Lecture

MASTER COURSE MARKETING

Univ.-Prof. Dr. Vishal Kashyap

 Chapter 6
Managing market research and forecasting

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Chapter Topics

• What constitutes good marketing research

• The marketing research process
• How marketers can assess their return on investment of marketing
expenditure
• How companies can measure and forecast demand

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Source: Kotler, Philip et al.(2019), Marketing Management, 4th e © Pearson Education Limited.
Chapter Topic

What constitutes good marketing research

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The marketing research system I

“Marketing research is defined as the systematic design, collection, analysis

and reporting of data and findings relevant to a specific marketing situation
facing the company.”
VIDEO: How to Do Market Research!, https://www.youtube.com/watch?v=b-
hDg7699S0

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Source: Kotler, Philip et al.(2019), Marketing Management, 4th e © Pearson Education Limited.
The marketing research system II

• Company sales forecast

• Marketing insights
• Marketing research firms
– Syndicated-service research firms
– Custom marketing research firms
– Specialty-line marketing research firms
• Alternatives
– Engaging students or professors to design and carry out projects
– Using the internet
– Checking out rivals
– Tapping into marketing partner expertise
– Tapping into employee creativity and wisdom

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Source: Kotler, Philip et al.(2019), Marketing Management, 4th e © Pearson Education Limited.
Chapter Topic

The marketing research process

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The marketing research process

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Source: Kotler, Philip et al.(2019), Marketing Management, 4th e © Pearson Education Limited.
An example of a marketing research application

In the highly competitive mobile communication industry, marketing research is focusing on which new services
customers might be willing to pay extra for, such as television viewing and music downloading

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Source: Kotler, Philip et al.(2019), Marketing Management, 4th e © Pearson Education Limited.
Step 1: Define the problem and the research
objectives
• Define the problem
• Specify decision alternatives
• State research objectives
– Exploratory
– Descriptive
– Causal

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Source: Kotler, Philip et al.(2019), Marketing Management, 4th e © Pearson Education Limited.
Step 2: Develop the research plan

• Data sources
– Primary data
– Secondary data
• Research approaches (primary data)
– Observational research
• Ethnographic research
– Focus group research
– Survey research
– Behavioural and big data
• Big data is a ‘high volume’ – often reported in multiple terabytes
• Big data often comprises large ‘variations” in text, images, audios, videos…
• Big data is ‘highly-velocity’ – it is often generated at high speed and frequency
– Experimental research

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Source: Kotler, Philip et al.(2019), Marketing Management, 4th e © Pearson Education Limited.
Research instruments

• Questionnaire
– Closed questions
– Open-ended questions
• Qualitative measures
– Word associations
– Projective techniques
– Vizualisation
– Brand personification
– Laddering
• Technological devices
• VIDEO: Types of market research, https://www.youtube.com/watch?v=F1Y0CYOIWIQ

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Source: Kotler, Philip et al.(2019), Marketing Management, 4th e © Pearson Education Limited.
Questionnaire dos and don’ts

• Avoid negatives • Avoid negatives

• Avoid hypotheticals • Avoid hypotheticals
• Avoid words that could be • Avoid words that could be
misheard misheard
• Use response bands • Use response bands
• Avoid fixed responses overlap • Avoid fixed responses overlap
• Allow for ‘other’ in fixed • Allow for ‘other’ in fixed
response questions response questions

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Source: Kotler, Philip et al.(2019), Marketing Management, 4th e © Pearson Education Limited.
Sampling plan

• Sampling unit
– Who should we survey?
• Sample size
– How many people should we survey?
• Sampling procedure
– How should we choose the respondents?

