Session 2  Marketing Research  Forecasting

Developing the research plan  Data Sources  Primary  Secondary

Developing the research plan  Approaches  Observational  Focus group  Survey  Behavioral Data  Experimental  Technological  Questionnaire

Question types – importance scale Airline food service is _____ to me.  Extremely important  Very important  Somewhat important  Not very important  Not at all important

Question types – rating scale Virgin Atlantic’s food service is _____.  Excellent  Very good  Good  Fair  Poor

Question types – intention to buy scale How likely are you to purchase tickets on Virgin Atlantic if in-flight Internet access were available?  Definitely buy  Probably buy  Not sure  Probably not buy  Definitely not buy

Question types – completely unstructured What is your opinion of Virgin Atlantic?

Question types – word association What is the first word that comes to your mind when you hear the following? Airline ________________________ British _____________________ Travel ________________________

Question types – sentence completion When I choose an airline, the most important consideration in my decision is: __________________________________________ __________________________________________ __________________________________________ __________________________________________ __________________________________________ ______________________________.

Question types – story completion ‘I flew Virgin a few days ago. I noticed that the exterior and interior of the plane had very bright colors. This aroused in me the following thoughts and feelings’. Now complete the story. ____________________________________________ ____________________________________________ ____________________________________________ ____________________________________________ ____________________________________________ ______________

Question types – picture (empty balloons)

Qualitative measures Word association Projective techniques Visualization Brand personification Laddering

Technological devices Galvanometers Tachistoscope Eye cameras Audiometers GPS

Sampling plan  Sampling unit: Who is to be surveyed?  Sample size: How many people should be surveyed?  Sampling procedure: How should the respondents be chosen?

Types of samples Table 6.2 Probability and non-probability samples

Contact methods Mail questionnaire Telephone interview Personal interview Online interview

Pros and cons of online research Advantages  Inexpensive  Fast  Accuracy of data, even for sensitive questions  Versatility Disadvantages  Small samples  Skewed samples  Technological problems  Inconsistencies

1) Scientific method 2) Research creativity 3) Multiple methods 4) Interdependence of models and data 5) Value and cost of information 6) Healthy scepticism 7) Ethical marketing Characteristics of good marketing research

Barriers to the use of marketing research Narrow conception of research Uneven calibre of researchers Poor framing of the problem Late and occasionally erroneous findings Personality and presentational differences

Slide Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1 st Edition © Pearson Education Limited 2009 The measures of market demand Penetrated Market Target Market Available Market Potential Market

Slide Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1 st Edition © Pearson Education Limited 2009  Market demand = total volume that would be bought by a customer group, in a particular time period, in a marketing environment, under marketing program  Market forecast = market demand corresponding to a certain level of marketing expenditure  Primary demand = total volume demanded by customers for a product category  Secondary demand = total volume demanded by customers for a specific brand or product

Slide Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1 st Edition © Pearson Education Limited 2009 Figure 6.4 Market demand functions

Slide Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1 st Edition © Pearson Education Limited 2009 Figure 6.4 Market demand functions (continued)

Slide Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1 st Edition © Pearson Education Limited 2009 Unit vs. Dollar Share in US Razor Blades

Slide Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1 st Edition © Pearson Education Limited 2009 How can we estimate current demand?  Total market potential  Area market potential  Market buildup method Potential buyers x potential purchases  Multiple-factor index method Population, Income, Physicians, Retail sales

Slide Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1 st Edition © Pearson Education Limited 2009 Sales Forecasting vs. Demand Forecasting  Basically interchangeable terms  Sales Forecasts are biased by:  Inventory stock-out (under-estimation of demand)  Promotions (over-estimation of demand) Historical Data Adjustments Sales Forecast

Slide Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1 st Edition © Pearson Education Limited 2009 Demand Forecasting Model

Slide Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1 st Edition © Pearson Education Limited 2009

Slide Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1 st Edition © Pearson Education Limited 2009 Mathematical  Time Series  Exponential Smoothing  Statistical Demand Analysis  Econometric Analysis

Slide Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1 st Edition © Pearson Education Limited 2009 Qualitative Adjustments  Price  Promotions, Events  Trends  Growth Rates  Market Data

Slide Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1 st Edition © Pearson Education Limited 2009 Non-mathmatical  Group discussion (Consensus)  Pooled individual estimates  Delphi technique  Jury of executive opinion  Composite of sales force opinion (Rollup)  Analogy  Customer surveys  Test marketing Judgmental Methods Customer- based Methods

Slide Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1 st Edition © Pearson Education Limited 2009

Slide Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1 st Edition © Pearson Education Limited 2009

Slide Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1 st Edition © Pearson Education Limited 2009

Slide Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1 st Edition © Pearson Education Limited 2009  Look for S Curves  Inflection points  20 years: “Never mistake a clear view for a short distance”  Look for indicators  “The future’s already arrived. It’s just not evenly distributed yet.” William Gibson  Black Swans  What do we really know? Turkey example.  Open Minded, Skeptical, History Jumps

Slide Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1 st Edition © Pearson Education Limited 2009 Black Swan member of the species Cygnus atratus, which remained undocumented until the eighteenth century

Slide Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1 st Edition © Pearson Education Limited 2009 Taleb – The Black Swan  Mediorcistan vs. Extermistan  Average (weight vs. income) of 1000 ppl.  Mistake map for territory  Platonification – overvaluation of factual information and creation of categories  “absence of evidence vs. evidence of absence”  Precisely wrong (narrow model with precise assumptions) or broadly right (across broad set of eventualities)