i. the role of research in marketing, the

8/6/2019 i. the Role of Research in Marketing, The

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THE ROLE OF RESEARCH INMARKETING, THE MARKETING

RESEARCH INDUSTRY -THINKING LIKE ARESEARCHER

DR. HJ. ALVI FURWANTI ALWIE, SE. MM

PASCASARJANA UNIVERSITAS RIAU

MARKETING RESEARCH


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Dr. Hj. Alvi Furwanti Alwie, SE, MM (Marketing Research)

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PART ONEthe role of reseachmarketing

WHAT IS MARKETING? THE RIGHT PHILOSOPHY : THE MARKETING

CONCEPTTHE RIGHT MARKETING STRATEGY

WHAT IS MARKETING RESEARCH? WHAT IS THE PURPOSE OF MARKETING

RESEARCH WHAT ARE THE USES OF MARKETING RESEARCH?

IDENTIFYING MARKET OPPORTUNITIES AND

PROBLEMS GENERATE, REFINE, AND EVALUATE POTENTIAL

MARKETING ACTION MONITOR MARKETING PERFORMANCE IMPROVE MARKETING AS A PROCESS

CLASSIFYING MARKETING RESEARCH STUDIES


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WHAT IS MARKETING?

Why talking about marketing? Because marketing research is part of

marketing, we cannot full appreciate the

role of marketing research unless weknow how it fits into the marketingprocess.

So, what is marketing ?

The American Marketing Association (AMA)has defined marketing as the process ofplanning and executing the conception,pricing, promotion, nd distribution of

ideas, goods, and services to createexchan es that satisf individual and


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Meaning.

Companies or organizations, whether for-profit or not-for-profit, are seccessfulmarketers.

Why are these companies and manyothers just like them so successful? Because :

the marketers have correctly heard theconsumers wants and needs andconceived a product (or service), price,promotion, and distribution method thatsatisfied those wants and needs.

By listening to the customer, thesecompanies know what it takes to SATISFY

consumer wants and needs.


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Meaning.

Marketing conceive of what the marketwants and exchange it for something else,usually money. Examples :

Volvo exchanges well-design, safe automobilesfor money

Sony exchanges quality electronicentertainment devices for money.

Farmers in USA willing to exchange their moneyfor John Deere tractors because these tractorssatisfy their wants and needs.

The American Heart Association exchangesservices designed to help detect and prevent

heart disease for donations


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Meaning..

Peter Drucker wrote that successful companiesare those that know and understand thecustomer so well that the product conceived,priced, promoted, and distributed by thecompany is ready to be boving thught as soon

as its available (2) If this is true, why do products fail? And indeed,

many new products and services do fail? One way managers can avoid product failure is

by having the right information so they can

make the best decision. However, in addition to having the right

information, success dictates thatmanagement must also have the rightphilosophy, which you have learned as the

marketing concept, and then implementsstrate ies that satisf customers.


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The Right Philosophy: The MarketingConcept

The marketing concept is a businessphilosophy that holds that the key toachieving organizational goals consists

of the companys being more effectivethan competitors in creating, delivering,and communicating customer value toits chosen target markets (3)


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Meaning..

For many years, business leaders haverecognized that this is the rightphilosophy.

And although marketing conceptis oftenused interchangeably which other termssuch as customer orientedor marketdriven, the key points that this philosophyputs the customer first.

The right philosophy is an important firststep in being successful.

Still, just appreciating the importance ofsatisfying consumer wants and needs isnt

enough, firms must put together the rightstrate .


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The right marketingstrategy A strategy is nothing more than a plan.

The term strategywas borrowed frommilitary jargon that stessed developing

plans of attack that would minimize theenemys ability to respond. Firms myalso have strategies in many differentareas, such as financial strategy,

production strategy, technologystrategy, and so on. So what exactly ismarketing strategy?


