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Conducting Marketing Research and Forecasting Demand
Donna Sia, Rhea Jardin, Shelle CaigaMBA StandardApril 7, 2012
www.yourwebsite.com
1. Defining Marketing Research2. Developing the research plan3. Metrics for measuring good marketing
productivity4. Assessing ROI of marketing
expenditures5. Measuring and Forecasting Demand
Outline: Conducting Marketing Research and Forecasting Demand
www.yourwebsite.com
important because it…
Why?– Can lead to the success of a brand or a
product.
How?– By producing insight into the
customer’s attitudes and buying behavior
Marketing research is…
www.yourwebsite.com
Marketing Research is the…
Systematic design Collection Analysis Reporting of data and findings
relevant to a specific marketing situation facing the company.
www.yourwebsite.com
Marketing Research Process involves…
6.Making the decision
1.Defining the problem
& objectives
2.Developing the
research plan
3.Collectinginformation
4.Analyzing the information
5.Presenting the findings
www.yourwebsite.com
Developing the Research Plan
1. Data Sources
2. Research instruments
3. Research approach
4. Sampling plan
5. Contact methods
www.yourwebsite.com
Researchers can gather:
Primary Data– Data freshly gathered for a specific purpose or
for a specific research project
Secondary Data– Collected for another purpose and
already exist somewhere
Developing the Research Plan
www.yourwebsite.com
Developing the Research Plan
Observation Focused Group Survey Research
Behavioral DataExperimentation
Marketing Research can be approached in many ways:
www.yourwebsite.com
The following research instruments are used to collect data:
Questionnaires
Qualitative Measures
Technological Devices
Developing the Research Plan
www.yourwebsite.com
Some popular Qualitative Research approaches are…
.
Why
WhyWhy
Word association Projective techniques
VisualizationBrand Personification
Laddering
Step 2: Developing the Research Plan
www.yourwebsite.com
Sampling Plan decisions:
1) Sampling plan unit: Who should we survey?
2) Sample size: How many people should we survey
3) Sampling procedure: How should we choose the respondents?
Developing the Research Plan
www.yourwebsite.com
Probability Sample
1) Simple random sample
2) Stratified random sample
3) Cluster Sample
Non probability Sample
4) Convenience sample
5) Judgment sample
6) Quota sample
Probability and Non probability Samples:
Step 2: Developing the Research Plan
www.yourwebsite.com
Contact Methods:
Mail Questionnaire
Telephone Interview Personal Interview
Online Interview
Developing the Research Plan
www.yourwebsite.com
Characteristics of good marketing research
Scientific Method Multiple methods
Interdependence of
models and data
Value and cost of information
Healthy skepticism Ethical marketing
Research creativity
www.yourwebsite.com
Measuring Marketing Productivity-Marketing Metrics
AwarenessMarket share Relative price
Number of complaints
Consumer Satisfacti
on& Loyalty
DistributionTotal number of customers
External
www.yourwebsite.com
Marketing Mix ModelInternal
Awareness &commitment to
goals
Freedom to failDesire to learn
Resource adequacy
Willingness to change Autonomy
Active support
www.yourwebsite.com
Marketing Dashboards to improve effectiveness and efficiency
Customer Metrics Unit Metrics Cash-flow Brand
www.yourwebsite.com
Marketing Measurement Pathway
Technically Sound but Ad-hoc Efforts Across Multiple Measurement Silos
Customer Metrics
Unit Metrics
Cash-Flow Metrics
Brand Metrics Metrics
Hierarchy of Effects
Products/Category Sales
Program & Company ROI
Brand Imagery/Attributes
Satisfaction/Experience
Marketing Cost/Unit
Media MixModels
Equity Drivers
Attitude/BehaviorSegment Margin
Margin Optimization
Initiative PortfolioOptimization
FinancialValuation
www.yourwebsite.com
Marketing Measurement Pathway
Technically Sound but Ad-hoc Efforts Across Multiple Measurement Silos
Customer Metrics
Unit Metrics
Cash-Flow Metrics
Brand Metrics Metrics
Hierarchy of Effects
Products/Category Sales
Program & Company ROI
Brand Imagery/Attributes
Satisfaction/Experience
Marketing Cost/Unit
Media MixModels
Equity Drivers
Attitude/BehaviorSegment Margin
Margin Optimization
Initiative PortfolioOptimization
FinancialValuation
Result: Hundreds of reports but very
Little knowledge integration or learning synthesis
www.yourwebsite.com
Purpose: – Identify market opportunities
How: – Measure and forecast size, growth
and profit potential of market opportunities
Who: – Marketers are responsible for preparing sales
forecast which are based on estimates of demand.
