Ch01a the Nature and Scope of MR

Copyright © by Houghton Mifflin Company, Inc. All rights reserved First Edition

Chapter 1

The Nature and Scope of

Marketing Research

Copyright © by Houghton Mifflin Company, Inc. All rights reserved 1-2

Chapter Objectives

• Identify the role of marketing research in strategic decision making

• Define the process of marketing research

• Identify the three principles for generating information useful to managers

• Explain why marketing research requires analysis and interpretation of data


Chapter Objectives (Cont’d)

• Discuss the relationship between marketing research and decision making

• Describe the wide variety of applications for marketing research

• Identify various career opportunities in marketing research


e-Bay: Listening to Customers

• Vision: To help practically anyone trade practically anything on earth

• To achieve the vision, e-Bay:– Blends marketing research with its overall business

strategy– Forms voice of the customer group to keep itself

informed about the needs and preferences of its customers

– Creates Feedback Forum for users to give each other ratings for each transaction


Exhibit 1.1 Role of Marketing Research in Strategic Planning

and Decision MakingStrategic Marketing Plan:

Organizational Resources,Objectives,Marketing Strategy,Implementation and Control

Marketing Research

Marketing Strategy/Marketing MixProduct-Price-Promotion-Distribution

Customer/Society

informs

influences


Marketing Strategy

• A plan that enable an organization to make the best use of its resources to meet marketing objectives


Marketing Plan

• A formal document that specifies the organization’s resources, objectives, strategy and implementation and control efforts in marketing the specific products


Basic Components of Marketing Plan

• Identifying marketing opportunities and constraints

• Developing and implementing marketing strategies

• Evaluating the effectiveness of marketing plans


Identifying Market Opportunities

and Constraints• Who are our potential competitors and how strong

are their market positions?• How satisfied are consumers with current

offerings on the market ? Are there any unmet consumer needs ?

• How is our offering likely to be perceived by consumers relative to competitors’ offerings ?

• Marketing Research can help answer these and other questions of interest to marketers


Identifying Marketing Opportunities and Constraints

• Identify– Potential customers’ strengths and weaknesses– Consumer satisfaction with current market

offerings– Consumer perceptions of the offer relative to

competitors

• Goal– Maintain competitiveness


T.G.I.Friday’s: Using Marketing Research to Identify New Opportunities

• How the Research Was Conducted:– Formal interviews with parents and children– Observation of young customers’ likes and

wants

• Research Showed– Young customers want something beyond

ordinary drinks– T.G.I Friday’s created special kids’ drinks like

Banana Kong

Jamal


Marketing Research to Track Product Performance and Customer Satisfaction of

Products and Services• Research Showed

– Consumers wanted abundance of toppings

• Marketing research led to revamping of pizza toppings


Embracing the Marketing Concept-Need to gain a good understanding of

customers• Importance of conducting marketing

research in the early stages of formulating marketing strategies:

• Unilever PLC – Developed new detergent brand, Power– Ignored warnings about the catalyst

used in the product – Forced to withdraw the product


Understanding the Competitive Environment

• Who are Blockbuster’s competitors?

• Direct Broadcast Satellite (DBS)– Cable movie and pay TV channels – Supermarket video rentals

• How should Blockbuster react to competitive threats?


Developing and Implementing Marketing Strategies

Develop an effective Marketing Mix

Price Place

Product Promotion


Developing and Implementing Marketing Plans

• Renaissance Spirometry -- NPB– Conducted marketing research

• interviews,focus groups, telephone surveys, usage experiences, usage frequencies from doctors

– Quality deployment function: translate customer requirements into engineering specifications

– Potential users evaluate product through each step of product development


Evaluating the Effectiveness of Marketing Plans

• Controlling or the Control Function– Getting feedback from the marketplace

– Taking necessary or corrective actions

• Example Questions– Is the market share rising/declining/not moving? Why?

– Who uses the product?

– Are the answers consistent with company goals?


Common Views of Marketing Research

• Gathering data from markets• Conducting customer surveys• Determining the needs of customers• Evaluating customer response to advertising• Testing products in the market place• Estimating the potential sales of product• Gathering sales and market share data of

competitors


Exhibit 1.2 Role of Marketing Research in the

Organization/BusinessOrganizational / Business

Decision Makers

Marketing Research

Marketing Decisions

Customer/Society

informs

influences


Marketing Research Definition

• A set of techniques and principles for systematically collecting, recording, analyzing, and interpreting data that can aid decision makers who are involved with marketing goods, services or ideas


Principles of Marketing Research

• Principle #1: – Attend to the timeliness and relevance of research

• Principle #2: – Define research objectives carefully and clearly

• Principle #3: – Do not conduct research to support decisions already

made


Principle # 1: Attend to the Timeliness and Relevance of Research

Ariel High Suds

Launch

LOW SALES RATES

1985 1986 1987 1988 1989

Marketing Research

Lag Time


Research and Decision Making• P&G’s Ariel High Suds

– Research-related decisions--the timing of the research studies prior to launch

• Decision to forgo additional research to understand the impact of changed economic conditions – contributed to the initial lackluster performance of the product


Principle # 2: Define Research Objectives Carefully and Clearly

• Coca Cola tested New Coke against Coke Classic

• They didn’t account for consumer reaction to lack of choice between the two!

