Essentials of

Marketing Research

MALHOTRA

HALL

SHAW

OPPENHEIM

AN

APPLIED

ORIENTATION

PowerPoint to accompany

1- 1

1- 2 Malhotra Hall Shaw Oppenheim Essentials of Marketing Research © Copyright 2004 Pearson Education Australia

PART ONE

Chapter 1

The Marketing Research

Process

1-3 Malhotra Hall Shaw Oppenheim Essentials of Marketing Research © Copyright 2004 Pearson Education Australia

Chapter Objectives

After reading this chapter, you should be able to:

Understand the nature and scope of marketing research.

Explain the role of marketing research in business management decision-making.

Discuss the types and roles of research suppliers.

Explain the importance of ethical behaviour

Appreciate the components of the marketing research process.

Learn about the process used for defining the marketing research problem.

Discuss the background and environmental factors affecting the definition of the research problem.

Clarify the distinction between the management decision

problem and the marketing research problem.

1-4 Malhotra Hall Shaw Oppenheim Essentials of Marketing Research © Copyright 2004 Pearson Education Australia

Chapter Objectives (cont’d)

Understand the link between the research problem and

the research design.

Understand the importance of clearly specifying the

information required from research.

Define the elements of the research brief.

Understand the relationship between the research brief

and the research proposal.

1-5 Malhotra Hall Shaw Oppenheim Essentials of Marketing Research © Copyright 2004 Pearson Education Australia

History of Market Research

19th Century The Birth

1900-1930s Childhood

1930-1950s Adolescence

1950-1960’s Teenage

1960-1970s Young Adult

1970-1980s New Executive

1980-1990s Professional

1990-2000 Maturity

2000 onwards Wisdom (or Second Childhood?)

1-6 Malhotra Hall Shaw Oppenheim Essentials of Marketing Research © Copyright 2004 Pearson Education Australia

Marketing Research (MR) is the systematic and

objective identification, collection, analysis, and

dissemination of information for the purpose of

assisting management in decision- making

related to the identification and solution of

problems and opportunities in marketing.

Definition

1-7 Malhotra Hall Shaw Oppenheim Essentials of Marketing Research © Copyright 2004 Pearson Education Australia

MR and Decision Making

MR should produce information that is:

Relevant

Accurate

Reliable

Valid

Timely

1-8 Malhotra Hall Shaw Oppenheim Essentials of Marketing Research © Copyright 2004 Pearson Education Australia

Figure 1.2 The Central Role of Marketing Research

1-9 Malhotra Hall Shaw Oppenheim Essentials of Marketing Research © Copyright 2004 Pearson Education Australia

Figure 1.3 A Typology of Business Decision Making

1-10 Malhotra Hall Shaw Oppenheim Essentials of Marketing Research © Copyright 2004 Pearson Education Australia

Classification of MR

Problem Identification

Research

Identifies problems

not yet apparent

Often undertaken for

survival and long

term growth of the

company

Problem Solving

Research

Used once the

problem has been

identified

Used in making

decisions to solve

problems

1-11 Malhotra Hall Shaw Oppenheim Essentials of Marketing Research © Copyright 2004 Pearson Education Australia

Examples of Problem Identification Research

Market potential research

Market share research

Image research

Market characteristics research

Sales analysis research

Forecasting research

Business trends research

1-12 Malhotra Hall Shaw Oppenheim Essentials of Marketing Research © Copyright 2004 Pearson Education Australia

Examples of Problem Solving Research

Segmentation research

[lifestyle, demographics]

Product research

[concepts, packaging]

Pricing research

[price elasticity, price line pricing]

Promotion research

[advertising effectiveness, sales promotion]

Distribution research

[location of retail outlets]

1-13 Malhotra Hall Shaw Oppenheim Essentials of Marketing Research © Copyright 2004 Pearson Education Australia

MMIS and DSS

Marketing Management Information System

A formalised set of procedures for generating, analysing, storing, and distributing information to marketing decision makers on an ongoing basis.

[invoices, annual reports, previous research]

Decision Support Systems

Integrated system including hardware, communications network, database, model base, software base and the DSS user that collects and interprets information for decision making.

1-14 Malhotra Hall Shaw Oppenheim Essentials of Marketing Research © Copyright 2004 Pearson Education Australia

MMIS vs DSS

Marketing Management

Information System

Structured problems

Use of reports

Rigid structure

Information displaying

restricted

Can improve decision

making by clarifying

raw data

Decision Support Systems

Unstructured problems

Use of models

User-friendly interaction

Adaptability

Can improve decision

making by using “what

if” analysis

1-15 Malhotra Hall Shaw Oppenheim Essentials of Marketing Research © Copyright 2004 Pearson Education Australia

Figure 1.6 Market Research Suppliers and Services

1-16 Malhotra Hall Shaw Oppenheim Essentials of Marketing Research © Copyright 2004 Pearson Education Australia

