Marketing Research and Marketing

Information Systems
 Marketing environment

 Shifts are dramatic (computers, television, fax machines, scanners,

internet)
 Inferior goods
 Marketing decisions- branding, product differentiation, advertising and
sales promotion.
 Information technology is key to success

 Many firms lack information

 Many firms lack marketing department.

 Competitive advantage

 Companies should study marketing managers’ informational needs and

design

(Marketing Information System)

 What is Marketing Information?

 The data collected during the marketing research process

 Types of data
 Company and competitor records
 Customer profile data
o Buying behavior
o Shopping patterns
o Demographics and lifestyle research
o Government data
o Market research reports produced and sold by research firms
 Marketing Information System

MIS consists of people, equipment and procedures to gather,

sort , analyze, evaluate and distribute needed, timely and

accurate information.
 Economically feasible
 Marketing Information System

 An organised way of continually gathering and analysing information from

every source relevant to the organisation

 Link external data with internal sources to provide a strong basis for

informed marketing decisions

 Data Information
Marketing Information System Model
Input sub Output subsystems
systems
Product
internal
D subsystem
reporting
subsystem
A
Place
T subsystem
Internal sources
A
Marketing Promotion
research B subsystem Users
sub system
A
Environmental sources Price
S subsystem
Marketing
intelligence E
Integrated-
sub system mix
subsystem
 Components of MIS

Systems that provide rapid and sufficient detail about

buyer wants, preferences and behavior
A marketer has information about consumption patterns:
 Greeks eat more cheese
 Swiss consume the most chocolate
 Austrians smoke the most cigarettes
The Marketing Information System (MKIS)

Kotler's marketing nerve center

 Three informational flows:

 Internal
 Intelligence (from environment)
 Communications (to environment)
 MIS is developed from

 Internal company records

 Marketing intelligence activities
 Marketing Decision Support System
 Marketing research
 Internal company records

 The order to payment cycle

 Sales information systems

 Database, data warehouse and data mining

Marketing intelligence activities
 Happening data
 To obtain everyday information about developments in the marketing
environment.
 By reading books, newspapers, trade publications, talking to customers,
suppliers, distributors, meeting with other company managers.
 Train and motivate the sales managers (books)
 Motivate distributors and retailers
 Competitive intelligence (banks)
 Customer advisory panel (Hitachi Data system)
 Purchasing information
 Scanning the internet
 Marketing Decision Support System

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.

Multiple regression

New- product pretest

 BRANDAID

 CALLPLAN

 MEDIAC

 ADCAD
Marketing Research
Marketing Research

The systematic and

objective process of
generating information
for aid in making
marketing decisions
 Introduction

 Business which have “extra information” are more

competitive.

Garbage In = Garbage Out

 Good marketing information = good marketing planning

 Market Research vs. Marketing Research

Market Research Researching the immediate competitive

environment of the marketplace, including
customers, competitors, suppliers, distributors and
retailers
Marketing Research Includes all the above plus:
- companies and their strategies for products
and markets
- the wider environment within which the firm
operates (e.g. political, social, etc)
 Marketing Research

Marketing research is the systematic and objective

identification, collection, analysis, dissemination,
and use of information for the purpose of assisting
management in decision making.
 THE ROLE OF MARKETING RESEARCH

MARKETING RESEARCH

A FORMAL COMMUNICATION LINK WITH ENVIRONMENT

PROVIDE ACCURATE AND USEFUL INFORMATION

a) specifying
b) collecting
c) analyzing
d) interpreting

FOR
a) planning
b) problem-solving
c) control

BETTER DECISION MAKING

Spending on Market Research by Sector in the UK

Other
Non-ad. research
agencies
Ad. agencies 4% 5%
4%
Retailers and
wholesalers 9%

Manufacturing
44% Companies
13%
Public sector

21%

Service companies
 Marketing research can tell us…
 How our customer service is perceived by our customers and what particular areas we
can improve on or emphasize
 What new products or new product features do customers want
 How customers perceive us in relation to our key competitors
 Who our most loyal customers are and how do we cater to them
 How can we segment the market in more manageable groups
 What marketing communications are most effective at reaching the market
 What is going to be the demand for a new product or an existing product
 Where should we build our next retail location
 At what price point we can maximize profitability and maintain consumer demand

 Which media vehicles will be most effective to communicate our advertising message
 Using Marketing Research
We can use Marketing Research to:
 Identify & Evaluate Opportunities

 Analyze Market Segments

 Select Target Markets

 Plan & Implement Marketing Mixes

 Analyze Marketing Performance

 Performance Monitoring Research

 Coca Cola Failure: Chronology

May 1985 Old Coke withdrawn

New Coke introduced

July Old Coke reintroduced as Coke Classic

 Coca Cola Failure: Background and Research

- Early 80s, share losses to Pepsi

- New Product research carried out

• $4m cost

• 200,000 taste tests

• 60% of consumers preferred it in blind tests

- BUT research was narrowly defined

• considered taste not emotions

• dropping Old Coke not mentioned

 U.S. Reaction to Old Coke’s Return

“A very meaningful moment in the history

Political
of America, this shows that some national
institutions cannot be changed”

Coca Cola’s share price rose to its

Economic highest level in 12 years
 Advantages of Marketing Research

 Helps focus attention on objectives

 Aids forecasting, planning and strategic development
 May help to reduce risk of new product development
 Communicates image, vision, etc.
 Globalisation makes market information valuable
 Disadvantages of Marketing Research

 Information only as good as the methodology used

 Can be inaccurate or unreliable
 Results may not be what the business wants to hear!
 Always a problem that we may never know enough to be sure!
Purpose
 Identifying and Evaluating Opportunities

Examples:

 Home cooking is on the

decline. Purchase of pre-cooked home replacement meals is on the

rise.

