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An organizational function and a set of processes for creating, communicating and delivering value to customers, and for managing customer relationships in ways that benefit the organization and its stakeholders

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Marketing

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Business philosophy that holds that the key to achieving organizational goals consists of the company's being more effective than competitors in creating, delivering, and communicating customer value to its chosen markets

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Marketing Concept

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Consists of: -Selecting a Segment of the market as the company's target market. -Designing the proper "mix": of the product/service, price, promotion, and distribution system to meet the wants and needs of the consumers within the target market. :

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Marketing Strategy

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The process of designing, gathering, analyzing, and reporting information that may be used to solve a specific marketing problem.

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Marketing Research

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Same as marketing research, only applies to a particular market (geographic area).

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Market Research

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Studies that identify marketing opportunities and problems: - Market-demand determination - Market Segments identification - Marketing audits- SWOT analysis

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Uses of Marketing Research- identify marketing opportunities and problems

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Studies that generate, refine, and evaluate potential marketing actions: - Proposed marketing-mix evaluation testing - New-product prototype testing - Advertising pretesting

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Uses of Marketing Research- Generate, refine, and evaluate potential marketing actions

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An MIS is a structure consisting of people, equipment, and procedures to gather, sort, analyze, evaluate, and distribute needed, timely, and accurate information to marketing decision makers.

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The Marketing Information System (MIS)

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-Internal Reports System- includes billing, inventory, and receivables. -Marketing Intelligence System- sources used by managers to obtain information, includes newspapers and magazines. -Marketing Decision Support System (DSS)- tools used by managers to make decisions, including break-even analysis and regression models. -Marketing Research System- information collected about specific situations that the other components misses.

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Components of an MIS

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When is marketing research NOT needed? -The information is already available. -Decisions must be made now. -We can't afford research. -Costs outweigh the value of marketing research.

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Marketing Research Process: Step 1 Establish the need for Marketing Research

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This is the most important of the 11 steps (assuming we've decided to do marketing research!) If the problem is incorrectly defined, all else is wasted effort. Problems may be either specific or general.

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Marketing Research Process: Step 2 Define the Problem

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-A problem (or threat) exists when a gap exists between what was supposed to happen and what did happen (e.g., missed sales target) -An opportunity exists when there is a gap between what did happen and what could have happened (e.g., not catering to increased health consciousness of customers)

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Two Sources of Problems

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Research objectives, when achieved, provide the information necessary to solve the problem identified in step 2. Research objectives state what the researchers must do to collect the information (via what format, which method, from whom) needed for solving the problem.

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Marketing Research Process: Step 3 Establish Research Objectives

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3 Types of Research Designs -Exploratory Research (many different types): collecting information in an unstructured and informal manner. -Descriptive Research (large sample surveys) refers to a set of methods and procedures describing marketing variables, describes consumers' attitude -Causal Research (experiments): allows isolation of causes and effects.

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Marketing Research Process: Step 4 Determine Research Design

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Primary information: information collected specifically for the problem at hand Secondary information: information already collected, should be sought first to save money

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Marketing Research Process: Step 5 Identify Information Types and Sources

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Secondary data is relatively easy to access; primary data is more complex. Three main choices for primary data: -Have a person ask questions -Use computer assisted method -Allow respondents to answer questions themselves without assistance Combination of the above three

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Marketing Research Process: Step 6 Determine Methods of Accessing Data

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Questionnaire must be worded objectively, clearly, and without bias in order to communicate with respondents. Software programs are available to assist marketing researchers in preparing questionnaire forms. Examples: -Qualtrics -Surveymonkey

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Marketing Research Process: Step 7: Design Data Collection Forms

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Sample plan refers to the process used to select units from the population to be included in the sample. Gives you representativeness! Sample size refers to determining how many units of the population should be included in the sample. Gives you accuracy! Errors in the above are called Sampling Errors

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Marketing Research Process: Step 8 Determine Sample Plan and Size

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Data collection is very important because, regardless of the data analysis methods used, data analysis cannot fix bad data. Errors in data collection are called non-sampling errors: -Data collection errors may be attributed to field workers or respondents. -Researchers must know the sources of these errors and the controls to minimize them.

