CONCEPTS IN MARKETING

Marketing Research

Consumers are full of surprises and finding them out can be awfully tough. If Coca Cola can make a large

marketing research mistake, any company can.

The case of New Coke

SEARCH FOR INFORMATION

In order to produce superior value and satisfaction for customers, companies need information at almost every turn. Companies need information on competitors, resellers

and other forces in the market place.

SEARCH FOR INFORMATION

Factors which have had a catalytic effect on the involved parties in the exchange process, necessitating the search for information:

• Acceleration in the globalization of goods & services• Rapid rate of technological innovation• Fragmentation of markets• A population of consumers—better educated, more

discriminating purchase habits, higher expectations• Increasing speed with which information is being

transmitted & goods delivered

The Consumer Information Model

Consumer

Demographics

Purchasingbehavior

MediaPreferences

WantsLifestyleNeeds

RespondsTo surveys

AnswersThe Census

WatchesReads & Listens

SpendsMoney

THE MARKETING TASK

In today’s complex and rapidly changing environment, marketing managers need more and better information to

make effective and timely decisions.

TASK: Identify the information needs and design information systems to meet those needs

MARKETING INFORMATION SYSTEMS

People, equipment and procedures to

- gather,

- sort,

- analyze,

- evaluate and

- distribute

needed, timely and accurate information to marketing decision makers

The Marketing Information System

Marketing ManagersAnalysis Planning Implementation Organization Control

Marketing Information System

AssessingInformation Needs

Distributing Information

Developing needed information

Internal InformationDatabases Analysis

Marketing Marketing Intelligence Research

Marketing Environment

Target Marketing Competitors Publics Macro EnvironMarkets Channels -ment forces

Demographics

Years

Age group2001 2006 2011 2016

0 – 14 366(35.6) 262(32.5) 355(29.7) 343(27.1)

15 – 59 598(58.2) 673(60.4) 747(62.5) 811(64)

60+ 65(6.3) 78(7) 94(7.9) 113(8.9)

Age distribution & projection of Indian population, in millions.

Statistical outline of India, 2003-04, Jan 2004, Tata Services Ltd.

Characteristics of population

• Size

• Distribution…age, sex, rural-urban

• Growth…absolute, sectors

• Profile & character…nuclear family, working women, youth, literacy, BPL

EDUCATION LEVEL

OCCUPATION

Illiterate School upto 4 yrs/lit but no formal education

Schooling

5-9 yrs

SSC/HSC Some college

but not graduate

Graduate/

post graduate, general

Graduate/ postgraduate

professional

Unskilled worker E2 E2 E1 D D D D

Skilled worker E2 E1 D C C B2 B2

Petty trader E2 D D C C B2 B2

Shop owner D D C B2 B1 A2 A2

Businessman/industrialist with nos. of employees….none

D C B2 B1 A2 A2 A1

Businessman/industrialist with nos. of employees….1-9

C B2 B2 B1 A2 A1 A1

Businessman/industrialist with nos. of employees….10+

B1 B1 A2 A2 A1 A1 A1

Self employed professional D D D B2 B1 A2 A1

Clerical/salesman D D D C B2 B1 B1

Supervisory level D D C C B2 B1 A2

Officer/Executive….. junior C C C B2 B1 A2 A2

Officer/Executive….. senior B1 B1 B1 B1 A2 A1 A1

Socio-Economic classificationBased on education & occupation of the chief wage earner

3 STEP PROCESS

• Assessing Information Needs– Balance between what a manager would like, against what he really

needs and what is feasible– Co must decide whether benefits of additional information is worth the

cost…information’s worth comes from it’s use.• Developing Information

Sources of information are - Internal data…Information through functional departments & sales staff- Marketing Intelligence…Informal collection of information through Staff, Suppliers, Trade shows, Recruitment Ads. Govt Dept.- Marketing Research…Systematic design,collection, analysis & reporting

of data relevant to a specific marketing situation• Distributing Information

– Information gathered through MI & MR must be distributed to the right manager at the right time.

Marketing Research & Marketing Planning

• MR seeks information….re customer needs, product preferences and marketing environment

• MR determines fit…between company resources and customer needs

• MR assists in developing…the marketing mix to meet customer needs

• MR assess the level of satisfaction, post implementation

The Marketing Research Process

Define the Problem &Researchobjectives

Develop the Research planFor collectinginformation

Implement the Research plan-Collecting & Analyzing data

Interpreting& reportingThe findings

MR Process: Defining the Problem & Research Objectives

• Problem definition should neither be too narrow nor too broad… e.g when Coke introduced the New Coke in 1985, their research focused only on “taste” and not on the emotional attachment with the brand.

• The research objective should accordingly be drawn by the marketing manager along with the Research manager, in terms what they wish to achieve through the research.– E.g: to determine customer satisfaction with a brand of new

frost free refrigerators launched by our company.

Developing the Research Methodology

• Outline sources of data– Secondary data

• Internal• External

– Primary Research• Research Approach

– Observation– Descriptive– Exploratory– Focus group

• Research Instruments– Questionnaire– Mechanical instruments

• Sampling Plan– Sampling unit– Sample size– Sampling procedure

• Contact methods– Personal– Mail– Telephone– Online

Research Instrument

• Questionnaire Method– Closed ended questionnaires…answers are specific to the

questions asked & can cover a large spectrum of views/responses….facilitates easy interpretation & tabulation for statistical analysis & comparisons.

