Essentials of Marketing Research The Nature of Marketing Research Introduction. Marketing research is the systematic and objective process of gathering information that can help a manager make good marketing decisions. In this class we are going to focus on introducing you to the basic framework of marketing research. Talk about, what activities make up Market research, What tools can be used. How do you use these tools and Insights that you can gain from using these tools.

Course Web Page http://www.personal.psu.edu/faculty/jcl12/

The Nature of Marketing Research Marketing research is focused on understanding the market: Links the consumer, customer, and public to the market through information used to identify and define marketing Generates, refines, and evaluates marketing actions Monitors marketing performance Underlines the understanding of marketing as a process The basic idea of market research is to try and understand the market. What are the links between the customer and the market? Given an understanding of the market, what should the firm do? These actions become a refining cycle. Did our actions make a difference? How much of a difference? Which actions helped? The consumer--what do they like, how do they behave? The competition--what are they offering, what is not being offered?

Marketing Research Defined Marketing research is defined as: the systematic and objective process of generating information for aid in making marketing decisions. Figure out what is happening based on good information. Systematic: getting information that accurately reflects the entire market. Objective: have not made up mind before, being willing to be wrong. One of the most challenging tasks of marketing research is marketing your findings. If you get good insight, then how do you convince others? How do you communicate the importance of what you have found?

Marketing Research Defined Marketing research is defined as: the systematic and objective process of generating information for aid in making marketing decisions. This process includes: Figure out what is happening based on good information. Systematic: getting information that accurately reflects the entire market. Objective: have not made up mind before, being willing to be wrong. One of the most challenging tasks of marketing research is marketing your findings. If you get good insight, then how do you convince others? How do you communicate the importance of what you have found?

Marketing Research Defined Marketing research is defined as: the systematic and objective process of generating information for aid in making marketing decisions. This process includes: specifying what information is required; Figure out what is happening based on good information. Systematic: getting information that accurately reflects the entire market. Objective: have not made up mind before, being willing to be wrong. One of the most challenging tasks of marketing research is marketing your findings. If you get good insight, then how do you convince others? How do you communicate the importance of what you have found?

Marketing Research Defined Marketing research is defined as: the systematic and objective process of generating information for aid in making marketing decisions. This process includes: specifying what information is required; designing the method for collecting information; Figure out what is happening based on good information. Systematic: getting information that accurately reflects the entire market. Objective: have not made up mind before, being willing to be wrong. One of the most challenging tasks of marketing research is marketing your findings. If you get good insight, then how do you convince others? How do you communicate the importance of what you have found?

Marketing Research Defined Marketing research is defined as: the systematic and objective process of generating information for aid in making marketing decisions. This process includes: specifying what information is required; designing the method for collecting information; managing and implementing the collection of data; Figure out what is happening based on good information. Systematic: getting information that accurately reflects the entire market. Objective: have not made up mind before, being willing to be wrong. One of the most challenging tasks of marketing research is marketing your findings. If you get good insight, then how do you convince others? How do you communicate the importance of what you have found?

Marketing Research Defined Marketing research is defined as: the systematic and objective process of generating information for aid in making marketing decisions. This process includes: specifying what information is required; designing the method for collecting information; managing and implementing the collection of data; analyzing the results; and Figure out what is happening based on good information. Systematic: getting information that accurately reflects the entire market. Objective: have not made up mind before, being willing to be wrong. One of the most challenging tasks of marketing research is marketing your findings. If you get good insight, then how do you convince others? How do you communicate the importance of what you have found?

Marketing Research Defined Marketing research is defined as: the systematic and objective process of generating information for aid in making marketing decisions. This process includes: specifying what information is required; designing the method for collecting information; managing and implementing the collection of data; analyzing the results; and communicating the findings and their implications. Figure out what is happening based on good information. Systematic: getting information that accurately reflects the entire market. Objective: have not made up mind before, being willing to be wrong. One of the most challenging tasks of marketing research is marketing your findings. If you get good insight, then how do you convince others? How do you communicate the importance of what you have found?

