Chapter 4 - Marketing Research PDF

Topic 4: Market Research and Managing After reading this chapter, you should be able Marketing Information to : 4.1 Define Marketing Research. 4.2 Explain the importance of marketing 1) Define what is Marketing Research. researc...

Topic 4: Market Research and Managing After reading this chapter, you should be able Marketing Information to : 4.1 Define Marketing Research. 4.2 Explain the importance of marketing 1) Define what is Marketing Research. research. 4.3 Outline the steps in the marketing 2) Explain the importance of Marketing process. Research. 4.4 Define the marketing information 3) Outline the steps in the marketing process. system & discuss its parts. 4) Define the marketing information system & 4.5 Discuss special issues some marketing discuss its parts. researchers face 5) Discuss special issues some marketing researchers face.  Definition Of Marketing Research The systematic design, collection, interpretation reporting of information to help marketers solve specific marketing problems or take advantages of marketing opportunities. 1)A process for gathering information not currently available to decision makers. 2)Purpose: To inform an org. about customers’ needs & desires, marketing opportunities for particular goods & services, & change attitudes & purchase patterns of customers. Learning objective 1  Why marketing research Can help a firms better understand important? Can measure the effectiveness of the marketing opportunities, pricing, products, distribution and ascertain the potential for success promotion activities. for new products & determine the feasibility of particular marketing strategy. Can help them assess market 2 potential & marketing research is used by market share all sorts of org. to help develop marketing mixes to match the needs of customers.. Changes in economy have changed marketers’ decisions Can help marketers understand making strategies to focus more customers satisfaction & on small-scale surveys & short- purchasing behaviors. range forecasting. Business need speed & agility to survive & to react quickly to changing consumer behaviors. Value of marketing research is measures by improvement in marketer’s ability to make decisions. Marketers should treat information in same manner as other resources utilized by org. & must weigh the costs of obtaining information against benefits derived. Information should be judged worthwhile if its results can improve the org. ability to satisfy its target customers, leads to increased sales & profits or helps Learning objective 2 the org. achieve some other goals.  Marketing research process 1. Defining problem & research objectives. 2. Designing research plan. 3. Implementing research plan. 4. Interpreting & reporting findings Learning objective 3  1. Defining the problem & Have 3 types of research: research objectives. To discover ideas & insight to a problem. 1. Hardest step in the research process. Exploratory Used to generate possible explanation & identify 2. Understanding the marketing problems & Research the areas for further clarification. Collects all possible information that give a developing research obj. are two crucial better definition of what to study. tasks. Emphasizes on opening up all channels of 3. Most managers fail to identify & recognize the communication for those who have something basic problems in their companies. rather than on probability sampling. 4. Not easy to develop a problem statement. –Example: A restaurant may ask their customers Tendency to confuse between problem & to define a good service. symptom always happen. –Problem: Situation requiring some type of To describe the number of times an event action. Descriptive happens or the relationship between two –Symptom: The evidence that a problem exists. Research variables. –Example: A marketer would like to investigate 5.The mistakes will happens if the problem the potential of introduction certain food for statement not correctly defined and it can be breakfast on the demographic of consumers who costly to the firms. buy the food. –Examples: When Coca-Cola faces taste test challenge from Pepsi, Coca-Cola thought the Causal To find cause-and-effect relationship problem was ‘Which formula tastes the best?’, but between two variables. Research the actual problem is ‘What is the customer –Example: A marketer would like to know whether the introduction of new food product reaction if we replace our formula with the newer results in increased demand for the whole food ones?’ products. 2. Designing research plan Have 2 types of data: Primary data are observed and Primary 1. Researcher must then determine the exact recorded or directly collected from Data information needed, develop a plan respondents. gathering it efficiently & present the plan to This types of data must be gathered mgt. thru observation or by surveying people of interest. 2. Outline the sources of gathering data, methods of data collection, sampling plan & Information that already exists or have been Secondary instruments used to get the information. collected by third party for another purpose. Data 3. The researcher must specify the types of Used in the beginning to develop a plan for data collected & how the data is collected. gathering primary data. Used for exploratory purposes. Consist of internal & external sources of data.  