Marketing Research

N.C.GHUGE
 The Marketing Research Industry:
Evolution of the Industry

• Charles Coolidge Parlin is known as the “father of marketing

research.”
• Parlin conducted the first continuous marketing research in the
early 1900s for the Curtis Publishing Company.
• The purpose of Parlin’s research was to increase
advertising for The Saturday Evening Post magazine.

Growth of the Need for Marketing Research

• The Industrial Revolution led to manufacturers

producing goods for distant markets.
• Manufacturers needed to know about far away
consumers.
• This led to the growing need for marketing
research.
• Marketing research is the function which
links consumers and the consumer to the
organization through information-
Information used to identify and define
marketing problems; generate, refine, and
evaluate marketing actions;monitor
marketing performance; and improve our
understanding of marketing as a process.”
Why do market research?
• Shift from production to customer-
orientation
• Declining cost of unit information (digital
age)
• Increase intensity of competition
• Globalization
• Technology and commercialization
Why do market research?

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 Opportunities

Through market research, Marriott Hotels discovered an opportunity to

create a hotel chain that would serve business travelers at moderate
prices.

After the target market was identified, Marriott spent 2 years developing the
‘marketing mix’ for its new target market.

‘Marketing mix’ is the unique blend of product/service, pricing, promotion,

and distribution strategies that aim to make the product successful in the
specific target market.

The end result was the latest addition to the Marriott product line:
Courtyard by Marriott.

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 External Marketing Environment

Some external factors may exist that are out of control of managers. This
may affect the marketing mix over time.

When USA-based Domino’s Pizza entered the Japanese market it faced

the problem that normal US-style home delivery pizza was not widely
accepted in that culture.

Through conducting market research Domino’s Pizza was able to develop

a successful product to the Japanese market that was acceptable to the
culture there.

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 Importance to Management

UPS Delivery service company has always assumed that on-time delivery
was the most important concern to customers.

As such its market research only focused on asking customers if they were
pleased with delivery times.

When UPS began asking broader questions, they discovered that

customers wanted more interaction with drivers, and drivers that were
more willing to chat.

UPS began training drivers according to these needs and the results were
improved customer satisfaction.

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 Global Research

Sony Corporation uses market research to develop strategy for its Sony
and Aiwa brands.

Aiwa-brand products are lower price and appeal to younger customers,

also the functions of Aiwa products will be limited.

This allowed Sony to develop and sell these simple products without
affecting the Sony brand name which focuses on multi-function and high
performance products.

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 Applied Research and Basic Research

Applied Research – Marketing research done to better understand the

market, find out why a strategy failed, or to reduce uncertainty in
management decision making.

Basic Research – Marketing research done to expand knowledge, but is

not aimed at a specific problem. In the long run, basic research helps us
understand more about the world we live in.

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 Decision to conduct Marketing Research or not?
 Low resources – small companies would sometimes not have enough
money to conduct market research.

Research results would not be useful.

The opportunity has passed – if the product is in the late maturity or

decline stage of the product life cycle (e.g. black and white T.V.’s).

Information already exists – prior marketing research studies may have

been conducted in the past.

Cost of conducting marketing research outweighs the benefits.

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 Market Research opportunities
MARKET SMALL PROFIT MARGIN LARGE PROFIT MARGIN
SIZE

Small Maybe conduct marketing

Do NOT conduct marketing research. Learn all you can from
research existing information prior to
making decision to conduct
research.

Large Maybe conduct marketing YES conduct market research.

research. Learn all you can
from existing information
prior to making decision to
conduct research.

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 The Internet effect on Marketing Research
 Provides rapid access to business intelligence, allowing faster decision
making.

Improves a firm’s ability to respond quickly to customer needs and

market shifts.

Reduces labour and time intensive research activities.

Internet databases available online – census data. Help with target

demographics e.g. High-Average Income levels in a particular area may
help Market research for a company wishing to open a jewellery shop.

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 Internet Surveys - Advantages
Reduced costs.

Personalization – More personalized service for people participating in

online surveys.

