2. Chapter 2 Marketing research

3. After going through this chapter, you should be able to:  Explain the role marketing research plays in decision-making in the hospitality industry  Identify sources of marketing information available to hospitality organizations  Define secondary and primary data collection  Explain the differences between qualitative and quantitative research methods  Recognize how bias and sampling errors can distort marketing research findings  Describe how hospitality organizations conduct online research.

4.  Managers are paid to make decisions.  The purpose of marketing research is to inform and improve decision-making by reducing uncertainty.  Marketing research can be defined as the systematic gathering and analysis of data to provide relevant information to aid decision-making.  Marketing research is a planned process.  Market research describes the investigation of consumer and organizational markets  Marketing research includes research into all the marketing mix variables and the macro (PESTE) and micro- environments.

5. Presents unique problems because of the cultural and technological differences between countries:  Translation difficulties  Variations in customer behaviour because of different cultural backgrounds  Variations in customers’ product knowledge  Difficulties in obtaining comparable samples  Different cultural responses to market research surveys  Differences in the infrastructure

6.  Hospitality managers need relevant, accurate, current and reliable information to be able to make effective decisions that will influence the future of the business.  Small, single-unit, owner-operated companies rely on informal approaches to data collection and interpretation.  Larger organizations need to develop more sophisticated marketing information systems to ensure that corporate executives understand complex environment  The marketing information system helps marketers to identify trends and plan for the future

7. The hospitality marketing information system

8.  Internal information is held by the organization  Accommodation businesses hold a wealth of information about customers because of legal requirements  Information sources include:  Customer records  Guest history  Departmental reports  Marketing and sales reports

9. External information can be collected via the Internet and publications including:  International and national government organizations  Marketing research organizations  Publicly quoted companies “Annual Accounts”  Trade associations  Hospitality industry trade press  Financial press  Universities and academic publishers

10.  Secondary (desk) data are data that have already been collected  It is relatively easy to obtain secondary data since the information has already been published  Limitations to secondary data include:  data have been collected and analysed by another organization  some organizations may deliberately manipulate data  other organizations may have inadvertently introduced bias  information is generally available to competitors  secondary data and analysis can often be ‘dated’ because of the long time between carrying out the research and publishing  the findings

11.  Primary data consist of original information collected by an organization for a specific purpose.  The data have not been published before.  The organization conducting or commissioning the research determines the research objectives and research questions.  Data are collected directly to provide answers to those questions.  Primary research is usually more costly than the secondary research.  Advantages of primary research include the following:  The ability to frame the research questions to the needs of the organization  Research is current and not dated  Research is confidential  Primary data can enable a hospitality company to gain competitive advantage if competitors are not carrying out similar research.

12.  Qualitative research aims to provide a deep understanding of people’s contextualized behaviour  It aims to explain how and why people behave in certain ways  Qualitative research in hospitality uses:  Observation  in-depth interviews,  focus groups (also known as group discussions)  qualitative questions in surveys

13.  Quantitative research uses a wide range of methods to obtain and analyse numerical data  Quantitative research counts numbers, in terms of either volume or value. For example:  the number of customers, passengers, residents, diners, room nights, room occupancy;  restaurant unit’s sales; or a hotel chain’s room sales.  If data are numeric then the research is quantitative

14.  Quantitative research techniques are founded upon statistical theory  Correct statistical methods are required to reduce possible error and bias  Possible errors include:  Sampling errors  Respondent errors  Investigator errors  Administrative errors  In large surveys, statistical software packages are used to process the quantitative research data.

15.  exit surveys  mystery customer audits  telephone (including mobile phone) surveys  online surveys  omnibus surveys.

16.  Closed questions provide a number of alternative answers from which the respondent chooses one answer, for example questions about:  respondent’s age, sex, employment, income  Closed questions use a structured format which creates a data set that can be efficiently analysed using statistical methods.  Closed questions are essential if a quantitative research method is used  Open-ended questions allow respondents to provide their own answers,  Examples include ‘Where would you stay tonight if this hotel was fully booked?’ and ‘How did you feel about the quality of service?’  Open question allows respondents to use their own words to describe their experience, feelings and opinions.  Qualitative research findings using open questions provide ‘rich’ data  Researchers usually ask a combination of both closed and open questions and combine qualitative and quantitative analysis. Compare Le Meridien and Malmaison in-room customer questionnaires

17. Le Meridien customer questionnaire

18. Le Meridien customer questionnaire (2)

19. Malmaison comment card

20. There are six steps in the marketing research process:  Formulation of research objectives  Development of a research plan  Data collection  Data analysis  Assess the reliability and validity of data  Presentation of findings

21.  Advantages of online research include:  significant cost savings in the design and administration of questionnaires and discussion groups  the ability to accurately target surveys to current, former or potential customers.  Often, customers are incentivized to participate in online surveys  Post- consumption e-surveys provide customers with a convenient tool to give feedback on service quality and customer satisfaction.  Tools such as blogs and social networking sites are useful to obtain unsolicited such for customer- generated comment  The Internet is available to all sizes of hospitality companies.

22.  Academics and practitioners have criticized modern marketing research for a number of reasons  The focus on collecting data and performing statistical analysis, which does not provide new insights for the business or inform decision-making  Flawed marketing research methodologies that introduce unacceptable levels of bias or error  The emphasis on research stifles creativity in marketing  Despite these criticisms, major hospitality companies recognize the importance of marketing research and carry out extensive customer and competitor research on a continuous basis

23.  Altinay, L., & Paraskevas, A. ( 2008 ). Planning research in hospitality and tourism, Oxford, UK : Butterworth- Heinemann.  Bowie, D & Buttle, F (2011), Hospitality Marketing: Principles and Practice, Oxford, UK : Butterworth-Heinemann  Brown, S. ( 2001 ). Marketing: The retro revolution. Sage.  Chaffey, D., Ellis-Chadwick, F., Johnston, K., & Mayer, R. ( 2009 ). Internet marketing: strategy, implementation and practice ( 4th ed. ). Pearson Education.  Daymon, C., & Holloway, I. ( 2002 ). Qualitative research methods in public  relations and marketing communications. Routledge.  Saunders, M. K., Thornhill, A., & Lewis, P. ( 2009 ). Research methods for business students ( 5th ed.). Financial Times/Prentice Hall.  Usunier, J. C., & Lee, J. ( 2009 ). Marketing across cultures ( 5th ed.). Financial Times/Prentice Hall.