Introduction to Marketing Research Chapter One Introduction to Marketing Research

Chapter Outline 1) Overview 2) What does Marketing Research Encompass 3) The Nature of Marketing Research 4) Definition of Marketing Research 5) A Classification of Marketing Research 6) The role of Marketing Research in MIS and DSS 7) Marketing Research Suppliers and Services ) Selecting a Research Supplier 1

Chapter Outline (cont.) 9) Careers in Marketing Research 10) Marketing Research Process 11) The Department Store Patronage Project 12) International Marketing Research 13) Ethics in Marketing Research 14) Internet and Computer Applications 15) Focus on Burke 16) Summary 17) Key Terms and Concepts 18) Acronyms 2

The American Marketing Association Redefines Marketing Research RIP 1.1 Used to identify and define market opportunities and problems The New Definition Marketing research is the function which links the consumer, customer, and public to the marketer through Generate, refine, and evaluate marketing performance Monitor marketing performance Information Improve understanding of marketing as a process 12

The Role of Marketing Research Fig 1.1 Customer Groups Consumers Employees Shareholders Suppliers Uncontrollable Controllable Environmental Marketing Factors Variables Marketing Economy Technology Laws & Regulation Social & Cultural Factors Political Factors Product Pricing Promotion Distribution Research Assessing Marketing Providing Information Decision Information Needs Making Marketing Managers Market Segmentation Target Market Selection Marketing Programs Performance & Control 3

Market Research Specifies the information necessary to address these issues Manages and implements the data collection process Analyzes the results Communicates the findings and their implications

A Classification of Marketing Research Fig 1.2 Marketing Research Problem Identification Research Problem Solving Research Market potential research Market share research Market characteristics research Sales analysis research Forecasting research Business trends research Segmentation Research Product Research Promotion Research Distribution Research 4

Problem Solving Research Table 1.1 Segmentation Research Product Research Test concept Determine optimal product design Package tests Product modification Brand positioning and repositioning Test marketing Control score tests Determine the basis of segmentation Establish market potential and responsiveness for various segments Select target markets Create lifestyle profiles:demography, media, and product image characteristics 9

0.00% $ALE APR Table 1.1 Contd. PRICING RESEARCH PROMOTIONAL RESEARCH Importance of price in brand selection Pricing policies Product line pricing Price elasticity of demand Initiating and responding to price changes $ALE PROMOTIONAL RESEARCH Optimal promotional budget Sales promotion relationship Optimal promotional mix Copy decisions Media decisions Creative advertising testing Claim substantiation Evaluation of advertising effectiveness 0.00% APR 10

Distribution Research Table 1.1 Contd. Determine… Types of distribution Attitudes of Channel members Intensity of wholesale & resale coverage Channel margins Location of retail and wholesale outlets

Management Information Systems Versus Decision Support Systems Fig 1.3 MIS DSS Structured Problems Use of Reports Rigid Structure Information Displaying Restricted Can Improve Decision Making by Clarifying Data Unstructured Problems Use of Models User Friendly Interaction Adaptability Can Improve Decision Making by Using “What if” Analysis problems 5

Marketing Research Supplier and Services Figure 1.4 EXTERNAL INTERNAL RESARCH SUPPLIERS LIMITED SERVICE FULL SERVICE Branded Products and Services Field Services Syndicate Services Internet Services Coding and Data Entry Services Standardized Services Customized Services Data Analysis Services Analytical Services

Organization of Marketing Research at Oscar Mayer RIP 1.2 Marketing Systems and Analytics (MSA) Performs Sales Analysis Based on Shipment & Store Scanner Data Supports Computer End Users within Marketing Department Serves as Source of Marketing Information Brand Research Conducts Primary & Secondary Research Serves As Marketing Consultants Analyzes Market Trends Advances the State of the Art in Marketing Research 16

Research Organizations Top 50 Marketing Research Organizations RIP 1.3 18

RIP 1.3 Contd. 18

RIP 1.3 Contd.

Full Services Versus Limited Service Marketing Research Firms RIP 1.4 Susan Adelman and Kevin Heaken of Survey Service, Inc. and Heaken Research, both field survey firms, find that more often today clients will perform the problem definition and design the survey instrument in-house to subcontract the data collection. This is done in order to cut costs in market research. This has also changed the method and approach of the full-service companies to meet new customer needs. Burke Marketing Research, a large full-service company, has replaced many in-house departments for end-users who have cut their in-house staff because of a downsizing trend. An example would be Ocean Spray or Quaker Oats which have cut marketing staff and subcontract all marketing research to companies such as Burke and Maritz Marketing Research.

