ch04a - mju · 4/8/2011 7 financial analysis return on assets = profit margin x asset turnover...

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CAPTURING

PART

2

4-1© Kotler, Keller, Ang, Leong & Tan4th Edition

Marketing ManagementAn AsianPerspective

MARKETING [email protected]

[email protected]: 089 4331511

GATHERING

Chapter

4



Information & Scanning the Environment

1. What constitutes good marketing research?

In this chapter, weaddress the following

questions:



g g2. What are good metrics for measuring

marketing productivity?3. How can marketers assess their return on

investment of marketing expenditures?4. How can companies more accurately

measure & forecast demand?4-4© Kotler, Keller, Ang, Leong & Tan

4th Edition


LG TelecomLG Telecom - differentiated servicedifferentiated service - each customer group -research findings on customer value & profitability

The Marketing Research System

Good marketing research is characterized by

scientific method, creativity,



multiple research methods, accurate model building,

cost-benefit analysis,

healthy skepticism & an ethical focus

The Marketing Research Process

Define problem & research objective,

Develop research plan,



evelop esea c pla , Collect information, Analyze information,

Present findings to management& Make decision

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Figure 4.1Figure 4.1TheMarketingResearchProcess




Marketing- studies to researcher

Step 1: Define Problem, Decision Alternatives & Research Objectives



Define problem carefullySurvey, forecast, ad evaluationMarketing researcher - insight -customer’s attitudes & buying behavior


Develop efficient plan - gather informationDesign research plan calls for:

Step 2: Develop the Research Plan



Design research plan calls for:Data sourcesResearch approachesResearch instrumentsSampling planContact methods


Secondary dataCollected for other purpose & already existLow cost & ready availability

Step 2: Develop the Research Plan - DATA SOURCES



Low cost & ready availabilityPrimary data

Data freshly gathered for specific purpose

Procedure - interview people – their feeling on topic - develop instrument & proceed


Primary data collected in 5 ways1. Observation2 F

Step 2: Develop the Research Plan – RESEARCH APPROACHES



2. Focus groups3. Surveys4. Behavioral data5. Experiments

A focus group



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Marketing researchers - 3 main research instruments to collect primary data:

Step 2: Develop the Research Plan – RESEARCH INSTRUMENTS



instruments to collect primary data:

1. Questionnaires

2. Qualitative measures

3. Mechanical devices

Table 4.1 Types of Questions



Table 4.1 Types of Questions



Questionnaire Dos & Don’tsQuestionnaire Dos & Don’ts

1. Ensure questions - not biased

2. Make questions simple & specific

3. Avoid jargon/nonsense

4. Avoid uncommon or ambiguous words



5. Avoid questions with a negative

6. Avoid hypothetical/doubtable questions

7. Avoid words that could be misheard

8. Desensitize/dull questions - use response bands

9. Ensure fixed responses don’t overlap


Qualitative research techniquesU t t d t h




Unstructured measurement approaches





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Getting into Consumers’ HeadsGetting into Consumers’ Headswith Qualitative Researchwith Qualitative Research

Common qualitative research approaches to

find out what customers think or feel about

brands & products:

1) Word associations



1) Word associations

2) Projective techniques

3) Visualization

4) Brand personification

5) Laddering


After research approach & instruments, design sampling plan

Step 2: Develop the Research Plan – SAMPLING PLAN



Decide on:

1. Sampling unit2. Sample size

3. Sampling procedure

Table 4.2Probability & Non-probability Samples




Once sampling plan is determined,

decide how to contact subject:

Step 2: Develop the Research Plan – CONTACT METHODS



j

Mail QuestionnaireTelephone InterviewPersonal InterviewOnline Interview

Pros and Cons of Online ResearchPros and Cons of Online Research

AdvantagesAdvantagesInexpensiveFasterPeople - more honest online than - personal



or telephone interviews More versatile/useful

DisadvantagesDisadvantagesSamples - small & skewed/falsified Prone/likely to technological problems & inconsistencies


Step 3: Collect the Information



Data collection – expensive, prone to

error

Get right respondents - critical

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Step 3: Collect the Information

4 surveys problems:4 surveys problems:



1. Respondents not home2. Respondents refuse to cooperate3. Respondents – biased/dishonest answers4. Interviewers biased or dishonest


Extract/quote findings from collected data

Step 4: Analyze the Information



Tabulate & develop frequency distributionAverages & dispersion computed - variables

Advanced statistical techniques & decision models


The researcher present findings

Step 5: Present the Findings



present findings relevant to major marketing decisions facing management


Marketing decision support system (MDSS)Marketing decision support system (MDSS)

Collection of data, systems, tools & techniques

Step 6: Make the Decision



, y , q

With software & hardware by which organization

gathers & interprets relevant information

from business & environment & used

for marketing action


Many fail to use marketing research sufficiently or correctly WHY?WHY?