Forecasting Demand and Measurement
www.yourwebsite.com
1. Market Demand
2. Company Demand
• Demand function• Sales forecast• Potential
Major Concepts in Demand Measurement
www.yourwebsite.com
Ninety Types of Demand Measurement
www.yourwebsite.com
Ways to break down the market:1. Potential Market
2. Available Market
3. Target Market
4. Penetrated market
The Measures of Market Demand
www.yourwebsite.com
Market Forecast– Market demand corresponding to the level of
Industry marketing expenditure.
Market Potential– Is the limit approached by the market demand as
an industry marketing expenditures approach infinity for a given marketing environment.
Market Forecast and Market Potential
www.yourwebsite.com
Marketing Demand as a function of Marketing Expenditure
Planned expenditure
Market potential, Q2
Market forecast, QF
Market minimum, Q1
Industry Marketing ExpenditureMark
et
Dem
and in t
he S
peci
fic
Peri
od
www.yourwebsite.com
Marketing Demand as a function of Marketing Expenditure
Recession
Market Potential(prosperity)
Market Potential(recession)
Industry Marketing ExpenditureMark
et
Dem
and in t
he S
peci
fic
Peri
od
Prosperity
www.yourwebsite.com
Market Demand– total volume that would be bought ….
Market Demand and Company Demand
by a defined customer group
in a defined geographical area
in a defined time period
in a defined marketing
environment
A defined Marketing Program
www.yourwebsite.com
Company Demand– Is the company’s estimated share of market
demand at alternative levels of company marketing effort at a given time period
Market Demand and Company Demand
www.yourwebsite.com
Company Sales Forecast– Is the expected level of company sales based on a
chosen marketing plan and an assumed target market
Company Sales Potential– is the sales limit approached by company demand
as a company marketing effort increases relative to that of competitors
Company Sales Forecast and Sales Potential
www.yourwebsite.com
Marketing executives would like to estimate..1. Total Market Potential
2. Area Market Potential
3. Total Industry Sales and Market share
Estimating Current Demand
www.yourwebsite.com
Total Market Potential is the
Estimating Current Demand
maximum amount of sales
available to all the firms in an industry
during a given period
Marketing effort and environment
www.yourwebsite.com
Area Market PotentialEstimating market potential of different
Estimating Current Demand
maximum amount of sales in an area (city, state or nation)
during a given period
Marketing effort and environment
www.yourwebsite.com
The 2 Major Methods of assessing area market potential are…
1. Market-Build-up Method – Identify all the potential buyers in
each market and estimate their potential
purchases
2. Multiple-Factor Index Method-assigning weights to different factors (income, sales,
population, buying power)
Estimating Current Demand
www.yourwebsite.com
Calculating the Brand Development Index:
Estimating Current Demand
Territory Percent of US Brand
Percent of US Category
BDI
Sales Sales (a/b) x100
Seattle, CA 3.09 2.71 114
Portland, OR 6.74 10.41 65
Boston, MA 3.49 3.85 91
Toledo, OH 0.97 0.81 120
Chicago, IL 1.13 0.81 140
Baltimore, MD
3.12 3.00 104
www.yourwebsite.com
Industry Sales and Marketing Shares– identifying competitors and estimating their sales
– Derive data from: industry trade association– Buy reports from marketing research (E.g.
