Conducting

Marketing Research and

Forecasting Demand
Marketing Management, 13
th
ed
4
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?
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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.
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Types of Marketing Research Firms
Syndicated service
Custom
Specialty-line
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The Marketing Research Process
Define the problem
Develop research plan
Collect information
Analyze information
Present findings
Make decision
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Step 1: Define the Problem

Define the problem.
State research objectives
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Step 2: Develop the Research Plan
Data sources
Research approach
Research instruments
Sampling plan
Contact methods
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Research Approaches
Observation
Focus group
Survey
Behavioral data
Experimentation
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Research Instruments
Questionnaires
Qualitative Measures
Technological Devices
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Questionnaire Dos and Donts
Ensure questions are
free of bias
Make questions simple
Make questions specific
Avoid jargon
Avoid sophisticated
words
Avoid ambiguous words
Avoid negatives
Avoid hypotheticals
Avoid words that could
be misheard
Use response bands
Use mutually exclusive
categories
Allow for other in fixed
response questions
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Question Types - Dichotomous
In arranging this trip, did you contact
American Airlines?
Yes No
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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
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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
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Question Types Semantic Differential
American Airlines
Large ....Small
Experienced..Inexperienced
Modern...Old-fashioned
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Question Types Importance Scale
Airline food service is _____ to me.
Extremely important
Very important
Somewhat important
Not very important
Not at all important
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Question Types Rating Scale
American Airlines food service is _____.
Excellent
Very good
Good
Fair
Poor
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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
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Question Types
Completely Unstructured
What is your opinion of American Airlines?






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Question Types
Word Association
What is the first word that comes to your mind
when you hear the following?
Airline ________________________
American _____________________
Travel ________________________


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Question Types
Sentence Completion
When I choose an airline, the most important
consideration in my decision is:
_____________________________________
_____________________________________
_____________________________________
_____________________________________
_____________________________________
_____________________________________
__________________.
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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.
_______________________________________
_______________________________________
_______________________________________
_______________________________________
_______________________________________
_______________________________________
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Question Types
Picture (Empty Balloons)
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Qualitative Measures
Word association
Projective techniques
Visualization
Brand personification
Laddering
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Technological Devices
Galvanometers
Tachistoscope
Eye cameras

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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?
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Table 4.2 Types of Samples
Probability Samples
Simple random
Stratified random
Cluster

Nonprobability Samples
Convenience
Judgment
Quota

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Contact Methods
Mail questionnaire
Telephone interview
Personal interview
Online interview
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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
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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.
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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
Measuring Marketing producitivity

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What are Marketing Metrics?
Marketing metrics are the set of
measures that helps marketers
quantify, compare, and interpret
marketing performance.
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Table 4.4 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
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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.
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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 companys performance
including employees, suppliers, banks,
distributors, retailers, and stockholders.
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Table 4.5 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
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Common Measurement Paths
Customer metrics pathway
Unit metrics pathway
Cash-flow metrics pathway
Brand metrics pathway
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The Measures of Market Demand
Potential market: Total No.
Available market:
Target market
Penetrated market
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Vocabulary for Demand Measurement
Market demand
Market forecast
Market potential
Company demand
Company sales forecast
Company sales potential
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.
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Market forecast: Only one level of
industry marketing expenditure will
actually occur. The marketing demand
corresponding to this level is called the
market forecast.
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Market potential: is the limit
approached by market demand as
industry market expenditure approach
infinity for a given marketing
environment.
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Company Demand: is the company
estimated share of market demand at
alternative levels of co. marketing
efforts in a given time period.
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Company Sales forecast: is the
expected level of company sales based
on a chosen marketing plan and an
assumed marketing environment.
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Company sales potential: is the sales
limit approached by co. demand as co.
marketing efforts increases relative to
that of competitors.
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How Can We Estimate
Current Demand?

Total market potential
No. of buyers*Units purchased* price

Area market potential
Market buildup method
Multiple-factor index method
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Estimating Future Demand
Survey of Buyers Intentions
Composite of Sales Force Opinions
Expert Opinion
Past-Sales Analysis
Market-Test Method