Marketing Research

1. PowerPoint to accompany
Essentials of
Marketing Research
AN
APPLIED
ORIENTATION
MALHOTRA
HALL
SHAW
OPPENHEIM
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2. PART ONE
Chapter 1
T he Mar keting
Resear ch Process
Malhotra  Hall  Shaw  Oppenheim Essentials of Marketing Research © Copyright 2004 Pearson Education Australia 1- 2

3. Chapter Objectives
After reading this chapter, you should be able to:
 Understand the nature and scope of marketing research.
 Explain the role of marketing research in business
management decision-making.
 Discuss the types and roles of research suppliers.
 Explain the importance of ethical behaviour
 Appreciate the components of the marketing research
process.
 Learn about the process used for defining the marketing
research problem.
 Discuss the background and environmental factors
affecting the definition of the research problem.
 Clarify the distinction between the management decision
problem and the marketing research problem.
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Malhotra  Hall  Shaw  Oppenheim Essentials of Marketing Research © Copyright 2004 Pearson Education Australia

4. Chapter Objectives (cont’d)
 Understand the link between the research problem and
the research design.
 Understand the importance of clearly specifying the
information required from research.
 Define the elements of the research brief.
 Understand the relationship between the research brief
and the research proposal.
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Malhotra  Hall  Shaw  Oppenheim Essentials of Marketing Research © Copyright 2004 Pearson Education Australia

5. History of Market Research
19th Century The Birth
1900-1930s Childhood
1930-1950s Adolescence
1950-1960’s Teenage
1960-1970s Young Adult
1970-1980s New Executive
1980-1990s Professional
1990-2000 Maturity
2000 onwards Wisdom (or Second Childhood?)
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Malhotra  Hall  Shaw  Oppenheim Essentials of Marketing Research © Copyright 2004 Pearson Education Australia

6. Definition
 Marketing Research (MR) is the systematic and
objective identification, collection, analysis, and
dissemination of information for the purpose of
assisting management in decision- making
related to the identification and solution of
problems and opportunities in marketing.
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Malhotra  Hall  Shaw  Oppenheim Essentials of Marketing Research © Copyright 2004 Pearson Education Australia

7. MR and Decision Making
MR should produce information that is:
 Relevant
 Accurate
 Reliable
 Valid
 Timely
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Malhotra  Hall  Shaw  Oppenheim Essentials of Marketing Research © Copyright 2004 Pearson Education Australia

8. Figure 1.2 The Central Role of Marketing Research
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Malhotra  Hall  Shaw  Oppenheim Essentials of Marketing Research © Copyright 2004 Pearson Education Australia

9. Figure 1.3 A Typology of Business Decision Making
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Malhotra  Hall  Shaw  Oppenheim Essentials of Marketing Research © Copyright 2004 Pearson Education Australia

10. Classification of MR
Problem Identification Problem Solving
Research Research
 Identifies problems  Used once the
not yet apparent problem has been
identified
 Often undertaken for  Used in making
survival and long decisions to solve
term growth of the problems
company
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Malhotra  Hall  Shaw  Oppenheim Essentials of Marketing Research © Copyright 2004 Pearson Education Australia

11. Examples of Problem Identification Research
 Market potential research
 Market share research
 Image research
 Market characteristics research
 Sales analysis research
 Forecasting research
 Business trends research
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Malhotra  Hall  Shaw  Oppenheim Essentials of Marketing Research © Copyright 2004 Pearson Education Australia

12. Examples of Problem Solving Research
 Segmentation research
[lifestyle, demographics]
 Product research
[concepts, packaging]
 Pricing research
[price elasticity, price line pricing]
 Promotion research
[advertising effectiveness, sales promotion]
 Distribution research
[location of retail outlets]
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Malhotra  Hall  Shaw  Oppenheim Essentials of Marketing Research © Copyright 2004 Pearson Education Australia

