1

Lecture 18 35. Marketing Research

36. Marketing Organisation

2

Introduction to Market ResearchPrepared for:

… in association with HK IPD, IP Australia

3

INTRODUCTION: MARKET RESEARCH

Market research is the systematic and objective identification, collection, analysis and reporting of information for the purpose of assisting organisations in decisions relating to the understanding of the behaviours and attitudes of people and their organisations, the ultimate aim being the development and implementation of solutions to problems or opportunities.

In this first chapter, the role and importance of market research will be reviewed:

What is market research? The role of market research Whether to conduct market research In-house vs. external research

4

1) THE ROLE OF MARKET RESEARCH

The role of market research is to help organisations—in this case IP agencies—align themselves to:(1) their customers; in the narrow context users of the IP agencies services, and in the wider context the general public(2) their organisational goals, which will reflect government policy and vary across individual Economies (3) changing market conditions

Market Research

Customers PolicyGoals

MarketEnvironment

Descriptive Diagnostic Predictive

Alignment

Function

Measure awareness Explain behaviour Predict outcomes / trends

5

2) WHEN TO CONDUCT A RESEARCH STUDY

No organisation should commence a research study before assessing the value of such work in relation to the expense.

The very first task is to ask: Should I conduct market research at all?

There are several situations where it may be best not to proceed:

(1) Limited financial resources

There are at least two situations in which a lack of funding should preclude marketing research:(a) When the organisation lacks the funds to do the research properly. (b) When funds are available to do the research but are insufficient to implement any recommendations from the findings of the research.

(2) Precise objectives have not been formulated

(3) The costs of conducting research outweigh the benefits (or return on objectives - ROO).

(4) Inappropriate timing

6

3) IN-HOUSE vs EXTERNAL MARKET RESEARCH

The second question: Should I conduct market research myself or hire a research company?

Some large MNCs do nearly all their research in-house, including project design and focus groups. Others choose to outsource or do both on a case-to-case basis.

The key elements necessary for successful internally managed research projects are:

(1) long-term vision; (2) clearly defined goals; (3) earmarked budget;(4) project execution and management skills; and (5) a means of measuring success.

Advantages of outsourcing research

(1) Expertise and experience(2) Confidentiality and security (3) Unbiased viewpoint(4) More efficient

Advantages of conducting in-house research

(1) Lower costs(2) Stronger domain knowledge(3) Better control

7

The case for in-house research can be made under two circumstances:

(1) Where the burden of the research effort is shared with a research firm. This can occur in several ways:

(a) the IP agency has access to surveyors (e.g. student interns) that can be trained then deployed by the research firm;(b) the IP agency has its own research instruments. Research firms will always charge for questionnaire development as this is time consuming and requires a high level of expertise. Using the Pilot template or sharing templates used by other APEC Economies—even if these still require some modification to specific objectives—should reduce the overall cost; and(c) the IP agency has a captive audience (for self-completion surveys) .

In these circumstances, a research company should still be retained in order to advise on the correct implementation, sampling, etc.

(2) Exploratory research, which does not need to be representative, can often be undertaken internally.

8

Marketing information and research

Importance of effective marketing information and research

Effective penetration of markets requires specialised and sophisticated approaches to identify, assess and satisfy

market demands.

Effective marketing information and research enables an organisation to make better decisions on the most appropriate

market entry and competitive strategies.

Defining market research

Marketing research is the function which links the consumer, customer, and public to the marketer through information -

information used to identify and define marketing opportunities and problems; generate, refine and evaluate marketing actions, monitor marketing performances, and

improve understanding of marketing as a process.

Marketing research specifies the information required to address those issues; designs the method of collecting information;

manages and implements the data collection process; analyses the results; and communicates the findings and their

implications.

McDonald and Gates, 1990

The role of marketing research

• Consumer markets - In EU important to manufacturers as retailers act as buffer between manufacturers and end

consumer. Provides accurate and reliable flow of information to the marketing decision makers.

• B2B markets - Helps organisations understand the marketing environment and make better informed decisions about

marketing strategies.

Types of marketing research

• Exploratory.

• Descriptive.

• Causal or predictive.

Origins of research data

• Qualitative research - the collection of data that are open to interpretation, e.g. peoples’ opinions.

• Quantitative research - the collection of data that is quantifiable and is not open to the same level of interpretation as qualitative research, e.g. sales

figures, market share data, etc.

Continuous research

On going research usually undertaken by market research agencies and offered to organisations for a subscription or

agreement to purchase the updated findings.

Approaches include:

• Consumer panels.

• Home audits.

• Omnibus surveys.

• Retail audits.

Marketing information systems

(MIS)

Effective systems of organising, structuring and managing the storage, access and dissemination of

market research data.

The marketing information system

Figure 6.1

Defining information requirements

Table 6.1

Sources of marketing information

• External sources - ad hoc studies using secondary or primary research or continuous data which contains views from customers, suppliers, channels of distribution, strategic

alliance partners, independent third parties, etc.

