Transcript What is market research?

Lecture 18
35. Marketing Research
36. Marketing Organisation
1
Introduction to Market Research
Prepared for:
… in association with HK IPD, IP Australia
2
INTRODUCTION: MARKET RESEARCH
Market research is the systematic and objective identification, collection,
analysis and reporting of information for the purpose of assisting
organisations in decisions relating to the understanding of the behaviours
and attitudes of people and their organisations, the ultimate aim being the
development and implementation of solutions to problems or opportunities.
In this first chapter, the role and importance of market research will be
reviewed:




What is market research?
The role of market research
Whether to conduct market research
In-house vs. external research
3
1) THE ROLE OF MARKET RESEARCH
The role of market research is to help organisations—in this case IP agencies—align
themselves to:
(1) their customers; in the narrow context users of the IP agencies services, and in the wider
context the general public
(2) their organisational goals, which will reflect government policy and vary across individual
Economies
(3) changing market conditions
Customers
Policy
Goals
Market
Environment
Alignment
Market Research
Function
Descriptive
Measure awareness
Diagnostic
Explain behaviour
Predictive
Predict outcomes / trends
4
2) WHEN TO CONDUCT A RESEARCH STUDY
No organisation should commence a research study before assessing the value of such work in relation to
the expense.
The very first task is to ask: Should I conduct market research at all?
There are several situations where it may be best not to proceed:
(1) Limited financial resources
There are at least two situations in which a lack of funding should preclude marketing research:
(a) When the organisation lacks the funds to do the research properly.
(b) When funds are available to do the research but are insufficient to implement any
recommendations from the findings of the research.
(2) Precise objectives have not been formulated
(3) The costs of conducting research outweigh the benefits (or return on objectives - ROO).
(4) Inappropriate timing
5
3) IN-HOUSE vs EXTERNAL MARKET RESEARCH
The second question: Should I conduct market research myself or hire a research company?
Some large MNCs do nearly all their research in-house, including project design and focus groups. Others
choose to outsource or do both on a case-to-case basis.
Advantages of
outsourcing research
Advantages of
conducting in-house research
(1) Expertise and experience
(2) Confidentiality and security
(3) Unbiased viewpoint
(4) More efficient
(1) Lower costs
(2) Stronger domain knowledge
(3) Better control
The key elements necessary for successful internally managed research projects are:
(1) long-term vision;
(2) clearly defined goals;
(3) earmarked budget;
(4) project execution and management skills; and
(5) a means of measuring success.
6
The case for in-house research can be made under two circumstances:
(1) Where the burden of the research effort is shared with a research firm. This can
occur in several ways:
(a) the IP agency has access to surveyors (e.g. student interns) that can be trained
then deployed by the research firm;
(b) the IP agency has its own research instruments. Research firms will always charge
for questionnaire development as this is time consuming and requires a high level of
expertise. Using the Pilot template or sharing templates used by other APEC Economies—
even if these still require some modification to specific objectives—should reduce the overall
cost; and
(c) the IP agency has a captive audience (for self-completion surveys) .
In these circumstances, a research company should still be retained in order to advise
on the correct implementation, sampling, etc.
(2) Exploratory research, which does not need to be representative, can often be
undertaken internally.
7
8
Marketing information and research
Importance of effective marketing information and research
Effective penetration of markets requires specialised and
sophisticated approaches to identify, assess and satisfy
market demands.
Effective marketing information and research enables an
organisation to make better decisions on the most
appropriate market entry and competitive strategies.
Defining market research
Marketing research is the function which 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 performances, and
improve understanding of marketing as a process.
Marketing research specifies the information required to address
those issues; designs the method of collecting information;
manages and implements the data collection process;
analyses the results; and communicates the findings and their
implications.
McDonald and Gates, 1990
The role of marketing research
•
•
Consumer markets - In EU important to manufacturers as
retailers act as buffer between manufacturers and end
consumer. Provides accurate and reliable flow of information
to the marketing decision makers.
B2B markets - Helps organisations understand the marketing
environment and make better informed decisions about
marketing strategies.
Types of marketing research
• Exploratory.
• Descriptive.
• Causal or predictive.
Origins of research data
• Qualitative research - the collection of data that are
open to interpretation, e.g. peoples’ opinions.
• Quantitative research - the collection of data that is
quantifiable and is not open to the same level of
interpretation as qualitative research, e.g. sales
figures, market share data, etc.
Continuous research
On going research usually undertaken by market research
agencies and offered to organisations for a subscription or
agreement to purchase the updated findings.
Approaches include:
•
Consumer panels.
•
•
Home audits.
Omnibus surveys.
•
Retail audits.
Marketing information systems
(MIS)
Effective systems of organising, structuring and
managing the storage, access and dissemination of
market research data.
The marketing information system
Figure 6.1
Defining information requirements
Table 6.1
Sources of marketing information
•
External sources - ad hoc studies using secondary or primary
research or continuous data which contains views from
customers, suppliers, channels of distribution, strategic
alliance partners, independent third parties, etc.
•
Internal sources - information obtained from internal record
keeping systems, sales reps, call details, customer enquiries,
etc.
The marketing research process
Figure 6.2
Secondary research (1 of 2)
•
•
Sometimes referred to as desk research.
Consists of data and information that is already in existence
and which can be accessed by the organisation.
•
Can be cheaper and quicker to access than primary research.
•
May provide an organisation with information that it would not
otherwise have time to gather.
•
Secondary data may not always be up to date, be applicable
to an organisation, or give the full picture.
Secondary research (2 of 2)
Secondary data sources include:
•
Government - e.g. Central Statistical Office.
•
Chambers of commerce.
•
•
Trade associations.
Commercial publications - e.g. Dun & Bradstreet, Mintel, etc.
•
Internet - e.g. country reports and news, etc.
Primary research
•
•
Sometimes called field research.
Is undertaken or commissioned by an organisation for a
specific purpose.
•
The required information does not already exist.
•
•
It is exactly tailored to a problem.
Can be expensive and time consuming.
Online market research
The website provides several novel methods for the collection of
primary data for example:
•
Server based log file analysis of site activity.
•
Browser based site activity data.
•
•
Panel activity.
Online focus groups.
•
Online questionnaires.
•
Mystery shoppers.
Advantages and disadvantages
of internet research
Table 6.5(a)
Source: Alex Johnston, Technology and Communications Director for New Media Research International, as reported by Gray (2000b).
Advantages and disadvantages
of internet research
Table 6.5(b)
Source: Alex Johnston, Technology and Communications Director for New Media Research International, as reported by Gray (2000b).
Sampling
Figure 6.3
Source: Adapted from Tull and Hawkins (1990).
Business Functions
and Organisation
Business Functions

