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C H A P T E R N I N E. TURNING MARKETING INFORMATION INTO ACTION. Irwin/McGraw-Hill. AFTER READING THIS CHAPTER YOU SHOULD BE ABLE TO:. Identify a five-step marketing research approach leading to marketing actions.

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Slide1 l.jpg

C H A P T E R N I N E

TURNING MARKETING INFORMATION INTO ACTION

Irwin/McGraw-Hill


After reading this chapter you should be able to l.jpg

AFTER READING THIS CHAPTER YOU SHOULDBE ABLE TO:

  • Identify a five-step marketing research approach leading to marketing actions.

  • Describe how secondary and primary data are used in marketing, including the uses of questionnaires, observations, experiments, and panels.

  • Understand how information technology enables information systems to be used that link massive amounts of marketing information to meaningful marketing actions.

  • Recognize alternative methods to forecast sales and use the lost-horse and linear trend extrapolation methods to make a simple forecast.


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PP9-AA What’s in a Movie’s Name?

Three movies’ initial and ultimate titles:

•Shoeless Joe became Field of Dreams

•Teenie Weenies became Honey, I Shrunk the Kids

•3000 became Pretty Woman

Is research on movie titles expensive? YES IT IS!!

But, what is more expensive? A bad title that can kill a movie and cost a studio millions of dollars. Big budget films can cost as much as $70 million.

Market research has resulted in other types of changes to movies as well.


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PP9-1a Marketing Research Questions Asked in Test Screenings of Movies and How They are Used

POINT WHEN ASKEDKEY QUESTIONSUSE OF QUESTION(S)

Before the test

screening

  • How old are you?

  • How frequently do you pay to see movies?

  • What movies have you seen in the last 3 months?

Decide if person fits profile of target audience for movie.

If yes, invite to test screening.

If not, don’t invite.

After the test

screening

  • What do you think of the title? What title would you suggest?

  • Were any characters too distasteful? Who? How?

Change movie title.

Change aspects of some characters.

(continued)


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PP9-1b Marketing Research Questions Asked in Test Screenings of Movies and How They are Used (continued)

POINT WHEN ASKEDKEY QUESTIONSUSE OF QUESTION(S)

  • Did any scenes offend you? Which ones? How?

  • How did you like the ending? If you didn’t like it, how would you change it?

  • Would you recommend the movie to a friend?

Change scenes.

Change or clarify ending.

Overall indicator of liking and/or satisfaction with movie.

After the test

screening


Pp9 bb definition of marketing research l.jpg

PP9-BB Definition of Marketing Research

Marketing Researchis . . . .

the process of defining a marketing problem or opportunity, systematically collecting and analyzing information, and recommending actions to improve an organization’s marketing activities.


Pp9 2 five step marketing research approach leading to marketing actions l.jpg

Step 1

Step 2

Step 3

Step 4

Step 5

  • Develop the research plan

  • Specify constraints

  • Identify data needed for marketing actions

  • Determine how to collect data

  • Collect

  • relevant

  • information by specifying

  • Secondary data

  • Primary data

  • Develop

  • findings and recom-mendations

  • Analyze data

  • Present findings

  • Make recom-mendations

  • Take marketing actions

  • Implement recommen-dations

  • Evaluate results

  • Define the

  • problem

  • Set Research Objectives

  • Identify possible marketing actions

PP9-2 Five-Step Marketing Research ApproachLeading to Marketing Actions


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PP9-CC The Goal of Marketing Research

Management is faced with many choices involving possible marketing actions. The goal of marketing research is to provide management with actionable information that will allow managers to make better decisions and ultimately reduce risk.


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PP9-DD Should Marketing Research be Undertaken?

As indicated earlier, marketing research can be expensive. Management must balance the cost of doing or contracting for marketing research against the value of the information, the value of a better decision.

A marketing research project might cost $50,000, but suppose its purpose is to evaluate the feasibility of a $20 million exhibition and convention center? In this case the involved parties cannot afford “not to do marketing research.”


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PP9-EE Concept Check

1. What is marketing research?

2. What are the five steps marketing

research uses to help lead to

marketing actions?


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PP9-FF Step 1: Defining the Problem -- Key Points

Objectives are the goals the decision maker seeks to achieve in solving a problem.

Measures of success are criteria or standards used in evaluating proposed solutions to a problem.