Nielsen)– Industry Data, Competitors Data– Over-all or Brand by Brand
Estimating Current Demand
www.yourwebsite.com
Good forecasting is a key factor in success
Estimating Future Demand
Macroeconomi
c
Industry
Company
Forecast
www.yourwebsite.com
All forecasts are built on one of the three information bases:1. What people say. (Survey)
2. What people do (Test Market)
3. What people have done. (Buying History)
Estimating Future Demand
www.yourwebsite.com
Survey of Buying IntentionsForecasting
– Is the art of anticipating what buyers are likely to do under a given set of conditions.
Do you intend to buy a car in the next 6 months?
Purchase probability scale
Estimating Future Demand
0.00 0.20 0.40 0.60 0.80 1.00
No Chance Slight Possibility
Fair Possibility
Good Possibility
High Possibility
Certain
www.yourwebsite.com
Composite of Sales Force Opinion– Sales representatives
Expert Opinion – dealers, distributors, suppliers, marketing
consultants and trade associations
Past-sales Analysis– Time series analysis, Exponential smoothing,
Statistical demand analysis (causal factors), Econometric Analysis
Market-Test Method
Estimating Future Demand
www.yourwebsite.com
Summary:
6.Making the decision
1.Defining the
problem & objectives
2.Developing the research plan
3.Collectinginformation
4.Analyzing the information
5.Presenting the findings
Sample plan, Sources, Contact Methods, Instruments
Customer is happy The brand is profitable Employees are satisfied
Market and company Demand
Total and Area Market Potential, industry sales & market share
Sales Force, Experts, History and Market Sales
www.yourwebsite.com
Conducting Marketing Research and Forecasting Demand
Donna Sia, Rhea Jardin, Shelle CaigaMBA StandardApril 7, 2012
www.yourwebsite.com
Conducting Marketing Research and Forecasting Demand
Donna SiaMBA StandardApril 7, 2012
www.yourwebsite.com
1. Defining Marketing Research2. Developing the research plan3. Metrics for measuring good marketing
productivity4. Assessing ROI of marketing
expenditures5. Measuring and Forecasting Demand
Outline: Conducting Marketing Research and Forecasting Demand
www.yourwebsite.com
important because it…
Why?– Can lead to the success of a brand or a
product.
How?– By producing insight into the
customer’s attitudes and buying behavior
Marketing research is…
www.yourwebsite.com
Marketing Research is the…
Systematic design Collection Analysis Reporting of data and findings
relevant to a specific marketing situation facing the company.
www.yourwebsite.com
Marketing Research Process involves…
6.Making the decision
1.Defining the problem
& objectives
2.Developing the
research plan
3.Collectinginformation
4.Analyzing the information
5.Presenting the findings
www.yourwebsite.com
Developing the Research Plan
1. Data Sources
2. Research instruments
3. Research approach
4. Sampling plan
5. Contact methods
www.yourwebsite.com
Researchers can gather:
Primary Data– Data freshly gathered for a specific purpose or
for a specific research project
Secondary Data– Collected for another purpose and
already exist somewhere
Developing the Research Plan
www.yourwebsite.com
Developing the Research Plan
Observation Focused Group Survey Research
Behavioral DataExperimentation
Marketing Research can be approached in many ways:
www.yourwebsite.com
The following research instruments are used to collect data:
Questionnaires
Qualitative Measures
Technological Devices
Developing the Research Plan
www.yourwebsite.com
Some popular Qualitative Research approaches are…
.
Why
WhyWhy
Word association Projective techniques
VisualizationBrand Personification
Laddering
Step 2: Developing the Research Plan
www.yourwebsite.com
Sampling Plan decisions:
1) Sampling plan unit: Who should we survey?
