Conducting Marketing Research and Forecasting Demand 4 Conducting Marketing Research and Forecasting Demand Marketing Management, 13th ed

Chapter Questions What constitutes good marketing research? What are good metrics for measuring marketing productivity? How can marketers assess their return on investment of marketing expenditures? How can companies more accurately measure and forecast demand? Copyright © 2009 Pearson Education, Inc.  Publishing as Prentice Hall 4-2

What is Marketing Research? Marketing research is the systematic design, collection, analysis, and reporting of data and findings relevant to a specific marketing situation facing the company. Copyright © 2009 Pearson Education, Inc.  Publishing as Prentice Hall 4-3

Types of Marketing Research Firms Syndicated service; firms gather consumer and trade information's for a free. Custom marketing research; hired firms for specific project :Small companies Specialty-line; provide a special research . Copyright © 2009 Pearson Education, Inc.  Publishing as Prentice Hall 4-4

The Marketing Research Process Define the problem Develop research plan Collect information Analyze information Present findings Make decision Copyright © 2009 Pearson Education, Inc.  Publishing as Prentice Hall 4-5

Step 1: Define the Problem Define the problem (symptoms & cause) (lunch internet connection for passenger aboard) Should we offer internet? which class should we offer? What price should we charge? What type of planes and length trip? Copyright © 2009 Pearson Education, Inc.  Publishing as Prentice Hall 4-6

Step 1: Define the Problem Types of Researches Exploratory; highlight on nature of problem Descriptive; Quantify demand how many passenger buy Causal; test the cause and the effect of relationship Importance of research State research objectives: To investigate offering internet? To Study which class should we offer? To find What price should we charge? To study type of planes and length trip? Copyright © 2009 Pearson Education, Inc.  Publishing as Prentice Hall 4-7

Step 2: Develop the Research Plan Data sources : Primary & Secondary Research approach Research instruments Sampling plan Contact methods Copyright © 2009 Pearson Education, Inc.  Publishing as Prentice Hall 4-8

Research Approaches Observation: Directly ,indirectly and Ethnographic: how the consumer live and work. Focus group Survey Behavioral data : Customer database Experimentation; Internet connection for passenger aboard Copyright © 2009 Pearson Education, Inc.  Publishing as Prentice Hall 4-9

Research Instruments Questionnaires Qualitative Measures Technological Devices Copyright © 2009 Pearson Education, Inc.  Publishing as Prentice Hall 4-10

Questionnaire Do’s and Don’ts Ensure questions are free of bias Make questions simple Make questions specific Avoid jargon Avoid sophisticated words Avoid ambiguous words Avoid negatives Avoid hypotheticals Avoid words that could be misheard Use response bands Use mutually exclusive categories Allow for “other” in fixed response questions Copyright © 2009 Pearson Education, Inc.  Publishing as Prentice Hall 4-11

Question Types - Dichotomous In arranging this trip, did you contact American Airlines?  Yes  No Copyright © 2009 Pearson Education, Inc.  Publishing as Prentice Hall 4-12

Question Types – Multiple Choice With whom are you traveling on this trip?  No one Spouse Spouse and children Children only Business associates/friends/relatives An organized tour group Copyright © 2009 Pearson Education, Inc.  Publishing as Prentice Hall 4-13

Question Types – Likert Scale Indicate your level of agreement with the following statement: Small airlines generally give better service than large ones.  Strongly disagree Disagree Neither agree nor disagree Agree Strongly agree Copyright © 2009 Pearson Education, Inc.  Publishing as Prentice Hall 4-14

Question Types – Semantic Differential American Airlines Large ………………………………...…….Small Experienced………………….….Inexperienced Modern……………………….…..Old-fashioned Copyright © 2009 Pearson Education, Inc.  Publishing as Prentice Hall 4-15

Question Types – Importance Scale Airline food service is _____ to me.  Extremely important Very important Somewhat important Not very important Not at all important Copyright © 2009 Pearson Education, Inc.  Publishing as Prentice Hall 4-16

Question Types – Rating Scale American Airlines’ food service is _____.  Excellent Very good Good Fair Poor Copyright © 2009 Pearson Education, Inc.  Publishing as Prentice Hall 4-17

Question Types – Intention to Buy Scale How likely are you to purchase tickets on American Airlines if in-flight Internet access were available?  Definitely buy Probably buy Not sure Probably not buy Definitely not buy Copyright © 2009 Pearson Education, Inc.  Publishing as Prentice Hall 4-18

Question Types – Completely Unstructured What is your opinion of American Airlines? Copyright © 2009 Pearson Education, Inc.  Publishing as Prentice Hall 4-19

Question Types – Word Association What is the first word that comes to your mind when you hear the following? Airline ________________________ American _____________________ Travel ________________________ Copyright © 2009 Pearson Education, Inc.  Publishing as Prentice Hall 4-20

Question Types – Sentence Completion When I choose an airline, the most important consideration in my decision is: ________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________. Copyright © 2009 Pearson Education, Inc.  Publishing as Prentice Hall 4-21

Question Types – Story Completion “I flew American a few days ago. I noticed that the exterior and interior of the plane had very bright colors. This aroused in me the following thoughts and feelings.” Now complete the story. __________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ Copyright © 2009 Pearson Education, Inc.  Publishing as Prentice Hall 4-22

