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CHAPTER 1Marketing research The function that links an organization to its market through the gathering of information.Marketing research is a systematic process that involves: ● designing methods for collecting information ● managing the information collection process ● analysing and interpreting r...

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CHAPTER 1 Marketing research The function that links an organization to its market through the gathering of information. Marketing research is a systematic process that involves: ● designing methods for collecting information ● managing the information collection process ● analysing and interpreting results ● communicating findings to decision makers Marketing Research and Marketing Mix Variables 1) Product: Product decisions are varied and includes - New product development and introduction - involves a great deal of research identifying possible new product opportunities, designing products that evoke favorable consumer response, and then developing an appropriate marketing mix for new products - Concept and product testing or test marketing provide information for decisions on product improvements and new-product introductions. -

Branding - important strategic issue both for new and existing products. Some marketing firms that specialise in branding try to identify possible new brand or product names, and then performing consumer research to choose which name effectively communicates product attributes or image.

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Positioning products. a process in which a company seeks to understand how present or possible products are perceived by consumers on relevant product attributes. - Perceptual mapping is a technique that is often used to picture the relative position of products on two or more dimensions important to consumers in making their choice to purchase. -

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To create an accurate perceptual map, companies need to conduct sound marketing research to know how consumers perceive their products and brands.

2) Place / Distribution Decisions - Distribution decisions in marketing include choosing and evaluating locations, channels, and distribution partners. -

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Retailing Research Research investigations that focus on topics such as trade area analysis, store image/perception, in-store traffic patterns, and location analysis. - focuses on database development through optical scanning at the point of purchase. - Retailers match data collected at the point of purchase with information on the media customers consume, type of neighborhoods they live in, and the stores they prefer to patronize. - This information helps retailers select the kind of merchandise to stock and to understand the factors that influence their customers’ purchase decisions. E-tailers - can determine when a website is visited, how long the visit lasts, which pages are viewed, and which products are examined and ultimately purchased, and whether or not products are abandoned in online shopping carts. - Online retailers who participate in search engine marketing have access to search analytics that help them choose keywords to purchase from search engines

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Behaviour Targeting Displaying ads at one website based on the user’s previous surfing behavior. E-tailers work with content sites to display ads based on data collected about user behaviors. For example, Weather.com may display ads for a specific pair of shoes that a customer has recently viewed while shopping online at Zappos.com.

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Shopper Marketing to help manufacturers and retailers understand the entire process consumers go through in making a purchase, from prestore to in-store to point-of-purchase. addresses product category management, displays, sales, packaging, promotion, and marketing.

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Marketing research helps businesses to understand when, where, and how consumers make decisions to purchase products that helps retailers provide the right strategy at the right time to influence consumer choices.

3) Promotional - Promotional decisions are important influences on any company’s sales. - Billions of dollars are spent yearly on various promotional activities. Given the heavy level of expenditures on promotional activities, it is essential that companies know how to obtain good returns from their promotional budgets. - requires reliable metrics to accurately gauge the return on advertising dollars spent.

4) Pricing - involve pricing new products, establishing price levels in test marketing, and modifying prices for existing products. - Marketing research provides answers to questions such as the following: 1. How large is the demand potential within the target market at various price levels? What are the sales forecasts at various price levels? 2. How sensitive is demand to changes in price levels? 3. Are there identifiable segments that have different price sensitivities? 4. Are there opportunities to offer different price lines for different target markets?

Consumers and Market - Segmentation Studies - A major focusing in MR - Creating customer profiles and understanding behavioral characteristics - Marketing decisions involving all four Ps are more successful when target market demographics, attitudes, and lifestyles are clear to decision makers. Major component of segmentation studies - Benefit and lifestyle studies - Examine similarities and differences in consumers’ needs. - Researchers use these studies to identify two or more segments within the market for a particular company’s products. - Researchers use these studies to identify segments within the market for a particular company’s products. - The objective : collect information about customer characteristics, product benefits, and brand preferences. - This data, along with information on age, family size, income, and lifestyle, can be compared to purchase patterns of particular products (e.g., cars, food, electronics, financial services) to develop market segmentation profiles. - Segmentation studies are also useful for determining how to design communications that will resonate with a target market. - Ethnographic

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To gather more detailed information about cultures or subcultures that businesses seek to serve Requires extended observation of consumers in context. Ethnography can highlight problems and opportunities for marketers that are based on consumers’ actual behavior. Example: When asked about light in the operating room, surgeons said that they had plenty of light. But when an ethnographer watched operations, he noticed that surgeons often struggled to get enough light as they worked. As a result of this research, a company introduced a throw-away light stick for use during operations Studying consumer culture and subculture requires immersion by trained, skillful observers. Studying consumers ethnographically broadens businesses’ understanding of how consumers view and use products in their day-to-day lives