INFORMATION REDUCES UNCERTAINTY Most people don’t like uncertainty. Mom and apple pie == Security. Different approaches: Ignorant and dogmatic Ignorant and freeze up Gain information Systematic, objective Sloppy approach or organized With information, you can see options better. Tell the birth story of Jospeh. Anestesiologiest explained the issue with an epideral. 2 go wrong: 1. Contaminated and emergency back surgury 2.needle tap spinal cord and wake up with a head ace. I needed some market research. Probabilities of occurance. I conducted a small focus group.

Marketing Research Types Basic Research Applied Research Basic research is what most academics work on. We are trying to expand the limits of knowledge. General problem: how do you identify groups of customers who prefer one group of products over another group of products. Applied research focuses on solving a real live problem. For example, given the above problem has been solved, we might want to know which customers prefer our product over other competing products.

SCIENTIFIC METHOD The analysis and interpretation of empirical evidence (facts from observation or experimentation) to confirm or disprove prior conceptions Market research, just like any good research is based on a solid research framework. 1. Guess based on your current knowledge. List of questions that you would like to have answered (hypothesis) 2. Design an experiment or study which will either confirm or disprove your hypothesis. 3. Go back to 1, but using the knowledge that you gained in step 2.

MARKETING CONCEPT CENTRAL IDEA IN MARKETING EVOLVED OVER TIME NOT PRODUCTION-ORIENTED MARKETING-ORIENTED Marketing Concept helps put marketing research in context. The Marketing concept describes what Marketing activities hope to accomplish It is the central idea of Marketing Something that has evolved over time: many people, researchers, and practitioners have contributed to developing this idea. You can benefit from there perspective … what is important and as you learn you may be able to help contribute to this perspective. The central idea is to focus on the market—what the customer wants—not on what you as a company can do. Ability to produce is great, but that should not drive what products and services a company produces, the drive should come from the market.

Marketing Concept Consumer Oriented Long Run Profitability Integrated and Coordinated Effort Goal is to create products that meet consumer’s needs. Need to create something that people want to buy, not just something that you think would be cool. Market research tools can help get inside the consumers mind! (Crisco example Savory Seasonings: Oil fills a consumer need for quick and easy preparation, but can be viewed as a ‘speed-scratch product’ that helps cut down on meal preparation time, yet satisfies their desire for giving a home cooked meal. The Market Research Information: P&G research showed that 72% households still prepare dinner at home nightly and 32% prepare the meal in less than 30 min. (Note this is information but it doesn’t scream out savory seasonings. Pieces of the puzzle.) Another goal is to interact with the customer in such a way that your firm will make money in the long run. This means the goal is not just short-term profit. That you really need to know the needs of consumers and then provide products that meet these needs. With integration is that the entire value proposition needs to be agreed upon by the firm. The basic business model should be understood. The Marketing department helps identify needs, but doesn’t usually develop products—this goes to the R&D group or engineering.

STAGES IN DEVELOPING AND IMPLEMENTING A MARKETING STRATEGY Identifying and evaluating opportunities Analyzing market segments and selecting target markets Planning and implementing a marketing mix Analyzing market performance Identifying opportunities – what makes a market tick. What do people value and is what being currently offered meeting these needs? Market is constantly changing. Analyzing and Selecting target markets – not everyone will like your product, that’s okay. Market research helps identify unmet needs for sub-groups in the population. That is where the opportunity are. What is left is obvious. The marketing mix: the 4 Ps. Product, Price, Placement (Distribution) and Promotion. Product Research – research evaluating and developing new products. Pricing Research – How much will people pay for your product? Can you command a premium? Placement (Distribution) Research – How to get your product in front of your customer? Promotion Research – What is the best way to educate consumers about your product and to entice consumers to give your product a try? Finally, everyone needs to have a regular reality check (that’s why we do grading). A firm’s grade has to do with their market performance – market share, profitability, customer loyalty, …