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Marketing Research Process: Step 9 Collect Data

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Data analysis -involves entering data into computer files, inspecting data for errors, and running tabulations and various statistical tests. Data cleaning -process by which raw data are checked to verify that the data have been correctly inputted from the data collection form to the computer software program.

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Marketing Research Process: Step 10 Analyze Data

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This last step's importance cannot be overstated because it is the report, or its presentation, that properly communicates the results to the client. Preparing and presenting the marketing research report is very important because, often, this is the only record of the research project for the client.

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Marketing Research Process: Step 11 Prepare and Present the Final Research Report

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-Marketing researchers should speed up marketing research by using IT. -Marketing researchers should take an integrative approach...avoid being "silos" of isolated information. -Marketing researchers should expand their strategic impact...get away from standard reports and get involved in strategic issues. -Other criticisms - lack of creativity, too survey oriented, lack of understanding of real problems, lack of concern for respondents.

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Challenges to the Marketing Research Industry

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The PRC (Professional Researcher Certification) represents certification of professionals in the marketing research industry. Started in 2005 by the Marketing Research Association

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Suggested Improvements: Research Certification

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Ethics: may be defined as a field of inquiry in to what behaviors are deemed appropriate under certain circumstances as prescribed by codes of behavior that are set by society. Society determines what is ethical and not ethical.

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Ethics and Marketing Research

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-Should not work for competing clients -Should not divulge any aspects of the research to third parties -Should not suggest research that is not needed by the client -Should not misrepresent and omit pertinent research data -Should treat respondents fairly

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Ethical Issues: Marketing Researchers

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-Respondent cooperation has been going down Marketing researchers should: -Eliminate or keep deception to a minimum -If promised, guarantee anonymity or confidentiality -Fight invasions of privacy such as telemarketing and SPAM

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Ethical Issues: Respondents

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-Marketing research companies are making greater use of panels -Recruiting respondents who agree to participate in future studies

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Panels

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Two competing ethical philosophies: Deontology: is concerned with the rights of the individual. If the rights of the individual are violated, then the behavior is not ethical. Teleology: analyzes a particular behavior in terms of its benefits and costs to society. If there are individual costs, but group benefits are greater, then there are net gains and the behavior is judged to be ethical.

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Why are Ethical Issues Problematic?

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"Problems" are situations calling for managers to make choices among alternatives. Managers make decisions because they have a problem. With the right information, managers can choose the correct decision alternative.

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Marketing Problem

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Research objectives state specifically what information is needed in order to allow the manager to select the correct decision alternative to address the problem. -Properly defining the problem is the most important step in the marketing research process. -If the wrong problem is defined, all the remaining steps in the marketing research process are wrong.

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Research Objectives

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Two sources of problems: A problem (or threat) exists when a gap exists between what was supposed to happen and what did happen (e.g., missed sales target) An opportunity exists when there is a gap between what did happen and what could have happened (e.g., not catering to increased health consciousness of customers)

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Defining the Problem

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To recognize a problem, managers must be knowledgeable of objectives and actual performance. There must be a control system in place which spots gaps between objectives and performance. To recognize opportunities, managers must have an opportunity identification system.

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Recognizing the Problem

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Symptoms are changes in the level of some key variable being monitored by the control system that measures the achievement of an objective. The role of the symptom is to alert management to a problem; there is a gap between what should be happening (i.e., is expected to happen) and what is happening.

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The Role of Symptoms in Problem Recognition

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Researchers should ensure managers are defining the problem correctly. This is particularly true when the manager has already defined the problem in very specific terms. Researchers sometimes take additional investigations, known as a "situation analysis," to ensure the problem is adequately defined.

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Problem Recognition

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-ITBs are Invitations to Bid. -RFPs are Requests for Proposals. -When ITBs and RFPs are issued, management has already defined the problem. -Phony ITBs and RFPs are ethical problems in the marketing research industry

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Problem Recognition: The Role of ITBs and RFPs

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-Once symptoms have been validated, it is important to identify ALL POSSIBLE causes for the symptoms. -The researcher and the manager should reduce ALL possible causes to PROBABLE causes.

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Identification of Causes

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-Essentially involves listing decision alternatives -Managers should anticipate consequences of each decision alternative ... how well will it reduce the symptom? -What assumptions are being made in determining the consequences of the decision alternatives?

