FUNCTIONS AND TYPES OF MARKETING RESEARCH; FIELDS OF APPLICATION.

ALENA KLAPALOVÁ

klapalov@econ.muni.cz

Sources: Exploring Marketing Research, 10th Edition William G. Zikmund, Barry J. Babin. 2010 Cengage Learning.Marketing Research David A. Aaker; V. Kumar; George DayJohn Wiley & Sons, Inc., 2001An Introduction to Marketing Research , Scott M. Smith and Gerald S. Albaum, 2010

What is the nature and purpose of marketing research?

http://www.youtube.com/watch?v=_X5CfPGYx-o

What Must Be Considered When Using Research in Marketing Decision-Making

http://www.youtube.com/watch?v=PgxDXOmMmHU&feature=related

COMPANIES/ORGANIZATIONS AND MARKETING RESEARCH• Existence of companies/organizations =

many questions to answer:

1. What is the purpose of our existence?

2. …………………….?

3. …………………….?

many decisions to make:

1. Which product should we offer?

2. Which price to set?

3. ……………………….?

4. ………………………?

many problems to solve:

1. competition is stronger and stronger…

2. Customers are no loyal enough………..

3. ……………………………………………………..

INFORMATION IS NEEDED!!!Primary marketing research’s function is: to supply information that helps provide these answers, thereby leading to more informed and more successful decision making. Managers

that use this information reduce the risk associated with decision making.

Marketing research seeks to deliver accurate and precise information that can make marketing strategy and management more effective.

Marketing research attempts to supply accurate information that reduces the uncertainty in decision making.

Marketing research helps decision makers shift from intuitive information gathering to systematic and objective investigating.

Marketing research is the application of the scientific method in searching for the truth about marketing phenomena.

providing relevant, accurate, and timely (RAT) information

= research quality, conformity to prior expectations, clarity of presentation, political acceptability within the firm, challenge to the status quo

In other words…..

The context for decisions where the information from marketign research can be needed is…

the MARKETING PLANNING PROCESS – ALL STAGES:

Situation analysis

Strategy development

Marketing programe development

Implementation

Evaluation

Marketing Information System and Marketing research

©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th editionUpper Saddle River, NJ 07458 Kotler, Bowen, and Makens

MIS and MDSS and MKT R and MI

An information system (IS) is a continuing and interacting structure of people, equipment, and procedures designed to gather, sort, analyze, evaluate, and distribute pertinent, timely, and accurate information to decision makers.

While marketing research is concerned mainly with the actual content of the information and how it is to be generated, the information system is concerned with managing the flow of data from many different projects and secondary sources to the managers who will use it. This requires databases to organize and store the information and a decision support system (DSS) to retrieve date, transform it into usable information, and disseminate it to users.

The purpose of a marketing decision support system (MDSS) is to combine marketing data from diverse sources into a single database which line managers can enter interactively to quickly identify problems and obtain standard, periodic reports, as well as answers to analytical questions.

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Marketing intelligence includes everyday information about developments in the marketing environment that helps

managers prepare and adjust marketing plans and short-run tactics (competence and commitment)

MARKETING RESEARCH APPLICATIONS

defining marketing opportunities and problems, generating and evaluating marketing ideas, monitoring performance, generally understanding the marketing process.

Marketing research is relevant to all aspects of the marketing mix. Research can facilitate managerial decision making in all aspects of the firm’s marketing mix: product, pricing, promotion, and distribution.

• WHICH AREAS OF MARKETING MANAGEMENT CAN BE COVERRED BY MARKETING RESEARCH AS WELL?

Marketing research – introduction – coffee industry

(example)

ARE THERE THE ABOVE MENTIONED ISSUES?

ANOTHER EXAMPLE OF APPLICATION - DEVELOPING AND IMPLEMENTING A MARKETING STRATEGY

1. Identifying and evaluating market opportunities;

2. Analyzing market segments and selecting target markets;

3. Planning and implementing a marketing mix that will provide value to customers and meet organizational objectives;

4. Analyzing firm performance……

MARKETING AND/OR MARKET RESEARCH

can be synonymous in practice

BUT

Market research is: the “systematic gathering, recording, and analyzing of data with respect to a particular market, where ‘market’ refers to a specific group in a specific geographic area.”