Marketing Strategy Stage 1. Identifying and Evaluating Opportunities Example of Market Research Mattel Toys investigates desires for play experiences Identifying and Evaluation: Mattel Toys – Desires for play. Research showed that boys likes the idea of Good battling evil – regardless of genera and are not that interested in military, spy themes. Will that change? Will boys always like that? Yes it will change. Pricing research is always done in the competitive context. How much would you pay for this given other prices for competitors? People trade off needs being met with the cost of meeting that need. (European Soccer-personal need, but I’m not willing to pay the price given I can follow it on internet for free and see local games for free). Distribution--Why is Cat treating dealer service as a distribution issue? Service is part of the product offered by Cat and it is provided by dealers. Product--ignoring price how does our product compare with competitors with regards to meeting your needs--here it is a fat/chocolate/sugar fix need. Promotion --did anyone hear you. Did what you say influence their behavior? Market Performance--Issue here is to separate responsibilities. Who should conduct market performance research? It shouldn’t be the person who was in charge of the marketing policy -- that is like asking the student to teach the class, make up the test and then give them selves a grade. It’s not how you view yourself, its how your customers view you!

Marketing Strategy Stage 1. Identifying and Evaluating Opportunities Example of Market Research Mattel Toys investigates desires for play experiences MTV, monitoring demographic trends, learns the Hispanic market is growing rapidly Identifying and Evaluation: Mattel Toys – Desires for play. Research showed that boys likes the idea of Good battling evil – regardless of genera and are not that interested in military, spy themes. Will that change? Will boys always like that? Yes it will change. Pricing research is always done in the competitive context. How much would you pay for this given other prices for competitors? People trade off needs being met with the cost of meeting that need. (European Soccer-personal need, but I’m not willing to pay the price given I can follow it on internet for free and see local games for free). Distribution--Why is Cat treating dealer service as a distribution issue? Service is part of the product offered by Cat and it is provided by dealers. Product--ignoring price how does our product compare with competitors with regards to meeting your needs--here it is a fat/chocolate/sugar fix need. Promotion --did anyone hear you. Did what you say influence their behavior? Market Performance--Issue here is to separate responsibilities. Who should conduct market performance research? It shouldn’t be the person who was in charge of the marketing policy -- that is like asking the student to teach the class, make up the test and then give them selves a grade. It’s not how you view yourself, its how your customers view you!

Marketing Strategy Stage 1. Identifying and Evaluating Opportunities 2. Analyze market Segments and Select Target Markets Example of Market Research Mattel Toys investigates desires for play experiences MTV, monitoring demographic trends, learns the Hispanic market is growing rapidly Cadillac investigates buyers’ demographic characteristics Identifying and Evaluation: Mattel Toys – Desires for play. Research showed that boys likes the idea of Good battling evil – regardless of genera and are not that interested in military, spy themes. Will that change? Will boys always like that? Yes it will change. Pricing research is always done in the competitive context. How much would you pay for this given other prices for competitors? People trade off needs being met with the cost of meeting that need. (European Soccer-personal need, but I’m not willing to pay the price given I can follow it on internet for free and see local games for free). Distribution--Why is Cat treating dealer service as a distribution issue? Service is part of the product offered by Cat and it is provided by dealers. Product--ignoring price how does our product compare with competitors with regards to meeting your needs--here it is a fat/chocolate/sugar fix need. Promotion --did anyone hear you. Did what you say influence their behavior? Market Performance--Issue here is to separate responsibilities. Who should conduct market performance research? It shouldn’t be the person who was in charge of the marketing policy -- that is like asking the student to teach the class, make up the test and then give them selves a grade. It’s not how you view yourself, its how your customers view you!

Marketing Strategy Stage 1. Identifying and Evaluating Opportunities 2. Analyze market Segments and Select Target Markets 3. Plan and Implement a Marketing Mix Example of Market Research Mattel Toys investigates desires for play experiences MTV, monitoring demographic trends, learns the Hispanic market is growing rapidly Cadillac investigates buyers’ demographic characteristics Price: Proctor and Gamble determines price sensitivity for their new Crisco, savory seasons product line. Identifying and Evaluation: Mattel Toys – Desires for play. Research showed that boys likes the idea of Good battling evil – regardless of genera and are not that interested in military, spy themes. Will that change? Will boys always like that? Yes it will change. Pricing research is always done in the competitive context. How much would you pay for this given other prices for competitors? People trade off needs being met with the cost of meeting that need. (European Soccer-personal need, but I’m not willing to pay the price given I can follow it on internet for free and see local games for free). Distribution--Why is Cat treating dealer service as a distribution issue? Service is part of the product offered by Cat and it is provided by dealers. Product--ignoring price how does our product compare with competitors with regards to meeting your needs--here it is a fat/chocolate/sugar fix need. Promotion --did anyone hear you. Did what you say influence their behavior? Market Performance--Issue here is to separate responsibilities. Who should conduct market performance research? It shouldn’t be the person who was in charge of the marketing policy -- that is like asking the student to teach the class, make up the test and then give them selves a grade. It’s not how you view yourself, its how your customers view you!

