foundations of Chapter M A R K E T I N G Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Obtaining Data for Marketing Decisions 7

Chapter Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Objectives 1.Describe the development and current status of the marketing research functions. 2.Present the steps of the marketing research process. 3.Discuss the nature and source of primary and secondary data. 4.Outline the methods of collecting survey data. 5.Discuss the nature of marketing information systems, and relate them to the marketing research function. 7 Obtaining Data for Marketing Decisions 7-1

Chapter Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Marketing Research The systematic gathering, recording, and analyzing of data about problems relating to the marketing of goods and services. Obtaining Data for Marketing Decisions 7 7-2

Chapter Copyright © 2003 by Nelson, a division of Thomson Canada Limited. The Marketing Research Process Obtaining Data for Marketing Decisions 7 Figure 7.1 Collect secondary data Design sample and collect data Determine the data collection method and forms Receive feedback on research and decision effectiveness Collect primary data; observations, surveys, experiments Develop the research design Formulate the problem do exploratory research formulate hypotheses Information is perceived Interpret and present information Make decision in response to the information need 7-3

Chapter Copyright © 2003 by Nelson, a division of Thomson Canada Limited. 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). Obtaining Data for Marketing Decisions 7 7-4

Chapter Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Topics for the Exploratory Analysis (1 of 4) Obtaining Data for Marketing Decisions 7 Table a The Company and Industry Company objectives The companies in the industry (size, financial power) and the industry trends Geographic locations of the industry The company’s market share as compared with the competitor’s Marketing policies of competitors

Chapter Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Topics for the Exploratory Analysis (2 of 4) Obtaining Data for Marketing Decisions 7 Table b The Market Products Geographic location Demographic characteristics of the market Purchase motivations Product-use patterns Nature of demand Physical characteristics Consumer acceptance-- strengths and weaknesses Package as a container and as a promotional device Manufacturing processes, production capacity. Closeness and availability of substitute products.

Chapter Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Topics for the Exploratory Analysis (3 of 4) Obtaining Data for Marketing Decisions 7 Table c Market Channels Sales Organization Channels employed and recent trends Channel policy Margins for resellers Market coverage Sales analysis by number of accounts per salesperson, size of account, type of account,etc. Expense ratios for various territories, types of product, size of accounts, etc. Control procedures Compensation methods

Chapter Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Topics for the Exploratory Analysis (4 of 4) Obtaining Data for Marketing Decisions 7 Table d Pricing Advertising and sales promotion Elasticity Season or special promotional price cuts Profit margins of resellers Legal restrictions Price lines Media employed Dollar expenditures as compared with competitor’s Timing of advertising Sales promotional materials provided for resellers Results from previous advertising and sales promotional campaigns.

Chapter Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Hypothesis A tentative explanation about the relationship between variables as a starting point for further testing. Obtaining Data for Marketing Decisions 7 7-6

Chapter Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Research Design A series of advance decisions that, taken together, make up a master plan or model for conducting the investigation. Obtaining Data for Marketing Decisions 7 7-7

Chapter Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Data Collection Primary Data Data being collected for the first time. Secondary Data Previously published matter. Obtaining Data for Marketing Decisions 7 7-8

Chapter Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Advantages of Secondary Data Less expensive Faster and easier to obtain Obtaining Data for Marketing Decisions 7 7-9

Chapter Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Limitations of Secondary Data Obsolete Fit Obtaining Data for Marketing Decisions

Chapter Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Collecting Primary Data 1.Observation 2.Survey Telephone interviews Self-completed surveys Personal interviews 3.Controlled Experiment Obtaining Data for Marketing Decisions

Chapter Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Test Marketing Selecting 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. Obtaining Data for Marketing Decisions

Chapter Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Sampling Techniques Population (Universe) Probability Sample Convenience Sample Quota Sample Simple Random Sample Obtaining Data for Marketing Decisions 7 Census Nonprobability Sample Judgement Sample Cluster Sample Systematic Sample 7-13

Chapter Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Population or Universe The total group that the researchers wants to study. Obtaining Data for Marketing Decisions

Chapter Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Census A collection of marketing data from all possible sources. Obtaining Data for Marketing Decisions

Chapter Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Probability Sample A sample in which every member of the population has known chance of being selected. Obtaining Data for Marketing Decisions

Chapter Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Nonprobability Sample A sample chosen in an arbitrary fashion so that each member of the population dose not have a representative chance of being selected. Obtaining Data for Marketing Decisions

Chapter Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Convenience Sample A non-probability sample base on the selection of readily available respondents. Obtaining Data for Marketing Decisions

Chapter Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Judgement Sample A non-probability sample of people with a specific attribute. Obtaining Data for Marketing Decisions

Chapter Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Quota Sample A non-probability sample that is divided so that different segments or groups are represented in the sample. Obtaining Data for Marketing Decisions

Chapter Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Cluster Sample A probability sample that is generated by randomly choosing one or more areas or population clusters and then surveying all members in the chosen cluster(s). Obtaining Data for Marketing Decisions

Chapter Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Simple Random Sample A probability sample in which every item in the relevant universe has an equal opportunity of being selected. Obtaining Data for Marketing Decisions

Chapter Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Systematic Sample A probability sample that takes every nth item on a list, after a random start. Obtaining Data for Marketing Decisions

Chapter Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Marketing Information System A set of routine procedures to continuously collect, monitor, and present internal and external information on company performance and opportunities in the marketplace. Obtaining Data for Marketing Decisions

Chapter Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Information components of a Firm’s MIS Obtaining Data for Marketing Decisions 7 Figure Sales analysis Cost analysis Financial records Purchase of syndicated Commercial data Marketing research studies by the MR department Secondary data Internal External Information