One test of whether marketing research should be undertaken is if different outcomes will lead to different marketing actions.


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PP9-GG Step 2: Develop the Research Plan

The second step in the marketing research process involves:

1.Specifying the constraints on the research activity,

2.Identifying the data needed for marketing actions, and

3.Determining how to collect the data.


Pp9 hh constraints l.jpg

PP9-HH Constraints

The constraints in a decision are restrictions placed on potential solutions by the nature and importance of the problem.

Common constraints in marketing problems are limitations on time and money available to solve the problem.


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PP9-IIa Data Collection

Methods are approaches that can be used to collect data to solve all or part of a problem.

One method of collecting data in by sampling. There are two basic ways of sampling from a population:

1.Probability sampling involves using precise rules to select the sample such that each element of the population has a specific known chance of being selected. Probability samples can be very representative of a particular population.

(continued)


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PP9-IIb Data Collection

2.Nonprobability samples may be used when time and budget are limited. They use arbitrary judgments to select the sample. With this method it is not known “how” representative a population might be.


Pp9 a kinds of samples used in marketing research l.jpg

Simple random

samples

Probability

Samples

Stratified randomsamples

Cluster

samples

All Samples

Convenience

samples

Nonprobability

Samples

Judgment

samples

Quota

samples

PP9-A Kinds of Samples Used in Marketing Research


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PP9-JJ Concept Check

1. How do research objectives relate to marketing actions?

2. What does constraints mean?

3. What is the difference between concepts and methods?


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PP9–3 Types of marketing information

  • Internal data (inside the firm)

  • Financial statements, researchreports files, customer letters,sales call reports, andcustomer lists

  • Secondary data

  • Facts and Figures

  • Already recordedprior to the project

  • External data (outside the firm)

  • U.S. Census reports, tradeassociation studies, and magazines, business periodicals,and commercial reports

  • Data

  • Facts and figurespertinent to theproblem

  • Observational data

  • (watching people)

  • Mechanical and electronicapproaches

  • Personal approaches

  • Primary data

  • Facts and Figures

  • Newly collected forthe project

  • Questionnaire data

  • (asking people)

  • Idea generation through in-depthinterviews and focus groups

  • Idea evaluation through mail,telephone, and personal surveys


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PP9-KK Concept Check

1. What are methods?

2. What is the difference between

secondary and primary data?

3. What are some advantages and

disadvantages of U.S. Census of

Population data?


Slide20 l.jpg

PP9–4 Nielsen Ratings of the Top 10 National Television Programs from February 2, 1999 through February 7, 1999

NIELSEN RATING

RANK

PROGRAM

NETWORK

1

2

3

4

5

6

7

8

9

10

ER

Frasier

Friends

NBC Sunday Night Movie

(The ‘60s Pt. 1)

60 Minutes

Touched by an Angel

Veronica’s Closet

Jesse

Dateline NBC-MON

CBS Sunday Night Movie

(Night Ride Home)

NBC

NBC

NBC

NBC

CBS

CBS

NBC

NBC

NBC

CBS

20.3

17.0

16.9

15.1

14.8

14.7

14.1

13.5

13.0

12.3


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PP9-LL Questionnaire Data

Questionnaire data are facts and figures obtained by asking people about their attitudes, awareness, intentions and behaviors.

Because so many questions might be asked in questionnaires, it is essential that the researcher concentrate on those directly related to the marketing problem at hand.


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PP9–B The two stages in a marketing research study

Hypothesis evaluation stage

Purpose: test ideas discovered in hypothesis generation stage to recommend marketing actions

Typical methods:mail, telephone, and personal interviews using large samples

Kind of questions used: fixed alternative

How results are analyzed:qualitative analysis

Hypothesis generation stage

Purpose:uncover ideas to test in idea evaluation stage

Typical methods:one-on-one conversations, focus groups, brainstorming sessions using small samples

Kind of questions used:open-end

How results are analyzed:qualitative analysis


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PP9-MM Hypothesis Generation Studies

Marketing studies for hypothesis generation involve a search for ideas that can be evaluated in later research. Two methods of collecting data for such studies are:

1.Individual interviews

2.Focus groups


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PP9-C Comparison of mail, telephone, and personal interview surveys

