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© 2012 McGraw-Hill Ryerson Ltd.
Module 7: Market ResearchChapter 4
© 2012 McGraw-Hill Ryerson Ltd.
Module 7 - Learning Objectives
1. Explain the use and benefits of a marketing information system and market research
2. Outline the importance and challenges of market research to companies
3. Differentiate between exploratory, descriptive, and causal research
4. Identify the step-by-step market research approach5. List and describe the primary and secondary research tools
available to marketers
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‘New Coke’
Coca-Cola’s NEW COKE - New Coke was introduced in North America in April 1985 as a new and improved, sweeter version of the traditional Coca-Cola Spent $4m on market research with 190,000 blind taste tests showing
that people preferred New CokeWithin 87 days, NEW COKE was pulled from the market. Coca-Cola drinkers did not realize their old product was being replaced. They liked the taste better (in blinded tests) but Coke underestimated the impact of its brand.
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Women and Cars
Automobile industry faced an ongoing economic crisis, leading up to the 2009 recession. Companies did not conduct the proper research Focused on the ‘ok’ results from customer satisfaction surveys
Missed significant customer insights:•Customers wanted cars with better value (mileage, greener, amenities)•Women play a critical role in the purchase decision
•Government rescue of GM and Chrysler, significant financial downturn for others.
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How do Marketing Departments get information? (p.82)
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Market Research (p.82)Finding the answers to what you don’t knowMarket research is the process of collecting and analyzing information in order to recommend actions to improve marketing activities.
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What types of marketing situations might require market research?
Product developmentProduct positioningPackaging developmentTarget marketPurchase behaviourAdvertising campaignsPrice elasticitySales force compensationDistribution options
And so on, and so on and so on and so on….
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Why?
Goal: Obtain accurate information Sound decisions
– Minimize risk– Maximize outcomes – Invest in the most effective way
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Market Research Example: 3M Post-it Flag Highlighter Video
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Classifications of market research: (pages 83-85)
Why is milk consumption declining?•Existing literature•Experts interviews•Small number of consumer interviews
http://www.cdc-ccl.gc.ca/CDC/index-eng.php?id=3800
© 2012 McGraw-Hill Ryerson Ltd.
Classifications of market research: (pages 83-85)
Researcher already has a general understanding of the marketing problem and is seeking more
conclusive data
• Demographic characteristics of current milk consumers
• Current usage patterns• Consumer attitudes towards
milk consumption
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Classifications of market research: (pages 83-85)
In the descriptive research, many consumers mentioned that they believed that milk was too fattening and high in cholesterol-Ran ads talking about how healthy milk was and essential to your diet. -Tracking research studies showed a correlation between the campaign, changing attitudes and increasing consumption
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Six-Step Market Research Approach (p.86)
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LO 4
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Step 1: Define the Problem/Issue/Opportunity (p.85)
Precise definition of the problem and a formal proposal defining the task.
Requires clarifying research objectives.
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LO 4
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Step 2: Design the Research Plan (p.86-87)
1. Determine information needsBased on your problem definition, what do
you need to find out? 2. How will it be collected?
Secondary and/or primary research3. Select a sampling plan
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LO 4
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Decide on collection method (p.86)
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Choose method to maximize accuracy
of results
Collection Methods:• Secondary research• In-depth personal interviews• Focus groups• Telephone surveys• Mall intercepts• Online questionnaires• Direct mail surveys
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Sampling (p.87)
The process of gathering data from a subset of the total population rather than from all members of that particular population
Probability sampling involves precise rules to select the sample – RANDOM – representative of the sample we want to generalize to.
Non-probability sampling involves the use of arbitrary judgment of the market researcher – Not RANDOMIZED
-“person on the street” interviews- ask for volunteers- mall intercept
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Step 3: Conduct Exploratory Research (p. 88-93)
Clarify scope and nature of problem Secondary data consists of internal data or data from published sources Primary data is newly collected data.
– Qualitative research uses focus groups and in-depth interviews
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Secondary data first, then primary data
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Types of Primary Research (p.90-93)
Qualitative – insightful and directional – not statistically significant
Quantitative – statistically accurate and more reliableFar more costly and time consuming
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Focus Group Research (p.90)
Focus groupQualitativeInformal interview sessionSmall groupModerator
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In-Depth Interview (p.90)QualitativeDetailed individual interviews
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Online Research: Online Community
22http://www.communispace.com/ihg-chase-credit-card-co-creation-case-study/
Creation Of A New Credit Card using an Online Community
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Online Research: Social Listening (p.93)
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• Monitors online consumer conversations for insights
What ethical issues does the practice of social listening raise?
Through social listening, Kraft was able to identify 4 distinct segments:•Aficionados•Dieters•Moms/household chefs•Entertainers
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Type of Primary Research
Qualitative – insightful and directional – not statistically significant
Quantitative – statistically accurate and more reliableFar more costly and time consuming
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Step 4: Collect Quantitative Primary Research (p.92)
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LO 4LO 5LO 6
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Aurora Foods watches how consumers bake cakes in test kitchens to determine how easy their instructions are to follow.
Neilsen HomeScan monitors shopper behaviour in more than 250,000 households in 25 countries.
McDonalds introduced the McLobster sandwich to a few stores in Eastern Canada and monitored the results.
One Sobeys store sells prepackaged cucumbers in 3s and another store in a similar area only sells cucumbers in bulk.
Shopper’s Voice collects the responses to questions answered by the main grocery shopper in a household.
Survey
Panel
Experiment
Test Market
Observation
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Step 5: Compile, Analyze, and Interpret Data (p.96)
Synthesize and simplify pages of data into actionable information.
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LO 4
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Step 6: Generate Report and Recommendations
Market data and information has little value unless recommendations are provided that lead to marketing actions
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IAB Canada Activity
IAB Canada has a new research centre that profiles online digital marketing studies from Canada and around the world. Go to the website: www.iabcanada.com
1.What issue is IAB Canada solving by posting new research studies?2.Check the IAB Canada website at www.iabcanada.com and review one of its latest research studies. Identify interesting facts revealed by the study and what areas you think require further research.
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