AND

Marketing research is the process of designing, gathering, analyzing, and reporting information that may be used to solve a specific marketing problem.

OR

Marketing research: the function that links the consumer, customer, and public to the marketer through information – information used to identify and define marketing opportunities and problems; generate, refine, and evaluate marketing actions; monitor marketing performance; and improve the understanding of marketing as a process. (AMA def.)

TYPES OF MARKETING RESEARCH (1)

Programmatic research is performed to develop marketing options through market segmentation, market opportunity analysis, or consumer attitude and product usage studies.

Selective research is done to test different decision alternatives such as new product concept testing, advertising copy testing, pretest marketing, and test marketing.

Evaluative research is carried out to evaluate performance of programs, including tracking advertising recall, corporate and brand image studies, and measuring customer satisfaction with the quality of the product and service.

BASIC (FUNDAMENTAL OR PURE or Theoretical) MARKETING RESEARCH (2)

is conducted without a specific decision in mind;

it usually does not address the needs of a specific organization;

it attempts to expand the limits of marketing knowledge in general;

as such it is not aimed at solving a particular pragmatic problem.

Basic research can be used:

to test the validity of a general marketing theory (one that applies to all of marketing)

or

to learn more about some market phenomenon.

APPLIED (decisional) MARKETING RESEARCH

is conducted to address a specific marketing decision for a specific firm or organization.It attempts to use existing knowledge (or newly obtained) to aid in the solution of some given problem or set of problems.

MARKETING RESEARCH AND SCIENTIFIC METHOD

All marketing research, whether basic or applied, involves the scientific method.

The scientific method is the way researchers go about using knowledge and evidence to reach objective conclusions about the real world. The scientific method has evolved objective and rigid procedures for verifying hypotheses or evaluating evidence.

The essential tenets of the scientific method are:

• Direct observation of phenomena.

• Clearly defined variables, methods, and procedures.

• Empirically testable hypotheses.

• The ability to rule out rival hypotheses.

• Statistical rather than linguistic justification of conclusions.

• The self-correcting process.

Types of marketing research (3)

Exploratory Research. Exploratory research is used when one is seeking insights into the general nature of a problem, the possible decision alternatives, and relevant variables that need to be considered. Typically, there is little prior knowledge on which to build. The research methods are highly flexible, unstructured, and qualitative (need not to be always), for the researcher begins without firm preconceptions as to what will be found. The absence of structure permits a thorough pursuit of interesting ideas and clues about the problem situation.

Descriptive Research. Descriptive research embraces a large proportion of marketing research. The purpose is to provide an accurate snapshot of some aspect of the market environment. In othr words, this research describes data and characteristics about the population or phenomenon being studied. However, it does not answer questions about eg: how/when/why the characteristics occurred

Causal Research. When it is necessary to show that one variable causes or determines the values of other variables, a causal research approach must be used. Descriptive research is not sufficient, for all it can show is that two variables are related or associated. Of course, evidence of a relationship or an association is useful; otherwise, we would have no basis for even inferring that causality might be present. To go beyond this inference we must have reasonable proof that one variable preceded the other and that there were no other causal factors that could have accounted for the relationship or to have expectations.

IN PRACTICE THESE TYPES OF RESEARCHES (RESEARCH APPROACHES) USUALLY MIX.

Research (basic) approaches can be also:

Observational research - (or field research) is a social research technique that involves the direct observation of phenomena in their natural setting.

Survey research is a means of analysis involving a respondent and questionnaire to obtain qualitative and/ or quantitative information in a sociological study. The respondent is a person who provides data for analysis by responding to a survey questionnaire. A questionnaire is a document containing questions and other types of items designed to solicit information appropriate for analysis.

Experimental research - a quasi-artificial environment is created to control for spurious factors, and where at least one of the variables is manipulated as part of the experiment.