2) Sample size: How many people should we survey
3) Sampling procedure: How should we choose the respondents?
Developing the Research Plan
www.yourwebsite.com
Probability Sample
1) Simple random sample
2) Stratified random sample
3) Cluster Sample
Non probability Sample
4) Convenience sample
5) Judgment sample
6) Quota sample
Probability and Non probability Samples:
Step 2: Developing the Research Plan
www.yourwebsite.com
Contact Methods:
Mail Questionnaire
Telephone Interview Personal Interview
Online Interview
Developing the Research Plan
www.yourwebsite.com
Characteristics of good marketing research
Scientific Method Multiple methods
Interdependence of
models and data
Value and cost of information
Healthy skepticism Ethical marketing
Research creativity
www.yourwebsite.com
Measuring Marketing Productivity-Marketing Metrics
AwarenessMarket share Relative price
Number of complaints
Consumer Satisfacti
on& Loyalty
DistributionTotal number of customers
External
www.yourwebsite.com
Marketing Mix ModelInternal
Awareness &commitment to
goals
Freedom to failDesire to learn
Resource adequacy
Willingness to change Autonomy
Active support
www.yourwebsite.com
Marketing Dashboards to improve effectiveness and efficiency
Customer Metrics Unit Metrics Cash-flow Brand
www.yourwebsite.com
Marketing Measurement Pathway
Technically Sound but Ad-hoc Efforts Across Multiple Measurement Silos
Customer Metrics
Unit Metrics
Cash-Flow Metrics
Brand Metrics Metrics
Hierarchy of Effects
Products/Category Sales
Program & Company ROI
Brand Imagery/Attributes
Satisfaction/Experience
Marketing Cost/Unit
Media MixModels
Equity Drivers
Attitude/BehaviorSegment Margin
Margin Optimization
Initiative PortfolioOptimization
FinancialValuation
www.yourwebsite.com
Marketing Measurement Pathway
Technically Sound but Ad-hoc Efforts Across Multiple Measurement Silos
Customer Metrics
Unit Metrics
Cash-Flow Metrics
Brand Metrics Metrics
Hierarchy of Effects
Products/Category Sales
Program & Company ROI
Brand Imagery/Attributes
Satisfaction/Experience
Marketing Cost/Unit
Media MixModels
Equity Drivers
Attitude/BehaviorSegment Margin
Margin Optimization
Initiative PortfolioOptimization
FinancialValuation
Result: Hundreds of reports but very
Little knowledge integration or learning synthesis
www.yourwebsite.com
Purpose: – Identify market opportunities
How: – Measure and forecast size, growth
and profit potential of market opportunities
Who: – Marketers are responsible for preparing sales
forecast which are based on estimates of demand.
Forecasting Demand and Measurement
www.yourwebsite.com
1. Market Demand
2. Company Demand
• Demand function• Sales forecast• Potential
Major Concepts in Demand Measurement
www.yourwebsite.com
Ninety Types of Demand Measurement
www.yourwebsite.com
Ways to break down the market:1. Potential Market
2. Available Market
3. Target Market
4. Penetrated market
The Measures of Market Demand
www.yourwebsite.com
Market Forecast– Market demand corresponding to the level of
Industry marketing expenditure.
Market Potential– Is the limit approached by the market demand as
an industry marketing expenditures approach infinity for a given marketing environment.
Market Forecast and Market Potential
www.yourwebsite.com
Marketing Demand as a function of Marketing Expenditure
Planned expenditure
Market potential, Q2
Market forecast, QF
Market minimum, Q1
Industry Marketing ExpenditureMark
et
Dem
and in t
he S
peci
fic
Peri
od
www.yourwebsite.com
Marketing Demand as a function of Marketing Expenditure
Recession
Market Potential(prosperity)
Market Potential(recession)
Industry Marketing ExpenditureMark
et
Dem
and in t
he S
peci
fic
Peri
od
Prosperity
www.yourwebsite.com
Market Demand– total volume that would be bought ….