13. MMIS and DSS
Marketing Management Information System
 A formalised set of procedures for generating,
analysing, storing, and distributing information
to marketing decision makers on an ongoing
basis.
[invoices, annual reports, previous research]
Decision Support Systems
 Integrated system including hardware,
communications network, database, model base,
software base and the DSS user that collects and
interprets information for decision making.
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Malhotra  Hall  Shaw  Oppenheim Essentials of Marketing Research © Copyright 2004 Pearson Education Australia

14. MMIS vs DSS
Marketing Management Decision Support Systems
Information System
 Structured problems  Unstructured problems
 Use of reports  Use of models
 Rigid structure  User-friendly interaction
 Information displaying  Adaptability
restricted  Can improve decision
 Can improve decision making by using “what
making by clarifying if” analysis
raw data
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Malhotra  Hall  Shaw  Oppenheim Essentials of Marketing Research © Copyright 2004 Pearson Education Australia

15. Figure 1.6 Market Research Suppliers and Services
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Malhotra  Hall  Shaw  Oppenheim Essentials of Marketing Research © Copyright 2004 Pearson Education Australia

16. Some Australian Research Companies
 AC Nielsen
 amrinteractive
 Australian Fieldwork Solutions
 BIS Shrapnel
 Chant Link & Associates
 Colmar Brunton
 Fieldforce
 FieldWorks
 Lynx
 Millward Brown Australia
 Quantum Market Research
 Roy Morgan Research
 Sweeney Research
 Wallis
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Malhotra  Hall  Shaw  Oppenheim Essentials of Marketing Research © Copyright 2004 Pearson Education Australia

17. MR Job advertisement
FMCG - Market Research role
Reporting to the MR Manager you will be required to undertake and
manage market research projects, ensuring these results are objectively
analysed and interpreted. You will prepare summaries and develop
independent conclusions and recommendations so that consumer
understanding is integrated into key strategies and brand development
activities. In addition, you will be responsible for ensuring that
presentations are timely, relevant and address key business issues.
A clear thinker and strategist, you will have tertiary qualifications in
marketing, psychology and/or statistics. Experience as a market research
supplier or buyer is essential for this position.
Conceptual and analytical skills combined with influential communication
skills are essential. An insight and understanding of marketing principles
is desired.
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Malhotra  Hall  Shaw  Oppenheim Essentials of Marketing Research © Copyright 2004 Pearson Education Australia

18. Skills and Knowledge required by
Market Researchers
 Knowledge of marketing, psychology and
consumer behaviour
 The ability to understand and interpret
secondary data
 The ability to complete projects on time
 Presentation skills
 Foreign-language competency
 Negotiation skills
 Computer proficiency
 Interpersonal skills
 Statistical skills
 Think creatively
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Malhotra  Hall  Shaw  Oppenheim Essentials of Marketing Research © Copyright 2004 Pearson Education Australia

19. Marketing Research Process
Marketing or business definition problem or opportunity

Development of an approach and specifying research
objectives

Research design formulation

Field work or data collection

Data preparation and analysis

Report preparation and presentation
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Malhotra  Hall  Shaw  Oppenheim Essentials of Marketing Research © Copyright 2004 Pearson Education Australia

20. Ethics in Marketing Research
 Address whether action is right or wrong, good
or bad
 Most ethical decisions have extended or long
term effects
 Ethical decisions are rarely black and white
 Alternatives have both positive and negative
outcomes
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Malhotra  Hall  Shaw  Oppenheim Essentials of Marketing Research © Copyright 2004 Pearson Education Australia

21. Stakeholders in MR
Public Respondents
Client Researcher
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Malhotra  Hall  Shaw  Oppenheim Essentials of Marketing Research © Copyright 2004 Pearson Education Australia

