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COLLECTING MARKETING
INFORMATION
CHAPTER 3

- Marketing Environment

- Marketing Research

- Forecasting & Measuring Demand

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COLLECTING
MARKETING
INFORMATION
• While Ferrero SpA is an Italian
firm, they use local insights into
consumers to tailor their products to
local needs.

INTRODUCTION

• Companies must possess comprehensive, up-to-date information about macro trends, as well as
about micro effects specific to their business.
• Holistic marketers recognize that the marketing environment is constantly presenting new
opportunities and threats, and they understand the importance of continuously monitoring,
forecasting, and adapting to that environment.
• The major responsibility for identifying significant marketplace changes falls to the company’s
marketers due to (i) disciplined methods for collecting information, and (ii) time
spent interacting with customers and observing competitors and other outside
groups.

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MARKETING INFORMATION SYSTEM

(MIS)
• A marketing information system consists of people, equipment, and procedures to gather, sort,
analyze, evaluate, and distribute needed, timely, and accurate information to marketing decision
makers.
• MIS Systems Provide Information on Buyer Preferences and Behavior

MODERN MARKETING INFORMATION SYSTEM

Marketing
Internal Records Marketing
Intelligence
System Research System
System

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INTERNAL RECORDS

• To spot important opportunities and potential problems, marketing managers rely on internal
reports of orders, sales, prices, costs, inventory levels, receivables, and payables.
• Order-to-Payment Cycle
• Sales Information Systems
• Databases

MARKETING INTELLIGENCE

• A marketing intelligence system is a set of procedures and sources that managers use to obtain
everyday information about developments in the marketing environment.

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STEPS TO
Train sales force to scan for new developments
IMPROVE
MARKETING Motivate channel members to share intelligence
INTELLIGENCE
Hire external experts to collect intelligence
Network internally and externally
Utilize a customer advisory panel
Utilize government data resources
Purchase information
Collect customer feedback online

SOURCES OF MARKETING INTELLIGENCE ON THE

INTERNET
• Independent customer goods and service review forums
• Distributor or sales agent feedback sites
• Combination sites offering customer reviews and expert opinions
• Customer complaint sites
• Public blogs

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MARKETING
ENVIRONMENT

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ANALYZING THE MACROENVIRONMENT

Needs and Trends

Fad

Trend

Megatrend

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ANALYZING THE MACROENVIRONMENT

Identifying the Major Forces Demographic

Political-Legal Economic

Technological Socio-Cultural

Natural

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DEMOGRAPHIC ENVIRONMENT

• Population growth Population Age Groups

65+
• Population age mix 40-65
• Diversity 20-40
Teens
• Educational groups
School-age
• Household patterns Preschool
Household patterns

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ECONOMIC ENVIRONMENT

• Purchasing power depends on consumers’ income, savings, debt, and credit availability as well
as the price level.

Types of industrial structures

Subsistence economies
Raw-material-exporting economies
Industrializing economies
Industrial economies

High-priced Lamborghini sports cars have found success in relatively

poorer countries by appealing to enough affluent buyers.

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SOCIAL-CULTURAL ENVIRONMENT

• High persistence of Core Cultural Values

• Core Beliefs
• Secondary Beliefs

• Existence of Subcultures

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NATURAL ENVIRONMENT

• Opportunities await those who can reconcile prosperity with environmental

protection.
• Corporate environmentalism

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TECHNOLOGICAL ENVIRONMENT

• Perhaps the most dramatic force now shaping our destiny

• Marketers should monitor the following technology trends: the accelerating pace of change,
unlimited opportu- nities for innovation, varying R&D budgets, and increased regulation of
technological change.

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POLITICAL-LEGAL ENVIRONMENT

• Two major trends in political-legal environment:

• Increase in business legislation
• Growth of special interest groups

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PESTEL ANALYSIS AND IFE-EFE MATRICES

• A PESTEL analysis is a framework or tool used by marketers to analyse and monitor the
macro-environmental factors that have an impact on an organisation.
• IFE-EFE Matrices - Internal Factors Evaluation
and External Factors Evaluation Matrices

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MARKETING
RESEARCH

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WHAT IS MARKETING RESEARCH?

• Marketing research is the systematic design, collection, analysis, and reporting

of data and findings relevant to a specific marketing situation facing the
company.

• Marketing researchers support decision-makers by collecting, analysing and

interpreting information needed to identify and solve marketing problems.

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DETERMINING WHEN TO CONDUCT MARKETING

RESEARCH
Time Constraints Availability of Data Nature of the Decision Benefits vs. Costs
Is the Does the
Information
Is sufficient decision of information Yes Conduct
Yes already on Yes Yes
time strategic value Marketing
hand
available? or tactical exceed the Research
inadequate?
importance? research cost?

