Introduction toMarketing Research

Marketing Research Defined

The systematic and objective process of generating information for aid in making marketing decisions

Marketing Research Types

Basic Research (Problem identification research)

Applied research ( Problem solving research)

Basic Research

• Attempts to expand the limits of knowledge

• This research will help to identify the problems exists or likely to arise in the future.

Basic Research Example

• Checking whether students spent time in SNS affects their academic performance?

Applied Research

• Conducted when a decision must be made about a specific real-life problem

Applied Research Example

• Should McDonalds add Italian pasta dinners to its menu?– Marketing research told McDonald’s it

should not

• Should Procter & Gamble add a high-priced home teeth bleaching kit to its product line?– Research showed Crest Whitestrips

would sell well at a retail price of $44

Using Marketing Research

• We can use Marketing Research to:–Identify & Evaluate Opportunities

–Analyze Market Segments

–Select Target Markets

–Plan & Implement Marketing Mixes

–Analyze Marketing Performance• Performance Monitoring Research

A Classification of Marketing Research

Marketing Research

Problem Identification Research

Problem-Solving Research

Market Potential ResearchMarket Share ResearchMarket Characteristics ResearchSales Analysis ResearchForecasting ResearchBusiness Trends Research

Segmentation Research

Product Research

Pricing Research

Promotion Research

Distribution Research

Problem-Solving Research

Determine the basis of segmentation

Establish market potential and responsiveness for varioussegments

Select target markets

Create lifestyle profiles:demography, media, and product image characteristics

SEGMENTATION RESEARCH

Test concept

Determine optimal product design

Package tests

Product modification

Brand positioning and repositioning

Test marketing

Control score tests

PRODUCT RESEARCH

Problem-Solving Research

PRICING RESEARCH

Pricing policies

Importance of price in brand selection

Product line pricing

Price elasticity of demand

Initiating and responding to price changes

$ALE

PROMOTIONAL RESEARCH

Optimal promotional budget

Sales promotion relationship

Optimal promotional mix

Copy decisions

Media decisions

Creative advertising testing

Evaluation of advertising effectiveness

Claim substantiation

0.00% APR

Problem-Solving Research

DISTRIBUTION RESEARCH

Determine…Types of distributionAttitudes of channel members Intensity of wholesale & resale coverage

Channel marginsLocation of retail and wholesale outlets

The Marketing Research Process

• Define the Problem

• Develop an Approach to the Problem– Type of Study? Exploratory, Descriptive, Causal?– Mgmt & Research Questions, Hypotheses

• Formulate a Research Design– Methodology

– Questionnaire Design

• Fieldwork

• Prepare & Analyze the Data

• Prepare & Present the Report

Step 1: Define the problem• Management decision problem

• Marketing research problem

Management Decision Problem Vs. Marketing Research Problem

Management Decision Problem Marketing Research Problem

 

Should a new product be

introduced? To determine consumer preferences and purchase intentions for the proposed new product.

 Should the advertising To determine the effectiveness

campaign be changed? of the current advertising

campaign.

 

Should the price of the To determine the price elasticity

brand be increased? of demand and the impact on sales

and profits of various levels of price changes.

Proper Definition of the Research Problem

Marketing Research Problem

Broad Statement

Specific Components

Department Store ProjectProblem DefinitionIn the department store project, the marketing research problem is to determine the relative strengths and weaknesses of Tesco Lotus, vis-à-vis other major competitors, with respect to factors that influence store patronage. Specifically, research should provide information on the following questions.

1. What criteria do households use when selecting department stores?2. How do households evaluate Tesco Lotus and competing stores in terms of the choice criteria identified in question 1?3. Which stores are patronized when shopping for specific

product categories?4. What is the market share of Tesco Lotus and its competitors for specific product categories?5. What is the demographic and psychological profile of the

customers of Tesco Lotus ? Does it differ from the profile of customers of competing stores?6. Can store patronage and preference be explained in terms of store evaluations and customer characteristics?

Step 2: Develop an approach to the problem

1. Objective/Theoretical Foundations

2. Analytical Model

3. Research Questions

4. Hypotheses

5. Specification of the Information Needed

Role of Theoretical foundationsResearch Task Role of Theory

1. Conceptualizing

and identifying

key variables

Provides a conceptual foundation and understanding of the basic processes

underlying the problem situation. These processes will suggest key dependent

and independent variables.

2. Operationalizing

key variables

Theoretical constructs (variables) can suggest independent and dependent

variables naturally occurring in the real world.

3. Selecting a

research design

Causal or associative relationships suggested by the theory may indicate whether

a causal or descriptive design should be adopted.

4. Selecting a

sample

The theoretical framework may be useful in defining the population and

suggesting variables for qualifying respondents, imposing quotas, or stratifying

the population (see Chap. 11).

5. Analyzing and

interpreting data

The theoretical framework (and the models, research questions and hypotheses

based on it) guide the selection of a data analysis strategy and the interpretation

of results (see Chap. 14).

6. Integrating

findings

The findings obtained in the research project can be interpreted in the light of

previous research and integrated with the existing body of knowledge.

