Marketing Research ( Prof. Geeta Shetti)

8/7/2019 Marketing Research ( Prof. Geeta Shetti)

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Marketing Basics


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MIS, MR, Demand Forecast/Measurement

y Marketing Information System

y Marketing Research Process

y MTR Case Study

y Demand Forecasting

y Demand Measurement

y Market Research vs. Market Intelligence

y Case Study on the positival revival of SBI

Prof. Geeta Shetti


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Marketing Information System (MIS)

MIS comprises of:

y Internal records

y Marketing Intelligence

y Decision support system

y Analysis of the Macro Environment


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M.I.S Data

y Internal records

Order to payment cycle

Sales reporting systems

y Marketing Intelligence

Information collected by continuous interactionwith customers, dealers, suppliers, trade journals,magazines, news clippings etc


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MIS Data

y Decision support system

Data collected is analysed using software programs,statistical tools to obtain meaningful solutions forthe marketing problems.


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Marketing Research(M.R)

Systematic design, collection, analysis & reporting of data

& findings relevant to a specific marketing situation facing

the company.

M.R helps to build a strong basis:

y To gain and retain competitive advantages.

y To plan any major change in the marketing strategies.

More & more companies are now turning towardsit. eg. -HUL, P&G, Colgate Palmolive, Dabur.


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Role of M.R

y Every business works on a Business Plan which includesthe corporate and the competitor strategies.

y The Business Plan is then supported by other functionalareas, with their own specific strategies.

M.R plays a vital role in providing the necessaryinformation for selecting an appropriate strategy.


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Role of M.R

Business levels:y Level 1

(Strategic)

y Level 2

(Tactical)

Mktg. Strategy

Informationfor Mktgdecisions

Marketing Plan

Segmentation

Target marketselection

Positioning

4 Ps

Product

Price

Promotion

Place


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Marketing Plan

y After the marketing strategy is finalised, the marketing

plan proceeds further using the 4 Ps & based on the

information given by Market Research.

Most decisions related to marketing plans are interms of the product design, packaging, pricing,

short-term & long-term promotions, distribution,

logistics.


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Role of M.R in Mktg. Plan

Product- Identify the gap in the existing product

which needs to be bridged up.

Price-At what price the product would sell and get

well accepted.

Promotion-Which form of promotion should beadopted to get maximum returns.

Place-Where the product should be marketed.


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Marketing Research

1. Define the idea, gather alternate strategies

2. Plan the specific problem

3. Analyse the problem4. Frame the problem

5. Collect the required information

6. Analyse the information collected7. Evaluate and present the findings

8. Make a decision about the solution


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M.R Process

1.Problem formulation

The 1st and most vital step is to formulate a specific problem

faced by the Marketer.

2.Defining the research objective

The objective of market research should be loud and clear.

This will include purpose, methodology of the study, informn

and sources of informn needed etc.


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M.R Process

3.Designing an effective research plan

a)Exploratory Research to gather preliminary data

to shed light on the real nature of the problem andsuggest possible solutions/new ideas.

Data is obtained from books, journals, magazines,annual reports, case studies etc.

Minimal time & money is spent in this stage.


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M.R Process

b)Descriptive Research Usually conducted after

an exploratory research. The quantum or intensity

of the problem is identified. Usually involves less

number of subjects.

c) Causal Research to test the cause and effectrelationship between two variables.

Conducted using a detailed Questionnaire.


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Thought for the day


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Case study of MTR

The MTR ( Mavalli Tiffin Room ) is the brand

name of a food related enterprise, originated

from Bangalore.

MTR restaurant on the Lal Bagh Road in

Bangalore is very popular place and pre-

packed food articles in packets with the MTR

brand are sold here.

MTR holds a record of being the 1st fastfood restaurant in the world to serve21,000 customers in seven hours.


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Pioneering concept

During World War 2, MTR found it difficult to makeidlis, since rice was in short supply.

According to MTR, they experimentedwith using semolina instead of rice and

thus they invented the very popular

breakfast item of Rava idli.