Marketing Strategy Stage 1. Identifying and Evaluating Opportunities 2. Analyze market Segments and Select Target Markets 3. Plan and Implement a Marketing Mix Example of Market Research Mattel Toys investigates desires for play experiences MTV, monitoring demographic trends, learns the Hispanic market is growing rapidly Cadillac investigates buyers’ demographic characteristics Price: Proctor and Gamble determines price sensitivity for their new Crisco, savory seasons product line. Distribution: Caterpillar Tractor Co. investigates dealer service program. Identifying and Evaluation: Mattel Toys – Desires for play. Research showed that boys likes the idea of Good battling evil – regardless of genera and are not that interested in military, spy themes. Will that change? Will boys always like that? Yes it will change. Pricing research is always done in the competitive context. How much would you pay for this given other prices for competitors? People trade off needs being met with the cost of meeting that need. (European Soccer-personal need, but I’m not willing to pay the price given I can follow it on internet for free and see local games for free). Distribution--Why is Cat treating dealer service as a distribution issue? Service is part of the product offered by Cat and it is provided by dealers. Product--ignoring price how does our product compare with competitors with regards to meeting your needs--here it is a fat/chocolate/sugar fix need. Promotion --did anyone hear you. Did what you say influence their behavior? Market Performance--Issue here is to separate responsibilities. Who should conduct market performance research? It shouldn’t be the person who was in charge of the marketing policy -- that is like asking the student to teach the class, make up the test and then give them selves a grade. It’s not how you view yourself, its how your customers view you!

Marketing Strategy Stage 1. Identifying and Evaluating Opportunities 2. Analyze market Segments and Select Target Markets 3. Plan and Implement a Marketing Mix Example of Market Research Mattel Toys investigates desires for play experiences MTV, monitoring demographic trends, learns the Hispanic market is growing rapidly Cadillac investigates buyers’ demographic characteristics Price: Proctor and Gamble determines price sensitivity for their new Crisco, savory seasons product line. Distribution: Caterpillar Tractor Co. investigates dealer service program. Product: Oreo conducts taste test, Oreo cookie vs. Chips Ahoy Identifying and Evaluation: Mattel Toys – Desires for play. Research showed that boys likes the idea of Good battling evil – regardless of genera and are not that interested in military, spy themes. Will that change? Will boys always like that? Yes it will change. Pricing research is always done in the competitive context. How much would you pay for this given other prices for competitors? People trade off needs being met with the cost of meeting that need. (European Soccer-personal need, but I’m not willing to pay the price given I can follow it on internet for free and see local games for free). Distribution--Why is Cat treating dealer service as a distribution issue? Service is part of the product offered by Cat and it is provided by dealers. Product--ignoring price how does our product compare with competitors with regards to meeting your needs--here it is a fat/chocolate/sugar fix need. Promotion --did anyone hear you. Did what you say influence their behavior? Market Performance--Issue here is to separate responsibilities. Who should conduct market performance research? It shouldn’t be the person who was in charge of the marketing policy -- that is like asking the student to teach the class, make up the test and then give them selves a grade. It’s not how you view yourself, its how your customers view you!

