Transcript Chapter 4

Part 2: Understanding markets
Chapter 4: Market research and
information management
Step 2: Undertake market research
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PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy
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When we finish this lecture you
should
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Understand the scientific approach to market research
Know how to define and solve marketing problems
Understand the criteria for obtaining primary and secondary
data
Understand the difference between qualitative and
quantitative research
Know the most common methods used to collect qualitative
and quantitative information
Appreciate the need to assess the value of information
Be aware of the specific nature of international market
research
Know about marketing information systems
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Market research
• Procedures to gather and analyse information for
marketing decision-making
• Focus is on new information not already available
in the MIS or in other secondary data sources
• May be handled inside the company or by outside
specialists
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Cooperation is needed between technical specialists and
managers/decision-makers
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Figure 4.1 Market Research Society of Australia’s
(MRSA’s ) Code of Professional Behaviour
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Figure 4.2 The five-step approach to market
research
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Step 1—defining the problem
• This is the most important step in the market
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research process and often the most difficult
Clearly define the problem
Understand the target market and ability of
company to satisfy the needs of the market
Focus on lower-level problems—for example, how
sensitive the target market is to a change in one or
more of the marketing mix elements
It is easy to confuse symptoms with problems
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Step 2—analysing the situation
• A situation analysis is useful when the marketing
manager believes that the real problem has begun
to emerge
• Situation analysis is an informal study of available
information relating to each problem area
• The situation analysis usually involves informal
discussions with informed people
• Situation analysis is especially important if a
researcher is a specialist who is unfamiliar with the
management decisions to be made
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Figure 4.3 Sources of secondary and primary data
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Secondary and primary data
• Secondary data—information that has previously
been collected or published
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Examples—data from the Australian Bureau of Statistics,
computer databases, internal reports, industry trade
associations and the Internet
• Primary data—information specifically collected to
solve a current problem
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Examples—surveys, experiments and observational
studies
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Step 3—obtaining problem-specific
data
• The next step consists of planning a formal
research project in order to gather primary data
• In most primary data collections, researchers
attempt to learn what customers think about some
topic or how they behave in certain conditions
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Qualitative research
• Seeks in-depth open-ended responses—not yes or
no answers
• Examples of qualitative methods
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Personal in-depth interviews
Projective techniques
Focus groups
• Can provide good ideas or hypotheses
• Responses may not be representative of the
population
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Focus group interview
• A popular type of qualitative research
• Involves a small group (usually 6 to 12 people) in a
discussion—usually for about an hour
• A group leader (interviewer) unobtrusively guides
the discussion
• Designed to get in-depth, open-ended responses,
not to be ‘representative’ of a larger market
• Group interaction stimulates thinking and reactions
• Analysis of results is subjective
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Quantitative research
• Seeks structured responses that can be
summarised in numbers—like percentages,
averages or other statistics
• Utilises sampling—a fraction of the relevant
population
• Methods include
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Surveys
Observation
Experimentation
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Sampling methods
• Random sampling—each member of the research
population has an equal chance of being included
in the sample
• Stratified sampling—selecting fixed proportions of
each group of interest in the sample
• Response rate—the percentage of people
contacted who complete the questionnaire
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Figure 4.4 Sample questioning methods to
measure attitudes and opinions
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Accuracy, reliability and validity of
the research
• Confidence intervals—the range on either side of
an estimate that is likely to contain the true value
for the whole population
• Validity—the extent to which data measure what
they are intended to measure
• Reliability—the extent to which results can be
expected to hold when a test or survey is repeated
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Mail surveys
• Advantages
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No interviewer bias
Economical for large geographic areas
Respondent is anonymous = > more truthful responses
• Disadvantages
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Require simple and clearly worded questions
Return rate low and/or slow (can introduce a bias)
Need a good, up-to-date mailing list
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Telephone surveys
• Advantages
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Quick
Permits question clarification
Cheaper than personal interviews
Can be cheaper than mail if restricted to local area
• Disadvantages
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Restricted to telephone owners
Must be short and not too personal
May allow interviewer bias
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Personal interviews
• Advantages
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Easier to get and hold attention = > more questions can
be asked
Permits question clarification
Can be supplemented by personal observation
• Disadvantages
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Most expensive
Technical and administrative planning and supervision
needed
May allow interviewer bias
May allow respondent bias
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Observation
• Researches try to see or record what subjects do
naturally, and avoid influencing a subject’s
behaviour in any way
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Advantages
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Highly accurate
Objective
Consumers are unaware, so they act naturally
No interviewer bias
Disadvantages
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Shows what happened but not why—can't tell motives,
opinions, beliefs, brand images and so forth
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The experimental method
• Researchers compare the responses of two or
more groups that are similar except on the
characteristic being tested
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Advantages
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Extraneous factors are eliminated or controlled
Most reliable way to find answers
Disadvantages
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Difficult to control all other variables
May alert competitors to new strategies
Alert competitors may disrupt test
May need cooperation of stores/sales representatives/others
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Step 4—interpreting the data
• Collected data is analysed in order to extract
meaning and generate information
• Statistical packages are often used
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SPSS
Microtab
• Cross-tabulation is one of most frequently used
approaches for analysing and interpreting market
research data
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Figure 4.5 Cross-tabulation breakdown of
responses to a telephone company survey
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Step 5—solving the problem
• In the problem-solution step, the research results
are used to make marketing decisions
• When research has been completed, the marketing
manager should be able to apply the findings to
marketing strategy planning—in terms of choosing
the target market or the mix of the four Ps
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Getting value from market research—
how much information do you need?
• Information is costly
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but it reduces risk
• What is the value of information?
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International dimensions of market
research
• Market research on overseas markets is often a
major contributor towards international success
• Export failures are often due to lack of
management expertise concerning local customer
needs, interests, environmental factors,
competitors’ prices and products
• Should work with local research companies
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Marketing information systems (MIS)
• Organised for the continuous flow of information
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Gathering information
Analysis of information
• Design of the MIS requires data processing
expertise and marketing expertise
• Use of MIS is focused on making better marketing
decisions
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Strategy planning
Details of implementation
Timely control procedures
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A decision support system (DSS)
• A computer program—an interface—between the
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manager and the MIS
Makes it easy to obtain needed information
Makes it easy to analyse the information
Usually involves a search engine
May involve marketing models—to show the
relationships among different marketing variables
Is used by the manager making the decisions
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Making the most of the MIS
• Once marketing managers recognise how a
functioning MIS or DSS can help their decisionmaking, they are usually eager for more
information
• Monitor implementation of current plans, compare
actual results with plans, and make necessary
changes more quickly
• Opportunities exist to standardise computer-based
elements of MIS internationally
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Figure 4.6 Elements of a complete marketing
information system (MIS)
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What we will be doing in the next
chapter
• In Chapter 5 we will discuss one of the most
important principles of marketing—segmentation—
which involves identifying, and understanding the
needs of particular groups of customers. Marketers
often aim their products at particular segments of
the population. Chapter 5 explains what is involved
in segmentation, why it is a sound approach and
how it can be implemented
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