MTR is the pioneer of the popular Rava idli.


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History of MTR

MTR was founded as a restaurant

by Parampalli Yajnanarayana Maiya

and his brothers in the year 1924.

Many prefer to relax in the cafe's

waiting hall on first floor before and

after the breakfast.


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Diversification into instant food business

In mid 1970s, when India was under emergency,

a Food Control Act made it mandatory that all

food items be sold at very low prices.

This made it difficult for MTR to maintain the

high standards in its restaurant business and

forced them to diversify into instant foods

business like sambar powder, rasam powder.

That was the beginning of its entry into instant

food business and a major turning point.


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Diversification of restaurant business

Since 1970s, MTR has expanded and

diversified, with MTR department stores

opened next to the restaurant, and an

outlet opened in Chennai.

Currently MTR represents two

separate entities.

1.MTR restaurant business and2.MTR Foods, the pre-packaged food

business.


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MTR Restaurant

MTR restaurant is currently headed byHemamaliniMaiya (granddaughter of Yajnanarayana Maiya).

Uniqueness of this restaurant is that silver

tumblers are used to serve beverages.


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MTR Foods Ltd.

MTR Foods was headed by Sadanand Maiya (son ofthe Yajnanarayana Maiya) until it was sold to

Orkla, a Norwegian company for $80 million inMarch 2007.

It produces packaged foods in different ranges -

spices, instant mixes, ready-to-eat foods,vermicelli, ready-to-cook gravies, range of frozenproducts, papads, pickles, chips, snacks and icecreams.


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Quality standards

It bought the packaging technology from the DefenceFood Research Laboratory in Mysore and there are

no preservatives added to the food whilepackaging.

MTR is also the first Indian processed foodscompany to be certified with the HACCP (HazardAnalysis Critical Control Point) certification whichis a rigorous standard of food safety and hygiene.


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Global vision

MTR Foods is also the first company

in the world to have created a frozen

dosa, which can be heated and eatenright away.

MTR Food products are exported tothe countries in the Persian Gulf,

United States and U.K


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Case study of MTR

MTR is planning an All India positioning for its spices and ready

mixes category. MTR is an old company with an heritage of

authentic vegetarian diet.

Reasons for All India positioning- Market Research data indicates:

1.MTR despite being a pan-India brand is more popular for Indian

spices and mixes such as Rasam, Puliyogare, Bisibele bath and

Vangi bath.

2. Indian woman is not yet fully ready to move out of the kitchen.She needs cooking aids that makes cooking easier.

3.MTR as a brand was popular in South India, whereas up-north it

is not very popular.


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Case study of MTR

Regionalised strategy:

1.Enhance and strengthen position in Karnataka and

Andhra Pradesh where they hold 40 & 15% market share

respectively of the total spice market.

2.Launching spice mixes to each region in the country.

3.Withdrawing from 350 out of 500 towns operating

currently.

Product portfolio:

The range is divided into breakfast mixes, dessert mixes &

meal mixes.


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Research Instruments

Questionnaires Open-end questions allows

the respondents to answer in their own words,

while close-ended questions pre specify all possibleanswers & respondents make a choice among them.

Open-end questions reveal more while close-endedquestions provide answers that are easier to interpret

and tabulate.


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Mechanical instruments

1.Galvanometers measure arousal/interest by

exposure to specific ad/picture.2.Tachistoscope flashes an ad repeatedly to measurerecall/specific points of interest.

3.Audiometer is attached to TV sets to recordchannel viewing.


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Sampling unit target population that will be

sampled. Once sampling unit is determined, a

sampling frame must be developed so that everyonein the target population has an equal chance of being

sampled.

Sampling procedure the method used to selecta representative sample from the identified target

population.


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Probability Sampling

Types of P. sampling:1.Random sampleEvery member has an equal chance of gettingselected.

2. Stratified random samplePopulation is divided into mutually exclusivegroups (age etc.) and then random samples aredrawn from each group.

3.Cluster sampleMore than 2 sample groups are drawn for theinterview.