Marketing Strategy Stage 1. Identifying and Evaluating Opportunities 2. Analyze market Segments and Select Target Markets 3. Plan and Implement a Marketing Mix Example of Market Research Mattel Toys investigates desires for play experiences MTV, monitoring demographic trends, learns the Hispanic market is growing rapidly Cadillac investigates buyers’ demographic characteristics Price: Proctor and Gamble determines price sensitivity for their new Crisco, savory seasons product line. Distribution: Caterpillar Tractor Co. investigates dealer service program. Product: Oreo conducts taste test, Oreo cookie vs. Chips Ahoy Promotion: How may consumers recall “Just One Calorie, Diet Coke” Identifying and Evaluation: Mattel Toys – Desires for play. Research showed that boys likes the idea of Good battling evil – regardless of genera and are not that interested in military, spy themes. Will that change? Will boys always like that? Yes it will change. Pricing research is always done in the competitive context. How much would you pay for this given other prices for competitors? People trade off needs being met with the cost of meeting that need. (European Soccer-personal need, but I’m not willing to pay the price given I can follow it on internet for free and see local games for free). Distribution--Why is Cat treating dealer service as a distribution issue? Service is part of the product offered by Cat and it is provided by dealers. Product--ignoring price how does our product compare with competitors with regards to meeting your needs--here it is a fat/chocolate/sugar fix need. Promotion --did anyone hear you. Did what you say influence their behavior? Market Performance--Issue here is to separate responsibilities. Who should conduct market performance research? It shouldn’t be the person who was in charge of the marketing policy -- that is like asking the student to teach the class, make up the test and then give them selves a grade. It’s not how you view yourself, its how your customers view you!

Marketing Strategy Stage 1. Identifying and Evaluating Opportunities 2. Analyze market Segments and Select Target Markets 3. Plan and Implement a Marketing Mix 4. Analyze Marketing Performance Example of Market Research Mattel Toys investigates desires for play experiences MTV, monitoring demographic trends, learns the Hispanic market is growing rapidly Cadillac investigates buyers’ demographic characteristics Price: Proctor and Gamble determines price sensitivity for their new Crisco, savory seasons product line. Distribution: Caterpillar Tractor Co. investigates dealer service program. Product: Oreo conducts taste test, Oreo cookie vs. Chips Ahoy Promotion: How may consumers recall “Just One Calorie, Diet Coke” This year’s market share is compared to last year’s. Identifying and Evaluation: Mattel Toys – Desires for play. Research showed that boys likes the idea of Good battling evil – regardless of genera and are not that interested in military, spy themes. Will that change? Will boys always like that? Yes it will change. Pricing research is always done in the competitive context. How much would you pay for this given other prices for competitors? People trade off needs being met with the cost of meeting that need. (European Soccer-personal need, but I’m not willing to pay the price given I can follow it on internet for free and see local games for free). Distribution--Why is Cat treating dealer service as a distribution issue? Service is part of the product offered by Cat and it is provided by dealers. Product--ignoring price how does our product compare with competitors with regards to meeting your needs--here it is a fat/chocolate/sugar fix need. Promotion --did anyone hear you. Did what you say influence their behavior? Market Performance--Issue here is to separate responsibilities. Who should conduct market performance research? It shouldn’t be the person who was in charge of the marketing policy -- that is like asking the student to teach the class, make up the test and then give them selves a grade. It’s not how you view yourself, its how your customers view you!

PERFORMANCE-MONITORING RESEARCH RESEARCH THAT REGULARLY PROVIDES FEEDBACK FOR EVALUATION AND CONTROL INDICATES THINGS ARE OR ARE NOT GOING AS PLANNED RESEARCH MAY BE REQUIRED TO EXPLAIN WHY SOMETHING “WENT WRONG” Marketing and Business == change! If you don’t like change, don’t go into business. Even with the best market research you will make mistakes. How do you know when something is going wrong? Performance research helps you know when you breakdown. Can include, market share research--profits and sales are up, is that because of a general trend in the industry or because you are doing better than your competition (you will get top marks for doing doing better than the competition). The best grade, however goes to those who identify a new trend and create a product which meets that emerging need (you have a monopoly setting, you can charge a premium and you get a reputation as an innovator--that is something you can take to the bank, or stock market for funding future projects). When things go wrong--find out why. You will typically find an opportunity while you are digging.

Restaurant Market Research? (page 17, question 7) The owner of 22 restaurants was asked how he does marketing research. He answered that he does it after driving around in a pickup truck at midnight: “I stay up late. If it’s midnight and I don’t have anything else to do, I drive around town and look at the lines in front of places. I’ll look at the trash and see if a guy’s not doing any business. I find out a lot by talking to my vendors. I ask the bread guy how many boxes of buns the drive-in down the street is buying. Very few restaurateurs do that. But that’s the way I research my market.”

