1. Conducting Marketing Research and Forecasting Demand Marketing Management, 13 th ed 4

2. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 4-2 Chapter Questions What constitutes good marketing research? What are good metrics for measuring marketing productivity? How can marketers assess their return on investment of marketing expenditures? How can companies more accurately measure and forecast demand?

3. 4-3 Build-A-Bear Workshop makes the most of “interactive entertainment retailing”

4. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 4-4 What is Marketing Research? Marketing research is the systematic design, collection, analysis, and reporting of data and findings relevant to a specific marketing situation facing the company.

5. 4-5 Types of Marketing Research Firms Syndicated- Service — trade Information (Nielsen Media Research-- track viewing habits of varied audiences) Custom (Specific projects Design study Report findings) Specialty- Line (interviewing Services)

6. 4-6 The Marketing Research Process Define the problem Develop research plan Collect information Analyze information Present findings Make decision

7. 4-7 Step 1 Define the problem (e.g., Will offering an in-flight Internet service create enough incremental preference and profit for American Airlines to justify its cost?) Specify decision alternatives (e.g., Should American offer an Internet connection?) State research objectives (e.g., types of 1 st class passengers are likely to use internet?)

8. 4-8 Step 2 5) Data Sources 4) Contact Methods 2) Research Instruments 3) Sampling Plan 1) Research Approach

9. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 4-9 Research Approaches Observation—unobtrusive (LP) Ethnographic--link between culture & behavior &/or how cultural processes develop over time (participant observation) Focus group—discuss topics of interest (LS) Survey—knowledge, beliefs, preferences, satisfaction Behavioral data--Data—purchasing data Experimentation—cause and effect relationships

10. 4-10 Focus Group in Session

11. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 4-11 Research Instruments Questionnaires Qualitative Measures Technological Devices

12. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 4-12 Questionnaire Do’s and Don’ts Ensure questions are free of bias Make questions simple Make questions specific Avoid jargon Avoid sophisticated words Avoid ambiguous words Avoid negatives Avoid hypothetical's Avoid words that could be misheard Use mutually exclusive categories Allow for “other” in fixed response questions

13. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 4-13 Question Types - Dichotomous In arranging this trip, did you contact American Airlines?  Yes  No

14. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 4-14 Question Types – Multiple Choice With whom are you traveling on this trip?  No one  Spouse  Spouse and children  Children only  Business associates/friends/relatives  An organized tour group

15. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 4-15 Question Types – Likert Scale Indicate your level of agreement with the following statement: Small airlines generally give better service than large ones.  Strongly disagree  Disagree  Neither agree nor disagree  Agree  Strongly agree

16. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 4-16 Question Types – Semantic Differential American Airlines Large ………………………………...…….Small Experienced………………….….Inexperienced Modern……………………….…..Old-fashioned

17. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 4-17 Question Types – Importance Scale Airline food service is _____ to me.  Extremely important  Very important  Somewhat important  Not very important  Not at all important

18. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 4-18 Question Types – Rating Scale American Airlines’ food service is _____.  Excellent  Very good  Good  Fair  Poor

19. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 4-19 Question Types – Intention to Buy Scale How likely are you to purchase tickets on American Airlines if in-flight Internet access were available?  Definitely buy  Probably buy  Not sure  Probably not buy  Definitely not buy

20. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 4-20 Question Types – Completely Unstructured What is your opinion of American Airlines?

21. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 4-21 Question Types – Word Association What is the first word that comes to your mind when you hear the following? Airline ________________________ American _____________________ Travel ________________________

22. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 4-22 Question Types – Sentence Completion When I choose an airline, the most important consideration in my decision is: _____________________________________ _____________________________________ _____________________________________ _____________________________________ _____________________________________ _____________________________________ __________________.

23. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 4-23 Question Types – Story Completion “I flew American 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. _______________________________________ _______________________________________ _______________________________________ _______________________________________ _______________________________________ _______________________________________

24. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 4-24 Question Types – Picture (Empty Balloons)

25. 4-25 Question Types – Thematic Apperception Test Make up a story that reflects what you think is happening in this picture.

26. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 4-26 Qualitative Measures Word association—words are presented, one at a time, and respondents mention the first word that comes to mind. Projective techniques—give people an incomplete stimulus and ask them to complete it. Empathy—the experiencing as one’s own of the feelings or another. Visualization—requires people to create a collage from magazine or drawing to depict their perceptions Brand personification—ask subjects what kind of person they think of when the brand is mentioned.

27. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 4-27 Qualitative Measures Laddering—series of increasingly more specific “why” questions can reveal consumer motivation and consumers’ deeper, more abstract goals. Means End Chain theory--hierarchy of consumer perceptions and product knowledge that ranges from attributes (A) to consumption consequences (C) to personal values (V), as follows: attributes—At the top level of this hierarchy, attributes are most recognizable by individuals. Individuals recognize the attributes of a product or system easily. For example, “I like this car, because it is a convertible.” consequences—In turn, the attributes have consequences for the individual. For example, the convertible makes its driver feel young and free. Each attribute may have one or more consequences for any given individual. core values—Finally, each consequence is linked to a core value of the person’s life. For example, the sense of youth makes that driver feel attractive.

28. 4-28 Qualitative Measures Shadowing—observing people Behavior mapping —photographing people with a space—2 or 3 days Consumer journey —keeping track of interactions a consumer has with a product, service, or space Camera journals —ask consumers to keep visual diaries of activities and impression related to a product Extreme user interviews —talking to people about a product and evaluating their experience with it Storytelling—prompting people to tell personal stories about their consumer experiences Unfocused groups —interview a diverse group of people to explore ideas

29. 4-29 Technological Devices Galvanometers (measure interest or emotions aroused by Exposure to a specific ad or picture) Tachistoscope (flashes an ad to a Subject with an exposure interval and respondent describes everything he/she recalls) Eye cameras (study respondents’ eye movement to see where their eyes land 1 st and how long, etc.) Audiometers (record when TV is on and the channel) GPS (global positioning system, can Determine how many billboards a person may walk or drive by during a day)

30. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 4-30 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?

31. 4-31 Types of Samples Probability Simple random Every member of population has an equal chance of selection Stratified random Population is divided into mutually exclusive groups (age groups) and random samples are drawn from each group Cluster area Population is divided into mutually exclusive groups (city blocks) and a sample is taken from each group Non-probability Convenience Selects the most accessible population members Judgment Selects population members who are good prospects for accurate information Quota Selects and interviews a prescribed number of people in each of several categories

32. 4-32 Contact Methods Mail Questionnaire ( For people that would not give personal interviews or whose responses might be biased or distorted by interviewer) Telephone Interview (Gather information quickly, however interview are short and non-personal) Personal Interview (Most versatile and expensive, subject to interview bias or distortion) Online Interview (Inexpensive, faster, honest, versatile, samples small and skewed, tech problems and inconsistencies)

33. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 4-33 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

34. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 4-34 What is a Marketing Decision Support System (MDSS)? A marketing decision support system is a coordinated collection of data, systems, tools, and techniques with supporting hardware and software by which an organization gathers and interprets relevant information from business and environment and turns it into a basis for marketing action.

35. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 4-35 Barriers Limiting the Use of Marketing Research A narrow conception of the research Uneven caliber of researchers Poor framing of the problem Late and occasionally erroneous findings Personality and presentational differences

36. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 4-36 What are Marketing Metrics? Marketing metrics are the set of measures that helps marketers quantify, compare, and interpret marketing performance.

37. 4-37 Marketing Metrics External Awareness Market share Relative price Number of complaints Customer satisfaction Distribution Total number of customers Loyalty Internal Awareness of goals Commitment to goals Active support Resource adequacy Staffing levels Desire to learn Willingness to change Freedom to fail Autonomy

38. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 4-38 What is Marketing-Mix Modeling? Marketing-mix models analyze data from a variety of sources, such as retailer scanner data, company shipment data, pricing, media, and promotion spending data, to understand more precisely the effects of specific marketing activities.

39. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 4-39 Marketing Dashboards A customer-performance scorecard records how well the company is doing year after year on customer-based measures. A stakeholder-performance scorecard tracks the satisfaction of various constituencies who have a critical interest in and impact on the company’s performance including employees, suppliers, banks, distributors, retailers, and stockholders.

40. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 4-40 Common Measurement Paths Customer metrics pathway—how prospects become customers, from awareness to preference to trail to repeat purchase. Unit metrics pathway—sales of product/service units (e.g., how much sold by product line &/or geography) Cash-flow metrics pathway—how well marketing expenditures are achieving short-term returns. Brand metrics pathway—brand equity measures to assess both the perceptual health of the brand from customer and prospective customer perspectives as well as the overall financial health of the brand

41. 4-41 Sample Customer-Performance Scorecard Measures % of new customers to average # % of lost customers to average # % of win-back customers to average # % of customers in various levels of satisfaction % of customers who would repurchase % of target market members with brand recall % of customers who say brand is most preferred

42. 4-42 Sales Analysis Micro- Sales Analysis (views specific products, territories that fail to produce expected sales) Sales- Variance Analysis (Relative contribution of different factors to a gap in Sales performance)

43. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 4-43 The Measures of Market Demand Potential market—interest Available market—interest, income, access Target market—qualified available, company pursues Penetrated market—buying product

44. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 4-44 Vocabulary for Demand Measurement Market demand—total volume that would be bought by a defined customer group in a defined geographical area in a defined time period in a defined marketing environment under a defined marketing program. Market forecast—expected level of industry expenditure Market potential—upper limit of industry expenditure Company demand—estimated share of market demand at alternative levels of company marketing effort in a given time period. Company sales forecast—expected level of company sales based on a chosen marketing plan and an assumed marketing environment. Company sales potential—sales limit approached by company demand as company marketing effort increases relative to that of competitors.

45. 4-45 Estimating Current Demand Total market potential Maximum amount of sales available to all the firms in an industry during: a given period under a given level of industry marketing effort, and environmental conditions. Area market potential Market buildup method Identifying all potential buyers in each market and estimating their potential purchases Multiple-factor index method Sales are directly related to a series of indices Brand development index Index of brand sales to category sales

46. 4-46 Estimating Future Demand Survey of Buyers’ Intentions—probability of purchase Composite of Sales Force Opinions— salespeople Expert Opinion—dealers, distributors, suppliers, marketing consultants, trade associations Past-Sales Analysis—trend, cycle, seasonal, erratic Market-Test Method—select some territories to sell the product

47. 4-47 Study Question 1 ________ is the systematic design, collection, analysis, and reporting of data and findings relevant to a specific marketing situation facing the company. A.Marketing intelligence B.MIS (marketing information system) C.Marketing research D.Demographics E.Marketing management

48. 4-48 Study Question 2 Which of the following types of marketing research firms would best be described as being one that gathers consumer and trade information which they sell for a fee (e.g., Nielsen Media Research)? A.Custom marketing research firms B.Syndicated-service research firms C.Specialty-line marketing research firms D.General-line marketing research firms E.Nonprofit marketing research firms

49. 4-49 Study Question 3 The first step in the marketing research process is to ________. A.develop a research plan B.define the problem and research objectives C.analyze the internal environment D.read marketing research journals E.contact a professional consultant

50. 4-50 Study Question 4 ________ are data that were collected for another purpose and already exist. A.Primary data B.Secondary data C.Tertiary data D.Inordinate data E.Ordinate data

51. 4-51 Study Question 5 With respect to the sampling plan, three decisions must be made: (1) the sampling unit—who is to be surveyed; (2) sample size—how many people should be surveyed; and (3) ________. A.sample cost—how much the sampling costs B.surveyor skill—who does the surveying C.sample security—how to protect the sample data D.sampling procedure—how the respondents are chosen E.sample supervisor—who leads the sampling effort