22. Unethical Practices
Problem definition
 Using surveys as a guise for selling or fundraising
 Following personal agendas of the researcher or
client
 Conducting unnecessary research
Approach to the problem
 Soliciting proposals to gain research expertise
without pay
 Using findings and models for specific clients or
projects for other projects
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Malhotra  Hall  Shaw  Oppenheim Essentials of Marketing Research © Copyright 2004 Pearson Education Australia

23. Unethical Practices cont.
Research design
 Formulating a research design more suited to the
researcher’s rather than the clients needs
 Using secondary data that are not applicable
 Disguising the purpose of the research
 Not maintaining anonymity of respondents
 Disrespecting privacy of respondents
 Misleading questions
 Embarrassing or putting stress on respondents
 Using measurement scales of questionable reliability
and validity
 Designing overly long questionnaires or sensitive
questions
 Using inappropriate sampling procedures and sample
size
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Malhotra  Hall  Shaw  Oppenheim Essentials of Marketing Research © Copyright 2004 Pearson Education Australia

24. Unethical Practices cont
Fieldwork
 Increasing the discomfort level of respondents
 Following unacceptable fieldwork procedures
Data Preparation and analysis
 Identifying and discarding unsatisfactory respondents
 Using statistical techniques when the underlying
assumptions are violated
 Interpreting the results and making incorrect
conclusions and recommendations
Report Preparation and Presentation
 Using incomplete, biased and inaccurate reporting
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Malhotra  Hall  Shaw  Oppenheim Essentials of Marketing Research © Copyright 2004 Pearson Education Australia

25. Code of Professional Behaviour
Market Research Society of Australia
www.mrsa.com.au
Code of Professional Behaviour covers:
 Responsibilities to respondents
 Researchers’ professional responsibilities
 Researchers’ and Clients mutual rights and
responsibilities
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Malhotra  Hall  Shaw  Oppenheim Essentials of Marketing Research © Copyright 2004 Pearson Education Australia

26. Importance of Defining the Problem
 Problem definition involves stating the general
problem and identifying the specific components
of the marketing research problem.
 Critical in setting the directions for all
subsequent phases of the marketing research
process.
 Inadequate problem definition is a leading cause
of failure of marketing research projects.
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Malhotra  Hall  Shaw  Oppenheim Essentials of Marketing Research © Copyright 2004 Pearson Education Australia

27. Case: Where did Coca-Cola go wrong?
 Coca-Cola conducted blind taste tests in the early 1980s to
determine consumer taste preferences.
 Results indicated that consumers preferred a sweeter product,
similar to Pepsi Cola. Coca-Cola introduced the new taste
Coke and named it “New Coke” and discontinued the original
Coke.
 In less than 3 months, New Coke was discontinued after
customer outrage that the original Coke was removed.
 It has been suggested that Coca-Cola narrowly defined the
research problem.
 Coca-Cola failed to measure the emotional attachment and
loyalty to the existing brand name and its effect on subsequent
purchase and consumption behaviour.
Source: Shields, M.J. 1985 ‘Coke Fizzles, Fails to Factor in Customer Loyalty’, Adweek, 15 July, p.8.
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Malhotra  Hall  Shaw  Oppenheim Essentials of Marketing Research © Copyright 2004 Pearson Education Australia

28. Tasks involved in the
Problem Definition Process
Collect the background information

Consider the environmental context of the problem

Conduct problem or opportunity audit

Step 1: Marketing or Business Problem Definition

Specify the Management Decision Problem

State the Purpose of the project

Define the Marketing Research Problem

Prepare the Marketing Research Brief
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Malhotra  Hall  Shaw  Oppenheim Essentials of Marketing Research © Copyright 2004 Pearson Education Australia

29. Collect the Background Information
 Discussion with decision makers
 Interviews with industry experts
 Reviewing existing information
 Secondary data analysis
 Exploratory qualitative research
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Malhotra  Hall  Shaw  Oppenheim Essentials of Marketing Research © Copyright 2004 Pearson Education Australia

