Lecture 3 , Part 1

Toward Marketing Planning: Marketing Research and Forecasting Demand

Chapter 3&4 Ch.3, p. 108-113 Ch.4, p. 119-121; 136-138

Marketing Research: Tasks

1. To capture the marketing insights, provide diagnostic information about the marketplace.( pages 119-121). 2. to support The Marketing Plan Development Analyzing the macro/microenvironment Forecasting and demand Measurement Measuring Marketing Productivity.

3. To assess the efficiency and effectiveness of marketing activities : marketing metrics , marketing mix modeling and developing marketing dashboards ( pages 136-138).

Marketing Research Defined:

The systematic design, collection, analysis, and reporting of data and findings relevant to a specific marketing situation facing the company.
Budgeted at 1-2% of company sales In-house/ or subcontracted

The Marketing Research Process: 11 Steps

Step One: Step Two: Step Three: Step Four: Step Five:

Step Six:

Establishing the Need for Marketing Research Defining the Problem Establishing Research Objectives Determining Research Design Identifying Information Types and Sources Determining Methods of Accessing Data
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The Marketing Research Process: 11 Steps cont

Step Seven: Step Eight: Step Nine: Step Ten: Step Eleven:

Designing Data Collection Forms Determining Sample Plan and Size Collecting Data Analyzing Data Preparing and Presenting the Final Research Report/ Recommendation

The Marketing Research Process

Step One: Establish the Need for Marketing Research

When Marketing Research is not needed The information is already available Decisions need to be made now We cant afford research Costs outweigh the value of the research

The Marketing Research Process

Step Two: Define the Problem

The most important step in the marketing research process is defining the problem. Not to be broad or narrow Mkt Manger and the researcher agree on the problem.

The Marketing Research Process

Step Three: Establish Research Objectives

What information is needed in order to solve the problem?

The Marketing Research Process

Step Four: Determine Research Design/Plan

We need to make decisions about: 1. Research approaches: observational, ethnographic, focus group, survey, behavioral data (scanner, database), or experimental (treatments).

The Marketing Research Process

Step Five: Identify Information Types and Sources

Secondary Data: information that has been collected for some other purpose other than the research at hand. Primary Data: information that has been gathered specifically for the research objectives at hand.

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The Marketing Research Process

Step Six: Determine Methods of Accessing Data

Secondary Data: accessing data through sources such as governmental sources , the Internet and library, syndicated bodies. Primary Data: collecting data through methods such as telephone, mail, online, and face-to-face (quantitative) and observation studies and focus groups (qualitative).
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The Marketing Research Process

Step Seven: Design Data Collection Forms

The design of the data collection form that is used to ask and record information in marketing research projects is critical to the success of the project. It is easy to write a set of questions but very difficult to construct a questionnaire. Questionnaires ( Scaled questionnaires) Qualitative studies ( unstructured ) Technological Devices

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Instruments of collecting data: Scaled questionnaires, non structured or qualitative measures ,technological devices .

pupil dilation eye tracing/ Brain waves

galvanic skin response
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The Marketing Research Process

Step Eight: Determine Sample Plan and Size

Sample plan: refers to the process used to select units from the population to be included in the sample Sample size: refers to determining how many elements of the population should be included in the sample Contact method: Mail, Telephone, in person, or online.

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The Marketing Research Process

Step Nine: Collect Data

Data collection is very important because, regardless of the data analysis methods used, data analysis cannot fix bad data. 12 Nonsampling errors may occur during data collection. These are related to poor design and/or execution of the data gathering. Sampling errors may occur based purely on chance
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The Marketing Research Process

Step Ten: Analyze Data

Data analysis: involves entering data into computer files, inspecting data for errors, and running tabulations and various statistical tests

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The Marketing Research Process

Step Eleven: Prepare and Present the Final Research Report/ and Make the decision

The last step is one of the most important phases of marketing research. Its importance cannot be overstated because it is the report, or its presentation, that properly communicates the results to the client.

