3.  Consumers have many choices when it comes to spending their discretionary income.  Sports and entertainment businesses compete to gain a share of the total potential market.  To gain market share, businesses must obtain customer’s wants and needs.  Marketing research is conducted to gather and identify solutions to marketing problems.

4. W HO IS B UYING ? Developing a product or service can be an expensive undertaking. (Ex: the average film costs well over $100 million to make) Smart investors want marketing information about what consumers want to view and the public’s opinion of a celebrity before they invest. Research conducted by an independent company and then offered for sale to everyone in and industry is called syndicated research.

5. Engaging Customers Polls are surveys of people’s opinions. ◦The Gallup Organization is an international marketing research firm that uses special software to conduct polls. ◦The info is used to help client companies move customers beyond just being satisfied with the product or service to being totally engaged with the company’s product and service. ◦Engaged customers are repeat customers who are completely loyal to the company’s products and services.  It is five times as expensive to attract the business of new customers as it is to retain the loyalty of current customers.

6. Careers in Marketing Research Marketing Research Firms  According to the U.S. Department of Labor, the number of careers in marketing research will increase by 18 to 26 percent through 2014, faster than the average for other occupations.  Most live in large cities with advanced college degrees.  Researchers like to explore new ideas and look for trends.  Generally begin as entry-level associates who assist with conducting surveys and compiling reports based on collected data.  When staff researchers work with external research agencies, they are referred to as client-side researchers, because they are employees of the client.  Example: ACNielsen is most known for its TV audience ratings, but has a number of divisions.

8. Steps in Marketing Research When information is gathered that is very specifically focused on a single target market, it is referred to as market research rather than the broader topic – marketing research. Marketing research may involve market research, but it is a process that can be applied to a number of marketing problems. EX: Univision (Spanish TV network) has ads where they quote statistics about the tremendous spending power of Hispanics in the U.S. They state that Hispanics are 70% more likely to buy a product advertised in Spanish. Univision is using ACNielsen marketing research data collected to show business why they should advertise on Univision.

9.  Marketing research is a problem-solving tool that helps focus decision making. The process, which must be ongoing, repeated frequently, and revised often, involves seven steps 1. Discover and define the problem 2. Analyze current conditions 3. Develop the process for data collection 4. Collect the data 5. Analyze and report the data 6. Determine a solution to the problem 7. Implement and evaluate the results

10.  1. Discover and Define the Problem Marketing research is planned around the need to make a decision that will solve a problem. The research that needs to be conducted is defined by the decision or problem that needs to be resolved. Three degrees of research related to problem definition. 1.Exploratory research 2.Descriptive Research 3.Casual Research

11. Steps in Marketing Research  Exploratory Research is conducted when a business is unaware of the exact problem.  For Example, fewer people are watching a TV show but the network does not know why.  Exploratory research can include desk research where reports of other completed research are used to help define the problem.  Exploratory research is expected to lead to further research once the problem is defined.

12. Steps in Marketing Research  Descriptive Research is used when the business is aware of the problem that needs to be solved.  For example, if a group wants to start a new pro soccer team, it needs to know if there will be a sufficient fan base to support the team.

13.  Casual research is used to determine cause- and-effect relationships when the problem si already clearly defined.  For example, if a sports team’s marketing department does not know which of two team logos and colors will motivate fans to buy more team merchandise, research can help determine the effect of each alternative.

14.  2. Analyze Current Conditions › Analysis might include examining sales volume and customer data to understand current conditions.  If sales of merchandise related to team uniforms and logos have slowed while season ticket sales are high, the team may need to take a look at changing the uniform  If team merchandise sales are very high, a change might slow sales.

15.  3. Develop the Process for Data Collection  There are a number of ways to conduct marketing research, including observation and conducting a survey.  When trying to decide whether to switch team uniforms, the marketers could have the team wear each of the uniforms for one-half of the game and observe the fan’s reactions.  Another method would be to develop a written survey and ask fans to respond.  The most effective way to gather information about current and potential customers is through personal interviews where fans can actually look at samples of the uniforms and merchandise, but it is also a very expensive and slow process.  The Internet can be a more efficient way to conduct a survey and can include photographs of players wearing uniforms.  Questions must be carefully worded to assure that the answers will be valid and will provide the needed information.

