CONDUCTING Chapter Four

MARKETING RESEARCH
CONDUCTING MARKETING RESEARCH
& FORECASTING DEMAND

In this Chapter we will address

the following questions:

What constitutes good marketing

Research?

What are the best metrics for

measuring marketing
productivity?

How can marketers assess their

return on investment of
marketing expenditure?
WHAT IS MARKETING RESEARCH?

What is Marketing Research?? Companies normally budget

marketing research at 1 to 2% of
company sales.
Marketing research is a
systematic design, collection,
analysis, and reporting of data
and findings relevant to a specific
marking situation facing the
company.

At the end of 2013, global market

research revenue totaled $40.29
billion.

From 2010-2013, the industry

grew at an average of 8.77% per
year, suggesting that the current
industry size is just under $45
billion.*
MARKETING RESEARCH FIRMS TYPES

Syndicated-service research Specialty-line marketing

firms: research firms:
These firms gather consumer These firms provide
and trade information, which specialized research
they sell for a fee. services. The best example is
the field-service firm, which
sells field interviewing
Custom marketing research services to other firms.
firms:
These firms are hired to carry
out specific projects, they
design the study and report
the findings.
 Designing a research plan, it
includes: decisions on the data
THE MARKETING sources, research approaches,
research instruments, sampling plan,
RESEARCH PROCESS and contact methods.
STEPS Data Sources

Data sources involves secondary

The Marketing Research Process data, primary data, or both
Steps:

Secondary data are data that were

Step 1: Define the Problem, the collected for another purpose and
decision Alternatives, and the already exist somewhere.
research Objectives.

Step 2: Develop the Research Primary data are data freshly

Plan (The Approach) gathered for a specific purpose or for
a specific research project.

Developing the most efficient plan

for gathering the needed
information.

Knowing the cost of the research

plan before final approval is an
essential step.
RESEARCH APPROACHES

Primary data can be collected

in six main ways:

- Observational research
- Ethnographic research
(based on social science
studies).
- Focus Groups research
- Survey research
- Behavioral data research
- Experimental research
 Questionnaires
Qualitative Measures
RESEARCH Technological Devices
INSTRUMENTS

Marketing researchers have a

choice of three main research
instruments in collecting
primary data, they are as
follows:
QUALITATIVE MEASURES
Qualitative Research Tools &
Steps
Some times consumer actions
do not match their answers to Word associations (what words
survey questions. come to mind when a brand name is
mentioned).
Projective techniques (giving
Qualitative research people an incomplete puzzle and ask
techniques are: them to complete it).

Relatively unstructured Visualization (asking people to create

measurement approaches that a combination from magazine photos to
permit a range of possible describe their perceptions).
responses. Brand personification (what kind of
person they think of when a brand name
is mentioned)
Laddering (a serious of WHY
questions can reveal more and deep
about consumer motivations)
STEP 3: COLLECTING DATA
This stage generally the most
expensive and the most prone to
error.
In the case of surveys, four major
problems usually arise:
Some respondents will not be
available where they should be,
and must be contacted again or
replaced.
Other respondents will refuse to
cooperate.
Others will give biased or
dishonest answers.
Some interviewers will be biased Getting the right
or dishonest. respondents is critical.
STEP 4. SAMPLING PLAN

After deciding on the

research approach and
instruments, sampling plan
has to be designed.
at this stage three decisions
must be taken:
Sampling unit: Who should be
survey?
Sample size: How many
people should be surveyed?
Sampling procedure: How
should the respondents be
chosen?
 Simple random sample
SAMPLING
TECHNIQUES Every member of the
population has an equal
chance of selection.