30. Environmental Context of the Problem
 Past information and forecasts
 Resources and constraints
 Organisational and decision maker’s objectives
 Buyer behaviour
 Legal environment
 Economic environment
 Marketing and Technological skills
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Malhotra  Hall  Shaw  Oppenheim Essentials of Marketing Research © Copyright 2004 Pearson Education Australia

31. The Problem or Opportunity Audit
 Management decision problems and marketing
research problems encompass both problems
and opportunities.
 Conduct a problem audit to understanding the
origin and nature of the problem. Discussion
with decision maker should uncover:
 Symptoms
 Alternative course of action
 Background information
 Suspected causes and possible solutions
 Anticipated consequences
 Corporate culture of the organisation
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Malhotra  Hall  Shaw  Oppenheim Essentials of Marketing Research © Copyright 2004 Pearson Education Australia

32. The Problem or Opportunity Audit (cont)
Symptoms
 Declining sales
 Decline in profits
 Losing market share
 Inability to meet sales
forecasts
 Low traffic
 Dissatisfied customers
Management
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Malhotra  Hall  Shaw  Oppenheim Essentials of Marketing Research © Copyright 2004 Pearson Education Australia

33. The Problem or Opportunity Audit (cont)
Possible Causes
 Low-quality product
or service
 Incorrect pricing
 Inappropriate
distribution channels
 Low awareness of
company or brands
 Poor image of the
company
 Unmotivated sales
Researcher force
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Malhotra  Hall  Shaw  Oppenheim Essentials of Marketing Research © Copyright 2004 Pearson Education Australia

34. The Problem or Opportunity Audit (cont)
The interaction between the decision maker and the
researcher should be characterised by the 7Cs
Co-operation
Confidence
Creativity
Communication
Candour
Continuity
Closeness
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Malhotra  Hall  Shaw  Oppenheim Essentials of Marketing Research © Copyright 2004 Pearson Education Australia

35. MDP and MRP
Management Decision Problem (MDP)
 What the decision maker needs to do?
 Action oriented
eg. Should the advertising campaign be changed?
Marketing Research Problem (MRP)
 What information is needed and how that
information can be obtained effectively and
efficiently?
 Information oriented
eg. To determine the effectiveness of the current advertising
campaign
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Malhotra  Hall  Shaw  Oppenheim Essentials of Marketing Research © Copyright 2004 Pearson Education Australia

36. Defining the MRP
Broad statement
To understand the decision making process of potential
university students in their choice of university .
Specifically,
To determine the factors potential students consider to be
important in selecting a university.
To determine when decisions regarding university
selection are made.
To determine sources of information and people who
influence potential students decision regarding choice of
university.
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Malhotra  Hall  Shaw  Oppenheim Essentials of Marketing Research © Copyright 2004 Pearson Education Australia

37. Estimating the value of research and
setting a budget
Expected Value (EV) = Probability (Pr) x Value of Outcome (Vr)
With
Research
A
EV with
$2 x 0.7 = $1.4 million
Probability of success 0.7
Difference contributed
Project Return (profit)
by research (A – B)
$2million
1.4 – 0.6 = $0.8million
Probability of success 0.3 EV with
$2 x 0.3 = $0.6 million B
Without
research
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Malhotra  Hall  Shaw  Oppenheim Essentials of Marketing Research © Copyright 2004 Pearson Education Australia

38. Contents of Marketing Research Brief
 Executive summary
 Introduction
 Background
 Management decisions - Research Purpose
 Research Objectives (research information)
 Scope of the Project
 Proposed Research Approach
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Malhotra  Hall  Shaw  Oppenheim Essentials of Marketing Research © Copyright 2004 Pearson Education Australia

39. Contents of Marketing Research Brief cont.
 Reporting Requirements
 Timing
 Budget
 Materials
 Contractual Arrangements
 Requirements for proposals
 Project Management
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Malhotra  Hall  Shaw  Oppenheim Essentials of Marketing Research © Copyright 2004 Pearson Education Australia