1. 1 LECTURE 3 MARKETING RESEARCH by Suren AYADASSEN

2. 2 Marketing Research ‘The systematic gathering, recording and analysing of data about problems relating to the marketing of goods and services’ (American Marketing Association)

3. 3 Marketing Research is Systematic –Carried out in an ordered and logical fashion –Covers collection and recording information as well as analysis –It should address marketing problems – it has a defined purpose –It can help in any area of marketing decision making –Not only it can help to solve problems but it can also highlight opportunities

4. 4 Reasons for conducting marketing research Marketing research can help organisations to : –Determine customers needs and wants –Estimate and forecast customer demand –Identify trends and changes in market –Improve existing products and services –Confirm or disprove marketers’ ideas, hunches or ‘gut feelings’ –Avoid making costly mistakes by reducing the risk in marketing decisions

5. 5 When is marketing research useful Marketing research can be used in support of any marketing decision like - –Identify and choice of markets – Segmentation and Targeting –Designing the Marketing Mix to attract a target market Product/Service design Pricing Promotion Place (Distribution) –Avoid Failure (Lack of profits and Damage image of company)

6. 6 Types of Marketing Research Marketing research is carried out into any area of a company’s marketing operations –Market Research –Product Research –Promotion Research –Price Research –Place / Distribution Research –Sales Research –Environmental Research

7. 7 Market Research Market research aims to describe the market for a product or service –Market Size – Numbers of customers and their spending/disposable income –Market Trends – Market growth-rate, new products, new patterns of consumption –Market Shares – Proportion you and your competitors have. –Competitors – Who are they? How many? What are their Marketing programmes? –Market segments - How can the market be segmented, The size and spending power of each segment –Customers - Who are they? How many? Needs/Wants? Location? Name/Address? Buying Pattern? Fidelity? Payment Pattern? Why buy from you and not competitor? etc

8. 8 Product Research Product research aims to forecast customers’ responses to new products and product changes –Likely customer acceptance (or rejection) of new products –Comparison of existing products in the market (e.g. price, features, costs, distribution) –Forecasting new uses for existing products –Technologies that may threaten existing products –New product development

9. 9 Promotion Research Promotion Research is looking at the organisation’s communication with its publics. It covers messages, media and effectiveness. –Effectiveness of advertising –Effectiveness of sales force (personal selling) –Extent and effectiveness of sales promotional activities –Competitor promotional strategies –Pre-testing of Communication messages –Determining which media its customers see, hear or read

10. 10 Price Research Price Research aims at ensuring that the company price its product correctly taking into consideration internal and external factors. Estimates and testing of price elasticity Analysis of revenues, margins and profits Customer perceptions of “just or fair” pricing Competitor pricing strategies

11. 11 Place (Distribution) Research Distribution Research aims to ensure that the company is using effectively its channels of distribution –Use and effectiveness of distribution channels –Opportunities to sell direct –Cost of transporting and warehousing products –Level and quality of after-sales service

12. 12 Sales Research Analysis of the Company’s Sales in order to understand the company’s current competitive position. –Ranking customer on how much they buy –Sales per region or by sales representative area –Sale by product or by product line –Competitors sales

13. 13 Environmental Research Monitoring and assessment of the effect of the PEST factors on the Company to determine opportunities and threats –Political and Legal –Economic and Demographic –Social and Cultural –Technological

14. 14 Marketing Research Process (1) Planning MR is very important so as to ensure that the information collected is –Useful –Relevant –Enables a decision to be made –Affordable and Cost-Effective

15. 15 Marketing Research Process (2) The typical process that the Company follows :- –Problem Definition –Exploratory Research –Research Objectives written –Research Design –Implementation –Analysis and Interpretation –Marketing Decision

16. 16 Marketing Research Process (3) Problem Definition –Clear idea on the purpose, the marketing decision that they are trying to make and the value of gaining extra information Exploratory Research –Preliminary research to be carried out before commissioning expensive research – Help to define size of marketing problem and may highlight existing information that can be gained at a relatively low cost (Published reports, previous surveys) Research Objectives written –State clearly and exactly the information the organisation requires (eg Forecast the number of customers who will buy our new product)

17. 17 Marketing Research Process (4) Research Design –What sources of information can be used –How the information is to be collected : Two main sources of data - primary and secondary data Primary research is conducted from scratch. It is original and collected to solve the problem in hand. Secondary research, also known as desk research, already exists since it has been collected for other purposes.

