CHAPTER 5: MARKETING RESEARCH

Hudson Rogers

Florida Gulf Coast University

MARKETING INFORMATION SYSTEM Marketing has three main sub-systems: 1) Internal Accounting System – provides

financial data 2) Marketing Intelligence System –

supplies data about what is currently taking place

3) Marketing Research System – formal information gathering and analyzing process

MARKETING RESEARCHMarketing Research is the systematic

design of data collection, analysis, and reporting of data and findings relevant to a specific marketing situation facing the company.

MARKETING RESEARCH PROCESS1) Define Problem & research

objectives.  2) Develop the Research Plan 3)  Collect the Information4) Analyze the Information 5) Present the Findings

CHARACTERISTICS OF GOOD MARKETING RESEARCH

Research may have to overcome many problems chief of which are:

1. Narrow Conception of Marketing Research – some managers view research as act finding without clearly defined problems rather than information gathering

2. Uneven Caliber of Researchers – marketing research is not a clerical activity.

3. Late and Erroneous Results – managers need timely results that are accurate, takes time and money.

4. Intellectual Differences - difference in style between managers and researchers can get in the way

OVERCOMING PROBLEMS Rely on: 1) The scientific method - helps objectivity 2)  Research Creativity – quality of researcher. 3)  Use of multiple methods – helps reliability

4)   Interdependence of explicit model and data – select data gathering and research model best suited to analyzing the problem.

Consider the cost versus the information when marking marketing research decisions. This is really a trade off.

TYPES OF RESEARCH Exploratory –you do not have a precise problem

formulation or do not know the problem. Mostly qualitative, lacks formal design. Should not be used for decision-making. Secondary data, experts, focus groups

Conclusive Research – These are used for decision making. Does not show cause and effect & you never know all the alternatives.

Descriptive (describes characteristics of thing studies), Case History, statistical methods (set objectives, formal design, representative sample, quantitative data gathered and analyzed, reliability).

Causal Research

DATA SOURCES Secondary Data Focus Groups Interviews Experts Knowledgeable Persons (Psych Tests) to

get at underlying motivations Surveys (Mail, Telephone, E-mail, Mall) Simulations Case Histories

DATA COLLECTIONSampling:Non-Probability – convenience,

quota, snowball, judgment, shopping mall.

Probability – Systematic data collection process: simple random, stratified, cluster, area, multi-stage, proportional

DATA ANALYSISDescriptive AnalysisCross TabulationsAnalysis of Variance (ANOVA)T-TestRegression AnalysisDiscriminant Analysis

DEMAND MEASUREMENT Potential Market – set of consumers who

indicate a sufficient level of interest to something offered in the marketplace

 Available Market – consumers with interest, income, and access to a given product.

 Qualified available Market – consumers with interest, income, access and qualification to purchase a given product

DEMAND MEASUREMENT (Cont’d) Target Market – (served market). Target market is

the set of consumers that the firm wishes to go after with its marketing effort.

 Penetrated Market – set of consumers actually buying the firm’s product.  If not satisfied with current sales, a firm can take actions geared toward affecting the target market, or the potential market.

 Market Demand – number of units that will be sold to a defined customer group in geographic area for a defined period of time under a defined marketing program. To modify demand seek to adjust any or all of the “defined” factors on which the total volume is based.

DEMAND MEASUREMENT1.  Market demand2.  Market forecast3.  Market potential4.  Company demand5. Company sales forecast6.  Company sales potential

ESTIMATING CURRENT DEMAND Estimating current demand 1.   Total market potential 2.   Area market potential:

a)  Market-buildup method b)  Multiple-factor index method

3.  Estimating industry sales and market shares

a)                  a) identifying competitors and estimating their sales

ESTIMATING FUTURE DEMANDEstimating Future Demand – All

forecast are built upon three information bases (1) what people say they will do (2) what people do, and (3) what people have done.

ESTIMATING FUTURE DEMAND (Cont’d) Five main ways to assess future demand: 1)  Survey of Buyer Intentions – determine what

buyers are likely to do under certain conditions.

2)  Composite of Sales Force Opinion – ask sales representatives to estimate their future sales and sum the individual estimates to arrive at the firms forecast

3) Expert Opinion/Delphi Method – ask the experts what they think

4)  Past-Sales Analysis – use time series analysis, statistical demand analysis or econometric analysis to predict.

5) Market Test Method – observing what buyers do in a test market & using information to project to wider market.