 Number of investors trading stock on the Internet is

growing.
Analyze Market Segments and Select Target Markets

Examples:
 MTV, monitoring demographic trends, targets young people
(growing rapidly)
 Sears learns women of age 25-54 years old with average household
income of $38,000, are core customers. Targets this market with
"The Good Life at a Great Price.
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 Yes Yes decision of Yes information Yes Conduct
already on
time
hand
strategic value Marketing
available? or tactical exceed the Research
inadequate?
importance? research cost?

No No No No

Do Not Conduct Marketing Research

 Applied Research Example

 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 White strips would sell well at a retail price
of $44
The Marketing Research Process

Define
Define the
the problem
problem and
and
research
research objectives
objectives

Research Design
Develop
Develop the
the research
research plan
plan

Collect
Collect the
the information
information

Analyze
Analyze the
the information
information

Present
Present the
the findings
findings

Implementation
of research
Make
Make the
the decision
decision
American airlines (AA) is constantly looking for new ways to serve its customers.
It was first company to install phone headsets. Now it is reviewing many new
ideas, especially to cater to its first- class passengers on
Q1. Find out everything you can about first class air travelers’ needs

Q2. Find out if enough passengers you fly between Chicago and Tokoyo
would be willing to $ 25 for an internet connection so that AA break even in
one year.

Q3. Will offering an in-flight internet service create enough incremental

preference and profit for AA to justify its cost against other possible
investments it can make.

Q4. How fast could other airlines copy it?

 Research types

 Specific
 Exploratory
 Descriptive
 Causal
 2. Develop the Research Plan

Plan for gathering the needed information.

 Estimate cost

 Data Collection sources

 Research Approaches
 Research Instruments
 Sampling Plan
 Research Design

A detailed blue print

to guide the
implementation of a
research study towards
the realization of its
objectives.
 Data Collection sources
Time consuming and costly

 Secondary data-Previously produced or published matter

 Mailing lists
 Retail sales statistics
 Video retrieval systems

 Primary data- Data being collected for the first time

 Survey
 In-depth interview
 Observation
 Controlled experiment
 Origins of Research Data

 Qualitative research (subjective and personal) - the

collection of data that are open to interpretation, e.g.
peoples’ opinions.

 Quantitative research (statistical basis) - the collection of

data that is quantifiable and is not open to the same level of
interpretation as qualitative research, e.g. sales figures,
market share data, etc.
 Research Approaches

 Observational research
 Focus Group Research
 Survey Research
 Experimental research
 Research Instruments

 Questionnaire
 Qualitative measures
 Mechanical devices
 Sampling Plan

 A scheme outlining the group (or groups) to be surveyed in a

marketing research study, how many individuals within the group
are to be chosen, and on what basis that choice is to be made.

Three decisions-

 Sample Unit
 Sample Size
 Sample Procedure
 Contact Methods

 Mail Questionnaire
 Telephone Interview
 Personal Interview
 Online Interview
 Scope of Marketing Research

Product
Product Research
Research

Advertising
Advertising research
research Marketing
Marketing research
research Customer
Customer Research
Research

Sales
Sales Research
Research
 Parameter Marketing research Marketing Information System

Definition Systematic collection, recording, and Includes a set of procedures and methods for the
analysis of data about problems continuous analysis and presentation of
relating to marketing of goods, information for decision making in the area
services and ideas of marketing.

Scope handles problems pertaining to a Concerned with the problems in all area of
particular area marketing such as sales, cost of
distribution, advertising, etc.

Continuity Operates on specific marketing problems A continuous process

and is over after the research study

Objective Conceived with finding solutions for Cautions against possible marketing problems
specific marketing problems and helps in preventing them, also helps in
solving problems when they arrive

Orientation May be a post-mortem of what has already Always directed at the future aspects of
taken place or may relate to present marketing management
situation for a future decision

Higher System A part of marketing information system An integral part of Information System of the
organization
 ALWAYS Remember

 Marketing Research is a tool.

 It assists marketing managers in their decision making.

IT IS NOT A REPLACEMENT FOR

MANAGERIAL JUDGEMENT!!
Forecasting and Demand
Measurement
Ninety Types of Demand Measurement

World
Space level
India
Region
Territory
Customer

All sales
Industry sales

Company Sales
Product
level
Product
line sales

Product
form sales

Product
item sales

Short run Medium Long run

run

Time level
Market Breakdown
 Potential Market
 Available Market
 Target Market
 Penetrated Market
Vocabulary for Demand Measurement

 Market Demand
 Market Forecast
 Market Potential
 Company Demand
 Company Sales Forecast
Market Demand Function

Market
Potential, Q2

Market
Demand
in
specific Market
period forecast, Qf

Planned
Expenditure
Market
minimum,Q1

Industry Marketing Expenditure

Estimating Current Demand
Total Market Potential
=Potential number of buyers X average quantity purchased by
a buyer X the price