MARKETING RESEARCH

AN INTRODUCTION

DR. SK LAROIYA

Dr. SK Laroiya, ABS

 Common Views of Marketing
Research
„ Gathering data from markets
„ Conducting customer surveys
„ Determining the needs of customers
„ Evaluating customer response to advertising
„ Testing products in the market place
„ Estimating the potential sales of product
„ Gathering sales and market share data of
competitors

Dr. SK Laroiya, ABS

Role of Marketing Research in
the Organization/Business
Organizational / Business
Decision Makers
informs
Marketing Research
influences
Marketing Decisions

Customer/Society
Dr. SK Laroiya, ABS
Marketing Research Definition

A set of techniques and principles for

systematically collecting, recording,
analyzing, and interpreting data that can
aid decision makers who are involved with
marketing goods, services or ideas

Dr. SK Laroiya, ABS

 Marketing Research Definition
contd.
Marketing research is the function which
links the
„ Consumer

„ Customer

„ And public

to the marketer through information –

Dr. SK Laroiya, ABS

‰ information used to identify and define
marketing opportunities and problems
‰ generate, refine, and evaluate marketing

actions
‰ monitor marketing performance

‰ and improve our understanding of

marketing as a process

Dr. SK Laroiya, ABS

 This definition indicates that marketing
research provides information to the
marketer for use in at least four areas:

1. The generation of ideas for marketing

action, including identification of
marketing problems and opportunities

Dr. SK Laroiya, ABS

2. The evaluation of marketing actions

3. The comparison of performance versus

objectives

4. Development of general understanding of

marketing phenomena and process

Dr. SK Laroiya, ABS

Further marketing research is involved
with all the phase of information-
management process including:

1. The specification of what information is

needed

Dr. SK Laroiya, ABS

2. The collection and analysis of information

3. The interpretation of that information

with respect to the objectives that
motivated the study in the first place

Dr. SK Laroiya, ABS

 DOMINO’S PIZZA
IN JAPAN
„ Domino’s Pizza tried to enter the Japanese
market even though Japanese consumers tend
not to eat lot of tomato-based foods, many have
allergies to dairy products, and complex
navigation is required to deliver pizza through
the streets of Tokyo

„ Domino should have conducted marketing

research before entering Japan
Dr. SK Laroiya, ABS
„ But better late than never as the company, upon
entering the market, conducted some research
and listened to their customers

„ In reaction to the new consumer information,

Domino’s introduced SUSHI PIZZA TOPPINGS
and created a street address data base for
delivery scooters

Dr. SK Laroiya, ABS

„ What could have been another export disaster
tale was turned around to highly successful
overseas venture
by using marketing research
___________________________
Source:
Tevfik Dalgic and Ruud Heijblom: “ Educator Insights: International Marketing
Blunders Revisited-Some Lessons for Managers, “ Journal of International Marketing
4, no.1 (1996)
Vijai Mahajan and Jerry Wind, “ Rx for marketing Research,” Marketing Research 11,
no.3, (1999)

Dr. SK Laroiya, ABS

 COCA-COLA
GRAPE DRINK IN CHILE

„ Coca-Cola had little success in marketing a

product in Chile

„ When the company attempted to introduce a

new grape-flavored drink, it soon discovered
that Chileans were not interested

„ Apparently, the Chileans prefer wine as their

grape drink

Dr. SK Laroiya, ABS

 CHASE AND SANBORN
INSTANT COFFEE IN FRANCE

„ Chase and Sanborn met resistance when it tried to

introduce its instant coffee in France

„ In the French home, the consumption of coffee plays a

more significant role than in the English home

„ The preparation of coffee is a ritual in the life of the

French consumer, and instant coffee is rejected because
it is not “real” coffee

Dr. SK Laroiya, ABS

COMPONENTS OF RESEARCH

In general, research should be based on

objective evidence and supported by
theory

Dr. SK Laroiya, ABS

Theory :

A conceptual scheme based on

foundational statements, or axiom, which
are assumed to be true

Dr. SK Laroiya, ABS

Objective evidence:

Unbiased evidence supported by empirical

findings

Dr. SK Laroiya, ABS

The researcher should rely on theory to
determine which variables should be
investigated

Dr. SK Laroiya, ABS

 The role of theory in applied
marketing research

‰ Conceptualizing and identifying key variables

‰ Selecting a research design

‰ Selecting a sample

‰ Analyzing and interpreting data

‰ Integrating findings with the existing knowledge

Dr. SK Laroiya, ABS

„ Theoretical framework serves as a
foundation for developing an appropriate
analytical model

„ Analytical model is known as explicit

model

Dr. SK Laroiya, ABS

 What is analytical model?