Human Resources

Sales and Marketing

Research and Development

Production/Operations

Customer Service

Finance and Accounts

Administration and IT
Human Resources
 Recruitment and retention
–
Job descriptions
–
Person Specifications

Dismissal

Redundancy

Motivation

Professional development and training

Health and safety and conditions
at work

Liaison with trade unions
Sales and Marketing
 Market
research
 Promotion
 Pricing
 Sales
 The
strategies
strategies
strategies
sales team
– advice on new product development,
product improvement, extension strategies, target
markets
 Product
Research and Development

New product development

Product improvements

Competitive advantage

Value added

Product testing

Efficiency gains

Cost savings
Finance and Accounts
 Cash
flow
–
Monitoring income/revenue
–
Monitoring expenditure
 Preparing
 Raising
finance
–
Shares
–
Loans
 Links
accounts
with all other functional areas
Production/Operations

Acquiring resources
 Planning
output – labour, capital, land
 Monitoring
costs
 Projections
on future output
 Production
methods
– Batch;
Flow; Job; Cell
 Efficiency
Customer Service

Monitoring distribution

After-sales service

Handling consumer enquiries

Offering advice to consumers

Dealing with customer complaints

Publicity and public relations
Business Organisation

Organisation by type
businesses – complex organisation
structures
 Global
– organisation possibly stretches
throughout the country
 National
– could be through a county or wider
area (North West, South East, etc.)
 Regional
– small organisations serving local area or
community
 Local
Business Organisation

Authority – the right to make decisions and carry out tasks

Span of control – the number of people a superior
is responsible for

Chain of Command – the relationship between different levels of
authority in the business

Hierarchy – shows the line management
in the business and who has specific responsibilities

Delegation – authority to carry out actions
passed from superior to subordinate

Empowerment – giving responsibilities to people
at all levels of the business to make decisions
Administration and IT
•Managing estates – cleaning, health
and safety, maintenance, security
•Reception
•Clerical work – reporting, recording, record
keeping, communication
•Overview of quality control
•Use of IT systems
Organisation Charts
Hierarchical Structure
Managing Director
Marketing
Director
Sales Director
A
B
C
D
Market
Research
Strategy
Finance Director
Purchasing
Sales
Manager Manager
Accounts
Manager
Organisation Charts
Pyramidal Structure
MD
Senior
Management
Middle Management
Workers
Organisation Charts
Centralised/Entrepreneurial
Finance
R&D
Production
MD
Marketing
Sales
Organisation Charts
Collaborative
Sales
Accounts
Marketing
Production
Organisation Charts
Circular/Flat
Marketing
Sales
Finance
Production
R&D
Organisation Charts
Matrix Structure
Marketing
Sales
R&D
Project
HR
Production
Finance
Organisation Charts