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Specification of the Decision

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Assess the information state. Can managers be absolutely certain they have the information needed to support their assumptions? If so, there is no need for marketing research. However, if there are information "gaps," research objectives should be specified which will provide the information needed to close these gaps.

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Consequences of Decision Alternatives

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Stating the research objective is extremely important, for it defines what information will be collected from whom and in what format. The key assessment to be made of the research objective is: If this information, as stated in the research objective, is provided, can a decision alternative be selected?

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Information needed for Selecting Decision Alternative

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-Be precise, detailed, and clear -Specify from whom the information will be collected -Specify what construct(s) (e.g., loyalty, awareness, knowledge, satisfaction, intentions, attitudes, etc.) will be measured -Specify the unit of measurement (operational definition) (e.g., 3 7-point items for measuring brand awareness).

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Research Objectives should be

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An action standard is the pre-designation in a research objective of some quantity of the attribute or characteristic being measured that must be achieved in order for a predetermined action to take place. The purpose of the action standard is to define what action will be taken given the results of the research findings. Example: If less than 15% of the population is aware of our product, we will change advertising agencies.

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Action Standards

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A marketing research proposal is a formal document prepared by the researcher; it serves three important functions: 1) states the problem 2) specifies the research objectives 3) details the research method proposed by the researcher to accomplish the research objectives Proposals also contain 4) a timetable 5) budget

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Marketing Research Proposal

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-Research design is a master plan that specifies the methods and procedures for collecting and analyzing the information needed for addressing the marketing research problem. -There are basic marketing research designs that can be successfully matched to given problems and research objectives. -The choice of the most appropriate design depends largely on the objectives of the research and how much is known about the problem and research objectives.

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Research Design

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To gain background information,to define terms, to clarify problems and hypotheses, to establish research priorities. -Secondary Data Analysis -Experience Surveys -Case Analysis -Focus Groups -Projective Techniques

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Types of Research Designs- Exploratory

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Unstructured, spontaneous discussion with a small group of people, gains information about research problem.

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Focus Groups

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-Fresh Ideas -Ability to observe participants -Wide variety of issues covered - Easy to get special respondent groups (lawyers, doctors) - Good for "describe" research objectives

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Focus Groups Advantages

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- Low Representativeness of participants - Interpretation sometimes difficult - High cost per participant - bad for quantitative research

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Focus Groups Doisadvantages

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Projective techniques: participants are placed in (projected into) simulated activities in the hopes that they will divulge things about themselves that they might not reveal directly. -Word association test -Sentence completion -Cartoon or balloon test -Role-playing activity

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Projective Techniques

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-Descriptive research is undertaken to describe answers to questions of who, what, where, when, and how. -Descriptive research is desirable when we wish to project a study's findings to a larger population, if the study's sample is representative.

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Descriptive Research

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-Measure units from a sample of the population at only one point in time. :Sample surveys: are cross-sectional studies whose samples are drawn in such a way as to be representative of a specific population. -take "snapshots" of the population at a point in time.

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Descriptive Research- Cross-Sectional Studies

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-Repeatedly measure the same sample units of a population over time -Often make use of a panel which represents sample units who have agreed to answer questions at periodic intervals -Take "videos" of the population over a period of time -Ability to detect changes and higher accuracy than Cross-Sectional studies

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Descriptive Research- Longitudinal Studies

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-Ask panel members the same questions on each round of measurement. -They are used quite differently from discontinuous panels in that one may use data from continuous panels to gain insights into changes in consumers' purchases, attitudes, etc. For example, brand switching studies are used to illustrate how consumers change brands, and market-tracking studies track some variable of interest over time.

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Marketing Research Panels- Continuous Panels

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-Vary questions from one round to the next. -They are sometimes referred to as omnibus ("including or covering many things or classes") -Can provide information that may be quickly accessed for a wide variety of purposes

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Marketing Research Panels- Discontinuous Panels

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-Causality may be thought of as understanding a phenomenon in terms of conditional statements of the form "If x, then y." (Why?) Example: if "price is lowered," then "sales will be higher." Example: if "shelf display is simplified," then "customers will find it easier to make selections." Causal studies are conducted through the use of experiments.

