MARKETING RESEARCH

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Marketing Research

• www.census.gov
• www.adage
• www.gallup.com
• www.ropercenter.uconn.edu
• www.future.sri.com

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RD Spending as a of GDP

• - Japan 3.0
• - U. S. 2.7
• - Germany 2.5
• - EU 1.9
• - China 1
• The U.S. is , by far, the biggest player in
  science and technology it does 44 of all the
  research in the world (1999)

Source WSJ 4June 03,B1 (OECD data 2000
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R D Spending

• 2001
• Industry 68.7
• Federal Government
  .. 26
  
• Non Profit/ 5.4 Academic

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Research Development Spending

• (Booz, Allen Hamilton) Percent of Sales by
  Industry

11.5
407 bil in 2005 among top 1000 firms
Health
11
Software internet
7.5
Computing Electronics
Money does not buy effective innovation
4.0
Aerospace Defense
4.0
Technology
94 firms outperformed peers while spending less
on RD
3.9
Auto
2.2
Industrials
2.0
Consumer
1.5
Telecom
Paying for Innovation, WSJ, 13Nov06,B3
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Technology R DWhos Leading . . . And Whos
Falling Back

• 
  RD Spending As of
• Mil(s) Sales
• Service Industries 205 1.0
• Health Care 13,886 10.6
• Automotive 13,441 4.0
• Telecommunications 4,240 3.7 Food
  640 0.8
• Office Equipment Services 17,212 8.0
• Leisure Time Products 1,891 5.4
• Aerospace Defense 4,210 4.2
• Metals Mining 360 0.9

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Factors Intensifying the Need for Marketing
Information

• Local to National to International Markets
• Basic needs to Wants
• Price to Non Price Focus
• Intense Competition
• New Technology (innovation)
• Government Regulations
• Cost of Mistakes

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• Information Gaps
• Create the need
• for research
• - Product - by age, gender
• - Price - Attitudes
• - Promotion - Reference
• - Phys. Distr. Groups
• - motives, income

Marketing Management
Consumer Needs Wants
Marketing Mix
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Information Gap Examples

• - 2/3 of Americans stop at a convenience store
  once a week.
• - Only about 13 of leftovers carried home in
  doggie bags actually goes to the dogs.
• Americans spend 15 times more on gambling than
  they give to churches.
• Churches turn to research for help in saving new
  souls

WELCOME TO S-MART
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Research links controllable company resources
and uncontrollable environmental events.

• Research supports problem solving activities
• - Planning
• - Organizing
• - Control
• to understand and predict marketplace
  reaction to company efforts

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Research Activities of American Firms

• Percent of Firms Doing Research

97
Market Potential
97
Market Share
92
Sales Analysis
89
Sales Forecasting
83
Pricing Studies
76
New Prod. Acceptance
58
Sales Promotion
Social Value
39
23
Ecological Impact
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Benefit- Costs Value of Research
BENEFITS
COSTS

• Improve
• information
• Increase
• confidence
• - Reduce
• Risk

• - Money
• Time
• Mistakes

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Example
Crest Spices Up Toothpaste War

• U.S. toothpaste market 1.5 Billion dollars
  PG has 23 . . Colgate 27 market share
• PGs Crest has a new product line . . .
  Whitening Expressions . .a home tooth whitening
  kit which had over 500 million in sales in the
  first 2 years
• Flavors Herbal Mint, Cinnamon and Citrus

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Market Research

• P G placed small microchips in battery operated
  toothbrushes and found consumers brushed 20
  longer with Whitening Expressions than normal
  Crest
• .99 cent sample tubes with a scratch and sniff
  adv wooed retailers

WSJ, 15 Sep 03, B1
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Marketing Research

• The systematic process of generating information
  for use in marketing decision(s).
• Another View
• Input Interpret the Environment
• To
• Output Influence Brand Demand

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Characteristics of the Scientific Method

• Systematic
• Objectivity
• Timely
• Accuracy
• Credibility (Ethics)

SCIENTIFIC METHOD
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A Theoretical Framework(Increases Credibility
provides A systems view)

