Marketing Research

Marketing Research The process of defining a marketing problem and opportunity, systematically collecting and analyzing information, and recommending action.

Uses of Marketing Research Movies Shoeless Joe became Field of Dreams 3000 became Pretty Woman Sneak Previews help with selecting scenes Pocahontas has scenes cut because preview audiences were confused My Best Friend’s Wedding ending changed because preview audiences didn’t like the ending

Marketing Research Helps identify and define things that might be wrong with your product/service Improves the marketing of products/services Is not foolproof Can reduce some risk in marketing decisions

Difficulties in Marketing Research If a researcher asks a “Yes/No” question, that’s all they’re going to get Brand new products have nothing to be compared to Personal questions “Actual Self” vs. “Ideal Self”

Definitions Decision Decision Making Conscious choice from among two or more alternatives Decision Making Act of consciously choosing between alternatives with formal, structured approaches

Marketing Research Approach Step #1: Define Problem Step #2: Develop the Research Plan Step #3: Collect Relevant Information Step #4: Develop Findings Step #5: Take Marketing Actions

Marketing Research Approach

Marketing Research Approach Step 1: Define Problem Fisher-Price Example NY nursery children play with toys in a room with a one-way mirror Watch kids play with various versions of their toy

Marketing Research Approach Step 1: Define Problem Set Research Objectives Marketing objectives must be specific and measurable Examples include increase sales, increase profits, find out consumer wants, find out why your product is selling poorly Fisher-Price objective is to decide to market new phone or not

Marketing Research Approach Step 1: Define Problem Set Research Objectives After objectives are set, you have to decide what kind of research you will complete Kinds of Research Exploratory Research – Can provide ideas about a relatively vague problem (Interview for new ideas) General Mills figured out first version of Hamburger Helper wasn’t well liked by consumers. Interviewed for improvement ideas

Marketing Research Approach Step 1: Define Problem Set Research Objectives Kinds of Research Descriptive Research – The frequency that something occurs or the extent of the relationship between 2 factors How many people buy your product and how many buy competitions product

Marketing Research Approach Step 1: Define Problem Set Research Objectives Causal Research – Most advanced form of research, looks at determining how much the change in one product changes another Changing toy design is related to changes in amount of time kids play with that toy

Marketing Research Approach Step 1: Define Problem Identify Possible Marketing Actions Decision makers create measures of success Criteria or standards used in evaluating proposed solutions to a problem Findings in your research lead to different marketing actions based on measures of success

Marketing Research Approach Step 2: Develop Research Plan Specify Constraints Constraints are restrictions that are placed on potential solutions to a problem Examples are time and money used

Marketing Research Approach Step 2: Develop Research Plan Identify data needed for marketing actions Only focus on information that is relevant to solve this particular problem

Marketing Research Approach Step 2: Develop Research Plan Determine How to Collect Data Concepts in marketing are ideas about products or services In marketing research, new product concepts are a picture or verbal description of a product or service that the firm might offer for sale Chatter Telephone with noisemaker, wheels, eyes

Marketing Research Approach Step 2: Develop Research Plan Determine How to Collect Data Methods are approaches that can be used to collect data to solve all or part of a problem Sampling Statistical Inference

Marketing Research Approach Step 2: Develop Research Plan Determine How to Collect Data Sampling is selecting elements from an entire population that are representative of that population Probability Sampling uses exact rules to select sample so that each element has a specific known chance of being selected Sample is representative of entire population and allows conclusions to be drawn about entire population

Marketing Research Approach Step 2: Develop Research Plan Determine How to Collect Data Nonprobability Sampling uses arbitrary judgements to select samples so that chance of selecting a particular element may be unknown. Allows bias and can be dangerous in research outcome

Marketing Research Approach Step 2: Develop Research Plan Determine How to Collect Data Statistical Inference draws conclusions about the research population from a sample Population is entire group of people that the researchers are wanting to find out information – MTSU students, dog owners, children between ages of 3-4 Sample is a portion of the population

Marketing Research Approach Step 3: Collect Relevant Info. Data are the facts and figures related to a problem Primary data are new facts and figures just collected for problems Secondary data are facts and figures that you already had before working on problem