– Open ended questionnaires…allows a respondent to answer in his/her own words….used to elicit feelings/opinions towards a question…used more in exploratory research

• Mechanical Instruments– Peoples Meters…used for continuous monitoring e.g TV

viewer ship habits

Types of QuestionsA. Closed – End

Name Description Example

Dichotomous

A question with two possible answers

In arranging this trip, did you personally phone the travel agent?

Yes No

Multiple choice

A question with three or more answers

With whom are you traveling on this flight?

No one Children only

Spouse Bus. Associates/friends/relatives

Spouse and children An organized tour group

Likert scaleA statement with which the respondent shows the amount of agreement / disagreement

Small airlines generally give better service than large ones

Strongly disagree

DisagreeNeither agree nor disagree

AgreeStrongly

agree

1 2 3 4 5

Semantic differential

A scale connecting two bipolar words. The respondent selects the point that represents his or her opinion

Indian Airlines

Large ----------------------------------- Small

Experienced ----------------------------------- Inexperienced

Modern ----------------------------------- Old-fashioned

Types of Questions

A. Closed – End (contd…)

Name Description Example

Importance scale

A scale that rates the importance of some attribute.

Airline food service to me is

Extremely important

Very important

Somewhat important

Not very important

Not at all important

1 2 3 4 5

Rating scaleA scale that rates some attribute from “poor” to “excellent.”

Jet’s food service is

Excellent Very Good Good Fair Poor

1 2 3 4 5

Intention-to-buy scale

A scale that describes the respondent’s intention to buy

If in-flight merchandise were available on a flight, I would

Definitely buy

Probably buy

Not sureProbably not buy

Definitely not buy

1 2 3 4 5

Types of QuestionsB. Open – End Questions

Name Description Example

Completely unstructured

A question that respondents can answer in an almost unlimited number of ways

What is your opinion of Jet Airways?

Word association

Words are presented, one at a time, and respondents mention the first word that comes to mind

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

Airline ----------------------------------------------------

Jet ----------------------------------------------------

Travel ----------------------------------------------------

Sentence completion

An incomplete sentence is presented and respondents complete the sentence

When I choose an airline, the most important consideration in my decision is _____________________________________

Story completion

An incomplete story is presented, and respondents are asked to complete it.

“I flew Jet 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.

Picture

A picture of two characters is presented, with one making a statement. Respondents are asked to identify with the other and fill in the empty balloon.

A blurb

Thematic Apperception Test (TAT)

A picture is presented and respondents are asked to make up a story about what they think is happening or may happen in the picture

Designing a questionnaire

Some parameters to be kept in mind• Is the question necessary ( is the information required)• Will the respondent understand the question (is the wording

simple & clear)• Will the question elicit the required response(will the data be

factual)• Does the respondent have the necessary knowledge about the

subject to be able to respond (right segment)• Is the respondent willing & able to answer the question• Questions must be pre-tested, before implementation(on a sub

sample of the intended sample)• Questions should flow in a sequence ( to get respondent

involved; ask personal questions at the end)

Sampling Plan

Sample--- a segment of the population, selected for marketing research to represent the population as a whole

• Sampling Unit– Who is to be surveyed/target population– Determined by what kind of information is needed & who is likely to

have it

• Sample size– How many people should be surveyed– More heterogeneous the population, larger the sample size– Determined by cost & time relevance

• Sampling procedure– How should the respondents be chosen– Probability or non-probability sample

Data Collection

• The most critical aspect of MR—expensive and prone to errors• Data may be collected internally or by out sourcing to

specialized MR firms• Out sourcing is faster, more professional• Requires very close supervision to ensure smooth flow & error

free collection• Typical problems faced in data collection

– Respondent is not available(revisit/replace)

– Respondent refuses to respond or does not answer correctly/honestly

– Interviewer is biased/dishonest

Analyzing the information

• Put the data in order– Both secondary & primary data must be evaluated for accuracy and

completeness.

– Codify data based on the analytical tools to be used

– Tabulate data for analysis

• Analyze the data– Use of basic averages, measures of central tendency(mean,

median,mode), standard deviation

– Statistical methods & techniques

– Computer based models—SPSS

• Interpret the findings– Relate the findings to the objectives of research

– Not be an overload of figures & data but bring out implications

Potential sources of error

• Problem formulation---management identifies the wrong problem or defines it poorly

• Determining info needs & data sources---failure to identify the specific info needed or the source of obtaining the same

• Research design & questionnaire---ambiguous questions or poor experimental design resulting in invalid responses

• Sample design & size---selection of biased sample due to faulty design or inadequate representation

• Data collection---poor selection of respondents, interviewer bias, incomplete responses

• Tabulation & analysis---errors in tabulating raw data and use of relevant tools to interpret data

Caution in using MR

• MR is only a tool to be used for effective decision making• MR is not a guarantee to success—reduces the odds of making

an error; can improve chances of success• MR is not a Crystal Ball• The process of conducting MR is critical to the quality of

response• Should not be used to merely justify decisions• Is not the cure for all marketing problems• Statistical results can be deceptive---should be seen in the

context of the problem

10 most common uses for MR

• Determining market characteristics• Measurement of market potential• Market share analysis• Sales analysis…product, territory• Business trends• Short range forecasts• Competitive studies• Pricing studies• Testing new or existing products• Advertising…concept, content