• facts become meaningful, understandable, and
  render an explanation through the theoretical
  framework surrounding the problem area understudy

I touched all the bases just like the old man
wanted, but(SOB) I missed home plate!
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Limitations of the Scientific Method

• Emotional involvement of investigator
• Non precise measurements
• Time pressure for results
• Complexity of consumer behavior
• Costs may not benefits

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Research Process (A Framework)
APPLICATION
INTERPRETATION
ANALYSIS
DATA COLLECTION
SAMPLE DESIGN
Primary Data
Secondary Data
RESEARCH DESIGN
PROBLEM DEFINIION
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Phase 1Problem Definition

• Analyze the situation (use exploratory research
  methods) evaluate secondary data
• State clear research objectives
  - if. . . then . . . Decisions
• Research Maxim if you do not know what you are
  looking for, you will
  not find it

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LISTEN To Your Customer
Information Gaps

• - Ford sends one representative
• every four months (avg.)
• - Toyota sends one representative per month
  (avg.)

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Iceberg Effect Identify Symptoms vs. Causes

• Simple (S R)
• Complex Interactions

10 is visible
90 is invisible
Competition
Marketing Mix
Consumer Behavior
Technology
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Degree of Problem Definition Research Design

• Uncertain Aware Certain
• (Vague problem)
• Exploratory Descriptive Casual
• Research Research Research

Three major types of research studies
Research Design is a master plan for research
studies who, what, where, when, how?
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Validity Versus Reliability
Validity
High
Low
High
Reliability
Low
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Types Of Data
PRIMARY DATA Data collected and analyzed
specifically for the purpose at hand, Ex. Sample
data from customers
SECONDARY DATA Data previously collected by
someone else for some purpose other than the one
at hand, Already published

• External Sources
• Government sources
• Trade Association
• Commercial sources
• Internet sources
• http//zikmund.swcollege.com

• Examples
• Syndicated services
• Nielsen diaries

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Evaluating Data
Source quality
Who collected data? What was the original
purpose? How was data collected?
Data quality
How relevant is the data? How accurate reliable
is the data? How recent is the data?
Data compatibility
Is the data compatible with other sources? How
comparable is the data with other sources?
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Evaluation Criteria for Data
Information type
PRIMARY SECONDARY

• Relevance to problem
• Timeliness of information
• Quality of information
• Cost of information
• Speed of acquisition

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SURVEY OF BUYING POWERSCRANTON, WILKES BARRE,
and HAZELTON

• U.S. Population Rank
• 283 million 623,800 86th
• Median Age
• 35.9 yrs. 40.7 13th
• EBI
• 5,230 billion 10.2 billion 91th
• Median Income
• 43,400 xx,000 232th/323

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Foreign Based Marketing Research

• Limitations/obstacles
• Secondary data
• non existent -- low credibility
• Sampling
• incomplete telephone directories
• unavailable street maps

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Focus Groups, a type of exploratory research
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City of Human Guinea Pigs
Exploratory Research Technique

• PG products are found in 98 of American
  households
• Cincinnati participants are happy to help in the
  name of research and to know their opinions are
  shaping PGs products
• Studies act as school fundraisers

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Focus Group Bloomsburg Retailing Viewed From
Three Distinct Perspectives
Exploratory Research Technique

• Older Consumers Working Consumers
• - limited expenditures - economy is
  causing minimum
• - buy basics purchases
• - sees average/good - sees limited variety
• variety - mobile, parking is inconvenient
• - captured in town - willing to travel to
  get it
• market
• College Student
• - spending limited amounts - waits
  to go home
• - sees poor variety - very selective
• - can walk to stores

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Focus Group Research In The Real World
Exploratory Research Technique

• Participants will bring misconceptions with them
  to the table
• Their feedback could be biased because of the
  Guinea Pig effect
• Increase in cynicism and suspicion about the
  value of the information and the intent of the
  researcher

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Exploratory Technique Sentence Completion
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Exploratory Research Leads to Hypothesis
Development
(a )Case Analysis (b ) Theory Literature (c)
Experts/ Management Experience (d ) Focus
Group Research
Research Purpose
Research Questions
Hypotheses
Research Design
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Observation Techniques
Examples of Descriptive Research

