Marketing Research and

Marketing Analytics

Sapna Popli
Professor of Marketing
Session 1-2

What do we know about MR

and MA ?

Can you help Dr. Anand?

Can you help Dr
Can you help Dr. Anand
Workings for Dr. Anand

Marketing Research

1. What is MR?
Definition

MR is the systematic and objective identification, collection,

analysis, dissemination and use of information for the
purpose of improving decision making related to the
identification and solution of problems and opportunities in
marketing
Market Research
Specifies the information necessary to address these
issues
Manages and implements the data collection process
Analyzes the results
Communicates the findings and their implications
Helps managers use this information to make decisions

Nature of Research
Exploratory

Conclusive
Descriptive
Sampling Survey

Experimental
Product Test, Matched Panel

Method of Information Collection

Quantitative

Combinations of
these methods are
used frequently to
address different
research objectives

Qualitative
Panel
Tracking

Mystery Shopping
Observation
Ethnography

Market Research can be classified in various ways

Type of Services
Customized

Syndicated
I Cube (Internet in India), TGI
(Target Group Index)

Marketing Mix being researched

Product

Price

Pack

Sector being researched

FMCG

Finance
Industrial
Media

Social
Automotive
Healthcare
7

2. Why do organisations
need it?
Assists

in making business decisions & diagnose specific

marketing problems & questions
Who is my consumer?
Consumers dreams & aspirations?their lifestyle?
Explicit needs and latent needs? therefore, need gaps to be tapped?
Sources of influence?
Relevance / credibility of the offering?
Effectiveness of marketing tools?
Who are my competitors?
National / InternationalOrganised / unorganised
Other potential competitor categories? E.g.Juices for Cola
and many more

Merging

roles: Marketers are becoming more research savvy

and researchers also participate in marketing decision making

Role of Marketing Research in

Decision Making
Customer Groups
Consumers
Employees
Shareholders
Suppliers

Controllable
Marketing
Variables
Product
Pricing
Promotion
Distribution

MARKETING
RESEARCH

Marketing
Assessing
Providing
Information Information Decision
Making
Needs

Marketing Managers
Market Segmentation
Target Market Selection
Marketing Programs
Performance & Control

Uncontrollable
Environmental
Factors
Economy
Technology
Laws &
Regulations
Social &
Cultural Factors
Political Factors

3. Who conducts MR?

Internal
Suppliers
of MR
Within the firm: HUL,
P&G, Coca Cola, GM

External
External suppliers of market research
agencies like Neilsen, IMRB International,
TNS

Full Service
Syndicated
Standardized
Customized
Internet

Team

Limited
Service
Field Services
Coding & Data Entry
Analytical Services
Data Analysis
Branded Products &
Services

comprised of Researchers, Field executives, Analysts

4. Where is it conducted?
Depending

on the research design & methodology, research may

be conducted
as personal face to face interviews
At the respondents home
At the respondents office
Outside: on the street-side / shopping complexes / malls / restaurants /

office complexes

at a hall / venue in a central location where respondents are

invited
on the phone
online, through the internet
via mail, through mailer surveys

The processthe way

6. Report
Preparation &
Presentation

1. Problem Definition: Brief

received from the Client

2. Develop Approach
to Problem: Creating a
proposal

MR
PROCE
S

3. Research Design Formulation:

Methodology, Questionnaire
Preparation & Sampling

5. Data Preparation
& Analysis

4. Fieldwork Data
Collection
Briefing Research to Field

Field Briefing + Mock

Interviews Face to
Face

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Examples
Assess the brand performance for a new variant of chips : i.e. to
gauge
Brand awareness / saliency
Advertising awareness

Brand image / perception

Disposition towards the brand trial, usage & future intention to purchase

Identify the market for microwave ovens so that I can position

my brand accordingly: i.e. a usage & attitude study

Explore Indian cooking habits

Attitudes towards health, fitness, nutrition
Attitudes towards cookingmicrowaves vs. gas stove
Lifestyle of families in metros: working? Have a cook? How free time
spent? Leisure activities undertaken
Other white goods owned?
Demographics: education, occupation, age, SEC, marital status, stage in
the life cycle

EXAMPLE: Launching a
school
An education company wants to launch premium schools in select small cities
of North India - Amritsar, Patiala, Meerut etc. It had 2 options:
School M: a new, modern, technology-savvy school with state of the art
facilities focusing on talent development and nurturing the potential of
each student
School D: to be launched as a tie-up with a renowned convent education
institution. Focus on discipline, heritage, tradition; with the same
technological facilities available
Since it is launching premium schools in smaller cities, it wants to understand
the market in terms of their needs & ability to pay
Research objective was to assess the acceptability of the 2 school concepts in
the proposed cities and therefore recommend which one would work where
the expectations of parents & teachers from a school
need gaps existing amongst the current options available
the perception of school-concepts, esp. the name (new vs. established)
the price - school fee that parents were willing to pay

Marketing Analytics

If you cant measure it,

you cant manage it.

