Market research mb mk 02 - MBA - III Sem, UPTU Syllabus

Marketing Research
MB MK – 0 2

Syllabus of Unit I
1. Marketing Research –
1. Definition,
2. Scope,
3. Significance,
4. Limitations,
5. Obstacles in acceptance.
2. Ethics in marketing research.
3. Marketing Intelligence system
4. Research process
5. Management dilemma (problem) –
1. Decision problem
2. Research problem
6. Hypothesis statement –
1. characteristics of a good hypothesis
7. Drafting the research proposal.
8. Various sources of market Information –
1. Methods of collecting Market Information
2. Secondary data – sources – problems of fit
and accuracy.
9. Syndicated services.
7/3/2014 Kartikeya Singh 2

a). Definition
• “Marketing research is the systematic
gathering, recording and analyzing of
data about problems relating to the
marketing of goods and services.”
• “Market research will give you the data
you need to identify and reach your
target market at a price customers are
willing to pay.”

b).Scope
• The scope of Marketing Research could cover the
business problems relating to the followings
– Types of consumer that compromise present and
potential markets.
– Buying habits and purchasing habits
– Size and location of different markets, not only in
Indian but also overseas
– New mantras for emerging markets
– Marketing and manufacturing capabilities of
competitors
– Most Suitable entry timing
– Optimum use of Promotion tools.
– Chances of improvement in current channels
– Pricing Strategy.

b). Scope
• Market Research
• Product Research
• Sales related Research
• Packaging Research
• Advertising Research
• Business Economic Research
• Promotion Research
• Distribution Research
• Consumer Research
• Pricing Research

c).Significance
• A manager takes decisions
• His responsibility is to reduce risk of
failure in decision making
• Risk arises due to lack of relevant
information
• A manager always seeks information
to improve quality of decision making
• Information can be collected through
MR
• Hence, MR is an important tool for
managerial decision making

d).Disadvantages/Limitations
• Disadvantages of Market Research
– Information only as good as the
methodology used
– Can be inaccurate or unreliable
– Results may not be what the business wants
to hear!
– May stifle initiative and ‘gut feeling’
– Always a problem that we may never know
enough to be sure!

e).Obstacles in Acceptance
A} A narrow conception of
Marketing Research.
B} Uneven Caliber of
Marketing Researchers
C} Late and Occasionally
Erroneous Findings by
Marketing Research
D} Personality and
presentation
Differences

2. Ethics in Marketing
Research
• Relating to
Respondents
• Relating to Clients
• Relating to Research
Firms
• Relating to Research
Professionals

3.Marketing Intelligence System
• “A Market Intelligence
System (MkIS) is one
that systematically
gathers and processes
critical business
information,
transforming it into
actionable Management
intelligence for
marketing decisions”.

3.Marketing Intelligence System
• Market and customer orientation
• Identification of new opportunities
• Early warning of competitor moves
• Minimizing investment risk
• Better customer interaction.
• Better market selection & positioning.
• Quicker, more efficient and cost effective
information

4.Research Process
1. Define the Problem
2. Develop an Approach to the Problem
• Type of Study? Exploratory, Descriptive, Causal?
• Mgmt & Research Questions, Hypotheses
3. Formulate a Research Design
• Methodology
• Questionnaire Design
4. Fieldwork/Data collection.
5. Prepare & Analyze the Data
6. Prepare & Present the Report7/3/2014 Kartikeya Singh 13

4. Research Process-Simplified
1. Identifying and Defining
the Research Problem
2. Conducting Survey
3. Formulating hypothesis
4. Creating Research Design
5. Determining the data Need
6. Sample Selection
7. Designing Questionnaire
8. Selection and Training of
Field Staff
9. Collection of Data
10. Data Processing
11. Data Analysis and
Interpretation
12. Preparation of Research
Report
13. Follow up

5. Management Dilemma
a). Decision Problem
• Research Problem: Research problem
must contain the following
i. An Individual or an organization which has the
problem
ii. Some objective/goal to be attained.
iii. Research Should have some doubts regarding
the selection of possible alternatives.
iv. They must occupy some environment/condition
to which the difficulty pertains
v. There should be some alternative course of
action through which the objectives can be
attained.

6.(b) Research Problem
• Research problem
enables the
researchers to be on
the right path,
whereas an ill-defined
problem may create
problems. In real
sense, formulation of
a problem is often
more essential than
its solution.

7.Hypothesis Statement
The word hypothesis is a compound of two words
‘hypo’ and ‘thesis’. Hypo means under or below
and thesis means a reasoned theory or a
viewpoint.
• “A hypothesis is an attempt at explanation: a
provisional supposition made in order to
explain scientifically some fact or
phenomenon.” - Coffey
• “Hypothesis is a summary which is temporary
and imaginary related to subject of study.” -
George Caswell
• “Hypothesis is a proposition which can be put
to test to determine its validity”- Good and
Hatt

7.(a)Characteristics of Good Hypothesis
• Guidance
• Clarity
• Not in Exaggerative
Language
• Temporary Solution
• Connectivity with
Main problem
• Specialization
• Scientific and
Meaningful
• Related with
Theories

7.Research Proposal
• A research proposal is a document
written by a Researcher that
describes in details the program for a
proposed scientific investigation..
• A research proposal is a document
written by a researcher that provides
a detailed description of the
proposed program. It is like an
outline of the entire research process
that gives a reader a summary of the
information discussed in a project.

7. Research Proposal

7.Drafting a Research Proposal
1. Brief paragraph – what the research is about.
2. Background to the topic
3. Why this research is import, necessary, and
what is new about it.
4. Detail what the research about – Aims and
objectives of the research.
5. If we have research design then give a glimpse
of it.(not necessary)
6. Methodology – How you are going to carry this
research.
7. Limitations if any.

8. Various Sources of Market Information
• Importance of Market Information.
– Anticipation of consumer demand
– Complexity of Marketing
– Significance of Economic Indicators
– Significance of Competition
– Development of Science and Technology
– Consumerism
– Marketing Planning
– Information explosion.

8.Various Sources of Market Information
• Marketing
Information:-
“Marketing research is
the function which
links the consumer,
customer and public to
the marketer through
information.”
• Data – “Recorded
experience that is
useful for decision
making.”
• Characteristics:
– Accurate
– Current
– Sufficient
– Available
– Relevant

8.Various Sources of Market Information.
a) Methods of collecting Market Information
• Questionnaire Method
• In this method, the
responded is
questioned directly
about his attitudes,
opinion etc.
• Observation Method
• In this method the
responded is simply
observed and his
actions are recorded.
This is done by using
mechanical devices
or by physically
watching them.

Questionnaire Method:-
• Questionnaire is simply a formalized schedule to
obtain and record specific and relevant information
with accuracy.
• Questionnaire has five functions to perform
– Give the respondent clear comprehension of the questions.
– Assurance of confidentiality.
– Stimulate responses through introspection, using memory or
reference to records.
– Give instructions on what is required and the way it would be
responded.
– Identify what needs to be known to classify and verify the
interview.

Questionnaire Method:-
• Eight steps in designing a questionnaire:-
1. Determine the specific data to be collected
2. Determine Interview Process
3. Then evaluation of the questionnaire content
4. Decide on Question Content
i. Open ended
ii. Closed ended
a) Dichotomous
b) Ranking
c) Checklist
d) Multiple Choice Questions
e) Scales
Cont…….

• Questionnaire Method:-Contd….
• Eight steps in designing a questionnaire:-
5. Determine the wordings of the questions.
I. Use of simple language.
II. Use familiar words
III. Avoid using lengthy questions
IV. Be as specific as possible.
6. Questionnaire structure.—Sequence of
questions.
7. Determine the physical characteristics of the
forum.
8. Pretest, Revision and Final Draft.

Advantage:-
a. The questionnaire method
has the capacity to address
or deal with all types/aspects
of research problems.
b. This method can maintain
confidentiality of answers
and hence respondents can
freely express themselves.
c. The processing of data can
be fast if the questionnaire is
well structured.
d. It is less time consuming and
less expensive than
observation method.
e. It is very structured and thus
leaves little room for
manipulation or incorrect
recording by the interviewer
or respondent.
Disadvantage:-
a. A saturation level has been reached
and now the respondent is not willing
to fill up questionnaire and hardly
manages to spare time.
b. If a questionnaire is not well-
designed, it generates incomplete
information.
c. Interviewers who are not well trained
can spoil a good questionnaire.
d. The respondent may not fill a
questionnaire property if he has to
tax his memory too much.
e. Lack of Time.
f. Lack of Interest.
Questionnaire Method:-Contd….

Observation Method:-
• Another method used for gathering research data is by
observing a respondents over behavior. Observation is used
to obtain information on both past and present behavior of
people.
• Observation may be used either solely or in conjunction with
some other method.
• The potential components in this form must be evaluated on
the basis of four criteria to determine what exactly is to be
observed:
I. Who should be observed?
II. What should be observed?
III. When should the observation take place?
IV. What should be the expected path?
Equipments used for it:- eye camera, pupil metric camera,
Psycho galvanometer, video camera, cctv etc.

