Chapter 2

2. Chapter 2 Marketing research

3. Lecture Objectives After going through this chapter, you should be able to: • Explain the role marketing research plays in decision-making in the hospitality industry • Identify sources of marketing information available to hospitality organizations • Define secondary and primary data collection • Explain the differences between qualitative and quantitative research methods • Recognize how bias and sampling errors can distort marketing research findings • Describe how hospitality organizations conduct online research.

4. Introduction • Managers are paid to make decisions. • The purpose of marketing research is to inform and improve decision-making by reducing uncertainty. • Marketing research can be defined as the systematic gathering and analysis of data to provide relevant information to aid decision-making. • Marketing research is a planned process. • Market research describes the investigation of consumer and organizational markets • Marketing research includes research into all the marketing mix variables and the macro (PESTE) and micro-environments.

5. International Marketing Research Presents unique problems because of the cultural and technological differences between countries: • Translation difficulties • Variations in customer behaviour because of different cultural backgrounds • Variations in customers’ product knowledge • Difficulties in obtaining comparable samples • Different cultural responses to market research surveys • Differences in the infrastructure

6. Marketing Information Systems • Hospitality managers need relevant, accurate, current and reliable information to be able to make effective decisions that will influence the future of the business. • Small, single-unit, owner-operated companies rely on informal approaches to data collection and interpretation. • Larger organizations need to develop more sophisticated marketing information systems to ensure that corporate executives understand complex environment • The marketing information system helps marketers to identify trends and plan for the future

7. The hospitality marketing information system

8. Sources of information - internal • Internal information is held by the organization • Accommodation businesses hold a wealth of information about customers because of legal requirements • Information sources include: • Customer records • Guest history • Departmental reports • Marketing and sales reports

9. Sources of information - external External information can be collected via the Internet and publications including: • International and national government organizations • Marketing research organizations • Publicly quoted companies “Annual Accounts” • Trade associations • Hospitality industry trade press • Financial press • Universities and academic publishers

10. Secondary (or desk) data collection • Secondary (desk) data are data that have already been collected • It is relatively easy to obtain secondary data since the information has already been published • Limitations to secondary data include: • data have been collected and analysed by another organization • some organizations may deliberately manipulate data • other organizations may have inadvertently introduced bias • information is generally available to competitors • secondary data and analysis can often be ‘dated’ because of the long time between carrying out the research and publishing • the findings

11. Primary data collection • Primary data consist of original information collected by an organization for a specific purpose. • The data have not been published before. • The organization conducting or commissioning the research determines the research objectives and research questions. • Data are collected directly to provide answers to those questions. • Primary research is usually more costly than the secondary research. • Advantages of primary research include the following: • The ability to frame the research questions to the needs of the organization • Research is current and not dated • Research is confidential • Primary data can enable a hospitality company to gain competitive advantage if competitors are not carrying out similar research.

12. Qualitative data • Qualitative research aims to provide a deep understanding of people’s contextualized behaviour • It aims to explain how and why people behave in certain ways • Qualitative research in hospitality uses: • Observation • in-depth interviews, • focus groups (also known as group discussions) • qualitative questions in surveys

13. Quantitative data • Quantitative research uses a wide range of methods to obtain and analyse numerical data • Quantitative research counts numbers, in terms of either volume or value. For example: • the number of customers, passengers, residents, diners, room nights, room occupancy; • restaurant unit’s sales; or a hotel chain’s room sales. • If data are numeric then the research is quantitative

14. Quantitative research • Quantitative research techniques are founded upon statistical theory • Correct statistical methods are required to reduce possible error and bias • Possible errors include: • Sampling errors • Respondent errors • Investigator errors • Administrative errors • In large surveys, statistical software packages are used to process the quantitative research data.

15. Quantitative research methods • exit surveys • mystery customer audits • telephone (including mobile phone) surveys • online surveys • omnibus surveys.

16. Closed and open questions • Closed questions provide a number of alternative answers from which the respondent chooses one answer, for example questions about: • respondent’s age, sex, employment, income • Closed questions use a structured format which creates a data set that can be efficiently analysed using statistical methods. • Closed questions are essential if a quantitative research method is used • Open-ended questions allow respondents to provide their own answers, • Examples include ‘Where would you stay tonight if this hotel was fully booked?’ and ‘How did you feel about the quality of service?’ • Open question allows respondents to use their own words to describe their experience, feelings and opinions. • Qualitative research findings using open questions provide ‘rich’ data • Researchers usually ask a combination of both closed and open questions and combine qualitative and quantitative analysis. Compare Le Meridien and Malmaison in-room customer questionnaires

17. Le Meridien customer questionnaire

18. Le Meridien customer questionnaire (2)

19. Malmaison comment card

20. Marketing research process There are six steps in the marketing research process: • Formulation of research objectives • Development of a research plan • Data collection • Data analysis • Assess the reliability and validity of data • Presentation of findings

21. Online research • Advantages of online research include: • significant cost savings in the design and administration of questionnaires and discussion groups • the ability to accurately target surveys to current, former or potential customers. • Often, customers are incentivized to participate in online surveys • Post- consumption e-surveys provide customers with a convenient tool to give feedback on service quality and customer satisfaction. • Tools such as blogs and social networking sites are useful to obtain unsolicited such for customer- generated comment • The Internet is available to all sizes of hospitality companies.

22. Criticisms of Marketing Research • Academics and practitioners have criticized modern marketing research for a number of reasons • The focus on collecting data and performing statistical analysis, which does not provide new insights for the business or inform decision-making • Flawed marketing research methodologies that introduce unacceptable levels of bias or error • The emphasis on research stifles creativity in marketing • Despite these criticisms, major hospitality companies recognize the importance of marketing research and carry out extensive customer and competitor research on a continuous basis

23. References and Further Reading • Altinay , L. , & Paraskevas , A. ( 2008 ). Planning research in hospitality and tourism, Oxford, UK : Butterworth-Heinemann . • Bowie, D & Buttle, F (2011), Hospitality Marketing: Principles and Practice, Oxford, UK : Butterworth-Heinemann • Brown , S. ( 2001 ). Marketing: The retro revolution . Sage . • Chaffey , D. , Ellis-Chadwick , F. , Johnston , K. , & Mayer , R. ( 2009 ). Internet marketing: strategy, implementation and practice ( 4th ed. ). Pearson Education . • Daymon , C. , & Holloway , I. ( 2002 ). Qualitative research methods in public • relations and marketing communications . Routledge . • Saunders , M. K. , Thornhill , A. , & Lewis , P. ( 2009 ). Research methods for business students ( 5th ed.). Financial Times/Prentice Hall . • Usunier , J. C. , & Lee , J. ( 2009 ). Marketing across cultures ( 5th ed.). Financial Times/Prentice Hall .