Mr1 pt10

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Introduction to Marketing Research

Lecture 1

Hamendra Dangi

[email protected]

9968316938

mailto:hkdangi@f

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Session Break Up

• Out line of Sessions

• Internal Assessment

• Text Book

• Introduction to Marketing Research

• EVPI

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Session – Break Up

• Imparting Instruction with Software Example

( SPSS , Mini Tab , E-view )- 1 Hour 30 minutes

Case discussion /Class activity : 30 Minutes • Case Study ( One Group in Each lecture )

( 20 Minutes )

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INTERNAL ASSESMNET

• Synopsis submission : After Two weeks ( 2 marks)• Written Test (A) - 8th September 2010 ( 10 Marks) Mid Term review of project : One week after minor test

(5 Marks ) • Final submission and Viva Voce on Projects –2 Weeks

before final exam ( 8 marks) Case Presentation/ class activity - 3 Marks Participation in Class – 2 Marks

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Text Book

• Business Research – Donald Cooper

• Research Method : C.R Kothari

• Marketing Research – Naresh Malhotra

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Software

• Statistical Package for Social Science

• Mini Tab

• E – View

• R

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Definition of Marketing Research

Marketing research is the systematic and objective

identification

collection

analysis

dissemination

and use of information

For the purpose of improving decision making related to the

identification and

solution of problems and opportunities in the area of marketing

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Management Decision Problem Vs. Business Research Problem

Management Decision Problem Business Research Problem Should a new product be To determine consumer preferences introduced? and purchase intentions for the

proposed new product. Should the advertising To determine the effectiveness campaign be changed? of the current advertising

campaign. Should the price of the To determine the price elasticity brand be increased? of demand and the impact on sales

and profits of various levels of price changes.

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Question for Discussion

• Discuss the management decision problem for which following research problem might be useful

• Determine the number of tenants and their annual income in a particular region

• Evaluate the effectiveness of commercial in a Mall

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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. Examples: market potential, market share, image, market characteristics, sales analysis, forecasting, and trends research.

Problem-Solving Research• Research undertaken to help solve specific marketing

problems. Examples: segmentation, product, pricing, promotion, and distribution research.

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Distinction between Risk and Uncertainty

Risk: A decision making condition under which a manager can list all outcome and assign probabilities to each outcome

Uncertainty : A decision- making condition under which a manager cannot list all possible outcome and/ or cannot assign probabilities to the various outcome

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Important Term

Decision Alternative : There is finite number of decision alternative available with the decision maker at each point when decision is made

State of Nature : A possible future condition resulting from choice of a decision alternative depends upon certain factors beyond the control of decision maker

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• Pay off : A numerical value resulting from each possible combination of alternative and state of nature is called Pay off

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Conditional Pay off table

A retailer buys an article at Rs.2 per case and sells the same at Rs.5 . He incurs a loss of Rs 2 for every item which is not sold.Previous experience shows that demand varies from 13 to 15 cases a day . Construct Conditional Payoff table

I

I

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Conditional Pay off Table

State of Nature/

Strategy

13 14 15

13 39 37 35

14 39 42 40

15 39 42 45

I hear, I forget I see, I remember I do I understand

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Example

• A physician purchase a particular medicine n Monday of each week . The medicine must be used within the week following otherwise it will become worthless . The medicine costs Rs 2 per order and physician charges Rs 4 per dose . The past 50 week records are as follow:

Dose per Week 20 25 40 60

No of weeks 5 15 25 5

Find : I) EMV ii) EOL iii) EVPI


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Pay off table

Prob. 20 25 40 60

20 0.10 40 30 0 -40

25 0.30 40 50 20 -20

40 0.50 40 50 80 40

60 0.10 40 50 80 120

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EVPI

• EPPI=40x.10+50x.30+80x.50+120x.10

= 71

EVPI = 71-54

=17


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EOL

Events / Demand

Prob 20 25 40 60

20 0.10 0 10 40 80

25 0.30 10 0 30 70

40 0.50 40 30 0 40

60 0.10 80 70 40 0

EOL 31 23 17 49


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• Relevance of EVPI?

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Decision Tree Analysis

• A Decision tree is nothing but a graphic exercise of showing the sequence of decision to be made and the possible events that may occur

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Example

• A company has leased an oil mine . It may sell it for Rs 25000or drill it for oil . The various possible drilling results are given as under along with probability dist.

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• A company has leased an oil mine . It may sell it for Rs 25000or drill it for oil . The various possible drilling results are given as under along with probability dist.

Possible results Probability Rs consequences

Dry well 0.10 - 1,00,000

Gas well only 0.40 45000

Oil& Gas 0.30 98000

Oil well only 0.20 1,99,000

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• A business man has two investments A and B available to him: but he lacks the capital to undertake both of them simultaneously. He can choose to take A first and then stop, or if A is successful then take B, or vice versa. The probability of success of A is 0.7 while for B is 0.4 .Both require an initial outlay of Rs 2000 and both return nothing if it fails. Successful completion of A will return Rs 3000 while B will return Rs 5000 .Draw the decision tree and determine the best strategy.