CHAPTER 5: MARKETING RESEARCH Hudson Rogers Florida Gulf Coast University

MARKETING INFORMATION SYSTEM  Marketing has three main sub-systems:  1) Internal Accounting System – provides financial data  2) Marketing Intelligence System – supplies data about what is currently taking place  3) Marketing Research System – formal information gathering and analyzing process

MARKETING RESEARCH  Marketing Research is the systematic design of data collection, analysis, and reporting of data and findings relevant to a specific marketing situation facing the company.

MARKETING RESEARCH PROCESS  1) Define Problem & research objectives.  2) Develop the Research Plan  3) Collect the Information  4) Analyze the Information  5) Present the Findings

CHARACTERISTICS OF GOOD MARKETING RESEARCH  Research may have to overcome many problems chief of which are:  1. Narrow Conception of Marketing Research – some managers view research as act finding without clearly defined problems rather than information gathering  2. Uneven Caliber of Researchers – marketing research is not a clerical activity.  3. Late and Erroneous Results – managers need timely results that are accurate, takes time and money.  4. Intellectual Differences - difference in style between managers and researchers can get in the way

OVERCOMING PROBLEMS  Rely on:  1) The scientific method - helps objectivity  2) Research Creativity – quality of researcher.  3) Use of multiple methods – helps reliability 4) Interdependence of explicit model and data – select data gathering and research model best suited to analyzing the problem.  Consider the cost versus the information when marking marketing research decisions. This is really a trade off.

TYPES OF RESEARCH  Exploratory – you do not have a precise problem formulation or do not know the problem. Mostly qualitative, lacks formal design. Should not be used for decision-making. Secondary data, experts, focus groups  Conclusive Research – These are used for decision making. Does not show cause and effect & you never know all the alternatives. Descriptive (describes characteristics of thing studies), Case History, statistical methods (set objectives, formal design, representative sample, quantitative data gathered and analyzed, reliability).  Causal Research

DATA SOURCES  Secondary Data  Focus Groups  Interviews  Experts  Knowledgeable Persons (Psych Tests) to get at underlying motivations  Surveys (Mail, Telephone, , Mall)  Simulations  Case Histories

DATA COLLECTION  Sampling:  Non-Probability – convenience, quota, snowball, judgment, shopping mall.  Probability – Systematic data collection process: simple random, stratified, cluster, area, multi-stage, proportional

DATA ANALYSIS  Descriptive Analysis  Cross Tabulations  Analysis of Variance (ANOVA)  T-Test  Regression Analysis  Discriminant Analysis

DEMAND MEASUREMENT  Potential Market – set of consumers who indicate a sufficient level of interest to something offered in the marketplace  Available Market – consumers with interest, income, and access to a given product.  Qualified available Market – consumers with interest, income, access and qualification to purchase a given product

DEMAND MEASUREMENT (Cont’d)  Target Market – (served market). Target market is the set of consumers that the firm wishes to go after with its marketing effort.  Penetrated Market – set of consumers actually buying the firm’s product. If not satisfied with current sales, a firm can take actions geared toward affecting the target market, or the potential market.  Market Demand – number of units that will be sold to a defined customer group in geographic area for a defined period of time under a defined marketing program. To modify demand seek to adjust any or all of the “defined” factors on which the total volume is based.

DEMAND MEASUREMENT  1. Market demand  2. Market forecast  3. Market potential  4. Company demand  5. Company sales forecast  6. Company sales potential

ESTIMATING CURRENT DEMAND  Estimating current demand  1. Total market potential  2. Area market potential:  a) Market-buildup method  b) Multiple-factor index method  3. Estimating industry sales and market shares a) a) identifying competitors and estimating their sales

ESTIMATING FUTURE DEMAND  Estimating Future Demand – All forecast are built upon three information bases (1) what people say they will do (2) what people do, and (3) what people have done.

ESTIMATING FUTURE DEMAND (Cont’d)  Five main ways to assess future demand:  1) Survey of Buyer Intentions – determine what buyers are likely to do under certain conditions.  2) Composite of Sales Force Opinion – ask sales representatives to estimate their future sales and sum the individual estimates to arrive at the firms forecast  3) Expert Opinion/Delphi Method – ask the experts what they think  4) Past-Sales Analysis – use time series analysis, statistical demand analysis or econometric analysis to predict.  5) Market Test Method – observing what buyers do in a test market & using information to project to wider market.