Some Australian Research Companies

AC Nielsen

amrinteractive

Australian Fieldwork Solutions

BIS Shrapnel

Chant Link & Associates

Colmar Brunton

Fieldforce

FieldWorks

Lynx

Millward Brown Australia

Quantum Market Research

Roy Morgan Research

Sweeney Research

Wallis

1-17 Malhotra Hall Shaw Oppenheim Essentials of Marketing Research © Copyright 2004 Pearson Education Australia

MR Job advertisement

FMCG - Market Research role

Reporting to the MR Manager you will be required to undertake and

manage market research projects, ensuring these results are objectively

analysed and interpreted. You will prepare summaries and develop

independent conclusions and recommendations so that consumer

understanding is integrated into key strategies and brand development

activities. In addition, you will be responsible for ensuring that

presentations are timely, relevant and address key business issues.

A clear thinker and strategist, you will have tertiary qualifications in

marketing, psychology and/or statistics. Experience as a market research

supplier or buyer is essential for this position.

Conceptual and analytical skills combined with influential communication

skills are essential. An insight and understanding of marketing principles

is desired.

1-18 Malhotra Hall Shaw Oppenheim Essentials of Marketing Research © Copyright 2004 Pearson Education Australia

Skills and Knowledge required by

Market Researchers

Knowledge of marketing, psychology and consumer behaviour

The ability to understand and interpret secondary data

The ability to complete projects on time

Presentation skills

Foreign-language competency

Negotiation skills

Computer proficiency

Interpersonal skills

Statistical skills

Think creatively

1-19 Malhotra Hall Shaw Oppenheim Essentials of Marketing Research © Copyright 2004 Pearson Education Australia

Marketing Research Process

Marketing or business definition problem or opportunity

Development of an approach and specifying research objectives

Research design formulation

Field work or data collection

Data preparation and analysis

Report preparation and presentation

1-20 Malhotra Hall Shaw Oppenheim Essentials of Marketing Research © Copyright 2004 Pearson Education Australia

Ethics in Marketing Research

Address whether action is right or wrong, good

or bad

Most ethical decisions have extended or long

term effects

Ethical decisions are rarely black and white

Alternatives have both positive and negative

outcomes

1-21 Malhotra Hall Shaw Oppenheim Essentials of Marketing Research © Copyright 2004 Pearson Education Australia

Stakeholders in MR

Public Respondents

Client Researcher

1-22 Malhotra Hall Shaw Oppenheim Essentials of Marketing Research © Copyright 2004 Pearson Education Australia

Unethical Practices

Problem definition

Using surveys as a guise for selling or fundraising

Following personal agendas of the researcher or client

Conducting unnecessary research

Approach to the problem

Soliciting proposals to gain research expertise without pay

Using findings and models for specific clients or projects for other projects

1-23 Malhotra Hall Shaw Oppenheim Essentials of Marketing Research © Copyright 2004 Pearson Education Australia

Unethical Practices cont.

Research design

Formulating a research design more suited to the researcher’s rather than the clients needs

Using secondary data that are not applicable

Disguising the purpose of the research

Not maintaining anonymity of respondents

Disrespecting privacy of respondents

Misleading questions

Embarrassing or putting stress on respondents

Using measurement scales of questionable reliability and validity

Designing overly long questionnaires or sensitive questions

Using inappropriate sampling procedures and sample size

1-24 Malhotra Hall Shaw Oppenheim Essentials of Marketing Research © Copyright 2004 Pearson Education Australia

Unethical Practices cont

Fieldwork

Increasing the discomfort level of respondents

Following unacceptable fieldwork procedures

Data Preparation and analysis

Identifying and discarding unsatisfactory respondents

Using statistical techniques when the underlying assumptions are violated

Interpreting the results and making incorrect conclusions and recommendations

Report Preparation and Presentation

Using incomplete, biased and inaccurate reporting

1-25 Malhotra Hall Shaw Oppenheim Essentials of Marketing Research © Copyright 2004 Pearson Education Australia

Code of Professional Behaviour

Market Research Society of Australia

www.mrsa.com.au

Code of Professional Behaviour covers:

Responsibilities to respondents

Researchers’ professional responsibilities

Researchers’ and Clients mutual rights and

responsibilities

1-26 Malhotra Hall Shaw Oppenheim Essentials of Marketing Research © Copyright 2004 Pearson Education Australia

Importance of Defining the Problem

Problem definition involves stating the general

problem and identifying the specific components

of the marketing research problem.

Critical in setting the directions for all

subsequent phases of the marketing research

process.

Inadequate problem definition is a leading cause

of failure of marketing research projects.

1-27 Malhotra Hall Shaw Oppenheim Essentials of Marketing Research © Copyright 2004 Pearson Education Australia

Case: Where did Coca-Cola go wrong?

Coca-Cola conducted blind taste tests in the early 1980s to

determine consumer taste preferences.

