Chpt 5 Obtaining Data for Marketing Decisions

Introduction Business which have “extra information” are more competitive. The process of developing information through Market Research is becoming more complicated and is greatly enhanced and improved by using advanced telecommunications (e-mail, fax, internet etc.)

Garbage In = Garbage Out good market info = good marketing planning “The quality of marketing planning decision depends on the quality of the information on which they are based” p. 76 Garbage In = Garbage Out good market info = good marketing planning

good market info = good marketing planning There are many sources of Market Info customer complaints sales-force reports government statistics industry reports … and ... Page 76

Marketing Research The systematic gathering, recording, and analyzing of data about problems relating to the marketing of goods and services. Page 76

Marketing Research The critical task of the Marketing Manager is DECISION MAKING. P. 77 Marketing Research helps provide good information to help in decision making.

Marketing Research The information gathered during Marketing Research can help: develop sales forecasts design new products, based on customer opinion create attractive packaging guide advertising plans Page 77

Where do you get the info? Marketing Research Where do you get the info? A. you can do it yourself by making someone in the company responsible for doing the research B. you can hire an outside agency that specializes in Market Research Page 78

Marketing Research Where do you get the info? B. you can hire an outside agency that specializes in Market Research There are 2 types of outside agencies 1. Full Service Research Supplier 2. Syndicated Service Page 78

Marketing Research There are 2 types of outside agencies 1. Full Service Research Supplier They will will handle all aspects, conduct interviews, send out questionnaires, do telephone polls etc. and provide a detailed report explaining all aspects of your potential customer base. Page 78

Marketing Research There are 2 types of outside agencies 2. Syndicated Service These types of companies gather various types of information and sell it (usually in subscription form) to clients that have regular needs. Restaurants can buy statistical information on eating habits and spending patterns Clothing companies can buy information on demographics and seasonal buying patterns as well as trend information. Page 78

6 Steps in the Market Research Process 1. 2. 3. 4. 5. Figure 5.1 The Marketing Research Process 6. Page 79

Problem Definition You have to first know what you are looking for - this is not always so easy. If your new chocolate bar isn’t selling well, you don’t automatically do market research on the “taste” - because maybe the reason has to do with the packaging. Page 78

Often described as looking before you start looking Exploratory Research “Learning about the problem area and beginning to focus on specific areas of study by discussing the problem with informed sources within the firm (a process often called situation analysis) and with knowledgeable others outside the firm (the informal investigation).” Page 79

Exploratory Research One of the important things to do is review the existing situation to determine how things came to be that way - this is an important part of the Exploratory Research and is one of the reasons why companies hire outside agencies. It is difficult for a company to “look at itself” Page 80

After the problem has been defined (Step 1), and an exploratory investigation (Step 2) has been conducted, it is possible to then formulate a Hypothesis (Step 3)

Stage 3 Hypothesis “A tentative explanation about the relationship between variables as a starting point for further testing.” TEXT Page 81 The way of thinking about how something works - and using your original “guess” as a starting point for further investigation WTGR

Hypothesis http://www.reinartz.com/mark4338/CLASS_4/sld006.htm

Research Design Stage 4 The Research Design should be a plan for testing the Hypothesis. A series of advance decisions that, taken together, make up a master plan or model for conducting the investigation. page 81

Research Design http://www.reinartz.com/mark4338/CLASS_4/sld007.htm

Collecting Data Stage 5 Collecting Data is often the expensive stage because it may involve paying people to make telephone calls, or hiring students to takes questionnaires to malls and ask shoppers to answer questions. This is time consuming as well as costly

Collecting Data Primary Data Secondary Data Stage 5 Data being collected for the first time. Secondary Data Previously produced or published matter. Page 81

Collecting Data Secondary Data Stage 5 Internal - eg. company sales records External Previously published matter. (gov’t statistics, reports, newspaper articles etc.) Page 83

Collecting Data Secondary Data Stage 5 External - Government Sources http://WWW.StatCan.CA/english/Pgdb/Economy/econom.htm http://WWW.StatCan.CA/english/Pgdb/People/Population/demo05.htm The Canadian government produces so MUCH data from census and business reports that it is published in report. Some of these reports are free, some can be bought, and some customized information can be bought at a high price. Page 83

Collecting Data Advantages of Secondary Data 1. less expensive Page 84 1. less expensive 2. less time

Collecting Data Advantages of Secondary Data Page 84 1. It is usually less expensive than Primary Data - and if the purpose if just to determine a general trend, then for many situations, Secondary Data is O.K. 2. It takes less time to find Secondary Data (compared to doing new studies) and therefore you answer your questions more quickly, and get on with the business.

