Chapter One A Decision Making Perspective on Marketing

Chapter One A Decision Making Perspective on Marketing Research Essentials of Marketing Research Kumar, Aaker, Day

Why study Marketing Research • Careers – Research Organizations (e. g. A. C. Nielsen, J. D. Power Associates, IRI, etc. ) – Marketing & Business Consultancies (e. g. Arthur Andersen, Price Waterhouse, Mc. Kinsey & Co, etc. ) – Marketing Departments of Businesses – Academia Essentials of Marketing Research Kumar, Aaker, Day

Situations where MR knowledge is essential • Your boss wants to introduce a new product and calls you for advice. • Your ad agency wants your business to buy an expensive ad campaign. • Your MR consultants present their findings about why your sales are falling. Do you accept their reasons? • Your boss wants to reduce prices and calls you for advice. Essentials of Marketing Research Kumar, Aaker, Day

Why study Marketing Research • Universal belief – numbers don’t lie • Increase chances of taking the right decision • Increase confidence in your recommendations Essentials of Marketing Research Kumar, Aaker, Day

What is Marketing Research? Examples Gentleness Pain Relievers Perceptual Map l Tylenol Effectiveness l Bayer l Advil l Private-label Aspirin l Anacin l Nuprin l Excedrin Essentials of Marketing Research Kumar, Aaker, Day

Definition of Marketing Research • Marketing research is the – systematic (pre-planned) and objective (measurable) – identification, collection, analysis, and dissemination of information (information goes from market to organization) – for the purpose of improving decision making (providing factual basis for taking a decision) – related to the identification of opportunities and solution of problems in marketing. Essentials of Marketing Research Kumar, Aaker, Day

Role of Marketing Research in Managerial Decision Making Four Stages of Market Planning Situation analysis Process Strategy development Marketing program development Implementation Essentials of Marketing Research Kumar, Aaker, Day

Situation Analysis • The analysis of the environment in which the business operates – Market (sector-specific e. g. demand supply, production, etc. ) – Economy (e. g. money supply, inflation, BOP, interest rates, etc. ) – Consumer and society (buyer behavior, societal trends) – Technology (obsolescence, innovations, inventions) – Legal (laws regulating business) – Political (govt. attitudes to business and specific sectors) – Natural (effect of natural resources on business) • Usually focus on trends which impact the marketing situation Essentials of Marketing Research Kumar, Aaker, Day

Aspect of business environment? Interested business? • • • Depletion of forest cover Increased demand for gasoline in China and India Tough vehicle emission laws in California Fed drops interest rates by a quarter of a point Dow Jones rises by 100 points Consumers increasingly prefer to buy online Increasing trend in downloading songs from the Internet Growing popularity of satellite radio Increased duties on European cars Essentials of Marketing Research Kumar, Aaker, Day

Case: MP 3 players • Identify at least one aspect of the external environment I-Pod would be interested in researching: – Economic – Technological – Buyer behavior – Market – Legal Essentials of Marketing Research Kumar, Aaker, Day

Situation Analysis – Common Marketing Research Questions Describing the market: • • • How big is the existing market? How big is the potential market? How fast is the market growing? How brand loyal is the market? What competitive products exist? What is the supply situation in the market? Essentials of Marketing Research Kumar, Aaker, Day

Situation Analysis – Common Marketing Research Questions Describing an organization’s market position: • What market share does the company hold? • What market segments exist and which do we serve? • Who are our primary competitors? • What opportunities exist with distribution channels? Essentials of Marketing Research Kumar, Aaker, Day

Situation Analysis – Common Marketing Research Questions Describing buyer behavior: • Who are our customers? (i. e. , demographic, geographic, psychographic segments) • How do buyers perceive our brand competing brands? • What is the repurchase rate for our brand competing brands? • How satisfied are customers with our brand? • Where do customers buy? When do they buy? Why do they buy? • How much do buyers like our brand? Essentials of Marketing Research Kumar, Aaker, Day

Role of Marketing Research in Managerial Decision Making Four Stages of Market Planning Situation analysis Process Strategy development Marketing program development Implementation Essentials of Marketing Research Kumar, Aaker, Day

Strategy Development Market Research Provides Information to Assist Management With Three Critical Decisions • What business should we be in? • How will we compete? • What are the objectives for the business? Essentials of Marketing Research Kumar, Aaker, Day

Strategy development – Common Marketing Research Questions • What business should we be in: – What products should we offer (e. g. Why did Apple get into the music business? ) – What technologies should we use (e. g. Should the TV industry go the plasma monitors way or the LCD way? Sony Betamax or Toshiba VHS? ) – What market segments should we target (e. g. Under Armour – serious athletes or even casual athletes? ) – What distribution channels should we use (e. g. Cars – dealerships or Internet? ) Essentials of Marketing Research Kumar, Aaker, Day

Strategy development – Common Marketing Research Questions • How will we compete – How do we differentiate ourselves / our product from competition (e. g. Should Lacoste be a premium brand or a mass market brand? ) – What attributes do consumers consider to be important (e. g. toothpaste – whitening power or cavity protection? ) – How do we compare to competition (e. g. Pepsi and Coke – who is winning? ) Essentials of Marketing Research Kumar, Aaker, Day

Strategy development – Common Marketing Research Questions • What our the business objectives – Sales Profits – Market share – Service objectives (Car dealers – low prices or turnaround times) – Customer satisfaction (self-survey or actual complaints) – Attitudes, etc. Essentials of Marketing Research Kumar, Aaker, Day

Role of Marketing Research in Managerial Decision Making Four Stages of Market Planning Situation analysis Process Strategy development Marketing program development Implementation Essentials of Marketing Research Kumar, Aaker, Day

Common Questions • Segmentation – which segment to target (e. g. BMW – should they introduce an economy car? ) • Product – How should the product be positioned (Should Apple I-Pod be a premium brand or a mass market brand? ) • Distribution – exclusive / mass distribution (Barbie dolls – should be sold exclusively through Toys’r’us or even in Walmart? ) • Advertising – what appeals should be used (e. g. Dolce & Gabbana super low-rise jeans – should they use over-the -top sex appeal in their ads or not? ) Essentials of Marketing Research Kumar, Aaker, Day

Common Questions • Personal selling – which customers should be approached personally (e. g. Epson printers – is personal selling and option? ) • Price – what price should be charged (e. g. should Starbucks drop their prices? ) • Branding – how can brand loyalty be increased (e. g. should Morton salt institute a customer rewards program? ) • Customer satisfaction – how can it be measured Essentials of Marketing Research Kumar, Aaker, Day

Role of Marketing Research in Managerial Decision Making Four Stages of Market Planning Situation analysis Process Strategy development Marketing program development Implementation Essentials of Marketing Research Kumar, Aaker, Day

Common questions Implementation • Did the marketing program achieve its objectives (e. g. did the Aflac duck campaign improve TOMR? Attitudes? ) • Should the marketing program be modified, continued or terminated (e. g. The Sonic guys – should the company pull the campaign? ) Essentials of Marketing Research Kumar, Aaker, Day

Factors Influencing Marketing Research Decisions Yes Time Constraints Is sufficient time available? No Yes Availability of Data Is the information on hand inadequate? No Yes Nature of Decision Is the decision of considerable importance? Yes Benefits vs. Costs Does the value of the research exceed the cost? No No Do not conduct marketing research! Essentials of Marketing Research Kumar, Aaker, Day Conduct Marketing Research