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MKTG 2100

Principles of Marketing

Lecture 3
Information Management &
Marketing Research

Lecturer: Dr Doreen Kum MKTG 2100: page 1


The Main Role

The main role of


market research
is to provide
information
INFO 
This allows better
decisions to be
made

Lecturer: Dr Doreen Kum MKTG 2100: page 2


The Importance of Information
Identify
opportunities &
problems

Marketing
Environment

Why
Customer Information Competition
Needs is Needed

Strategic
Planning
Helps
Generate & VALUE
evaluate CREATION!
marketing
actions
Lecturer: Dr Doreen Kum MKTG 2100: page 3
Marketing Research’s Central 0

Role

MR links
the
consumer,
customer
& public to
the
marketer
through
Lecturer: Dr Doreen Kum (Malhotra et al, 2006, informatio
MKTG 2100: page 4
Uses of MR
 New product development
 Consumer trends
 Testing of advertising messages
 Choice of brand names
 Price setting
 To forecast sales
 …

= a marketer’s eyes & ears

Lecturer: Dr Doreen Kum MKTG 2100: page 5


TEST SCREENINGS: LISTENING TO
CONSUMERS TO REDUCE MOVIE RISKS

 Test screenings
 Tracking studies

Lecturer: Dr Doreen Kum MKTG 2100: page 6


Marketing research questions asked in
test screenings of movies, and how they
are used

Lecturer: Dr Doreen Kum MKTG 2100: page 7


The Marketing Information
System (MIS)
 A marketing information system (MIS) consists of
 people, equipment, and procedures…
 …to gather, sort, analyse, evaluate and distribute…
 …needed, timely and accurate information to marketing
decision makers.
 MIS distributes information to managers…
 in the right form and
 at the right time
 to help them make better marketing
decisions
 Begins and ends with Marketing Managers
 Is not the same as Marketing Research

Lecturer: Dr Doreen Kum MKTG 2100: page 8


The Marketing Information System

Marketing
Marketing
Environm
Environm
Developing Information ent
ent
Assessing
Assessing
Marketin
Marketin Internal Marketing Target
information
information Internal Marketing Target
gg needs reports
reports intelligence
intelligence markets
markets
Manager needs
Manager
Marketing
ss Marketing
channels
channels
Analysis
Analysis
Competitor
Competitor
Planning
Planning ss
Implemen
Implemen Marketing
Marketing Publics
-tation
-tation Distributing
Distributing decision Publics
decision Marketing
Marketing
information
information support
Organisat
Organisat support research Macro-
Macro-
research
ion
ion analysis
analysis environme
environme
nt
nt
Control
Control forces
forces

Marketing Decisions and Communications


Lecturer: Dr Doreen Kum MKTG 2100: page 9
Marketing Information System

1. Assessing Information Needs


2. Developing Information
3. Information Analysis
4. Distributing Information

Lecturer: Dr Doreen Kum MKTG 2100: page


1. Assessing Information Needs

Info needs differ according to current problems

Lecturer: Dr Doreen Kum (Kotler et al, 2006, Fig 4.2, MKTG 2100: page
2. Developing Information

 Differentiate between the three


sources of information
1. Internal Records
2. Marketing Intelligence
3. Marketing Research (see notes on
“The Marketing Research Process”)

Lecturer: Dr Doreen Kum MKTG 2100: page


i. Internal Records

 Information gathered from sources within


the company to evaluated marketing
performance and detect marketing
problems and opportunities.
 Internal records can be obtained more
quickly and cheaply than other information
but may be incomplete or in the wrong
form for making marketing decisions.

Lecturer: Dr Doreen Kum MKTG 2100: page


ii. Marketing Intelligence
(MI)
 Everyday information about developments in the
marketing environment that helps managers
prepare and adjust marketing plans.
 MI is important and can be gathered from many
sources including the organisation’s own
personnel.
 Personnel are often busy and fail to pass on
important information unless there is a formal
process for doing so.
 The organisation needs important intelligence
from suppliers, resellers and customers.

Lecturer: Dr Doreen Kum MKTG 2100: page


iii. Marketing Research

 The function that links the consumer, customer


and public to the marketer through information
used to:
 identify and define marketing opportunities and
problems
 generate, refine and evaluate marketing actions
 monitor marketing performance
 improve understanding of the marketing process

Lecturer: Dr Doreen Kum MKTG 2100: page


3. Information Analysis
Examples of questions :
 What are the major variables affecting my sales
and how important is each one?
 What are the best variables for segmenting my
market, and how many segments exist?
 What are the best predictors of which
consumers are likely to buy my brand
vs my competitor’s?
 If I raised my price 10% and increased
advertising expenditures 20%, what
would happen to sales?

