1. 1995 7888 4320 000 000001 00023 Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved.

2. 1995 7888 4320 000 000001 00023 Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. CHAPTERCHAPTERCHAPTERCHAPTER 1234 0001 897251 00000 1 The Role of Marketing Research in Strategic Planning 1-2

3. 1995 7888 4320 000 000001 00023 Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. The Value of Marketing Research Information  Marketing research identifies new approaches and evolving processes.  Marketing research allows a business enterprise to make confident, cost- effective decisions.  Marketing research helps build and manage relationships with customers. 1-3

4. 1995 7888 4320 000 000001 00023 Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Why Study Marketing Research?  Marketing Research: Systematic and objective planning, gathering, recording, and analyzing of information to enhance the decision making of marketing managers.  Marketing: Tool used by managers to satisfy consumer desires. The AMA defines marketing as “the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives.”  Marketing Concept: Management philosophy stating that to satisfy organizational objectives, the wants and needs of target markets must be determined so that products can be created to satisfy those desires better than competitors do.

5. 1995 7888 4320 000 000001 00023 Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Customer Relationship Management and the Marketing Research Process  Marketing: Planning and executing the 4 P’s in order to satisfy the business enterprise and its customers.  Management: Getting the right goods and services, to the right people, at the right place and time, with the right price, through the right blend of promotional techniques.  Relationship Marketing:  Knowledge of the Market  Effective Training Programs  Employee Empowerment and Teamwork 1-4

6. 1995 7888 4320 000 000001 00023 Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Customer Relationship Management  CRM, a process for implementing a relationship marketing strategy, is based upon the following four fundamental concepts: I.Customer/market knowledge II.Data Integration III.Information Technology IV.Creating Customer Profiles 1-5

7. 1995 7888 4320 000 000001 00023 Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Strategic Marketing Planning and Marketing Research It’s a big job… but someone has to do it Decisions, decisions, decisions!!! BROAD QUESTIONS  What markets should we penetrate?  What products should we introduce?  What new business opportunities should we pursue? NARROW QUESTIONS  Is our new advertising campaign generating awareness?  How is our brand positioned in the competitive landscape?  What is our most productive segment? 1-6

8. 1995 7888 4320 000 000001 00023 Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Who Does Marketing Research? Applied versus Basic Research  Research: Systematic and objective investigation of a subject or problem to discover relevant information or principles.  Basic research: Provides information about a phenomenon or tests a theory or hypothesis (does not solve a specific problem).  Applied research: Problem-specific research that focuses on helping managers resolve specific problems.

9. 1995 7888 4320 000 000001 00023 Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Top 10 Marketing Research Companies 1.ACNielsen Corp. - $1,577.0 million 2.IMS Health Inc. - $1,131.2 million 3.Information Resources Inc. - $531.9 million 4.VNU Inc. - $526.9 million 5.NFO WorldGroup Inc. - $470.5 million 6.The Kantar Group Ltd. - $270.0 million 7.Westat Inc. - $264.4 million 8.Arbitron Inc. - $206.8 million 9.Market Facts Inc. - $190.3 million 10.Martiz Marketing Research Inc. - $172.0 million

10. 1995 7888 4320 000 000001 00023 Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Marketing Research Companies  Syndicated Services: Full-service agencies which routinely collect information and report their findings to several clients or companies that subscribe to their service; data is not usually problem specific.  Standardized Research Services: Examines a particular aspect of the market in a unique way and uses a standard research method for different clients, allowing for comparisons between studies and across other evaluative standards.  Custom Houses: “Ad hoc services” that tailor their studies to the client’s needs.

11. 1995 7888 4320 000 000001 00023 Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Marketing Research Companies – cont’d  Independent Consultants: Offer expert knowledge and skills in specialized subjects.  Field Services: Collect data via interviews in the field. (A “field” is a place where information is collected.)  Coding and Data Entry Services: Edit collected surveys from respondents and code the responses.  Tabulation Houses: Quantitative specialists which perform statistical analyses and turn raw data into information that managers can use.

12. 1995 7888 4320 000 000001 00023 Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Marketing Research Companies Worldwide  Strong need for marketing research companies to exist throughout the world.  Quite a few market differences.  Thousands of marketing research organizations around the world conduct research and shape market strategies, but only a handful control the bulk of revenues for marketing, advertising, and public opinion research.  The top 25 firms had revenues of $8.3 billion in 1999.