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Casual Research

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An experiment is defined as manipulating an independent variable to see how it affects a dependent variable, while also controlling the effects of additional extraneous variables.

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Experimental Studies

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Variables which the researcher has control over and wishes to manipulate A.k.a, the treatment or causal variables Examples: level of ad expenditure (high vs. low); type of ad appeal (informative vs. humorous); price (low vs. high); etc.

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Independent Variables

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Variables that are believed to be affected by the independent variables. A.k.a, the effect or outcome variables Examples: sales, ad recall, purchase intent, etc.

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Dependent Variables

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Experimental design is a procedure for creating an experimental setting such that a change in a dependent variable may be attributed solely to the change in an independent variable and not due to changes in extraneous variables. An experimental design specifies: -The test units (e.g., study participants) and how these units are to be assigned to control and experimental groups -Which independent variables are to be manipulated -Which dependent variables are to be measured -How potential extraneous variables are to be controlled.

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Experimental Design

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Randomization- refers to the random assignment of test units to experimental and control groups so as to minimize the influence of extraneous variables. Matching- involves comparing test units on a set of key extraneous variables before assigning them to the treatment conditions. Statistical control- involves measuring the extraneous variables and adjusting for their effects through statistical analysis

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Controlling Extraneous Variables

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O = measurement of a dependent variable X = manipulation, or change, of an independent variable R = random assignment of subjects to experimental and control groups E = experimental effect (Difference of dependent variable after changes in Independent variable)

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Symbols of Experimental Design

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Pre-test refers to the measurement of the dependent variable taken prior to changing the independent variable.

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Pre-test

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Post-test refers to measuring the dependent variable after changing the independent variable.

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Post-Test

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A "true" experimental design is one that truly isolates the effects of the independent variable on the dependent variable while controlling for the effects of any extraneous variables.

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True Experimental Design

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After-Only Design- X O We don't know the "effect" the change in the independent variable has on the dependent variable. One-Group, before-after Design We know how much the dependent changed but was the change due SOLELY to the change in independent variable? Could other (extraneous) variables have accounted for the change?

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Not True Experimental Designs

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indicates the extent to which the change in the dependent variable is actually due to the change in the independent variable and not due to changes in extraneous variables.

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Internal Validity

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refers to the extent that the relationship observed between the independent and dependent variables during the experiment is generalizable to the "real world."

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External Validity

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-Independent Variable is manipulated and measures of the dependent variable are taken in a contrived, artificial setting for the purpose of controlling the many possible extraneous variables that may affect the dependent variable -Good at establishing internal validity

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Types of Experiments- Laboratory Experiments

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-Independent Variables manipulated and the measurements of the Dependent Variables are made on test units in their natural setting -Good at establishing external validity

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Types of Experiments- Field Experiments

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Test marketing is the phrase commonly used to indicate an experiment, study, or test that is conducted in a field setting. Uses of test markets -To test sales potential for a new product or service -To test variations in the marketing mix for a product or service

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Field Experiments- Test Marketing

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-Standard test markets- Normal Distribution channels -Controlled test markets- used by outside research firms through pre- specified types of distributors. -Electronic test markets- Identification card used when purchasing -Simulated test markets (STMs)- -Consumer vs. industrial test markets- difference between consumer products and B2B products -"Lead country" test markets- good indicator market for entire country

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Types of Test Markets

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-Representativeness- represents the marketing territory where the product will be distributed -Degree of isolation- limited geographical area -Ability to control distribution and promotion

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Criteria for Test Marketing

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Pros: -A good method of forecasting future sales -Allows firms the opportunity to pretest marketing mix variables Cons: -Does not yield 100% accurate results -Can be very expensive -Takes time to conduct -Exposes the new product to competitors

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Test Marketing Pros and Cons

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Involves collecting, analyzing, and interpreting data be observing what people do or say. -Non-standardized questions, involving small groups of people (focus groups)

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Qualitative Research

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-Research involving the use of structured questions in which the response options have been pre-determined (Surveys) -large number of respondents are involved.