Ex. Kano’s Model of satisfaction

One of a popular model used for measuring and analyzing customer satisfaction

Technology acceptance Model (TAM)

TAM—one of popular information systems theory that models how users come to accept and use a technology; the model suggests that the acceptability of an info system is determined by two main factors: (i) perceived usefulness and (ii) perceived ease of use

Theory of reasoned action (TRA) Person’s behavior (behavioral intention) depends on the

person’s attitude about the behavior and subjective norm (the person’s perception that most people who are important to him/her think s/he should or should not perform the behavior in question)

3 components of TRA: (i) behavioral intention (BI); (ii) attitude (A); and (iii) subjective norm (SN); BI = A + SN

Models

An analytical model is a set of variables and their interrelationships designed to represent, in whole or in part, some real system or process.

In verbal models, the variables and their relationships are stated in prose form. Such models may be mere restatements of the main tenets of a theory.

Graphical ModelsGraphical models are visual. They are used to

isolate variables and to suggest directions of

relationships but are not designed to provide

numerical results.

Awareness

Understanding

Preference

Patronage

Mathematical ModelsMathematical models explicitly specify the

relationships among variables, usually in

equation form.

Where

y = degree of preference

= model parameters to be estimated

statistically

n

iii xaay

10

aa i,

0

Step 3: Development of Research Questions and Hypotheses

Components of the

Research Questions

Hypotheses

Objective/TheoreticalFrameworkAnalyticalModel

Marketing Research Problem

Research Questions and Hypotheses

• Research questions (RQs) are refined statements of the specific components of the

problem.

• A hypothesis (H) is an unproven statement or proposition about a factor or phenomenon that is of interest to the researcher. Often, a hypothesis is a possible answer to the research question.

RQ & Hypothesis ExampleRQ & Hypothesis Example

• RQ 1: What are the characteristics of RQ 1: What are the characteristics of online gamers?online gamers?

• Null hypothesis ( Ho): Null hypothesis ( Ho):

There is no difference between males and females who play online

• Alternate Hypothesis (Ha): Alternate Hypothesis (Ha):

Males are more into online games than females.

Research Proposal• A specific document that provides an overview

of the proposed research and its methodology.• Normally includes the description of first 3 steps

of a research such as– Purpose of the research – Type of study– Definition of target population and sample size– Data collection methods– Specific research instruments– Potential benefits of the study– Proposed cost of the total research project

How to increase the customer loyalty?

At United, Food Is Uniting the Airline with Travelers

United Airlines, as other major airlines, had to deal with passenger loyalty (management decision problem: how to attract more and more loyal passengers). The broad marketing research problem was to identify the factors that influence loyalty of airline travelers.

The basic answer is to improve service. Exploratory research, theoretical framework, and empirical evidence revealed that the consumers’ choice of an airline is influenced by: safety, price of the ticket, frequent-flyer program, convenience of scheduling, and brand name.

At United, Food Is Uniting the Airline with Travelers

The problem was that major airlines were quite similar on these factors. Indeed, "airlines offer the same schedules, the same service, and the same fares.”

Consequently, United Airlines had to find a way to differentiate itself. Food turned out to be the solution.

At United, Food Is Uniting the Airline with Travelers

Secondary data, like the J. D Power & Associates' survey on "current and future trends in the airline food industry," indicated that "food service is a major contributor to customers’ loyalty." This survey also emphasized the importance of food brands.

At United, Food Is Uniting the Airline with Travelers

The airline's Marketrak survey told United Airlines that "customers wanted more varied and up-to-date food.”

The following research questions and hypotheses may be posed.

RQ1 How important is food for airline customers?

H1: Food is an important factor for airline travelers.

H2: Travelers value branded food.

H3: Travelers prefer larger food portions, but with consistent quality.

H4: Travelers prefer exotic food.

At United, Food Is Uniting the Airline with Travelers

Characteristics that influence the research design included the identification of competing airlines (Delta, American, etc.), factors of the choice criteria (already identified), measurement of airline travel, and loyalty.

At United, Food Is Uniting the Airline with Travelers

Determining When to Conduct Marketing Research

•Time constraints

•Availability of data

•Nature of the decision

•Benefits versus costs

Is sufficient time

available?

Information already on

handinadequate?

Is the decision of

strategicor tactical

importance?

Does theinformation

valueexceed the

research cost?

ConductMarketingResearch

Do Not Conduct Marketing Research

Time Constraints Availability of Data Nature of the Decision Benefits vs. Costs

Yes YesYesYes

No No No No

Determining When to Conduct Marketing Research

Value

Decreased uncertaintyIncreased likelihood of correct decisionImproved marketing performance and resulting higher profits

Costs

Research expendituresDelay of marketing decision and possible disclosure of information to rivalsPossible erroneous research results

Potential Value of a Marketing Research Effort Should Exceed Its Estimated Costs

ALWAYS Remember

• Marketing Research is a tool.• It assists marketing managers in

their decision making.

• IT IS NOT A REPLACEMENT FOR MANAGERIAL JUDGEMENT!!