Collecting Data Limitations of Secondary Data 1. Obsolete Page 85 1. Obsolete 2. Fit - relevance

Collecting Data Limitations of Secondary Data Page 85 1. Obsolete - date it was produced may be old - this is why some companies pay for new Primary Data 2. Fit - relevance. Some Secondary Data is too vague to answer the questions - therefore you need new Primary Data that is more specific

Collecting Data Primary Data Stage 5 Data being collected for the first time. 1. Observation 2. Survey Telephone Mail Personal Interview 3. Controlled Experiment Page 85

Collecting Data Primary Data Stage 5 Data being collected for the first time. 1. Observation overt - watching how customers shop, what they look at, the features they like, asking for postal codes, counting cars - often used to evaluate how good some advertising is covert (technical eg. Hidden camera, POP computerized information) Page 85 ~ 86

Collecting Data Primary Data Stage 5 Data being collected for the first time. 2. Survey Telephone - inexpensive and fast - they are the majority of primary marketing research used by big marketing research companies Mail - costs less, and more detailed questions can be asked, can be used in geographic segments Personal Interview - the best method, but most expensive Page 86

Collecting Data Primary Data Stage 5 Data being collected for the first time. 2. Survey Personal Interview - FOCUS GROUPS are a special type of personal interview typically 8 ~ 12 people are shown something, then asked for comments typically used in preparing TV commercials Page 88

Collecting Data Primary Data Stage 5 Data being collected for the first time. 3. Controlled Experiment - not used very often due to costs, but sometimes done by people who need to answer difficult questions - the most common method is test marketing a target market segment, then look at the results and see what works, and what didn’t work Page 88

Collecting Data Primary Data Stage 5 Data being collected for the first time. 3. Controlled Experiment - Sometimes TEST products are used in cities like Calgary and Winnipeg, and then not followed up, so people there have a chance to use totally new products not available elsewhere - eg. Winnipeg was the first city to try variable sizes of plastic soft drink bottled Page 88 ~ 89

Collecting Data Test Marketing The selection of areas considered reasonably typical of the total market, and introducing a new product to these areas with a total marketing campaign to determine consumer response before marketing the product nationally. Page 88 ~ 89

Collecting Data The Data Collection Instrument or, … “getting the info” “Most of the work in Data Collection depends on the use of a good questionnaire” has to ask questions referring to specific objectives should be pre-tested, if it is new, so you can make any changes to the questions Page 89

Sampling Techniques Population (universe) Census Probability Sample Convenience Quota Simple Random Census Nonprobability Sample Judgment Cluster Systematic Technique Page 90

Sampling Techniques Population (universe) the total group that the researcher wants to study Page 90

Sampling Techniques Census if the total group is contacted, the results are known as a census (same term as used when the government does a census to get information on the citizens) Page 90

Sampling Techniques Probability Sample a sample in which every member of the population has a known chance of being selected Page 90

Sampling Techniques Nonprobability Sample a sample chosen in an arbitrary way so that each member of the population does not have a representative chance to be selected. Page 90

Sampling Techniques Convenience Sample a sample chosen in an arbitrary way (a nonprobability sample) so that each member of the population does not have a representative chance to be selected. - BECAUSE they just used readily available respondents/participants eg. “CityTV on the street interviews” Page 90

Sampling Techniques Judgement Sample a nonprobability sample of people with a specific attribute. eg. “CityTV on the street interviews” of people that DO NOT have political party affiliation - to determine how they voted, and who would win the election Page 90

Sampling Techniques Quota Sample a nonprobability sample that is divided so that different segments or groups are represented in the total sample. Page 90

Sampling Techniques Cluster Sample a probability sample that is used in groups used when it is difficult to ask everybody, so they pick some areas and ask everybody in that area (cluster) Page 90

Sampling Techniques Simple Random Sample a probability sample in which everybody has an equal opportunity of being selected. Page 90

Sampling Techniques Systematic Sample every 5th, or every “n”th person is selected. An example is market research people who call every 10th person in the phone book to get an opinion. Page 90

Marketing Information Systems For some companies, market knowledge comes in on a regular basis. Some stuff is “Data”, and some is “Information” Data = statistics, opinions in surveys, facts, predictions etc. Information = data RELEVANT to the Marketing Manager in making decisions Page 91

The most important thing is Marketing Information Systems The most important thing is RELEVANCE Page 91

Marketing Information Systems The best way to get RELEVANT information is to establish a systematic approach and have a planned Marketing Information System Page 91

Marketing Information Systems Defn A set of routine procedures to continuously collect, monitor, and present internal and external information on company performance and opportunities in the marketplace. Page 91

Marketing Information Systems A set of routine procedures - things you do all the time to continuously collect, monitor, - always gathering info and present - give to the boss internal and external information - inside the company, and from primary and secondary sources on company performance - how you are doing and opportunities in the marketplace. Page 91

Figure 5.2 Information Components of a Firm’s MIS Page 92

Marketing Information Systems All of this depends on the ability of the company to use technology to help it be better than the competition