Changes to business structures

Linked to new thinking on leadership and management

Less hierarchical

Emphasis on communication
and collaboration between sections

Global businesses – more complex structures
CHAPTER
DEVELOPING
SUCCESSFUL
MARKETING AND
CORPORATE
STRATEGIES
DEFINITION OF ORGANIZATIONS
• Profit
• Organizations as defined by profit
 Business Firm
 Nonprofit Organization
Both commonly referred to as
the Firm
the Company
the Corporation
the Organization
ORGANIZATION’S LEVELS OF STRATEGY
 Corporate Level-create value for stockholders
 Business Unit Level- plan direction for each SBU
 Functional Level –execute plan on daily basis
 Department-specialized functions of daily operation
FOCUS OF THE STRATEGY
Mission -statement of the organization’s purpose for
existing, often identifying its customers, markets,
products, technology, and values.
 Goals or Objectives
• Profit
• Sales
• Market Share
• Quality
• Customer Satisfaction
• Employee Welfare
• Social Responsibility
SETTING STRATEGIC DIRECTIONS
• A Look Around: Where Are We Now?
- Identify your Customers
- Competencies-identify what you do best
• Competitive Advantage-your unique strength
- Competitors-identify the biggest threats
SETTING STRATEGIC DIRECTIONS
• Growth Strategies: Where Do We Want to Go?
 Business Portfolio Analysis (BCG Matrix)
• Market Growth Rate-vertical axis
• Relative Market Share-horizontal axis
 Stars
 Question Marks or Problem Children
(HH)
 Cash Cows
(LH)
(HL)
 Dogs
(LL)
Boston Consulting Group portfolio analysis for
Kodak sbu’s in 2003
Kodak digital
camera
Kodak film sales: US,
Canada, & W. Europe
Kodak digital
photo printer
Kodak selfservice kiosk
SETTING STRATEGIC DIRECTIONS
• Growth Strategies: How Do We Get There?
 Market-Product Analysis
• Market Penetration- same product; same market
• Market Development- same product; new market
• Product Development-new product; same market
• Diversification -
new product; new market
Four market-product strategies: alternative ways to
expand sales revenues for Ben & Jerry’s
THE STRATEGIC MARKETING PROCESS
• How do we allocate our resources to get where
we want to go?
• How do we convert our plans to actions?
• How do our results compare with our plans,
and do deviations require new plans?
 Marketing Plan
THE STRATEGIC MARKETING PROCESS
-The Planning Phase
 Step 1:
SWOT Analysis
GOOD NOW
Maintain & build
GOOD FUTURE
Prioritize &
optimize
BAD NOW
Remedy or stop
BAD FUTURE
Intercept and
counter
Ben & Jerry’s: SWOT analysis
Which Product-Which Customers
 Step 2: Market-Product Focus and Goal Setting
• Market Segmentation
• Set Marketing and Product Goals
• Select Target Markets
• Find Points of Difference
• Position the Product
Marketing Program Strategy
 Step 3: Marketing Program
• Product Strategy
• Price Strategy
• Promotion Strategy
• Place (Distribution) Strategy
Elements of the marketing mix that comprise a
cohesive marketing program
THE STRATEGIC MARKETING PROCESS-The
Implementation Phase
 Obtaining Resources
Designing the Marketing Organization
-delegating who does what
Developing Schedules-Linear or Gantt
Tasks to complete a term project
Gantt chart for scheduling the term project
THE STRATEGIC MARKETING PROCESSThe Control Phase
 Comparing Results With Plans to Identify Deviations
• Filling the Planning Gap – Marketing’s Job
 Acting on Deviations
Evaluation & control of Kodak’s marketing program
Profit
Profit is the reward to a business firm
for the risk it undertakes in offering a
product for sale. It is also the money
left over after a firm’s total expenses are
subtracted from its total sales.
Mission
Mission is a statement of the
organization’s scope, often identifying
its customers, markets, products,
technology, and values.
Goals or Objectives
Goals or objectives convert the mission
into targeted levels of performance to be
achieved, often by a specific time.
Market Share
Market share is the ratio of sales
revenue of the firm to the total sales
revenue of all firms in the industry,
including the firm itself.
Marketing Plan
A marketing plan is a road map for the
marketing activities of an organization
for a specified future period of time. It
allocates the 4P’s of a firm to reach the
target market.
SWOT Analysis
SWOT analysis is an acronym
describing an organization’s appraisal of
its internal Strengths and Weaknesses
and its external Opportunities and
Threats.
Market Segmentation
Market segmentation involves
aggregating prospective buyers into
groups, or segments, that (1) have
common needs and (2) will respond
similarly to a marketing action.
Points of Difference
Points of difference are those
characteristics of a product that make it
superior to competitive substitutes.