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Principles of MarketingPrinciples of Marketing

Fall Term 2009 - MKTG 220Fall Term 2009 - MKTG 220 Dr. Abdullah SultanDr. Abdullah Sultan

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The Importance of Marketing Information Companies need information about their:

Customers’ needs Marketing environment Competition

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Developing Marketing Information Internal Databases:

Electronic collections of information obtained from data sources within the company (orders, customer demographics, & contacts).

Marketing Intelligence: Systematic collection and analysis of publicly available

information about competitors and developments in the marketing environment (talking to customers, observing competitors, monitor sales, & free databases).

Marketing Research: Systematic design, collection, analysis, and reporting of

data relevant to a specific marketing situation facing an organization (research that answers a specific question).

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The Marketing Research Process

Defining the problem and research objectives Developing the research plan Implementing the research plan Interpreting and reporting the findings

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Defining Problem & Objectives

Exploratory Research: Gathers preliminary information that will help define the

problem and suggest hypotheses. Descriptive Research:

Describes things (e.g., market potential for a product, demographics and attitudes of consumers who buy the product).

Causal Research: Tests hypotheses about cause-and-effect relationships

(would consumers buy a car that cost KD 9,999 or KD 10,000?).

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Developing the Research Plan

Includes: Determining the exact information needed. Developing a plan for gathering it efficiently. Presenting the written plan to management.

Outlines: Sources of existing data Specific research approaches (observational, surveys,

experiments) Contact methods (phone, mail, personal, online) Sampling plans (sample size, sampling procedure) Instruments for data collection (questionnaire, mechanical

instruments)

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Gathering Secondary Data

Information that already exists somewhere: Internal databases Commercial data services from companies Government sources

Available more quickly and at a lower cost than primary data.

But, must be relevant, accurate, current, and impartial.

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Primary Data Collection

Consists of information collected for the specific purpose at hand.

Must be relevant, accurate, current, and unbiased. Costly Must determine:

Research approach Contact methods Sampling plan Research instruments

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Observational Research

The gathering of primary data by observing relevant people, actions, and situations.

Ethnographic research: Observation in “natural environment”

Mechanical observation: People meters (Nielsen ranking) Checkout scanners (Retailers)

Costly and subjective.

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Survey Research

Most widely used method for primary data collection.

Approach best suited for gathering descriptive information.

Can gather information about people’s knowledge, attitudes, preferences, or buying behavior.

Not very costly, but results in data-driven findings.

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Experimental Research

Tries to explain cause-and-effect relationships, but it is costly

Involves: selecting matched groups of subjects giving different treatments controlling unrelated factors checking differences in group responses

Example: a car that sells for KD 9,999 vs. KD 10,000

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Contact Methods

Mail surveys Telephone surveys Personal interviews

Individual interviewing Focus group interviewing

Online marketing research Surveys Experiments Focus groups

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Implementing the Research Plan

Collecting the data Most expensive phase Subject to error

Processing the data Check for accuracy Code for analysis

Analyzing the data Tabulate results

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Interpreting and Reporting Findings

Interpret the findings Draw conclusions Report to management

Present findings and conclusions that will be most helpful to decision making.

In-class Activity

Assume you work for Starbucks and your task is to assess customer satisfaction. Discuss the strengths and weaknesses of each contact method used in marketing research:

Mail questionnaire Telephone interviewing Personal interviewing Online collection method