Discussion Points Is that market research? What types of questions will his research help him answer? How could he improve his marketing research efforts? The owner is collecting data. He is observing facts. He is not using a systematic process to summarize these facts or to answer a particular question. This approach has many pitfalls because it does not follow the scientific method. Is his approach objective? (Yes fact finding). Is it systematic? (No). Is he following the scientific method? What type of research is he engaged in? (Identifying opportunities? Analyzing segments and target markets? Marketing Mix research (Product, Pricing, Promotion, Placement?)? Market Performance--probably this more than anything else?) Will this help him understand the needs of the consumers? Will it help him provide a service which has long term benefit? Why is he going about it in such a backwards way? Eunatarpaunre syndrome, can’t give up control. Won’t delegate or pay enough to hire people who he can delegate to.

Determining When to Conduct Marketing Research Time Constraints Availability of Data Nature of the Decision Benefits vs. Costs Is sufficient time available before a managerial decision must be made? Is the information already on hand inadequate for making the decision? Is the decision of considerable strategic or tactical importance? Does the value of the research information exceed the cost of conducting research? Conducting Marketing Research Yes Yes Yes Yes No No No No Do Not Conduct Marketing Research Do you always want to do Market Research? How much Market Research Should you do if you are going to do it? Size depends on the importance of the task. If it is a big deal, then sweat the details. Friends locally work in real-estate. Have property, have recognized a niche market need--seeing prices paid for renting a venue for events like weddings, … they figure they can build a lodge on property they own and make a nice return. That is probably all the market research that they need to carry out. If the task is more involved, here are some criteria that you can use to help make the decision of how much market research you should engage in. Cost Benefit analysis are always based on assumptions. What is the benefit? Don’t know really, if you did you wouldn’t need to do the research. This is where expert knowledge becomes very important--have to know your industry or work with someone who does. Your prior belief of the value of doing the research has to be larger than your prior belief of the cost.

Potential value of a marketing research effort should exceed its estimated costs Costs Value Value--Peace of mind that you are doing something that makes sense, given the current data. Better data will also help you eliminate obvious mistakes -- mistakes which are obvious once you have more knowledge. Better performance--you can set better prices (charging a premium where possible), better distribution (in front of your clients more often), better promotion--find out what people want and tell them how your product meets that need. Finally, you may be able to hit the big one and find a new emerging or overlooked need. Costs--the direct costs; the cost of the delay, loosing the first mover advantage--MS Windows and O/S2 form IBM. IBM signaled early and said well get a great product--need was there Apple had pointed it out, but priced themselves out of the market--MS said lets get something out that may be junk but it meets the basic need--first mover--how many have ever used O/S2. Chance that you muff the research. That is why you need to sweat the details when you are making a discussion. Won’t always count, but every now and then you’ll get clobbered if you don’t.

Potential value of a marketing research effort should exceed its estimated costs Costs Value Decreased Certainty Value--Peace of mind that you are doing something that makes sense, given the current data. Better data will also help you eliminate obvious mistakes -- mistakes which are obvious once you have more knowledge. Better performance--you can set better prices (charging a premium where possible), better distribution (in front of your clients more often), better promotion--find out what people want and tell them how your product meets that need. Finally, you may be able to hit the big one and find a new emerging or overlooked need. Costs--the direct costs; the cost of the delay, loosing the first mover advantage--MS Windows and O/S2 form IBM. IBM signaled early and said well get a great product--need was there Apple had pointed it out, but priced themselves out of the market--MS said lets get something out that may be junk but it meets the basic need--first mover--how many have ever used O/S2. Chance that you muff the research. That is why you need to sweat the details when you are making a discussion. Won’t always count, but every now and then you’ll get clobbered if you don’t.