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Non-Probability Sampling

1. Convenience sample select the most accessible

population.

2. Judgment sample Identify a good prospect for

getting accurate information.

3. Quota sample prescribed no. of people in each

of the several categories.


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Data collection

Data sources are of two types:

1.Primary- gathered specially for a specific

project.

2.Secondary-already existing but needs to be

collected.


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Contact methods for data collection

1. Mail Questionnaire

2.Telephone Interview

3.Personal InterviewMost versatile method, as the interviewer can analyse the

body language. However, its also the most expensive and issubject to the bias of the interviewer.

Respondents may not be at home, may refuse to co-operate,may give biased/dishonest answers and some interviewersmay be biased or dishonest.


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Information analysis

Researcher tabulates the data and developsfrequency distributions.

Averages and measures of dispersion arecalculated for major variables.

Advanced statistical techniques are applied toextract pertinent findings from the collected data.


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Evaluation

Researcher should not overwhelm managementwith lots of numbers and fancy statisticaltechniques, but should present major findings thatare pertinent to the major marketing decisions

facing management.


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Good M.R

y Scientific method

y

Research creativityy Multiple methods

y Interdependence of models & data

yValue & cost of information

y Healthy skepticism

y Ethical marketing


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y In 1982, an industrial groups application for financialassistance was not accepted by a leading financialinstitution.

Reason demand for the product was over-estimated.

y Likewise, another well known engineering companysproposal for financial participation in its ambitiousexpansion plan was not accepted by the same financialinstitution.

Reason- environmental factors considered were toooptimistic, hence demand was over-estimated.

Demand Forecasting


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y Amarketing director took the credit when his firms

actual sales were 25% more than the budgeted sales.

Reason- market, as a whole had grown by 20% in that

year. Hence, all companies had done well. He had to

accept the fact that his sales for the year did not reflectthe reality.

Demand Forecasting


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Key process in demand forecasting


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Demand forecasting


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y Market Potential:

Forecasting exercise involves a thorough understanding

of the market potential.

eg. TV set

Market Potential of TV sets =Number of household in

India.

If we assume that 6 people constitute a household, wehave 192 million households.

Key factors


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However, 25% of the population is below poverty line,

and would not be able to buy TV sets.

40% of population are in low income group , may not

be able to afford it.

Remaining 35% of the total population constitutesthe real market which needs to be targeted.

Contd


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y These buyers need to have 3 characteristics:

1. Interest in the product.

2. Income to afford the product.

3. Access to the product.

In other words, Market potential refers to the upper

limit of Market demand.

Contd


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y Market demand refers to the total volume that wouldbuy the product by a defined customer group in a

defined geographical area in a defined time period in adefined marketing environment under a definedmarketing program.

Demand can be measured in physical/monetary terms.

Market Demand


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y In the above eg of TV sets, as more income isgenerated in the Indian economy following ahigher economic growth rate, the demand forTV sets will increase.

Contd


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Market Potential Sales Curve

Market Forecast

Market Minimum

PlannedExpenditure

Expenditure on Marketing


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y This refers to a companys share of the total marketdemand. It is subjected to all the determinants of themarket demand, plus the determinants of the

companys market share.

Company Demand


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1.Qualitative Tools

y Survey of Buying Intention

y Composite of sales force opinion

y Delphi Technique

2.Quantitative Techniques

y Short-term forecasting

y

Long-term forecasting

Tools to estimate Demand


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y Survey of Buying Intention:

This involves surveying the buyers to assess theirintentions to buy the product. This is very useful in

estimating the market demand for consumersdurables or even a new product.eg:- Change in price& its effect on consumer demand can be studiedthrough this method, the purchase intention of the

buyer can be measured on a seven point scale from aDefinitely buy to a Definitely not buy.

Qualitative Tools


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y Composite of Sales Force Opinion:

The company asks individual sales personnel toestimate sales of the given product in his or her

territory. These estimates are then pooled & anational level forecast of sales is obtained.

