Marketing Research

The Nature of Marketing Research

Dr. Zafer Erdogan

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Principle Marketing Tool

Philip Kotler argues

‘marketing is becoming more of a battle based on information rather than one based on sales power these days’

Marketing research fulfills the marketing manager’s need for

• knowledge of the market • helps the manager predict how the market will

respond to his marketing decisions.

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Marketing Research Defined

The emphasis is to shift decision makers from risky intuitive decisions to decisions based on systematic and objective investigations.

Therefore,

The systematic and objective process of generating information for aid in making marketing decisions.

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I don’t knowif we should

enter the European Market?

Information

Reduces

Uncertainty

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Marketing Research Types

Basic research

Applied research

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Basic Research

• Attempts to expand the limits of knowledge

• Not directly involved in the solution to a pragmatic problem

Example: Do consumers experience cognitive dissonance in

low-involvement situations?

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Applied Research

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

• Should McDonalds add Italian pasta dinners to its menu?– Marketing research told McDonald’s it should not?

• Should Procter & Gamble add a high-priced home teeth bleaching kit to its product line?– Research showed Crest Whitestrips would sell

well at a retail price of $44

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Scientific Method

• The analysis and interpretation of empirical evidence (facts from observation or experimentation) to confirm or disprove prior conceptions

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Marketing Concept & MR

• Central idea in marketing

• Evolved over time

• Not production-oriented

• Marketing-oriented

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ConsumerOriented

Long RunProfitability

Cross-FunctionalEffort

Marketing Concept

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Keeping Customers and Building Relationships• RELATIONSHIP MARKETING - the

idea that a major goal of marketing is to build long-term relationships with the parties who contribute to the company’s success.

• Marketers want customers for life.

• Managing the relationships that will bring about additional exchanges

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Stages in Developing and

Implementing a Marketing Strategy

• Identifying and evaluating opportunities

• Analyzing market segments and selecting target markets

• Planning and implementing a marketing mix

• Analyzing market performance

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Identifying and Evaluating OpportunitiesExamples

– Home cooking is on the decline. Purchase of precooked home replacement meals is on the rise.

– Number of investors trading stock on the Internet is growing.

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Analyze Market Segments and Select Target MarketsExamples

– Cadillac investigates buyers’ demographic characteristics

– MTV, monitoring demographic trends, learns the Hispanic audience is growing rapidly

– Sears learns women, age 25-54 with average household income of $38,000, are core customers. Targets this market with "The Good Life at a Great Price. Guaranteed. Sears."

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Plan and Implement a Marketing Mix• Price: Safeway does a competitive pricing

analysis• Distribution: Caterpillar Tractor Co. investigates

dealer service program.• Product: Oreo conducts taste test, Oreo cookie

vs. Chips Ahoy• Promotion: How many consumers recall the “Life

Tastes Good. Coca Cola!” slogan?

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Analyze Marketing Performance

• This year’s market share is compared to last year’s.

• Did brand image change after new advertising?

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Performance-monitoring Research• Research that regularly provides

feedback for evaluation and control

• Indicates things are Or are not going as planned

• Research may be required to explain why something “went wrong”

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Determining When to Conduct Marketing Research

• Time constraints

• Availability of data

• Nature of the decision

• Benefits versus costs

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Is sufficient time

available?

Information already on

handinadequate?

Is the decision of

strategicor tactical

importance?

Does theinformation

valueexceed the

research cost?

ConductMarketingResearch

Do Not Conduct Marketing Research

Time Constraints Availability of Data Nature of the Decision Benefits vs. Costs

Yes YesYesYes

No No No No

Determining When to Conduct Marketing Research

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Benefits

•Decreased certainty•Increased likelihood of a correct decision•Improved marketing performance and resulting higher profits

Costs•Research expenditures•Delay of marketing decision and possible disclosure of information to rivals•Possible erroneous research results

Benefits Should Exceed Estimated Costs

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Marketing Research in the 21st Century

• Increased globalization

• Growth of the Internet and other information technologies

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Global Research

• Business Research is increasingly global

• Market knowledge is essential

• A.C. Nielsen - more that 67% international business

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The Internet is Transforming Society• Time is collapsing.

• Distance is no longer an obstacle.

• Crossing oceans is only a mouse click away.

• People are connected 24 hours a day, seven days a week.

• "Instantaneous" has a new meaning.

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Discussion

Is it possible to make sound marketing decisions without marketing research?