Market Demand and Company Demand
by a defined customer group
in a defined geographical area
in a defined time period
in a defined marketing
environment
A defined Marketing Program
www.yourwebsite.com
Company Demand– Is the company’s estimated share of market
demand at alternative levels of company marketing effort at a given time period
Market Demand and Company Demand
www.yourwebsite.com
Company Sales Forecast– Is the expected level of company sales based on a
chosen marketing plan and an assumed target market
Company Sales Potential– is the sales limit approached by company demand
as a company marketing effort increases relative to that of competitors
Company Sales Forecast and Sales Potential
www.yourwebsite.com
Marketing executives would like to estimate..1. Total Market Potential
2. Area Market Potential
3. Total Industry Sales and Market share
Estimating Current Demand
www.yourwebsite.com
Total Market Potential is the
Estimating Current Demand
maximum amount of sales
available to all the firms in an industry
during a given period
Marketing effort and environment
www.yourwebsite.com
Area Market PotentialEstimating market potential of different
Estimating Current Demand
maximum amount of sales in an area (city, state or nation)
during a given period
Marketing effort and environment
www.yourwebsite.com
The 2 Major Methods of assessing area market potential are…
1. Market-Build-up Method – Identify all the potential buyers in
each market and estimate their potential
purchases
2. Multiple-Factor Index Method-assigning weights to different factors (income, sales,
population, buying power)
Estimating Current Demand
www.yourwebsite.com
Calculating the Brand Development Index:
Estimating Current Demand
Territory Percent of US Brand
Percent of US Category
BDI
Sales Sales (a/b) x100
Seattle, CA 3.09 2.71 114
Portland, OR 6.74 10.41 65
Boston, MA 3.49 3.85 91
Toledo, OH 0.97 0.81 120
Chicago, IL 1.13 0.81 140
Baltimore, MD
3.12 3.00 104
www.yourwebsite.com
Industry Sales and Marketing Shares– identifying competitors and estimating their sales
– Derive data from: industry trade association– Buy reports from marketing research (E.g.
Nielsen)– Industry Data, Competitors Data– Over-all or Brand by Brand
Estimating Current Demand
www.yourwebsite.com
Good forecasting is a key factor in success
Estimating Future Demand
Macroeconomi
c
Industry
Company
Forecast
www.yourwebsite.com
All forecasts are built on one of the three information bases:1. What people say. (Survey)
2. What people do (Test Market)
3. What people have done. (Buying History)
Estimating Future Demand
www.yourwebsite.com
Survey of Buying IntentionsForecasting
– Is the art of anticipating what buyers are likely to do under a given set of conditions.
Do you intend to buy a car in the next 6 months?
