Business and trade magazines• Electronic systems• Radio-frequency identification technology




▮ Online sources of secondary data• Online databases• Research aggregators - Companies that acquire,

catalog, reformat, segment, and resell premium research reports• Examples: Datamonitor, eMarketer

• Social networking sites

http://www.datamonitor.com/

http://www.emarketer.com/



Sampling Techniques

▮ Sampling - Process of selecting survey respondents or research participants

▮ Population (universe) - Total group of people a researcher wants to study

▮ Classification of samples • Probability sample• Nonprobability sample



Probability Sample

▮ Sample that gives every member of the population a chance of being selected• Simple random sample - Sample in which every

individual in the relevant universe has an equal opportunity to be sampled

• Stratified sample - Sample constructed to represent randomly selected subsamples of different groups within the total sample

• Cluster sample - Researchers select a sample of subgroups (or clusters) from which they draw respondents



Nonprobability Sample

▮ Sample that involves personal judgment in the selection process• Convenience sample - Sample selected from

among readily available respondents• Quota sample - Sample divided to maintain the

proportion of certain characteristics among different segments or groups seen in the population as a whole



Figure 10.2 - Types of Primary Research



Observation Method

▮ Researchers view the overt actions of subjects being studied

▮ Increasingly sophisticated ways for observing behavior are being used

▮ Videotaping consumers is gaining acceptance



Interpretative Research

▮ A researcher observes a customer or group of customers in their natural setting and interprets their behavior based on an understanding of the social and cultural characteristics of that setting



Survey Method

▮ Telephone interviews• Quick and inexpensive way of getting a small

quantity of relatively impersonal information• Many people refuse to take part or are reluctant

to give personal information over the phone• Not a viable option in international markets

where telephone ownership is rare



Survey Method

▮ Personal interviews• Allows researchers to obtain detailed

information and ask follow-up questions• Researchers can establish rapport with

respondents and explain confusing or vague questions

• Mall intercepts - Interviews conducted inside retail shopping centers



Survey Method

▮ Focus group - A small group of individuals brought together to discuss a specific topic• Valuable for exploratory research• Drawback is the potential lack of honesty due to

peer pressure• Researchers are experimenting with online

focus groups



Survey Method

▮ Mail surveys• Cost-effective and provides anonymity• Lower response rates than for personal

interviews • Time-consuming• May be subject to bias through self-selection• Long follow-up time



Survey Method

▮ Fax surveys• Limited households use fax machine• Securing a representative sample of respondents is a

difficult undertaking

• Federal Junk Fax Prevention Act limits fax transmissions for commercial purposes



Survey Method

▮ Online surveys and other Internet-based methods• Allow researchers to: • Increase the speed of the survey process• Increase sample sizes• Ignore geographic boundaries• Reduce costs

• No industry wide standards define techniques for measuring Web use



Experimental Method

▮ Least used method▮ Controlled experiment - Scientific

investigation in which a researcher manipulates a test group and compares the results with those of a control group



Experimental Method

▮ Test marketing - Introducing a new product in a specific area and then observing its degree of success• Can be expensive • Competitors can learn about new products quickly• Some products are not well suited to

test marketing

▮ Alternatives include• Computer-modeling software• Regional product launches• Limiting a product to a single retail outlet



Conducting International Marketing Research▮ Follow same basic steps as for domestic

marketing research▮ Researchers must be aware of cultural and

legal environments▮ May have to adapt research methods to local

conditions



Interpretive Research

▮ Researcher spends time studying the culture

▮ Focus is on understanding the meaning of the product or consumption experience in the consumer’s life

▮ Captures what consumers actually do, not just what they say they do



Computer Technology in Marketing Research▮ Marketing information systems (MIS)• A planned, computer-based system designed to

provide decision makers with a continuous flow of information relevant to their areas of responsibility

• Continually monitors marketing environment and provides instantaneous information



Computer Technology in Marketing Research▮ Marketing decision support systems

(MDSSs) • Marketing information system component that

links a decision maker with relevant databases and analysis tools

• Develops raw data useful for decision making



Data Mining

▮ Process of searching through computerized data files to detect patterns

▮ Focuses on identifying relationships that are not obvious to marketers

▮ Efficient way to sort through huge amounts of data and make sense of it



Business Intelligence

▮ Process of gathering information and analyzing it to improve business strategy, tactics, and daily operations

▮ Can tell the firm how its own sales operation is doing or what its top competitors are up to



Competitive Intelligence

▮ A form of business intelligence ▮ Focuses on finding information about

competitors using secondary sources▮ Aim is to uncover the specific advantages a

competitor has



Sales Forecasting

▮ Estimate of a firm’s revenue for a specified time period• Qualitative forecasting - Use of subjective

techniques to forecast sales• The jury of executive opinion, Delphi technique, sales

force composite, and surveys of buyer intentions

• Quantitative forecasting - Use of statistical forecasting techniques • Test market, trend analysis, and exponential

smoothing



Table 10.2 - Benefits and Limitations of Various Forecasting Techniques



Strategic Implications of Marketing in the 21st Century▮ Marketing research can help an

organization develop effective marketing strategies

▮ Marketing research ideally matches new products to potential customers

▮ Marketing researchers have a broad range of techniques to collect quantitative and qualitative data



GaGa SherBetter Video

http://www.cengage.com/marketing/book_content/boone_9781133628460/videos/ch10.html





Chapter 10 © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole.

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