Question Types – Picture (Empty Balloons) Copyright © 2009 Pearson Education, Inc.  Publishing as Prentice Hall 4-23

Qualitative Measures Word association: what does BMW mean to you? Projective techniques Visualization; product made women feel thin Brand personification Laddering Copyright © 2009 Pearson Education, Inc.  Publishing as Prentice Hall 4-24

Technological Devices Galvanometers Eye cameras Copyright © 2009 Pearson Education, Inc.  Publishing as Prentice Hall 4-25

Sampling Plan Sampling unit: Who is to be surveyed? Sample size: How many people should be surveyed? Sampling procedure: How should the respondents be chosen? Copyright © 2009 Pearson Education, Inc.  Publishing as Prentice Hall 4-26

Table 4.2 Types of Samples Probability Samples Simple random Stratified random Cluster Nonprobability Samples Convenience Judgment Quota Copyright © 2009 Pearson Education, Inc.  Publishing as Prentice Hall 4-27

Contact Methods Mail questionnaire Telephone interview Personal interview Online interview Copyright © 2009 Pearson Education, Inc.  Publishing as Prentice Hall 4-28

Pros and Cons of Online Research Advantages Inexpensive Fast Accuracy of data, even for sensitive questions Versatility Disadvantages Small samples Skewed samples Technological problems Inconsistencies Copyright © 2009 Pearson Education, Inc.  Publishing as Prentice Hall 4-29

What is a Marketing Decision Support System (MDSS)? A marketing decision support system is a coordinated collection of data, systems, tools, and techniques with supporting hardware and software by which an organization gathers and interprets relevant information from business and environment and turns it into a basis for marketing action. Copyright © 2009 Pearson Education, Inc.  Publishing as Prentice Hall 4-30

Table 4.3 Characteristics of Good Marketing Research Scientific method Research creativity Multiple methods Interdependence Value and cost of information Healthy skepticism Ethical marketing Copyright © 2009 Pearson Education, Inc.  Publishing as Prentice Hall 4-31

What are Marketing Metrics? Marketing metrics are the set of measures that helps marketers quantify, compare, and interpret marketing performance. Copyright © 2009 Pearson Education, Inc.  Publishing as Prentice Hall 4-32

Table 4.4 Marketing Metrics External Awareness Market share Relative price Number of complaints Customer satisfaction Distribution Total number of customers Loyalty Internal Awareness of goals Commitment to goals Active support Resource adequacy Staffing levels Desire to learn Willingness to change Freedom to fail Autonomy Copyright © 2009 Pearson Education, Inc.  Publishing as Prentice Hall 4-33

What is Marketing-Mix Modeling? Marketing-mix models analyze data from a variety of sources, such as retailer scanner data, company shipment data, pricing, media, and promotion spending data, to understand more precisely the effects of specific marketing activities. Copyright © 2009 Pearson Education, Inc.  Publishing as Prentice Hall 4-34

Marketing Dashboards A customer-performance scorecard records how well the company is doing year after year on customer-based measures. A stakeholder-performance scorecard tracks the satisfaction of various constituencies who have a critical interest in and impact on the company’s performance including employees, suppliers, banks, distributors, retailers, and stockholders. Copyright © 2009 Pearson Education, Inc.  Publishing as Prentice Hall 4-35

Table 4.5 Sample Customer-Performance Scorecard Measures % of new customers to average # % of lost customers to average # % of win-back customers to average # % of customers in various levels of satisfaction % of customers who would repurchase % of target market members with brand recall % of customers who say brand is most preferred Copyright © 2009 Pearson Education, Inc.  Publishing as Prentice Hall 4-36

Common Measurement Paths Customer metrics pathway; how prospects become customers Unit metrics pathway; to know about sales products Cash-flow metrics pathway; how well marketing expenditures are achieving retuerns Brand metrics pathway; development of the longer term brand equity Copyright © 2009 Pearson Education, Inc.  Publishing as Prentice Hall 4-37

The Measures of Market Demand Market: A set of all actual and potential buyers of market Potential market: a set of interest consumer in market offer Available market: a set of consumer who have interest ,income and access to particular offer Target market: is apart of available market the company decide to pursue Penetrated market: a set of consumer who buy the company product Copyright © 2009 Pearson Education, Inc.  Publishing as Prentice Hall 4-38

Vocabulary for Demand Measurement Market demand; the total volume that would be bought by defined customers in defend geographical area Market forecast; Company demand: the company’s estimated share of market demand at alternative levels of company marketing effort in a given time period. Company sales forecast: the expected level of company sales based on a chosen marketing plan and an assumed marketing environment Company sales potential: the sales limit approached by company demand as the company marketing effort increases relative to that of competitors. Copyright © 2009 Pearson Education, Inc.  Publishing as Prentice Hall 4-39

Figure 4.4 Ninety Types of Demand Measurement Copyright © 2009 Pearson Education, Inc.  Publishing as Prentice Hall 4-40

Figure 4.5 Market Demand Functions Copyright © 2009 Pearson Education, Inc.  Publishing as Prentice Hall 4-41

Figure 4.5 Market Demand Functions Copyright © 2009 Pearson Education, Inc.  Publishing as Prentice Hall 4-42

Estimating Future Demand Survey of Buyers’ Intentions Composite of Sales Force Opinions Expert Opinion Past-Sales Analysis Market-Test Method Copyright © 2009 Pearson Education, Inc.  Publishing as Prentice Hall 4-43