product development pment desi hill[1]

8/13/2019 Product Development pment Desi Hill[1]

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Using marketing research in theproduct development process

Dr Desmond Hill

University of Ulster16thNovember 2005

Step up Programme Lecture


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http://www.celebrations365.com/products/


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Format

Introduction Types of marketing research

The marketing research process

Defining the problem and research objectives

Developing the research plan for collecting information

Implementing the research plan

Interpreting and reporting the findings

Future trends within the chocolate market


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Introduction

Every aspect of marketing (planning, promotion orcontrol) requires information

Marketers require information about customers,

competitors and the micro and macro-environment Information is now viewed as a strategic asset and

valuable marketing tool

Large amounts of information received

Marketers have to seek out information, rather than

wait for it to arrive

Many fail to use it effectively


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Introduction continued

Managers require formal studies about specific

situations

They normally do not have the skill or time to

obtain the information on their own

Companies need to develop effect MIS

As a result they require formal marketing research

conducted by marketing researchers


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Marketing research defined

The systematic design, collection, analysis andreporting of data relevant to a specific marketingsituation facing an organisation (Amstrong andKotler, 2005, p. 254)

The process of gathering, interpreting and

reporting information to help marketers solvespecific marketing problems or take advantage ofmarketing opportunities (Dibb et al., 2001, p.

169)


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Types of marketing research

Market research and sales research covers:

Estimates the market size of both developed and newmarkets

Identification of market characteristics of thesegment

Sales forecasting

Obtaining information on customers and potentialcustomers

Obtaining information on competitors and theirimportance


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Chocolate market and sales research

What are the leading companies in relation

to chocolate production?

What are the top selling brands of chocolate

in the UK?


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Top selling chocolate bars2001 2003


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Women (89.2% ) are only marginally more

likely than men (87.3% ) to be consumers of

chocolate bars Men however, are more likely to be the heavy

users, whereas women dominate the light usage

category

Chocolate consumption is equal across the social

class structure, although C1s are slightly heavier

users


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Heavy users account for 24.6% of the market -

eat more than twice a week

Medium users account for 26.9% of the market

- eat once or twice a week

Light users account for 35.6% of the market -

Eat less than once a week

Non-users account for 11.9% of the market


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Customer and motivational research

Customer and motivational research covers:

Why customers buy and their buying behaviour

Why customers do not buy certain products/services


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Customer and motivational research

In contrast, energetic males are young

disproportionately middle income lads

They live at a fast pace, work hard, eat fast foodand are reckless shoppers.

They eat chocolate in a hurry in the evening, at

lunch or at mid-morning or afternoon breaks.

Boxed chocolates are not for them, they get their

energy fix from products like Mars and Snickers


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Product research

Product research covers:

The generation of new ideas

Sources of new products

Product concept testing

Product testing

Test marketing of products


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Pricing research

Pricing research covers:

Identification of the relationship between a

products price and demandAlso includes setting of prices for new and

current products

Involves sales forecasting and estimating costs


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Marketing communication research

Marketing communications research covers:

Research into the effectiveness of marketing

communicationTo determine the viability of advertising in

different media

Media selection researchSales territory planning


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Marketing research process


Developing the research plan for collecting information


Interpreting and reporting the findings


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Objectives must be turned into specific informationneeds

The problem might be to attract new consumers

The research objectives would be to identify groupsof consumers

Characteristics of the product that appeals to people

Other information required e.g scale of project andtimetable

Case studyCoca-Cola


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Marketing research objectives

There are three main types of objectives

Exploratory

Descriptive

Causal


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Exploratory

Before carrying out a major piece of work

exploratory work is often undertaken

For example, the company may wish toattract a different market segment

Case Study Baileys


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Descriptive

This examines items such as the market potential

for a product

It may also investigate demographics of themarket segment and attitudes towards the product

Case studyCAMRA


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Causal

This will test hypothesis and cause and effectrelationships

Causal research involves the setting of controlprocedure to isolate the impact factor

The key to success is the elimination of otherexplanations of changes in the dependentvariable

It is usual to start with exploratory anddescriptive before using causal


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Causal continued

The problem with causal is it is not like a

laboratory

Many things are going on which could havean impact on your research


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Developing the research plan

