1 MARKETING RESEARCH

2 Introduction to Marketing Research

Because Marketing Research is part of Marketing we should understand: What is marketing? What is the marketing concept? What is marketing strategy? Ch 13

What is Marketing? Marketing has been defined by the AMA as an organizational function and a set of processes for creating, communicating and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders. Ch 14

What is the Marketing Concept? The Marketing Concept is a business philosophy that holds that the key to achieving organizational goals consists of the company’s being more effective than competitors in creating, delivering, and communicating customer value to its chosen markets. Ch 15

What is Marketing Strategy? A Marketing Strategy consists of selecting a segment of the market as the company’s target market and designing the proper “mix” of the product/service, price, promotion, and distribution system to meet the wants and needs of the consumers within the target market. Ch 16

a Restaurant Learning by Doing: Let’s Apply Marketing to a Restaurant Target market segment? Marketing strategy – Location? – Menu? – Prices? – Type? – Advertising? Ch 17

Restaurant Marketing Decisions What if you owned a restaurant located in Austin, Texas near the University of Texas? What would be your marketing strategy? How certain are you that you made the right decisions? Ch 18

Restaurant Marketing Decisions What if the restaurant was located near a university in a foreign country like China, Thailand, Italy, Iceland, or Peru? What would be your decisions? How certain are you that you made the right decisions now? So, what’s going on? Class comments? Ch 19

Key Point To practice marketing; to implement the marketing concepts; to implement marketing strategy, managers must make decisions. Many decisions require additional information and marketing research is needed in order to supply that information. Ch 110

We need Marketing Research to: Make the “right” decisions to Implement marketing Practice the marketing concept and Make the right decisions to select the right marketing strategy Ch 111

What is Marketing Research? (Burns and Bush Definition) Marketing research is the process of designing, gathering, analyzing, and reporting information that may be used to solve a specific marketing problem. Ch 112

What is Marketing Research? AMA definition Marketing research: the function that links the consumer, customer, and public to the marketer through information – information used to identify and define marketing opportunities and problems; generate, refine, and evaluate marketing actions; monitor marketing performance; and improve the understanding of marketing as a process. Ch 113

Market Research vs. Marketing Research Market research: the “systematic gathering, recording, and analyzing of data with respect to a particular market, where ‘market’ refers to a specific group in a specific geographic area.” Ch 114

What is the purpose of Marketing Research? To link the consumer to the marketer by providing information that can be used in making marketing decisions Ch 115

What are the uses of Marketing Research? Identify marketing opportunities and problems Generate, refine, and evaluate potential marketing actions Monitor marketing performance Improve marketing as a process Ch 116

Classifying Marketing Research Studies Identifying marketing opportunities and problems – Market-demand determination – Market segments identification – Marketing audits SWOT analysis Ch 117

Classifying Marketing Research Studies Generating, refining, and evaluating potential marketing actions – Proposed marketing-mix evaluation testing – New-product prototype testing – Advertising pretesting…see Insight Express AdInsight ad pretesting… Ch 118

Classifying Marketing Research Studies Monitoring marketing performance – Image analysis…bank image analysis – Tracking studies...sales, market shares of all brands in our category – Customer satisfaction studies Ch 119

Classifying Marketing Research Studies Improving marketing as a process – The purpose of these studies is to expand knowledge (basic research) of marketing as a process rather than to solve a specific problem facing a company …How does background music affect perceptions of products…How preshopping information affects product returns…Understanding cultural differences in consumer impatience…all in Journal of Marketing. Ch 120

The Marketing Information System An MIS is a structure consisting of people, equipment, and procedures to gather, sort, analyze, evaluate, and distribute needed, timely, and accurate information to marketing decision makers. Ch 121

Components of an MIS Internal Reports System… Accounting information system…data from income statement, etc. Marketing Intelligence System... Information coming from outside the firm… Marketing Decision Support System (DSS)…database with analytical tools Marketing Research System Ch 122

The Marketing Research System has a role in MIS because… It gathers information not gathered by the other MIS component subsystems. Marketing research studies are conducted for a specific situation facing the company. People Magazine study – which of three different cover stories should we use? Marketing research projects unlike other MIS components are not continuous – they have a beginning and an end. Ad hoc studies/Projects Ch 123

Hot Topics in Marketing Research Online Marketing Research Growing Consumer/Respondent Resentment Globalization Ch 124

Hot Topics – Online Marketing Research Online research: the use of computer networks, including the Internet, to assist in any phase of the marketing research process including development of the problem, research design, data gathering, analysis, and report writing and distribution. Ch 125

Hot Topics – Online Marketing Research Web-based research: research that is conducted on web applications; may use traditional methods as well as on-line research methods in conducting research on web- based applications… Usability studies On-line survey research: collection of data using computer networks… Ordering samples online via Survey Sampling, Inc. Ch 126

Hot Topics – Online Marketing Research On-line survey research: collection of data using computer networks… Ordering samples online via Survey Sampling, Inc. Ch 127

Hot Topics – Growing Consumer/ Respondent Resentment Marketing research is invasive. Telemarketers and direct marketers have abused “marketing research.” The government through FTC has instituted a “Do not call” list. The marketing research industry is so far excluded from the ban of the “do not call” regulations. Ch 128

Hot Topics – Globalization As marketing firms spread globally, so did marketing research firms. According to Jack Honomichl, 48% of U.S. marketing research firms’ revenues were generated outside of U.S. The top 25 marketing research firms in the world earn 67% of their revenues outside their own country. Ch 129

Innovative Online Marketing Research Methods

“Over 80% of market researchers in Europe and North America intend to increase their use of online as a research channel over the next six months.” ~ New Media Age

Article Overview Marketing Research: Online, on tap. Marketing Magazine ROI Real-Time Promo Magazine Search for Tomorrow FastCompany Magazine

Marketing Research: Online, on tap. Marketing Magazine

Online Panels: Pros Real Time Results Time and Money Savings Convenient for Consumers More Relaxed Environment – Higher Quality – Honest and Reasoned Responses Access to Target Audiences Unrestricted by Geography

Online Panels: Cons Online Profile vs. General Population Lengthy Questionnaires  Poor Quality Poor Recruitment and Badly Managed Panels  Damaged Data Technical Problems Higher Programming Costs

Online Research in Practice

ROI Real-Time Promo Magazine

Reasons for Marketing Research Measure Impact of Marketing ROI More complex due to integration New methods developed – Digital Promotions

Digital Promotions Research Results Improves ROI 1.Reduces data entry costs 2.Improves data accuracy 3.Saves time 4.Ability to change

Data Collection Ability to Measure Sales & Consumer Behavior Given… – Accurate self-entered data – Ready-for-use databases – Immediacy of real-time results

Search for Tomorrow FastCompany Magazine

Search for Tomorrow Goal of Internet Marketing Research Search-Based Ads; Google & YahooGoogleYahoo Identifying Audiences, Web-surfing Habits Effectively Displaying Ads in Relation to User

Recap: Popular Trends in Online Marketing Research We Discussed the Use Of:  Online Panels  Online Promotions  Search Engines Others Trends:  Online Surveys w/ Incentives  Monitoring of Web-based forums

Key Points  Research is an Essential Part of Marketing.  Don’t Let Yourself or Your Company Fall Behind.

Class Discussion What types of online research have you personally participated in? Do you believe that some research methods are better done in the traditional fashion? Why or why not? In class, we talked about the Richness vs. Reach Trade-Off? Which would you prefer?