Types of Marketing Research Firms Internal Researchers ● research providers are typically organizational units that reside within a company. For example, IBM, Procter & Gamble, Kraft Foods, and Kodak all have internal marketing research departments. ● Benefits ○ Research method consistency ○ Shared information across the company ○ Lower research costs ○ Ability to produce actionable research results External Researchers ● usually referred to as marketing research suppliers ● perform all aspects of the research, including study design, questionnaire production, interviewing, data analysis, and report preparation. ● These firms operate on a fee basis ● commonly submit a research proposal to be used by a client for evaluation and decision purposes. ● Benefits ○ more objective and less subject to company politics and regulations than internal suppliers. ○ provide specialized talents that, for the same cost, internal suppliers could not provide ○ Greater flexibility in scheduling studies ○ companies can choose external suppliers on a study-by-study basis and thus gain greater flexibility in scheduling studies ○ match-specific project requirements to the talents of specialized research firms. ○ provide research that is customized or standardized Brokers or Facilitators

Customized research firms ● provide specialized, highly tailored services to the client. ● concentrate their activities in one specific area such as brand-name testing, test marketing, or new-product development ● Example: Namestormers assists companies in brand-name selection and recognition; Survey Sampling Inc., which recently added mobile sampling to its portfolio, concentrates solely on sample development; and Retail Diagnostics Inc. specializes in collecting research in store environments.

Standardized research firms ● provide more general services. ● These firms also follow an established, common approach in research design so the results of a study conducted for one client can be compared to norms from studies done for other clients. ● Example: Burke Market Research, which conducts day-after advertising recall; AC Nielsen (separate from Nielsen Media Research), which conducts store audits for a variety of retail firms; and Arbitron Ratings, which provides primary data collection on radio audiences. Many standardized research firms also provide syndicated business services, which include the purchase of diary panels, audits, and advertising recall data made or developed from a common data pool or database Ethics in Marketing Research Practices

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research firms may engage in unethical pricing. For example, after quoting a fixed overall price for a proposed research project

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the researcher may tell the decision maker that variable-cost items such as travel expenses, monetary response incentives, or fees charged for computer time are extra, over, and above the quoted price. selling of unnecessary or unwarranted research services. While it is perfectly acceptable to sell follow-up research that can aid the decision maker’s company, selling nonessential services is unethical. Unable to maintain client confidentiality a new client may ask for a study very similar to one recently conducted for another client. It may be tempting to simply share the previous results, but those results belong to another client. The Branded “black box” methodologies Offered by research firms that are branded Methodologies are called black-box methodologies when they are proprietary, and research firms will not fully disclose how the methodology works without access to the inner workings of the technique, research buyers and others cannot assess its validity

Conducting Research Not Meeting Professional Standards - Example: a client may insist that a research firm use a particular methodology even though the research firm feels the methodology will not answer the research question posed by the client. - Fearful of losing the business entirely, a firm may go along with their client’s wishes. - Research providers may agree to do a study even though the firm does not have the expertise to conduct the kind of study needed by the client. - client pressure to perform research to prove a predetermined conclusion. - researchers consciously manipulate the research methodology or reporting to present a biased picture just to please a client. - cost-cutting. - A client may not provide a sufficient budget to do a research project that will provide useful information - result in sample size reductions = findings may have large margins of error (e.g., +/−25 percent). - Curbstoning - occurs when the researcher’s trained interviewers or observers will complete the interviews themselves or make up “observed” respondents’ behaviors, rather than conducting interviews or observing respondents’ actions as directed in the study Abuse of Respondents ● Research firms may not provide the promised incentive (contest awards, gifts, or money) to respondents for completing interviews or questionnaires. ● state that interviews are very short when in reality they may last an hour or more ● research firms use “fake” sponsors ○ Clients sometimes fear that identification of the sponsor will affect respondent answers to research questions.

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While a research firm does not have to reveal its client to respondents, it is nevertheless unethical to create fake sponsors for a study. At the end of any study involving deception, subjects must be debriefed and the deception must be explained promise respondents anonymity to encourage cooperation and honesty in their responses. Sugging/frugging ○ Claiming that a survey is for research purposes and then asking for a sale or donation or is actually after their datas / names. ○ Respondents’ confidentiality is breached if their names are shared with the sponsoring company for sales follow-up or if respondents’ names and demographic data are given to other companies without their approval. ○ some “research” is conducted for the purpose of collecting names. Behavior in private, including during research interviews, may not be taped without respondents’ consent. Deanonymizing data ○ Combining different publicly available information (on social network), usually unethically, to determine consumers’ identities, especially on the Internet.