Higher response rates – email faster than regular ‘snail mail’.

Ability to contact the hard-to-reach – e.g. doctors, top company

executives.

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 Nature of Marketing

Definition of Marketing

Customer Goal Systems

Orientation Orientation Orientation

The External Environment:

Marketing research is a key means for
understanding the external environment.

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 Some Other Key points
 Market conditions, not the supplier’s cost, usually determine the selling
price.

 A major objective in conducting marketing research is to determine

pricing trends.

 When prices are expected to rise, there is a potential buying

opportunity now.

 When prices are expected to fall, postpone unnecessary

purchases until better pricing is evident.

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 Determining Market Trends
 Market trends influence buying decisions.
 Timing

 Levels of inventory

 Sourcing effort

 Market trends influence procurement strategies

 Length of commitment – long term, spot buying.

 Cash flow and investment planning.

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 Sources of Market Research Information
 Experts
 Other market research
 Requests for information
 Internet search engines
 On-line databases
 Source lists from other organizations
 Product literature
 Trade shows
 Professional Associations
 Market Research firms

And many more………..

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The Request for Information

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The Overall Role of Marketing Research

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Transparency 1 :
THE ROLE OF MARKETING RESEARCH

MARKETING RESEARCH

A FORMAL COMMUNICATION LINK WITH

ENVIRONMENT
PROVIDE ACCURATE AND USEFUL
a) specifying
b) collecting
c) analyzing
d) interpreting

FOR
a) planning
b) problem-solving
c) control
BETTER DECISION MAKING
 Some types of marketing research

Brand equity research - how favorably do consumers view the brand?

Brand name testing - what do consumers feel about the names of the
products?
Commercial eye tracking research - examine advertisements, package
designs, websites, etc by analyzing visual behavior of the consumer
Concept testing - to test the acceptance of a concept by target
consumers
Coolhunting - to make observations and predictions in changes of new or
existing cultural trends in areas such as fashion, music, films, television,
youth culture and lifestyle
Buyer decision processes research - to determine what motivates
people to buy and what decision-making process they use
Copy testing – predicts in-market performance of an ad before it airs by
analyzing audience levels of attention, brand linkage, motivation,
entertainment, and communication, as well as breaking down the ad’s
flow of attention and flow of emotion.

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 Some more types of marketing research

Customer satisfaction research - quantitative or qualitative studies that

yields an understanding of a customer's of satisfaction with a transaction
Demand estimation - to determine the approximate level of demand for
the product
Distribution channel audits - to assess distributors’ and retailers’
attitudes toward a product, brand, or company
Internet strategic intelligence - searching for customer opinions in the
Internet: chats, forums, web pages, blogs... where people express freely
about their experiences with products, becoming strong "opinion formers"
Marketing effectiveness and analytics - Building models and measuring
results to determine the effectiveness of individual marketing activities.
Mystery Consumer or Mystery shopping - An employee or
representative of the market research firm anonymously contacts a
salesperson and indicates he or she is shopping for a product. The
shopper then records the entire experience. This method is often used for
quality control or for researching competitors' products.

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 …. And more

Price elasticity testing - to determine how sensitive customers are to

price changes
Sales forecasting - to determine the expected level of sales given the
level of demand. With respect to other factors like Advertising expenditure,
sales promotion etc.
Segmentation research - to determine the demographic, psychographic,
and behavioural characteristics of potential buyers
Online panel - a group of individual who accepted to respond to marketing
research online
Store audit - to measure the sales of a product or product line at a
statistically selected store sample in order to determine market share, or to
determine whether a retail store provides adequate service
Test marketing - a small-scale product launch used to determine the likely
acceptance of the product when it is introduced into a wider market
Viral Marketing Research - refers to marketing research designed to
estimate the probability that specific communications will be transmitted
throughout an individuals Social Network.
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 Review

1. The role of marketing is to create exchanges. What role might marketing

research play in facilitating the exchange process?

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 Review

1. The role of marketing is to create exchanges. What role might marketing

research play in facilitating the exchange process?

