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Conducting Marketing Research and

Forecasting Demand

Marketing Management, 13th ed

4

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 4-2

Chapter Questions

• What constitutes good marketing research?

• What are good metrics for measuring marketing productivity?

• How can marketers assess their return on investment of marketing expenditures?

• How can companies more accurately measure and forecast demand


Gillette Used Extensive Market Research When Designing the Venus

http://www.gillettevenus.com/us/


What is Marketing Research?

Marketing research is the systematic design, collection, analysis, and

reporting of data and findings relevant to a specific marketing situation facing

the company.


Types of Marketing Research Firms

Syndicated-service

CustomSpecialty-

line


The Marketing Research Process

Define the problem

Develop research plan

Collect information

Analyze information

Present findings

Makedecision


Step 1: Define the Problem

• Define the problem

• Specify decision alternatives

• State research objectives


Step 2: Develop the Research Plan

Data Sources

ContactMethods

ResearchInstruments

SamplingPlan

Research Approach


Research Approaches

ObservationObservation

Focus GroupFocus Group

SurveySurvey

Behavioral DataBehavioral Data

ExperimentationExperimentation

EthnographicEthnographic


Focus Group in Session


Research Instruments

QuestionnairesQualitative MeasuresTechnological Devices


Questionnaire Do’s and Don’ts

• Ensure questions are free of bias

• Make questions simple

• Make questions specific• Avoid jargon• Avoid sophisticated

words• Avoid ambiguous words

• Avoid negatives• Avoid hypotheticals

• Avoid words that could be misheard

• Use response bands• Use mutually exclusive

categories• Allow for “other” in fixed

response questions


Question Types—Dichotomous

In arranging this trip, did you contact American Airlines?

Yes No


Question Types—Multiple Choice

With whom are you traveling on this trip?

No one

Spouse

Spouse and children

Children only

Business associates/friends/relatives

An organized tour group


Question Types—Likert Scale

Indicate your level of agreement with the following statement: Small airlines generally give better service than large ones.

Strongly disagree

Disagree

Neither agree nor disagree

Agree

Strongly agree


Question Types—Semantic Differential

American Airlines

Large ………………………………...…….Small

Experienced………………….….Inexperienced

Modern……………………….…..Old-fashioned


Question Types—Importance Scale

Airline food service is _____ to me.

Extremely important

Very important

Somewhat important

Not very important

Not at all important


Question Types—Rating Scale

American Airlines’ food service is _____.

Excellent

Very good

Good

Fair

Poor


Question Types—Intention to Buy Scale

How likely are you to purchase tickets on American Airlines if in-flight Internet access were available?

Definitely buy

Probably buy

Not sure

Probably not buy

Definitely not buy


Question Types—Completely Unstructured

What is your opinion of American Airlines?


Question Types—Word Association

What is the first word that comes to your mind when you hear the following?

Airline ________________________

American _____________________

Travel ________________________


Question Types—Sentence Completion

When I choose an airline, the most important consideration in my decision is: ________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________.


Question Types—Story Completion

“I flew American a few days ago. I noticed that the exterior and interior of the plane had very bright colors. This aroused in me the following thoughts and feelings.” Now complete the story. __________________________________________________________________________________________________________________________________________________________________________________________________________________________________________


Question Types—Picture (Empty Balloons)


Question Types—Thematic Apperception Test

Make up a story that reflects what you think is happening in this picture.


Qualitative Measures

Word AssociationWord Association

Projective TechniquesProjective Techniques

VisualizationVisualization

Brand PersonificationBrand Personification

LadderingLaddering


Technological Devices

Galvanometers

Tachistoscope

Eye cameras

Audiometers

GPS


Nielsen Outdoor Leverages GPS to Track Billboard Reach

http://www.nielsen.com/solutions/nielsenoutdoor.html


Sampling Plan

• Sampling unit: Who is to be surveyed?

• Sample size: How many people should be surveyed?