Unethical Activities of the Client / Research User Client/research user

Respondent

decision makers requesting detailed research proposals from several competing research providers with no intention of actually selecting a firm to conduct the research. - for the purpose of learning how to conduct the necessary marketing research themselves - Then, unethically, they may use the information to either perform the research project themselves or bargain for a better price among interested research companies.

Providing dishonest answers or faking behaviours An intention to cheat - general expectation in the research environment is that when a subject has freely consented to participate, she or he will provide truthful responses.

Promising a prospective research provider long-term relationships or additional projects to obtain a low price on the initial research project

Faking behavior So that they can get recruited into the focus group - have the prospect of earning money by participating in marketing research surveys and focus groups. - may lie to try to match the characteristics that screeners are seeking, so that they can join the focus group

Overstating the results of a marketing research project - Example: They may claim that consumers prefer the taste of their product when in actual testing, the difference between products was

statistically insignificant, even if slightly higher for the sponsoring firm’s products.

CHAPTER 2 Changing View of the Marketing Research Process

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SECONDARY DATA are information previously collected for some other problem or issue. A by-product of the technology advances is the ongoing collection of data that is placed in a data warehouse and is available as secondary data to help understand business problems and to improve decisions. PRIMARY DATA are information collected specifically for a current research problem or opportunity. Example: Many large businesses (e.g., Dell Computers, Bank of America, Marriott Hotels, Coca-Cola, IBM, McDonald’s, and Walmart) are linking purchase data collected (Primary) in-store and online with customer profiles (Secondary) already in company databases, thus enhancing their ability to understand shopping behavior and better meet customer needs. Gatekeeper Technologies (e.g., caller ID and automated screening and answering devices) as a means of protecting one’s privacy against intrusive marketing practices such as by telemarketers and illegal scam artists. Similarly, many Internet users either block the placement of cookies or periodically erase them in order to keep marketers from tracking their behavior. Marketing researchers’ ability to collect consumer data using traditional methods such as mail and telephone surveys has been severely limited by the combination of gatekeeper devices and recent federal and state data privacy legislation. marketing researchers must contact almost four times more people today to complete a single interview than was true five years ago. Advances in gatekeeper technologies will continue to challenge marketers to be more creative in developing new ways to reach respondents. Information research process a systematic approach to collecting, analyzing, interpreting, and transforming data into decisionmaking information

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understanding the process of transforming data into usable information from a broader information processing framework expands the applicability of the research process in solving organizational problems and creating opportunities

Determining the Need for Information Research - Need to understand when a research is needed and when it is not - Researchers must interact closely with managers to recognize business problems and opportunities. -the initial recognition of the existence of a problem or opportunity should be the primary responsibility of the decision maker, not the researcher. Responsibility of today’s decision makers is to determine if research should be used to collect the needed information Questions decision makers should ask - Can the problem and/or opportunity be resolved using existing information and managerial judgment? (focus is on deciding what type of information (secondary or primary) is required to answer the research question) -

Is adequate information available within the company’s internal record systems to address the problem? (If the necessary marketing information is not available in the firm’s internal record system, then a customized marketing research project to obtain the information should be considered.)

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Is there enough time to conduct the necessary research before the final managerial decision must be made

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Do the benefits of having the additional information outweigh the costs of gathering the information? (A cost-benefit assessment should be made of value of the research compared to the cost)

Overview of the Research Process

The four phases are guided by the scientific method. This means the research procedures should be logical, objective, systematic, reliable, and valid. 1. Determine the research problem (1) identify and clarify information needs - decision makers prepare a statement of what they believe is the problem before the researcher becomes involved - researchers then assist decision makers to make sure the problem or opportunity has been correctly defined and the information requirements are known -

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Problem definition process : used to understand the problem - (1) agree on the decision maker’s purpose for the research - (2) understand the complete problem - (3) identify measurable symptoms and distinguish them from the root problem - (4) select the unit of analysis - (5) determine the relevant variables. the iceberg principle holds that decision makers are aware of only 10 percent of the true problem. Frequently the perceived problem is actually some type of

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measurable market performance factor, while 90 percent of the problem is not visible to decision makers. Understand the complete problem situation: Situation analysis - gathers and synthesizes background information to familiarize the researcher with the overall complexity of the problem. - A situation analysis attempts to identify the events and factors that have led to the situation, as well as any expected future consequences. - enhances communication between the researcher and the decision maker. The researcher must understand the client’s business Identify and Separate Out Symptoms - Once the researcher understands the overall problem situation, he or she must work with the decision maker to separate the possible root problems from the observable and measurable symptoms that may have been initially perceived as being the problem - Example: many times managers view declining sales or loss...