Multimedia Marketing/Marketing.iso/market/chapter4.5p

Text File | 1996-08-22 | 12KB | 275 lines

SECTION 4.5  Initial Steps

INSTRUCTIONS Think about how you would go about beginning a marketing research
project. Then pursue this section for guidance in this area.

EXAMPLE

An automobile company desired to market a car that had an image of
being very modern, upscale, and fashionable. The firm left a large
group of stylists with the problem of determining what the car
should look like to portray the intended image and personality.
The stylists devoted many man hours to this project, producing a
design that was expected to be state-of-the-art. They did not
utilize research to learn if the design actually created the
desired personality in the eyes of consumers. This product introduction
was a major failure, one that cost the company substantial profits
and market share.

DETAILS

Marketing research's first step is initial observation, where
researchers learn the fundamentals relating to a particular decision
problem. This enables them to set a realistic direction for the
entire research effort. The activities of awareness, fact finding,
and problem definition are parts of this step.

Awareness is gaining a basic understanding of the characteristics
of the decision environment. This is essential before attempting
to tackle a research project. It depends considerably on the
company's particular situation. If the company plans research to
learn why many customers do not repeat their purchases of a particular
brand of detergents, the researchers should first become familiar
with the nature of detergents, the target market's makeup, the
competitive setting, the consumer decision making process, and
related factors. Inexperienced researchers sometimes try to cut
corners and collect data before they first understand the situation
and what management expects from the research.

Researchers can gain awareness in a number of ways. They may read
company advertisements, reports, and past research studies. They
may visit with knowledgable persons, including sales representatives,
advertising personnel, and physical distribution managers. They may
talk with target customers and others who know target customers well.
They may visit retail stores and visualize company displays and
packages. A variety of information sources can be very useful.

PROBLEM 1

Which of the following activities of marketing research personnel
for an antibacterial liquid handsoap manufacturer constitute parts of the
"awareness" step:

A. Reading a report on why consumers buy liquid handsoap.
B. Interviewing consumers on what brands they buy.
C. Designing a sample for data collection.
D. Defining the population to be studied in a survey.

WORKED

If marketing research personnel for an anibacterial liquid handsoap
manufacturer read a report on why consumers buy liquid handsoap, this
is part of the awareness stage of marketing research. Here, the
researchers want to acquire a feel for the area in which they are
about to do research. They desire a basic familiarity with that which
they are about to study. This will be of value throughout all of
the steps in the research, as the personnel attempt to produce results
that will be of genuine value to line managers in decision making.

ANSWER A
INSTRUCTIONS Think about how you would go about beginning a marketing research
project. Then pursue this section for guidance in this area.

EXAMPLE

An automobile company desired to market a car that had an image of
being very modern, upscale, and fashionable. The firm left a large
group of stylists with the problem of determining what the car
should look like to portray the intended image and personality.
The stylists devoted many man hours to this project, producing a
design that was expected to be state-of-the-art. They did not
utilize research to learn if the design actually created the
desired personality in the eyes of consumers. This product introduction
was a major failure, one that cost the company substantial profits
and market share.

DETAILS

Fact finding is another phase of initial observation. Here analysts
construct a list of facts to later consider as symptoms of
underlying causes.  The symptoms may be that sales are
falling, that there is a low awareness of the product among consumers,
or the morale of the sales force is poor. Some research projects
uncover literally hundreds of symptoms.

While fact finding, researchers are like auditors who investigate
company documents such as warranty files, sales records, and accounts
receivable to gain useful insights. Fact finding can also include
talking with company sales reps, executives, distributors, customers,
and examining research reports. No attempt should be made to explain
the facts during this stage, only to uncover them--both the "good
ones" and the "bad ones".

Problem definition is the next phase. Before collecting any primary
data, the researchers should carefully define the problem. Exploratory
research--small scale studies that examine various directions and
different probable solutions and implications--is sometimes desirable.

Generally, exploratory research is designed to uncover problems--but
not their solutions. For example, many factors relating to sales
representatives (personality characteristics, salary structures,
and education) might be looked at to learn if they relate to
performance. Here the intent is to narrow the direction of future
research.

There is a difference between a decision problem and a research
problem. The former is one that managers must resolve, such as
"How can we increase camera sales". A research problem, on the
other hand, specifies precisely what information the research
should provide. It is both specific and limited in scope.

PROBLEM 2

A company that markets energy bars and drinks for runners plans to
engage in exploratory research. Which of the following is an example:

A." Why is customer loyalty for our drinks lower than that for
    competitors'drinks?"
B. "Is our salesforce compensation plan producing superior sales
   performance?"
C. "Is our advertising budget adequate?"
D. "How effective are our advertisements?"

