Marketing research INtroduction

Welcome to Marketing Research

Dr. Vinod Kumar

Marketing Research Basics

Teaching Pedagogy

• PPTs

• Case Studies

Evaluation Components

• Class Performance and Behavior – 20 Marks

• Group Project – 20 Marks

• Mid Term – 20 Marks

• End Term – 40 Marks

Marketing Research Defined

The systematic and objective process of generating information for aid in making marketing decisions

The American Marketing Association defines marketing research as follows:

Marketing research is the function which links the consumer, customer, and public to the marketer through information—information used to identify and define marketing opportunities and problems; generate, refine, and evaluate marketing actions; monitor marketing performance; and improve understanding of marketing as a process.

Marketing Research Defined

Why Do Marketing Research?

• Make better marketing decisions

• Understand consumers and the marketplace

• Find out what went wrong

Role of Marketing Research in Managerial Decision Making

•Performance monitoring

•Refining strategies and program

•Define the business scope and

market segments served

•Establish competitive advantages

•Set performance objectives

Situation Analysis

Strategy Development

Marketing Program

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

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Classification of Marketing Research

Problem Identification Research • Research undertaken to help identify problems which are

not necessarily apparent on the surface and yet exist or are likely to arise in the future.

Problem Solving Research • Research undertaken to help solve specific marketing

problems.

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Research by

Type of

Marketing Mix

Decision

Outcomes of Research

Is research relevant to a real

management problem?

YES NO

Does the

research follow

scientific

methods?

YES 1. Results are

relevant and

believable.

2. Results are

believable, but

not relevant.

NO 3. Results are

relevant, but not

believable.

4. Results are

neither relevant

nor believable.

Value

•Decreased uncertainty •Increased likelihood of a correct decision •Improved marketing performance and resulting higher profits

Costs

•Research expenditures •Delay of marketing decision and possible disclosure of information to rivals •Unclear research results

Value Should Exceed Estimated Costs

P&G Luring Women with their Feminine Toothpaste

• 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.

18 Marketing Research 10th Edition http://www.drvkumar.com/mr10/

Harley Davidson Exploring New Markets

• Problem: Flat domestic sales

• 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.

19 Marketing Research 10th Edition http://www.drvkumar.com/mr10/

Marketing Research Process

Step 1: Problem Definition

Step 2: Development of an Approach to the

Problem

Step 3: Research Design Formulation

Step 4: Fieldwork or Data Collection

Step 5: Data Preparation and Analysis

Step 6: Report Preparation and Presentation

Problem Definition

Indication of specific marketing decision area that will be clarified by answering some research questions

“The formulation of the problem is often more essential than its solution.” - Albert Einstein

The Iceberg Principle

– The dangerous part of many marketing problems is neither visible to nor understood by many marketing managers.

– “Submerged” parts of the problem must be understood and including in the research design for the research to be useful.

Symptoms Can Be Confusing

Symptoms vs. Problems

Microbrewery • Symptom

– Consumers prefer the taste of competitor’s brand

• PD based on the Symptom – What type of reformulated taste is needed?

• True Problem – Old-fashioned package influenced taste

perception

Symptoms vs. Problems

Manufacturer of palm-size computers with Internet access • Symptom

– Distributors complain prices are too high

• PD based on the Symptom – Investigate business users to learn how much

prices need to be reduced

• True Problem – Distributors do not have adequate product

knowledge to communicate product’s value

Management Decision Problems vs. Marketing Research Problems

Management Decision Problems

• Ask what the decision maker needs to do

• Action oriented

• Focus on symptoms

Marketing Research Problems

• Ask what information is needed and how it should be obtained

• Information oriented

• Focus on the underlying causes

Common Errors

Problem Definition is

too Broad

•Does Not Provide

Guidelines for

Subsequent Steps

•e.g., Improving the

Company’s Image

Problem Definition

is too Narrow

•May Miss Some

Important Components

of the Problem

•e.g. Changing Prices in

Response to a

Competitor’s Price

Change.

Management Decision Problems vs. Marketing Research Problems

The management problem is concerned with the decision maker and is action oriented in nature. For example, the management problem offers a psychological pricing to enhance the quantum of sales. This management problem focuses on the symptoms.

Research problem is somewhat information oriented and focuses mainly on the causes and not on the symptoms. This is to determine the consumer’s opinion on psychological pricing and to estimate their purchase behavior for the psychological price being offered.

Translating Problems into Research Problems (Questions)

Marketing Problem • Determine the best ways the firm can communicate with

potential purchasers of laptop computers Research Questions • How familiar are consumers with the various brands of

computers? • What attitudes do consumers have toward these brands? • How important are the various factors for evaluating the

purchase of a laptop computer? • How effective are the communications efforts of the

various competitive marketers in terms of message recognition?

“Bad” vs. “Good” Research Questions

• “Bad” research question

– Is advertising copy X better than advertising copy Y?

• “Good” research question

– Which advertising copy has a higher day-after recall score?

Approach to a Problem

• For example, to estimate the “buying intentions” for a particular product, first, the researcher has to prepare a theoretical model to measure an attitude like buying intentions.

• Factors affecting buying intention?

• How buying intention can be measured?

Theoretical model to measure the buying intention

Framing Hypothesis

• Hypothesis 1: “Brand image” has a significant liner impact on the buying intention.

• Hypothesis 2: “Brand awareness” has a significant liner impact on the buying intention.

• Hypothesis 3: “Price” has a significant liner impact on the buying intention.

• Hypothesis 4: “Availability” has a significant liner impact on the buying intention.

• Hypothesis 5: “After-sales services” has a significant liner impact on the buying intention.

Broad Classification of Research Designs