Chapter 1: Introduction of Marketing Research

Chapter 1: Introduction of Marketing Research

Use of marketing research

Marketing research is one of the principal tools of marketing because it enables companies to implement the Marketing concept, builds relationships with customers, and maximises customer lifetime value.

Types of Marketing Research

Basic Research:  Try to expand the limits of knowledge - not directly involved in the solution to a realistic problem. We use basic research to expand our knowledge not to create a solution and solve our curiosity. Eg. Do consumers experience cognitive dissonance in low-involvement position?

Applied Research:  carry out when a decision must be made about a real-life problem.It is not used to expand our knowledge but improve the human condition.  Eg. How can the Red Cross attract more blood donors?

Scientific Method

Basic and applied research use the same techniques and procedures(meaures)– Both use the scientific method. We use scientific Method to analysis and interpretation of experimental evidence (fact) to confirm or disprove earlier conceptions.Use of the scientific method in applied research provides a logical method that ensures the result is fairly.

Marketing research value

Marketing Research helps in:

1. Identifying and evaluating opportunities

Example: Number of investors trading stock on internet is growing.

Ø  What is the proportion of investors trading on the Internet v. using a broker?

Ø  Why investors switch to online trades.

Ø  How many trades does the average online investor do a month?

Ø  What are they willing to pay for these services?

Ø  What do these investors look for when selecting an Internet trading site?

2. Analysing market segments and selecting target markets

Example: The war between Telstra and Optus is ongoing

Ø  Who are the customers that are more likely to join Telstra?  Why?

Ø  Who are the customers that are more likely to join Optus?  Why?

Ø  What do the different market segments of Personal Users and Business Users look for in a phone company?

3. Planning and implementing a marketing mix that will satisfy customer needs.

Example: Mercedes is releasing the new Smart Car in Australia

Ø  Price: who are its main competitors and how do their pricing affect pricing of the Smart Car?

Ø  Promotion: who are our main target markets?  What product image appeals to them?  What is their readership of various print media?

Ø  Distribution: Should a new dealership system be developed?

Ø  Product: what does our target market look for in these types of cars?  What product features are important to them?

4. Analysing marketing performance

               Example: Action Supermarket wants to do continuing

 Performance-Monitoring Research to track customer satisfaction of its bakery section

Ø  What are customer expectations in terms of service quality and the visual appeal of bakeries in general?

Ø  How does the perceived performance of Action bakery’s service quality compare with these expectations?  Compared to other bakeries such as Bakers Delight?

Ø  What can they do to deal with any issues where their performance falls short of customer expectations?

Marketing information system

It is a system in which marketing information is formally gathered, stored, analysed and distributed to marketing managers in deal with their informational needs on a regular basis.

Functions of a MIS

1.    Internal Data-It is cheap quick but insufficient. It is used to collect information and data souces within the company.

2.    Marketing intelligence – It is used to collect and analysis of public information that is related to competitors and marketing environment, for example competitor’s annual report, industry news and internet.

3.    Propriety marketing research- it is expensive. It is used to design, analysis and collect data about specific situation.

Marketing research process

1. Problem discovery and problem definition.

Selection of investigative search technique, for example historical data, experience survey, guide study, case study. Next, Problem definition.

2. Research design

Selection basic research method such as experiment(e.g. laboratory),survey(e.g. interview, questionnaire, observation and historical data study.

3. Sampling

Selection of sampling technique, for example probability and non-probability.

4. Data gathering

Collection of data

5. Data processing and analysis

Adding data and then data processing.

6. Conclusions and report

Interpretation of findings and make a report.

Defining problem and research

1. Exploratory research (unaware research) , for example our sale are declining but do not know why so we use exploratory research to gather all the initial information that will help define the problem and suggest theory.

2. Then we use Descriptive Research (aware research), for example describing thing like consumer attitude, demographics, and market potential for a product. (What kind of people is buying our product and what kind of people buy our competitor’s product and our consumers prefer what product’s features.)

3. Causal research (problem clearly define) is used to test theory about cause-and-effect relationships, for example will consumer purchase more if we change our packaging?

Evidence of causality

1.      Temporal order of events

2.      Connected variation -- two event fluctuate together, for example if one of the event is up that mean the other event will up too.

3.      Lack of alternative reasonable explanations

Increase of ice-cream sale will directly cause increase number of drowning. However, it is not the fact, it is just hypotheses. Summer is the real cause.