It is a set of variables and their

interrelationships designed to represent in
whole or in part, some real system or
process

Dr. SK Laroiya, ABS

 Types of analytical models

„ Verbal model

„ Graphical model

„ Mathematical model

Dr. SK Laroiya, ABS

 Verbal model

Analytical models that provide a written

representation of the relationships among
the variables

Dr. SK Laroiya, ABS

 Graphical model

Analytical models that provide a visual

picture of the relationships among the
variables

Dr. SK Laroiya, ABS

 Mathematical model

Analytical models that explicitly describe

the relationships among the variables,
usually in equation form

Dr. SK Laroiya, ABS

 Model building:
Store patronage example
Verbal model

‰ A consumer first becomes aware of a department store

‰ That person then gains an understanding of the store in
terms of factors making up the choice criteria
‰ Based on the evaluation, the consumer forms a degree
of preference for the store
‰ If preference is strong enough, the consumer will
patronize the store

Dr. SK Laroiya, ABS

Graphical model

Patronage

Preference

Understanding: Evaluation

Awareness
Dr. SK Laroiya, ABS
 Mathematical model

y = a0 + Ʃ a i x i

where y = degree of performance

a0, ai = model parameters to be
estimated statistically
x i = store patronage factors that constitute the
choice criteria
Dr. SK Laroiya, ABS
CLASSIFICATION OF MARKETING
RESEARCH

MARKETING
RESEARCH

PROBLEM IDENTIFICATION PROBLEM-SOLVING

RESEARCH RESEARCH

Dr. SK Laroiya, ABS

 PROBLEM IDENTIFICATION
RESEARCH

Research which is undertaken to help

identify problems that are not necessarily
apparent on the surface and yet exist or
are likely to arise in future

Dr. SK Laroiya, ABS

PROBLEM SOLVING RESEARCH

Research undertaken to specific marketing

problems

Dr. SK Laroiya, ABS

 PROBLEM IDENTIFICATION
RESEARCH
„ MARKET POTENTIAL RESEARCH

„ MARKET SHARE RESEARCH

„ IMAGE RESEARCH

„ MARKET CHARACTERISTICS RESEARCH

Dr. SK Laroiya, ABS
„ SALES ANALYSIS RESEARCH

„ FORECASTING RESEARCH

„ BUSINESS TRENDS RESEARCH

Dr. SK Laroiya, ABS

PROBLEM-SOLVING RESEARCH

„ SEGMENTATION RESEARCH

„ PRODUCT RESEARCH

„ PRICING RESEARCH

Dr. SK Laroiya, ABS

„ PROMOTION RESEARCH

„ DISTRIBUTION RESEARCH

Dr. SK Laroiya, ABS

 SEGMENTATION RESEARCH

„ DETERMINATION OF SEGMENTATION

„ ESTABLISHMENT OF MARKET POTENTIAL

AND RESPONSIVENESS FOR VARIOUS
SEGMENTS

Dr. SK Laroiya, ABS

„ SELECT TARGET MARKETS AND CREATE
LIFESTYLE PROFILES DEMOGRAPHY,
MEDIA, AND PRODUCT IMAGE
CHARACTERISTICS

Dr. SK Laroiya, ABS

 PRODUCT RESEARCH

„ TEST CONCEPT

„ DETERMINE OPTIMAL PRODUCT DESIGN

„ PACKAGE TESTS

Dr. SK Laroiya, ABS

„ PRODUCT MODIFICATION

„ BRAND POSITIONING AND

REPOSITIONING

„ TEST MARKETING
Dr. SK Laroiya, ABS
 PRICING RESEARCH

„ IMPORTANCE OF PRICE IN BRAND

SELECTION

„ PRICING POLICIES

„ PRODUCT LINE PRICING

Dr. SK Laroiya, ABS
 PROMOTIONAL RESEARCH

„ OPTIMAL PROMOTIONAL BUDGET

„ SALES PROMOTION RELATIONSHIP

„ OPTIMAL PROMOTIONAL MIX

Dr. SK Laroiya, ABS

„ COPY DECISIONS

„ MEDIA DECISIONS

„ CREATIVE ADVERTISING TESTING

„ EVALUATION OF ADVERTISING EFFECTIVENESS

Dr. SK Laroiya, ABS
 DISTRIBUTION RESEARCH

„ DETERMINE TYPE OF DISTRIBUTION

„ ATTITUDE OF CHANNEL MEMBERS

„ INTENSITY OF WHOLESALE AND RETAIL

COVERAGE
Dr. SK Laroiya, ABS
„ CHANNEL MARGINS

„ LOCATION OF RETAIL AND WHOLESALE

OUTLETS

Dr. SK Laroiya, ABS

„ Classifying market research into two main
types is useful from both conceptual
and practical viewpoints