Marketing Research Approach Step 3: Collect Relevant Info. Secondary Data Secondary data has two components – Internal and External Internal data is what’s already been collected and is stored inside the company Product sales data, customer service logs External data is published outside company Information from U.S. Census Bureau, Nielsen Media Research

Marketing Research Approach Step 3: Collect Relevant Info. Secondary Data Advantages Time saving Low cost More detail than primary data Disadvantages Out of date Categories may not be specific to your project May not be specific enough for your project

Marketing Research Approach Step 3: Collect Relevant Info. Primary Data Also has two components Observing people Asking people questions

Marketing Research Approach Step 3: Collect Relevant Info. Primary Data Observational data is facts and figures obtained by watching how people behave Best Western hotels found women decide when to stop on road trips and where to stay – target more messages to women

Marketing Research Approach Step 3: Collect Relevant Info. Primary Data Questionnaire data are facts and figures obtained by asking people about attitudes, awareness, intentions, and behaviors Try to focus on project at hand

Marketing Research Approach Step 3: Collect Relevant Info. Primary Data Questionnaire data Individual Interviews (research by asking one person a question Focus Groups (groups of 6-10 past, present, or prospective customers) Use moderator to lead discussion Usually recorded One way mirrors Get ideas and concerns because of group discussion, not just answer to question

Marketing Research Approach Step 3: Collect Relevant Info. Primary Data Questionnaire data Unique ways to collect data Results in very basic actions/questions Identify upcoming trends Example is Teenage Research Unlimited. They collect data from 2,000 teens twice a year. They ask what they like, wear, listen to, watch, read. Identifies lifestyles, attitudes, trends, behavior. Directly asks what the teens think are “cool” products.

Marketing Research Approach Step 3: Collect Relevant Info.

Marketing Research Approach Step 3: Collect Relevant Info. Primary Data Questionnaire data Sample includes past, present, and prospective customers Large sample size

Marketing Research Approach Step 3: Collect Relevant Info. Primary Data Questionnaire Data – Types Personal Interviews Mall Intercept Surveys Mail Surveys Telephone Interviews Email, Fax, Internet Surveys

Marketing Research Approach Step 3: Collect Relevant Info. Primary Data

Marketing Research Approach Step 3: Collect Relevant Info. Primary Data A panel is a sample of consumers that researchers take a series of measurements over time Asks panel participants many questions about many various products Conducted by research firm Company can look at this and see how consumers change over time Disadvantage – research firms must replace participants that quit

Marketing Research Approach Step 3: Collect Relevant Info. Primary Data Experiments obtain data by manipulating factors under tightly controlled conditions to test cause and effect Want to see if changing an independent variable (cause) changes the dependent variable that is being studied (the result) Independent variables usually are the marketing mix elements (Ads, coupons) Dependant variable is usually purchase behavior

Marketing Research Approach Step 3: Collect Relevant Info. Primary Data Experiments Test markets offer product in a limited area for a limited time to help decide effectiveness of marketing actions. Wal-Mart opened 3 stand-alone supercenters in 1988 to test market, now has over 1,000 Disadvantage is outside factors

Marketing Research Approach Step 3: Collect Relevant Info. Primary Data Advantages More specific than secondary data Disadvantages More expensive than secondary data More time consuming that secondary data

Marketing Research Approach Step 3: Collect Relevant Info. Data mining Taking “hidden” information from large databases Finds links that may suggest marketing actions Example is Fingerhut magazine People that move are 3 times as likely to buy more “home” products Created special magazine for people that recently moved

Marketing Research Approach Step 4: Develop Findings “Collecting data is like collecting garbage. You’ve got to know what you’re going to do with the stuff before you collect it.” Mark Twain

Marketing Research Approach Step 4: Develop Findings Analyze data collected to see if answers research objectives set in Step #1 Present findings Clear and easily understood Concise

Marketing Research Approach Step 5: Take Marketing Actions Make action recommendations based on research findings Implement the action(s) recommended Evaluate results Determine if the recommended action needs to continue to be effective in the long run Determine if the market research and analysis was effective Always look for improvement