Advantage:-
I. It is objective and accurate.
II. It eliminates the subjective
element faced in
questionnaires
III. The willingness of the
respondents does not
matter as the respondent is
not aware.
IV. It is very useful in case of
respondents where there is
difficulty to communicate.
Disadvantage:-
I. The action observed may not
necessary be the one in actual
normal circumstances.
II. It is very expensive and time
consuming to set up and
undertake observation studies.
III. It can’t yield information on
state of mind, motives etc.
IV. The observer must be properly
selected and trained as the data
collection depends upon skill of
the observer.
V. Time constraint.
VI. Confidentiality.
Survey Method:-

b) Secondary data – sources.
a) Secondary Data:- “Data collected by
someone else for purpose other than solving
the problem being investigated". Secondary
data can be collected through
I. Internal and
II. external sources.
a) Government Sources
b) Business References
c) Commercial Research Agencies

c) Problems of fit and accuracy.
• It is not enough to know what was the purpose behind
the data collection, it is also necessary to know how
the data was collected.
• Secondary data suffers from a major limitation of
obsolescence. The utility of secondary data
diminishes with time.
• Secondary data may be available but always be
relevant is not necessary.
• The Classification bases used in the secondary data
often do not coincide with those of the present study.
• Locating appropriate sources of secondary data is a
time consuming affair.
• One can not be always sure of the accuracy of
secondary data.

9. Syndicated services.
• Syndicate services may be regarded as
an ‘intermediate’ source falling between
primary and secondary sources of data.
Syndicated services are normally
designated to suit the requirements of
many individual firms. Such services are
particularly useful in the spheres of T.V.
viewing, magazine readership and
consumer goods/movement through retail
outlet.
• Syndicate services are provided by
certain organizations, which collect and
tabulate marketing information on a
continuous basis. Organizations providing
syndicated services may also engage
themselves in other types of research
work for their clients. However, such
organizations usually confine themselves
to this activity alone.

Assignment - 1
1. Define Market Research. State its
significance and Limitations.
2. What do you understand by the
term ethics in Market Research?
3. Elaborate Research Process in
detail with suitable example.
4. How hypothesis is different from
Research Proposal.
5. What are the various sources of
information. Discuss it in detail.
• Date of Submission
– 27th September,2013

Case Study-JD sports
• CASE STUDY-MARKET RESEARCH-JD
SPORTS.pdf

End of Unit I

Unit II

Syllabus of Unit II
1. Marketing research techniques:
2. Market development research:
I. Cool hunting – socio cultural trends,
II. Demand estimation research,
III. Test marketing,
IV. Segmentation Research - Cluster analysis,
V. Discriminant analysis.
3. Sales forecasting –
I. objective and
II. subjective methods
4. Marketing Mix Research:
I. Concept testing,
II. Brand Equity Research,
III. Brand name testing,
5. Commercial eye tracking :
I. package designs,
II. Conjoint analysis,
III. Multidimensional scaling
IV. positioning research,
V. Pricing Research,
VI. Shop and retail audits,
6. Advertising Research
I. Copy Testing,
II. Readership surveys and viewer ship surveys,
III. Ad tracking,
IV. Viral marketing research.

1. Research Techniques
• Ad Tracking – periodic or continuous in-market research to monitor
a brand’s performance using measures such as brand awareness, brand
preference, and product usage. (Young, 2005)
• Advertising Research – used to predict copy testing or track the efficacy
of advertisements for any medium, measured by the ad’s ability to get
attention (measured with Attention Tracking), communicate the message,
build the brand’s image, and motivate the consumer to purchase the
product or service. (Young, 2005)
• Brand equity research — how favorably do consumers view the brand?
• Brand association research — what do consumers associate with the
brand?
• Brand attribute research — what are the key traits that describe the
brand promise?
• Brand name testing - what do consumers feel about the names of the
products?
• Commercial eye tracking research — examine advertisements, package
designs, websites, etc. by analyzing visual behavior of the consumer
Concept testing - to test the acceptance of a concept by target consumers

1. Research techniques
• Cool hunting - to make observations and predictions in changes of new or existing
cultural trends in areas such as fashion, music, films, television, youth culture and
lifestyle
• Buyer decision making process research — to determine what motivates people
to buy and what decision-making process they use; over the last decade,
• Neuro marketing emerged from the convergence of neuroscience and marketing,
aiming to understand consumer decision making process
• Copy testing – predicts in-market performance of an ad before it airs by analyzing
audience levels of attention, brand linkage, motivation, entertainment, and
communication, as well as breaking down the ad’s flow of attention and flow of
emotion.
• Customer satisfaction research - quantitative or qualitative studies that yields an
understanding of a customer's satisfaction with a transaction
• Demand estimation — to determine the approximate level of demand for the
product
• Distribution channel audits — to assess distributors’ and retailers’ attitudes toward
a product, brand, or company
• Internet strategic intelligence — searching for customer opinions in the Internet:
chats, forums, web pages, blogs... where people express freely about their
experiences with products, becoming strong opinion formers.

• Marketing effectiveness and analytics — Building models and
measuring results to determine the effectiveness of individual
marketing activities.
• Mystery consumer or mystery shopping - An employee or
representative of the market research firm anonymously contacts a
salesperson and indicates he or she is shopping for a product. The
shopper then records the entire experience. This method is often
used for quality control or for researching competitors' products.
• Positioning research — how does the target market see
the brand relative to competitors? - what does the brand stand for?
• Price elasticity testing — to determine how sensitive customers
are to price changes
• Sales forecasting — to determine the expected level of sales
given the level of demand. With respect to other factors like
Advertising expenditure, sales promotion etc.

• Segmentation research - to determine
the demographic, psychographic, and behavioral characteristics of
potential buyers
• Online panel - a group of individual who accepted to respond to
marketing research
• Online Store audit — to measure the sales of a product or product
line at a statistically selected store sample in order to
determine market share, or to determine whether a retail store
provides adequate service
• Test marketing — a small-scale product launch used to determine
the likely acceptance of the product when it is introduced into a wider
market
• Viral Marketing Research - refers to marketing research designed to
estimate the probability that specific communications will be
transmitted throughout an individual's Social Network. Estimates
of Social Networking Potential (SNP) are combined with estimates
of selling effectiveness to estimate ROI on specific combinations of
messages and media.

2.(a)Cool Hunting.
• The practice of
observing current trends
and predicting where the
youth demographic will
shift in trends in the
immediate future.
• A term coined in the 90’s
referring to marketing
firms who looked to
design and develop the
newest trends.
• The marketing firms
then sell these ideas
to retail
establishments who
uses these idea to
earn more profits.

2.(a)Cool Hunting.
• The “hot new designs” influence…
• Art (ex. Magic Poster, Window
Pictures, Wall Paint Colors)
• Retail Merchandise (ex. Tights,
Baggy pants, Khaki’s, Knee Length
Socks, Not Socks)
• Music (ex. Reggae, Punk, Techno,
European, Alternative)
• Shoes (ex. Knee length boots, Low
Rise Sneakers, Design your own
shoes)
• Gaming (ex. Puzzle Solving
games, War Rally Games, Real
Life Solutions Gaming)
• Travel (Ex. Costa Rica, Thailand,
Backpacking)

2.(a)Cool Hunting.
 Alpha Consumer: A term
used by marketers to
define the “cool people”
setting trends within their
peer group. Usually the
alpha consumer is setting
this trend a year before it is
mainstreamed.
 Urban Pioneers: People
who are established in
music, fashion, film,
marketing, and advertising.

2.(b)Demand estimation research
• The decision-making
task has become
difficult and extremely
important
• The need of the hour
for a manager is to
know the behavior of
the market related
variables, their
interrelationship and
future movement
• Demand estimation
attempts to quantify the
links between the level
of demand for a
product and the
variables which
determines it whereas
demand forecasting
simply attempts to
predict the level of
sales at some particular
future date

- Methods of Demand Estimation
Demand
Estimation
Qualitative
Methods
Consumer Survey,
Market Experiment
Quantitative
Methods
Statistical Method
Model specification
Statistical Models7/3/2014 Kartikeya Singh 47

Qualitative Method
• Consumer Survey.
• Firms can obtain
information regarding their
demand functions by using
interviews and
questionnaires, asking
questions about buying
habits, motives and
intentions.
• These can be quick on-the-
street interviews, or in-
depth ones.

Qualitative Method
Advantage
• They give up-to-date
information reflecting the
current business environment.
• Much useful information can
be obtained that would be
difficult to uncovering other
ways;
• Firms can also establish
product characteristics that are
important to the buyer,
Disadvantage
• Validity: Consumers often find it
difficult to answer hypothetical
questions, and sometimes they
will deliberately mislead the
interviewer to give the answer
they think the interviewer wants.
• Reliability: It is difficult to collect
precise quantitative data by such
means.
• Sample bias: Those responding
to questions may not be typical
consumers.

Qualitative Method
• Market experiments:
• Laboratory experiments or consumer clinics seek to
test consumer reactions to changes invariables in the
demand function in a controlled environment.
• Consumers are normally given small amounts of money
and allowed to choose how to spend this on different
goods at prices that are varied by the investigator.
• However, such experiments have to be set up very
carefully to obtain valid and reliable results; the
knowledge of being in an artificial environment can affect
consumer behavior.

