MGM 301 1st EditionExam # 2 Study Guide Lectures: 14-21Lecture 14: (October 13th)What is marketing research? Explain the 5-step approach. Marketing research- the process of defining a marketing problem and opportunity, systematically collecting and analyzing information, and recommending actions5-Step ApproachStep 1: Define the Problem-Setting the research objectives:o Specific, measurable goals the decision maker seeks to achieve in conducting the marketing research o 3 main types of marketing research are:Exploratory research- provides ideas about a vague problemDescriptive research- generally involves trying to find the frequency with which something occurs or the extent of a relationship between two factorsCasual research- tries to determine the extent to which the change in one factor changes another one-Identify Possible Marketing Actions:o Measures of success- criteria or standards used in evaluating proposed solutions to the problemo Different research outcomes, based on the measure of success, lead to different marketing actionsStep 2: Develop the Research PlanSpecify Constraints:o Constraints- the restrictions placed on potential solutions to a problem; Ex: limitations on the time and money available to solve the problemIdentify the Data Needed for Marketing Actions:o Should focus on collecting data that will lead to effective marketing actionsDetermine How to Collect Datao Concepts- ideas about products or servicesTo find out about consumer reactions to a potential new product, marketing researchers frequently develop a new-product concept- a picture or verbal description of a product or service they might offer for saleo Methods- the approaches that can be used to collect data to solve all or part of a problemObserving people and asking them questions are the two main data collection methodsSpecial methods vital to marketing are sampling (selecting a group of distributors, customers, or prospects, asking them questions, and treating their answers as typical of all those in whom they are interested) and statistical inference (generalizes the results from the sample to much larger groups of distributors, customers, or prospects to help decide on a marketing action)Step 3: Collect Relevant InformationData- facts and figures related to the project; divided into two main points:o Secondary data- facts and figures that have already been recorded prior to the study at hand; can be internal or external depending on whether the data comes from inside or outside the organization needing the researcho Primary data- facts and figures that are newly collected for the projectSecondary Data: Internalo Internal records generally offer the most easily accessible marketing informationo Internal sources of secondary data may be divided into two related parts:Marketing input data- relate to the effort expended to make sales; rangefrom sales and advertising budgets and expenditures to salespeople’s call reports, which describe the number of sales callers per day, who wasvisited, and what was discussedMarketing outcome data- relate to the results of marketing efforts; involve accounting records on shipments and include sales and repeat sales, which can often be broken down by sales reps, industry, and geographic regionSecondary Data: Externalo Published data from outside the organizationo US Census Bureau publishes a variety of useful reports; collect data about race, sex, income, occupation, age, and education of individuals which marketers use to identify characteristics and trends of ultimate consumerso IRI’s InfoScan- tracking services that collect product sales and coupon/free-sample redemptions that have been scanned at the checkout counters of supermarket, drug, convenience, and mass merchandise retailerso Trade associations, universities, and business periodicals provide detailed data of value to market research and plannersAdvantages and disadvantages of Secondary Data:o Obtain secondary data first, then primary datao Two important advantages are:The tremendous time savings because the data have already been collected and published or exist internallyThe low cost, such as free or inexpensive Census reportso Disadvantages:Data may be out of date, especially if they are US census data collected only every 5 or 10 yearsThe definitions or categories might not be quite right for a researcher’s project; data may not be specific enough for the project or the age groups may not be rightPrimary Data: Watching Peopleo Observing people and asking them questions are the 2 principal ways to collect new or primary data for a marketing studyo Observational data- facts and figures obtained by watching, either mechanically or in person, how people actually behaveEx: mechanical observational data “people meter” measures what channel and program is tune in and who is watchingEx: personal methods companies hiring mystery shoppers to check on the quality and pricing of their products and the integrity of and customer service provided by their employeesEthnographic research- specialized observational approach in which trained observers seek to discover subtle behavioral and emotional reactions as consumers encounter products in their “natural use environment” such as their home or carCould also watch consumers in person or record them o Neuromarketing methods- using brain scanning to analyze the buying processesPrimary Data: Asking Peopleo Questionnaire data- facts and figures obtained by asking people about their attitudes, awareness, intentions, and behaviorsIndividual interview- involves a single researcher asking questions of onerespondent; expensive but lets you probe for additional ideas using follow-up questionsDepth interview- researchers ask lengthy, free-flowing kinds of questionsto probe for underlying ideas and feelings Focus groups- informal sessions of 6-10 past, present, or prospective customers in which a discussion leader or moderator, asks for opinions about the firm’s products and those of its competitors, including how they use these products and special needs they have that these products don’t addressPAGE 203Primary Data: Other Sourceso Social media conversation velocity, share of voice, and sentiment are tracked by electronic search engines that comb the Internet for consumers’ behaviors and “brand mentions” to calculate share of voice and determine whether