Essentials of Marketing Research Kumar, Aaker, Day Chapter One A Decision Making Perspective on Marketing Research

Essentials of Marketing Research Essentials of Marketing Research Kumar, Aaker, Day Kumar, Aaker, Day

Chapter OneChapter One

A Decision Making A Decision Making Perspective on Marketing Perspective on Marketing

ResearchResearch


Why study Marketing ResearchWhy study Marketing Research

• Careers– Research Organizations (e.g. A.C. Nielsen,

J.D. Power Associates, IRI, etc.)– Marketing & Business Consultancies (e.g.

Arthur Andersen, Price Waterhouse, McKinsey & Co, etc.)

– Marketing Departments of Businesses– Academia


Situations where MR knowledge is Situations where MR knowledge is essentialessential

• Your boss wants to introduce a new product and calls you for advice.

• Your ad agency wants your business to buy an expensive ad campaign.

• Your MR consultants present their findings about why your sales are falling. Do you accept their reasons?

• Your boss wants to reduce prices and calls you for advice.


Why study Marketing ResearchWhy study Marketing Research

• Universal belief – numbers don’t lie

• Increase chances of taking the right decision

• Increase confidence in your recommendations


What is Marketing Research?What is Marketing Research?ExamplesExamples

Pain RelieversPerceptual Map

Gentleness

Effectiveness

Tylenol

Private-labelAspirin Anacin

Bayer

Excedrin

Nuprin

Advil


Definition of Marketing Definition of Marketing ResearchResearch

• Marketing research is the – systematic (pre-planned) and objective

(measurable)– identification, collection, analysis, and

dissemination of information (information goes from market to organization)

– for the purpose of improving decision making (providing factual basis for taking a decision)

– related to the identification of opportunities and solution of problems in marketing.

Role of Marketing Research in Role of Marketing Research in Managerial Decision MakingManagerial Decision Making

Four Stages of

Market Planning Situation analysis

Process

Strategy development

Marketing program development

Implementation


Situation AnalysisSituation Analysis

• The analysis of the environment in which the business operates– Market (sector-specific e.g. demand and supply, production,

etc.)

– Economy (e.g. money supply, inflation, BOP, interest rates, etc.)

– Consumer and society (buyer behavior, societal trends)

– Technology (obsolescence, innovations, inventions)

– Legal (laws regulating business)

– Political (govt. attitudes to business and specific sectors)

– Natural (effect of natural resources on business)

• Usually focus on trends which impact the marketing situation


Aspect of business environment?Aspect of business environment?Interested business?Interested business?

• Depletion of forest cover• Increased demand for gasoline in China and India• Tough vehicle emission laws in California• Fed drops interest rates by a quarter of a point• Dow Jones rises by 100 points• Consumers increasingly prefer to buy online• Increasing trend in downloading songs from the Internet• Growing popularity of satellite radio• Increased duties on European cars


Case: MP3 playersCase: MP3 players

• Identify at least one aspect of the external environment I-Pod would be interested in researching:– Economic– Technological– Buyer behavior– Market– Legal


Situation Analysis – Common Situation Analysis – Common Marketing Research QuestionsMarketing Research Questions

Describing the market:

• How big is the existing market?• How big is the potential market?• How fast is the market growing?• How brand loyal is the market?• What competitive products exist?• What is the supply situation in the market?


Situation Analysis – Common Situation Analysis – Common Marketing Research QuestionsMarketing Research Questions

Describing an organization’s market position:

• What market share does the company hold?• What market segments exist and which do

we serve?• Who are our primary competitors?• What opportunities exist with distribution

channels?


Situation Analysis – Common Marketing Situation Analysis – Common Marketing Research QuestionsResearch Questions

Describing buyer behavior:• Who are our customers? (i.e., demographic,

geographic, psychographic segments)• How do buyers perceive our brand and

competing brands?• What is the repurchase rate for our brand

and competing brands?• How satisfied are customers with our brand?• Where do customers buy? When do they

buy? Why do they buy?• How much do buyers like our brand?


Four Stages of


Process



Implementation


Strategy DevelopmentStrategy Development

Market Research Provides Information to Assist Management With Three Critical Decisions

• What business should we be in?

• How will we compete?

• What are the objectives for the business?


Strategy development – Common Strategy development – Common Marketing Research QuestionsMarketing Research Questions

• What business should we be in:– What products should we offer (e.g. Why did Apple

get into the music business?)– What technologies should we use (e.g. Should the TV

industry go the plasma monitors way or the LCD way? Sony Betamax or Toshiba VHS?)

– What market segments should we target (e.g. Under Armour – serious athletes or even casual athletes?)

– What distribution channels should we use (e.g. Cars – dealerships or Internet?)



• How will we compete– How do we differentiate ourselves / our

product from competition (e.g. Should Lacoste be a premium brand or a mass market brand?)

– What attributes do consumers consider to be important (e.g. toothpaste – whitening power or cavity protection?)

– How do we compare to competition (e.g. Pepsi and Coke – who is winning?)



• What our the business objectives– Sales Profits – Market share – Service objectives (Car dealers – low prices

or turnaround times)– Customer satisfaction (self-survey or actual

complaints)– Attitudes, etc.


Four Stages of


Process



Implementation


Common QuestionsCommon Questions

• Segmentation – which segment to target (e.g. BMW – should they introduce an economy car?)

• Product – How should the product be positioned (Should Apple I-Pod be a premium brand or a mass market brand?)

• Distribution – exclusive / mass distribution (Barbie dolls – should be sold exclusively through Toys’r’us or even in Walmart?)

• Advertising – what appeals should be used (e.g. Dolce & Gabbana super low-rise jeans – should they use over-the-top sex appeal in their ads or not?)


Common QuestionsCommon Questions

• Personal selling – which customers should be approached personally (e.g. Epson printers – is personal selling and option?)

• Price – what price should be charged (e.g. should Starbucks drop their prices?)

• Branding – how can brand loyalty be increased (e.g. should Morton salt institute a customer rewards program?)

• Customer satisfaction – how can it be measured


Four Stages of


Process



Implementation


Common questions - Common questions - ImplementationImplementation

• Did the marketing program achieve its objectives (e.g. did the Aflac duck campaign improve TOMR? Attitudes?)

• Should the marketing program be modified, continued or terminated (e.g. The Sonic guys – should the company pull the campaign?)


Factors Influencing Marketing Factors Influencing Marketing Research DecisionsResearch Decisions

Availability of DataIs the information on hand inadequate?

Do not conduct marketing research!

Conduct Marketing Research

Nature of DecisionIs the decision of considerableimportance?

Benefits vs. CostsDoes the value of the research exceed the cost?

Time ConstraintsIs sufficient time available?

Yes Yes Yes Yes

No No No No

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Essentials of Marketing Research Kumar, Aaker, Day Chapter One A Decision Making Perspective on Marketing Research