2.(b) Demand estimation research
Qualitative Method
Advantage
• Gives direct feed back
about customer interest.
• Customers are able to act
in stimulated atmosphere
so their interest level can
be known immediately
• Direct observation of the
consumers takes place
rather than something of
a hypothetical theoretical
model .
Disadvantage
• There is less control in
this case
• The number of variations
are more
• Experiments may have to
be long-lasting

Qualitative Method
Model specification
• In order to understand this we must first distinguish a
statistical relationship from a deterministic relationship. The
latter are relationships known with certainty, for example
the relationship among revenue, price and quantity:
• R=P*Q; if P and Q are known R can be determined exactly.
• Statistical relationships are much more common in
economics and involve an element of uncertainty. The
deterministic relationship is considered first.

Qualitative Method
Mathematical models:
• It is assumed to begin with
that the relationship is
deterministic. With a simple
demand curve the
relationship would therefore
be:
• Q=f (P)
• If we are also interested in
how sales are affected by
the past price, the model
might in general become:
• Qt=f (Pt, Pt-1)

Qualitative Method
In practice we can very rarely specify an economic relationship exactly. Models
by their nature involve simplifications; in the demand situation we cannot hope
to include all the relevant variables on the right hand side of the equation, for a
number of reasons:
1. We may not know from a theoretical viewpoint what variables are relevant
in affecting the demand for a particular product.
2. The information may not be available, or impossible to obtain. An example
might be the marketing expenditures of rival firms.
3. It may be too costly to obtain the relevant information. For example, it might
be possible to obtain information relating to the income of customers, but it
would take too much time (and may not be reliable).
• Statistical models

Qualitative Method
Statistical Method
• In a perfect relationship the points would exactly fit a
straight line, or some other regular curve. We therefore
have to specify the relationship in statistical terms, using a
residual term to allow for the influence of omitted
variables. This is shown for the linear form as follows:
• Qi=a +bPi +di
• where di represents a residual term. Thus, even if P is
known, we cannot predict Q with complete accuracy
because we do not know for any observation what the size
or direction of the residual will be.

2.(c) Test marketing
• Test marketing is a research technique which is
used when the proposed product and the
marketing programme for the same is tried out for
the first time with a small sample size in the
potential market.
• Test marketing is defined as “A controlled
experiment done in a limited but carefully
selected part of the market place, whose aim is
to predict the sales or profit consequences in
absolute or relative terms of one or more
proposed marketing actions”

• Features
– It helps to get information and experience with the
marketing programme before finalizing the plans and
making a total commitment to it.
– It helps to predict the programmes outcome when it is
applied to the total market.
– It is costly/Expensive.
– It is time consuming.
– It allows the competitors to view your new product or
your test marketing mix.
– The test market should be large enough to provide
meaningful results and it should be demographically
represent the actual population

Methods of Test Marketing
• Consumer Goods Test Marketing:
– Purchase frequency
– Trial purchase
– Repeat purchase
• Sales Wave Research:
– Offered free for trial and then they charge for it. They repeat the
process 3-4 times.
– When customer makes the choice to purchase
– How they get an advantage over their competitor.
• Simulated Test Marketing:
– Simulation is an imitation of a real world situation.
– Advertisement shown>Money provided>store purchase behavior
noticed>compared with the competitor.
• Controlled Test Marketing:
– Shelf position, display method, point of purchase, pricing etc.

2.(d) Segmentation Research – Cluster Analysis
Cluster analysis is used to classify persons
or objects into a smaller number of
mutually exclusive and exhaustive groups.
There should be high internal (within
cluster) homogeneity and high
external(between cluster) heterogeneity,
cluster analysis has been increasingly
used in marketing research due to its utility
in resolving the problem of classifying the
consumers, products etc.

2.(d) Segmentation Research – Cluster Analysis

2.(e). Discriminant analysis
• A discriminant analysis enables the researcher
to classify the person or objects into two or more
categories.
• For Example, consumers may be classified as
heavy and light users.
• With the help of such techniques, it is possible to
predict the categories or classes which are
mutually exclusive in which individuals are likely
to be included. In recent years, discreminant
analysis has been used by the marketing
researchers.
• Identifying new product buyers, determining
brand loyalty among customers etc.

a). Objective and Subjective methods
• Sales analysis:- Sales
analysis enables a company to
identify the areas where its
sales performance has been
good or mediocre, customers
who have bought I bulk,
products with high and low
sales volume etc.
• A systematic, comprehensive
and periodical sales analysis
will be helpful to a company to
reinforce its sales effort where
it is most needed. In this way,
it can achieve the best
possible results.

• Sales analysis by
Territory
• Sales analysis by Product
• Sales analysis by
Customer
• Sales analysis by Order

• The concept of Market Potential.
– “Market Potential has been defined as “the
maximum demand response possible for a
given group of customers within a well-
defined geographic area for a given product
or service over a specified period of time
under well-defined competitive and
environmental conditions”

• Methods of Estimating Current Demand:
• “Total market potential is the maximum amount of
sales that might be available to all the firms in an
industry during a given period under a given level
of industry marketing effort and given
environment conditions”
• Symbolically, total marketing potential is
• Q = nxqxp
– Q = total market Potential
– n = number of buyers in the specific product/market
under the given assumptions
– q = quantity purchased by an average buyer
– p = price of an average unit.

 Process of predicting a future event
based on historical data
 Educated Guessing
 Underlying basis of
all business decisions
 Production
 Inventory
 Personnel
 Facilities
•What is Sales
forecasting
•Importance
•Forecasting
Process

• Predict the next number in
the pattern:
a) 3.7, 3.7, 3.7, 3.7, 3.7,
b) 2.5, 4.5, 6.5, 8.5, 10.5,
c) 5.0, 7.5, 6.0, 4.5, 7.0,
9.5, 8.0, 6.5,
•What is Sales
forecasting
•Importance
•Forecasting
Process

Importance:
a) It keeps any firm ready for any contingency to happen.
b) It is tool to help budgeting for the entire firm
c) Forecasting is quite necessary for planning for
uncertain future in different areas of the economy.
d) For effective planning by providing a scientific and
reliable basis for anticipating future operations such as
production, inventory, supply of capital and so on.
e) For reducing the area of uncertainty that surrounds
management decision-making with respect to cost,
production, profits, pricing, etc.
f) Making and reviewing on a continuous basis will
compel the managers to think ahead and to search for
the best possible decisions with a dynamic approach.
g) For efficient managerial control as Forecast of sales a
must in order to control the costs of production and the
productivity of personnel.
•What is Sales
forecasting
•Importance
•Forecasting
Process

a). Objective and Subjective methods.
5
Forecast is to be made.
4
How necessary Data should be collected
3
The method or Technique of forecasting is to selected
2
Time period for which the forecast is to be made
1
Objective of the Sales Forecast
•What is Sales
forecasting
•Importance
•Forecasting
Process

• Short-range forecast
– Usually < 3 months
• Job scheduling, worker assignments
• Medium-range forecast
– 3 months to 2 years
• Sales/production planning
• Long-range forecast
– > 2 years
• New product planning
Design
of system
Detailed
use of
system
Quantitative
methods
Qualitative
Methods

Introduction Growth Maturity Decline
Sales
Time
Quantitative models
- Time series analysis
- Regression analysis
Qualitative models
- Executive judgment
- Market research
-Survey of sales force
-Delphi method

Methods of
Forecasting
Subjective or
Qualitative
Field Sales
Force
Jury of
Executives
Users
Expectations
The Delphi
Method
Objective or
Quantitative
Causal
Leading
Indicators
Input-Output
analysis
Regression
Models
Econometric
Models
Time Series
Free Hand
Trend
Projection
Exponential
Smoothing
Autoregressive
Model
Box- Jenkins
Models

Subjective Methods:
• An important advantage of subjective
methods is that they are easily understood.
• Another advantage is that the cost involved in
forecasting is quite low.
• One major limitation is the varying
perceptions of people involved in forecasting.
As a result, wide variance is found in
forecasts.
• Subjective methods may be more suitable in
case of highly technical products which have
a limited number of customers.
a). Subjective methods.
Subjective Method
a) Field Sales
Force
b) Jury of
Executives
c) Users
Expectations
d) The Delphi
Method

Field Sales Force
• Some companies ask their salesman to indicate the most likely
sales for a specified period in the future.
• Usually the salesman is asked to indicate anticipated sales for
each account in his territory. These forecasts are checked by
district managers who forward them to the company’s head
office. Different territory forecasts are then combined into a
composite forecast at the head office. This method is more
suitable when a short-term forecast is to be made as there
would be no major changes in this short period affecting the
forecast.
• Advantage
– Sales force are directly involved so we get a direct feedback
• Disadvantage
– Sales force would not take an overall or broad perspective
– Sales force may give somewhat low figure.
Subjective
Method
a) Field Sales
Force
b) Jury of
Executives
c) Users
Expectations
d) The Delphi
Method