No No No No

Do Not Conduct Marketing Research

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Potential Value of a Marketing Research Effort Should Exceed

Its Estimated Costs
ØResearch expenditures
ØDecreased uncertainty ØDelay of marketing
ØIncreased likelihood of decision and possible
correct decision disclosure of information
ØImproved marketing to rivals
performance and ØPossible erroneous
resulting higher profits research results

Costs
Value

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THE SCOPE OF MARKETING RESEARCH

• Importance of marketing insights
• Marketing insights provide diagnostic information
about how and why we observe certain effects in the
marketplace.

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THE SCOPE OF MARKETING RESEARCH

• Who Does Marketing Research?

ü Marketing departments in big firms

ü Everyone at small firms
ü Syndicated-service research firms
ü Custom marketing research firms
ü Specialty-line marketing research firms

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RESEARCH CONDUCTED AT SMALL COMPANIES

Engage
students/
professors
Tap
employee Use Internet
creativity

Tap partner Check out

expertise rivals

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THE SCOPE OF MARKETING RESEARCH

• Overcoming Barriers to the Use of Marketing Research

• Many companies still fail to use it sufficiently or correctly

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THE MARKETING RESEARCH PROCESS

Define the problem

Develop research plan

Collect information
Make
decision
Analyze information

Present findings

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EXAMPLE:

• A design by Red Bull to add a

line of enhanced waters to its
already successful mix of energy
and cola drinks would call for
market research that provides a
mountain of information!

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EXAMPLE:
The proposed research might call for the following specific information:
• The demographic, economic and lifestyle characteristics of current Red Bull customers. (Do current customers also
consume enhanced water products? Are such products consistent with their lifestyles? Or would Red Bull need to target
a new segment of consumers?)
• The characteristics and usage patterns of the broader population of enhanced-water users: What do they need and
expect from such products, where do they buy them, when and how do they use them, and what existing brands and
price points are most popular? (The new Red Bull product would need strong, relevant positioning in the crowded
enhanced-water market.)
• Retailer reactions to the proposed new product line: Would they stock and support it? Where would they display it?
(Failure to get retailer support would hurt sales of the new drink.)

• Forecasts of sales and profits of both the new and current Red Bull products. (Will the new enhanced waters create new
sales or simply take sales away from current Red Bull products? Will the new product increase Red Bull’s overall
profits?)

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STEP 1: DEFINE THE PROBLEM

• Define the problem

• State research objectives

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STEP 2: DEVELOP THE RESEARCH PLAN

Data Research
Sources Design & Approach

Research Sampling
Instruments Plan

Measurement & Contact

Scaling Methods

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RESEARCH
DESIGN
• A research design is a
framework or blueprint for
conducting a marketing research
project.
• Classification of market
research designs:

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Exploratory research
• The primary objective of exploratory research is to provide insights into and an understanding
of marketing phenomena. It is meaningful in any situation where the researcher does not have
enough understanding to proceed with the research project.
• Exploratory research is characterised by flexibility and versatility with respect to the methods,
because formal research protocols and procedures are not employed.
• It rarely involves structured questionnaires, large samples and probability sampling plans.
• Exploratory research can be used for any of the purposes listed below:
• To obtain some background information where absolutely nothing is known about the problem area.
• To define problem areas fully and to formulate hypotheses for further investigation and/or quantification.
• Concept identification and exploration in the development of new product or forms of marketing
communications.
• To ‘data-mine’ or explore quantitative data to reveal hitherto unknown connections between different
measured variables.

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Conclusive research
• The objective of conclusive research is to describe specific phenomena, to test specific
hypotheses and examine specific relationships. This requires that the information
needed is clearly specified.
• Conclusive research is typically more formal and structured than exploratory research.
• It is based on large, representative samples, and the data obtained are subjected to
quantitative analysis.
• Conclusive research can be used for any of the purposes listed below:
• To describe the characteristics of relevant groups, such as consumers, salespeople, organisations, or
market areas.
• To estimate the percentage in a specified population exhibiting a certain form of behaviour.
• To determine the degree to which marketing variables are associated.

