CHAPTER ONE 

• Marketing Research

Methodological FoundationsENROLMENT KEY: MRM711S

ResearchResearch is a systematic process of collecting, analyzing, and interpreting information (data) to increase understanding of a phenomenon about which we are interested.

Characteristics of Research

Originates with a question or problem Requires clear articulation of a goal Requires a specific plan for proceeding Usually divides the principal problem into

more manageable subproblems

Is guided by the specific research problem, question, or hypothesis

Accepts certain critical assumptions Requires the collection and interpretation

of data

5

target

market

Figure 1: The Task of Marketing Management

6

CompetitiveEnvironment

TechnologicalEnvironment

NaturalEnvironment

SocialEnvironment

Politicaland Legal

Environment

EconomicEnvironment

Figure 2: The Environments That Affect Marketing

MarketingStrategy

CustomerValue andBehavior

• Marketing research is the “function which links the consumer, customer, and public to the marketer through information-

• Information used to identify and define marketing opportunities and problems; generate, refine and evaluate marketing actions; monitor marketing performance; and improve understanding of marketing as a process.”

Marketing Management

Marketing management is the process of

… Interpreting the external environment (the firm’s and the prospect’s)

… To develop internal strategy and tactics ( by allocating company resources to alternative marketing mixes directed at selected target markets)

… To influence (control) the level of brand demand… To achieve organizational objectives (profit)

*The Effects of Inaccurate Environmental Analysis

POORANALYSIS

MAY LEAD

TO

WHICHADVERSELY

AFFECTSCOMPANY

PER-FORMANCE

Lack of Direction

Missed Opportunities

Legislative Violations

Research is the link between controllable company resources and uncontrollable

environmental events.

Research supports problem solving activities:- Planning- Organizing- Control

* to describe, understand, and predict marketplace reaction to company efforts

A Systems View

• Management is a total system of functional subsets such as finance, production, marketing etc., operating as one unit.

• Avoid: inverting the means with the end.

Research is the means to an end

Marketing Research, E-Commerce, and the internet

• Electronic Marketing Research

Research ON the Internet: These studies usethe Internet or other high tech means to studyany consumer or market behavior.

The Internet becomes another modality forcommunicating with customers, like paper-pencilsurveys, phone interviews, etc.

A Systems View of Marketing Influences

Organization& Consumer

Wants

Top Mgmt

Personnel

Production

Finance

Economics

PoliticalLegal

Technology

SocialCulture

Monopoly Pure Competition

Marketing

R & D Legal

Acctg.

Research

Marketing Research is

• The systematic & objective process of generating information for use in marketing decisions.

Interpret the firm’s environment to influence brand demand

Scientific Method

The analysis/interpretation of empiricalevidence (facts from observation orexperimentation) to confirm or disproveprior conceptions

Scientific/Theoretical Framework(A systems view)

• Facts become meaningful, understandable, and render an explanation through the theoretical framework surrounding the problem area understudy

Characteristics of the Scientific Method

Systematic (control) Objective Timely Accurate (Validity) Credible (Ethical)

Limitations of the Scientific Method

Emotional Involvement (subjects and/or researcher) Non Precise Measurements Time Pressure for Results Complexity of Consumer Behavior Costs may not > Benefits

Marketing Research Types

• Basic Research• Attempts to expand the limits of knowledge• Not directly involved in the solution to a pragmatic

problem

Basic Research Example

•Do consumers experience cognitive dissonance in low-involvement situations?

Applied Research

• Conducted when a decision must be made about a specific real-life problem

Applied Research Example •Should McDonalds add Italian pasta dinners to its menu?•Marketing research told McDonald’s it should not?•Should McDonald’s add a “Whopper Stopper” burger to its menu?

- Product - demographics- Price - attitudes- Promotion - Reference- Distribution Groups

- ProblemSolving

MarketingManagement

ConsumerNeeds & Wants

Information gaps (actual vs. desired data) create the need for research to reduce uncertainty.

Information Gaps

Factors Intensifying the Need for Marketing Information

• Local to National to International Markets• Basic needs to Wants• Price to Non Price Focus• Intense Competition • Marketing mix effects (fine tuning)• New Technology (innovation)• Government Regulations• Cost of Mistakes

Keeping Customers and Building Relationships

• RELATIONSHIP MARKETING

• – to develop a long-term relationship with the parties

who contribute to the company’s success.

• Marketers want continuity with customers to build continuous exchanges.

Total Quality Management

• A focus on integrating customer-driven quality throughout the organization.

• Stresses continuous improvement • Is consistent with the marketing concept

TQM The Deadly Sins

• Lack of constancy of purpose throughout the organization.

• Emphasis on short term profits and short time thinking

• Evaluation of performance, merit ratings, or annual reviews

• Mobility of management (job hopping)• Excessive medical costs and costs of liability

Evolution of Managerial Philosophies

1980sProduction EraProduction Era

Sales EraSales EraMarketing EraMarketing Era

IndustrialRevolution

Mid-1920s

1950sSocietal Era

1990’s

The Societal Marketing Concept

• Act socially responsibly;• Consider the ethical consequences of one’s

actions; And• Consider the collective needs of society,

customer desires and the organization’s profits.

Research ABOUT the Internet:

These studies focus on e-commerce or consumer and market behavior on the Internet as an end in itself.

They often also use the Internet as a means of collecting data, e.g., through email contacts, Web-based surveys, or surreptitious observation and measurement of Web page visitations.

Electronic Marketing Research Companies

Full Service, Established Firms: extending their menu of services to include the Internet (e.g., A.C. Nielsen, The NPD Group, Information Resources Inc.)

Internet Specialists:

Newer marketing research firms concentrating on the Internet (e.g., Media Metrix, I-tracks, eMarketer, Jupiter Communications)

END OF CHAPTER ONE