Applied Marketing Research Module 1: Introduction

1. Applied Marketing Research Module 1: Introduction

2. STP and the 4Ps: The backbone of Marketing 4 Ps Market Segmentation Targeting Positioning Customer

3. ‘Marketing research is a key element within the total field of marketing information. It links the consumer, customer and public to the marketer through information, which is used to identify and define marketing opportunities and problems; generate, refine and evaluate marketing actions; and improve understanding of marketing as a process and of the ways in which specific marketing activities can be made more effective’.

4. Strategy of MR • Time • Money • Accuracy of Results

5. 1. Establish need for information 2. Establish information needs 3. Determine research design/data sources 4. Develop data collection procedures 5. Sample design 6. Survey design 7. Collect data 8. Process data 9. Analyze data 10. Write report/present findings 11. Action The Market Research Process Decision

6. (Why) Do we need to conduct Marketing research? 1) Check out what the market is like! (SWOT analysis-Proactive Research) Explore a new opportunity Check for any threats in the market Identify our strengths Identify our weaknesses Step 1: Establish Need for information

7. Defining the problem • Ford: We are experiencing a loss of market share in the United States. • Researcher: Is it just the US? • Ford: No, but as we conduct the majority of our business in US, the loss is causing us the greatest amount of concern. • Researcher: Why do you think you are losing market share? • Ford: We wish we knew! • Researcher: How are your competitors coping? • Ford: We suspect that other US manufacturers are also suffering, and that the Japanese ones are capturing market share. • Researcher: How do your customers feel about your product and service? • FORD: I am guessing they hate both! We can put a lot of money into it, but where does the money go? • Researcher: Lets check it out?

9. 2) Check out if a strategy makes sense! (Dry run/Concept Testing) – The Volvo Hybrid Introducing a new product… will it make money?

10. 3) I see changes? Why do I see changes? (Reactionary Research) My product used to sell very well… but its sales are now declining! Step 1 contd. : Establish Need for information

11. 4) Have things changed from the past? (Tracking Study) I had a 30% Market Share last month. What is it now?

12. 5) The law wants me to! (Mandatory Studies) – Location based Insurance and Medicine need to check for consumer satisfaction

13. What are the questions that we need to ask (the consumers)? Will they give us answers to what we want to know in step 1? Show me the numbers!!! Don’t use toooo much intuition!! What percentage of the time do you think you smell bad amongst friends/co-workers? What percentage of the time do you think your friends/co-workers smell bad? You think < 10% Everybody else thinks – 35% Step 2: Establish Information Needs

16. Can I get by using less money and time? (consider Ford) Use Secondary Data! General Motors/Holden had a similar problem and they conducted a survey. Since Holden and FMC are perceived similarly, that data might be used Can we just get by observing what is going on around us? Observational Research Ask people who come to the showroom and not buy the product Observe what people who buy a competing brand (Honda) focus on when they buy the product. Ok, we do need to spend Time AND Money! Survey Research Ask Subjects questions that will help us in answering our questions “Are you satisfied with the reliability of Ford Cars?” “Are you satisfied with the looks of Ford Cards?” Step 3: Determine Design and Data Sources

17. Secondary and Primary Data

18. Examples of data generated from invoices that could help to understand consumer behaviour • What products customers buy • Which customers buy the most products • Which customers repeat purchases • Which customers appear only when there are special offers • Where these customers are located • How these customers pay – by cash or credit • Which customers are the most profitable • Seasonal patterns of purchasing behaviour by product types and customer types.

19. Criteria for evaluating secondary data

20. Criteria for evaluating secondary data

21. A classification of marketing research designs

22. What types of data do we need? Attitudes: how do people think/feel about our products? What is the first thing that comes to mind when you think of FMC? Behaviors: how do people behave in the market? Which was your last vehicle purchase? Demographics: company, people, industry Where do you live? How many children under 12 do you have in your family? How should we collect the data? Get it the right way! Phone/Personal/Mail/E-mail (Surveys) Secondary research Observation Step 4: Develop data collection procedure

23. Who should be interviewed? (Population and Sample) Want to sell to the entire US. How do I survey EVERYBODY? Decision maker/influencer Dad who buys the car (purchaser) or Child that drives it to school (user) How should these respondents be contacted? Telephone interviews (Can respondent visualize color, design etc.?) Personal interviews (very expensive) Mail interviews (too slow? Can we wait that long?) How many people should we interview? At what level of confidence can we project the results to the population? What possible amount of error can we live with? Step 5: Sample Design (for survey research)

24. Potential sources of error in research designs

25. Ask as few questions as possible and in a logical fashion!! Humans are lazy (Cognitive Misers) Keep it simple and stupid (KISS) Use language that is convenient and comfortable for the respondent Speak in the respondent’s “language” Would you consider yourself a turophile? – Actual Survey Qn by Kraft Ask the hard questions first and easy ones last. Humans are not only lazy, but they easily get tired (Survey Fatigue) Step 6: Survey Design

26. Step 7/8: Collect Process Data • Interview quality control procedures • Interviewer quality – • Make sure that you haven't hired a lazy guy • Confirm that he is doing his job • Data processing quality • Data cleaning procedures • Qn 6 asked - Do you prefer an automatic transmission? • Respondent did not answer…  TRASH • Logic checks • Qn 5 asked - Do you own a car? Respondent said No. • Qn 6 asked – Is it an American Car? Respondent said Yes.  TRASH

27. Step 9: Analyze Data • Does the data tell you anything without using Math • Go back and review information needs – Rural people like FMC better • Everybody hates our reliability • “Visualize” results – A picture says a 1000 words • Think, use your brains! • Now use Math Techniques • Cross-tabulations • Multivariate analysis (regression, semantic scales, conjoint) • More complex designs and analyses Don’t just make the analysis very simple… but don’t just go crazy with math either

28. Step 10/11: Write a report/Take Action • Writing reports • User friendly reports • Bullets and dashes format • Picture is worth a 1000 words • “BLOT” strategy (bottom line on top) • Presenting findings • Be sensitive to the audience’s level of knowledge • Be a manager, not a statistician • Sometimes numbers don’t mean a thing! But most of the times nothing means anything without numbers • Action • Design changes in the marketing mix • Go back and see if you need more data to make better decisions