King Fahd University of Petroleum

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King Fahd University of Petroleum
MineralsDepartment of Management and Marketing
MKT 345 - Marketing Researchby Dr. Alhassan G.
Abdul-Muhmin

• Lectures 1 2
• Introduction to Marketing Research and its Role
  in a Firm
• Reference Zikmund, Chapter 1

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LEARNING OUTCOMES

• At the end of the discussion you should be able
  to
• define marketing research
• identify and explain key concepts in the
  definition of marketing research
• explain the difference between basic and applied
  research
• list and explain the different ways in which
  marketing research serves an organization
• list the conditions under which research may not
  be conducted prior to a marketing decision
• identify the different kinds of marketing
  research suppliers in the global, GCC, and Saudi
  Arabia marketing research industry

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WHAT IS MARKETING RESEARCH?

• 1. A systematic and objective process of
  generating information to aid in marketing
  decisions (Zikmund 8e, p. 3)
• 2. The application of the scientific method in
  searching for the truth about marketing phenomena
  Zikmund Babin 9e, p. 3)

What keywords can be identified from these
definitions?
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THE KEY WORDS

• From Zikmund 8e, the key words are
• Information
• Process
• Systematic
• Objective
• Decisions
• From Zikmund Babin 9e, they are
• Scientific method
• Truth
• Marketing phenomena

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The Key Words

• Information
• The primary function of marketing research (MR)
  is to provide information, not just to collect
  data.
• Thus the MR function is also responsible for
  analyzing data collected, interpreting results,
  drawing conclusions, making recommendations, and
  communicating these to the decision maker.
• Decisions
• MR is usually conducted not just for the sake of
  doing research, but because the results will be
  used in decision making.
• Research helps the decision-maker by reducing the
  risk of making a wrong decision.

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The Key Words

• Process
• MR is a process consisting of distinct activity
  stages
• Decisions have to be made in each stage
• Systematic
• MR should be conducted systematically (i.e. in an
  orderly manner) NOT haphazardly (or in a
  disorganized manner)
• Objectivity
• MR should conducted objectively (i.e. without
  bias from the person doing the research) NOT
  subjectively (i.e. with the results depending on
  who is doing the research)

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The Key Words

• 6) The Scientific Method
• The scientific method is defined as the methods,
  techniques, and procedures used to ensure that
  research is conducted in a systematic and
  objective manner.
• Thus science is not only about mixing chemicals
  and observing what happens it is about being
  systematic and objective in trying to arrive at
  the truth about a phenomenon
• 7) Truth
• Also referred to as objective reality
• Facilitated by systematicity and objectivity in
  scientific inquiry
• 8) Marketing Phenomena
• What distinguishes marketing research from
  other social science research

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The Official A.M.A. Definition of Marketing
Research

• Marketing research is the function that links the
  consumer, customer, and public to the marketer
  through information - information used to make
  marketing decisions such as
• identify and define marketing opportunities and
  problems
• generate, refine, and evaluate marketing actions
• monitor marketing performance and
• improve understanding of marketing as a process
• Marketing research as a process
• specifies the information required to address
  these issues
• designs the method for collecting the
  information
• manages and implements the data collection
  process
• analyzes the results and
• communicates the findings and their implications
• (Footnote 11 for Chapter 1 on p. 796)

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CLASSIFICATION OF MARKETING RESEARCH

• There are several ways of classifying mkt
  research
• By application of research results
• basic vs applied research
• By focal research design
• exploratory, descriptive, or causal research
• By type of data collected
• qualitative or quantitative research
• By locus of problem
• problem identification or problem solving
  research,

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BASIC VS APPLIED RESEARCH

• Basic (or Pure) Research
• Research that is conducted to
• expand the boundaries of knowledge
• verify the acceptability of a given theory, or
• learn more about a certain concept
• The findings usually do not have immediate
  implications for marketing practice.
• Applied Research
• Research that is conducted to provide information
  to
• solve a real-life marketing problem, or
• make decisions about particular courses of
  marketing action
• Both basic and applied research use the
  scientific method

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THE ROLE OF MARKETING RESEARCH IN A FIRM

• MR is important in most business firms because it
  helps them to
• implement the marketing concept - the philosophy
  of modern marketing
• carry out strategic marketing - the practice of
  modern marketing

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1) The Role of MR in Implementing the Marketing
Concept

• The Marketing Concept - is a modern philosophical
  idea that identifies three components to
  successful marketing
• Consumer/Customer orientation
• Cross-functional integration
• Profit orientation ? Long run profitability
• Other key concepts in modern marketing are
• Customer Relationship Management (CRM) ? building
  and maintaining long-term relationships with
  valued customers
• Total Quality Management (TQM) focus on
  continuous, customer-driven quality improvements

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..Marketing Research and the Marketing Concept

• MR helps a firm to become customer oriented by
  providing information for the firm to
• identify customer needs
• determine ways to satisfy those needs
• measure customer satisfaction so the firm can
  improve its performance
• eliminate the commercialization of products that
  are technically exciting, but that do not satisfy
  customer needs.
• MR helps a firm to adopt a cross-functional
  integration by
• gathering market information, and
• communicating the information to all relevant
  departments
• MR information links all departments to each
  other just like a string links the beads of a
  rosary together.