• Internal sources - information obtained from internal record keeping systems, sales reps, call details, customer enquiries,

etc.

The marketing research process

Figure 6.2

Secondary research (1 of 2)

• Sometimes referred to as desk research.

• Consists of data and information that is already in existence and which can be accessed by the organisation.

• Can be cheaper and quicker to access than primary research.

• May provide an organisation with information that it would not otherwise have time to gather.

• Secondary data may not always be up to date, be applicable to an organisation, or give the full picture.

Secondary research (2 of 2)

Secondary data sources include:

• Government - e.g. Central Statistical Office.

• Chambers of commerce.

• Trade associations.

• Commercial publications - e.g. Dun & Bradstreet, Mintel, etc.

• Internet - e.g. country reports and news, etc.

Primary research

• Sometimes called field research.

• Is undertaken or commissioned by an organisation for a specific purpose.

• The required information does not already exist.

• It is exactly tailored to a problem.

• Can be expensive and time consuming.

Online market research

The website provides several novel methods for the collection of primary data for example:

• Server based log file analysis of site activity.

• Browser based site activity data.

• Panel activity.

• Online focus groups.

• Online questionnaires.

• Mystery shoppers.

Advantages and disadvantagesof internet research

Table 6.5(a)Source: Alex Johnston, Technology and Communications Director for New Media Research International, as reported by Gray

(2000b).

Advantages and disadvantagesof internet research

Table 6.5(b)Source: Alex Johnston, Technology and Communications Director for New Media Research International, as reported by Gray

(2000b).

Sampling

Figure 6.3Source: Adapted from Tull and Hawkins (1990).

Business Functions and Organisation

Business Functions

Human Resources

Sales and Marketing

Research and Development

Production/Operations

Customer Service

Finance and Accounts

Administration and IT

Human Resources Recruitment and retention

– Job descriptions

– Person Specifications

Dismissal

Redundancy

Motivation

Professional development and training

Health and safety and conditions at work

Liaison with trade unions

Sales and MarketingMarket research

Promotion strategies

Pricing strategies

Sales strategies

The sales team

Product – advice on new product development, product improvement, extension strategies, target markets

Research and Development

New product development

Product improvements

Competitive advantage

Value added

Product testing

Efficiency gains

Cost savings

Finance and AccountsCash flow

– Monitoring income/revenue

– Monitoring expenditure

Preparing accounts

Raising finance

– Shares

– Loans

Links with all other functional areas

Production/Operations Acquiring resources

Planning output – labour, capital, land

Monitoring costs

Projections on future output

Production methods

– Batch; Flow; Job; Cell

Efficiency

Customer Service

Monitoring distribution

After-sales service

Handling consumer enquiries

Offering advice to consumers

Dealing with customer complaints

Publicity and public relations

Business Organisation

Organisation by type

Global businesses – complex organisation structures

National – organisation possibly stretches throughout the country

Regional – could be through a county or wider area (North West, South East, etc.)

Local – small organisations serving local area or community

Business Organisation

Authority – the right to make decisions and carry out tasks

Span of control – the number of people a superior is responsible for

Chain of Command – the relationship between different levels of authority in the business

Hierarchy – shows the line management in the business and who has specific responsibilities

Delegation – authority to carry out actions passed from superior to subordinate

Empowerment – giving responsibilities to people at all levels of the business to make decisions

Administration and IT

•Managing estates – cleaning, health and safety, maintenance, security

•Reception

•Clerical work – reporting, recording, record keeping, communication

•Overview of quality control

•Use of IT systems

Organisation Charts

Hierarchical Structure

Managing Director

Sales DirectorMarketingDirector

Finance Director

A B C D Market Research

Strategy PurchasingManager

Sales Manager

AccountsManager

Organisation Charts

MD

Middle Management

Workers

Pyramidal Structure

SeniorManagement

Organisation Charts

R&D

Marketing Sales

Production

Finance

MD

Centralised/Entrepreneurial

Organisation Charts

Sales

Marketing

Production

Accounts

Collaborative

Organisation Charts

Marketing Sales

ProductionFinance

R&D

Circular/Flat

Organisation Charts

Project

Marketing

R&DSales

Finance

HRProduction

Matrix Structure

Organisation Charts

Changes to business structures

Linked to new thinking on leadership and management

Less hierarchical

Emphasis on communication and collaboration between sections

Global businesses – more complex structures

DEVELOPING SUCCESSFUL

MARKETING AND CORPORATE STRATEGIES

CHAPTER

DEFINITION OF ORGANIZATIONS

• Profit

Business Firm

• Organizations as defined by profit

Nonprofit Organization

Both commonly referred to as the Firm

the Company the Corporationthe Organization

ORGANIZATION’S LEVELS OF STRATEGY

Corporate Level-create value for stockholders

Functional Level –execute plan on daily basis

Business Unit Level- plan direction for each SBU

Department-specialized functions of daily operation

Mission -statement of the organization’s purpose for existing, often identifying its customers, markets,

products, technology, and values.

