MARKETING MANAGEMENT 12 th edition 4 Conducting Marketing

MARKETING MANAGEMENT 12 th edition 4 Conducting Marketing Research and Forecasting Demand Kotler Keller

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? 2

Build-A-Bear Workshop makes the most of “interactive entertainment retailing” 3

Marketing Research Defined Systematic design, collection, analysis, and reporting of data and findings relevant to a specific marketing situation facing a company. 4

Karmaloop. com 5

Types of Marketing Research Firms Syndicatedservice Custom Specialtyline 6

The Marketing Research Process Define the problem Develop research plan Collect information Analyze information Make decision Present findings 7

Step 1 • Define the problem • Specify decision alternatives • State research objectives 8

Step 2 Data Sources Research Approach Research Instruments Sampling Plan Contact Methods 9

Research Approaches Observation Focus Group Survey Behavioral Data Experimentation 10

Focus Group in Session 11

Research Instruments ØQuestionnaires ØQualitative Measures ØMechanical Devices 12

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 13

Question Types - Dichotomous In arranging this trip, did you contact American Airlines? Yes No 14

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 15

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 16

Question Types – Semantic Differential American Airlines Large ………………. . . ……………. Small Experienced…………………. Inexperienced Modern……………. Old-fashioned 17

Question Types – Importance Scale Airline food service is _____ to me. Extremely important Very important Somewhat important Not very important Not at all important 18

Question Types – Rating Scale American Airlines’ food service is _____. Excellent Very good Good Fair Poor 19

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 20

Question Types – Completely Unstructured What is your opinion of American Airlines? 21

Question Types – Word Association What is the first word that comes to your mind when you hear the following? Airline ____________ American ___________ Travel ____________ 22

Question Types – Sentence Completion When I choose an airline, the most important consideration in my decision is: _________________________________________ _____________________. 23

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. _________________________________________ _____________________ 24

Question Types – Picture (Empty Balloons) 25

Question Types – Thematic Apperception Test Make up a story that reflects what you think is happening in this picture. 26

Qualitative Measures Shadowing Behavior mapping Consumer journey Camera journals Extreme user interviews Storytelling Unfocused groups 27

Mechanical Devices Galvanometers Tachistoscope Eye cameras Audiometers GPS 28

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? 29

Types of Samples Probability • Simple random • Stratified random • Cluster Nonprobability • Convenience • Judgment • Quota 30

Contact Methods Mail Questionnaire Telephone Interview Personal Interview Online Interview 31

Characteristics of Good Marketing Research ü Scientific method ü Research creativity ü Multiple methods ü Interdependence ü Value and cost of information ü Healthy skepticism ü Ethical marketing 32

Table 4. 4 Marketing Metrics Internal External • Awareness of goals • Awareness • Commitment to goals • Market share • Active support • Relative price • Number of complaints • Resource adequacy • Customer satisfaction • Staffing levels • Desire to learn • Distribution • Willingness to change • Total number of customers • Freedom to fail • Loyalty • Autonomy 33

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 34

Tools to Measure Marketing Plan Performance Sales Analysis Market Share Analysis Expenseto-Sales Analysis Financial Analysis 35

Sales Analysis Sales. Variance Analysis Micro. Sales Analysis 36

Market Share Analysis • Overall market share • Served market share • Relative market share 37

Figure 4. 2 The Control-Chart Model 38

Figure 4. 3 Financial Model of Return on Net Worth 39

Marketing-Profitability Analysis Step 1: Identifying Functional Expenses Step 2: Assigning Functional Expenses to Marketing Entities Step 3: Preparing a Profit-and-Loss Statement for each Marketing Entity 40

Table 4. 6 Simplified Profit-and-Loss Statement 41

Table 4. 7 Mapping Natural Expenses into Functional Expenses 42

Table 4. 8 Bases for Allocating Functional Expenses to Channels 43

Table 4. 9 Profit-and-Loss Statements for Channels 44

Distinguishing Types of Costs Direct Traceable common Nontraceable common 45

Gladware uses marketing-mix modeling to test advertising effectiveness 46

The Measures of Market Demand Potential Market Available Market Target Market Penetrated Market 47

Figure 4. 4 Ninety Types of Demand Measurement 48

Figure 4. 5 Market Demand Functions 49

Figure 4. 5 Market Demand Functions 50

Product Penetration Percentage 51

Estimating Current Demand • Total market potential • Area market potential – Market buildup method – Multiple-factor index method • Brand development index 52

Table 4. 10 Calculating Brand Development Index 53

Estimating Future Demand • • • Survey of Buyers’ Intentions Composite of Sales Force Opinions Expert Opinion Past-Sales Analysis Market-Test Method 54

Purchase Probability Scale Do you intend to buy an automobile within the next 6 months? 0. 00 No 0. 20 Slight possibility 0. 40 Fair possibility 0. 60 Good possibility 0. 80 High possibility 1. 00 Certain 55

Marketing Debate ü What is the best type of marketing research? Take a position: 1. Marketing research should be 2. quantitative. 3. 2. Marketing research should be 4. qualitative. 56

Marketing Discussion When was the last time you participated in a survey? How helpful do you think was the information you provided? Could the research have been done differently? 57