Jury of Executives:
• Some companies prefer to assign the task of sales
forecasting to executives instead of a sales force. Given this
task each executive make his forecast for the next period.
Since each has his own assessment of the environment and
other relevant factors, one forecast is likely to be different
from the other.
• To narrow down the differences in the forecasts, sometimes
discussion between the executives is organized so that
they can arrive at a common forecast. In case this is not
possible, the chief executive may have to decide which of
these forecasts is acceptable as a representative one.
• Advantage:
– It includes large base of executive to come on final consensus.
• Disadvantage:
– Opinion may be influenced by current market conditions.
Subjective
Method
a) Field Sales
Force
b) Jury of
Executives
c) Users
Expectations
d) The Delphi
Method

Users Expectations
• Forecast can be based on users expectations
or intentions to purchase goods and services.
• It is difficult to use this method when the
number of users is large.
• Another limitations of this method is that
though it indicates users intentions to buy, the
actual purchases may be far less at a
subsequent period.
• It is most suitable when the number of buyers
is small such as in case of industrial
products.
Subjective
Method
a) Field Sales
Force
b) Jury of
Executives
c) Users
Expectations
d) The Delphi
Method

The Delphi Method:
• This method is based on the expert opinions. Here,
each expert has access to the same information that is
available. A feedback system generally keeps them
informed of each others forecasts but no majority opinion
is disclosed to them. However, the experts are not
brought together. This is to ensure that one or more
vocal experts do not dominate other experts.
• The experts are given an opportunity to compare their
own previous forecasts with those of the others and
revise them. After three or four rounds, the group of
experts arrives at a final forecast.
• The method may involve a large number of experts and
this may delay the forecast considerably. Generally it
involves a small number of participation
Subjective
Method
a) Field Sales
Force
b) Jury of
Executives
c) Users
Expectations
d) The Delphi
Method

b).Objective methods.
• Quantitative or Objective Method
1. Causal or Explanatory Methods
Causal or explanatory methods are regarded as the
most sophisticated methods of forecasting. These
methods yield realistic forecasts provided relevant
data are available on the major variables
influencing changes in sales. There are three
distinct advantages of causal methods.
First, turning points in sales can be predicted more
accurately by these methods than by time-series
methods.
Second the use of these methods reduces the
magnitude of the random component far more
than it may be possible with the time series
methods.
Third, the use of such methods provides greater
insight into causal relationships
This facilitates the management in decision making.
Quantitative or Objective
Method
1. Causal or Explanatory
Methods
a) Leading Indicators
b) Regression Models
c) Input-Output
Analysis
d) Econometric
Models
2. Time Series
a) Free hand
b) Trend Projection
c) Exponential
Smoothing
d) Autoregressive
Model
e) Box Jenkins Model

a) Leading Indicators:
• Sometimes one finds that changes in sales of a
particular product or service are preceded by
changes in one or more leading indicators. In such
cases, it is necessary to identify leading indicators
and to closely observe changes in them.
• One example of leading indicators is the demand for
various household appliances which follows the
construction of new houses.
• Likewise, the demand for many durables is
preceded by an increase in disposable income.
• Yet another example is of number of births. The
demand for baby food and other goods for infants
can be ascertained by the number of births in
territory. It may be possible to include leading
indicators in regression models.
Method
Methods
a) Leading
Indicators
c) Input-Output
Analysis
d) Econometric
Models
2. Time Series
a) Free hand
b) Trend Projection
c) Exponential
Smoothing
d) Autoregressive
Model

a).Subjective methods.
b). Regression Models:
• Linear regression analysis is perhaps the most
frequently used and the most powerful method
among causal methods.
• Regression models indicate linear
relationships within the range of observations
and at the times when they were made.
• Sometimes there may be a lagged relationship
between the dependent and independent
variables.
• It may happen that the data required to
establish the ideal relationship, do not exist or
are inaccessible or, if available, are not useful.
• Finally, regression model reflects the
association among variables.
Method
Methods
b) Regression
Models
c) Input-Output
Analysis
d) Econometric
Models
2. Time Series
a) Free hand
b) Trend Projection
c) Exponential
Smoothing
d) Autoregressive
Model

Input and Output Method:
• The analyst takes into consideration a large number of
factors, which affect the outputs he is trying to forecast.
For this purpose, input- out put table is prepared where
the inputs are shown horizontally trying to forecast.
• For this purpose, input-output table is prepared where
the inputs are shown horizontally as the column
headings and the outputs vertically as the stubs. It may
be mentioned that by themselves input-output flows are
of little direct use to the analyst.
• The use of input-output analysis in sales forecasting is
appropriate for products sold to governmental,
institutional and industrial markets as they have distinct
patterns of usage. It is seldom used for consumer
products and services.
• Major constraint in the use of this method is that it needs
extensive data for a large number of items which may not
easily available.
Method
Methods
c) Input-Output
Analysis
d) Econometric
Models
2. Time Series
a) Free hand
b) Trend Projection
c) Exponential
Smoothing
d) Autoregressive
Model

d). Econometric Models:
• Econometric is concerned with the use of statistical and
mathematical techniques to verify hypothesis emerging
in economic theory. An econometric model incorporates
functional relationships estimated by these techniques
into an internally consistent and logically self-contained
framework. The use of econometric models is generally
found at the macro level such as forecasting national
income and its components.
• Such models show how the economy or any specific
segment operates. As compared to an ordinary
regression equation, they bring out the causalities
involved more distinctly. This merit of econometric
models enables them to predict turning points more
accurately. However, their use at the micro level for
forecasting has so far been extremely limited.
Method
Methods
c) Input-Output
Analysis
d) Econometric
Models
2. Time Series
a) Free hand
b) Trend Projection
c) Exponential
Smoothing
d) Autoregressive
Model

• Time Series: Values taken by a variable over time (such
as daily sales revenue, weekly orders,
monthly overheads, yearly income) and tabulated or
plotted as chronologically ordered numbers
or data points.
• To yield valid statistical inferences, these values must be
repeatedly measured, often over a four to five
year period. Time series consist of four components:
I. Seasonal variations that repeat over a specific period such
as a day, week, month, season, etc.,
II. Trend variations that move up or down in a reasonably
predictable pattern,
III. Cyclical variations that correspond with business or
economic 'boom-bust' cycles or follow their own peculiar
cycles, and
IV. Random variations that do not fall under any of the above
three classifications.
Method
Methods
c) Input-Output
Analysis
d) Econometric
Models
2. Time Series
a) Free hand
b) Trend Projection
c) Exponential
Smoothing
d) Autoregressive
Model

a). Freehand Method: One of the
methods of getting a secular trend is
the freehand method.
It may be mentioned that it is the
simplest method of finding the trend
line, which is simply extended for
forecast.
It is highly subjective method as the
trend line fitted to the same set of data
will vary from one person to another
as such it is the most inappropriate
method to be used for forecasting
Method
Methods
c) Input-Output
Analysis
d) Econometric
Models
2. Time Series
a) Free hand
b) Trend Projection
c) Exponential
Smoothing
d) Autoregressive
Model

b). Trend Projection: The trend is
forecast simply by substituting the
appropriate value t(i.e. the year for
which the forecast is desired) in the
least squares line.
In case the data are monthly or
quarterly, this value is to be multiplied
by the seasonal index.
Finally we measure the cyclical
component and try to ascertain what
it is likely to be at the point for which
forecast is being made.
Method
Methods
c) Input-Output
Analysis
d) Econometric
Models
2. Time Series
a) Free hand
b) Trend Projection
c) Exponential
Smoothing
d) Autoregressive
Model

c). Exponential Smoothing: When a large
number of forecasts are to be made for a
number of items, exponential smoothing is
particularly suitable as it combines the
advantages of simplicity of computation and
flexibility. It may be used for short-term
forecasts(One period into the future)
particularly when there is no long-term trend in
a time series data or when the trend is not
clear.
This method uses differential weights to time-
series data. The heaviest weight is assigned to
the most recent data and the least weight to
the most remote data in the time series. It is a
type of moving average that “smooth's” the
time series of its sharp variations.
Method
Methods
c) Input-Output
Analysis
d) Econometric
Models
2. Time Series
a) Free hand
b) Trend Projection
c) Exponential
Smoothing
d) Autoregressive
Model

• Exponential Smoothing:
The formula used for exponential smoothing is based on three terms:
i) The present observed value of the time series Y
ii) The previous computed exponentially smoothed value Ei-1
iii) A subjectively assigned weighting factor or smoothing coefficient W.
Thus, the formula is
Ei=WYi+(1-W)Ei-1
Ei = value of the exponentially smoothed series being computed in time
period i.
Ei-1 = value of the exponentially smoothed series computed in the
preceding time period i-1
Yi = observed value of the time series in period i.
W = subjectivity assigned weight whose value is between 0 and 1.
Method
Methods
c) Input-Output
Analysis
d) Econometric
Models
2. Time Series
a) Free hand
b) Trend Projection
c) Exponential
Smoothing
d) Autoregressive
Model

Sales data of a firm for the year 1995 to 2000 are given below
1995 15
1996 24
1997 15
1998 20
1999 22
2000 28
Method
Methods
c) Input-Output
Analysis
d) Econometric
Models
2. Time Series
a) Free hand
b) Trend Projection
c) Exponential
Smoothing
d) Autoregressive
Model
Exponentially Smoothed Values of Sales of a Business Firm
Year Sales (milliion rs) W=0.5 W=0.3
1995 15 15 15
1996 24 19.50 17.70
1997 15 17.25 16.89
1998 20 18.63 17.82
1999 22 20.32 19.07
2000 28 24.16 21.75

