4

Conducting
Marketing Research and
Forecasting Demand

Marketing Management, 13th ed

 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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 Types of Marketing Research
Firms
Syndicated market research companies are the
ones who look the market requirements and
prepare their reports accordingly.
For example
A.C Nielson is a market research company,
which knows that other top companies are
looking for consumer behavior studies, buying
patterns etc.

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 Types of Marketing Research
Firms
Syndicated market research
Data gathered periodically from customers and
distribution channels and then sold to clients.

Custom
Hired to carry out specific research projects for clients.
The firm conducts the survey and the results are the
property of one client only (e.g. Research International)
Firms providing a specialized service to other market
research firms, e.g. a firm selling field interviewing
services (e.g. Continental Research)

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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

• Specify decision alternatives
• 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
• Ethnographic
• Focus group
• Survey
• Behavioral data
• Experimentation

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 Research Instruments

• Questionnaires
• Qualitative Measures
• Technological Devices

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 Questionnaire Do’s and Don’ts
• Ensure questions are • Avoid negatives
free of bias • Avoid hypotheticals
• Make questions simple • Avoid words that could
• Make questions specific be misheard
• Avoid jargon • Use response bands
• Avoid sophisticated • Use mutually exclusive
words categories
• Avoid ambiguous words • 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
• Audiometers
• GPS

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 Technological Devices
Galvanometer
A scientific instrument used in marketing research to
measure the reaction of a subject in a study to an
advertisement; the instrument measures the perspiration
that accompanies the subject's interest or arousal.

Tachistoscope
A tachistoscope is a device that provides the researcher
timing control over a visual stimulus by exposing images to
the eye for a very brief measured period of time. In
marketing research, the visual stimulus is often a specific
advertisement.

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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 Nonprobability Samples

• Simple random • Convenience
• Stratified random • Judgment
• Cluster • Quota

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 Probability Samples

Simple random sampling

In a simple random sample, every member of the population has
an equal chance of being selected.

Stratified sampling
Stratified sampling involves dividing the population into
subpopulations that may differ in important ways. It allows you
draw more precise conclusions by ensuring that every subgroup is
properly represented in the sample. To use this sampling method,
you divide the population into subgroups (called strata) based on
the relevant characteristic (e.g. gender, age range, income bracket,
job role).

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 Probability Samples

Cluster sampling
Cluster sampling also involves dividing the population into
subgroups, but each subgroup should have similar
characteristics to the whole sample. Instead of sampling
individuals from each subgroup, you randomly select
entire subgroups.

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 Types of Samples
Probability sampling
Probability sampling involves random selection, allowing you
to make statistical inferences about the whole group.

Non-probability sampling
Involves non-random selection based on convenience or
other criteria, allowing you to easily collect initial data.

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 Nonprobability Samples

Convenience sampling
A convenience sample simply includes
the individuals who happen to be most
accessible to the researcher.

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 Nonprobability Samples

Judgement/Purposive sampling
This type of sampling involves the researcher using
their judgement to select a sample that is most useful
to the purposes of the research.

Quota Sampling
Quota sampling is a sampling method where we divide
the survey population into mutually exclusive
subgroups. These subgroups are selected with respect
to certain known features, traits, or interests.

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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 Disadvantages
• Inexpensive • Small samples
• Fast • Skewed samples
• Accuracy of data, • Technological
even for sensitive problems
questions • Inconsistencies
• Versatility

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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

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 Table 4.3 Characteristics of
Good Marketing Research
• Scientific method
• Research creativity
• Multiple methods
• Interdependence
• Value and cost of information
• Healthy skepticism
• Ethical marketing

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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 Internal
• Awareness • Awareness of goals
• Market share • Commitment to goals
• Relative price • Active support
• Number of complaints • Resource adequacy
• Customer satisfaction • Staffing levels
• Distribution • Desire to learn
• Total number of • Willingness to change
customers • Freedom to fail
• Loyalty • 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 company’s 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
• 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

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 How Can We Estimate
Current Demand?

• Total market potential

• 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

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