1market Research Introduction

AN OVERVIEW OF MARKETING RESEARCH

Learning Objectives • Define marketing research and speak intelligently about its • • • • • •

relevance to marketing Describe how marketing research relates to the marketing concept Tell why you should study marketing research Explains who conducts marketing research Name two classifications of research and distinguish between them Explain who uses marketing research Discuss the ethical responsibility of marketing researchers to society

Ask Yourself • Who really uses the results of the study? • Why did they conduct the study the way they did? • Why wasn’t the Internet used to collect the data?

Why Study Marketing Research? • Marketing Research: Systematic and objective planning,

gathering, recording, and analyzing of information to enhance the decision making of marketing managers. • Marketing: Tool used by managers to satisfy consumer desires. The AMA defines marketing as “the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives.” • Marketing Concept: Management philosophy stating that to satisfy organizational objectives, the wants and needs of target markets must be determined so that products can be created to satisfy those desires better than competitors do.

Who Does Marketing Research? Applied versus Basic Research • Research: Systematic and objective investigation of a subject or problem to discover relevant information or principles. • Basic research: Provides information about a phenomenon (does not solve a specific problem). • Applied research: Problem-specific research that focuses on helping managers resolve specific problems.

Top 10 Marketing Research Companies ESOMAR - 2003 1. VNU(Netherlands) - $3,048.3 million 2. TNS(UK) - $1,565.1 million 1. 2. 3. 4. 5. 6. 7. 8.

• •

TNS - $1,050.5 Million NFO – 514.6 Million

IMS Health Inc.(USA) - $1,381.8 million The Kantar Group(UK) – $1,002.1 million Gfk Group(Germany) - $673.6 million Ipsos Group(France) - $644.6 million Information Resources Inc.(USA)-$554.3 million Westat Inc.(USA) - $381.8 million Synovate(UK) - $357.7 million NOP world(UK) - $335.8 million

Evolution of Research and Marketing Research • Early days • Research has an extensive history. • 1800s • First formal practice of marketing research can be traced to the 1824 presidential race. • In 1879, the pioneering agency N.W. Ayer & Son used market research to solve marketing and advertising problems. • Early 1900s • In 1911, J. George Frederick set up his marketing research firm, the Business Bourse. • In 1926, important breakthrough in market research occurred with the early gathering and sorting of business and marketing data by the U.S. Department of Commerce.

Evolution of Research and Marketing Research – cont’d • Mid 1900s • American Management Association, American Association of Public

Opinion Research, Advertising Research Foundation contributed to the development of marketing research. • American Marketing Association • Formed in 1937. • 1963 study found that more than half of the 860 firms surveyed were organized after 1947, with two-thirds of the advertising agencies, publishing companies, and broadcasting firms established after that year. The computer, with its ability to analyze vast quantities of data, began to revolutionize marketing research. • Early 2000s • Personal computer introduced in early 1980s. Its speed and memory constantly increase and so do its marketing research capabilities.

Personal Computer Capabilities • • • • • • • • • •

Computer-aided personal interviewing Integrated survey packaging Adaptive survey packages Fast tabulations Online panel/databases Automated fieldwork administration Online coding/data entry Online surveying User-friendly analysis software Improved presentation of results

Marketing Research Companies • Syndicated Services: Full-service agencies which routinely collect information and report their findings to several clients or companies that subscribe to their service; data is not usually problem specific. • Standardized Research Services: Examines a particular aspect of the market in a unique way and uses a standard research method for different clients, allowing for comparisons between studies and across other evaluative standards. • Custom Houses: “Ad hoc services” that tailor their studies to the client’s needs.

Marketing Research Companies – cont’d • Independent Consultants: Offer expert knowledge and skills in specialized subjects. • Field Services: Collect data via interviews in the field. (A “field” is a place where information is collected.) • Coding and Data Entry Services: Edit collected surveys from respondents and code the responses. • Tabulation Houses: Quantitative specialists which perform statistical analyses and turn raw data into information that managers can use.