Results That Increase Revenue

More

sales leads

Increased

closing ratio, conversion rate (a higher percentage of leads become

customers)

Shorter
More

sales cycles

new customers

Larger

sales to existing customers, consisting of:

More units per sale, or

Higher-ticket products or services, or
Up-sells (sales
More-frequent

of related products or services)

sales to existing customers

Longer

customer relationships or reduced attrition or re-activation of inactive

customers

Additional

distributors or licensees for your products or services

Additional

suppliers whose products or services you can resell profitably

Results That Reduce Expenses

Sales

of higher-margin products or services (reduced cost of goods sold)

Fewer

product returns or fewer refunds for service errors

Avoidance
Quicker

of regulatory action against your company

or less-expensive resolution of regulatory challenges

Avoidance

of boycotts, vandalism and sabotage

Prevention

of crime against employees

Reduced
Fewer

shrinkage

accidents

Increased
Lower

productivity per employee (reduced labor cost per revenue rupee)

recruiting costs

Reduced

employee turnover

What results are we

looking for?
Marketing

programs, including social media, advertising,

promotion and public relations (PR) programs, can
produce three types of results:

Awareness:

The target audience knows something about

your company, product or service.

Perception:

The target audience thinks about your

company, product or service in a certain way.

Behavior:

The target audience does something

(e.g., buys your product or service), or refrains
from doing something (e.g., doesnt boycott your
company).

What Is a Metric?
A

metric is a measuring system that

quantifies a trend, dynamic, or
characteristic.
In virtually all disciplines,
practitioners use metrics to explain
phenomena, diagnose causes, share
findings, and project the results of
future events.
Throughout the worlds of science,
business, and government, metrics

Marketing Metrics
Metrics

the science of measuring

; Measurable performance standards
are called metrics, which are the
cornerstone of accountability
Marketing Analyticsare tools that
produceMarketing
Metrics(performance metrics) that
help marketers analyze and improve
marketing performance.

What metrics can tell us..

Health

Marketing

Analytics

Metrics

What does it tell

Temperature

98.6

Normal body
temperature

Blood Pressure 120/80

Normal BP

Pulse

65

Pulse rate is normal

Market Dev.
Index

40

Only 40% of the

market potential has
been developed

Customer
Retention

67%

Losing 33% of our

customers each year

Marketing ROI

150%

Rs 1.50 profit per Rs 1

of marketing and sales
expense

Some Marketing
Metrics..

Customer Retention
A

customer retention of 67 percent is a marketing metric

derived from the following marketing analytic.

Customer

Retention = (Customers Retained/Total

Customers at the Start of Year ) * 100

CR

=( 67,000 / 100,000) x 100%= 67%

This

business retains 67 percent of its customer base each

year. To maintain customer base of 100,000 they needed to
attract 33,000 new customers each year. This is expensive
since the cost of acquiring a new customer can be 5 to 10
times more expense that the cost of retaining a customer. If the
company is able to improve this metric performance to 75
percent, they will reduce the cost of acquiring replacement
customers by a considerable amount.

Customer Acquisition Cost (CAC)

Sales

and Marketing cost add up all the

program, social media, advertising spend, plus
salaries, plus commissions and bonuses, plus
overhead -- in a time period, divided by the
number of new customers in that time period.
That time period,, could be a month, a quarter,
or a year.
For instance, if you spent Rs. 300,000 on Sales
and Marketing in a month and added 30
customers that month, then your CAC is
Rs.10,000.

Time to Payback CAC

This is the number of months it takes you to earn back the

CAC you spent to get a new customer.

You

take the CAC and divide by margin-adjusted revenue per

month for the average new customer you just signed up, and
the resulting number is the number of months to payback.

In industries where customers pay one time upfront, this metric

is less relevant because the upfront payment should be greater
than the CAC, otherwise you are losing money on every
customer.

On

the other hand, in industries where customers pay a

monthly or annual fee, you usually want the Payback Time to be
under 12 months, meaning that you become profitable on a
new customer in under a year, and then after that you start
making money.

Market Share
Market

share is the percentage of a

market (defined in terms of either units
or revenue accounted for by a specific
entity.
Unit Market Share: The units sold by a
particular company as a percentage of
total market sales, measured in the
same units.
Unit Market Share%=Unit Sales#/Total
Market Unit Sales#

Relative Market Share

Relative

market share indexes a firms or a

brands market share against that of its
leading competitor.
These metrics are useful in comparing a
firms or a brands relative position across
different markets and in evaluating the type
and degree of competition in those markets.
RMS = Brands Market Share (Rs,#)/
Largest Competitors Market Share
(Rs,#)

Employee Retention
Rates
Employee

retention implies that your marketing team

focuses on internal audiences, as well as boosts
overall company perception. Good retention rates vary
by industry, but impact the bottom line across the
board in terms of the internal resources needed to
interview, hire, onboard and develop new employees.
To find your companys retention rate, look at number
of employees last year at this time. For example, lets
say company ABC had 500 employees. After a full
year, 350 of those original 500 employees are still
working at company ABC. The retention rate is 350 /
500, or 70% (which isnt very good..30% people
left??).

Customer Satisfaction
The number of customers, or percentage of
total customers, whose reported
experience with a firm, its products, or its
services (ratings) exceeds specified
satisfaction goals.
Generally measured on a 15 scale, in
which customers declare their satisfaction
in general
or specific
attributes.
1 with brand
2
3
4
5

Very
Dissatisfie
d

Somewhat
Dissatisfie
d

Neither
Satisfied
nor
Dissatisfie
d

Satisfied

Very
Satisfied

Net Promoter Score

Net Promoter Score (NPS):is based on

the theory that one question can measure
customer perception and performance.
How likely is it that you would
recommend Company ABC to a friend or
colleague

10

Not at all likely

Extremely Likely

NPS= Percentage of promoters(9/10)percentage of detractors(1-6)

Measuring performance Southwest Airlines