Lecture 02 - 03

Introduction to Marketing Research Defining the Marketing Research Problem and Developing an Approach

Redefining Marketing Research

The American Marketing Association (AMA) redefined Marketing Research as: The function which links the consumer, the customer, and public to the marketer through INFORMATION

Redefining Marketing Research

Used to identify and define market opportunities and problems Generate, refine, and evaluate marketing performance Monitor marketing performance Improve understanding of marketing as a process

Definition of Marketing Research

Marketing research is the systematic and objective identification collection analysis dissemination and use of information

for the purpose of improving decision making related to the identification and solution of problems and opportunities in marketing.

Market Research
Specifies the information necessary to address these issues Manages and implements the data collection process Analyzes the results Communicates the findings and their implications

Classification of Marketing Research

Problem Identification Research
Research undertaken to help identify problems which are not necessarily apparent on the surface and yet exist or are likely to arise in the future. Examples: market potential, market share, image, market characteristics, sales analysis, forecasting, and trends research.

Problem Solving Research

Research undertaken to help solve specific marketing problems. Examples: segmentation, product, pricing, promotion, and distribution research.

A Classification of Marketing Marketing Research Research

Problem Solving Research

Problem Identification Research Market Potential Research Market Share Research Market Characteristics Research Sales Analysis Research Forecasting Research Business Trends Research

Segmentation Research Product Research Promotion Research Distribution Research

Problem Solving Research

Table 1.1 SEGMENTATION RESEARCH
Determine the basis of segmentation Establish market potential and responsiveness for various segments Select target markets Create lifestyle profiles: demography, media, and product image characteristics

PRODUCT RESEARCH
Test concept

Determine optimal product design

Package tests Product modification Brand positioning and repositioning Test marketing Control score tests

Problem Solving Research

Table 1.1 cont. PROMOTIONAL RESEARCH
Optimal promotional budget Sales promotion relationship Optimal promotional mix Copy decisions Media decisions Creative advertising testing Evaluation of advertising effectiveness Claim substantiation

PRICING RESEARCH
Pricing policies

Importance of price in brand selection Product line pricing Price elasticity of demand Initiating and responding to price changes

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Problem Solving Research

Table 1.1 cont. DISTRIBUTION RESEARCH

Determine Types of distribution

Attitudes of channel members

Intensity of wholesale & resale coverage Channel margins Location of retail and wholesale outlets

Marketing Research Process

Step 1: Problem Definition Step 2: Development of an Approach to the Problem Step 3: Research Design Formulation Step 4: Fieldwork or Data Collection Step 5: Data Preparation and Analysis Step 6: Report Preparation and Presentation

The Role of Marketing Research

Customer Groups Consumers Employees Shareholders Suppliers

Controllable Marketing Variables

Product Pricing Promotion Distribution Assessing Information Needs Providing Information Marketing Decision Making

Uncontrollable Environmental Factors Economy Technology Laws & Regulations Social & Cultural Factors Political Factors

Marketing Research

Marketing Managers Market Segmentation Target Market Selection Marketing Programs Performance & Control

Marketing Research Suppliers & Services

Fig 1.3

INTERNAL

RESEARCH SUPPLIERS

EXTERNAL

FULL SERVICE
Syndicate Services Standardized Services Internet Services

LIMITED SERVICE
Field Services Coding and Data Entry Services Branded Products and Services Data Analysis Services

Customized Services

Analytical Services

Marketing Research Firms

ACNielsen India Centre for Research, Planning & Action Delphi Research Services Private Ltd Gallup MBA India Pvt Ltd Indian Market Research Bureau MRAS / Burke ORG-MARG Research Ltd

Career Descriptions
Vice-President of Marketing Research: The senior position in marketing research. The vice president (VP) is responsible for the entire marketing research operation of the company and serves on the top management team. This person sets the objectives and goals of the marketing research department. Research Director: Also a senior position. The research director has the general responsibility for the development and execution of all the marketing research projects. Assistant Director of Research: Serves as an administrative assistant to the director and supervises some of the other marketing research staff members. (Senior) Project Manager: Has overall responsibility for design, implementation, and management of research projects. Statistician/Data Processing Specialist: Serves as an expert on theory and application of statistical techniques. Responsibilities include experimental design, data processing, and analysis.

 Internal suppliers External suppliers

Marketing Research Suppliers & Services

Full-service suppliers
Syndicated services Standardized services Customized services Internet services
Field services Coding and data entry services Analytical services Data analysis services Branded marketing research products

Limited-service suppliers

Criteria for Selecting a Research Supplier

What is the reputation of the supplier? Do they complete projects on schedule? Are they known for maintaining ethical standards? Are they flexible? Are their research projects of high quality? What kind and how much experience does the supplier have? Has the firm had experience with projects similar to this one? Do the supplier's personnel have both technical and non-technical expertise? Can they communicate well with the client?
Competitive bids should be obtained and compared on the basis of quality as well as price.

