Marketing Research

Business Research MethodsSession 1

Managerial value of business research

Decision making process:Identifying problems or opportunitiesDiagnosing and assessing problems or opportunitiesSelecting and implementing a course of actionEvaluating the course of action

Decision making processIdentifying problems or opportunitiesDetermining the nature of situations or identifying the existence of problems or opportunities present in the organization in order to plan strategiesShifts in the positioning of a business Decision to enter a new marketHow best to stock a grocery shelf??

3

Diagnosing and assessing problems or opportunitiesInsight about the underlying factors causing the situationAlternative course of actions for an opportunityQuantitative or qualitative investigationsSelecting and implementing a course of actionResearch for evaluating the alternatives and in selecting the best course of action. Example, to set up a garments factory in Bangladesh or PakistanOpportunities evaluation through use of various performance criteria. Example, estimates of market potential allow managers to evaluate the revenue generated by each of the possible opportunities.

Evaluating the course of action Evaluation research formal, objective measurement and appraisal of the extent to which a given activity, project or program has achieved its objectives as well as providing information about the major factors influencing the observed performance levels. Performance monitoring research specific type of evaluation research that regularly provides feedback for the evaluation and control of recurring business activity. For example, monitoring wholesale and retail activity to ensure early detection of sales declines etc. using such mechanisms as universal product code for sales research, together with computerized cash registers and electronic scanners at checkout counters

Total Quality Management a business philosophy that focuses on integrating customer-driven quality throughout the organization; continuous improvement of product quality and service.

For example, Hyundai repositioned its brand to make its low price image mean more than cheap price = cheap car. With the introduction of creative marketing, Hyundai launched 10-year, 100,000 mile warranties, and a 1-year buy-back program for consumers who fell victim to the recessionary environment. Suddenly, low price didnt mean cheap. Instead, it meant more value for your money.Campbells SoupThis again gets people to see the product in a new light. Its probably more effective than the last idea. The placing of the soup with the cold and flu remedies catches people under the weather, and while they might be thrown at first as to why the chicken soup is beside the Lemsip theyll quickly think of how comforting chicken soup can be. That translates into a bunch of new sales.

7

Al-Shaheer Corporation has been awarded several international accreditations like the ISO 9001:2000 certification and the SAFE Food Award 2009 by URS for quality and hygiene. In 2009, Al Shaheer also won the first Best Export Performance award for Fresh and Frozen Meat from the Federation of Pakistan Chamber of Commerce and Industry.

8

When is business research needed?Is sufficient time available before a managerial decision must be made?Is the information already on hand inadequate for making the decision?Is the decision of considerable strategic or tactical importance?Does the value of research information exceed the cost of conducting research?Conduct business researchyesyesyesyesBusiness research should not be conductednonononoTime constraintsData Availability Nature of the decisionBenefits vs. costs

Role in Managerial Decision process Situation Analysis

Strategy Development

Marketing Program Development

Implementation

Segmentation, Product, Distribution,Advertising and Promo., Personal Selling,Price, Branding, Customer satisfaction

Performance monitoringRefining strategies and Program

Business Scope, Current Marketing Situation, Competitive Advantage, Setting objectives

Macroenvironment AnalysisThreats and Opportunities in the market

Percentage of Consumer Companies Using Mkt. Research for various ApplicationsApplication Area%

New product screening/ new concept evaluation95 Product design studies65 Consumer Product Testing82 Test marketing of new products in labs.54 In store, test marketing of new products51 Tracking studies to measure brand acceptance or usage92 Advertising pretesting or copy testing83 Advertising campaign testing 61 Basic marketing strategy studies82

What do we do with Problems?Ignore themTalk about themTry to solve them

12

General rules to be followed in defining the research problem is that the definition should

Allow the researcher to obtain all the information needed to address the management decision problem. Guide the researcher in proceeding with the research.

Don'tsResearch problem should not be defined too broadly.Example : Develop market share for a brand. Improve companys image.

2) Research problem should not be defined too narrowly.

Problem DefinitionManagement decision Problem & Marketing Research Problem

Mgt. Decision ProblemMkt. Research Problem

Asks what the decision maker needsAsks what information is neededto do& how it should be obtained

Action orientedInformation oriented

Focuses on symptomsFocuses on the underlying causes

Problem DefinitionExamples

Mgt. Decision ProblemMkt. Research Problem

Should the advertising campaign beTo determine the effectivenesschanged?of the current campaign

Should we invest new production facility?To determine the long-term consumer loyalty for the productHow should the loss of market share be arrested?

Should the market be segmented differently?

Should a new product be introduced?

Should the promotional budget be increased?

Problem DefinitionDefining Marketing Research Problem

Broad Statement

Specific Components

Problem DefinitionExample: Tennis Magazine

To gather information about the subscribers of Tennis Magazine

DemographicsPsychological characteristicsTennis Activity Relationship to& Lifestyles Tennis Magazine

Application Harley Davidson Example Management Decision Problem Should it invest to produce more motorcycles?

Marketing Research Problem To determine if customers would be loyal buyers of Harley Davidson in the long term.

Application Harley Davidson Example To determine if customers would be loyal buyers of Harley Davidson in the long term

Who are the customers? Can different types of customers be distinguished? What are their demographic Is it possible to segment the market in a meaningful way? & psychographic characteristics?

How do customers feel regarding Are the customers loyal to Harley Davidson? their Harleys? What is the extent of brand loyaltyAre all customers motivated by theSame appeal?

Adventure Loving TraditionalistsSensitive PragmatistsStylish Status-SeekersLaid-Back CampersClassy CapitalistsCool-Headed LonersCocky Misfits

Harley Davidson researchers had Harley owners, would be owners and owners of other brands create cut-and-paste collages to express their feelings about Harley-Davidson motorcycles. Whether the artwork was from long time Harley loyalists or fresh prospects, common themes emerged: enjoyment, the great outdoors, and freedom. Subsequent surveys among customers identified seven core types: Adventure-Loving Traditionalists, Sensitive Pragmatists, Stylish Status-Seekers, Laid-Back Campers, Classy Capitalists, Cool-Headed Loners, and Cocky Misfits. While the groups differed in many aspects, they all appreciated Harley-Davidson products because they were associated with independence, freedom and power.19

Departmental store patronage project

DM: we have seen the decline in the patronage of our store.R: How do you know that?DM : well, it is reflected in our sales and market share.R: Why do you think that your patronage has declined?Dm : I wish I knew.R: What about competition?DM: I suspect we are better than competitors on some factors and worse on others.R: How do the customer view your store?DM: I think most of them positively, although we may have a weak area or two.

Problem?

Management Decision Problem

What should be done to improve the patronage of the store.

Marketing Research Problem

Determine the relative strengths and weakness of sears, vis--vis other major competitors, with respect to factors that influence store patronage.

The process of problem solving

Ascertain the decision makers objectivesUnderstand the background of the problem Isolate and identify the problem rather than its symptomsDetermine the unit of analysisDetermine the relevant variablesState the research questions and research objectives

Research Questions

Researchers translation of the business problem into a specific need for inquiry.

Research Objectives

The purpose of the research, expressed in measurable terms; the definition of what the research should accomplish.

The objectives must specify the information needed to make a decision.

Major topics for research in businessExhibit 1.2, page 15, Business Research Methods, Zikmund.General business conditions and corporate researchFinancial and accounting researchManagement and organizational behavior researchSales and marketing researchInformation systems researchCorporate responsibility researchCross-functional teams

Global Perspective Global business researchExamples, A.C. Nielson, IMS etc.Nature of particular markets; example, EU in color preferences for medicinesGrowth of the internet