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Role of Market Research

• Market Research is the process of defining a marketing problem and opportunity, systematically collecting and analyzing information, and recommending actions to improve and organization’s marketing activities

• 5 steps in the market research process1. Define the problem

2. Develop the research plan

3. Collect relevant information

4. Develop and analyze findings

5. Take marketing action

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Importance of Market Research• Research is used for the purpose of learning - about the

customer, product needs, etc• Also a critical component to making good decisions

• Market research does this by giving marketers a picture of what is occurring (or likely to occur) • Once complete, research offers alternative choices that can be

made. • For instance, good research may suggest multiple options for

introducing new products or entering new markets. Ex: Blackberry entering the teenage market

• In most cases marketing decisions prove less risky (though they are never risk free) when the marketer can select from more than one option.

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How market research changed the outcome…

The Lovely Bones -

• Initial reviews from test release showed a lukewarm response. • Originally the movie targeted an artistic

audience

• After researching test audience, Paramount decided to switch the demographic

• Went after the Twilight market-college women and teen girls

• This grouped liked the movie better.

• The Result…$20.5 Million in its first weekend.

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The table below presents a small sampling of the research undertaken by marketing decision area.

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Why Good Marketing Research is difficult

• Dishonest answers

• Hard to get people to respond

• Participants respond one way and act another;

• Purchase behavior often doesn’t match their stated interest.• Costs, likes change by the time a product is on the market, new products

come to market quicker

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How do you do market research?

• You have to talk to the customer!!!• Must get their feedback and opinion

• Technology has made this easier

• Some ways include:• Mall stops - interviewed by a person

• “Can you answer a few questions?”

• Phone research

• Surveys

• Focus Groups

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60 minutes - The Virtual Border

• http://www.cbsnews.com/video/watch/?id=6078904n&tag=cbsnewsMainColumnArea.3

• Think about:• Who the market is

• What the product is

• What the marketers (the provider of the product) did wrong

• Now what?

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Virtual Border - Answers

• Think about:• Who the market is: The Border Patrol Employees

• What the product is: The Virtual Fence

• What the marketers (the provider of the product) did wrong: They never talked to the people that would actually be using the product (the virtual fence) so they had no idea what they wanted.

• Now what? They have to build another one! Millions of $$$ down the drain.

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5 steps

• Market research process1. Define the problem

2. Develop the research plan

3. Collect relevant information

4. Develop and analyze findings

5. Take marketing action

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Step 1: Define the Problem

• 2 goals: • 1) set objectives

• 2) identify actions

• Objectives are specific, measurable goals the decision maker seeks to achieve in solving a problem• Typical objectives are increasing revenue; finding out why a product isn’t

selling; discovering what consumers want/need

• Measures of success are criteria or standards used in evaluating proposed solutions.• Measures of success lead to clear marketing actions

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Problem statements

• Developed after a company has looked at is internal practices and sees room for improvement.

• Problem: McDonalds customer service is poor

• Problem: GAP stores are routinely “messy”

• Problem: More people are shopping at Home Depot than Lowes

• For research project we will be hypothesizing as to the problem related to customer service

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Goals/Objectives

• Convert a mission into targeted levels of performance to be achieved usually within a specific time.

• Focus business activities onto specific activities• Profit goals: to maximize profit• Sales revenue goals: increases sales numbers• Market share: increase market share• Unit sales: specific to a particular product• Quality goals: ensure high quality, always• Employee welfare: commitment to good employee practices• Social goals: social/corporate responsibility

• For research project, goals will be what we center our promotional campaign around

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Define the Problem-Fisher Price

• Because kids can’t fill out questionnaires, Fisher Price runs a state licensed daycare center in NY where researchers watch kids play/destroy toys behind a 1-way mirror.

• Objective: to find out if kids like particular toys?

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Define the Problem-Fisher Price

• The first chatter Telephone by Fisher Price was a wooden phone with a dial that rang a bell

• In watching kids, designers noticed kids wanted to pull the phone along by the receiver and thus added wheels.

• Noisemaker and eyes that bobbed up and down were also added

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Define the Problem

• “A problem well-defined is half-solved”• John Dewey

• Really….defining a problem is an incredibly difficult task. Too broad of objectives may not be researchable (where do you start?) and too narrow of objectives may prove to be too limiting (I can’t get enough info?)