• Autoregressive model:
• Sometimes the values of a time
series data are highly correlated
with the values that precede and
succeed them. In such cases an
auto regression model is used for
forecasting.
• The first order auto regressive
model may be expressed as
• Y^i=b0+b1Yi-1
Method
Methods
c) Input-Output
Analysis
d) Econometric
Models
2. Time Series
a) Free hand
b) Trend Projection
c) Exponential
Smoothing
d) Autoregressive
Model

• Box-Jenkins Method: The analyst
identifies a tentative model
considering the nature of the past
data. This tentative model and the
data are entered in the computer.
The box-Jenkins programme then
gives the values of the parameters
included in the model. A diagnostic
check is then conducted to find out
whether the model gives an adequate
description of the data. If the model
satisfies the analyst in this respect,
then it is used to make the forecast.
Method
Methods
c) Input-Output
Analysis
d) Econometric
Models
2. Time Series
a) Free hand
b) Trend Projection
c) Exponential
Smoothing
d) Autoregressive
Model
e) Box Jenkins
Model

4.Marketing Mix Research
a). Concept Testing

a). Concept Testing
• Concept testing (or market testing) is the process of
using quantitative methods and qualitative methods to
evaluate consumer response to a product idea prior to
the introduction of a product to the market.
• It can also be used to generate communication designed
to alter consumer attitudes toward existing products.
• Such methods are commonly referred to as concept
testing and have been performed using field surveys,
personal interviews and focus groups, in combination
with various quantitative methods, to generate and
evaluate product concepts.

b). Brand Equity Research:
• A brand is a “name,
term, sign, symbol, or
design, or a
combination of them
intended to identify the
goods and services of
one seller or group of
sellers and to
differentiate them from
those of competition.”
• :-American Marketing
Association

• Brand equity is the added
value that endowed to
products and services. This
value may be reflected in
how consumers think, feel,
and act with respect to the
brand, as well as the prices,
market share and
profitability that the brand
commands for the firm.
Brand equity is an important
intangible asset that has
psychological and financial
value to the firm.

• Brand equity research measures your brand
value. We use leading edge brand equity
research models and quantitative marketing
research tools to tailor each client firm's
research analysis study.
• Brand equity research studies support
branding strategy programs
• Brand Base Research
• Brand Qualitative Research
• Brand Quantitative Research

c).Brand Name Testing
• Develop Your Brand Strategy
• Research the Market, Competitors, and
Consumers
• Identify the Message Your Brand Should
Communicate
• Brainstorm without Judging
• Create a Short List
• Trademark and Domain Name Availability
Search
• Create a Shorter Short List
• Develop Brand Marketing Mock-ups
• Test Your Brand Marketing Mock-ups
• Roll out and Monitor Your Brand

• So how should names be
researched?
• Here’s just a few thoughts and
research companies may not
respond well to this kind of heresy.
Every one will have their own
methodology and you will need to
decide if it can adapt easily to
names. However, these principles
apply if you are talking to real
people or their ‘avatar’.
• Think about what you are testing.
This will help to keep research
simple.
• Allow the audience to concentrate
on the names. Don’t let them be
distracted by elements which
potentially cloud their judgement.
• Don’t waste your time producing
unnecessary stimulus. Instead, you
should be testing the strength of
prospective names before entering
into design (unless of course, you
have unlimited budget!).
• Don’t waste time on too many
names. If you’ve done your job, you
will already have narrowed the list
to a manageable size – say, six
words. If you can’t be decisive, use
a group to screen out then use the
subsequent ones to dig deeper.
• Listen out for consumers playing
back to you the criteria you’ve used
all the way through the development
process – then you’ll know that
you’ve asked the right questions.

• Put your thoughts into context (without
getting caught up in the detail of design
work). For example, set the scene with
what your product is and does – not the
price and pack size. You recruited these
people because they’re your target, but
they don’t have to like the product to tell
you that the name isn’t right for it. You
could also tell them about the personality of
your brand, what its story is, because then
they’ve got something to relate the names
back to, not just a product or a usage
occasion.
• Don’t let the respondents read the words
until they have heard them. The consumer
should react to the name, not just to words
on a page. Get them to say them out loud –
to test ease of pronunciation. (You won’t
hear this in an on-line test, so how will you
know if it works?).
• Remember the core idea? Which of the
names best fits the story?
• Don’t worry about how many people like
the name – this is a brand, you want
stronger emotions than ‘like’. You want and
need people to sit up and take notice; a
groan, a laugh. That doesn’t mean that
they have to like it. And a name can be
right for all the wrong reasons.
• Research is for your guidance and
reassurance, not necessarily for cut-and-
dried decisions.
• And finally, don’t believe them when they
say they don’t like it. If you ask the right
questions and prompt them the right way,
you may find that the first name they heard
– and hated – is actually the one they think
works best for the brand! Brand names
seep into our consciousness, they do not
always bang us over the head. Give them
time to fall in love.

d). Commercial Eye Tracking
• Determining what a user looks at. Using
sophisticated equipment, eye tracking
follows the eye movements of a person
looking at any visual such as a printed ad,
an application's user interface or a page
on a Web site. It is used to analyze the
usability and effectiveness of the layout.

d). Package Designs
I. Protect
II. Inform
III. Contain
IV. Transport
V. Preserve
VI. Display
I. Captures Attention
II. Offers First
Impression
III. Provides Information
IV. Aids Purchasing
V. Addresses Needs in
Global Markets
VI. Meets Legal
Requirements

f).Conjoint analysis,
• Technique that allows a
subset of the possible
combinations of product
features to be used to
determine the relative
importance of each
feature in the purchase
decision
• Conjoint Analysis is an
advanced multivariate
technique that helps to
identify what value most
in making decisions.

f).Conjoint analysis,
Attitudes towards dishwashing
products
1.Clean: glass/dishes clean
2.Shiny: glass/dishes shiny
3.Smell: Non-perfumed/lemon
fresh/intensive lemon fresh
4.Quantity: small/medium/x-
large
5.Packaging: loose in box/tab
in plastic/tab in dissolving
plastic
6.Design: single/multi-
colored/multi-colored + ball
• Advantage:
• Estimates psychological tradeoffs
that consumers make when
evaluating several attributes
together
• Ensures preferences at the
individual level
• Uncovers real or hidden drivers
which may not be apparent to the
respondent themselves
• Realistic choice or shopping task
• Able to use physical objects
• If appropriately designed, the ability
to model interactions between
attributes can be used to develop
needs based segmentation

g).Multidimensional Analysis
• Multidimensional scaling (MDS) is a class of
procedures for representing perceptions and
preferences of respondents spatially by means of
a visual display.
• Perceived or psychological relationships among
stimuli are represented as geometric relationships
among points in a multidimensional space.
• These geometric representations are often called
spatial maps. The axes of the spatial map are
assumed to denote the psychological bases or
underlying dimensions respondents use to form
perceptions and preferences for stimuli.

Statistics and Terms Associated with MDS
• Spatial map. Perceived relationships among brands or
other stimuli are represented as geometric relationships
among points in a multidimensional space called a
spatial map.
• Coordinates. Coordinates indicate the positioning of a
brand or a stimulus in a spatial map.
• Unfolding. The representation of both brands and
respondents as points in the same space is referred to
as unfolding.

Conducting Multidimensional Scaling
Formulate the Problem
Obtain Input Data
Decide on the Number of Dimensions
Select an MDS Procedure
Label the Dimensions and Interpret
the Configuration
Assess Reliability and Validity

i). Formulate the Problem
• Specify the purpose for which the MDS results would be
used.
• Select the brands or other stimuli to be included in the
analysis. The number of brands or stimuli selected
normally varies between 8 and 25.
• The choice of the number and specific brands or stimuli
to be included should be based on the statement of the
marketing research problem, theory, and the judgment of
the researcher.

ii). Input Data for Multidimensional Scaling
Direct (Similarity
Judgments)
Derived (Attribute
Ratings)
MDS Input Data
Perceptions Preferences

• Perception Data: Direct Approaches. In direct approaches to
gathering perception data, the respondents are asked to judge how
similar or dissimilar the various brands or stimuli are, using their own
criteria. These data are referred to as similarity judgments.
Very Very
Dissimilar Similar
Crest vs. Colgate 1 2 3 4 5 6 7
Aqua-Fresh vs. Crest 1 2 3 4 5 6 7
Crest vs. Aim 1 2 3 4 5 6 7
.
.
.
Colgate vs. Aqua-Fresh 1 2 3 4 5 6 7
• The number of pairs to be evaluated is n (n -1)/2, where n is the
number of stimuli.
ii). Conducting Multidimensional Scaling Obtain Input Data

Similarity Rating Of Toothpaste Brands
Aqua-Fresh Crest Colgate Aim Gleem Macleans Ultra Brite Close-Up Pepsodent Dentagard
Aqua-Fresh
Crest 5
Colgate 6 7
Aim 4 6 6
Gleem 2 3 4 5
Macleans 3 3 4 4 5
Ultra Brite 2 2 2 3 5 5
Close-Up 2 2 2 2 6 5 6
Pepsodent 2 2 2 2 6 6 7 6
Dentagard 1 2 4 2 4 3 3 4 3

