is Recap
What Marketing Research? Why do Organizations Need Market Research? What sort of information is needed generally? Why and When does Marketing Research Work? What is the Marketing Research Process
The Marketing Research Process
Step 1: Identify and define the Problem or Opportunity Step 2: Define the Marketing Research Problem Step 3: Specify the Research Design Step 4: Develop the Data Collection Procedure Step 5: Design the Sampling Procedure Step 6: Collect the Data Step 7: Process and Analyze the Data Step 8: Present the Results Step 9: Follow-up
The Management Problem versus the Marketing Research Problem
A distinction must be made between the management problem and the marketing research problem.
Marketing Research Problems
Focus on causes Data oriented
Management Problem
Focus
on symptoms
Action oriented
Step 1: Identify the Management Problem or Opportunity
What Question Does the Management decision Problem ask? What should the decision maker do? Moti Italian restaurant sales are low (the symptom) and if they remain at current levels the restaurant will soon go out of business. What broadly is the management decision problem? What should the restaurant do to improve sales? Is this enough?
What do we need to know to identify or define the problem?
History of the problem what is the business issue prompting the research What will the information be used for what decisions might be made? Environment in which it is being made (eg legal, competitive, economic, financial, social) situation analysis What alternative courses of action are there? What criteria should we use to decide between alternatives (e.g. sales targets, market share, profitability, ROI) Constraints, e.g.. timing, monetary Who are the decision makers and what are their purposes?
Why is it important to clearly define the management decision problem?
The problem definition process provides guidelines on how to correctly define the marketing research problem Because problem definition sets the course of the entire project Because the client is paying for the research so both need to know what to expect Because mistakes made at this level grow into larger, more expensive mistakes later on. All the effort, time and money spent from this point on will be wasted if the problem is not properly defined.
What's wrong with these statements? 1. Develop a marketing strategy for the brand. 2. Improve the competitive position of the firm 3. Improve the company's image What's wrong with this statement? 1. How should the company adjust its pricing given that a major competitor has initiated price changes?
Step 2: Define the Marketing Research Problem A statement of the objective of the research and the information needed to make a sound decision
Examples To determine the effectiveness of the advertising campaign To determine the impact on sales and profits at various price levels To determine the needs of product users and the extent to which the needs are being met by the market.
Management Decision Problem: What should Moti restaurant do to improve sales? Marketing Research Problem: Why are Sales low? What factors influence people to spend money in restaurants and to what extent does Moti meet their needs? What information is needed to answer this question?
What can we say about restaurant patrons that makes them go out to dinner to an Italian restaurant and spend money? I.e. what's our theory?
People who go out to restaurants like a wide menu selection at a convenient location and demand good tasting food, good service, at a reasonable price.
Research Objectives and Hypotheses
1. needs What do restaurant goers seek to satisfy. Hypotheses? 2. How well does Moti Italian restaurant meet these needs? Hypotheses? 3. What are the psychographic and demographic characteristics of the restaurant goers? Hypotheses? 4. Does Moti Italian restaurant cater to this segment? Hypotheses? make a list of the information that should be collected for each research question and hypothesis
In 2002, Westjet added service to two new Ontario destinations, London and Toronto. As Westjet expanded into Eastern Canada it began to run into competition from Montreal-based discount carrier Jetsgo, which started in 2002 (and ended March 2005).
In 2003 Jetsgo expanded into Western Canada to compete directly on flights between Calgary and Toronto and Montreal. In the first six months of 2004, Westjet's net earnings were $8.0 million compared to $15.5 million during the first six months of 2003. Both Jetsgo and Westjet modeled themselves on the highly successful US Carrier Southwest Airlines. Both airlines offered the same schedules, the same service, and the same fares. With little to differentiate the two airlines Westjet began to look at a way to increase passenger loyalty especially on the longer haul domestic flights.
Management decision problem How to attract more loyal customers Marketing Research Problem Identify the factors that influence loyalty of airline passengers
Exploratory research revealed that the consumer's choice of an airline is influenced by safety, ticket price, frequent flyer program, convenience of scheduling and brand name. A theoretical model stipulated that consumers evaluate competing airlines based on factors of the choice criteria to select a preferred airline. Since both airlines offer the same schedules, same service, and fares Westjet had to find a way to differentiate itself.
Food turns out to be the solution.
Secondary data, like the J. D. Power and Associates survey on "current and future trends in the airline food industry" indicated that "food service is a major contributor to customer loyalty". This survey also emphasized the importance of food brands. Westjet then conducted a survey to ev...