Chapter 1 Marketing Research for Managerial Decision Making PDF

Because learning changes everything. ® Chapter 01 Marketing Research for Managerial Decision Making ESSENTIALS of MARKETING RESEARCH Sixth Edition Joseph F. Hair, Jr. , David J. Ortinau, Dana E....

Because learning changes everything. ® Chapter 01 Marketing Research for Managerial Decision Making ESSENTIALS of MARKETING RESEARCH Sixth Edition Joseph F. Hair, Jr. , David J. Ortinau, Dana E. Harrison © McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill LLC.  The Growing Complexity of Marketing Research Databases or data warehouses store big data. Many companies use a customer relationship management (CRM) system to manage information. Digital advances provide new data collection opportunities. Hybrid research techniques use multiple methods. Marketing research tasks include: Marketing research is the function that Designing ways to collect links an organization to information. its market through the Managing the collection gathering of process. information. Analyzing and interpreting results. © McGraw Hill, LLC 2  The Role and Value of Marketing Research Managerial decisions may involve new context where experience may be absent or even misleading. Marketing research draws on the social sciences for methods/theory. Recently, the size of the toolbox has grown with “big data.” Marketers must first understand the questions that need to be addressed, then use the appropriate tool and technique. Marketing research applies to problems involving the four Ps. Theoretical research helps marketers understand © McGraw Hill, LLC 3  Marketing Mix Variables – Product New product Branding. development and Research detects early introduction changes in meaning and Concept and product attitudes. testing or test Positioning. marketing answers two questions. Understanding how consumers perceive How does a product products. perform for the customer? Perceptual mapping fixes products on two or How can a product be more dimensions improved or exceed impacting purchase. customer © McGraw Hill, LLC 4  Exhibit 1.1: Perceptual Map of the Fast Food Market Access the text alternative for these images © McGraw Hill, LLC 5  Marketing Mix Variables—Place/Distribution Retail market research includes: trade area analysis, store image studies, in-store traffic patterns, and location analysis. Retailing research focuses on database development through optical scanning at the point Online retailers face unique challenges and of purchase. opportunities. In behavioral targeting, online retailers work with content sites to display ads based on data collected Shopper about usergives marketing behavior. an understanding of a customer’s purchase journey and addresses: Product category management. Displays, sales, packaging, promotion, and marketing. © McGraw Hill, LLC 6  Marketing Mix Variables—Promotion Companies must know Three common research how to obtain good tasks in integrated returns from their marketing promotional budgets. communications: Traditional and digital Advertising media present effectiveness studies. challenges in obtaining Attitudinal research. reliable metrics to accurately gauge Sales tracking. advertising return. Market researchers must develop meaningful metrics and then collect the © McGraw Hill, LLC 7  Marketing Mix Variables—Price Pricing decisions involve pricing new products, establishing price levels in test marketing, and modifying prices for existing products. Marketing research provides answers to these questions. How large is the demand potential within the target market at various price levels? What are the sales forecasts at various price levels? How sensitive is demand to changes in price levels? Are there identifiable segments that have different price sensitivities? © McGraw Hill, LLC 8  Consumers and Markets—Segmentation Studies Benefit and lifestyle Although useful, more studies examine detailed information may consumers’ needs. be needed. This is a major Ethnography requires component of market extended observation of segmentation consumers in context. research. It highlights problems Objective—data on and opportunities based customer on consumer behavior. characteristics, product benefits, and brand preferences. Combined with other demographics, it © McGraw Hill, LLC 9  Marketing Theory The purpose of theory is to generalize relationships between concepts in a way applicable to a wide variety of settings. Adoption and diffusion theory helps marketers understand how new products are adopted and spread through the market. Services marketing research found five characteristics important to consumers—reliability, empathy, responsiveness, assurance, and tangibles. Information overload theory explains why consumers are more likely to purchase from a sample of 6 versus 24. © McGraw Hill, LLC 10  The Marketing Research Industry This industry has experienced record growth, due to: Post-sale customer satisfaction studies—a third of research company revenues. Retail-driven product scanning systems—also a third of revenues. Database development for long-term brand management. International research studies. © McGraw Hill, LLC 11  Types of Marketing Research Firms Internal or external—a unit within the company, or hiring a firm on a fee basis. Customized or standardized Customized research firms provide tailored services while Brokers or other standardized research firms facilitators. provide general services. Many standardized research firms provide syndicated business services. © McGraw Hill, LLC 12  Changing Skills for a Changing Industry A unique skill base is Top five skills candidates required in a research need for marketing jobs: firm. Understand and Communication skills, interpret secondary both verbal and data. written. Presentation skills. Interpersonal skills— Foreign language ability to work with competency. others. Negotiation skills. Statistical skills. Information technology proficiency. © McGraw Hill, LLC 13  Ethical Questions in General Business Practices Pricing issues. “Soft” costs are used to pad the total project cost. Selling nonessential services is unethical. Client confidentiality issues. When firms specialize, it is tempting to reuse research results from one client to another. Selling of branded “black box” methodologies. Methodologies are black box when they are proprietary and firms will not fully disclose how the methodology works. A methodology is not a black box just because it is © McGraw Hill, LLC 14  Conducting Research Not Meeting Professional Standards Due to client pressure, research providers may conduct research that does not meet professional standards. One client pressure is to prove a predetermined conclusion. The client may Interviewers not for working provide a sufficient research budget. firms may engage in curbstoning by completing answers themselves. They may also have friends fill out surveys. They may not use the designated sample but rather anyone conveniently available. They may not follow up on callback procedures. © McGraw Hill, LLC 15  Abuse of Respondents Research firms may The Marketing Research neglect incentives, Association has misrepresent time guidelines. requirements, or use fake They prohibit sponsors. researchers from If deception is deanonymizing necessary, “debrief” data. afterwards. Online information can Research used just to be “deanonymized.” collect names is Online actions may be unethical. observed but with no Sugging or frugging. identifying information. Market researchers © McGraw Hill, LLC 16  Unethical Activities of the Client/Research User “Clients” may request research proposals from several companies with no intention of hiring any of them. Instead using the information to perform the research themselves. Another behavior is to promise a research provider a long-term relationship in order to obtain a low price. Then providing no further business to the research firm. Clients may also be tempted to overstate results of a marketing research project. © McGraw Hill, LLC 17  Unethical Activities by the Respondent The primary unethical practice is to provide dishonest answers or fake behavior. Respondents frequently provide untrue answers to questions related to income or to their indulgence in sensitive behaviors. If there is the prospect of earning money— respondents lie to match the characteristics the screeners are seeking. This undermines the validity of the research. © McGraw Hill, LLC 18  Emerging Trends: Marketing Research Industry Five major trends are becoming evident. Increased emphasis on secondary data collection methods. Movement toward technology-related data management. Expanded use of digital technology for information acquisition and retrieval. A broader international client base. Movement beyond data analysis toward a data interpretation/ information management environment. © McGraw Hill, LLC 19  Emerging Trends: The Development of Marketing Analytics Marketing analytics uses data, statistics, mathematics, and technology to solve marketing business problems. Marketing analytics and big data rely on: Vast amounts of digital Analytics secondary data. techniques vary in complexity Enhanced computer processing from simple to power. advanced. Knowledge of mathematical modeling. Computer programming skills. © McGraw Hill, LLC 20