3104: Marketing Exam 4 Material
Chapter 8: Marketing Research
The Role of Marketing Research
1. Marketing Research: the process of defining a marketing problem and opportunity,
systematically collecting and analyzing information, and recommending actions
a. Marketers conduct marketing research to reduce risk of and thereby improve
marketing decisions
2. Challenges of doing marketing research: good marketing research is challenging
a. Ex. if you asked a consumer about their personal hygiene habits. Even if they
knew the answer, they might not reveal them.
3. Five Step Marketing Research Approach
a. A decision: a conscious choice from among two or more alternatives, all of us
make many such decisions daily
b. This step approach focuses on marketing decisions, and it provides a systematic
checklist for making both business and personal decisions
Step 1: Define the Problem
1. Set Research Objectives
a. Research objectives: are specific, measurable goals the decision maker seeks to
achieve in conducting the marketing research
b. Exploratory Research: provides ideas about a relatively vague problem, used
when the research problem is NOT well defined.
c. Descriptive Research: generally involves trying to find the frequency that
something occurs or the extent of a relationship between two factors. Measures
the frequency of variables or associations/relationships between them.
d. Causal Research: tries to determine the extent to which the change in one factor
changes another one. Experiments and test markets are examples of causal
research. Used to assess whether one variable causes another.
2. Identify Possible Marketing Actions
a. Measures of success: criteria or standards used in evaluating proposed solutions to
the problem
b. Different research outcomes based on the measure of success lead to different
marketing actions
Step 2: Develop the Research Plan
1. Specify constraints: the constraints in a decision are the restrictions placed on potential
solutions to a problem
2. Identify data needed for marketing actions
3. Determine how to collect data
a. Concepts: are ideas about products or services
a.i. To find out about consumer reaction to a potential new product, marketing
researching frequently develop a new-product concept: a picture or verbal
description of a product or service the firm might offer for sale
b. Methods: are the approaches that can be used to collect data to solve all or part of
a problem
b.i. Sampling: a technique to select a group of distributors, customers, or
prospects and treating the information they provide as typical of all those
in whom they are interested
b.ii. Statistical Inference is when you generalize the results from the sample to
much larger groups to help decide on marketing actions
Step 3: Collect Relevant Information (LOOK AT FIGURE 8-3 ON PAGE 199)
1. Data: the facts and figures related to the problem, are divided into 2 main parts below
2. Obtain secondary data: facts and figures that have already been recorded before the
project, always collect secondary data before first
a. Internal Data (inside the firm): ex. financial statements, reports, files, etc
b. External Data (outside the firm): ex. US Census reports, trade association
b.i. Syndicated Panel Data: some market research companies pay household
and businesses to record all their purchases using paper or electronic diary
c. Advantage: the tremendous time savings because the data have already been
collected and publishes or exist internally, and the low cost
d. Disadvantage: the secondary data may be out of date, and the definitions or
categories might not be quite right for a researchers project
3. Obtain primary data: facts and figures newly collected for the project, observing people
and then asking those questions. Advantage: more specific to the problem being studied.
Disadvantage: primary data are usually far more costly and time consuming to collect.
a. Observational Data (watching people): how people actually behave
a.i. Mechanical methods: ex. Nielsen Media Research that does national TV
ratings
a.ii. Personal methods
a.ii.1.
Mystery Shopper: companies pay people to check on the
quality and pricing of their products and the integrity of and
customer service provided by their employees
a.ii.2.
Ethnographic Research: is a specialized observational
approach in which trained observers seek to discover subtle
behaviourial and emotional reactions as consumers encounter
products in their natural use environment such as in their home
or car
a.ii.3.
Personal observation is useful and flexible, but its costly
and unreliable
a.iii. Neuromarketing methods
a.iii.1.
Martin Lindstrom merged neuroscience, the study of the
brain, with marketing!
b. Data Questionnaire (asking people): facts and figures obtained by asking people
about their attitudes, awareness, intentions, and behaviours ex. survey
b.i. Idea generation methods (coming up with ideas)
b.i.1.