A. Probability Sample: Stratified random sample

The population is divided into
A probability sampling mutually exclusive groups
method is any method of (such as age groups), and
sampling that utilizes some random samples are drawn
form of random selection. In from each group.
order to have a random
selection method, you must
set up some process or Cluster (area) sample
procedure that assures that
the different units in your The population is divided into
population have equal mutually exclusive groups
probabilities of being chosen. (such as city blocks), and the
researcher draws a sample of
the groups to interview.
 Judgment sample
The researcher selects
SAMPLING population members who are
TECHNIQUES good prospects for accurate
information.

Quota sample
B. Non-probability Sample
The researcher finds and
interviews a prescribed number
of people in each of several
A core characteristic of non- categories.
probability sampling techniques
is that samples are selected
based on the subjective Contact Methods
judgment of the researcher,
rather than random selection.
Mail questionnaire.
Telephone interview.
Convenience sample
Personal interview.
The researcher selects the
most accessible population Online interview.
members.
STEP 5. ANALYSE INFORMATION

At this stage findings are

extracted from the collected
data.
The researcher arranged data
in tables.
Averages and measures are
computed for the major
variables.
Using statistical techniques
and decision models to
discover any additional
findings.
STEP 6. PRESENT FIDINGS

Findings that are relevant to

the major marketing decisions
should be presented to the
management.
Usually researchers are being
asked to play a more
proactive, consulting role in
translating data and
information into insights and
recommendations.
 Research
STEP 7. MAKING DECISIONS Findings
Evaluation

The managers who

commissioned the research
need to weigh the High Low
evidence. Confidence Confidence

If their confidence in the

findings is low, they may
decide against introducing
the study. Findings to be Study not to be
Submitted to Submitted to
If they are relieved of Mgt. Mgt.
launching the study, the
findings should support this
decision.
New or
Additional
Researches
MARKETING METRICS

When marketers can estimate

Marketing metrics are set of the dollar contribution of
measures that helps firms to marketing activities, they are
quantify, compare, and better able to justify the
interpret their marketing marketing investments to senior
performance. management.
They are used to design
marketing programs and
senior management to decide
on financial allocations
SAMPLE MARKETING METRICS
1. External 2.Internal
Awareness Awareness of goals
Market share (volume or value) Commitment to goals
Relative price (market share Active innovation support
value/volume)
Number of complaints (level of Resource adequacy
dissatisfaction)
Consumer satisfaction Staffing / skill levels
Distribution / Availability Desire to learn
Total number of customers Willingness to change
Perceived quality/esteem Freedom to fail
Loyalty / retention Autonomy (Independency)
Relative perceived quality Relative employee satisfaction
Marketing Mix Modeling

Marketing mix models analyze

data from a variety of sources
such as: Retailer scanner data -
Company shipment data
Pricing Media Promotion
spending data.
CONDUCTING MARKETING RESEARCH
& FORECASTING DEMAND

Although marketing mix Despite its important, the

modeling helps to isolate integration of metrics such as
effects, it is less effective at customer satisfaction,
assessing how different awareness, and brand equity
marketing elements work in into marketing mix modeling
combination. is limited.

Such modeling also suffers

other several things: It fails generally to
incorporate metrics related
top competitors, the trade, or
It focuses on incremental the sales force.
growth instead of baseline
sales or long term effects.
MARKETING DASHBOARDS

Marketing dashboards are

like the instrument panel in
a car or plane, visually
displaying real-time
indicators to ensure proper
functioning.
As input to marketing
dashboard, companies
should include two key
market based scorecards
that reflect performance
and provide possible early
warning signals
PERFORMANCE SCORE CARDS

Customer Performance Scorecard Average perception of company's

Data product quality relative to chief
competitor.
Percentage of new customers to
average number of customers. . Average perception of company's
service quality relative to chief
Percentage of lost customers to competitor.
average number of customers.
Stakeholder Performance
Percentage of win-back customers scorecard
to average number of customers.
This card data tracks the
Percentage of customers who say satisfaction of various parties who
they would repurchase the have a critical interest in and
product. impact on companys performance.
Percentage of customers who
correctly identify the brand's
intended positioning and
differentiation.