• Supermarket Scanners
• Nielsen People Meters
• Eye Tracking Sensors
• Mystery Shoppers
• Garbage Analysis

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What does your GARBAGE say about you?
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Experiments

• Hold all variables constant while
  manipulating (independent) variables of interest
  to measure their effect on dependent variables
• Objective cause effect
• (x)
  (y)

Marketplace Or Field
Laboratory
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The Search For Cause And Effect

• X . causes . Y
• Simplistic Price Sales
• (Independent) (Dependent)
• Complex A Price Sales
• B Product
• C Promotion
• D Phys. Distr.

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Thematic Apperception Test
WINE
WINE
7
55
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Major Survey Methods
TELEPHONE
E-MAIL/FAX
MAIL
PERSONAL
INTERVIEW
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Economic Cost
Survey Criteria
Flexibility
Source Bias
Sample Cooperation
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Phase 3Collecting the Data
Mail and Personal Online
Telephone Interview
Survey Classifications
Cross Sectional Longitudinal
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Questionable Questions
Measurement Techniques

• Disguised - Non disguised
• Disguised Question Wording Why do you suppose
  your neighbors children wear Jordache Jeans?
• Purpose Avoid Social Desirable Response(s)

• How many employees do you have broken down by
  sex?
• What do you usually have for lunch?

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Below Are Two Questions Asked of the Same 1,031
People, Asking Essentially the Same Thing.
Loaded Questions

• I would be disappointed Cuts in funding for
• if Congress cut its public television are
• funding for public justified. . . to reduce
• television. federal spending.
• Cuts would be . . .

6------Dont Know----------10
Not OK 37
Not OK 54
OK 40
OK 52
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Measurement
Research Limitations

• Measures are only as good as your ruler
• Example
• Moderate Alcohol Consumption
• American Standard 1 or 2 drinks per day
• Great Britain 3 drinks per day
• British drinks contain 2/3 the alcohol of U.S.
  drinks

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Ethical Behavior In Marketing Research

• Confidentiality
• Research Integrity
• Conflict of Interest
• Social Issues

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Ethics in Research

• Ultraviolet Ink
• A researcher asked to use ultraviolet ink on
  pre-coded mail questionnaires. The cover letter
  indicated the survey was anonymous, but he said
  he needed respondent identification to permit
  cross tabulations of the data.
• Approve Disapprove
• Research Directors 29 71
• Line Marketers 23 77

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Sampling Methods

• Target Market

• Population
• Sample Frame
• Types of Sampling
• Probability
• Non probability
• Sample Size

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Probability and Non-probabilitySampling Methods
random sample
Probability
Systematic
Stratified
Cluster
Area
Convenience
Non probability
Quota
Judgment
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Normal Distribution
MEAN
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Triple -S Disease(s)

• A self selected sample
• (Self serving study)
• (Small statistical samples)

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Data (Interpret-Analyze)
Information
Phase 4
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Data Analysis Guides

• - Validate Data Collection Process
• - Do analysis prior to looking at data
• - Avoid self justification
• - Participate in all facets of study
• Be creative Consider your audience
• Make Benchmark Comparisons with competitors (TQM)

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Graphical Distortion by Compressing the Vertical
Axis
Sales, Uncle Deweys Distillery. It appears that
sales are growing quite nicely.
250
200
Thousand of Cases
150
100
Sales, Uncle Deweys Distillery On second
thought, maybe his business is on the rocks.
1000 500 0
Thousand of Cases
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Graphic Distortion by Taking a Slice from the
Vertical Axis
Monthly patronage, Family Theater
1000 500 0
Number of patrons
May June July
The same theater patronage totals, but showing
a dramatic increase here
1000
Number of patrons
900
May June July
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Forward Research Report To Management For

• Action Non-Action

• Formal Written Document
• Report relevance, accuracy deficiencies
• Executive Summary
• Technical Report Contains More Detail

Clear Concise Complete
Report