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References
Chapter File Format: Microsoft Powerpoint 97 - View as HTML 2. The Marketing. Research Process. The Marketing Research Process: 11 Steps. Step One: Establishing the Need for Marketing Research. ... The Marketing Research Process. ... homepages.wmich.edu/~lindquis/marketing%20research%20ppt/ bbch2.ppt.ppt - Similar pages Date : 12th, January 2004

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Measuring Marketing Productivity Pages136-138

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Marketing Metrics
A set of measures relative to marketing performance. Example of the matrix for a website: 1- Visitor number( measure exposure), 2-Number of visits by individuals suggest loyalty ), 3-How deep into the site visitors go 4-How long visitors stay on the site, 5-Subscription numbers (express commitment to the site) 6- promotions acted on e.g. discount coupons 20 downloaded.

Online sales matrix

1- sales volumeincome measure 2- Sales trend time of day/week/ month/year/ geographic 3- Average order size (bigger order values suggest customer satisfaction). 4- conversion rate ( sales per site visits) .

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Developing a Marketing Dashboards( Scorecard).

A system of identified objectives, target and indexes. To monitor the marketing performance while setting control.

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Forecasting and Demand Measurement

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Topics on this part:

Market Demand Company Demand Method of measuring Demand Forecasting demand

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Why measuring and forecasting demand Identifying market opportunities . Measuring market size, growth and profit potential of each market opportunity. Selection of an opportunity that match the organization resources or mission. Sales forecast support allocating the resources for purchasing, operation and marketing, for instance.

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Market Demand Defined

"A market demand is the total volume of a product that consumer would buy in a defined target segment , defined time, defined area, defined market environment, and defined marketing program".

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Which market to measure? Vocabularies Case study: Motor Cycle Market

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Market Potential Actual + Prospects

Available Market

Qualified Market Serviced Market (TMs)

Penetrated Market

have Interest, Income and Access

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Market Potential
. Market potential is the limit approached by market demand as industry marketing expenditure approach infinity for a given marketing environment.
Mkt potential Mkt forecast Mkt min

Industry Marketing Expenditure

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Measuring Marketing Share ( Company demand)

Company demand is a function of the company marketing effort under assumed marketing environment. Company use this forecast for preparing a marketing plan and establishing the sales quotas and sales budget. Absolute : measured as percentage of its sales expressed as a percentage of total industry sales in unite sales or dollar sales) or relative.
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Methods of measuring demand

1-Total market Potential Measurement Total market potential is the maximum amount of sales that might be available to all the firms in an industry during a given period ,under a given level of industry marketing effort and environmental conditions. Q= nqp Q( Total Market Potential) N( number of buyers) Q( quantity purchase by average buyer) 30 P( price)

Methods of measuring Company demand( Company Sales Forecast) Chain Ratio method ( Multiplicative Model) It involves multiplying a base number by several adjusting percentages . Example : Total estimated prospective buyers 1 million ( Base Number) Target market(25% of total buyers) x25% Distribution /communication coverage (.75% of target market ) x.75 Annual purchase rate (20unites per year) x20 Average offering unite price ($10) x $10 Demand ( or sales) measured $37.5 Millions

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Area Market Potential( cities, states, nations)

1- Market buildup Method (To measure area sales potential) Calls for identifying all the potential buyers in each market and estimating their potential purchases (e.g. wood lathes in an area). 2- Multiple Factor index Method Used in consumer market . % of population in area; % of disposable income; % of retail sales are weighted [0.5(2.5)+0.3(2)+0.2(1.7)]= 2.19 % of the nation
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Estimating Future Demand (Forecasting)

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Qualitative Techniques :

1.

Survey of buyers intentions undertaken by marketing researches.

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2. Composite of sales force opinion as they have better insight on trends in the market.

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3. Expert opinion ( from dealers, distributors, suppliers, marketing consultants ( Delphi method).

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Quantitative Techniques
A) Time Series analysis/ Past Sales Analysis
Usage
-Existing of data for a long period provided stability and exclusion of drastic factors -More convenient for short term forecast

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B) Market testing Method Usage : When buyers do not plan their purchases carefully. When experts are not available or reliable To forecast new product sales in a new distribution channel or territory.

End

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