Method of data collection Can be distributed thru email, mail & Questionnaire Experiment face-to-face. Can be in two forms:- Observations 1)Opened-ended Require an 2)Close-ended: Best to gather causal elaborate Provide information. respondents Gathering data by observing answer & Involve selecting matched with limited relevant people, actions & respondents groups of subjects, giving choices. situations may answer in them different treatment, their own Example: –Example: controlled unrelated factors words. What is your age? A restaurant owner & checking for differences in Example : ( ) Below 20 might evaluate to employ ( ) 21 to 40 group responses How do you use more workers to work ( ) 41 & above Takes place when a product A? during certain hours by company would like to checking the number of introduce new product. customer queuing or their waiting time.  Medium of contact 4) Online 1) Mail interview. questionnaires. 3)Face-to-face 2)Telephone interview. Used email, web links or web pop-up to Used to collect large Can be done invite people to amount of The best method of individually or in answer & provide information at low gathering information groups. incentives for cost per quickly & provides greater Individual interviewing participating. respondents. flexibility than mail is flexible, interviewer Fast and low costs. Respondents questionnaires. can guide interview, Can reach to a group answering on their But, cost per respondent explain difficult that is difficult to reach own time and no is higher than mail question. like the working single interviewer bias. questionnaires & many Group interviewing parents. Not flexible & the people may not want to (focus group) inviting 6 Drawbacks: Internet response rate discuss personal question to 10 people to talk with penetration is usually very poor. with interviewer. trained moderator. restricted and Interviewer bias exist. Free & easy but costly. consumer privacy.  Sampling design Probability sampling Non- Probability sampling SAMPLING EXPLAINATION SAMPLING EXPLAINATION Judgement Respondents are chosen by researcher’s own Simple Equal chance to be selected in every judgement. Random member in population. Example : researcher chosen respondent that they Cluster/Area Population divided into mutually feel can give accurate information. exclusive groups like region or block. Convenience Respondents are easily accessible by the Random sample is pick to each group. researchers. Example : Family and friends. Population divided into mutually Respondents are chosen by a prescribed number of Stratified Quota exclusive groups like age or gender. people in each several categories. Random sample is pick to each group. Example : researchers set a certain % of respondents that will be selected across ethnic groups.  Research instrument 1)Questionnaires 2)Mechanical devices  Used to monitor consumer behaviour & obtain information.  Example: shopping complex, retailers use check-out (barcode scanner) to record shoppers’ purchases. Barcode scanner 3. Implementing research 4. Interpreting & reporting plan finding 1. The marketing research --> action. 1. Must interpret the finding, draw conclusion & 2. Involves collecting, processing & analyzing report them to the mgt. the information. 2. Researcher should present important finding 3. Data collection --> most expensive & most of that useful in major decision. subject to error. 3. marketing manager have to discuss with 4. Must process & analyze the collected data & researcher if the findings interpreted in separate information and finding. different ways that help to have best 5. Check accuracy & completeness & code it for interpretations. analysis. 4. Research must also communicate the 6. Tabulate the results & compute averages & conclusion & recommendation to the mgt. other statistical measures.  Understanding marketing information system A.Marketing Information Systems B.Customer Relationship (MIS) Management (CRM) A framework for the day-to-day mgt. & the a system that manages information about structuring of information regularly individual customer from various sources gathered from sources inside & outside an in order to maximize customer loyalty. org. CRM alone cannot guarantee any success Provides a continuous flow of information because CRM only technology & software about prices, advertising, expenditures, solution. sales, competition & distribution expenses. Companies that properly used CRM Main focus data storage and retrieval the reported an attractive return on investment. computer capabilities & mgt.’s information requirements. –Determining the objective Marketing information system (MIS) of the information by identifying decision People and procedures dedicated to assessing information needs, developing needs which require certain information. the needed information, and helping decision makers to use the information to generate and validate actionable customer and market insights. Learning objective 4  Understanding marketing information system C.Big Data and Marketing Analytics Big data With the recent explosion of information technologies, companies can now generate and find The huge and complex data