Other typologies of marketing research

PRODUCT RESEARCH (4)Studies designed to evaluate and develop new products and to find out how to adapt existing product lines.

Concept testing exposes potential customers to a new product idea to judge the acceptance and feasibility of the concept.

Product testing reveals a product prototype’s strengths and weaknesses or determines whether a finished

product performs better than competing brands or according to expectations.

Brand-name evaluation studies investigate whether a name is appropriate for a product.

Package testing assesses size, color, shape, ease of use, and other attributes of a package.

Product research encompasses all applications of marketing research that seek to develop product attributes that will add value for consumers.

PRICING RESEARCHHow consumers will respond to a product offering two different prices.

Pricing involves finding the amount of monetary sacrifice that best represents the value customers perceive in a product after considering various market constraints.

How much are customers willing to pay for XXX?

Will customers behave the same way after price will rise?

Pricing research also investigates the way people respond to pricing tactics.

Do consumers view prices and/ or quantity discounts as fair in a given category?

DISTRIBUTION RESEARCHStudies aimed at selecting retail sites or warehouse locations.

A survey of retailers or wholesalers may be conducted because the actions of one channel member can greatly affect the performance of other channel members.

Studies to gain knowledge about retailers’ and wholesalers’ operations and to learn their reactions to a manufacturer’s marketing policies.

Research examining the effect of just-in-time ordering systems or exclusive distribution on product quality.

Research focused on developing and improving the efficiency of marketing channels

PROMOTION RESEARCHInvestigates the effectiveness of advertising, premiums, coupons,

sampling, discounts, public relations,and other sales promotions.

Media research helps businesses make decisions about whether television, newspapers, magazines, or other media alternatives are best suited to convey the intended message.

Ansoff matrix and marketing research

Likelihood of adoption of new products

Showing unmeet needs and providing and understanding of unfamiliar markets

Find new territories for products or services

Measuring customer satisfaction to find out how to maintain a competitive edge

ANALYZING MARKETING PERFORMANCE (5)

serve to inform managers whether planned activities were properly executed and are accomplishing what they were expected to achieve = marketing research may be conducted to obtain feedback for evaluation and control of marketing programs.

Performance-monitoring research refers to research that regularly, sometimes routinely, provides feedback for evaluation and control of marketing activity.

Marketing metrics refer to quantitative ways of monitoring and measuring marketing performance.

TWENTY DIFFERENT TYPES OF MARKETING SURVEYS (6)

1 - Market Description Surveys

To determine the size and relative market share of the market. Such studies provide key information about market growth, competitive positioning and tracking share of market.

2 - Market Profiling-Segmentation Surveys

To identify who the customers are, who they are not, and why they are or are not your customers. This is often a descriptive market segmentation and market share analysis

3 - Stage in the Purchase Process / Tracking Surveys

Where is the customer in the adoption process? This information shows market Awareness – Knowledge – Intention – Trial – Purchase – Repurchase of the product.

4 - Customer Intention - Purchase Analysis Surveys

Directed at understanding the current customer. What motivates the customer to move from interest in the product to actual purchase? This is a key to understanding customer conversion, commitment and loyalty.

5 - Customer Attitudes and Expectations Surveys

Does the product meet customer expectations? What attitudes have customers formed about the product and/or company. Used to direct advertising and improve customer conversion, commitment and loyalty.

6 - Customer Trust - Loyalty – Retention Analysis Surveys

Especially for high priced consumer goods with long decision and purchase processes (time from need recognition to purchase), and depth of consumer attitudes formed about the product and/or company.

7 - New Product Concept Analysis Surveys

Concept test studies are appropriate in the initial screening of new product concepts. Likes and dislikes about the concept and evaluation of acceptability and likelihood of purchase are especially useful measures.

8 - New Product Acceptance and Demand Surveys (Conjoint Analysis)

Primarily for estimating demand for new products that can be described or have been developed in drawing or concept, but have not yet been developed physically. Develops develop market share estimates of market potential for the alternative potential products.