„ Problem identification and problem solving

research go hand in hand and a given MR
project may combine both
Dr. SK Laroiya, ABS
Principles of Marketing Research
„ Principle #1:
„ Attend to the timeliness and relevance of research
„ Principle #2:
„ Define research objectives carefully and clearly
„ Principle #3:
„ Do not conduct research to support decisions
already made

Dr. SK Laroiya, ABS

 Principle # 1: Attend to the Timeliness
and Relevance of Research

Ariel High
Suds
Marketing Research Launch

1985 1986 1987 1988 1989 LOW

Lag Time SALES
RATES

Dr. SK Laroiya, ABS

 Research and Decision Making

P&G’s Ariel High Suds – A case study

Proctor & Gamble launced its Ariel high Suds detergent brand in
CAIRO after a comprehensive study of the Egyptian market
spanning more than three years
Even such exhaustive research , however could not guarantee a
smooth beginning
Source: Mahmoud Aboul-Fatah
and Laula Zaklama, “ Ariel High Suds Detergent in Egypt – a case
study,” Marketing and Management today, May, 1992

Dr. SK Laroiya, ABS

‰ Although brand awareness was for Ariel high Suds was high, its
initial sales were disappointingly low

‰ One major reason was that Ariel High Suds was introduced a year
after the marketing research was conducted

‰ Economic conditions had worsened during the period following the

research study

Dr. SK Laroiya, ABS

Marketing research manger of P & G, Mahmoud Aboul-
Fath and Laula Zaklama, MD of Rada Research, said of
the launch

“ Perhaps we should have also rechecked our

final product mix given the important changes
that took place in the market between our final
qualification test and the introduction of Ariel”

Dr. SK Laroiya, ABS

„ Though extensive research was done prior to the
launching Ariel high Suds, the decision maker had paid
insufficient attention to very basic principle of marketing
research:

The elapsed time between research and launch

was simply too long in rapidly changing Egyptian
market

„ Thus, the timeliness and relevance of the data generated

from those studies were questionable

Dr. SK Laroiya, ABS

„ P & G didn't give up on Ariel high Suds. It conducted additional
research in a timely fashion and modified its marketing strategy
accordingly

„ With in three years Ariel high Suds became a leader in its category

„ Systematic marketing research finally helped P & G develop a high

performing product, identifying a good advertising copy format, and
accurately predict demand at different price points

„ Research was a key factor leading to the brand’s ultimate success

Dr. SK Laroiya, ABS

 Principle # 2: Define Research
Objectives Carefully and Clearly
„ Coca Cola tested New Coke against Coke
Classic
„ They didn’t account for consumer reaction
to lack of choice between the two!
„ End Result: New Coke failed

Dr. SK Laroiya, ABS

Hewlett- Packard – A case study

HP, a global technology company, assembled a product

team to develop a tiny (1.3-inch) disk drive
The team decided to target this disk drive towards the
Personal Digital Assistant (PDA) market and successfully
developed the product in a stipulated time

Source: “Hewlett-Packard: The Flight of the Kitty Hawk,” Harvard

Business School Case No. N9-697-060

Dr. SK Laroiya, ABS

‰ However, the product never took off, as the estimated PDA market
potential never materialized

‰ Marketing members of the team interviewed leading customers to

gain insights into the PDA market

‰ However, they failed to take into account other associated

technologies required to make PDA a usable product
‰ For example, handwriting recognition was a technology critical
for the successful launch of the PDA, but was not ready for
commercial use

Dr. SK Laroiya, ABS

„ HP could have selected the growing video game market
for its tiny disk drive product

„ According to the team, the consumer video game

market was not lucrative, as it required a lower-
performance drive and a cheaper version compared to
what company had developed for the PDA market

„ The need to recover its investment in a relatively short

period of time led the company to focus on a
narrower market

Dr. SK Laroiya, ABS

Lesson:

The research objectives in a high-

technology market should cover all
aspects of emerging technology

Dr. SK Laroiya, ABS

Principle # 3:Do Not Conduct Research to Support
Decisions Already Made

Indianized Yogurt: Milk Food Limited- A case

„ Decision was made to produce yogurt for the Indian market believing
that Indians would take to yoghurt in the same way US consumers do
„ Yogurt plant was constructed
„ Marketing research determined there was
only a very small market
„ Product failed in the market place
„ Apparently management undertook
research merely to see whether the results
would support a decision that had already
been made
„ Nestlé's Dahi is a recent entrant
in the yogurt market