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Descriptive research
• The major objective of descriptive research is to describe something, usually market
characteristics or functions. For example, advertising studies describing media consumption
habits and audience profiles for specific television programmes and magazines.
• Cross-sectional designs
The cross-sectional study is the most frequently used descriptive design in marketing research. Cross-
sectional designs involve the collection of information from any given sample of population elements
only once. They may be either single cross- sectional or multiple cross-sectional. In single cross-sectional
designs, only one sample of respondents is drawn from the target population, and information is
obtained from this sample only once. These designs are also called sample survey research designs. In
multiple cross-sectional designs, there are two or more samples of respondents, and information from
each sample is obtained only once. Often, information from different samples is obtained at different
times.
• Longitudinal designs
In longitudinal designs, a fixed sample (or samples) of population elements is measured repeatedly. A
longitudinal design differs from a cross-sectional design in that the sample or samples remain the same
over time. In other words, the same people are studied over time.

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Causal research
• Causal research is used to obtain evidence of cause-and-effect (causal)
relationships. Causal research is appropriate for the following purposes:
• To understand which variables are the cause (independent variables) and which
variables are the effect (dependent variables) of marketing phenomena.
• To determine the nature of the relationship between the causal variables and the effect
to be predicted.
• To test hypotheses.

• The main method of causal research is experimentation.

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RESEARCH METHODS
(RESEARCH TOOLS OR TECHNIQUES OR APPROACHES)

Observation Word Association

Ethnographic Projective Techniques

Focus Group Visualization

Survey Brand Personification

Laddering
Behavioral Data
Interviews
Experimentation

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RESEARCH METHODS

• Expert surveys, Pilot surveys, Secondary data, Qualitative

interviews, Unstructured observations are some of the
main methods of conducting exploratory research.

• Surveys, Secondary data, Databases, Structured

observations, and Experiments are some of the main
methods of conducting conclusive research.

Focus Group in Session

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SAMPLING PLAN

• Sampling unit: Who is to be studied?

• Sample size: How many people should be included?
• Sampling procedure: How should the respondents be chosen?

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SAMPLING

Probability Samples Nonprobability Samples

• Simple random • Convenience
• Systematic random • Judgment
• Stratified random • Quota
• Cluster • Snowball

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Probability Sampling
• This Sampling technique uses randomization to make
sure that every element of the population gets an equal
chance to be part of the selected sample.
• Simple Random Sampling: Every element has an equal
chance of getting selected to be the part sample.

• Systematic Sampling is when you choose every “nth”

individual to be a part of the sample. For example, you
can choose every 5th person to be in the sample.

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• Stratified Sampling: This technique divides the elements of the

population into small subgroups (strata) based on the similarity in such
a way that the elements within the group are homogeneous and
heterogeneous among the other subgroups formed.
And then the elements are randomly selected from each of these strata.

• Cluster Sampling: The entire population is divided into clusters or

sections and then the clusters are randomly selected. All the elements
of the cluster are used for sampling. Clusters are identified using details
such as age, sex, location etc.

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Non-Probability Sampling
• It does not rely on randomization. This technique is more reliant on the researcher’s ability to
select elements for a sample. Outcome of sampling might be biased and makes difficult for all the
elements of population to be part of the sample equally.

• Convenience Sampling: Here the samples are selected based on the availability. This method is
used when the availability of sample is rare and also costly. So based on the convenience samples
are selected.
• Judgement Sampling: This is based on the intention or the purpose of study. Only those elements
will be selected from the population which suits the best for the purpose of our study.
• Quota Sampling: It is a two-stage restricted judgemental sampling. The first stage consists of
developing control categories or quotas of population elements. In the second stage, sample
elements are selected based on convenience or judgement.
• Snowball Sampling: In this an initial group of respondents is selected randomly. Subsequent
respondents are selected based on the referrals or information provided by the initial respondents.
By obtaining referrals from referrals, this process may be carried out in waves.

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MEASUREMENT & SCALING

Measurement means assigning numbers or other symbols to characteristics of objects according

to certain pre-specified rules.
• We measure not the object but some characteristic of it. Thus, we do not measure consumers,
only their perceptions, attitudes, preferences or other relevant characteristics.
Scaling may be considered an extension of measurement. Scaling involves creating a continuum
upon which measured objects are located.
• To illustrate, consider a scale for locating consumers according to the characteristic ‘attitude towards banks’. Each respondent is
assigned a number indicating an unfavourable attitude (measured as 1), a neutral attitude (measured as 2) or a favourable
attitude (measured as 3). Measurement is the actual assignment of 1, 2 or 3 to each respondent. Scaling is the process of placing
the respondents on a continuum with respect to their attitude towards banks. In our example, scaling is the process by which
respondents would be classified as having an unfavourable, neutral or positive attitude.

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PRIMARY SCALES OF MEASUREMENT

Nominal scale
• A scale whose numbers serve only as labels or tags for identifying and classifying objects.