• Sampling procedure: How should the respondents be chosen?


Table 4.2 Types of Samples

Probability Samples• Simple random• Stratified random• Cluster

Nonprobability Samples• Convenience• Judgment• Quota


Contact Methods

Mail Questionnaire

TelephoneInterview

PersonalInterview

OnlineInterview


Pros and Cons of Online Research

Advantages• Inexpensive• Fast• Accuracy of data,

even for sensitive questions

• Versatility

Disadvantages• Small samples• Skewed samples• Technological

problems • Inconsistencies


MarketTools’ Research Panels

http://www.markettools.com/panels_communities/hispanic_reach.php


What is a Marketing Decision Support System

(MDSS)?

A marketing decision support system is a coordinated collection of data, systems, tools, and techniques with supporting hardware and software by which an organization gathers and interprets relevant information from business and environment and turns it into a basis for marketing action.


Barriers Limiting the Use of Marketing Research

• A narrow conception of the research

• Uneven caliber of researchers

• Poor framing of the problem

• Late and occasionally erroneous findings

• Personality and presentational differences


Table 4.3 Characteristics of Good Marketing Research

Scientific method Research creativity Multiple methods Interdependence Value and cost of information Healthy skepticism Ethical marketing


What is Marketing Metrics?

Marketing metrics is the set of measures that helps marketers quantify, compare, and interpret

marketing performance.


Table 4.4 Marketing Metrics

External• Awareness

• Market share• Relative price• Number of complaints• Customer satisfaction• Distribution• Total number of

customers• Loyalty

Internal• Awareness of goals

• Commitment to goals• Active support• Resource adequacy• Staffing levels• Desire to learn• Willingness to change• Freedom to fail• Autonomy


What is Marketing-Mix Modeling?

Marketing-mix models analyze data from a variety of sources, such as

retailer scanner data, company shipment data, pricing, media, and

promotion spending data, to understand more precisely the effects

of specific marketing activities.


Marketing Dashboards

• A customer-performance scorecard records how well the company is doing year after year on customer-based measures.

• A stakeholder-performance scorecard tracks the satisfaction of various constituencies who have a critical interest in and impact on the company’s performance including employees, suppliers, banks, distributors, retailers, and stockholders.


Table 4.5 Sample Customer-Performance Scorecard Measures

• % of new customers to average #• % of lost customers to average #• % of win-back customers to average #• % of customers in various levels of satisfaction• % of customers who would repurchase

• % of target market members with brand recall• % of customers who say brand is most

preferred


Common Measurement Paths

Customer Metrics Pathway

Unit Metrics Pathway

Cash-flow Metrics Pathway

Brand Metrics Pathway


Figure 4.2 Marketing Measurement Pathways


Figure 4.3 Example of a Marketing Dashboard


The Measures of Market Demand

PotentialMarket

PenetratedMarket

TargetMarket

AvailableMarket


Vocabulary for Demand Measurement

• Market demand

• Market forecast

• Market potential

• Company demand

• Company sales forecast

• Company sales potential


Figure 4.4 Ninety Types of Demand Measurement


Figure 4.5 Market Demand Functions


Product Penetration Percentage

http://www.tivo.com/

http://www.tivo.com/jump/redir.asp?main=HPNav&sub=HP_Redirect&URL=/0.0.asp


How Can We Estimate Current Demand?

• Total market potential

• Area market potential• Market buildup method• Multiple-factor index method


Table 4.6 Calculating Brand Development Index


Estimating Future Demand

• Survey of Buyers’ Intentions

• Composite of Sales Force Opinions

• Expert Opinion

• Past-Sales Analysis

• Market-Test Method


Marketing Debate

What is the best type of marketing research?

Take a position:1. Marketing research should be quantitative.

or

2. Marketing research should be qualitative.


Marketing Discussion

When was the last time you participated in a survey?

How helpful do you think the information you provided was?

Could the research have been done differently?