Dr. SK Laroiya, ABS

 The Role of Marketing Research in
Analysis and Interpretation
„ Marketing Research can be used to
identify “profitable customers” and
“not-profitable customers”
„ Profitable Customers: those who are more
likely to spend large amounts of money
and become repeat customers
„ Not-Profitable Customers: those who are
more likely to spend less money on each
transaction and might not return

Dr. SK Laroiya, ABS

Importance of Analysis and
Interpretation

Few Customers, Large Volume/per Customer

– Profitable Target Market

Large Number of Customers, Low Volume/per

Customer -- Not-Profitable

Dr. SK Laroiya, ABS

 Research Results and
Management Decisions
• Kellogg sought foreign markets in which to
expand
Latvians prefer a hearty plate of sausage,
cold cuts,potatoes,eggs, and a few slices of
thick, chewy buttered bread.

Mexicans and Indians prefer hot,

spicy breakfasts.
Dr. SK Laroiya, ABS
 Research Results and
Management Decisions
„ Marketing research conducted by
Kellogg did not forecast enthusiastic
response in the countries—Kellogg
decided to pursue these markets,
anyway !
„ Kellogg cereals’ appeal is limited to a
small health-conscious group.
„ Will it work?
Dr. SK Laroiya, ABS
Marketing Research’s Relationship to
Decision Making Activity

Marketing
Research

Marketing
situation calling Decision- Final
for decision(s) making activity decision(s)

Organization’s
internal and
external
environments

Dr. SK Laroiya, ABS

 In-house Marketing Research

„ Formal Marketing Department

„ Centralized: one marketing department for all
product lines
„ Decentralized: separate marketing
departments for individual product lines
„ Hybrid : combination of centralized and
decentralized

Dr. SK Laroiya, ABS

 Illustrative Centralized Marketing Research
Function in a Multibrand Company
Corporate Marketing Research Department
Responsibilities include:
• Designing Studies
• Constructing Questionnaires
• Selecting Samples
Corporate Marketing Department

• Collecting Data
• Analyzing Data
• Preparing Reports
• Choosing External Research Providers

Research
Reports

Research Marketing of Marketing of Marketing of

Requests Brand A Brand B Brand C

Dr. SK Laroiya, ABS

 Illustrative Decentralized Marketing Research
Function in a Multibrand Company
Corporate Marketing Department

Marketing of Marketing of Marketing of

Brand A Brand B Brand C

Requests Reports Requests Reports Requests Reports

Marketing Research Marketing Research Marketing Research

Department for Brand A Department for Brand B Department for Brand C

Responsibilities Include: Responsibilities Include: Responsibilities Include:

• Designing Studies
• Constructing Questionnaires
• Selecting Samples
• Collecting Data
• Analyzing Data
• Preparing Reports
• Choosing External Research
Providers
• Designing Studies
• Constructing Questionnaires
• Selecting Samples
• Collecting Data
• Analyzing Data
• Preparing Reports
• Choosing External Research
Providers
Dr. SK Laroiya, ABS
• Designing Studies
• Constructing Questionnaires
• Selecting Samples
• Collecting Data
• Analyzing Data
• Preparing Reports
• Choosing External Research
Providers
 Illustrative Mixed-Structure Marketing Research
Function in a Multibrand Company
Corporate Marketing Research Department Corporate Marketing Department
Responsibilities include:
• Collecting Data
• Analyzing Data
• Preparing Reports
• Choosing External Research Providers

Research Reports

Marketing of Marketing of Marketing of

Brand A Brand B Brand C

Shared
Responsibilities Research Requests Research Requests Research Requests
for Research

Marketing Research Marketing Research Marketing Research

Department for Brand A Department for Brand B Department for Brand C

Responsibilities Include: Responsibilities Include: Responsibilities Include:

• Designing Studies • Designing Studies • Designing Studies
• Constructing Questionnaires • Constructing Questionnaires • Constructing Questionnaires
• Selecting Samples • Selecting Samples • Selecting Samples

Dr. SK Laroiya, ABS

 MR at BK -- Brand Research
and Analysis Department
„ Decentralized Function: Four separate
groups within the department help to segment
out the research into areas of specialty
„ Consumer research
„ Sales analysis group
„ Competitive/secondary information
„ Customer satisfaction
„ Centralized Function: Director of the
department keeps the 4 groups unified in their
goals and task allocation
Dr. SK Laroiya, ABS