4 Conducting Marketing Research and Forecasting Demand Marketing

4 Conducting Marketing Research and Forecasting Demand Marketing Management, 13 th ed

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

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. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 4 -3

Types of Marketing Research Firms • Syndicated service • Custom • Specialty-line Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 4 -4

The Marketing Research Process • • • Define the problem Develop research plan Collect information Analyze information Present findings Make decision Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 4 -5

Step 1: Define the Problem • Define the problem • Specify decision alternatives • State research objectives Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 4 -6

Step 2: Develop the Research Plan • • • Data sources Research approach Research instruments Sampling plan Contact methods Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 4 -7

Research Approaches • • • Observation Ethnographic Focus group Survey Behavioral data Experimentation Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 4 -8

Research Instruments • Questionnaires • Qualitative Measures • Technological Devices Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 4 -9

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 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 4 -10

Question Types - Dichotomous In arranging this trip, did you contact American Airlines? Yes No Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 4 -11

Question Types – Multiple Choice With whom are you traveling on this trip? No one Spouse and children Children only Business associates/friends/relatives An organized tour group Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 4 -12

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 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 4 -13

Question Types – Semantic Differential American Airlines Large ………………. . . ……. Small Experienced…………………. …. Inexperienced Modern……………. …. . Old-fashioned Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 4 -14

Question Types – Importance Scale Airline food service is _____ to me. Extremely important Very important Somewhat important Not very important Not at all important Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 4 -15

Question Types – Rating Scale American Airlines’ food service is _____. Excellent Very good Good Fair Poor Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 4 -16

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 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 4 -17

Question Types – Completely Unstructured What is your opinion of American Airlines? Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 4 -18

Question Types – Word Association What is the first word that comes to your mind when you hear the following? Airline ____________ American ___________ Travel ____________ Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 4 -19

Question Types – Sentence Completion When I choose an airline, the most important consideration in my decision is: ______________________________________ ______________________________________. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 4 -20

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. _______________________________________ _______________________________________ Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 4 -21

Question Types – Picture (Empty Balloons) Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 4 -22

Qualitative Measures • • • Word association Projective techniques Visualization Brand personification Laddering Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 4 -23

Technological Devices • • • Galvanometers Tachistoscope Eye cameras Audiometers GPS Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 4 -24

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? Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 4 -25

Table 4. 2 Types of Samples Probability Samples • Simple random • Stratified random • Cluster Nonprobability Samples • Convenience • Judgment • Quota Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 4 -26

Contact Methods • • Mail questionnaire Telephone interview Personal interview Online interview Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 4 -27

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 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 4 -28

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. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 4 -29

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 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 4 -30

Table 4. 3 Characteristics of Good Marketing Research • • Scientific method Research creativity Multiple methods Interdependence Value and cost of information Healthy skepticism Ethical marketing Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 4 -31

What are Marketing Metrics? Marketing metrics are the set of measures that helps marketers quantify, compare, and interpret marketing performance. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 4 -32

Table 4. 4 Marketing Metrics External Internal • • • • Awareness Market share Relative price Number of complaints Customer satisfaction Distribution Total number of customers • Loyalty Awareness of goals Commitment to goals Active support Resource adequacy Staffing levels Desire to learn Willingness to change Freedom to fail Autonomy Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 4 -33

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. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 4 -34

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. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 4 -35

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 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 4 -36

Common Measurement Paths • • Customer metrics pathway Unit metrics pathway Cash-flow metrics pathway Brand metrics pathway Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 4 -37

The Measures of Market Demand • • Potential market Available market Target market Penetrated market Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 4 -38

Vocabulary for Demand Measurement • • • Market demand Market forecast Market potential Company demand Company sales forecast Company sales potential Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 4 -39

How Can We Estimate Current Demand? • Total market potential • Area market potential • Market buildup method • Multiple-factor index method Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 4 -40

Estimating Future Demand • • • Survey of Buyers’ Intentions Composite of Sales Force Opinions Expert Opinion Past-Sales Analysis Market-Test Method Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 4 -41