Results indicated that consumers preferred a sweeter product,

similar to Pepsi Cola. Coca-Cola introduced the new taste

Coke and named it “New Coke” and discontinued the original

Coke.

In less than 3 months, New Coke was discontinued after

customer outrage that the original Coke was removed.

It has been suggested that Coca-Cola narrowly defined the

research problem.

Coca-Cola failed to measure the emotional attachment and

loyalty to the existing brand name and its effect on subsequent

purchase and consumption behaviour.

Source: Shields, M.J. 1985 ‘Coke Fizzles, Fails to Factor in Customer Loyalty’, Adweek, 15 July, p.8.

1-28 Malhotra Hall Shaw Oppenheim Essentials of Marketing Research © Copyright 2004 Pearson Education Australia

Tasks involved in the

Problem Definition Process

Collect the background information

Consider the environmental context of the problem

Conduct problem or opportunity audit

Step 1: Marketing or Business Problem Definition

Specify the Management Decision Problem

State the Purpose of the project

Define the Marketing Research Problem

Prepare the Marketing Research Brief

1-29 Malhotra Hall Shaw Oppenheim Essentials of Marketing Research © Copyright 2004 Pearson Education Australia

Collect the Background Information

Discussion with decision makers

Interviews with industry experts

Reviewing existing information

Secondary data analysis

Exploratory qualitative research

1-30 Malhotra Hall Shaw Oppenheim Essentials of Marketing Research © Copyright 2004 Pearson Education Australia

Environmental Context of the Problem

Past information and forecasts

Resources and constraints

Organisational and decision maker’s objectives

Buyer behaviour

Legal environment

Economic environment

Marketing and Technological skills

1-31 Malhotra Hall Shaw Oppenheim Essentials of Marketing Research © Copyright 2004 Pearson Education Australia

The Problem or Opportunity Audit

Management decision problems and marketing

research problems encompass both problems

and opportunities.

Conduct a problem audit to understanding the

origin and nature of the problem. Discussion

with decision maker should uncover:

Symptoms

Alternative course of action

Background information

Suspected causes and possible solutions

Anticipated consequences

Corporate culture of the organisation

1-32 Malhotra Hall Shaw Oppenheim Essentials of Marketing Research © Copyright 2004 Pearson Education Australia

The Problem or Opportunity Audit (cont)

Symptoms

Declining sales

Decline in profits

Losing market share

Inability to meet sales

forecasts

Low traffic

Dissatisfied customers

Management

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The Problem or Opportunity Audit (cont)

Possible Causes

Low-quality product or service

Incorrect pricing

Inappropriate distribution channels

Low awareness of company or brands

Poor image of the company

Unmotivated sales force Researcher

1-34 Malhotra Hall Shaw Oppenheim Essentials of Marketing Research © Copyright 2004 Pearson Education Australia

The Problem or Opportunity Audit (cont)

The interaction between the decision maker and the

researcher should be characterised by the 7Cs

Co-operation

Confidence

Candour

Closeness

Continuity

Creativity

Communication

1-35 Malhotra Hall Shaw Oppenheim Essentials of Marketing Research © Copyright 2004 Pearson Education Australia

MDP and MRP

Management Decision Problem (MDP)

What the decision maker needs to do?

Action oriented

eg. Should the advertising campaign be changed?

Marketing Research Problem (MRP)

What information is needed and how that information can be obtained effectively and efficiently?

Information oriented

eg. To determine the effectiveness of the current advertising campaign

1-36 Malhotra Hall Shaw Oppenheim Essentials of Marketing Research © Copyright 2004 Pearson Education Australia

Defining the MRP

Broad statement

To understand the decision making process of potential

university students in their choice of university .

Specifically,

To determine the factors potential students consider to be

important in selecting a university.

To determine when decisions regarding university

selection are made.

To determine sources of information and people who

influence potential students decision regarding choice of

university.

1-37 Malhotra Hall Shaw Oppenheim Essentials of Marketing Research © Copyright 2004 Pearson Education Australia

Estimating the value of research and

setting a budget

Expected Value (EV) = Probability (Pr) x Value of Outcome (Vr)

Project Return (profit)

$2million

EV with

$2 x 0.7 = $1.4 million

EV with

$2 x 0.3 = $0.6 million

Difference contributed

by research (A – B)

1.4 – 0.6 = $0.8million

A

B

With

Research

Without

research

Probability of success 0.3

Probability of success 0.7

1-38 Malhotra Hall Shaw Oppenheim Essentials of Marketing Research © Copyright 2004 Pearson Education Australia

Contents of Marketing Research Brief

Executive summary

Introduction

Background

Management decisions - Research Purpose

Research Objectives (research information)

Scope of the Project

Proposed Research Approach

1-39 Malhotra Hall Shaw Oppenheim Essentials of Marketing Research © Copyright 2004 Pearson Education Australia

Contents of Marketing Research Brief cont.

Reporting Requirements

Timing

Budget

Materials

Contractual Arrangements

Requirements for proposals

Project Management