Potential value of a marketing research effort should exceed its estimated costs Costs Value Decreased Certainty Increased Likelihood of a Correct Decision Value--Peace of mind that you are doing something that makes sense, given the current data. Better data will also help you eliminate obvious mistakes -- mistakes which are obvious once you have more knowledge. Better performance--you can set better prices (charging a premium where possible), better distribution (in front of your clients more often), better promotion--find out what people want and tell them how your product meets that need. Finally, you may be able to hit the big one and find a new emerging or overlooked need. Costs--the direct costs; the cost of the delay, loosing the first mover advantage--MS Windows and O/S2 form IBM. IBM signaled early and said well get a great product--need was there Apple had pointed it out, but priced themselves out of the market--MS said lets get something out that may be junk but it meets the basic need--first mover--how many have ever used O/S2. Chance that you muff the research. That is why you need to sweat the details when you are making a discussion. Won’t always count, but every now and then you’ll get clobbered if you don’t.

Potential value of a marketing research effort should exceed its estimated costs Costs Value Decreased Certainty Increased Likelihood of a Correct Decision Improved Marketing Performance and Resulting Higher Profits Value--Peace of mind that you are doing something that makes sense, given the current data. Better data will also help you eliminate obvious mistakes -- mistakes which are obvious once you have more knowledge. Better performance--you can set better prices (charging a premium where possible), better distribution (in front of your clients more often), better promotion--find out what people want and tell them how your product meets that need. Finally, you may be able to hit the big one and find a new emerging or overlooked need. Costs--the direct costs; the cost of the delay, loosing the first mover advantage--MS Windows and O/S2 form IBM. IBM signaled early and said well get a great product--need was there Apple had pointed it out, but priced themselves out of the market--MS said lets get something out that may be junk but it meets the basic need--first mover--how many have ever used O/S2. Chance that you muff the research. That is why you need to sweat the details when you are making a discussion. Won’t always count, but every now and then you’ll get clobbered if you don’t.

Potential value of a marketing research effort should exceed its estimated costs Costs Value Decreased Certainty Increased Likelihood of a Correct Decision Improved Marketing Performance and Resulting Higher Profits Identifying new trends or niche markets Value--Peace of mind that you are doing something that makes sense, given the current data. Better data will also help you eliminate obvious mistakes -- mistakes which are obvious once you have more knowledge. Better performance--you can set better prices (charging a premium where possible), better distribution (in front of your clients more often), better promotion--find out what people want and tell them how your product meets that need. Finally, you may be able to hit the big one and find a new emerging or overlooked need. Costs--the direct costs; the cost of the delay, loosing the first mover advantage--MS Windows and O/S2 form IBM. IBM signaled early and said well get a great product--need was there Apple had pointed it out, but priced themselves out of the market--MS said lets get something out that may be junk but it meets the basic need--first mover--how many have ever used O/S2. Chance that you muff the research. That is why you need to sweat the details when you are making a discussion. Won’t always count, but every now and then you’ll get clobbered if you don’t.

Potential value of a marketing research effort should exceed its estimated costs Costs Value Research Expenditures Decreased Certainty Increased Likelihood of a Correct Decision Improved Marketing Performance and Resulting Higher Profits Identifying new trends or niche markets Value--Peace of mind that you are doing something that makes sense, given the current data. Better data will also help you eliminate obvious mistakes -- mistakes which are obvious once you have more knowledge. Better performance--you can set better prices (charging a premium where possible), better distribution (in front of your clients more often), better promotion--find out what people want and tell them how your product meets that need. Finally, you may be able to hit the big one and find a new emerging or overlooked need. Costs--the direct costs; the cost of the delay, loosing the first mover advantage--MS Windows and O/S2 form IBM. IBM signaled early and said well get a great product--need was there Apple had pointed it out, but priced themselves out of the market--MS said lets get something out that may be junk but it meets the basic need--first mover--how many have ever used O/S2. Chance that you muff the research. That is why you need to sweat the details when you are making a discussion. Won’t always count, but every now and then you’ll get clobbered if you don’t.

