Marketing Research Chapter 28

Marketing Information Systems Section 1

Objectives Describe the purpose of marketing research Explain the characteristics and purposes of a marketing information system Identify procedures for gathering information using technology.

Key Terms Marketing Research Marketing Information System Database Marketing Database

Defining Marketing Research One of the largest American sports shoes manufacturers wants to introduce its new, best-selling shoe in overseas market. A famous basketball player in the US wears the shoes ad the ad shows him shooting hoops in location all around the world.

Defining Marketing Research (cont) The ad is aired in 3 European countries, translated into each country’s official language. However, the sales are disappointingly low. What went wrong?

The Answer Even though the ad had global focus, it did not have global appeal in Europe. Marketing research would have shown that basketball is not as popular in Europe as it is in the US. Therefore, few people could associate with the sport associated with the product.

What is Marketing Research? Marketing Research involves the process and methods used to gather information Analyze it Report findings related to marketing goods and services.

Marketing Research Companies use it to: Determine consumers’ attitudes and preferences Test product features Determine market size and growth potential Learn about competitive products Determine buying cycles Understand how the company is perceived by the public.

Marketing Surveys…..

Why is Marketing Research Important? Businesses have to pay attention to consumers buying habits in order to be successful The information received helps businesses increase sales and profits.

Why is Marketing Research Important? Research answers the following questions: What products to produce What price to sell the products Who will buy the products How the products will be promoted What is happening in the marketplace

What is Marketing Information System? A set of procedures and methods that generates, stores, analyzes and distributes information for use in making marketing and other business decisions

Data that should be part of MIS Customer Profile data Buying behavior Shopping patterns Customer demographics & lifestyle research Company Records Sales results Expenses Supplier data

Data that should be part of MIS Competitors’ records, such as Prices Products Market share Government data, such as Price trends New regulations and laws Future projections for the economy Marketing research reports from research firms

Database Marketing Also known as Customer relationship management (CRM) Process of designing, creating, and managing customer lists. Customer lists contain information about individuals characteristics and transactions with a business.

Database A collection of related information about a specific topic. Example, American Express maintains a database of its card members, their addresses, plus what they buy, where they buy it, where they eat out, and how much money they spend.

Marketing Information Systems Section 2

Types, Trends, and Limitations of Marketing Research Objectives: Identify the methods of conducting marketing research Discuss trends and limitations in marketing research

Key Terms Quantitative research Qualitative research Attitude research Market intelligence Media research Product research

Types of Marketing Research Business conducts different research based on the problem they are trying to solve. Quantitative Research Qualitative Research Attitude Research Market Intelligence Media Research Product Research

Quantitative Research This type of research usually gathers information from large numbers of people. It answers questions, that start with “how many” or “how much”. This research relies heavily on surveys or questionnaires to obtain information.

Qualitative Research Qualitative Research: This type of research usually gathers information from smaller numbers of people (usually fewer than 100). It tries to answer questions about “why” or “how”. This research relies heavily on in-depth interviews, rather than surveys. Most market research depends on both quantitative and qualitative methods.

Attitude Research Attitude Research is also known as Opinion Research Designed to obtain information on how people feel about certain products, services, companies or ideas. This is often conducted by mail surveys or telephone interviews.

Attitude Research (cont.) Opinion polls are another example of attitude research. The Gallup Organization conducts opinion polls on politics, elections, business and the economy, social issues, and public policy. Consumer panels, also called focus groups, provide information on research issues.

Market Intelligence Market Intelligence is concerned with: the size and location of a market, the competition, and the segmentation within the market for a particular product or service.

Market Intelligence Market Intelligence also uses existing market data and new research to assemble a profile of present and potential customers, competitors, and the overall industry. It also helps define the target markets for a particular product or service and how to reach potential customers.

Sales Forecasting Sales forecasting is an attempt to estimate the future sales of an existing product. Based on its research findings, the business can then try to increase its market share through changes in the product, pricing, promotion, or distribution strategies.

Economic Forecasting Economic Forecasting is an attempt to predict the future economic conditions of a city, a region, a country or other part of the world. This research requires extensive knowledge of economic statistics and trend indicators.

Economic Factors (cont) Federal agencies collect information on key economic indicators, such as new building construction, inflation rates, money supply and consumer and producer price indexes. Businesses use research on general economic conditions to help plan for long-range expansion.

Media Research Media Research, also known as advertising research, focuses on issues of media effectiveness, selection, frequency, and ratings. Media research studies brand awareness, advertising recall, brand image, effectiveness of advertising copy, and audience size for a particular type of advertising.

Media Advertising Measures Important statistics for media measurement include audience, frequency, reach, and ratings. Audience is the number of homes or people exposed to a particular advertising medium Frequency is the number of times a viewer in the audience sees or hear an ad.

Media Advertising Measures (cont.) Reach is the percentage of the target audience that will see or hear an ad at least once. Ratings are the total number of audience impressions delivered over a set period of time. Another way to measure advertising research on the various media is to subscribe to Standard Rate and Data Service (SRDS).

Researching Print Advertisements To determine the ad’s effectiveness, readers are asked about the extent to which they noticed the ad, remembered it and associated it with the advertised brand. The ad is also measured on its ability to change the consumer’s beliefs, attitudes, or intended behavior.

Researching Print Advertisements Readership in print media is measured by surveys or estimated by circulation. Mediamark Research and Simmons Market Research Bureau provide audience data.

Researching Broadcast Media Most broadcast ad testing research is done on television commercials. Testing research can use both quantitative and qualitative research method.

Researching Broadcast Media (cont) Nielsen Media Research, Inc. provides audience measurement information for the television industry. Nielsen estimates the audience by measuring the viewing habits of 13,000 people in 5,000 homes. Nielsen uses “people meters”

Product Research Product research centers on evaluating product design, package design, product usage, and consumer acceptance of new and existing products. This is also done to collect information about competitive products. Concept testing is often used in the early stages of product development.

Trends in Marketing Research In this environment, product quality and customer satisfaction are the keys to business success. Research that measures these qualities has become the fastest growing form of marketing research.

Trends in Marketing Research (cont) Another important trend is the use of both internal and external information in managing a business Total quality management (TQM) programs place a premium on gathering and using database research in improving business operations.

Limitations of Marketing Research The amount of information that can be gathered is limited by the amount of money and time a company can afford to spend. Marketing research information also has its limitations. Customers in a test market situation may say they want a particular product but that does not mean they will buy it when it is on the market.