The Marketing Research The Marketing Research ProcessProcess

MKTG3342MKTG3342

Fall 2008Fall 2008

Professor Edward FoxProfessor Edward Fox

The Marketing Research The Marketing Research ProcessProcess

Research Process - Key QuestionsResearch Process - Key Questions

1. Why should we do research?1. Why should we do research? Management Decision Problem Research Management Decision Problem Research

Purpose Purpose

2. What research should be done?2. What research should be done? Research ObjectiveResearch Objective

3. Is it worth doing the project ?3. Is it worth doing the project ? Value of InformationValue of Information

Key Questions (cont.)....Key Questions (cont.)....

4. How should research be conducted?4. How should research be conducted? Research DesignResearch Design

55. . How should data be collected?How should data be collected? Sampling and Data CollectionSampling and Data Collection

66. . What will we do with the data?What will we do with the data? Data Analysis and InterpretationData Analysis and Interpretation

77. . How do we communicate the results?How do we communicate the results? Report Writing and PresentationReport Writing and Presentation

Step 1 - Problem/Opportunity Step 1 - Problem/Opportunity IdentificationIdentification

The research process begins with the The research process begins with the recognition of a marketing problem recognition of a marketing problem or opportunityor opportunity

As changes occur in the firm’s As changes occur in the firm’s external environment, marketing external environment, marketing managers are faced with the managers are faced with the fundamental questions, “Should we fundamental questions, “Should we change the current marketing mix?” change the current marketing mix?” and, “If so, how?”and, “If so, how?”

Problem DefinitionProblem Definition

Translating the Translating the Management Decision Management Decision ProblemProblem into into Research ObjectivesResearch Objectives

Management Decision ProblemManagement Decision Problem Manager’s version of the problem for Manager’s version of the problem for

which decisions is to be made. The which decisions is to be made. The management decision problem is action management decision problem is action oriented.oriented. e.g., How can I increase sales? What product e.g., How can I increase sales? What product

features should I add? Should I increase my features should I add? Should I increase my advertising? Who should I target for coupon advertising? Who should I target for coupon distribution?distribution?

Once a problem or opportunity has Once a problem or opportunity has been identified, the marketing been identified, the marketing researcher comes into the picture.researcher comes into the picture.The first responsibility of the researcher The first responsibility of the researcher

is to work with the marketing manager is to work with the marketing manager to clearly articulate the management to clearly articulate the management decision problem(s) whose symptoms decision problem(s) whose symptoms have been observed and then to have been observed and then to precisely define the marketing research precisely define the marketing research problem.problem.

Role of the Marketing Role of the Marketing ResearcherResearcher

Definition of Research Definition of Research ObjectivesObjectives

The culmination of the problem/ The culmination of the problem/ opportunity formulation process is a opportunity formulation process is a statement of research objectivesstatement of research objectivesThese objectives are stated in terms of These objectives are stated in terms of

the precise information necessary to the precise information necessary to address the marketing research problemaddress the marketing research problem

Objectives must be as specific and Objectives must be as specific and unambiguous as possible. All unambiguous as possible. All subsequent efforts will be geared subsequent efforts will be geared toward achieving the research toward achieving the research objectivesobjectives

Some wrong formulations … Some wrong formulations … Symptoms vs. Problems Symptoms vs. Problems (the Iceberg Principle)(the Iceberg Principle)

Management Decision ProblemManagement Decision Problem

Sales were falling below quotas. Sales were falling below quotas.

What should we do?What should we do?

Research ObjectiveResearch Objective

Find ways to motivate salesforceFind ways to motivate salesforce

Some wrong formulationsSome wrong formulations

Management Decision ProblemManagement Decision Problem

A major soft drink competitor is gaining A major soft drink competitor is gaining market share.market share.

In blind tests, this competitor’s product is In blind tests, this competitor’s product is considered better by majority of consumers.considered better by majority of consumers.

Research ObjectiveResearch Objective

Determine whether new product Determine whether new product formulations are preferred to the formulations are preferred to the competitor’s product.competitor’s product.

Research ObjectivesResearch Objectives

Research objectives can be stated as Research objectives can be stated as QuestionsQuestions Researchable statementsResearchable statements HypothesesHypotheses

A hypothesis is a conjectural statement A hypothesis is a conjectural statement about a relationship between two or about a relationship between two or more variables that can be tested with more variables that can be tested with empirical data.empirical data.