marketing information in great quantities. sets generated by today’s Consumers themselves are now generating tons of marketing information. Through their sophisticated information smartphones, PCs, and tablets—via online browsing and blogging, apps and social media generation, collection, storage, and analysis interactions, texting and video, and geolocation data. technologies. Far from lacking information, most marketing managers are overloaded with data and often overwhelmed by it. This problem is summed up in the concept of big data. Today’s big data can yield big results. But simply collecting and storing huge amounts of data has little value. Marketers must sift through the mountains of data to mine the gems—the bits that yield customer insights. That’s the job of marketing analytics. Marketing analytics Marketers apply marketing analytics to the large and complex sets of data they collect from web, The analysis tools, technologies, and mobile, and social media tracking; customer transactions and engagements; and other big data processes by which marketers sources. dig out meaningful patterns in For example, Netflix maintains a bulging customer database and uses sophisticated marketing big data to gain customer insights and gauge marketing analytics to gain insights, which it then uses to fuel recommendations to subscribers, decide what performance. programming to offer, and even develop its own exclusive content in the quest to serve its customers better  Issues in marketing research 1.marketing research in small 2. International marketing business & non-profit organizations Research Undertaking a low budget research follow same stage but faced more & different problems. project. Have difficult time finding good secondary Done by observing things around them or data in foreign market. conducting own experiments. Cultures differences. Can make used of secondary data. Usually collect the own primary data because sometime the problem not exist in domestic market. Learning objective 5  SUMMARY Define the marketing information system and discuss its parts. Outline the steps in the marketing research process. The marketing information system (MIS) consists of people and The first step in the marketing research process involves defining procedures for assessing information needs, developing the the problem and setting the research objectives, which needed information, and helping decision makers use the may be exploratory, descriptive, or causal research. The second information to generate and validate actionable customer and step consists of developing a research plan for collecting market insights. A well-designed information system begins and data from primary and secondary sources. The third step calls ends with users. for implementing the marketing research plan by gathering, The MIS first assesses information needs. The MIS primarily processing, and analyzing the information. The fourth step serves the company’s marketing and other managers, but consists of interpreting and reporting the findings. Additional it may also provide information to external partners. Then the information analysis helps marketing managers apply the MIS develops information from internal databases, marketing information and provides them with sophisticated statistical intelligence activities, and marketing research. Internal procedures and models from which to develop more rigorous databases provide information on the company’s own findings. operations and departments. Such data can be obtained quickly Both internal and external secondary data sources often provide and cheaply but often need to be adapted for marketing information more quickly and at a lower cost than primary decisions. Marketing intelligence activities supply everyday data sources, and they can sometimes yield information that a information about developments in the external marketing company cannot collect by itself. However, needed information environment, including listening and responding to the vast and might not exist in secondary sources. Researchers must also complex digital environment. Market research consists of evaluate secondary information to ensure that it is relevant, collecting information relevant to a specific marketing problem accurate, current, and impartial. faced by the company. Last, the marketing information system helps users analyze and use the information to develop customer insights, make marketing decisions, and manage customer relationships(CRM). References 1. Kotler, P., Armstrong, G. (2020). Principles of Marketing, Global Edition. United Kingdom: Pearson Education. 