Basis of Comparison

Cost per completed survey

Ability to probe and ask complex questions

Opportunity for interviewer to bias results

Anonymity given respondent

Mail, Internet, andFaxSurveys

Usually the least expensive, assuming adequate return rate

Little, since self-administered format must be short and simple

None, since form is completed without interviewer

Complete, since no signature is needed

Telephone Surveys

Moderately ex- pensive, assuming reasonable completion rate

Some, since interviewer can probe and elaborate on questions

Some, because of voice inflection of interviewer

Some, because of telephone contact

Personal Interview Surveys

Most expensive because of interviewer’s time and travel expenses

Much, since interviewer can show visuals, probe, establish rapport

Significant, because of voice and facial expressions of interviewer

Little, because of face-to-face contact


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PP9-D How Ethical is This Claim in an Ad That Is Based on a Survey of Doctors?


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PP9–5a Typical Problems in Wording Questions

PROBLEM

SAMPLE QUESTION

EXPLANATION

Leading question

Ambiguous question

Unanswerable

question

Two questions

in one

Consumer is led to make statement favoring Wendy’s hamburgers

What is meant by word regularly-once a day, once a month, or what?

Who can remember the answer? Does it matter?

How do you answer if you eat Wendy’s hamburgers but not chili?

Why do you like Wendy’s fresh meat hamburgers better

than those of competitors made with frozen meat?

Do you eat at fast-food restaurants regularly?

Yes No

What was the occasion for your eating your first hamburger?

Do you eat Wendy’s hamburgers and chili?

Yes No

(continued)


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PP9–5b Typical Problems in Wording Questions (continued)

PROBLEM

SAMPLE QUESTION

EXPLANATION

Nonexhaustive

question

Nonmutually

exclusive

answers

Where do you live?

At home In dormitory

What is your age?

Under 20 20-40 40 and over

What do you check if you live in an apartment?

What answer does a 40-year old check?


Pp9 6a sample questions from wendy s survey l.jpg

PP9–6a Sample Questions from Wendy’s Survey

1. What things are most important to you when you decide to eat

out and go to a restaurant?

2. Have you eaten fast-food restaurant food in the past three

months?

Yes No

3. If you answered “yes” to Question 2, how often do you eat

fast food?

Once a week or more Two or three times a month

Once a month or less

(continued)


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PP9–6b Sample Questions from Wendy’s Survey (continued)

4. How important is it to you that a fast-food restaurant satisfy you

on the following characteristics? Check the box that describes

your feelings.

SOME-

WHAT

IMPOR-

TANT

SOME-

WHAT

UNIMPOR -

TANT

UN-

IMPOR-

TANT

VERY

UNIMPOR-

TANT

VERY

IMPOR-

TANT

CHARAC-

TERISTIC

IMPOR-

TANT

Taste of food

Cleanliness

Price

Variety on

menu

     

     

     

     

5. Check the space on the scale below that describes how you feel about Wendy’s on the

characteristics shown.

CHARACTERISTIC

CHECK THE SPACE DESCRIBING HOW WENDY’S IS

Not Tasty

Dirty

Expensive

Narrow

Taste of food

Cleanliness

Price

Variety on menu

Tasty

Clean

Inexpensive

Wide

--------------------

--------------------

--------------------

--------------------

(continued)


Pp9 6c sample questions from wendy s survey continued l.jpg

PP9–6c Sample Questions from Wendy’s Survey (continued)

6. Check the box that describes your agreement with the statement.

STRONGLY

AGREE

DON’T

KNOW

STRONGLY

DISAGREE

STATEMENT

AGREE

DISAGREE

Adults like to take

their families to fast-

food restaurants.

Our children have a

say in where the

family eats.

    

    

7. How important is this information about fast-food restaurants?

VERY

IMPORTANT

SOURCE

SOMEWHAT

IMPORTANT

SOURCE

NOT AN

IMPORTANT

SOURCE

SOURCE OF

INFORMATION

  

  

  

  

Television

Newspapers

Billboards

Mail

(continued)


Pp9 6d sample questions from wendy s survey continued l.jpg

PP9–6d Sample Questions from Wendy’s Survey (continued)

8. In the past three months, how often have you eaten at each of these three fast-food

restaurants?

ONCE A WEEK

OR MORE

TWO OR THREE

TIMES A MONTH

ONCE A MONTH

OR LESS

RESTAURANT

  

  

  

Burger King

McDonald’s

Wendy’s

9. Please answer the following questions about you and your household.

a Are you Male Female

b Are you Single Married Other (widowed, divorced)

c How many children under the age of 18 live in your home?