WORKED

For a company that markets energy bars and drinks for runners, an
example of exploratory research is analyzing "Why is customer loyalty
for our drinks weaker than for rival drinks?" This is research
conducted to find the real problem. It is not research to determine
if a solution to a problem is potentially effective or not, but
rather to define the problem. Other research, conducted later,
can be used to solve the problem.

ANSWER  A
INSTRUCTIONS Think about how you would go about beginning a marketing research
project. Then pursue this section for guidance in this area.

EXAMPLE

An automobile company desired to market a car that had an image of
being very modern, upscale, and fashionable. The firm left a large
group of stylists with the problem of determining what the car
should look like to portray the intended image and personality.
The stylists devoted many man hours to this project, producing a
design that was expected to be state-of-the-art. They did not
utilize research to learn if the design actually created the
desired personality in the eyes of consumers. This product introduction
was a major failure, one that cost the company substantial profits
and market share.

DETAILS

Another early phase in marketing research is formulating hypotheses.
Sometimes formally identifying a problem is sufficient to enable
management to make an intelligent decision; the solution to the
problem is obvious. But, in many cases the best course of action is
not clear and further research is needed. Hypothesis testing is
required.

Hypotheses are hypothetical and unproven ideas to be confirmed or
rejected. Examples of hypotheses are:

."Appeals to convenience in mail brochures for antacid tablets will
 create more consumer interest than will low cost appeals."
."Sales of a water softener are down because rivals' salepersons
 in several territories are becoming more agressive."

Hypotheses need not come from top executives. Sales representatives,
advertising personnel, product managers, and others are all fruitful
sources. A hypothesis is merely a well educated explanation for some
condition or event.

PROBLEM 3

A marketing researcher for a paperboard company does not need to
develop hypotheses for a research study. This is because:

A. The only information management needs is to identify a problem.
B. Hypotheses are very difficult to develop, in some studies.
C. Hypotheses are based upon theory and may not be practical.
D. Usually, researchers experience problems in developing enough
   hypotheses for a particular study.

WORKED

A marketing researcher for a paperboard company does not need to
develop hypotheses for a research study. This is because the only
information management needs is to identify a problem. Sometimes
management does not know what the problem confronting the firm is.
Could it be that the sales force is not closing enough sales? Is
the advertising not generating target customer interest? Are prices
too high? Research into such issues does not require hypotheses.
Rather, it requires fact finding which indicates where the marketing
unit is not realizing its objectives and goals.

ANSWER  A
INSTRUCTIONS Think about how you would go about beginning a marketing research
project. Then pursue this section for guidance in this area.

EXAMPLE

An automobile company desired to market a car that had an image of
being very modern, upscale, and fashionable. The firm left a large
group of stylists with the problem of determining what the car
should look like to portray the intended image and personality.
The stylists devoted many man hours to this project, producing a
design that was expected to be state-of-the-art. They did not
utilize research to learn if the design actually created the
desired personality in the eyes of consumers. This product introduction
was a major failure, one that cost the company substantial profits
and market share.

DETAILS

In generating hypotheses, researchers confer with marketing personnel
and others, such as accountants, intermediaries, and advertising
agency personnel. In addition, they consult research reports and
company records. Basically, they are looking for creative ideas and
not answers to problems. The answers will come when they test the
hypotheses.

Sometimes marketing research does not include hypothesis testing.
Instead the analyst sets up research objectives. These are
statements of the information that management needs. A possible
objective for a producer of antacid tablets would be "To provide
the information necessary to indicate if the convenience or the
low cost appeal is superior in generating target customer interest.
A less complicated objective is "To determine the most profitable
target customers for our company."

PROBLEM 4

A researcher for a marketer of gum is in the process of generating
hypotheses about why the company's market share is declining. A
recommended technique for generating hypotheses is:

A. Conduct telephone interviews of target customers.
B. Conduct experiments where prices are low in some cities but
   high in others and observe sales results.
C. Confer with marketing personnel, advertising agency personnel,
   and other knowledgable parties.
D. Conduct personal interviews of consumers in shopping malls.

WORKED

In generating hypotheses about why market share for a gum producer
is declining, it is a good idea to consult marketing personnel,
advertising agency personnel, intermediaries, and other knowledgable
parties. These individuals have experience with this and other
products that can translate into very practical hypotheses.
Judgment built up over years of marketing products can be invaluable
in producing hypotheses. In contrast, marketing researchers sometimes
lack this practical experience and their hypotheses may not be as
relevant.

ANSWER  C