Contd


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y Delphi Technique:-

This involves constituting a panel of experts and asking

them to estimate the mkt demand for a given product.

They are also asked to mention their assumption about

the future market environment. Individual experts do

not know who else is on the panel as each expert works

from his or her office. Thus, chances of the expert gettinginfluenced by other does not arise.

Contd


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y Long-term Forecasting:-

refers to forecasts for a period of three years ormore, The methods used are

1. Time Series Analysis2. Correlation

3. Econometric models

Contd


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y Time SeriesAnalysis-

Most firms have their own industry & sales datafrom the previous years, this time series then

estimates sales for the next time period is called timeseries analysis.

Contd


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y Quantitive techniques can be categorized as:-

a) Tools for short term forecasting

b) Tools for long term forecasting

y Short-term Forecasting:-

Short-term forecast refers to all forecasts upto aperiod of one year.

Quantitative Techniques


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y Correlation Method:-

It is commonly believed that sale of a product isa function of several variables like price, advertising

expenditure, distribution expenditure, personaldisposable income. This relationship is reflected bythe following equation.

y= f( x1 x2, x3xn)

Contd


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Forecasting Techniques

y Atime series is the data on any variable recordedover a constant time interval.

y Atime-frame of data recording may be an hour, a

day, a week, a month, or a year, depending on thetype of event the data refer to hourly temperature ina particular city, weekly earnings of workers in anindustrial town monthly prices of wheat & annual

production of rice may be cited an example


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Contd

y All time series are subjected to variations whosepattern & amplitude differ from one period toanother, Given this, the object of dealing with a time

series is to study & analyse these variations with aview to knowing its past behavior.

y Aknowledge about the past behavior is useful fordrawing inferences about its future course.


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Contd

y In an ever changing business & economicenvironment, it is necessary to have an idea about

what the future is going to bring forth.

y

The anlaysis of time series is a means to do so,especially as it acts as the basis to make a forecast.


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Contd

y Economic & business forecasts are made for beingused by the policy makers to decide the future courseof action to survive & grow in a competitive

environment.


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y The analysis of time series is useful not only forindividual business concerns, it is equally importantfor the central & state government for devising

appropriate future growth strategies.


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y Aclose understanding of time series data on majornational aggregates such as populations, nationalincome, capital formation, etc not only providescrucial information about the strength or weaknessof strategies adopted in the past, but also helps insetting future growth targets.


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Time series is made up of four components

1. Trend (T) --represents the long term behavior of atime series. This would tell whether the time seriesdata reveal a steady upwards or downwardsmovement.

2. Seasonal Variations ( S) represents variationscaused by seasons. Typically this shows variationsin demand during peak & lean seasons, example

demand for snow tires will be at its peak duringwinter in USA.


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3. Cyclical variation (C) represents the typicalbusiness cycles that occur periodically in severalyears. For example, in stock market you will witnesscycle of boom & cycle of recession that occurs once ina while between many years.

4.Random Variation ( R)represents irregularvariations that occur by chance having no assignable

cause. Random variation cannot be predicted.


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Marketing ResearchMarketing Research Marketing IntelligenceMarketing Intelligence

y It is the process of collectinganswers for a clearly definedquestion.

y It is required for taking aremedial action.

y It usually lasts for a shortduration.

y It is done by 2 methods-Qualitative & Quantitative.

y It is collecting informationabout the industry in which

the Co. operates.y It is used as a general

information and does notlead to any action.

y It usually lasts for a long

duration.y Information collected from

papers, magazines, newschannels or competitoremployees.

Marketing Intelligence vs M.R


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Marketing ResearchMarketing Research Marketing IntelligenceMarketing Intelligence

y Basic objective is tobridge the existing gap.

y It is done by professionalM.R companies

y It mainly focuses onidentifying theconsumers preferencesrelating to a particular

brand.

y It is an ongoing

process.y It is done as in-house

activity.

y It is mainly done with

an objective of beingvigilant about thecompetitors activity.

Marketing Intelligence vs M.R


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Documents

Marketing Research ( Prof. Geeta Shetti)