0 1 2 3 4 5 or more

d What is your age?

24 or under 25-39 40 or over

e What is your approximate total annual household income?

Less than $15,000 $15,000-$30,000 More than $30,000


Pp9 nn concept check l.jpg

PP9-NN Concept Check

1. A mail questionnaire asks you, “Do you eat pizza?” What kind of question is this?

2. Does a mail, telephone, or personal interview survey provide the greatest flexibility for asking probing questions?

3.What is the difference between a panel and an experiment?


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PP9-OO Information Technology

Information technology involves designing and managing computer and communication networks to provide an information system to satisfy an organization’s needs for data storage, processing, and access.


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PP9-7 How Marketing Researchers & Managers Use Information Technology to Turn Information into Action

Customer orders

customer

characteristics

inventory

sales calls

promotions

Computer and

communication network

Databases

internal

external

Trade associations

U.S. Census

Internet

Single source services

Models to analyze, organize

interpret, and present data

Queries

- who buys?

- how much?

- why?

Results

Marketing researcher or manager at desktop computer


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PP9-PP Step 4: Develop Findings and Recommendations

Analyze Findings

Present Findings

Make Recommendations


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PP9-QQ Step 5: Take Marketing Actions

Implement the Recommendations: Putting the research results into action is critical, or the research was a waste of time.

Evaluate the Results:

- Evaluate the Decision Itself

- Evaluate the Decision Process Used


Pp9 rr concept check l.jpg

PP9-RR Concept Check

1. In querying an information system, give an example of a question that might be answered directly from the data in the system versus a question that would need some kind of a model to obtain an answer.

2. In marketing research, what is the difference between developing findings and recommendations and taking marketing actions?


Pp9 ss market sales forecasting l.jpg

PP9-SS Market & Sales Forecasting

Market or Industry Potential

Sales or Company Forecast


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PP9-TT Two Basic Approaches to Forecasting

Top-Down Forecast

Buildup Forecast

TOP-DOWN

BUILDUP


Pp9 8 u s population effective buying income and retail sales for selected states 1998 l.jpg

PP9-8 U.S. Population, Effective Buying Income, and Retail Sales for Selected States, 1998

1998 Regional State Summaries of…..

POPULATION EFFECTIVE BUYING RETAIL SALES

INCOME

1997

1998 Total

Total 1997 Retail

Region/ Pop. % of Total EBI % of Sales % of

State (000) U.S. (000) U.S. (000) U.S.

Middle Atlantic38,320.0 14.1793 684,011,632 15.5457 337,080,731 31.2381

New Jersey 8,078.3 2.9892 160,134,925 3.6394 78,290,968 3.0747

New York18,197.6 6.7335 315,102,328 7.1614 142,486,171 5.5958

Pennsylvania12,044.2 4.4566 208,774,378 4.7449 116,303,502 4.5676


Pp9 9 buildup approach to a two year sales forecast for boeing s aerospace department l.jpg

PP9-9 Buildup Approach to a Two-Year Sales Forecast for Boeing’s Aerospace Department

Forecast of total sales

$6

5

Estimated sales from

4

new business proposals

Estimated sales from

3

follow-up work

2

Estimated sales from

1

work under contract

0

1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

Year 1

Year 2


Pp9 uu specific sales forecasting techniques l.jpg

PP9-UU Specific Sales Forecasting Techniques

Judgments of the Decision Maker

direct forecast

lost-horse forecast

Survey of Knowledgeable Groups

survey of buyers’ intentions forecast

salesforce survey forecast

jury of executive opinion forecast

survey of experts forecast

Statistical Methods

Trend Extrapolation


Pp9 10 linear trend extrapolation of sales revenues of xerox made at the start of 1995 l.jpg

PP9-10 Linear Trend Extrapolation of Sales Revenues of Xerox, Made at the Start of 1995

26

24

Actual values

22

available before

forecast is made

20

Linear trend

18

extrapolation

16

forecast

14

Sales revenue ($ billions)

Actual values

12

after forecast

is made

10

8

Forecast

6

4

Actual

2

0

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004


Pp9 vv concept check l.jpg

PP9-VV Concept Check

1. What is the difference between the top-down and buildup approaches to forecasting sales?

2. How do you make a lost-horse forecast?

3. What is linear trend extrapolation?


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