RIP 1.5 Contd. So now, the end-user simply provides the full-service company with a management decision problem, which is interpreted and articulated into the marketing research problem by a full-service company and the other steps are also performed by the market research company. Some companies believe that they can reduce costs by going straight to the field-service companies. However, according to Cathy Kneidl, VP for Quality Control Services, a branch of Maritz, this is a mistake because the steps leading up to the data collection are omitted, which renders the market research questionable. The approach and process of market research are critical to obtain data that can be useful or can be interpreted to improve or make sound management decisions. The issue is determining if the company requires a full-service company, which would undertake the entire research process, or is field research satisfactory, as in the case of Samsonite. Samsonite wanted to test the market for responses to various suitcase colors. For this research, a full-service firm was not necessary, only a survey had to be administered to confirm trends or preferences.

Selected Marketing Research Career Descriptions Fig 1.5 Vice-President of Marketing Research: The senior position in marketing research. The vice president (VP) is responsible for the entire marketing research operation of the company and serves on the top management team. This person sets the objectives and goals of the marketing research department. Research Director: Also a senior position. The research director has the general responsibility for the development and execution of all the marketing research projects. Assistant Director of Research: Serves as an administrative assistant to the director and supervises some of the other marketing research staff members. (Senior) Project Manager: Has overall responsibility for design, implementation, and management of research projects. Statistician/Data Processing Specialist: Serves as an expert on theory and application of statistical techniques. Responsibilities include experimental design, data processing, and analysis. 7

Selected Marketing Research Career Descriptions Vice President of Marketing Research Part of company’s top management team Directs company’s entire market research operation Sets the goals & objectives of the marketing research department Research Director Also part of senior management Heads the development and execution of all research projects Assistant Director of Research administrative assistant to director supervises research staff members Senior Project Manager Responsible for design, implementation, & research projects

Statistician/Data Processing Senior Analyst Participates in the development of projects Carries out execution of assigned projects Coordinates the efforts of analyst, junior analyst, & other personnel development of research design and data collection Prepares final report Statistician/Data Processing Serves as expert on theory and application on statistical techniques Oversees experimental design, data processing, and analysis Fig 1.5 Contd. Analyst Handles details in execution of project Designs & pretests questionnaires Conducts Preliminary analysis of data Field Work Director Handles selection, training, supervision, and evaluation of interviewers and field workers Junior Analyst Secondary data analysis Edits and codes questionnaires Conducts preliminary analysis of data 8

A Sample of Marketing Research Jobs RIP 1.5 9

Marketing Research at Marriott Corporation RIP 1.6 Marriott functions in three main areas: lodging (Marriott Hotels and Resorts, Marriott Suites, Residence Inns, Courtyard Hotels, and Fairfield Inns), contract services (Marriott Business Food and Services, Education, Health-Care, In-Flight Services, and Host International, Inc.) and restaurants (family restaurants, Travel Plazas, and Hot Shops). It is probably best known, however, for its lodging operations. Marketing research at Marriott is done at the corporate level through the Corporate Marketing Services (CMS). CMS’s goals include providing the management of the different areas of Marriott with the information they need to better understand the market and the customer.

RIP 1.6 Contd. RIP 1.6 Contd. CMS conducts many different types of research. They use quantitative and qualitative research approaches such as telephone and mail surveys, focus groups, and customer intercept to gain more information on market segmentation and sizing, product testing, price sensitivity of consumers, consumer satisfaction, and the like. The process of research at Marriott is a simple stepwise progression. The first step is to better define the problem to be addressed and the objectives of the client unit and to develop an approach to the problem. The next step is to formulate a research design and design the study. CMS must decide whether to conduct its own research or buy it from an outside organization.

RIP 1.6 Contd. If the latter option is chosen, CMS must decide whether or not to use multiple firms. Once a decision is made, the research is carried out by collecting and analyzing the data. Then, CMS presents the study findings. The final step in the research process is to keep a constant dialogue between the client and the CMS. During this stage, CMS may help explain the implications of the research findings or may make suggestions for future actions. Marketing Research

Marketing Research Associations Online RIP 1.7 Domestic AAPOR: American Association for Public Opinion Research (www.aapor.org) AMA: American Marketing Association (www.ama.org) ARF: The Advertising Research Foundation (www.amic.com/arf) CASRO: The Council of American Survey Research Organizations (www.casro.org) MRA: Marketing Research Association (www.mra-net.org) QRCA: Qualitative Research Consultants Association (www.qrca.org) RIC: Research Industry Coalition (www.research industry.org)

RIP 1.7 Contd. International ESOMAR: European Society for Opinion and Marketing Research (www.esomar.nl) MRS: The Market Research Society (UK) (www.marketresearch.org.uk) MRSA: The Market Research Society of Australia (www.mrsa.com.au) PMRS: The Professional Marketing Research Society (Canada) (www.pmrs-aprm.com)