Goals or Objectives

• Quality

• Profit

• Sales

• Market Share

• Customer Satisfaction

• Employee Welfare

• Social Responsibility

FOCUS OF THE STRATEGY

SETTING STRATEGIC DIRECTIONS

- Competencies-identify what you do best

• A Look Around: Where Are We Now?

- Identify your Customers

• Competitive Advantage-your unique strength

- Competitors-identify the biggest threats

SETTING STRATEGIC DIRECTIONS

• Growth Strategies: Where Do We Want to Go?

Business Portfolio Analysis (BCG Matrix)

• Relative Market Share-horizontal axis

• Market Growth Rate-vertical axis

Cash Cows (LH)

Stars (HH)

Dogs (LL)

Question Marks or Problem Children (HL)

Boston Consulting Group portfolio analysis for Kodak sbu’s in 2003

Kodak self-service kiosk

Kodak film sales: US,Canada, & W. Europe

Kodak digitalphoto printer

Kodak digitalcamera

SETTING STRATEGIC DIRECTIONS

• Growth Strategies: How Do We Get There?

Market-Product Analysis

• Market Penetration- same product; same market

• Market Development- same product; new market

• Product Development-new product; same market

• Diversification - new product; new market

Four market-product strategies: alternative ways to expand sales revenues for Ben & Jerry’s

THE STRATEGIC MARKETING PROCESS

• How do we allocate our resources to get wherewe want to go?

• How do we convert our plans to actions?

• How do our results compare with our plans,and do deviations require new plans?

Marketing Plan

Step 1: SWOT Analysis

THE STRATEGIC MARKETING PROCESS -The Planning Phase

GOOD NOWMaintain & build

GOOD FUTUREPrioritize &

optimize

BAD NOWRemedy or stop

BAD FUTUREIntercept and

counter

Ben & Jerry’s: SWOT analysis

Step 2: Market-Product Focus and Goal Setting

• Market Segmentation

• Set Marketing and Product Goals

• Select Target Markets

• Find Points of Difference

• Position the Product

Which Product-Which Customers

Step 3: Marketing Program

• Product Strategy

• Price Strategy

• Promotion Strategy

• Place (Distribution) Strategy

Marketing Program Strategy

Elements of the marketing mix that comprise a cohesive marketing program

Obtaining Resources

Designing the Marketing Organization-delegating who does what

Developing Schedules-Linear or Gantt

THE STRATEGIC MARKETING PROCESS-The Implementation Phase

Tasks to complete a term project

Gantt chart for scheduling the term project

Comparing Results With Plans to Identify Deviations

Acting on Deviations

• Filling the Planning Gap – Marketing’s Job

THE STRATEGIC MARKETING PROCESS-The Control Phase

Evaluation & control of Kodak’s marketing program

Profit

Profit is the reward to a business firm for the risk it undertakes in offering a product for sale. It is also the money left over after a firm’s total expenses

are subtracted from its total sales.

Profit is the reward to a business firm for the risk it undertakes in offering a product for sale. It is also the money left over after a firm’s total expenses

are subtracted from its total sales.

Mission is a statement of the organization’s scope, often identifying

its customers, markets, products, technology, and values.

Mission is a statement of the organization’s scope, often identifying

its customers, markets, products, technology, and values.

Mission

Goals or objectives convert the mission into targeted levels of performance to be

achieved, often by a specific time.

Goals or objectives convert the mission into targeted levels of performance to be

achieved, often by a specific time.

Goals or Objectives

Market share is the ratio of sales revenue of the firm to the total sales revenue of all firms in the industry,

including the firm itself.

Market share is the ratio of sales revenue of the firm to the total sales revenue of all firms in the industry,

including the firm itself.

Market Share

A marketing plan is a road map for the marketing activities of an organization for a specified future period of time. It allocates the 4P’s of a firm to reach the

target market.

A marketing plan is a road map for the marketing activities of an organization for a specified future period of time. It allocates the 4P’s of a firm to reach the

target market.

Marketing Plan

SWOT analysis is an acronym describing an organization’s appraisal of

its internal Strengths and Weaknesses and its external Opportunities and

Threats.

SWOT analysis is an acronym describing an organization’s appraisal of

its internal Strengths and Weaknesses and its external Opportunities and

Threats.

SWOT Analysis

Market segmentation involves aggregating prospective buyers into groups, or segments, that (1) have

common needs and (2) will respond similarly to a marketing action.

Market segmentation involves aggregating prospective buyers into groups, or segments, that (1) have

common needs and (2) will respond similarly to a marketing action.

Market Segmentation

Points of difference are those characteristics of a product that make it

superior to competitive substitutes.

Points of difference are those characteristics of a product that make it

superior to competitive substitutes.

Points of Difference