Ordinal scale
• A ranking scale in which numbers are assigned to objects to indicate the relative extent to which some characteristic is
possessed.
Interval scale
• A scale in which the numbers are used to rank objects such that numerically equal distances on the scale represent equal
distances in the characteristic being measured.
• Arbitrary Zero

Ratio scale
• A ratio scale possesses all the properties of the nominal, ordinal and interval scales, and, in addition, an absolute zero
point. Thus, in ratio scales we can identify or classify objects, rank the objects, and compare intervals or differences.

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Primary Scales of
Measurement

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An Illustration
of primary
scales of
measurement

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RESEARCH INSTRUMENTS

ØQuestionnaires
ØQualitative Measures
ØTechnological Devices

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QUESTIONNAIRE

• Questionnaire - a structured technique for data collection consisting of a series of questions,

written or verbal, that a participant answers.
• A standardised questionnaire or form will ensure comparability of the data, increase the speed
and accuracy of recording and facilitate data processing.

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QUESTIONNAIRE DO’S AND DON’TS

• Ensure questions are free of bias
• Make questions simple
• Make questions specific
• Avoid jargon
• Avoid sophisticated words
• Avoid ambiguous words
• Avoid hypotheticals
• Avoid words that could be misheard
• Use response bands
• Use mutually exclusive categories
• Allow for “other” in fixed response
questions
• Eliminate problems by pilot-testing

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Do you think Coca-Cola is a tasty and refreshing soft drink?’

A single question that attempts to
• Yes cover two issues. Such questions
id
Avo • No can be confusing to respondents
and result in ambiguous
responses.

The inability to remember can

id How many litres of soft drinks you consumed during the last
Avo lead to errors of omission,
four weeks? telescoping and creation.

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QUESTION TYPES—DICHOTOMOUS

• In arranging this trip, did you contact American Airlines?

£ Yes £ No

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QUESTION TYPES—MULTIPLE CHOICE

With whom are you traveling on this trip?

£ No one

£ Spouse

£ Spouse and children

£ Children only

£ Business associates/friends/relatives
£ An organized tour group

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QUESTION TYPES—LIKERT SCALE

Indicate your level of agreement with the following statement: Small airlines generally give better
service than large ones.

£ Strongly disagree

£ Disagree
£ Neither agree nor disagree

£ Agree
£ Strongly agree

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QUESTION TYPES—SEMANTIC DIFFERENTIAL

American Airlines
Large ………………………………...…….Small

Experienced………………….….Inexperienced
Modern……………………….…..Old-fashioned

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QUESTION TYPES—SEMANTIC DIFFERENTIAL

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QUESTION TYPES—IMPORTANCE SCALE

Airline food service is _____ to me.

£ Extremely important
£ Very important
£ Somewhat important
£ Not very important
£ Not at all important

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QUESTION TYPES - RATING SCALE

American Airlines’ food service is _____.

£ Excellent
£ Very good
£ Good
£ Fair
£ Poor

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QUESTION TYPES - INTENTION TO BUY SCALE

How likely are you to purchase tickets on American Airlines if in-flight Internet access were
available?

£ Definitely buy

£ Probably buy
£ Not sure

£ Probably not buy

£ Definitely not buy

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QUESTION TYPES—COMPLETELY UNSTRUCTURED

• What is your opinion of American Airlines?

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QUESTION TYPES—WORD ASSOCIATION

What is the first word that comes to your mind when you hear the following?
• Airline ________________________

• American _____________________
• Travel ________________________

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QUESTION TYPES - SENTENCE COMPLETION

When I choose an airline, the most important consideration in my

decision is:
___________________________________________________________
___________________________________________________________
___________________________________________________________
___________________________________________________________
____.

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QUESTION TYPES—STORY COMPLETION

• “I flew American a few days ago. I noticed that the exterior and interior of the
plane had very bright colors. This aroused in me the following thoughts and
feelings.” Now complete the story.
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
_________________________________

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QUESTION TYPES—PICTURE
(EMPTY BALLOONS)

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QUESTION TYPES—THEMATIC APPERCEPTION

TEST

Make up a story that reflects what you think is

happening in this picture.

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TECHNOLOGICAL DEVICES Galvanometers

Tachistoscope

Eye cameras

Audiometers

GPS

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CONTACT METHODS Mail Questionnaire

Telephone
Interview

Personal
Interview

Online
Interview

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STEP 3 TO STEP 6

Step 3: Collect the Information

Step 4: Analyze the Information

Step 5: Present the Findings

Step 6: Make the Decision

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BARRIERS LIMITING THE USE OF MARKETING

RESEARCH
• A narrow conception of the research
• Uneven caliber of researchers
• Poor framing of the problem
• Late and occasionally erroneous findings
• Personality and presentational differences

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