Potential value of a marketing research effort should exceed its estimated costs Costs Value Research Expenditures Delay of Marketing Decision and Possible Disclosure of Information to Rivals Decreased Certainty Increased Likelihood of a Correct Decision Improved Marketing Performance and Resulting Higher Profits Identifying new trends or niche markets Value--Peace of mind that you are doing something that makes sense, given the current data. Better data will also help you eliminate obvious mistakes -- mistakes which are obvious once you have more knowledge. Better performance--you can set better prices (charging a premium where possible), better distribution (in front of your clients more often), better promotion--find out what people want and tell them how your product meets that need. Finally, you may be able to hit the big one and find a new emerging or overlooked need. Costs--the direct costs; the cost of the delay, loosing the first mover advantage--MS Windows and O/S2 form IBM. IBM signaled early and said well get a great product--need was there Apple had pointed it out, but priced themselves out of the market--MS said lets get something out that may be junk but it meets the basic need--first mover--how many have ever used O/S2. Chance that you muff the research. That is why you need to sweat the details when you are making a discussion. Won’t always count, but every now and then you’ll get clobbered if you don’t.

Potential value of a marketing research effort should exceed its estimated costs Costs Value Research Expenditures Delay of Marketing Decision and Possible Disclosure of Information to Rivals Possible Erroneous Research Results Decreased Certainty Increased Likelihood of a Correct Decision Improved Marketing Performance and Resulting Higher Profits Identifying new trends or niche markets Value--Peace of mind that you are doing something that makes sense, given the current data. Better data will also help you eliminate obvious mistakes -- mistakes which are obvious once you have more knowledge. Better performance--you can set better prices (charging a premium where possible), better distribution (in front of your clients more often), better promotion--find out what people want and tell them how your product meets that need. Finally, you may be able to hit the big one and find a new emerging or overlooked need. Costs--the direct costs; the cost of the delay, loosing the first mover advantage--MS Windows and O/S2 form IBM. IBM signaled early and said well get a great product--need was there Apple had pointed it out, but priced themselves out of the market--MS said lets get something out that may be junk but it meets the basic need--first mover--how many have ever used O/S2. Chance that you muff the research. That is why you need to sweat the details when you are making a discussion. Won’t always count, but every now and then you’ll get clobbered if you don’t.

Porsche Case Study (see page 18) After selling a record 30,000 automobiles in the United States in 1986, Porsche saw its sales begin to decline, reaching a low of approximately 4,000 in 1993. During the 1980s, the price of a Porsche 911 Carrera coupe was less than the average U.S. household’s annual income. But in 1993, the price was about 25 percent more because of the strength of the deutsche mark and a luxury tax passed by Congress. However, after conducting marketing research to learn which market segments were prime customers, Porsche Cars North America found out that a higher price was not the only thing that had gone wrong.

The research showed that the demographics of Porsche owners were utterly predictable: a 40-year-old male college graduate with an income of over $200,000 a year. The psycographics, however, were another aspect of the company’s marketing problem. The categories of Porsche owners are given below

The research showed that the demographics of Porsche owners were utterly predictable: a 40-year-old male college graduate with an income of over $200,000 a year. The psycographics, however, were another aspect of the company’s marketing problem. The categories of Porsche owners are given below

The research showed that the demographics of Porsche owners were utterly predictable: a 40-year-old male college graduate with an income of over $200,000 a year. The psycographics, however, were another aspect of the company’s marketing problem. The categories of Porsche owners are given below

The research showed that the demographics of Porsche owners were utterly predictable: a 40-year-old male college graduate with an income of over $200,000 a year. The psycographics, however, were another aspect of the company’s marketing problem. The categories of Porsche owners are given below

The research showed that the demographics of Porsche owners were utterly predictable: a 40-year-old male college graduate with an income of over $200,000 a year. The psycographics, however, were another aspect of the company’s marketing problem. The categories of Porsche owners are given below

Discussion Points What type of market research led to these findings? What are demographics? What are psycographics? How would you measure these? What additional information would Porsche need in order improve sales? Was it identifying and evaluating opportunities?. Was it market segmentation and targeting? Was it marketing mix information? Was it marketing performance? Demographics: tends to summarizes external information about a person—e.g. race, gender, religion, age, education level, income. Psycographics: tend to summarizes a persons values, how they perceive themselves—e.g. prestige, security/feeling safe, excitement, notoriety, anonymity, … More importantly, many people have similar common values, it is important to help them determine how they rank or prioritize these different values. Need some distribution and promotional information, also some pricing information. How to reach these different segments and how to sell to them. Make show room comfortable for all of these personalities. Some pricing/demand assessment is needed.