Lecturer: Dr Doreen Kum MKTG 2100: page


4. Distributing information

 Information must be distributed to the


right managers at the right time
 Centralised marketing information
systems (MIS) often provide regular
performance reports, intelligence
updates, and study reports to managers
 Developments in technology have
caused a revolution in information
distribution

Lecturer: Dr Doreen Kum MKTG 2100: page


The Marketing Research
Process This process includes:
 Specifying what information is
1. Defining the required
Problem & Research Objectives  Designing methods for
collecting information
 Managing & implementing data
collection
2. Developing the
Analysing the results
Research Plan 

 Communicating findings & their


implications

3. Implementing the
Research Plan

4. Interpreting and
Reporting the Findings
Lecturer: Dr Doreen Kum (Kotler et al, 2006, Fig 4.3, MKTG 2100: page
Stages of the Research Process
Problem
Conclusions
Discovery
and Report
and Definition

Discovery and

Development of an Definition Data Processing

Approach to the Problem and Analysis

and so on

Research
Design Data Gathering

Sampling

Zikmund, W. G. 2000. Exploring


Lecturer: Dr Doreen Kum Marketing Research 7th edition. MKTG 2100: page
0
1. Defining the Problem
 Accurately and adequately defining the
management problem is the single most
important task in the MR process
 It is the problem confronting management
 Asks what the decision maker needs to do
 Also called research purpose or aim
 Without this, money & effort will be wasted
 The challenge: may be difficult
 Manager may know there is a problem without
knowing or understanding the cause

Lecturer: Dr Doreen Kum MKTG 2100: page


Issues in Defining the
Problem
 Identify the real problem
 Identify what information is needed
 E.g., Fab One Shot
 Don’t confuse the symptoms with problems
 Decline in sales?
 Lead to asking wrong questions
 Develop a list of possible problem areas,
analyze situation (e.g., talk to informed people,
secondary data) and narrow in
 What else is needed?

Lecturer: Dr Doreen Kum MKTG 2100: page


The first step in the marketing
research process is the:

A. development of the research plan


B. survey of stakeholders to determine if
problems exist
C. decision regarding the research tools and
target group
D. collection of the available sources for
needed information
E. definition of the problem and research
objectives

Lecturer: Dr Doreen Kum MKTG 2100: page


2. Developing the research
plan; the research design
 Determining specific information needs –
what do we need to know?
 Breaking the problem down into specific
questions.
 E.g., How would consumers react to Oats
in microwaveable bowl?
 What questions do we need to ask to
determine this?

Lecturer: Dr Doreen Kum MKTG 2100: page


Developing the Research Plan
 First we look at information readily available (secondary
data):
 Internal sources
 Government publications
 Periodicals and books
 Commercial data
 This may be for the purpose of further refinement of the
research problem,
 Or to access information relevant to the solution to the
problem.
 If we then require new information, then we collect primary
data

Lecturer: Dr Doreen Kum MKTG 2100: page


Decide When MR is
Warranted
 Research is a cost and a budget is a must
 Value of MR: does the MR contribute
towards a better decision? Is it really
needed?
MR may not be needed: MR may be needed:
 Information already  Results directly affect
available your product/service
 Not enough time  Identifies correct
 Resources inadequate alternative
 Costs outweigh value
 Gives you competitive
advantage
 Keeps you abreast of
the market

Lecturer: Dr Doreen Kum MKTG 2100: page


Secondary vs Primary Data
 Primary data consist of information collected
for the specific purpose at hand
 It costs time and money to collect
 You only do if secondary research has no
answers
For Primary Data
For Secondary Data 
Research Approach
Research Instruments

 Relevant? 
Sampling Plan
Contact Methods

(garbage in, garbage out)
 Accurate?

 Current?
 Impartial?

Lecturer: Dr Doreen Kum MKTG 2100: page


Comparing Primary & Secondary
Data
Primary Data Secondary Data
Collection For the problem For other
purpose at hand problems

Collection Very involved Rapid and easy


process

Collection cost High Relatively low

Collection time Long Short

Lecturer: Dr Doreen Kum (Malhotra et al, 2006, Table MKTG 2100: page
A Classification of Marketing
Research Designs
Research
Designs

Conclusive
Exploratory

Descriptive Causal

Lecturer: Dr Doreen Kum MKTG 2100: page


Three Types of Research Designs
 Exploratory Research
 to understand...develop hypotheses…why?
 e.g. What is the cause of customer dissatisfaction?
 observation, interviews, focus groups
 Descriptive Research
 to measure the state…what is...?
 e.g. describe market characteristics or functions
 surveys, observation

 Causal Research
 to test hypotheses
 e.g. establishing cause & effect
 experiments