9 - Habits and Uses Surveys

Directed at understanding usage situations, including how, when and where the product is used. Habits and uses studies sometimes include a real or virtual pantry audit.

10 - Product Fulfillment Surveys (Attribute, Features, Promised Benefits)

Evaluation of the product’s promised bundle of benefits (both tangible and image). Are expectations created for the product by advertising, packaging and the produce appearance fulfilled by the product?

11 - Product Positioning Surveys (Competitive Market Position)

A “Best Practices” study of “How does the market view us relative to the competition?” Competitive positioning analyses often compare the attributes and benefits that make up the product using multidimensional scaling.

12 - Brand Equity Analysis Surveys

What is psychological value that a brand holds in the market place? Brand equity is a composite of brand awareness, brand quality, brand associations and brand loyalty measures.

13 - Advertising Value Identification and Analysis Surveys

Advertising value analysis focuses on mapping the hierarchical attributes, benefits and values that are associated with and portrayed by an advertisement. Means-end analysis is often part of this type of study.

14 - Advertising Message Effectiveness Surveys (Media and Message)

Message effectiveness testing identifies the impressions, feelings, and effectiveness in moving the respondent to a desired goal (increased awareness, more product information, trial, repeat purchase).

15 - Sales Force Effectiveness Surveys

A combination of measures that focus on the sales activities, performance and effectiveness in producing the desired and measurable effect or goal. Often measured as a 360 degree survey completed by the sales person, the client (evaluating the sales call) and the supervisor responsible for evaluating the sales person.

16 - Sales Lead Generation Surveys

Sales lead generation surveys for (1) assuring timely use and follow-up of sales leads, (2) qualifying sales leads (thereby saving valuable sales force time) and (3) providing more effective tracking of sales leads.

17 - Customer Service Surveys

Akin to customer satisfaction surveys, but focus in detail on the actual customer service that was received, the process involved in receiving that service and the evaluation of the participants in the service process.

18 - Customer Service Representative (CSR) Surveys: Attitudes, Burnout, Turnover and Retention:

CSRs hold attitudes that reflect on their job related activities including (1) the allocation of time; (2) solutions to customer needs; (3) how to improve their job; (4) best practices; (5) How well internal departments help customers. CSRs often exhibit frustration, burnout and high turnover and surveys focus on CSR retention, reducing costs and increasing the quality of customer relationships.

19 - Sales Forecasting and Market Tracking Surveys

Sales forecasting and market tracking studies can include expert opinion (experts estimate the market), judgmental bootstrapping (expert based rules describing how to use available secondary market information), conjoint analysis (estimation of consumer intentions based on product attributes that are important in the decision), and intentions evaluations (consumer self reported intentions of future purchases) are to be made.

20 - Price Setting Surveys and Elasticity of Demand Analysis

Price surveys estimate the elasticity of demand and show optimal price points, including prices too low or too high. Price surveys may estimate the demand for different product or service segments, or different usage situations.

Source: Twenty Different Types of Marketing Surveys: http://www.qualtrics.com/wiki/index.php/Market_Surveys.

A JD Sports case study

Questions to case study:

1. For what purposes can marketing managers of JD Sports use marketing research?

2. Which types of marketing research can be applied to the practice of JD Sports? Why?

3. Are there some specificities of JD Sports marketing research in comparison to for instance HORECA sector companies, to mobile phones producers or to electricity suppliers companies?

Other questions in the full case study

THE POSITION OF MARKETING RESEARCH

Research isn’t performed to support preconceived ideas but to test them!

The researcher should be personally detached and free of bias attempting to find truth.

If bias enters into the research process, the value of the research is considerably reduced.

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Ethical issues in marketing research

Summary – functions and tasks of marketing research

The task of research is:

To provide and maintain for management the research systém, to work with management in such a way as to be able to understand its needs, to help define informational requirements, to specifiy the filter and generate, through application of professional methodology, meaningful information in the most efficient manner. Its role is to broaden managerial decision alternatives and reduce the range of decision error through application of the scientific method to analysis of data and evaluation of information.

(Cayley, 1968, p. 36)