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!!
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