The plan outlines sources of secondary data,

sampling plans and instruments to be used

Research objectives need to be translatedinto specific information needs

Case study Campbells Soup


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Gathering secondary data

The researcher needs to gather secondary

data, primary data or both

Secondary data is defined by Dibb et al.(2001, p. 177) as:

information compiled inside or outside the

organisation for some purpose other thanthe current investigation


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Secondary data continued

Marketing managers may need to gather,primary or secondary data or both

Researchers usually begin by gatheringsecondary data

This work may be carried out within atrends studio or consumer insight unit

Researchers job to bring all the secondarydata together


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Various media are consulted in the gathering

of secondary data

Internal sourcestypes

Government publicationstypes

Commercial datatypes

International datatypes


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Secondary data is easily sourced and of

lower cost than primary data

Primary data may take months to collectand cost several thousand pounds

The information, however, may not exist

and the researcher may have to collectprimary data


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Primary data

Researchers must take great care to ensure

the collection of primary data is accurate,

current, and unbiased Primary data is defined by Dibb et al.

(2001, p. 177) as

Information gathered by observingphenomena or surveying respondents


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Primary data collection continued

Methods may be used in the collection of

primary data

A questionnaire is the most common instrumentused

It can be structured or unstructured

Focus groups can be used

Laboratory studies can be carried out


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Primary data collection continued

There are several approaches which can be taken:

Observational research

Survey research

Experimental research


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Observational research

This is gathering data by observing people

Food product manufacturer/retailer sends a

researcher into supermarkets to examine otherbrands, for price, packaging and promotion

This can be referred to as comp shop,benchmark shopping or comparativeshopping

The mystery shopper can also be used

Several companies sell information i.e. BARB


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Survey research

This is best suited to gathering descriptive

information

This may have been gathered in a focus groupor a personal interview

It can use a questionnaire which can be

structured or unstructured

Could be used in the product development stage


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Experimental research

Where observation research is best suited forexploratory research

Surveys are best for descriptive research

Experimental is best suited to gathering causalinformation

The researcher is trying to explain cause-and-

effect relationships Case studies McDonalds and packaging

Taste panels can also be used


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The researcher then puts the plan into action

A pilot study is usually carried out

This involves collecting, processing and

analysing the information

The researcher must be careful in the

collection of data so as it is accurate


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Interpreting and reporting the

findings The researcher must now report the findings, draw

conclusions and possibly make recommendations

This must be unbiased as it is on the basis of thisinformation that a product/range may be developed

The research is meaningless if the manager doesnot accept the results of the data

Data may have to be analysed quickly asadjustments may have to be made to the product


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Future trends

(a) Changing volume into value

(b) Increased competition

(c) Upholding freedom of choice

(d) Changing base

(e) Limited space

(f) Limited editions and NPD


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Future trendschanging volume into value

Manufacturers could implement multi-buystrategies to counteract the decline in sales, forexample, 3 for 2 offers

Consumers seeking to reduce their chocolateintake need to be traded up into higher pricedcategories

The boxed and luxury markets are the beststrategies to facilitate this

For example, Cadburys Flake Moments,Thorntons Eden range and Mars Celebrations


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Future trends increased competition

Displays must be set out in an attractive mannerand one which facilitates ease of purchase

Retailers need to physically put together itemswhich could be sold in a product bundle

For example, Boots and Marks and Spencer havesuccessfully adopted this strategy

Using their meal deal at lunchtimesandwich,drink and chocolate bar/crisps


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Future trends upholding freedom of choice

Government pressure is mounting on the foodindustry to improve the nutrient content of their

products

In addition, there is pressure to introducehealthier versions

Government has debated introducing a tax on

high fat foods such as chocolate Some manufacturers have removed King sized

bars

Consumers may however eat other high fat foods


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Future trends upholding freedom of choice


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Future trends changing base

In addition to Government intervention, the

chocolate market faces the problem of an ageing

population The over 55s is expected to grow by 1 million

by 2007

However, this market segment is the lightest usergroup consuming chocolate


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Future trends limited space

As schools continue to ban chocolate from the

tuck shop opportunities to target children are

diminishing Chocolate is also being removed from the tuck

shop, also restricting opportunities for sale

Retailers have also removed chocolate fromcheckouts, which also has led to a decrease in

impulse buys


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Future trends limited editions and NPD

Limited edition options have dominated recent

product development activity

Mintel (2004) suggests however these are of

limited interest to consumers

While innovation is of importance, you should

not overwhelm consumers with too much choice

For example, Kit Katsee handout

product development pment desi hill[1]

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