• Perception Data: Derived Approaches. Derived approaches
to collecting perception data are attribute-based approaches requiring the
respondents to rate the brands or stimuli on the identified attributes using
semantic differential or Likert scales.
Whitens Does not
teeth ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ whiten teeth
Prevents tooth Does not prevent
decay ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ tooth decay
.
.
.
.
Pleasant Unpleasant
tasting ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ tasting
• If attribute ratings are obtained, a similarity measure is derived for each
pair of brands.
Obtain Input Data

A Spatial Map of Toothpaste
Brands
0.5
-1.5
Dentagard
-1.0-2.0
0.0
2.0
0.0
Close Up
-0.5 1.0 1.50.5 2.0
-1.5
-1.0
-2.0
-0.5
1.5
1.0
Pepsodent
Ultrabrite
Macleans Aim
Crest
Colgate
Aqua- Fresh
Gleem

Using Attribute Vectors to Label Dimensions
0.5
-1.5
Dentagard
-1.0-2.0
0.0
2.0
0.0
Close Up
-0.5 1.0 1.50.5 2.0
-1.5
-1.0
-2.0
-0.5
1.5
1.0
Pepsodent
Ultrabrite
Macleans Aim
Crest
Colgate
Aqua- Fresh
Gleem Fights
Cavities
Whitens Teeth
Cleans Stains

• Stimuli can be selectively eliminated from the input data
and the solutions determined for the remaining stimuli.
• A random error term could be added to the input data.
The resulting data are subjected to MDS analysis and
the solutions compared.
• The input data could be collected at two different points
in time and the test-retest reliability determined.
Assess Reliability and Validity

External Analysis of Preference
Data
0.5
-1.5
Dentagard
-1.0-2.0
0.0
2.0
0.0
Close Up
-0.5 1.0 1.50.5 2.0
-1.5
-1.0
-2.0
-0.5
1.5
1.0
Pepsodent
Ultrabrite
Macleans Aim
Crest
Colgate
Aqua- Fresh
Gleem Ideal Point

Assumptions and Limitations of
MDS
• It is assumed that the similarity of stimulus A to B is the
same as the similarity of stimulus B to A.
• MDS assumes that the distance (similarity) between two
stimuli is some function of their partial similarities on
each of several perceptual dimensions.
• When a spatial map is obtained, it is assumed that
interpoint distances are ratio scaled and that the axes of
the map are multidimensional interval scaled.
• A limitation of MDS is that dimension interpretation
relating physical changes in brands or stimuli to changes
in the perceptual map is difficult at best.

h). Positioning Research,
• The first component is the product class
or the structure of the market a
company's brand will compete.
• The second component is consumer
segmentation.
• The third component is the consumers
perception of the company’s brand in
relation to those of the competitors.
• Fourth component of positioning is the
benefit offered by the company’s brand.

i). Pricing Research
Market Segmentation.
Estimate of Demand.
The Market Share.
The Marketing Mix.
Estimate of Costs.
Pricing Strategy.
The price Structure.

• Market Segmentation
– Type of product to be produced or sold
– The kind of service to be rendered
– The costs of operations, to be estimated.
– The type of customers or market segments
sought.

• Estimate of Demand:
– Marketers will estimate total demand for the
products. It will be based on sales forecast,
channel opinions and degree of competition in
the market
• Market Share:
– Marketer will choose a brand image and the
desired market share on the basis of
competitive reaction. Market planners must
know exactly what

j). Shop and Retail Audits
• Normally, the retailer would like that
research studies should cover
• Trade area analysis,
• Store image,
• Customer perception studies,
• In store traffic pattern,
• Location analysis

•End of
UnitII

•Unit III

Syllabus of Unit III
I. Marketing effectiveness and analytics research:
a) Customer Satisfaction Measurement,
b) Mystery shopping,
c) Market and Sales Analysis .
II. Exploratory designs
III. Descriptive designs
I. Longitudinal and cross-sectional analysis.
IV. Qualitative research techniques –
a) Based on questioning: Focus groups, Depth
interviews, Projective techniques.
b) Based on observations: ethnography, grounded
theory,
c) Participant observation.
V. Causal research –
a) Basic experimental designs
b) internal and external validity of experiments.

• Marketing expert Tony Lennon believes marketing
effectiveness is quintessential to marketing, going so far
as to say It's not marketing if it's not measured
• Dimensions of marketing effectiveness:
– Corporate – Each company operates within different bounds.
These are determined by their size, their budget and their ability
to make organizes act in similar ways leading to the need to
segment them. Based on these segments, they make choices
based on how they value the attributes of a product and the
brand, in return for price paid for the product.
– Exogenous Factors – There are many factors outside of our
immediate control that can impact the effectiveness of our
marketing activities. These can include the weather, interest
rates, government regulations and many others.

• Factors driving marketing effectiveness:
• Marketing Strategy – Improving marketing effectiveness can be achieved by
employing a superior marketing strategy. By positioning the product or brand
correctly, the product/brand will be more successful in the market than competitors’
products/brands.
• Marketing Creative – Even without a change in strategy, better creativity can
improve results.
• Marketing Execution – By improving how marketers go to market, they can achieve
significantly greater results without changing their strategy or their creative execution.
At the marketing mix level, marketers can improve their execution by making small
changes in any or all of the 4-Ps (Product, Price, Place and Promotion) (Marketing)
without making changes to the strategic position or the creative execution marketers
can improve their effectiveness and deliver increased revenue.
• Marketing Infrastructure (also known as Marketing Management) – Improving the
business of marketing can lead to significant gains for the company. Management of
agencies, budgeting, motivation and coordination of marketing activities can lead to
improved competitiveness and improved results.
• Exogenous Factors - Generally out of the control of marketers, external or
exogenous factors also influence how marketers can improve their results.

Customer satisfaction measurement

“The customer you loose holds information
you need to succeed.”
Frederick F.Reichheld

Measures of
customer satisfaction
• Overall customer satisfaction with the organization and its products /
services
• Rating in the industry on the basis of overall customer satisfaction
• Satisfaction with value for money
• Desire to recommend the product or service to others.
• Loyalty in terms of repeat purchases

Means of measuring
customer satisfaction
I.Customer feedback after delivery of product or service
II.Customer complaints and suggestions
III. Customer Surveys

I. Customer feedback after delivery of product or
service
This is one of the simplest, fastest and the most effective method of
measuring customer satisfaction. The customers should be immediately
asked to evaluate the product or service and comment upon areas of
satisfaction and dissatisfaction.

II. Customer complaints and
suggestions
The organization must have a formalized system
of recording all customer complaints and as well
as the methods of their disposal. Customer
complaints must be taken very positively as
valuable inputs by the organization and should
immediately trigger the improvement activities.

IV. Customer surveys
Steps in conducting customer surveys: -
A. Identify your customers requirements under various segments.
B. Determine your survey methodology
C. Develop survey / interview questions
D. Conduct survey / Interview your customers

A. Identify your customers
requirement areas.
It is extremely important to know the requirement of your
customers before designing a questionnaire or survey. This is
because if we do not ask the right questions, the answers we get
will be irrelevant and it will be difficult to find out if the customers
are really satisfied with the issues that are important to them.

Ways to identify customer
requirements
• Discuss the issue with sample group of customers
• Ask your existing customers “If we have to develop a questionnaire to
measure our customers’ satisfaction, what questions should we ask.
• Brainstorming with employees from various functions within the
organization. A cross section of ideas from various people will give us
the complete picture about the requirement of the customers

Product requirements
For identifying the customer requirements for a
PRODUCT, the survey must cover the following
areas:
• Performance
• Timeliness
• Reliability
• Durability
• Serviceability
• Aesthetics

Service requirements
For identifying the customer requirements
for a SERVICE, the survey must cover the
following areas:
• Security
• Reliability
• Accessibility
• Timeliness
• Responsiveness
• Empathy
• Assurance

B. Determine your survey methodology
This requires the organization to answer the following questions :
• How many customers to survey?
• Whom to survey?
• How to survey?
• When to survey?
• Who should conduct the survey?

How many customers to survey
The basic rule behind sample selection is to choose a cross section
of customers which represents your overall customer base. For
example if your customer database consists of large, medium &
small organizations, your sample must represent the same.
Other criteria for selecting may include percentage of frequent versus
infrequent customers, industry sector & geographic area.

Whom to survey?
While conducting the survey, the organizations must include the
following customers:
• Present customers
• Potential customers
• Past customers
• Competitor’s customers

Whom to survey?
The customer sample must never be biased. Everyone wants to
hear good things from the customers and nobody wants to hear a
negative feedback. There is a natural tendency to include a
positive feedback and to exclude the negative feedback. This will
never reflect the true measure of customer satisfaction. The
organization must be willing to hear both positive & the negative
from the customers if they are truly willing to improve their
customer satisfaction.

How to survey?
The following methods can be used for conducting the survey:
• Mail survey
• Telephonic surveys
• Face to face interviews
• Comment cards
The best method will depend on your situation, number of
customers in the sample group and what works best for your
customers.