13. 1995 7888 4320 000 000001 00023 Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved.  Almost half of their revenues come from operations outside their home country.  Twelve of the top 25 global research organizations in 1999 were from the United States.  The largest conglomerate, ACNielsen Corporation, has revenues exceeding $1 billion and subsidiaries or branch offices in 80 countries. Marketing Research Companies Worldwide – cont’d

14. 1995 7888 4320 000 000001 00023 Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Global Research is Similar and Different from U.S. Research  Planning  What are the major objectives?  Who is the key client(s)?  Who has input on what?  Who will gather/interpret/use the findings?  Design  What cannot be standardized? Is it affordable?  Will it be actionable, and at what level?  Will it be comparable?  Should it be executed locally or centrally?  Execution  Interpretation Brad Frevert’s Four-Stage Research Process:

15. 1995 7888 4320 000 000001 00023 Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Who Uses Marketing Research?  Company lacking information about its markets.  AMA study revealed the average marketing research budget was $1.9 million for marketing research departments.  Consumer and industrial manufacturers, advertising agencies, and retailers/wholesalers spend about 1.2% of sales on marketing research. Financial services, publishers/broadcasters, health services, and utilities spend about 0.6%.

16. 1995 7888 4320 000 000001 00023 Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. The Marketing Manager  Marketing Manager: Responsible for making the decisions that will help the company achieve its objectives in its target markets.  Marketing Management: The analysis, planning, implementation, and control of programs designed to create, build, and maintain beneficial exchanges with target buyers for the purpose of achieving organizational objectives.  The Decision-Making Process: Recognize the problem or opportunity, define the problem or opportunity, search for feasible courses of action, evaluate the options and select the optimal course, implement the plan, and evaluate the results.

17. 1995 7888 4320 000 000001 00023 Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Do Marketing Researchers Have an Ethical Responsibility?  Ethics : General nature of morals and of specific moral choices: moral philosophy and the rules or standards governing the conduct of the members of a profession.  Business ethics: “Moral principles and standards that guide behavior in the world of business.”  Social responsibility: Obligation a business assumes toward society.  Economic responsibilities: Produce goods and services society needs and wants at a price that can perpetuate the business and satisfy its obligations to investors.

18. 1995 7888 4320 000 000001 00023 Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved.  Legal responsibilities: Laws that businesses must obey.  Ethical responsibilities: Behaviors or activities expected of business by society.  Voluntary responsibilities: Behaviors and activities society desires and business values dictate.  CASRO: Council of American Survey Research Organizations – based in the United States. National trade association for commercial research firms. 170 member firms from United States.  ESOMAR: European Society for Opinion and Marketing Research - based in Amsterdam, Netherlands. Society of over 4,000 individual members in 100 countries. Do Marketing Researchers Have an Ethical Responsibility? – cont’d

19. 1995 7888 4320 000 000001 00023 Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. What Job Opportunities Exist in Marketing Research?  Vice President: Senior position, responsible for all marketing research activities and establishing goals for the research group.  Director: Following the vice president, the senior position within the research organization. Has overall responsibility for the creation and implementation of all marketing research projects.  Assistant Director: Person directly behind the director in the chain of command within the research organization. Supervises specific research projects.  Senior Analyst: Works closely with others in planning and executing research projects. Also writes the final report covering the research effort.

20. 1995 7888 4320 000 000001 00023 Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved.  Statistician: Expert in statistical procedures and works on questionnaire design, sampling, and statistical analyses.  Analyst: Closely supervised by the senior analyst and often does much of the work associated with designing and supervising the research studies.  Junior Analyst: Works closely with analysts, doing routine tasks such as editing and coding questionnaires, running simple statistical calculations, and performing basic library research.  Field Work Director: Responsible for training, supervising, and hiring interviewers “in the field.” What Job Opportunities Exist in Marketing Research? – cont’d

21. 1995 7888 4320 000 000001 00023 Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. What Job Opportunities Exist in Marketing Research? – cont’d  Librarian: Responsible for building and maintaining a reference library for use by research department staff.  Clerical Supervisor: Oversees the handling and processing of statistical information and prepares work schedules.  Full-Time Interviewers: Although very few companies employ them, full- time interviewers tend to spend the bulk of their time conducting personal interviews.  Tabulators and Clerical Help: Keep the office running by handling the daily routine work of the department, such as tabulating, filing, and keying.