Exchange is the basic tenet of ‘Marketing’ and ‘Commerce’. It really

means a sharing of ‘value’ between two parties, called the buyer
and the seller.

Marketing research in the exchange process offers knowledge to

help achieve customer satisfaction.

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 Review

2. Marketing research has traditionally been associated with manufacturers

of consumer goods. Today, both profit and non-profit organizations are
using marketing research. Why does this trend exist? Give examples.

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 Review

2. Marketing research has traditionally been associated with manufacturers

of consumer goods. Today, both profit and non-profit organizations are
using marketing research. Why does this trend exist? Give examples.

Over time all organizations have recognized the benefits of

conducting marketing research, even governments to have
communication with customers/subjects/clients.

Charities may conduct marketing research to better understand who

they are targeting for donations what the charitable people would
like from the charities regarding how the charity is set-up,
distribution, improvements, etc – all this information may lead to
increased donations.

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 Review

3. Explain the relationship between marketing research and the marketing

concept.

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 Review

3. Explain the relationship between marketing research and the marketing

concept.

One of the aspects of the marketing concept is ‘Customer

Orientation’. Marketing research helps the business achieve this
through a better understanding of the external environment. As the
communication with the customer will always inform us to be
orientated towards the consumer.

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 Review

4. What differences might you note among marketing research conducted

for (a) a retailer, (b) a consumer goods manufacturer, (c ) an industrial
goods manufacturer, (d) charitable organization?

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 Review

4. What differences might you note among marketing research conducted

for (a) a retailer, (b) a consumer goods manufacturer, (c ) an industrial
goods manufacturer, (d) charitable organization?

a) Aimed towards consumer preferences and trends.

c) Aimed towards the retailers they supply to and if they are

satisfied with their products.

e) What their consumers are concerned about e.g. Boeing

developing the ‘dreamliner’ for their customers – the airlines.

g) Research conducted towards the people that donate money –

what their preferences are in a charity and how their organization
operates.

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• Advantages of Market Research
– Helps focus attention on objectives
– Aids forecasting, planning and strategic
development
– May help to reduce risk of new product
development
– Communicates image, vision, etc.
– Globalisation makes market information
valuable (HSBC adverts!!)
• Disadvantages of Market Research
– Information only as good
as the methodology used
– Can be inaccurate or unreliable
– Results may not be what the business
wants to hear!
– May stifle initiative and ‘gut feeling’
– Always a problem that we may never
know enough to be sure!
Marketing Intelligence
Market Research
 Business Intelligence
• BI is the ability to access data from multiple
sources within an organization and deliver it to
business users for analysis
• It links the disparate operational systems to the
end users of the data, thus creating an
environment with free flow of information
• It offers a reliable barometer of the business
performance
• It helps to analyze what is behind trends and
anomalies in the business
 Business Intelligence
Business Intelligence

Financial Management Marketing Accounting ...................

Intelligence Intelligence Intelligence Intelligence .

Marketing Customer Relationship

Research Marketing/ Database Marketing

Primary Sources Secondary Sources Standardized Sources

Provide data on

Prospects Customers Competition Products/Markets

What is Marketing Intelligence?
Market intelligence (MI) is, “the process of acquiring and
analyzing information in order to understand the market
(both existing and potential customers); to determine the
current and future needs and preferences, attitudes and
behavior of the market; and to assess changes in the
business environment that may affect the size and
nature of the market in future.”
- Cornish S. L
Need for Marketing Intelligence
• Producers have little direct contact with consumers
(geographical distance and channel layers).
• Channel has little knowledge about customer attitudes,
preferences and changing tastes.
• Need to understand competition, without spying on
them.
• Management goals involve sales targets and market
share achievement.
• Need to identify successful new product developments
early in the process to ensure growth and revenue
maximization by finding a balance between costs and
prices of products.
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Domains of Marketing
 Marketing Research
• Marketing Research, a critical part of Marketing
Intelligence helps by providing accurate, relevant and
timely (ART) information
Links consumer, customer, and public to the marketer
through information used to:
• Identify and define marketing opportunity and
problems
• Generate, redefine and evaluate marketing actions
• Monitor marketing performance
• Improve understanding of marketing as a process
(from AMA’s official definition of Marketing Research)
 Role of Marketing Research in
Managerial Decision Making
Four Stages of Market Planning Process