Lecturer: Dr Doreen Kum MKTG 2100: page


A Comparison of Basic Research Designs
Exploratory Descriptive Causal
Objective: Discovery of Describe market Determine cause
ideas and insights characteristics or and effect
functions relationships
Flexible, versatile
Characteristics: Marked by the Manipulation of
prior formulation one or more
of specific independent
Often the front hypotheses variables
end of total
research design Preplanned and Control of other
structured design mediating
Expert surveys variables
Pilot surveys
Methods: Secondary data Secondary data Experiments
Qualitative Surveys
research Panels
Observation and (Malhotra et al,
2006, Table 4.6,
other data
Lecturer: Dr Doreen Kum MKTGp.2100:
115)page
Data Collection Methods

 Observational  Survey research


research  Structured
 Mechanical  Unstructured
 People metres  Indirect approach
 Checkout scanners  Direct approach
 Single-source data  Question type
systems  Closed-ended
 Eye cameras  Open-ended
 Video  Experimental research
 Personal
 Mystery shoppers

Lecturer: Dr Doreen Kum MKTG 2100: page


Research Instruments

Research Instruments
 Questionnaire
 Closed-end questions
 Open-end questions

 Mechanical devices
 Galvanometer
 Tachistoscope
 Eye cameras

Lecturer: Dr Doreen Kum MKTG 2100: page


Mechanical research
instruments

Lecturer: Dr Doreen Kum MKTG 2100: page


Survey Types

The main ways of administering surveys:


Lecturer: Dr Doreen Kum (Malhotra et al, 2006, Fig MKTG 2100: page
Advantages &
Disadvantages

Lecturer: Dr Doreen Kum (Kotler et al, 2006, Table MKTG 2100: page
Sampling: Definitions

 Sample
 Subset or some part of a larger group of objects
 Population
 Any complete group that share some common set of
characteristics
 e.g. restaurants in Singapore, Universities in Australia

Lecturer: Dr Doreen Kum MKTG 2100: page


Sampling Techniques
 Probability Samples
 Simple Random Sample
 Stratified Random Sample
 Cluster Sample
 Non-Probability Samples
 Convenience Sample
 Judgment Sample
 Quota Sample

 See Table 4.5 for a summary

Lecturer: Dr Doreen Kum MKTG 2100: page


Presenting the Research Plan
Summarise the plan in a written proposal:
Management problems addressed
Research objectives
Information to be obtained
Sources of secondary data
Methods for collecting primary data
How the results will help management
decision making
Research costs

Lecturer: Dr Doreen Kum MKTG 2100: page


Implementing the Research
Plan
 Putting the plan into action
involves
 collecting
 processing &
 analysing
the information

Lecturer: Dr Doreen Kum MKTG 2100: page


Interpreting & Reporting
Findings
Results without interpretation are
meaningless!
Both researchers and managers are
responsible for interpretations
Insignificant or unexpected findings are just
as important as those supporting expectations
 guard against biased interpretations
 do not reject findings that are not as hoped

Lecturer: Dr Doreen Kum MKTG 2100: page


Market Research in Small Businesses
(SMEs), & Non-Profit Organisations
 (NPOs)
MR is also for SMEs & NPOs, not just large firms
 MR can also be done on a small budget
 SMEs often use less formal approaches
 Managers can conduct informal surveys using small
convenience samples
 Can obtain good marketing information simply by
observing things around them
 Common technique for SME retailers
 Employees a good source of customer info
 Can also conduct their own simple experiments
 Small organisations can obtain most of the secondary
data available to large businesses

Lecturer: Dr Doreen Kum MKTG 2100: page


Summary
1. Marketing research provides information about
consumers, businesses, competitors, changes and
trends in the marketplace, and other aspects of
the firm’s external environment.
2. A marketing information system (MIS) consists of
people, equipment, and procedures to gather, sort,
analyse, evaluate, and distribute needed, timely
and accurate information to marketing decision
makers.
3. Steps in MR process are:
 problem definition, research plan,
implementation, interpretation

Lecturer: Dr Doreen Kum MKTG 2100: page


Summary
4. Types of research designs may be classified as
 exploratory - provides insights into problems.
 descriptive - describes market characteristics and requires
specification of who, what, when, where, why, and way of the
research
 causal - determines cause and effect.
4. Surveys (structured and unstructured), observations and
experiments are the main data collection techniques used in MR.
5. Sampling methods include probability and non-probability
techniques which are directly related to the type of research.
6. Key issues in a research plan:
 Research objectives, secondary information, primary data
collection methods, and costs

Lecturer: Dr Doreen Kum MKTG 2100: page


Lecture 3 Objectives
1. Explain the concept of the marketing information system,
emphasising:
 ways of assessing information needs,
 the sources used for developing information and ways
of distributing information.
1. Outline the marketing research process, including
 defining the problem and research objectives and
 developing the research plan.
1. Discuss the key issues of:
 planning primary data collection,
 implementing the research plan and interpreting and
 reporting the findings.

Lecturer: Dr Doreen Kum MKTG 2100: page