2. Marc Oliver Opresnik and Svend Hollensen (2018) Marketing: Principles and Practice: A management-oriented approach.Independently published  KEY TERMS Big data Marketing Secondary data information system (MIS) primary data Marketing research Observational research exploratory research Customer relationship Descriptive research management(CRM) Causal research Marketing analytics DISCUSSION QUESTIONS Question 1: Many producers do not sell products or services directly to consumers and instead use marketing intermediaries to execute an assortment of necessary functions to get the product to the final user. These intermediaries, such as middlemen (wholesalers, retailers, agents, and brokers), distributors, or financial intermediaries, typically enter into longer-term commitments with the producer and make up what is known as the marketing channel, or the channel of distribution. REQUIRED a) Explain marketing intermediaries and it’s 4 different types of marketing intermediaries? (10marks) b) Markwin Electronics is a company that only sells products online. Orders are taken through an interactive Web site, and goods are shipped out through a small warehouse the company owns. Markwin employees also handle the shipment of goods to desired destinations.How could marketing intermediaries help Markwin expand its business? (10 marks) (TOTAL 20 MARKS)  DISCUSSION QUESTIONS Question 2: Research conducted by Google and CEB indicates that customers that are emotionally connected to a brand are twice as likely to purchase a product or service, and are four-times as likely to defend their purchase decisions. This shouldn’t be too surprising. After all, customers are the mortar that keep businesses from falling apart, so it only makes sense that happy, invested customers are the underlying foundation for success. REQUIRED a) Define customer relationship management (CRM) and its functions. (5 marks) b) Discuss several ways in which small organizations can conduct marketing research at little or no expense. (5 marks) (TOTAL 10 MARKS)  MODEL ANSWER FOR DISCUSSION QUESTIONS Answer Q1- Syllabus chapter 4 Market Research and Answer Q1- Syllabus chapter 4 Market Research and Managing Marketing Information (CLO 1) Managing Marketing Information (CLO 1) Model Answer to Question a) Model Answer to Question b) Marketing intermediaries help the company promote, sell, and distribute its products to final buyers. They Marketing intermediaries help the company promote, sell, include resellers, physical distribution firms, marketing and distribute its products to final buyers. Marketing services agencies, and financial intermediaries. intermediaries already have channels ready that are directly connected to customers. Thus by utilizing intermediaries, i. Resellers are distribution channel firms that help the Markwin can tap into a much bigger source of sales. company find customers or make sales to them. These Intermediaries include resellers, physical distribution firms, include wholesalers and retailers that buy and resell marketing services agencies, and financial intermediaries. merchandise. These include wholesalers and retailers who buy and resell ii. Physical distribution firms help the company stock and merchandise. move goods from their points of origin to their Physical distribution firms can help Markwin stock and destinations. move goods from their points of origin to their destinations. iii. Marketing services agencies are the marketing Marketing services agencies are the marketing research research firms, advertising agencies, media firms, and firms, advertising agencies, media firms, and marketing marketing consulting firms that help the firm target and consulting firms that help the company target and promote promote its products to the right markets. its products to the right markets. iv. Financial intermediaries include banks, credit Financial intermediaries include banks, credit companies, companies, insurance companies, and other businesses insurance companies, and other businesses that can help that help finance transactions or insure against the risks finance transactions for Markwin, or insure against the risks associated with the buying and selling of goods. associated with the buying and selling of goods.  MODEL ANSWER FOR DISCUSSION QUESTIONS Answer Q2- Syllabus chapter 4 Market Research and Answer Q2- Syllabus chapter 4 Market Research and Managing Marketing Information (CLO 1) Managing Marketing Information (CLO 1) Model Answer to Question a) Model Answer to Question b) CRM integrate, analyze, and apply the mountains of There are many sources of free secondary data on the Web, individual customer data contained in their and small firms also have access to special help collecting databases. data from chambers of commerce, government agencies, CRM consists of sophisticated software and and other organizations. analytical tools from companies. Managers of small organizations can use observation to Example; Salesforce.com, Oracle, Microsoft, and SAS collect data. For example, they can monitor competitors' that integrate customer information from all sources, advertisements, evaluate their own customer mix, and analyze it in depth, and apply the results to build regularly visit their competitors' places of business. stronger customer relationships. Informal surveys with small convenience samples are CRM integrates everything that a company's sales, another tool that smaller organizations can use. service, and marketing teams know about individual Finally, managers of smaller organizations can conduct customers, providing a 360-degree view of the simple experiments by altering one aspect of a marketing customer relationship. strategy and analyzing the results. Marketing information has no value until it is used to As with larger firms, smaller organizations must conduct make better marketing decisions. research systematically for the results to be valid and useful.