Purchase probability scale
Estimating Future Demand
0.00 0.20 0.40 0.60 0.80 1.00
No Chance Slight Possibility
Fair Possibility
Good Possibility
High Possibility
Certain
www.yourwebsite.com
Composite of Sales Force Opinion– Sales representatives
Expert Opinion – dealers, distributors, suppliers, marketing
consultants and trade associations
Past-sales Analysis– Time series analysis, Exponential smoothing,
Statistical demand analysis (causal factors), Econometric Analysis
Market-Test Method
Estimating Future Demand
www.yourwebsite.com
Summary:
6.Making the decision
1.Defining the
problem & objectives
2.Developing the research plan
3.Collectinginformation
4.Analyzing the information
5.Presenting the findings
Sample plan, Sources, Contact Methods, Instruments
Customer is happy The brand is profitable Employees are satisfied
Market and company Demand
Total and Area Market Potential, industry sales & market share
Sales Force, Experts, History and Market Sales
www.yourwebsite.com
Conducting Marketing Research and Forecasting Demand
Donna SiaMBA StandardApril 7, 2012
www.yourwebsite.com
Conducting Marketing Research & Forecasting Demand
Marketing ManagementSubmitted to Prof. de Ungria
Shelle Caiga04.27.2012
CHAPTER 4
www.yourwebsite.com
The Marketing Research Process
Define the problemDevelop research
planCollect informationAnalyze
informationPresent Findings
Make decision
www.yourwebsite.com
Develop the Research Plan
DataSources
Research Approach
Research Instruments
SamplingPlan
ContactMethods
www.yourwebsite.com
Research Approaches
Etnographic
Focus GroupSurvey
BehavioralData
Experimentation
www.yourwebsite.com
Questionnaires: DO’s
Ensure questions are FREE of BIAS
K.I.S.S. (Keep It Short & Simple)
Make it SPECIFIC
No to JARGONS
No to SOPHISTICATED words
No to AMBIGUOUS words
www.yourwebsite.com
Questionnaires: DON’Ts
No negatives
No hypothetical
No words that could be misheard
Use response bands
Use mutually exclusive categories
Allow for “other” in fixed response questions
www.yourwebsite.com
Qualitative Measures
Word Association
Projective Techniques
Visualization
Brand Personification
Laddering
www.yourwebsite.com
Sampling Plan
Sampling Unit
Sample Size
Sampling Procedure
www.yourwebsite.com
PROBABILITY Sample
Involve random selection
NON-PROBABILITY Sample
x Doesn’t involve random selection
www.yourwebsite.com
Contact Methods
MAILSQUESTIONNAIRES
FACE-TO-FACEINTERVIEW
PHONEINTERVIEW
ONLINEINTERVIEW
www.yourwebsite.com
Good Marketing Research
• Scientific method• Research creativity• Multiple methods• Interdependence• Value & cost of
information• Healthy skepticism• Ethical marketing
www.yourwebsite.com
Marketing Metrics
EXTERNAL
Awareness
Market shareRelative price
Number of complaints
Customer satisfaction
Distribution
Total # of customers
Loyalty
www.yourwebsite.com
Marketing MetricsIN
TER
NA
L
Awareness of goals
Desire to learn
Resource adequacy
Active support
Customer satisfaction
Commitment of goals
Staffing levels
Willingness to change
Autonomy
Freedom to fail
INTER
NA
L
www.yourwebsite.com
Nobody counts the number of ads you run; they just remember the impression you make.
– Bill Bernbach, advertising pioneer and founder of DDB
An EXEMPLARY
MARKETING RESEARCH
will definitely result to an
EXCELLENT CUSTOMER SATISFACTION
www.yourwebsite.com
Marketing Researchand Forecasting Demand
MARKMASubmitted to Prof. de Ungria
Rhea G. Jardin
April 27, 2012
www.yourwebsite.com
Characteristics of good Marketing Research1. Scientific method
2. Creativity
3. Multiple research methods
4. Accurate model building
5. Cost-benefit analysis
6. Healthy skepticism
7. Ethical focus
1. Marketing Research
www.yourwebsite.com
A. Short-term results1. Sales turnover
2. Shareholder value
B. Changes in brand equity3. Customer awareness, attitudes and behaviors
4. Market share
5. Price premium
6. Number of complaints
7. Distribution and availability
8. Total number of customers
9. Perceived quality, loyalty and retention
2. Marketing Metrics
www.yourwebsite.com
Marketing Metrics
Sales turnover
Short term
Shareholder value
www.yourwebsite.com
Marketing Metrics
Brand Equity
Customer awareness, attitudes and behaviors
Market share
Price premium
Number of complaints
Distribution and availability
Total number of customers
Perceived quality, loyalty and retention
do-RE-mi.. so-la-TI - ON
www.yourwebsite.com
Marketing Researchand Forecasting Demand
MARKMASubmitted to Prof. de Ungria
Rhea G. Jardin
April 27, 2012
