BUS-M 300 Lecture 3Outline of Last Lecture I. Review SlideII. Consumer Behaviora. The Decision ProcessOutline of Current Lecture I. Review SlideII. What is marketing research?III. Why do it?IV. Marketing Research ProcessCurrent Lecture-Review SlideoKnow the five steps to consumer decision makingoExtended, routine, and limited problem solvingoEvoked setsoHierarchy of needs: Where do marketers focus?oVAL’s lifestyle: know the different categoriesoHow do situational and social issues play a role?oHow do marketers reduce risks for consumers?-What is Marketing Research?oIt is the process of defining a marketing problem and opportunity, systematically collecting and analyzing information (data), and recommending actions. -Why do it?oIt is impossible to sell products or services that customers do not want. oLearning what customers want, and how to present it attractively, drives the need for marketing research. Reduces risks for the firmThese 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 ProcessoLinear in natureoStep 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:oA 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.oThe consultant suggested instead that the name might be the problem, not the advertising. oEducating consumers to the fact that Ha-Psu-Shu-Tse means “Red Corn” helped increase sales. oStep 2. Determining the Research PlanResearch Processes-Exploratory ResearchoExploratory 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?oExploratory 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 ResearchoDescriptive Research is often quantitative (measurement/numbers based) and takes many forms.oUses data to describe, show, or summarize data about something specificoCan be used to draw conclusions only about the exact persons inthe studyoTypes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 ResearchoCasual research is experiment based and used to determine an actual cause and effect relationship. oAn example would be observing the effects of advertisement on brain activity.oDoes 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 goodoStep 3. Collecting Relevant InformationSecondary Information-Internal Records(inside the firm)oMany company records are useful for research.oBudgets, personnel records, actual sales records and customer communication records, etc.oExample: Kroger may keep various records on distributors, customer survey results, and cost information-External Sources (outside the firm)oGovernment data sources (e.g. US census).oAnnual Reports (e.g. trade association records).oOther published informationAcademic source articlesGeneral sources (e.g. internet reports)Can include statistical data-Secondary Information Benefits and LimitationsoBenefits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.oLimitations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 LimitationsoLimitations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.oAdvantages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.oStep 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.oStep 5: Take Marketing ActionsMake marketing recommendations.Implement action recommendations.Evaluate