Introduction to Marketing Research and its Role in a Firm Ovais IMSciences January 16, 2014 Lectures 1 Introduction to Marketing Research and its Role in a Firm Reference: Zikmund, Chapter 1

Chapter Outline 1) Overview of Marketing Management 2) Definition of Marketing Research 3) A Classification of Marketing Research 4) Marketing Research Process 5) The Nature of Marketing Research 6) Marketing Research Suppliers and Services

What is Marketing? The process by which companies create, communicate and deliver superior value for the target customers in order to get value in return.

What is Marketing Management? Marketing management is the art and science of choosing target markets and getting, keeping, and growing customers through creating, delivering, and communicating superior customer value.

Marketing is about;

Marketing Manager’s tasks and Research Developing marketing strategies Capturing marketing insights Connecting with customers Building strong BRANDS Shaping market offerings Delivering value Communicating value Creating long-term growth

Defining Research The systematic investigation into and study of materials and sources in order to establish new facts and reach new conclusions Research is defined as the creation of new knowledge and/or the use of existing knowledge in a new and creative way so as to generate new concepts, methodologies and understandings. 

Marketing research Marketing research . . . .. . . links the consumer, customer and public to the marketer through information which is used to identify and define marketing opportunities and problems; to generate, refine and evaluate marketing actions; and to improve understanding of marketing as a process and of the ways in which specific marketing activities can be made more effective.

WHAT IS MARKETING RESEARCH? 1. A systematic and objective process of generating information to aid in marketing decisions (Zikmund 8e, p. 3) 2. The application of the scientific method in searching for the truth about marketing phenomena Zikmund & Babin 9e, p. 3) What keywords can be identified from these definitions?

THE KEY WORDS From Zikmund 8e, the key words are: Information Process Systematic Objective Decisions From Zikmund & Babin 9e, they are: Scientific method Truth Marketing phenomena

The Key Words Information – Decisions – The primary function of marketing research (MR) is to provide information, not just to collect data. Thus the MR function is also responsible for analyzing data collected, interpreting results, drawing conclusions, making recommendations, and communicating these to the decision maker. Decisions – MR is usually conducted not just for the sake of doing research, but because the results will be used in decision making. Research helps the decision-maker by reducing the risk of making a wrong decision.

The Key Words Process – MR is a process consisting of distinct activity stages Decisions have to be made in each stage Systematic – MR should be conducted systematically (i.e. in an orderly manner) NOT haphazardly (or in a disorganized manner) Objectivity – MR should conducted objectively (i.e. without bias from the person doing the research) NOT subjectively (i.e. with the results depending on who is doing the research)

The Key Words 6) The Scientific Method The scientific method is defined as the methods, techniques, and procedures used to ensure that research is conducted in a systematic and objective manner. Thus “science” is not only about mixing chemicals and observing what happens; it is about being systematic and objective in trying to arrive at the truth about a phenomenon 7) Truth Also referred to as “objective reality” Facilitated by systematicity and objectivity in scientific inquiry 8) Marketing Phenomena What distinguishes “marketing research” from other “social science research”

Redefining Marketing Research The American Marketing Association (AMA) redefined Marketing Research as: The function which links the consumer, the customer, and public to the marketer through INFORMATION

CLASSIFICATION OF MARKETING RESEARCH There are several ways of classifying mkt research: By application of research results basic vs applied research By focal research design exploratory, descriptive, or causal research By type of data collected qualitative or quantitative research By locus of problem problem identification or problem solving research,

Classification of Marketing Research Problem Identification Research Research undertaken to help identify problems which are not necessarily apparent on the surface and yet exist or are likely to arise in the future. Examples: market potential, market share, image, market characteristics, sales analysis, forecasting, and trends research. Problem Solving Research Research undertaken to help solve specific marketing problems. Examples: segmentation, product, pricing, promotion, and distribution research.

A Classification of Marketing Research Fig 1.1 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

Problem Solving Research Table 1.1 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 SEGMENTATION RESEARCH Test concept Determine optimal product design Package tests Product modification Brand positioning and repositioning Test marketing PRODUCT RESEARCH

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

Problem Solving Research DISTRIBUTION RESEARCH Determine… Types of distribution Attitudes of channel members Intensity of wholesale & resale coverage Channel margins Location of retail and wholesale outlets

Marketing Research Process Step 1: Problem Definition Step 2: Development of an Approach to the Problem Step 3: Research Design Formulation Step 4: Fieldwork or Data Collection Step 5: Data Preparation and Analysis Step 6: Report Preparation and Presentation

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

Marketing Research Suppliers & Services Fig 1.3 LIMITED SERVICE Branded Products and Services Data Analysis Services Analytical Coding and Data Entry Field FULL SERVICE Syndicate Standardized Customized Internet RESEARCH SUPPLIERS EXTERNAL INTERNAL

Management Information Systems vs. Decision Support Systems DSS MIS 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

Marketing Research Associations Online 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)

Marketing Research Associations Online 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) And others IMS, Gallop. Neilson etc