Overcoming Barriers to the Use of Marketing Research



Narrow conception of research Uneven caliber/ability of researchers Poor framing of problemLate & occasionally erroneous findingsPersonality & presentational differences

Marketing Research in Asia

Marketing research in Asia challenging WHY?WHY?1. Unreliable/no secondary data



2. Databases not comparable cross-nationally

3. Poor research infrastructure

4. Cultural differences in response

5. Variations in research capabilities

6. High rates of change in marketplace

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Marketing Research in Asia

Solutions:

1. Sequence piloting, adapting & rollout of



surveys regionally

2. External validation of data sources

3. Use samples on future demographic profiles

4. Invest on research capabilities & infrastructure

44 toolstools to check on plan performance:

1. Sales analysis2 Market share analysis

Measuring Marketing Productivity- Measuring Marketing Plan Performance



2. Market share analysis3. Marketing expense-to-sales analysis

4. Financial analysis

SALES ANALYSISMeasure & evaluate actual sales - goals




Go to another slide ch 11(Sale management)

MARKET SHARE ANALYSIS

Go to another slide Ch4 forecasting sales




MARKETING EXPENSE-TO-SALES ANALYSIS

A l l l d




Annual-plan control - company not overspend -achieve sales goals Key ratio - marketing expense-to-sales

FINANCIAL ANALYSIS

Find profitable strategies beyond salesFactors - rate of return on net worth




Return on net worth =return on assets x financial leverageTo improve return on net worth– Increase net profits to assets ratio – Increase assets to net worth ratio

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FINANCIAL ANALYSIS

Return on assets = Return on assets = profit margin xprofit margin x asset turnoverasset turnover




profit margin xprofit margin x asset turnoverasset turnover

Improve performance - HOW? 2 ways:1. Increase profit margin

– increase sales/cut costs

2. Increase asset turnover– increase sales/reduce assets for given sales level

Deep financial analysis – benefits firm

Determine if any product/marketing

activity- expanded reduced or removed

Measuring Marketing Productivity- Profitability Analysis



activity expanded, reduced or removed

Analyze profitability of: Products,

territories, customer groups, segments,

trade channels, order sizes

MARKETING-PROFITABILITY ANALYSISStep 1: Identify Functional Expenses

Table 4.6 & 4.7Step 2: Assign Functional Expenses to

Measuring Marketing Productivity- Profitability Analysis



Step 2: Assign Functional Expenses to Marketing Entities

Table 4.8Step 3: Prepare Profit-and-Loss Statement for each Marketing Entity

Table 4.8 & Table 4.9

Table 4.6Simplified Profit-and-Loss Statement



Table 4.7Mapping Natural Expenses into Functional Expenses



Table 4.8 Bases for Allocating Functional Expenses to Channels



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Table 4.9Profit-and-Loss Statements for Channels



Forecasting & Demand Measurement

Marketing research - opportunitiesSales forecasts

Raise investment hire workers



– Raise investment, hire workers– Based on estimates of demand

Managers need to define market demand

The Measures of Market Demand

Productive ways to break down market:

1. The potential market

2 h il bl k



2. The available market

3. The target market

4. The penetrated market

The Measures of Market Demand- Estimating Current Demand

TOTAL MARKET POTENTIALMaximum sales to industry in period, given level of industry marketing & environmental conditions



conditions

AREA MARKET POTENTIAL

Sales available to territory given a level of conditions

The Measures of Market Demand- Estimating Future Demand

33--stage procedure stage procedure -- sales forecastsales forecast



1. Macroeconomic forecast

2. Industry forecast

3. Company sales forecast


How do firms develop their forecasts?Internally or buy forecasts



– Internally or buy forecasts

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EXPERT OPINIONS

Experts: distributors, suppliers, consultants & trade associations

1 Buy forecasts forecasting firms




1. Buy forecasts - forecasting firms– More data available & forecasting expertise

2. Invite experts to prepare forecastGroup-discussion methodPooling of individual estimates

PAST-SALES ANALYSIS1.Time series analysis

– past time-series - projects them into future

2 Exponential smoothing




2.Exponential smoothing– project sales – use past average & recent

sales

3.Statistical demand analysis– measure impact causal factors on sales

Marketing Debate What is the Best Type of Marketing Research?Many market researchers have their favorite research approaches or techniques, although different researchers often have differentpreferences. Some researchers maintain that the only way to really learn about consumers or brands is through in-depth, qualitative research. Others contend that the only legitimate & defensible form of marketing research involves quantitative measures.

Final discussion



Take a position:Marketing research should be quantitative versus Marketing research should be qualitative.

Marketing DiscussionWhen was the last time you participated in a survey?

How helpful do you think was the information you provided? How could the research have been done differently to make it more

effective?

ch04a - mju · 4/8/2011 7 financial analysis return on assets = profit margin x asset turnover...

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