Example of Problem Example of Problem Formulation - Formulation - Ford SUVFord SUV

A recent report suggests that middle-A recent report suggests that middle-class families with children are taking class families with children are taking more frequent and longer road trips more frequent and longer road trips for vacations. Ford wants to exploit for vacations. Ford wants to exploit this opportunity and add features to this opportunity and add features to their next-generation sport utility their next-generation sport utility vehicle (SUV) in order to make it vehicle (SUV) in order to make it more attractive to potential buyers.more attractive to potential buyers.

Management Decision Problem Management Decision Problem --Ford SUVFord SUV

To identify features that could be To identify features that could be added to the SUV in order to added to the SUV in order to increase its attractiveness to increase its attractiveness to potential buyers taking long trips. potential buyers taking long trips. In particular, the following features In particular, the following features are under consideration:are under consideration:

built-in TV/Video system, food built-in TV/Video system, food warmer, refrigerator …warmer, refrigerator …

Research Objectives – Question Research Objectives – Question FormFormFord SUVFord SUV

Consider the following research objectives:Consider the following research objectives: What is the likely consumer demand for an SUV with What is the likely consumer demand for an SUV with

an in-built refrigerator?an in-built refrigerator? With a built-in refrigerator, would consumers need With a built-in refrigerator, would consumers need

additional cup holders in the SUV? If so, what additional cup holders in the SUV? If so, what locations in the vehicle would be most convenient?locations in the vehicle would be most convenient?

What is the likely consumer demand for an SUV with What is the likely consumer demand for an SUV with Video/TV system at different price points: (i) $1500, Video/TV system at different price points: (i) $1500, (ii) $2000 or (iii) $2500. (ii) $2000 or (iii) $2500.

What are the characteristics of consumers who would What are the characteristics of consumers who would buy the video system? buy the video system?

……

Research Objectives – Statement Research Objectives – Statement FormFormFord SUVFord SUV

Consider the following research Consider the following research objectives:objectives:

Estimate Estimate consumer demand for an SUV with an consumer demand for an SUV with an in-built refrigerator.in-built refrigerator.

Determine whether, with a built-in refrigerator Determine whether, with a built-in refrigerator in the SUV, consumers would need additional in the SUV, consumers would need additional cup holders; if so, identify the most convenient cup holders; if so, identify the most convenient locations in the vehicle.locations in the vehicle.

Estimate consumer demand Estimate consumer demand for an SUV with for an SUV with Video/TV system at different price points: (i) Video/TV system at different price points: (i) $1500, (ii) $2000 or (iii) $2500. $1500, (ii) $2000 or (iii) $2500.

Identify Identify the characteristics of consumers who the characteristics of consumers who would buy the video system. would buy the video system.

……

Research Objectives – Hypothesis Research Objectives – Hypothesis FormFormFord SUVFord SUV

Consider the following research objectives:Consider the following research objectives: Demand for SUVs with built-in refrigerators will be Demand for SUVs with built-in refrigerators will be

higher in Sun Belt states (e.g., Florida, Texas) than higher in Sun Belt states (e.g., Florida, Texas) than in other states. in other states.

Customers who would buy an SUV with a built-in Customers who would buy an SUV with a built-in refrigerator would also prefer that the vehicle have refrigerator would also prefer that the vehicle have more cupholders.more cupholders.

Demand for SUVs with video/TV systems will be Demand for SUVs with video/TV systems will be highest among families with young children 1-6 highest among families with young children 1-6 years of age, compared to families with older years of age, compared to families with older children or no children.children or no children.

……

Points to Take AwayPoints to Take Away

Problem Definition is the first and very Problem Definition is the first and very important phase of marketing research. important phase of marketing research.

Problem Definition step involves translation of Problem Definition step involves translation of Management Decision ProblemManagement Decision Problem into into Research Research ObjectivesObjectives..

Research Objectives are generally framed in Research Objectives are generally framed in terms of terms of questionsquestions, , researchable statementsresearchable statements or or hypotheseshypotheses..

Clearer and more specific Research Objectives Clearer and more specific Research Objectives are easier to design and implement research.are easier to design and implement research.

There are no hard and fast rules for defining the There are no hard and fast rules for defining the problem. However, doing so requires problem. However, doing so requires interacting with managers and getting pertinent interacting with managers and getting pertinent information.information.