Marketing Research Companies Worldwide • Strong need for marketing research companies to exist throughout the world. • Quite a few market differences. • Thousands of marketing research organizations around the world conduct research and shape market strategies, but only a handful control the bulk of revenues for marketing, advertising, and public opinion research. • The top 25 firms had revenues of $8.3 billion in 1999.

Marketing Research Companies Worldwide – cont’d • Almost half of their revenues come from operations outside their home country. • Twelve of the top 25 global research organizations in 1999 were from the United States. • The largest conglomerate, ACNielsen Corporation, has revenues exceeding $1 billion and subsidiaries or branch offices in 110 countries.

Global Research is Similar and Different from U.S. Research Brad Frevert’s Four-Stage Research Process:

• Planning • What are the major objectives? • Who is the key client(s)? • Who has input on what? • Who will gather/interpret/use the findings? • Design • What cannot be standardized? Is it affordable? • Will it be actionable, and at what level? • Will it be comparable? • Should it be executed locally or centrally? • Execution • Interpretation

USERS OF MARKETING RESEARCH Companies with Formal Departments (%) Health Services Manufacturers of Industrial Products Financial Services Utilities Advertising Agencies Nonprofit Publishing and Broadcasting Manufacturers of Consumer Products Retailing/Wholesaling 0

20

40

60

80

100

Who Uses Marketing Research? • Company lacking information about its markets. • study reveals the average marketing research budget was $1.9 million(aprx.) for marketing research departments. • Consumer and industrial manufacturers, advertising agencies, and retailers/wholesalers spend about 1.2% of sales on marketing research. Financial services, publishers/broadcasters, health services, and utilities spend about 0.6%.

Percentage of Companies with Formal Marketing Research Department 1. 2. 3. 4. 5. 6. 7. 8. 9.

Retailing/Wholesaling - 91 Manufacturers of Consumer Products - 89 Publishing and Broadcasting - 86 Nonprofit Institutions - 85 Advertising Agencies - 79 Utilities - 79 Financial Services - 76 Manufacturers of Industrial Products - 66 Health Services - 43

Entities of Marketing • Marketing Manager is

responsible for making the decisions that will help the company achieve its objectives in its target markets. • Marketing Management is responsible for analyzing, planning, implementation, and control of programs designed to create, build, and maintain beneficial exchanges with target buyers for the purpose of achieving organizational objectives. • The Decision-Making Process: Recognize the problem or opportunity, define the problem or opportunity, search for feasible courses of action, evaluate the options and select the optimal course, implement the plan, and evaluate the results.

Responsibilities of Market Researcher • Ethics : General nature of morals and of specific moral choices: moral philosophy and the rules or standards governing the conduct of the members of a profession. • Business ethics: “Moral principles and standards that guide behavior in the world of business.” • Social responsibility: Obligation a business assumes toward society.

• Economic responsibilities: Produce goods and services society needs and wants at a price that can perpetuate the business and satisfy its obligations to investors.

Do Marketing Researchers Have an Ethical Responsibility? • Legal responsibilities: Laws that businesses must obey. • Ethical responsibilities: Behaviors or activities expected of business by society. • Voluntary responsibilities: Behaviors and activities society desires and business values dictate.

• CASRO: Council of American Survey Research

Organizations – based in the United States. National trade association for commercial research firms. 170 member firms from United States. • ESOMAR: European Society for Opinion and Marketing Research - based in Amsterdam, Netherlands. Society of over 4,000 individual members in 100 countries.

DECISION TIME! How vital do you think business ethics and social responsibility are to companies today? What responsibilities do you believe marketing providers have to be ethical and socially responsible? What if such behavior hurts company profits?

Training for Jobs in Marketing Research • Marketing research courses at universities and training institutes • Internships with research organizations • Cooperative education with research organizations • Working in some capacity with marketing departments within businesses

End of Presentation