Chapter 4

1. Chapter 4 Marketing Research

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4. What is Marketing Research? • It is the systematic collection, analysis, and interpretation of information used to develop a marketing strategy or to solve a problem. • Firms can do marketing research on their own or hire a marketing research firm, such as the Environics Research Group , Vebsite

5. Marketing research uses hard data(Information based on supportable facts) • Not Intuition – (decisions based on feelings and prior knowledge)

6. Why is Marketing Research Important? • Find out what people like; want/need • Make the company more successful • Learn how to improve your product/service • To find out who your target market is. • Where, when, & how people shop • What forms of promotions to use • To understand different cultures • Know the competition • Style of packaging • Et cetera

7. Types of Information • Secondary Data • Primary Data

8. 4.2 Secondary Data is marketing-research information that has been collected and published by others. • Secondary data is collected by means of on-line surveys, telephone marketing surveys, marketing research groups, etc. • Secondary research ~ collection and analysis of secondary data.

9. Sources for Secondary Data • Books • Periodicals ~ magazines, newspapers etc. • The Internet • Databases ~ lists of information organized by category • Indexes ~ list of all articles published about a specific topic over a particular period • Consultants ~ local chambers of commerce or business development offices are the best sources for free information. Canada Business Organization • Marketing-Research Professionals ~ companies that sell their data.

10. How is Secondary Data used? • Can be used by any business to help develop its marketing strategy and assist in decision making and problem solving • Read pages 130-132

11. 4.3 Primary Data • Unanalyzed, current information collected by a researcher for a specific purpose. • There are two types of Primary Research; • Qualitative & Quantitative

12. Qualitative Research ~ research about how people feel toward or think about a product. (Blind taste tests, opinion polls) • Quantitative Research ~ research based on data taken from surveys or figures based on a sample of the target market. (Quantitative = Measurable)

13. USING THE DATA • Researchers use the results to make predictions about the entire target market. • They use a number of techniques to gather this information: • Test Marketing • Internal Information Sources • Surveys • Observation • Focus-group Interviews

14. 1. TEST MARKETING • to see how well a product might sell, marketers may produce a limited quantity and introduce it into a test market. • Test Markets ~ are sites that mirror the demographic composition of the country as a whole. (Peterborough, ON, is often used in Canada) • Often used for packaged goods, i.e. soup, toothpaste & Movies

15. How Test Markets Are Administered • Selling a product in one or two major retails stores or • Changing the price, product packaging, in-store display location, in-store advertising etc., in one store and not changing anything in another store or • Trying different promotional activities in each store • ...and then monitoring the sales. • Disadvantages: expensive, not always accurate. (Competitors)

16. 2. Internal Information Sources: • Sales Records ~ provides information on the popularity or product lines, shows the seasonal fluctuations, data on stock turnover, and can help predict future sales & inventory stock • Inventory Records ~ provides more information on seasonal fluctuations • Advertising & Promotional Records ~ provides information on the success or failure of specific ads or promos. (What worked in the past might work in the present/future) • Production Records ~ indicates peak ordering and downtimes, helps with the scheduling of marketing & advertising plans

17. Company Databases • Can hold both personal data and purchasing information on customers. • Businesses obtain this information through a variety of means, client cards, frequent-purchaser cards, reward programs and other programs that require the consumer to provide personal data. • Each time one of these cards is used the company is supplied with specific purchasing data. • This information is used for data mining

18. Data Mining • Generally, data mining (sometimes called data or knowledge discovery) is the process of analyzing data from different perspectives and summarizing it into useful information - information that can be used to increase revenue, cuts costs, or both. • Video

19. 3. Surveys • a set of carefully planned questions that are used to gather data. The people chosen must be random. • Most surveys use closed-ended questions. (respondents select one answer from two or more choices) Examples: Yes/No; Agree/Disagree; “Select a, b, c, or d” or “Rate on a scale of 1 to 10. • Some use open-ended questions , questions that allow respondents to develop their own answers. • Ex. What do you like most about this flavour?

20. 4. Observations • collecting information by watching the actions of people. • Observations can be made using tv cameras, audiotapes, one-way mirrors and other mechanical methods. • Mechanical methods – bar-code scanners, eye-tracking devices. • Eye-tracking photography video

21. 5. Focus Group Interviews • bringing a small group of people together to discuss a particular product or problem. • Focus Group Video One • Second Video • UK video

22. Section 4.4 Types of Marketing Research The type of research a marketer uses depends on whether they need information on their consumersor their competitors.

23. Consumer Research • Consists of all the efforts marketers use to determine people’s buying behaviour. • There are nine methods: • Product Research • Motivation Research • Media Research • Consumer Tracking Device • Awareness, Attitude, and Usage Studies • Consumer Satisfaction Studies • Market Dimension Analysis • Advertising Research • Consumer Segmentation Analysis

24. Awareness, Attitude, and Usage Studies (AAU) ~ measures consumers’ awareness, attitude and usage of a product • Consumer Segmentation Analysis ~used to group potential customers into target markets based on shared demographics, geographic or psychographic characteristics. • Market Dimension Analysis ~ analysis of a segment of the potential market about what would influence them to purchase a product like the one being marketed.

25. Product Research ~ examines each detail of the product or service & analyzes its potential impact on the market. Looks at variables such as color, package, flavor, scent, etc. • Media Research ~ attempts to segment consumers based on which newspapers & magazines they read, which TV programs • Consumer-Tracking Device ~ machines that gather information on consumer’s’ purchasing habits while they shop (e.g., bar code scanners, internet software)

26. Motivation Research ~ research into why customers buy what they do • Consumer SatisfactionStudies ~ studies that show how happy a consumer is with a product or service • Advertising Research ~ research to determine how to effectively convey a product message to potential consumers

27. Competitive Research • used to determine what other products your product is competing with. • Competitive Market Analysis – uses a variety of tools to compare all of the products available in a particular market category.

28. Competitive Intelligence – hard data collected on the competitors company. (e.g. copies of annual reports from the internet, samples of advertising, promotions etc.) • Pricing Research – looks at what a customer will pay for a product. • Conjoint (tradeoff) Analysis – used to identify the individual features of a product that contribute to its perceived worth. (Value equation)