18. 18 Marketing Research Process (5) Primary Data v/s Secondary Data TYPEADVANTAGESDISADVANTAGES SECONDARY (Internal– Previous MR, Sales Office Data, Product Info, Annual report, etc) (External – CSO, Census, surveys, syndicated research, Company Info, website, internet, Bank review, market intelligence, media etc) Less Expensive Available and easily acquired Reduces amount of Primary Data needed Provides good starting point for research mainly at exploratory stage Non-specific Out of date (eg Census) Accuracy difficult to judge if no access to research methology Different sets of datas can be inconsistent PRIMARY Specific and relevant to the company Exclusive Expensive Time consuming – Planning, Implementing and analysing takes time (weeks/months)

19. 19 Marketing Research Process (6) Sample -segment of the population selected for MR to represent the population (demography) as a whole Sampling Method DefinitionUsesLimitations Cluster Sampling) Units in the population can often be found in certain geographic groups or "clusters" (e.g. primary school children in Derbyshire. A random sample of clusters is taken, then all units within the cluster are examined Quick & easy; does not require complete population information; good for face- to-face surveys Expensive if the clusters are large; greater risk of sampling error Convenience Sampling Uses those who are willing to volunteer Readily available; large amount of information can be gathered quickly Cannot extrapolate from sample to infer about the population; prone to volunteer bias Judgement Sampling A deliberate choice of a sample - the opposite of random Good for providing illustrative examples or case studies Very prone to bias; samples often small; cannot extrapolate from sample Quota Sampling Aim is to obtain a sample that is "representative" of the overall population; the population is divided ("stratified") by the most important variables (e.g. income,. age, location) and a required quota sample is drawn from each stratum Quick & easy way of obtaining a sample Not random, so still some risk of bias; need to understand the population to be able to identify the basis of stratification Simply Random Sampling Ensures that every member of the population has an equal chance of selection Simply to design and interpret; can calculate estimate of the population and the sampling error Need a complete and accurate population listing; may not be practical if the sample requires lots of small visits all over the country Systematic Sampling After randomly selecting a starting point from the population, between 1 and "n", every nth unit is selected, where n equals the population size divided by the sample size Easier to extract the sample than via simple random; ensures sample is spread across the population Can be costly and time- consuming if the sample is not conveniently located

20. 20 Marketing Research Process (7) In terms of data capture and analysis there are two main types of market research: Qualitative Research and Quantitative Research QualitativeQuantitative " Qualitative research involves analysis of data such as words (e.g., from interviews), pictures (e.g., video), or objects (e.g., an artifact). Quantitative research involves analysis of numerical data. The aim is a complete, detailed description. The aim is to classify features, count them, and construct statistical models in an attempt to explain what is observed. Researcher may only know roughly in advance what he/she is looking for. Researcher knows clearly in advance what he/she is looking for. Recommended during earlier phases of research projects.Recommended during latter phases of research projects. The design emerges as the study unfolds. All aspects of the study are carefully designed before data is collected. Researcher is the data gathering instrument. Researcher uses tools, such as questionnaires or equipment to collect numerical data. Data is in the form of words, pictures or objects.Data is in the form of numbers and statistics. Subjective - individuals’ interpretation of events is important,e.g., uses participant observation, in-depth interviews etc. Objective – seeks precise measurement & analysis of target concepts, e.g., uses surveys, questionnaires etc. Qualitative data is more 'rich', time consuming, and less able to be generalized. Quantitative data is more efficient, able to test hypotheses, but may miss contextual detail. Researcher tends to become subjectively immersed in the subject matter. Researcher tends to remain objectively separated from the subject matter.

21. 21 Marketing Research Process (8) Survey Questionnaire design make use of Open-Ended Questions and Closed Questions Closed Questions are carefully pre-coded and are easy to ask and reply. Can be in the form of a Dichotomous question (Yes or No) or in a Multiple choice form Open Ended Questions – Has many significant style variation within it but allows considerable scope for the respondent to express views on the selected theme

22. 22 Marketing Research Process (9) Implementation –Research Approaches Observational Research – Primary Data obtained by observing relevant people, actions and situations Survey Research : Primary Data obtained by asking people questions about their knowledge, attitudes, preferences and buying behaviour. Experimental Research : PD obtained by selecting matched groups of subjects, giving them different treatments, controlling related factors, and checking differences in group responses. –Contact Methods Mail Questionnaires Telephone Interviewing Personal Interviewing Group interviewing (Focus group) Online interview

23. 23 Marketing Research Process (10) Analysis and interpretation Data generated needs to be processed, analysed and interpreted by researcher Most important facts and findings uncovered by the MR are reported to Management for decision Marketing Decision Based on findings decision is taken.

24. 24 Thank you for your attention. Any Questions?