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Quantitative Research

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Techniques in which the researcher relies on his or her observation of behavior rather than communicating with a person in order to obtain information -A type of Qualitative Research

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Observation Techniques

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Direct observation: observing behavior as it occurs Indirect observation: observing the effects or results of the behavior rather than the behavior itself -Archives -Physical traces

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Observation Techniques- Direct vs Indirect

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Disguised observation: subject is unaware that he or she is being observed Undisguised observation: respondent is aware of observation e.g., Arbitron's PPM to monitor media to which a consumer is exposed

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Observation Techniques- Disguised vs Undisguised

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Structured observation: researcher identifies beforehand which behaviors are to be observed and recorded Unstructured observation: all behavior is observed and the observer determines what is to be recorded. No restriction is placed on what the observer would note: all behavior in the episode under study is monitored

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Observation Techniques- Structured vs Unstructured

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Human observation: observer is a person hired by the researcher, or, perhaps the observer is the researcher Mechanical observation: human observer is replaced with some form of static observing device

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Observation Techniques- Human vs. Mechanical

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Advantages -Insight into actual, not reported, behaviors -Certain types of data can only be collected via observation -No chance for recall error -Better accuracy -Less cost Disadvantages -Small number of subjects -Subjective interpretation of behaviors by observer -Less suited for "private" behaviors -Inability to pry beneath the behavior observed and understand motivations, attitudes, and other internal conditions ......we don't know the why? -May not be appropriate to observe without consent.

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Observation Techniques- Advantages and Disadvantages

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Small groups of people brought together and guided by a moderator through a focused yet undirected, spontaneous discussion for the purpose of gaining information relevant to the research problem. The moderator's task is to ensure that open discussion is "focused" on some area of interest. Focus groups are used to generate ideas, to learn the respondents' "vocabulary," and to gain some insights into basic needs and attitudes.

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Qualitative Research- Focus Groups

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Factors to remember when analyzing focus group data: -Translate the qualitative statements of participants into major themes and categories and then reporting the degree of consensus among the participants of the focus group -Demographics and buyer behavior characteristics of focus group participants should be judged against the target market profile to assess what degree the groups represent the target market

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Focus Groups- Reporting and Use of Results

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A set of questions posed one-on-one to a subject by a trained interviewer so as to gain an idea of what the subject thinks about something or why he or she behaves a certain way.

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Qualitative Research- Depth Interview

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Involves placing a person in a decision-making situation and asking him or her to verbalize everything he or she considers when making a decision.

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Qualitative Research- Protocol Analysis

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Participants are placed in (projected into) simulated activities in the hopes that they will divulge things about themselves that they might not reveal under direct questioning Word association test Sentence completion Picture test Cartoon or balloon test Role-playing activity

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Qualitative Research- Projective Techniques

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Borrowed from anthropology-descriptive study of a group -Observing, interviewing, recording consumers' behavior for prolonged periods of time recording emotions, behaviors, language, symbols -Types of ethnographic research: Immersion, participant observation, informal and on-going in-depth interviewing

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Qualitative Research- Ethnographic research

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Involves monitoring a respondent's involuntary responses to marketing stimuli via the use of mechanical equipment -Pupilometer -Galvanometer

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Qualitative Research- Physiological measurements

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Specific features or characteristics of an object that can be used to distinguish it from another object Objective properties- are physically verifiable characteristics such as age, gender, or number of bottles purchased Subjective properties- cannot be directly observed because they are mental constructs such as a person's attitudes, opinions, or intentions. For subjective properties, researchers must translate mental constructs onto an intensity continuum.

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Basic Concepts in Measurement- Properties

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is designing questions and response formats to measure the subjective properties of an object.

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Basic Concepts in Measurement- Scale development

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Nominal scales: those that use only labels Ordinal scales: those with which the researcher can rank-order the respondents or responses

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Types of Measures- Nominal and Ordinal

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Scale measures: those in which the distance between each level is known Interval scales: those in which the distance between each descriptor is equal Ratio scales: ones in which a true zero exists

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Types of Measures- Scale Measures

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Respondents are asked to indicate their degree of agreement or disagreement on a symmetric agree-disagree scale for each of a series of statements. (Strongly agree to Strongly Disagree)

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Types of Interval Scales- Likert Scale

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A semantic differential scale contains a series of bipolar adjectives for the various properties of the object under study, and respondents indicate their impressions of each property by indicating locations along its continuum. A concern with this type of scale is the halo effect, in which a general overall feeling about a brand or store could bias responses on its specific properties.