• End Result: New Coke failed


Principle # 3:Do Not Conduct Research to Support Decisions

Already Made• Indianized Yogurt:

– Decision was made to produce yogurt– Yogurt plant was constructed– Marketing research determined there was

only a very small market– Product failed in the marketplace

• Nestlé's Dahi is a recent entrant in the yogurt market


The Role of Marketing Research in Analysis and Interpretation

• Marketing Research can be used to identify “profitable customers” and “not-profitable customers”– Profitable Customers: those who are more

likely to spend large amounts of money and become repeat customers

– Not-Profitable Customers: those who are more likely to spend less money on each transaction and might not return


Importance of Analysis and Interpretation

Few Customers, Large Volume/per Customer – Profitable Target Market

Large Number of Customers, Low Volume/per Customer -- Not-Profitable


Research Results and Management Decisions

• Kellogg sought foreign markets in which to expand

Latvians prefer a hearty plate of sausage, cold cuts,potatoes,eggs, and a few slices of thick, chewy buttered bread.

Mexicans and Indians prefer hot, spicy breakfasts.


Research Results and Management Decisions

• Marketing research conducted by Kellogg did not forecast enthusiastic response in the countries—Kellogg decided to pursue these markets, anyway !

• Kellogg cereals’ appeal is limited to a small health-conscious group.

• Will it work?


Exhibit 1.3 Marketing Research’s Relationship to Decision Making

Activity

Decision-making activity

Marketing Research

Organization’s internal and

external environments

Marketing situation calling for decision(s)

Final decision(s)


Marketing Research Applications

• Gathering data from markets

• Conducting customer surveys

• Determining the needs of your customers

• Evaluating customer response to advertising


Marketing Research Applications (Cont’d)

• Gathering sales and market share data on your competitors

• Testing your products in the marketplace

• Estimating potential product sales


Classification of Marketing Research

• Basic Research : to generate or create knowledge – Journal of Marketing articles

• Applied research– To solve a problem– To develop strategies for products and services


Marketing Services

• Claritas Inc -- Specializes in providing marketing information to companies

• Key supplier of information containing the profiles and life-styles of U.S. consumers on a zip code-by-zip code basis

• Developed a information base by combining U.S. Census Bureau demographic data with life-style/attitudinal data generated through various regional surveys


How Do You Recruit a Nun? Marketing Research Comes to

the Rescue• St.Benedictine Convent:

– Majority of Sisters 70+ years– Inability to attract new recruits

• Conducted Focus Groups:– To determine why they were not able to recruit young

members– Research showed people perceived nuns to have a dull

existence

• Launched New Ad campaign • Recruited an average of three nuns a year


In-house Marketing Research

• Formal Marketing Department– Centralized: one marketing department for all

product lines– Decentralized: separate marketing departments

for individual product lines– Hybrid : combination of centralized and

decentralized


External Marketing Research

• Large Commercial Firms:– AC Nielsen provides full service, planning through

recommendations

• Small Commercial Firms – Specialize in one part of the process

– Custom Research Inc. provides

marketing research,customer

satisfaction, and database

marketing services


External Marketing Research (Cont’d)

Academic Consultants Professors and students’

research projects

Trade Associations

International trade site (www.fita.org)


Exhibit 1.4 Illustrative Centralized Marketing Research Function in a Multibrand Company

Corporate Marketing Research Department

Responsibilities include:

• Designing Studies

• Constructing Questionnaires

• Selecting Samples

• Collecting Data

• Analyzing Data

• Preparing Reports

• Choosing External Research Providers

Corporate Marketing Department

Marketing of Brand A

Marketing of Brand B

Marketing of Brand C

Research Reports

Research Requests






Requests Reports Requests Reports Requests Reports

Marketing Research Department for Brand A

Responsibilities Include:• Designing Studies• Constructing Questionnaires• Selecting Samples• Collecting Data• Analyzing Data• Preparing Reports• Choosing External Research Providers

Marketing Research Department for Brand B


Marketing Research Department for Brand C


Exhibit 1.5 Illustrative Decentralized Marketing Research Function in a Multibrand Company






Research Reports

Research Requests

Research Requests

Research Requests

Corporate Marketing Research Department

Responsibilities include:

• Collecting Data

• Analyzing Data

• Preparing Reports

• Choosing External Research Providers

Marketing Research

Department for Brand A

Responsibilities Include:• Designing Studies• Constructing Questionnaires• Selecting Samples

Marketing Research

Department for Brand B


Marketing Research

Department for Brand C


Shared Responsibilities

for Research

Exhibit 1.6 Illustrative Mixed-Structure Marketing Research Function in a Multibrand Company


MR at BK -- Brand Research and Analysis Department

• Decentralized Function: Four separate groups within the department help to segment out the research into areas of specialty– Consumer research– Sales analysis group– Competitive/secondary information– Customer satisfaction

• Centralized Function: Director of the department keeps the 4 groups unified in their goals and task allocation


Careers in Marketing Research

• The field of marketing research provides a vast array of job opportunities ranging from titles such as:– Data Entry Clerk; Tabulation Specialist;

Programmer– Interviewer (telephone or field)– Research Analyst– Marketing Research Manager/Director


Careers in Marketing Research


Careers in Marketing Research (Cont’d)

Documents

Ch01a the Nature and Scope of MR