– Situation analysis

– Strategy development

– Marketing program development

– Implementation
Marketing Planning Process
Situation •Understand the environment and the market
Analysis •Identify threats and opportunities
•Assess the competitive position

Strategy •Define the business scope and served

Development market segments
•Establish competitive advantages
•Set performance objectives
Marketing •Product and channel decision
Program •Communication decisions
Development •Pricing
•Personal selling decisions
•Performance monitoring
Implementation •Refining strategies and program
 Situation Analysis
Analysis of

– Market environment

– Market characteristics

– Consumer behavior

Research Approaches

– Organize information obtained from prior studies

(secondary)
– Focus groups
 Strategy Development
Market Research Provides Information to
Assist Management With Three Critical
Decisions:

– What business should we be in?

– How will we compete?

– What are the objectives for the business?

 Marketing Program
Development

• Programs embrace specific tasks

• Action program usually focuses on a single

objective in support of one element of overall
business strategy
 Marketing Program
Development (cont.)
Representative Decisions that Draw on Marketing
Research:
• Segmentation decisions
• Product decisions
• Distribution decisions
• Advertising and promotion decisions
• Personal selling decisions
• Price decisions
• Branding decisions
• Customer satisfaction decisions
 Implementation
• Starts with decision to proceed with a new
program or strategy
• Set specific measurable objectives for all
elements of marketing program
• Shift research focus to :
– "Did the elements achieve their objectives?"
– “Should the marketing program be continued,
discontinued, revised or expanded?"
Factors Influencing Marketing
Research Decisions
• Relevance
• Type and Nature of Information Sought
• Timing
• Availability of Resources
• Cost-benefit Analysis
Ethics in Marketing Research
Ethics of the Sponsor
– Overt and covert purposes
– Dishonesty in dealing with suppliers
– Misuse of research information
Ethics of the Supplier
– Violating client confidentiality
– Improper execution of research
Abuse of Respondents
– Falsifying answers
 Conquering Latino Homes
• Hispanics account for nearly 12.5% of the U.S. population.

• Research shows that Latino households contribute $600 billion

of $1.3 trillion purchasing power of multicultural population.

• In 2003 only 5.1% of total advertising dollars in the United

States was focused on Latinos.

• By 2050, Hispanic population would represent 25% of US

population.

• What do you think the problem is?

P & G Luring Women with their
Feminine Toothpaste
• P & G has came out with “Rejuvenating Effects” a gender specific
toothpaste targeting the female customers, who do 82% of the
grocery shopping.
• The flavor and package of the product was decided on the basis of
the results from a customer survey filled out by women.
• Though the product is priced slightly higher than the other brands
P & G hopes to make women think about the toothpaste in the
same light as skin care lotions and shampoo.
 Harley Davidson Exploring
New Markets
• Problem: Flat domestic scales
• Solution:
– In 1999, Harley-Davidson started a rental program which provided a way to hook
customers on riding and thereby entice them into buying a motorcycle.
– 40 percent of those enrolled in the program were female and about 30 percent
were under the age of 35
• Result:
– Motorcycles rented went up from 401 days in 1999 to a total of 224,134 days
worldwide in 2004.
– 32 percent of rental customers surveyed bought a bike or placed an order after
renting, another 37 percent were planning to buy one within a year.
– Nearly half of the renters spent more than $100 on Harley-Davidson accessories,
such as T-shirts and gloves.
CAREER OPPORTUNITIES IN MARKETING
RESEARCH

✔ VP Marketing Research
✔ Director / Assistant Director
✔ Manager of Marketing Research
✔ Senior / Junior Analyst
✔ Field Worker / Interviewer
✔ Clerical Help