BUS M 300 Lecture 3 Outline of Last Lecture I Review Slide II Consumer Behavior a The Decision Process Outline of Current Lecture I Review Slide II What is marketing research III Why do it IV Marketing Research Process Current Lecture Review Slide o Know the five steps to consumer decision making o Extended routine and limited problem solving o Evoked sets o Hierarchy of needs Where do marketers focus o VAL s lifestyle know the different categories o How do situational and social issues play a role o How do marketers reduce risks for consumers What is Marketing Research o It is the process of defining a marketing problem and opportunity systematically collecting and analyzing information data and recommending actions Why do it o It is impossible to sell products or services that customers do not want o Learning what customers want and how to present it attractively drives the need for marketing research Reduces risks for the firm These notes represent a detailed interpretation of the professor s lecture GradeBuddy is best used as a supplement to your own notes not as a substitute Marketing Research Process o Linear in nature o Step 1 Defining the Problem Research that does not have a specific actionable purpose is a waste of time Know what you need to know Examples Awareness preference competitive strengths vulnerabilities Tendency to Switch Target Characteristics Things to Consider Don t confuse symptoms with the real problem In marketing falling sales are a symptom that some aspect of the marketing mix that is not working properly Sales may be falling because price competition has intensified because buyer preferences have changed or they may not understand what the product is Example o A fried Indian bread mix named Ha Psu Shu Tse one of the few Native American Food products sold in the United States was experiencing poor sales The company felt that the product was not being advertised heavily enough and hired a consultant to develop a new advertising theme o The consultant suggested instead that the name might be the problem not the advertising o Educating consumers to the fact that Ha Psu Shu Tse means Red Corn helped increase sales o Step 2 Determining the Research Plan Research Processes Exploratory Research o Exploratory research is not designed to provide conclusions but to investigate or explore possible problems or opportunities Would people be interested in our new product or idea Will consumer buy electric automobiles If we add new flavor lines to our ice cream will sales volume increase o Exploratory research is often qualitative words based in nature and can take a variety of forms Focus groups group interviews Projective techniques use scenarios to get people s attention Case studies the observation of other firms or organizations Ethnography observing consumers in their natural setting Consumer Interviews one on one interviews Descriptive Research o Descriptive Research is often quantitative measurement numbers based and takes many forms o Uses data to describe show or summarize data about something specific o Can be used to draw conclusions only about the exact persons in the study o Types Personal Observation A researcher observes traffic counts in a department store Unobtrusive Measures Examine public records to find info Mechanical Observations Optical scanners in the grocery store Casual Research o Casual research is experiment based and used to determine an actual cause and effect relationship o An example would be observing the effects of advertisement on brain activity o Does the research paint the truth about the data collected Validity Did the research measure what it was intended to measure Reliability Are the research techniques free of errors Representativeness Is the group measured similar to the population Must be all three for an experiment to be good o Step 3 Collecting Relevant Information Secondary Information Internal Records inside the firm o Many company records are useful for research o Budgets personnel records actual sales records and customer communication records etc o Example Kroger may keep various records on distributors customer survey results and cost information External Sources outside the firm o Government data sources e g US census o Annual Reports e g trade association records o Other published information Academic source articles General sources e g internet reports Can include statistical data Secondary Information Benefits and Limitations o Benefits Low cost Less effort expended in process Less time taken Sometimes more accurate than primary data Some information can be obtained only from secondary data o Limitations May be originally collected for some other purpose No control over the data collection May not be reported in required form May not be very accurate or is outdated May not meet data requirements A number of assumptions have been made Primary Information Data Observational data watching people Questionnaire data asking people Experiments Primary Information Data Benefits and Limitations o Limitations High cost Can be inconvenient and time intense in terms of collecting data Can be less accurate than secondary data especially if the researcher influenced people who participated in the study o Advantages More control over the data collection thus greater certainty that the information was not poorly collected by others More current to today May be more applicable to a company s specific question o Step 4 Develop findings also Reporting results A Marketing Information System continuously gathers sorts analyzes and distributes relevant and timely marketing information to its managers This marketing information includes Internal data such as sales records customer lists inventories costs and external data on competition and demographic cultural and social trends o Step 5 Take Marketing Actions Make marketing recommendations Implement action recommendations Evaluate results