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Types of Interval Scales- Semantic Differential Scale

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The Stapel scale relies on positive and negative numbers, typically ranging from +5 to -5.

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Types of Interval Scales- Stapel Scale

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Symmetric interval scale- "balanced," as it has equal amounts of positive and negative positions, and typically it has "no opinion" or "neutral" separating the negative and positive sides. Non-Symmetric interval scale- has mainly degrees of positive positions and would be more appropriate because most people do not think in degrees of negative importance.

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Interval Scales- Symmetic and non-Symmetric

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Reliability: respondent responds in the same or a similar manner to an identical or nearly identical measure. Validity: accuracy of the measurement

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Reliability and Validity of Measurement

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-Translates the research objectives into specific questions asked of respondents -Standardizes those questions and the response categories so every participant responds to identical stimuli -Serves as an enduring record of the research -Depending on the data collection mode used, such as online, can speed up the process of data analysis -Contains the information on which reliability and validity assessments may be made

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Questionnaire

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A systematic process in which the researcher contemplates various question formats, considers a number of factors characterizing the survey at hand, ultimately words the various questions carefully, and organizes the questionnaire's layout. The researcher should strive to minimize question bias. Question bias is the ability of a question's wording or format to influence respondents' answers.

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Questionnaire Design Process

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The practice of selecting appropriate response formats and wording questions that are understandable, unambiguous, and unbiased. Marketing researchers take great care in developing research questions that measure the following: -Attitudes -Beliefs -Behaviors -Demographics

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Questionnaire development

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-The question should be focused on a single issue or topic. -The question should be brief. -The question should be grammatically simple. -The question should be crystal clear.

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Four "Do's" of Question Wording

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-Do not "lead" the respondent to a particular answer. :A leading question gives a strong cue or expectation as what answer to provide. -Do not use "loaded" wording or phrasing. :A loaded question has buried in its wording elements a sneaky presupposition, or it might make reference to universal beliefs or rules of behavior. -Do not use a "double-barreled" question. :A double-barreled question is really two different questions posed in one question. -Do not use words that overstate the case. :An overstated question places undue emphasis on some aspect of the topic.

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Four "Dont's" of Question Wording

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Pertains to the sequence of statements and questions that make up a questionnaire. -Well-organized questionnaires motivate respondents to be conscientious and complete. -Poorly organized questionnaires discourage and frustrate respondents and may even cause them to stop answering questions in the middle of the survey.

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Questionnaire Organization

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-The introduction sets the stage; it is what a potential respondent reads or hears before he or she begins answering survey questions. -With an undisguised survey, the sponsor is identified, but with a disguised survey, the sponsor's name is not divulged to respondents.

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Questionnaire Organization- Introduction

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-Incentives are offers to do something for the respondent to increase the probability that the respondent will participate in the survey. -Other forms of incentives address respondent anxieties concerning privacy. Two methods tend to reduce anxieties and, therefore, increase participation. :The first is ensuring anonymity. :The second method is confidentiality.

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Incentives

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-Question flow pertains to the sequencing of questions or blocks of questions, including any instructions, on the questionnaire. -Warm-up questions are simple and easy-to-answer questions that are used to get the respondents' interest and to demonstrate the ease of responding to the research request. -Transitions are statements or questions used to let the respondent know that changes in question topic or format are about to happen. -Response to a skipped question affects which question will be answered next. -Classification questions are used to classify respondents.

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Questionnaire Organization- Question Flow

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Computer-assisted questionnaire design refers to software that allows users to use computer technology to develop and disseminate questionnaires and to retrieve and analyze data gathered by the questionnaire.

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Computer-Assisted Questionnaire Design

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Skip logic lets the questionnaire designer direct the online survey to ask questions based on previous answers. Display logic is similar to skip logic. The survey displays or asks questions that are appropriate based on the respondent's prior answers.

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Skip and Display Logic

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-Codes are numbers associated with question responses to facilitate data entry and analysis. -The codes for an "all that apply" question are set up as though each possible response was answered with "yes" or "no."

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Coding The Questionnaire

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A pretest is a dry run of a questionnaire to find and repair difficulties that respondents encounter while taking the survey.

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Pretesting The Questionnaire

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