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Source: Kotler, Philip et al.(2019), Marketing Management, 4th e © Pearson Education Limited.
Contact methods

• Mail questionaire
• Telefone interview
• Personal interview
• Online interview

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Source: Kotler, Philip et al.(2019), Marketing Management, 4th e © Pearson Education Limited.
Types of samples

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Source: Kotler, Philip et al.(2019), Marketing Management, 4th e © Pearson Education Limited.
Step 3: Collect the information

• Most expensive
• Most prone to error
– Respondents need to be contacted several times
– Respondents refuse to cooperate
– Biased and dishonest answers
– Some interviewers will be biased or dishonest

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Source: Kotler, Philip et al.(2019), Marketing Management, 4th e © Pearson Education Limited.
Pros and cons of online research

• Advantages • Disadvantages
 Inexpensive – Small samples
 Fast – Skewed samples
 Survey tracking – Online panels can suffer from
 People tend to be honest excessive turnover
 Versatile – Technological problems
– Inconsistencies

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Source: Kotler, Philip et al.(2019), Marketing Management, 4th e © Pearson Education Limited.
Step 4: Analyze the information

• Extract findings
• Tabulate the data
• Develop frequency distributions
• Computation of averages and measures of dispersion
• Discovering of additional findings
• Test hypotheses and theories
• Apply sensitivity analysis to test assumptions and strength of
conclusions

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Source: Kotler, Philip et al.(2019), Marketing Management, 4th e © Pearson Education Limited.
Step 5: Present the findings

• Presentation of the findings relevant to the major marketing decisions

facing management
• Personas

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Source: Kotler, Philip et al.(2019), Marketing Management, 4th e © Pearson Education Limited.
Step 6: Make the decision

Marketing decision support system (MDSS):

“A Marketing Decision Support System (MDSS) is a coordinated
collection of data, systems, tools and techniques, with supporting
software and hardware, by which an organization gathers and interprets
relevant information from business and environment and turns it into a
basis for marketing action.”

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Source: Kotler, Philip et al.(2019), Marketing Management, 4th e © Pearson Education Limited.
Characteristics of good marketing research

• Scientific method • Value and cost of information

• Research creativity • Healthy sceptizism
• Multiple methods • Ethical marketing
• Interdependence of models and
data

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Source: Kotler, Philip et al.(2019), Marketing Management, 4th e © Pearson Education Limited.
Knowing your customers

Marketing research is about knowing your customers, Tom Hanks shows

how it’s done in this video clip from the 80’s classic!
– VIDEO: Market Research and Knowing the Cusotomer,
https://www.youtube.com/watch?v=QNMjx1o_Uyo&feature=related

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Source: Kotler, Philip et al.(2019), Marketing Management, 4th e © Pearson Education Limited.
Overcoming barriers to the use of marketing
research
• A narrow conception of research
• Uneven callibre of researchers
• Poor framing of the problem
• Late and occasionally erroneous findings
• Personality and presentational differences
• Illusions of seeing

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Source: Kotler, Philip et al.(2019), Marketing Management, 4th e © Pearson Education Limited.
Chapter Topic

How companies can measure and forecast demand

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The measures of market demand

• Potential market
• Available market
• Target market
• Penetrated market

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Source: Kotler, Philip et al.(2019), Marketing Management, 4th e © Pearson Education Limited.
Ninety types of demand measurement

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Source: Kotler, Philip et al.(2019), Marketing Management, 4th e © Pearson Education Limited.
Estimating current demand

• Total market potential

• Area market potential
– Market-buildup method
– Multiple-factor index method
• Brank development index (BDI)
• Industry sales and market shares

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Source: Kotler, Philip et al.(2019), Marketing Management, 4th e © Pearson Education Limited.
Calculating the brand development index (BDI)

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Source: Kotler, Philip et al.(2019), Marketing Management, 4th e © Pearson Education Limited.
Estimating future demand

• Survey of buyers’ intentions

– Forecasting
• Purchase probability scale
• Composite of sales force opinions
• Expert opinion
– Market forecast
• Past sales analysis
– Times-series analysis
– Exponential smoothing
– Statistical demand analysis
– Econometric analysis
• Market-test method

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Source: Kotler, Philip et al.(2019), Marketing Management, 4th e © Pearson Education Limited.