16.  4. Collect the Data › Using e-mail to contact season ticket holders and obtain their opinion about the uniforms could be an effective method of collecting data. › Since it is impossible to contact every member of the potential market, a sample, or small number representative of the large group, Is contacted during the data collection phase. › Ideally, the questions asked will be carefully worded to clearly define the problem, be easy for the respondent to answer in a short time, and be formatted so that responses can be electronically complied as they are submitted.

17.  5. Analyze and Report the Data After the responses are electronically compiled, the researchers will look for patterns in the data and draw conclusions based on those patterns. For example, the data could reveal that 75% of respondents chose uniform number two. Most research is more complex and may involve thousands of bits of information. Important data could include which styles, sizes, and colors sold best and at which price points.  Price points are the range of prices charged for a category of merchandise.  Noticing which price points sell best will provide insight on what customers want and the limits on what they are willing to spend.

18. Steps in Marketing Research Sorting thousands of bits of data and making sense of it can be tedious and time consuming. Spreadsheet and database software programs are used to sort the data and place it into graphic representations such as charts.

19. Steps in Marketing Research 6. Determine a Solution to the Problem Based on the conclusions from the data, recommendations will be made to change the current conditions, such as the style of uniforms, price of the merchandise or the distribution channels used for merchandise sales.

20.  7. Implement and Evaluate the Results  Finally, the company must implement the changes and then determine whether they actually result in an effective solution to the problem.  If concerns are uncovered, marketers may need to revisit some steps in the marketing research process.

21.  Research Sophistication In some businesses, gut feeling and intuition are used in decision making. In others, research is valued and actively used as a decision-making tool. Most companies fall somewhere in-between. Marketing managers need to develop a high level of knowledge about what makes good research and the harm that can come from making decisions based on poor research. The level to which the company has embraced the marketing concept (long-term customer relationships) and its knowledge about research will determine the place of marketing research in the company.

22.  Reducing Conflict › The potential exists for managers to want to “shoot the messenger” if marketing research shows that customers are not happy with the product or service. › To reduce the chances of conflict, marketing researchers must learn about all of the marketing functions.

23. The Human Factor  Ethical Research  Marketing researchers must maintain high ethical standards and report information accurately and objectively.  Conducting fake or biased research and reporting only what the client wants to hear is an example of unethical and perhaps illegal activity.  The American Marketing Association has a code of ethics that outlines the principles of ethical practice of marketing research and the obligation to protect the consumer from “misrepresentation and exploitation under the guise of research.”

24.  What’s in It For Me? While people are often reluctant to answer personal questions, they frequently supply the information in return for something they want. For example, sometimes moviegoers receive a discount card for future savings in return for filling out information on a sign up form. The movie theater then gains demographic information about their customers.

25. The Human Factor Worldwide Data  Billions of people in more than 200 countries around the world watched or listened to the most recent World Cup matches.  Potential customers can be lost forever because of a lack of information about their wants and needs.  For a company to grow, marketing information must be used to make effective decisions to shape product and service offerings for global customers.

27.  The information gathered through marketing research can be very valuable to businesses, but it must be collected, stored, and analyzed before it is of use.  If data is inaccurate, then the reports and decisions based on them will be of poor quality.

28.  Data Mining  The use of powerful computers to “dig up” data needed to make decisions (called data mining) is part of marketing research.  Businesses use data mining to understand their customers.  ACNielsen’s research is generally based on actions rather than opinions, and the input, storage and analysis is done electronically.

29. C OLLECTION OF D ATA Cookies Anyone? Nielsen households serve voluntarily as part of the sample, but personal data are often collected from consumers when they are not even aware that it is happening. Electronic marketers gather information about visitors to their web sites through the use of cookies. A cookie is a small data file that is placed on the hard rive of a web site visitor that collects and reports data on where visitors go within the site, which ads they view and click on, where they clicked from to get to he site, and so forth. Knowing customers’ interests and habits allows companies to better focus on what customers want.

30. Collection of Data  Consumer Privacy The protection of customers’ privacy and their right to know how their personal information is being used are key issues being addressed by industry and federal legislation. Security of credit card information is a major concern.

31.  Ranking the Ads  Internet sites like Google are search engines that help users find relevant web sites at no cost to the user.  Google is funded by sponsors that advertise on the site.  Google ranks advertisements based on the amount companies are paying for the ads and based on data collected by Google.  A click-through rate is determined by dividing the number of times an ad is clicked on by the number of times an ad is shown.  The effectiveness of the ad is immediately known and the more effective ads are moved to the top of the page.