Conducting Marketing Research & Forecasting Demand

Vishnu Parmar, IBA University of Sindh, Jamshoro

The Marketing Research System

Marketing Research as the systematic design, collection, analysis and reporting of data and findings relevant to a specific marketing situation facing the company. Most large companies have their own Marketing Research Department Normally companies allocated budget is 1% to 2% of their sales
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The Marketing Research System

Categories of Marketing Research Firms 1. Syndicated Service Firms: Gather consumer and trade information and sell for a fee e.g. NCAER (National Council for Applied Economics Research) 2. Custom Marketing Research Firms: designed and carry out research studies for various clients based on specific briefs. E.g. LUMS, IBA, SZABIST
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The Marketing Research System

3. Specialty Line Marketing Research Firm: Specialized research services they may hire academics and freelancers, collecting data field, and preparing data analyses and reports for other firms. Companies can hire the services of a marketing research firm or conduct research in creative and affordable ways like Engaging Professors and MBA students or collecting secondary information by various mediums
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Figure 4.1: The Marketing Research Process

The Marketing Research Process

1. Defining the Problem, the Decision Alternatives, and the Research Objectives What is to be researched (the content, the scope)? Why is it to be researched (the decision that are to be made)?

The Marketing Research Process

2. Develop the Research Plan
This step involves decisions on the data sources, research approaches, research instruments, sampling plan and contact method (i) Data Sources: (a) Secondary Data (b) Primary Data

The Marketing Research Process

(ii) Research Approaches: Primary data can
be collected in five ways a) Observational Research

b) Ethnographic Research (how people live & work, to uncover unarticulated desires that might not surface in other way) c) Focus Group Research (6 or 10 people invited to spent few hours with a skilled moderator to discuss a product)

The Marketing Research Process

d) Survey Research
e) Behavioral Data
(for descriptive research, to learn about peoples knowledge, beliefs, preferences, and satisfaction) (many high income group do not buy expensive brands) (to capture cause and effect relationship by eliminating competing explanations of the observed findings)
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f) Experimental Research

The Marketing Research Process

Research Instruments (I) Questionnaires (II) Qualitative Measures

(unstructured measurement approaches that permit a range of possible responses)

(III)Technological Devices (occasionally use in marketing research. E.g. Galvanometer, Tachistoscope flashes etc)
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A. Closed-end Questions

Name

Description

Example

Dichotomous

A question with two possible answers.

In arranging this trip, did you personally phone American? Yes No

Multiple Choice

A question with three or more answers.

With whom are you traveling on this flight? No one Children only

Spouse

Business associates/friends/relatives

Spouse and children

An organized tour group

Likert scale

A statement with which the respondent shows the amount of agreement/ disagreement.

Small airlines generally give better service than large ones. Strongly Disagree Neither agree Agree Strongly disagree nor disagree agree

1_____

2 _____

3_____

4_____

5_____

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The Marketing Research Process

Sampling Plan
Sampling unit (who should be survey?) Sample size (How many people should be survey?) Sampling procedure (How should we choose the respondents?)

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Table 5.3: Probability and Nonprobability Samples

A. Probability Sample Simple random sample Every member of the population has an equal chance of selection The population is divided into mutually exclusive groups (such as age groups), and random samples are drawn from each group The population is divided into mutually exclusive groups (such as city blocks), and the researcher draws a sample of the groups to interview

Stratified random sample

Cluster (area) sample

Continued on next slide . . .

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Table 5.3: Probability and Nonprobability Samples (Continued)

B. Nonprobability Sample Convenience sample The researcher selects the most accessible population members The researcher selects population members who are good prospects for accurate information

Judgment sample

Quota sample

The researcher finds and interviews a prescribed number of people in each of several categories

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The Marketing Research Process

Contact Methods
Mail questionnaire Telephone interviewing Personal interviewing
Arranged interviews Intercept interviews Online methods
Click-stream Cookies Automated telephone surveys
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The Marketing Research Process

Step 3: Collect the Information Step 4: Analyze the Information Step 5: Present the Findings Step 6: Make the Decision
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The Seven Characteristics of Good Marketing Research

1. 2. 3. 4. 5. 6. 7. Scientific Method Research Creativity Multiple Methods Models Interdependence Value and Cost of Information Healthy Skepticism Ethical Marketing
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The Seven Characteristics of Good Marketing Research

1. Scientific method 2. Research creativity Effective marketing research uses the principles of the scientific method: careful observation, formulation of hypotheses, prediction, and testing. At its best, marketing research develops innovative ways to solve a problem: a clothing company catering to teenagers gave several young men video cameras, then used the videos for focus groups held in restaurants and other places teens frequent. Marketing researchers shy away from overreliance on any one method. They also recognize the value of using two or three methods to increase confidence in the results. See text for complete table
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3. Multiple methods

The Marketing Research Process

Overcoming Barriers to the Use of Marketing Research
A narrow conception of the research Uneven caliber of researchers Poor framing of the problem Late and occasionally erroneous findings Personality and presentational differences
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