The Problem Definition Process

Tasks Involved

Discussion with Decision Maker(s)

Interviews with Experts

Secondary Data Analysis

Qualitative Research

Environmental Context of the Problem

Step I: Problem Definition

Management Decision Problem

Marketing Research Problem

Step II: Approach to the Problem

Analytical Model: Verbal, Graphical, Mathematical Specification of Information Needed

Objective/ Theoretical Foundations

Research Questions

Hypotheses

Step III: Research Design

Tasks Involved in Problem Definition

Discussions with Decision Makers Interviews with Industry Experts Secondary Data Analysis Qualitative Research

The Problem Audit

The problem audit is a comprehensive examination of a marketing problem with the purpose of understanding its origin and nature. 1. The events that led to the decision that action is needed, or the history of the problem. 2. The alternative courses of action available to the DM. 3. The criteria that will be used to evaluate the alternative courses of action. 4. The potential actions that are likely to be suggested based on the research findings. 5. The information that is needed to answer the DM's questions. 6. The manner in which the DM will use each item of information in making the decision. 7. The corporate culture as it relates to decision making.

Factors to be Considered in the Environmental Context of the Problem

PAST INFORMATION AND FORECASTS RESOURCES AND CONSTRAINTS OBJECTIVES BUYER BEHAVIOR LEGAL ENVIROMENT ECONOMIC ENVIROMENT

MARKETING AND TECHNOLOGICAL SKILLS

Management Decision Problem Vs. Marketing Research Problem

Management Decision Problem Marketing Research Problem
Should a new product be introduced? To determine consumer preferences and purchase intentions for the proposed new product. To determine the effectiveness of the current advertising campaign. To determine the price elasticity of demand and the impact on sales and profits of various levels of price changes.

Should the advertising campaign be changed?

Should the price of the brand be increased?

Proper Definition of the Research Problem

Marketing Research Problem Broad Statement

Specific Components

Department Store Project

Problem Definition
Department store patronage project, the marketing research problem is to determine the relative strengths and weaknesses of the store, vis-vis other major competitors, with respect to factors that influence store patronage. Specifically, research should provide information on the following questions.
1. What criteria do households use when selecting department stores? 2. How do households evaluate the store and competing stores in terms of the choice criteria identified in question 1? 3. Which stores are patronized when shopping for specific product categories? 4. What is the market share of the store and its competitors for specific product categories? 5. What is the demographic and psychological profile of the customers of the store? Does it differ from the profile of customers of competing stores? 6. Can store patronage and preference be explained in terms of store evaluations and customer characteristics?

Components of an Approach
Objective/Theoretical Foundations Analytical Model Research Questions Hypotheses Specification of the Information Needed

The Role of Theory in Applied Marketing Research

Research Task 1. Conceptualizing and identifying key variables Role of Theory Provides a conceptual foundation and understanding of the basic processes underlying the problem situation. These processes will suggest key dependent and independent variable s. Theoretical constructs (variables) can suggest independent and dependent

2. Operationalizing
key variables 3. Selecting a research design 4. Selecting a sample 5. Analyzing and interpreting data 6. Integrati ng findings

variables naturally occurring in the real world.

Causal or associative relationships suggested by the theory may indicate whether a causal or descriptive design should be adopted.

The theoretical framework may be useful in defining the population and

suggesting variables for qualifying respondents, imposing quotas, or stratifying the population The theoretical framework (and the models, research questions and hypotheses based on it) guide the selection of a data analysis strategy and the interpretation of results . The findings obtained in the research project can be interpreted in the light of previous research and integrated with the existing body of knowledge.

Models
An analytical model is a set of variables and their interrelationships designed to represent, in whole or in part, some real system or process. In verbal models, the variables and their relationships are stated in prose form. Such models may be mere restatements of the main tenets of a theory.

Graphical Models
Graphical models are visual. They are used to isolate variables and to suggest directions of relationships but are not designed to provide numerical results.
Awareness

Understanding: Evaluation

Preference

Patronage

Mathematical Models
Mathematical models explicitly specify the relationships among variables, usually in equation form.

y a a 0 ix i
i 1

Where y = degree of preference

a ,a =
0 i

model parameters to be estimated statistically

Development of Research Questions and Hypotheses

Components of the Marketing Research Problem Objective/ Theoretical Framework Analytical Model Hypotheses

Research Questions

Research Questions and Hypotheses

Research questions (RQs) are refined statements of the specific components of the problem. A hypothesis (H) is an unproven statement or proposition about a factor or phenomenon that is of interest to the researcher. Often, a hypothesis is a possible answer to the research question.

Department Store Project

RQ: Do the customers of Shoppers Stop exhibit store loyalty? H1: Customers who are store loyal are less knowledgeable about the shopping environment. H2: Store-loyal customers are more riskaverse than are non-loyal customers.

Department Store Project

Specification of Information Needed
Component 1 The researcher identified the following factors as part of the choice criteria: quality of merchandise, variety and assortment of merchandise, returns and adjustment policy, service of store personnel, prices, convenience of location, layout of store, credit and billing policies. The respondents should be asked to rate the importance of each factor as it influences their store selection. Component 2 The researcher should identify the competitive department stores as competitors to the Store based on discussions with management. The respondents should be asked to evaluate the store and its other competitors on the eight choice criteria factors.

Department Store Project

Component 3 Different product categories can be selected, including women's dresses, women's sportswear, body fashion, junior merchandise, men's apparel, cosmetics, jewelry, shoes, sheets and towels, furniture and bedding, The respondents should be asked whether they shop at each of the stores for each of the product categories. Component 4 No additional information needs to be obtained from the respondents.

Department Store Project

Component 5 Information should be obtained on the standard demographic characteristics and the psychographic characteristics of store loyalty, credit use, appearance consciousness, and combining shopping with eating. Component 6 No additional information needs to be obtained from the respondents.