22. 1995 7888 4320 000 000001 00023 Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Strategic Marketing Planning: Situation Analysis When placed in the context of a situation analysis, marketing research helps to: 1)Locate and identify new market opportunities for a company. 2)Identify groups of customers who possess similar needs, characteristics and preferences. 3)Identify existing and potential competitors’ strengths and weaknesses. 1-7

23. 1995 7888 4320 000 000001 00023 Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Target Marketing and Marketing Strategy Design 1-8 Target Market CharacteristicsKey Variables to Measure DemographicsAge, gender, race, income, religion, occupation, family size, geographic location, and zip code PsychographicsConsumer activities, interests, and opinions Product usageOccasion (special use, gift); situation (climate, time of day, place); and usage context (heavy, medium, or light) Brand preferencesLevel of brand loyalty, salient product attributes, and product/brand awareness Decision processSize and frequency of purchase; propensity to purchase; risk of purchase (high, medium, low); and product involvement

24. 1995 7888 4320 000 000001 00023 Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Marketing Program Development: Product Studies relating to products take one of the following two forms: Customer Satisfaction Studies Used to pinpoint pros and cons in a firm’s marketing mix Used to isolate and articulate the nature of consumer attitudes Good for brand re-positioning, new product development, exploring new segments and dropping poorly performing products Service Quality Studies Used to measure the “gap” between what’s expected and what’s delivered in terms of “quality” Focuses on the most important attributes to the customer Good for investigating appearance of company personnel, physical plant and facilities, and equipment 1-9

25. 1995 7888 4320 000 000001 00023 Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Marketing Program Development: Place There are three types of research methods associated with distribution: 1.Cycle Time Research 2.Retailing Research 3.Logistic Assessment 1-10

26. 1995 7888 4320 000 000001 00023 Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Marketing Program Development: Price “How much does it cost?... I’ll buy it!” Establishing and modifying prices leads us to ask: 1.How large is the demand potential within the target market? 2.How sensitive is demand to changes in price levels? 3.What non-price factors are important to customers? 4.What are the sales forecasts at various prices levels? 1-11

27. 1995 7888 4320 000 000001 00023 Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Marketing Program Development: Integrated Marketing Communications & Promotion Marketing research methods used to acquire information about the performance of a promotional program must consider:  Advertising Effectiveness  Attitudinal Research  Sales Tracking 1-12

28. 1995 7888 4320 000 000001 00023 Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Strategy Implementation & Control Marketing research captures and provides information required to implement strategy and make long-range plans for the future. It utilizes a “system” made up of the following three components: 1)Product Analysis 2)Environmental Forecasting 3)A Marketing Decision Support System (MDSS) 1-13

29. 1995 7888 4320 000 000001 00023 Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. The Marketing Research Industry: Types of Firms “ Where do we get answers to our questions?” “Who ya gonna call?” Providers of marketing research can be classified as:  Internal or External  Standardized or Custom  Broker or Facilitator 1-14

30. 1995 7888 4320 000 000001 00023 Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. The Marketing Research Industry: Trends & Skills “What’s happening out there?” : Trends to Watch  Increased emphasis on capturing secondary data  Data management driven by technology  Increased use of computers to capture and analyze data  Marketing research is an enterprise with a global reach  Moving beyond analysis toward interpretation and management “What do I need to succeed?” Skills to Acquire Can I understand and interpret secondary data? Do I enjoy making presentations? Can I speak and write more than one language? Do I enjoy negotiation and working with others? Do I feel comfortable and up-to-date with a computer? 1-15

31. 1995 7888 4320 000 000001 00023 Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Summary of Learning Objectives  Describe and explain the impact marketing research has on marketing decisions.  Demonstrate how marketing research fits into the strategic planning process.  Provide examples of marketing research studies.  Understand the scope and focus of the marketing research industry.  Understand emerging trends and new skills associated with marketing research. 1-16