Individual Interview: which involves a single researcher
asking questions of one respondent; good but expensive.
b.i.1.a.
Depth Interviews: researchers ask lengthy, free
flowing kinds of questions to probe for underlying ideas
and feeling
b.i.2.
Focus groups: informal sessions of 6 to 10 past, present, or
prospective customers in which a discussion leader, or moderator,
asks them
b.ii. Idea evaluation methods (testing an idea): here the marketing researcher
tries to test ideas discovered earlier to help recommend marketing actions
b.ii.1.
These methods often have conventional questionnaires
using personal, mail, telephone, fax and online
b.ii.2.
Online surveys are really cheap and easy to collect info.
Disadvantage is that some people see email surveys as junk.
b.ii.3.
Mall Intercept Interviews: personal interviews of
consumers visiting shopping centers
b.ii.4.
Open Ended Question: allows respondents to express
opinions, ideas, or behaviours in their own words w/out being
forced to choose among alternatives
b.ii.5.
Closed End (or Fixed Alternative Questions): the
respondents have to choose one or more from the predetermined
choices
b.ii.5.a.
Dichotomous Question: yes or no question
c. Other sources of data
c.i. Social networks: marketers go on social sites and collect info to maybe
track a trend
c.ii. Panels and experiments
c.ii.1.
Panel: a sample of consumers or stores from which
researches take a series of measurements
c.ii.2.
Experiment: involves obtaining data by manipulating
factors under tightly controlled conditions to test cause and effect,
an example of causal research.
c.ii.2.a.
Seeing whether changing one of the independent
variables (a cause) will change the behavior of the
dependent variable that is studied (the result)
c.ii.2.b.
The IVs are called Drivers (like price or
promotion), and the DV is a change in purchases.
c.ii.2.c.
Text Market: a kind of marketing experiment to
reduce risks
c.ii.2.d.
You have to think of outside factors too
c.iii. Information technology and data mining: marketers use these below to
convert all their data into useful information that leads to marketing
actions
c.iii.1.
Information Technology: involves operating computer
networks that can store and process data
c.iii.2.
Data Mining: is the extraction of hidden predictive
information from large databases to find statistical links between
consumer purchasing patterns and marketing actions
Step 4: Develop Findings
1. Analyze the data
2. Present the findings: you can use graphical pictures when presenting
Step 5: Take Marketing Actions
1. Make action recommendations: after looking at the market research findings, convert that
into specific marketing recommendations with a clear objective
2. Implement action recommendations
a. Ex. developing ads
3. Evaluate Results
a. Evaluating the decision itself: monitor the marketplace to determine if action is
necessary in future and if it had any effect
b. Evaluating the decision process used
Sales Forecasting Techniques: forecasting or estimating potential sales is often a key goal in
marketing research study, especially for scheduling production
1. Sales Forecast: refers to the total sales of a product that a firm expects to sell during a
specified time period under specified environmental conditions and its own marketing
efforts
2. Three main sales forecasting techniques are used, they are below
3. Judgments of the Decision Maker: a lot of sales forecasts are simply the judgment of the
person who must act on the results of the forecast the individual decision maker.
a. Direct Forecast: involves estimating the value to be forecast without any
intervening steps
b. Lost Horse Forecast: involves starting with the last known value of the time being
forecast, listing the factors that could affect the forecast, assessing whether they
have a positive or negative impact, and making the final forecast
4. Surveys of Knowledgeable Groups: can ask other people who would know about future
sales
a. Survey of Buyers Intentions Forecast: asking prospective customers if they are
likely to buy the product during some future time period
b. Salesforce Survey Forecast: asking the firms salespeople to estimate sales during
a coming period
5. Statistical Methods
a. Trend Extrapolation: involves extending a pattern observed in past data into the
future. It assumes that the underlying relationships in the past will continue into
the future.
a.i. When the pattern is a straight line then its a Linear Trend Extrapolation