Chapter 1 Marketing Research From Data to Information to Action INTRODUCTION Marketing research is a broad and quite common activity THE PROBLEM MARKETERS NEED INFORMATION All organizations need information in order to accomplish their goals effectively Data Information Action Marketing research can take many forms but its basic functions are to 1 gather data and 2 transform the data into useful information that managers can use to make decisions The task of marketing is to create exchanges with customers that satisfy the needs of both the customer and the marketer To do this marketing managers focus on the four Ps product price placement and promotion Factors that affect the success of the marketing effort include other social actors competitors suppliers governmental agencies customers themselves and so on and societal trends in the external environment economic political and legal social natural technological and competitive trends Marketing research The organization s formal communication link with the environment Solid marketing research is becoming increasingly important as the world moves t a global economy Example the long success of McDonalds in the UK WHO DOES MARKETING RESEARCH The first real instance of marketing in the United States was in 1879 when advertising agency N W Ayer Son collected data on expected grain production for a client who produced agricultural machinery The three major categories of firms that conduct market research 1 producers of products and services 2 advertising agencies and 3 marketing research companies Producers of Products and Services Marketing research grew around WWII when firms figured out they could no longer sell all they could produce but had to gauge market needs and produce accordingly Organizations that produce products or deliver services for businesses or consumers often conduct research designed to develop and market their products and services Many companies use marketing research to track customer satisfaction and customer usage patterns Page 1 Advertising Agencies Advertising agencies often conduct research designed to help create and measure the effectiveness of advertising campaigns This may involve testing alternative approaches to the wording or graphics used in an ad or investigating the effectiveness of carious celebrity spokespersons Many agencies also do marketing research for their clients to determine the market potential of a proposed new product or the client s market share Ad agencies sometimes do research to better understand consumers and their interests and behaviors in order to serve their corporate clients Marketing Research Companies The U S is home to 15 of the top 25 largest market research firms in the world Worldwide total revenues for these firms exceed 18 7 billion Nielson Holdings N V U S is the 1 largest marketing research firm in the world It provides product movement data for grocery stores and drug stores also the popular TV ratings and Arbitron which measures U S radio audiences This is a syndicated service Syndicated research involves collecting certain information on a regular basis not custom designed for a particular client and selling it to multiple clients Firms can also specialize in custom designed research Some of these provide only a field service where they collect data and return the data collection instruments directly to the research sponsor Some are limited service firms which not only collect the data but also analyze them for the client Some are full service research suppliers which help the client in the design of the research as well as in collecting and analyzing data Other organizations that provide or conduct marketing research include government agencies trade associations and universities WHY STUDY MARKETING RESEARCH Some people will find it fun and directly relevant to their careers To learn to be a smarter consumer of research results To gain an appreciation of the process what it can and cannot do It is not perfect because it is full of opportunities for error It is a detailed process time consuming and requires great amounts of thought and effort It is also costly Page 2 THE MARKETING RESEARCH PROCESS Research process A general sequence of steps that can be followed when designing and conducting research The first and most important step is to define the marketing problem to be solved Only when the problem is precisely defined can research be designed to provide the needed information Next decide which research design exploratory descriptive or causal is appropriate If relatively little is known about the phenomenon to be investigated exploratory research is needed qualitative research If a problem is well defined and clearly states descriptive or causal research is needed quantitative research Descriptive research focuses on describing a population often emphasizing the frequency with which something occurs or to the extent to which two variables are related to one another The causal design often uses experiments to identify cause and effect relationships between variables Sometimes the information that a firm needs to solve its problem already exists in the form of secondary data or data that have already been collected for purpose other than the question at hand Such data may exist in the firm s own internal information system as purchase or customer data call reports from the sales force or orders from wholesalers Or it can come externally from government statistics trade association reports or data from a commercial research supplier Secondary data is less expensive and can be obtained and analyzed more quickly If good secondary data aren t available or don t fit the situation the researcher will collect primary data which are data collected specifically for the study Researchers must pick a method to be used for the study and then design the data collection forms to be used on the project Next comes the development of an appropriate sample The population is determined The particular subset of the population for who data are available is known as a sample Two basic types of sampling plans probability sample and nonprobability sample Next data collection can begin Then it is analyzed and interpreted Finally a written research report can be prepared that summarizes the research results and conclusions including graphical representation of the data These stages may not always happen in order Some steps can be carried out at the same time and decisions about
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