When to survey?
Survey at periodic intervals:
Many organizations prefer to conduct customer satisfaction
measurement survey at certain time of the year. This however
has certain disadvantages. If the period of survey is widely
known it can signal the time for enhanced services to the
customers during that period. The marketing personnel may
distribute questionnaires to customers during these periods.
Such conduct is open to all sorts of bias & this practice should
be discouraged and avoided.

When to survey?
Surveying continuously:
More & more organizations are moving towards continuous
measurement of customer satisfaction due to turbulent & dynamic
marketing environment. Continuous measurement recognizes the
on-going importance of customer satisfaction and is not influenced
by momentary events (good or bad). This method keeps the
organization completely focused on customer satisfaction & does
not allow it to be forgotten between survey waves.

When to survey?
Surveying after “moments of truth” :
Moments of truth are any interactions with customers in which
an organizations effectiveness is tested. For example
• Getting the car loan from the bank
• Settlement of insurance claims
• Similarly, receiving money from the cash counter of a bank

When to survey?
Every moment of truth can be followed up with a satisfaction
survey to determine as to how well the organization has
performed in this important interaction.

Who should conduct the survey?
The survey can be undertaken by the organizations
themselves or it can also be given to outside agencies.
There are following advantages of getting the survey by
outside professional agencies.

Who should conduct the survey?
• They are more objective in formulating questions & analyzing
responses.
• Customers are more open when providing information to third
parties.
• Professional agencies have the expertise to ensure that the
process is productive & effective.

C. Develop survey questions
The organization must develop a pre-determined set
of questions which must take into account all the
requirements of the customers.

Develop survey questions
The questionnaire must give an impression to the customers
that you are thorough & organized when gathering customer
satisfaction information. The presentation & packaging of the
questionnaire should not be shoddy. A good appearance can
suggest evidence of organization’s high commitment to
customer satisfaction management process and vice versa.

Sample questionnaire - Airlines
 Waiting time for getting the boarding pass
 Behavior of the front desk executive
 Ready availability of information
 Time taken in identification of luggage
Excellent Good AverageA. At the airport

 Cabin crew’s welcome at the
time of boarding the flight
 Availability of reading material
 Quality and quantity of food &
beverages
 Quality of service
 Space in the aircraft to keep
your hand baggage
 Responsiveness for special
service asked for
 Cleanliness in the toilets
Excellent Good AverageB. In-flight service

 Timeliness of the flight
 In flight experience with regard to:-
Noise level
Temperature
Ride and landing
 Flight ambience
 Overall ratings
Your suggestions for improvement
Excellent Good AverageC. In-flight experience

Customer feedback
Sample survey / feedback forms for consumer durables, consumer
non-durables and service industry are given in MS Excel file
“Feedback forms” given along with this package.

Advantages of a
good survey
A well designed and executed customer satisfaction survey can
be a great asset to any organization due to the following
reasons:
• It can pinpoint expenditure & resources which is being spent but
do not help to satisfy the customers.

Advantages of a good
survey
• It can identify opportunities for product & service innovation.
• It can ensure that the quality improvement efforts are correctly
focused on issues that are most important to a customer.

Why customer
survey’s fail?
Unfortunately, a well designed & executed survey tends to be an
exception rather than the rule. The challenge of conducting a
customer survey is to minimize the total amount of error. This error
comes from two different sources.
A. Sampling errors
B. Measurement errors

Types of sampling errors
These errors deal with the manner in which people are selected
in a survey. They are of following types
• Failing to use statistical sampling methods
• Incorrect selection of profile
• Incorrect selection of number of people
• Ignoring non-responses.

Types of measurement errors
These errors are related to the content of the survey and the
way in which the results are used. These mistakes deal with :
• Drawing incorrect inferences from the responses
• Asking non-specific questions.
• Failing to ask all the questions.
• Using incorrect or incomplete data analysis methods.
• Error in feeding the results

Mystery shopping:
• Mystery Shopping is a highly valuable
performance tool that provides a clear, accurate
and unbiased account of the interaction between
your employees and your customers.
• It is a performance evaluation process that allows
the owners and managers of service organisations
to really understand how their customers are
treated in their shops, offices or practices, on the
telephone, in writing or online. It identifies the 'gap'
between their service beliefs and the reality of the
customer experience.

Mystery shopper:
Mystery shopper is one who is paid by the
company to masquerade as a customer to
discreetly measure the quality of services in their
showrooms and front offices.
Mystery auditors often throw up startling facts
and reveal huge room for improvement.
Mystery shoppers identify soft skills and
intuitiveness as the key default areas among
store staff in the country .
Typically ,mystery auditors charge Rs.1500-2000
for a small size retail format store with fees going
up for bigger showrooms.
A mystery shopper spends 30-45 mins to review
a small retail shop,it could take 2-3 days to
review a hotel.

1.c.Market and Sales Analysis
• Describe the goal of market analysis.
• Enumerate and classify the different
dimensions of market analysis.
• Discuss the dimensions of market analysis
and relate them to personal experiences
and/or observations.
• Illustrate the value chain and experience
curve.

Goal of Market Analysis
• To determine the attractiveness of a
market and to understand its evolving
opportunities and threats as they relate
to the strengths and weaknesses of the
firm.

Dimensions of Market Analysis
1. Market size (current and future)
2. Market growth rate
3. Market profitability
4. Industry cost structure
5. Distribution channel
6. Market trends
7. Key success factors
1. Market size (current
and future)
4. Industry cost
structure
6. Market trends

Market Size
The size of the market can
be evaluated based on:
• Present sales
• Potential sales (if expanded)
Some information sources
for determining market size:
• Government data
• Trade associations
• Financial data from major
players
• Customer survey
and future)
4. Industry cost
structure
6. Market trends

Market Growth Rate
A simple means of forecasting the
market growth rate is to extrapolate
(infer or estimate) historical data
into the future. While this method
may provide a first-order estimate,
it does not predict important turning
points. A better method is to study
growth drivers such as
demographic information and sales
growth in complementary products.
and future)
4. Industry cost
structure
6. Market trends

Ultimately, the maturity and
decline stages of the product
life cycle will be reached. Some
leading indicators of the decline
phase include:
• Price pressure caused by
competition
• Decrease in brand loyalty
• Emergence of substitute products
• Market saturation
• Lack of growth drivers
and future)
4. Industry cost
structure
6. Market trends

Market Profitability
While different firms in the
market will have different
levels of profitability, the
average profit potential for a
market can be used as a
guideline for knowing how
difficult it is to make money in
the market.
and future)
4. Industry cost
structure
6. Market trends

Porter’s Five Competitive Forces
Rivalry
among
Competi
tors
Threat of
Substitute
Products
Potential
New
Entrants
Bargaining
Power of
Buyers
Bargaining
Power of
Suppliers
Internet tends to
increase
bargaining power
of suppliers
Internet
reduces
barriers to
entry
Internet blurs
differences among
competitors
Internet creates
new substitution
threats
Internet shifts
greater power to
end consumers
and future)
4. Industry cost
structure
6. Market trends

Industry Cost Structure
The cost structure is important for
identifying key factors for success. To
this end, Porter’s value chain model is
useful for determining where value is
added and for isolating the costs.
The cost structure also is helpful for
formulating strategies to develop a
competitive advantage. For example, in
some environments the experience curve
effect can be used to develop a cost
advantage over competitors.
and future)
4. Industry cost
structure
6. Market trends

Porter’s Generic Value Chain
Infrastructure
Human Resource Management
Technology
Development
Procurement
Elapsed Time - Value added time cost
Inbound
Logistic
s
Operation
s
Outboun
d
Logistics
Marketing
& Sales
Service
Support
Activities
Primary
Activities
and future)
4. Industry cost
structure
6. Market trends

Primary Value Chain Activities:
• Inbound Logistics: the receiving and
warehousing of raw materials, and their
distribution to manufacturing as they are
required.
• Operations: the processes of
transforming inputs into finished products
and services.
• Outbound Logistics: the warehousing and
distribution of finished goods.
• Marketing and Sales: the identification of
customer needs and the generation of
sales.
• Service: the support of customers after
the products and services are sold to
them.
and future)
4. Industry cost
structure
6. Market trends

Supports of the Primary Activities:
• The infrastructure of the firm:
organizational structure, control
systems, company culture, etc.
• Human resource management:
employee recruiting, hiring, training,
development, and compensation.
• Technology development:
technologies to support value-creating
activities.
• Procurement: purchasing inputs such
as materials, supplies, and
equipment.
and future)
4. Industry cost
structure
6. Market trends

Distribution Channel
The following aspects of the
distribution system are useful in a
market analysis:
• Existing distribution channel
– can be described by how direct they are to
the customer.
• Trends and emerging channels
– new channels can offer the opportunity to
develop a competitive advantage.
• Channel power structure
– for example, in the case of a product
having little brand equity, retailers have
negotiating power over manufacturers and
can capture more margin.
and future)
4. Industry cost
structure
6. Market trends

Market Trends
Changes in the market are
important because they often are
the source of new opportunities
and threats. The relevant trends
are industry-dependent, but some
examples include changes in price
sensitivity, demand for variety, and
level of emphasis on service and
support. Regional trends also may
be relevant.
and future)
4. Industry cost
structure
6. Market trends

Key Success Factors
– Elements that are necessary in
order for the firm to achieve its
marketing objectives.
few examples are:
– Access to essential unique
resources
– Ability to achieve economies of
scale
– Access to distribution channels
– Technological progress
It is important to consider that key success
factors may change over time, especially as
the product progresses through its life cycle.
and future)
4. Industry cost
structure
6. Market trends

2.Exploratory Research Design
3.Descriptive Research Design
4. Longitudinal and cross-sectional analysis.
•Research Design
Syllabus

Research Design
• A master plan that specifies the methods
and procedures for collecting and
analyzing needed information.