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..Marketing Research and the Marketing Concept

• MR helps a firm to improve its profitability by
  providing information for
• sales and cost analyses
• selective targeting, etc
• MR helps a firm to implement CRM by
• gathering and storing customer-related
  information
• designing data-mining projects to better serve
  customers
• MR helps a firm to implement TQM by
• analyzing and bringing the customer perspective
  to quality improvement efforts
• collecting and analyzing information for
  bench-marking

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2) The Role of MR in Strategic Marketing

• Strategic Marketing - What marketing managers do
  to help chart the future strategic directions of
  their firms. It generally involves
• identifying and evaluating market opportunities
• analyzing market segments and selecting target
  markets
• planning and implementing the marketing programs
  (the marketing mix)
• analyzing marketing performance

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Role of Marketing Research in Strategic
Marketing Identifying and Evaluating Market
Opportunities

• MR provides information for
• diagnosing markets, e.g. changes in demographics,
  consumer tastes, preferences, etc
• estimating market potentials and forecasts
• evaluating market opportunities

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Role of Marketing Research in Strategic
Marketing Analyzing Market Segments and
Selecting Target Markets

• Marketing Research provides information to
  determine
• segment characteristics
• segment growth potential
• segment attractiveness, etc

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Role of Marketing Research in Strategic
Marketing Planning and Implementing Marketing
Programs

• MR provides information on all aspects of the 4Ps
• Product research (e.g. concept testing, product
  testing, brand name evaluation, etc)
• Pricing related information (e.g. competitive
  price levels, customers' price consciousness,
  effectiveness of price discounts, etc)
• Place-related information (e.g. effectiveness of
  alternative distribution channels, retail site
  location, optimum amount of shelf space, etc)
• Promotion-related information (e.g. effectiveness
  of different types of ads, sales promotion
  methods, message

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Role of Marketing Research in Strategic
Marketing Analyzing Market Performance

• Marketing Research provides information to
• determine market shares
• assess brand health
• assess customer satisfaction levels, etc.

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FACTORS AFFECTING DECISION TO CONDUCT OR NOT
CONDUCT MARKETING RESEARCH

• Time Constraints When there are time
  constraints to a decision research may not be
  conducted
• Availability of Data When data to help solve
  the problem or make the decision is already
  available internally research may not be
  conducted
• Nature of the Decision When the decision is
  tactical as opposed to strategic research may not
  be conducted
• Benefits vs. Costs When the cost of gathering
  the information exceeds its benefit in reducing
  the risk of a wrong decision research may not be
  conducted. The relevant questions to ask are
• Is the payoff from the research worth the
  investment?
• Will the information collected improve the
  quality of the decision enough to justify the
  expenditure?
• Is the proposed expenditure the best use of the
  funds?

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Determining When to (or Not to) Conduct Marketing
Research
Time Constraints
Availability of Data
Nature of the Decision
Benefits vs. Costs
Is sufficient time available?
Information already on hand inadequate?
Is the decision of strategic or tactical
importance?
Does the information value exceed the research
cost?
Conduct Marketing Research
Yes
Yes
Yes
Yes
No
No
No
No
Do Not Conduct Marketing Research
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MARKETING RESEARCH SUPPLIERS SERVICES
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Marketing Research Suppliers Services

• Full-service suppliers
• Research suppliers that contract for the entire
  ad hoc marketing research project of a client.
• Also typically provide
• Customized services Research services tailored
  to the needs of a specific client
• Syndicated services Standardized information
  that is of interest to many clients who are
  willing to pay a subscription to obtain the
  information, e.g. retail audit services
• Standardized services Typically involving
  development and use a unique methodology for
  investigating a phenomenon, e.g. TNS Tracker

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Marketing Research Suppliers Services

• Limited-service suppliers
• Research suppliers that specialize in particular
  research activities, such as
• Field interviewing services
• Coding and data entry services
• Analytical services
• Data analysis services
• Branded marketing research products
• etc

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