Chapter 4 - The Marketing Research Process

Front 1

is COGS part of the "Trade Costs" that we subtract out of our Gross Sales?

Back 1

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Marketing Research

Back 2

The systematic design, collection, analysis and reporting of data relevant to a specific marketing situation facing an organization

Gives insight into:

-Customer motivation
-Purchase Behavior
-Satisfaction levels

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The Market Research Process has 4 steps

Back 3

Defining the Problem and research objectives

Developing the research plan

Implementing the research plan

Interpreting and reporting the findings

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Defining the Problem & Research Objectives

Back 4

Often the most difficult step in the process

<b>3 types of Objectives:</b>

Exploratory Research

Descriptive Research

Causal Research

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Exploratory Research

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to gather preliminary info that will help define problems and suggest hypotheses

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Descriptive Research

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better describe marketing problems, situations, or markets, such as the market potential for a product or the demographics and attitudes of consumers

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Causal Research

Back 7

Test hypotheses about cause-effect-relationships

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Developing the Research Plan

really good example of considerations to look at on pg 106--Axe Cologne Example

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calls for gathering

Secondary Data

Primary Data

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Gathering Secondary Data

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usually start with 2ndary data

can also present problems. The needed information may not exist

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Observational Reserach

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Gathering primary data by observing relevant people, actions, and situations

Can obtain information that people are unwilling or unable to provide--<b>in some cases observation may be the only way to obtain the needed information</b>

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Gathering Primary Data--Table 4.2

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Need to make sure it is:

Relevant, Accurate, Unbiased, and current

<b>Planning Primary Data collection has 4 decision areas:</b>

Research Approaches

Contact Methods

Sampling Plan

Research Instruments

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Ethnographic Research

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A form of observational research that involves sending trained observers to <b>watch and interact with consumers in the "natural habitat"</b>

Front 13

Classic market research doesn't go far enough. It can't grasp what <b><i>people can't imagine or articulate</i></b>

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Henry Ford Quote:

"If i had asked people what they wanted, they would have said faster horses--"

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Survey Research

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Gathering primary data by asking people questions about their knowledge, attitudes, preferences, and buying behavior

Best suited for gathering DESCRIPTIVE information

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Experimental Research

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Gathering primary data by selecting matched groups of subjects, giving them different treatments, controlling related factors, and checking fro differences in group responses

Best suited for gathering CAUSAL information

McDonalds example--launch new sandwich in 2 different cities charging 2 different prices

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Focus Group Interviewing

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Personal interviewing that involves inviting six to ten people to gather for a few hours with a trained interviewer to talk about a product, service, or organization. The interviewer focuse the group discussion on important issues

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ONline marketing research

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Collecting primary data online through internet surveys, online focus groups web-based experiments or tracking consumers' online behavior

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Sample

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A segment of the population selected for marketing research to represent the population as a whole

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Types of Samples

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Probability Samples

Non-Probability Samples

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Probability Samples

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Simple Random Sample


Stratified Random Sample


Cluster (area) sample

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Non-Probability Samples

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Convenience Sample

Judgement Sample

Quota Sample

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Lecture

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In optimal conditions

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10-20% of your consumers don't actually complain.

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What is Market Research

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Specificy, gathering, analyzing, and interpreting information to help managers:

understand the environment

Identify problems and opportunities

Creat solutions/ideas

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Why do Market research?

Back 25

to provide information regarding

The situation

Customers needs and wants

Customers reactions to the planned marketing mix


Example: Ford "My Key"

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The Golden Gut

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When you have experience and you have history and you know and have good intuition and know what's going to happen before it happens

Marketing = Art + Science

Relying on the "art" (golden gut) without reference to the "science" (marketing research) can lead to disaster--like GM

when its done correctly it can lead to examples like Apple.

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you must understand what your customers VALUE <b>not what they DO</b>

Back 27

TRUE--APPLE

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Why Not do Market Research?

Back 28

costly

takes A LOT of time

What would I do without this information?--Maybe it doesn't matter!--perhaps i can use assumptions?--if the assumptions are wrong how substantial could the mistakes be

if the cost of a wrong assumption is less than the cost of the research, don't do the research!! vice versa too

To expensive

Doesn't warrant it (pencils... staples...)

Such a good hold on the market

Front 29

Being a Good consumer of market reserach

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Difference between Causality & Correlation

Causality:

A CAUSES B


Correlation:

A and B Occur Simultaneously

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Correlation does not imply causality

Observing that A and B happen together does not imply that A causes B.

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true

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Research Approaches

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<b>Secondary</b>
Internal (Trends from internal quantitative data)
External

<b>Primary</b>
Exploratory
<i>-Informal
-Quantitative
-Observation</i>
Surveys
Panels
Experiments
Models and Simulations

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The Marketing Research Process

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1. Define the Problem (Hardest part of Market research)!

2. Design Research Project

3. Collect Data

4. Analyze Data

5. Prepare Results

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Define Problem (Hardest Step)

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What is the real question at hand?

You must identify the key question or problem you wan answered.

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Design Research project

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What information is needed?

Secondary Data:
previously gathered data for purposes other than the one at hand
-lots of possible sources--need to be current and accurate

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Exploratory

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Used to gain ideas and insights about the research problem

Focus Groups (crack cocaine of market research)
-great for creating hypotheses not necessarily great for solving problems--issues with mirroring, biases, groupthink, etc.

Interviews
Observation
etc.

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ZMET:Interpretation

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collage that helps firms understand consumer's subconcious feelings about their brand

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Descriptive Research

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used to describe characteristics about the population or phenomenon--who, what, where when, how

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Causal (experimental) Research

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Used to establish cause and effect relationships

very expensive

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Instruments

Back 39

all about figuring out what you need to do to make important & BETTER DECISIONS

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Product Costs

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<b>the cost of direct labor, direct materials, and manufacturing overhead</b> that are consumed to create a product. Product cost can also be considered the cost of the labor required to deliver a service to a customer.