Research Design
Research
Design
Exploratory
Design
Survey of
Experts
Pilot Surveys
Secondary
Data research
Conclusive
Design
Descriptive
Research
Cross
Sectional
Single Cross
Sectional
Multiple Cross
Sectional
Longitudinal
Causal
Research

Exploratory Research
• Usually conducted during the
initial stage of the research
process
• Purposes
– To narrow the scope of the
research topic, and
– To transform ambiguous
problems into well-defined ones
Research Design
• Exploratory
– Secondary
data Research
– Pilot Survey
– Survey of
Experts
• Conclusive
– Descriptive
• Cross
Sectional
– Single
Cross
Sectional
– Multiple
Cross
Sectional
• Longitudinal
– Causal

Exploratory Research Techniques
• Secondary Data Analysis
– Secondary data are data previously
collected & assembled for some project
other than the one at hand
• Pilot Studies
– A collective term for any small-scale
exploratory research technique that uses
sampling but does not apply rigorous
standards
– Includes
• Focus Group Interviews
– Unstructured, free-flowing interview with a
small group of people
• Projective Techniques
– Indirect means of questioning that enables a
respondent to project beliefs and feelings
onto a third party or an inanimate object
– Word association tests, sentence completion
tests, role playing
Research Design
• Exploratory
– Secondary
data Research
– Pilot Survey
– Survey of
Experts
• Conclusive
– Descriptive
• Cross
Sectional
– Single
Cross
Sectional
– Multiple
Cross
Sectional
• Longitudinal
– Causal

Exploratory Research Techniques
• Case Studies
– Intensively investigate one or a few
situations similar to the problem
situation
• Experience Surveys
– Individuals who are knowledge
about a particular research
problem are questioned
Research Design
• Exploratory
– Secondary
data Research
– Pilot Survey
– Survey of
Experts
• Conclusive
– Descriptive
• Cross
Sectional
– Single
Cross
Sectional
– Multiple
Cross
Sectional
• Longitudinal
– Causal

Conclusive Research
• Provide specific information that
aids the decision maker in
evaluating alternative courses of
action
• Sound statistical methods & formal
research methodologies are used to
increase the reliability of the
information
• Data sought tends to be specific &
decisive
• Also more structured & formal than
exploratory data
Research Design
• Exploratory
– Secondary
data Research
– Pilot Survey
– Survey of
Experts
• Conclusive
– Descriptive
• Cross
Sectional
– Single
Cross
Sectional
– Multiple
Cross
Sectional
• Longitudinal
– Causal

Types of Conclusive Research
• Descriptive Research:
– Describes attitudes, perceptions,
characteristics, activities and situations.
– Examines who, what, when, where, why,
& how questions
• Causal Research:
– Provides evidence that a cause-and-effect
relationship exists or does not exist.
– Premise is that something (and
independent variable) directly influences
the behavior of something else (the
dependent variable).
Research Design
• Exploratory
– Secondary
data Research
– Pilot Survey
– Survey of
Experts
• Conclusive
– Descriptive
• Cross
Sectional
– Single
Cross
Sectional
– Multiple
Cross
Sectional
• Longitudinal
– Causal

Common Characteristics of
Descriptive Studies
• Build on previous information
• Show relationships between
variables
• Representative samples
required
• Structured research plans
• Require substantial resources
• Conclusive findings
Research Design
• Exploratory
– Secondary
data Research
– Pilot Survey
– Survey of
Experts
• Conclusive
– Descriptive
• Cross
Sectional
– Single
Cross
Sectional
– Multiple
Cross
Sectional
• Longitudinal
– Causal

Major Types of Descriptive Studies
Descriptive
Studies
Consumer Perception
And Behavior Studies
Image
Product Usage
Advertising
Pricing
Market Characteristic
Studies
Distribution
Competitive
Analysis
Market
Potential
Market
Share
Sales
Analysis
Sales Studies

Cross-sectional Designs
• Involve the collection of information from any
given sample of population elements only once.
• In single cross-sectional designs, there is only
one sample of respondents and information is
obtained from this sample only once.
• In multiple cross-sectional designs, there are
two or more samples of respondents, and
information from each sample is obtained only
once. Often, information from different samples
is obtained at different times.
• Cohort analysis consists of a series of surveys
conducted at appropriate time intervals, where
the cohort serves as the basic unit of analysis. A
cohort is a group of respondents who experience
the same event within the same time interval.
Research Design
• Exploratory
– Secondary
data Research
– Pilot Survey
– Survey of
Experts
• Conclusive
– Descriptive
• Cross
Sectional
– Single
Cross
Sectional
– Multiple
Cross
Sectional
• Longitudinal
– Causal

Longitudinal Designs
• A fixed sample (or samples) of
population elements is measured
repeatedly on the same variables
• A longitudinal design differs from
a cross-sectional design in that
the sample or samples remain the
same over time
Research Design
• Exploratory
– Secondary
data Research
– Pilot Survey
– Survey of
Experts
• Conclusive
– Descriptive
• Cross
Sectional
– Single
Cross
Sectional
– Multiple
Cross
Sectional
• Longitudinal
– Causal

Sample
Surveyed at
T1
Sample
Surveyed at
T1
Same Sample
also Surveyed
at T2
T1 T2
Cross
Sectional
Design
Longitudinal
Design
Time
Cross Sectional vs. Longitudinal
Designs

Relative Advantages and Disadvantages of
Longitudinal and Cross-Sectional Designs
Evaluation
Criteria
Cross-Sectional Design Longitudinal
Design
Detecting Change
Large amount of data collection
Accuracy
Representative Sampling
Response bias
-
-
-
+
+
+
+
+
-
-
Note: A “+” indicates a relative advantage over the other design, whereas a “-”
indicates a relative disadvantage.

Common Characteristics of
Causal Studies
• Logical Time Sequence
– For causality to exist, the cause must
either precede or occur simultaneously
with the effect
• Concomitant Variation
– Extent to which the cause and effect
vary together as hypothesized
• Control for Other Possible
Causal Factors
Research Design
• Exploratory
– Secondary
data Research
– Pilot Survey
– Survey of
Experts
• Conclusive
– Descriptive
• Cross
Sectional
– Single
Cross
Sectional
– Multiple
Cross
Sectional
• Longitudinal
– Causal

How Descriptive & Causal
Designs Differ
• Relationship between the
variables
– Descriptive designs determine degree of
association
– Causal designs infer whether one or more
variables influence another variable
• Degree of environmental
control
– Descriptive designs enjoy lesser degrees of
control
• Order of the variables
– In descriptive designs, variables are not
logically ordered
Research Design
• Exploratory
– Secondary
data Research
– Pilot Survey
– Survey of
Experts
• Conclusive
– Descriptive
• Cross
Sectional
– Single
Cross
Sectional
– Multiple
Cross
Sectional
• Longitudinal
– Causal

Uses of Casual Research
• To understand which variables
are the cause (independent
variables) and which variables
are the effect (dependent
variables) of a phenomenon
• To determine the nature of the
relationship between the causal
variables and the effect to be
predicted
• METHOD: Experiments
Research Design
• Exploratory
– Secondary
data Research
– Pilot Survey
– Survey of
Experts
• Conclusive
– Descriptive
• Cross
Sectional
– Single
Cross
Sectional
– Multiple
Cross
Sectional
• Longitudinal
– Causal

5. Qualitative research techniques –
1. Based on questioning: Focus groups,
Depth interviews, Projective techniques.
2. Based on observations: ethnography,
grounded theory,
3. Participant observation.

Qualitative Research
Qualitative research is a loosely defined
term. It implies that the research findings
are not determined by quantification or
quantitative analysis.

Qualitative vs. Quantitative Research
(1 of 2)
Comparison Dimension Qualitative Research Quantitative Research
Types of questions Probing Limited probing
Sample size Small Large
Information per Much Varies
respondent
Administration Requires interviewers Fewer specialized skills
with special skills required
Types of analysis Subjective, interpretive Statistical, summarization

Qualitative vs. Quantitative Research
(2 of 2)
Comparison Dimension Qualitative Research Quantitative Research
Tools Tape recorders, projection Questionnaires, computers
devices, video, pictures printouts
Ability to replicate Low High
Training needed by Psychology, sociology, Statistics, decision models,
the researcher social psychology, DSS, computer program-
consumer behavior ming, marketing
Type of research Exploratory Descriptive or causal

Market research mb mk 02 - MBA - III Sem, UPTU Syllabus

Market research mb mk 02 - MBA - III Sem, UPTU Syllabus

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