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A MARKETING STRATEGY CONSISTS OFSELECTING A SEGMENT OF THE MARKETAS THE COMPANYS TARGET MARKET

AND DESIGN THE PROPER MIX OFPRODUCT/SERVICE, PRICE, PROMOTION,AND DISTRIBUTION SYSTEM TO MEET

THE WANTS AND NEEDS OF THE

CONSUMERA WITHIN THE TARGETMARKET.


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Meaning.. Note how this definition assumes that we

have already adopted the marketingconcept.

A manager not having the marketingconcept, for example wouldnt be

concerned that his or her plan addressedany particular market segment andcertainly wouldnt be concerned withconsumers wants and needs.

So, to continiu, we are thinking likeenlightenedmanagers; we have adoptedthe marketing concept.

Now, as we shall se, because we have

adopted the marketing concept, we cantcome u with ust an strate .


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Meaning.

We have do develop the right strategy - the strategythat allows our firm to truly meet the wants andneeds of the customers within the market segmenwe have chosen.

Think of many questions we now must answer:

What is the market? How do we segment the market? What are the wants and needs of each segment? How do we measure the size of each market segment? What are our competitiors, how are they meeting the

wants and needs of each segment? Which segment(s) should we target? Which model of a proposed product will best suit the

target market? What is the best price? Which promotional method will be the most efficient?

How should we distribute the product/service?


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Meaning..

Now we see that many decisions must be made inorder to develop the right strategy in order todevelop the right strategy in order to succeed inbusiness.

In order to make a right decisions, managers must

have objective, accurate, and timely information. Not only do managers need information to implement

the right strategy now, but because environmentsare forever changing, this means marketersconstanly need updated information about thoseenvironments.

A strategy that is successful today may need to bechanged as the competitive, economic, social,political, legal, global, and technologicalenvironments change.

Managers must have the right information tounderstand when and how to modify their companystrategies.


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WHAT IS MARKETINGRESEARCH? Marketing researchis the process of

designing, gathering, analyzing, andreporting information that may be usedto solve a specific marketing problem.

This definition tells us that Marketingresearch is aprocessthat results inreporting information and thatinformation can be used to solve a

marketing problem such as determiningprice, how to advertise, and so on.

The focus, then, is on a process thatresults in information that will be used tomake decisions.

Notice also thatour definition refers to


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The AMA definition is : MarketingReseach is the function that links theconsumer, customer, and public to the

marketer through information information used to identify and definemarketing opportunities and problems;generate, refine, and evaluate

marketing action; monitor marketingperformance; and improve theunderstanding of marketing as a

process.


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WHAT IS THE PURPOSE OF MARKETINGRESEARCH?

The purpose of mar marketing research isto link the cunsumerto the marketer byproviding information that can be used

in making marketing decisions. In fact, by mentioning the consumer this

implies that marketing research is

consistent with the marketing conceptbecause it links the consumertothe marketer.


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WHAT ARE THE USES OF MARKETINGRESEARCH?

Identifying Market Opportunities andProblems

For example: Mintel, a British consumer

market research firm, looks foropportunities for new products. Some ofits interests include baby milk sold indisposable bottles, tea and coffee thatheat themselves, and spray thattemporarily whitens teeth (4). Manyresearch studies are being conductedtoday to determine the health effects ofingredients such as omega -3s, lecithin,

and soy and how best to offer the


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Generate, Refine, and Evaluate PotentialMarketing Action.

For example: as AT&T grew from being the long-distance telephone company to participating inall forms of the fast-paced telecommunicationsindustry, it wanted a brand image that wouldconnote being a dynamic, unique, creative, andfast-moving company with advance productsand services in many areas. It conductedresearch that generated theBoundless brand

advertising campaign. Then it conductedresearch to evaluate the effectiveness of thecampaign (6).

AT&T is a good example of a firm using marketingresearch to generate, refine, and evaluate a

marketing action. In this case, the action wasdeveloping a brand that conveyed the image


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Monitor Marketing PerformanceThe AMA definition also states that marketing

research may be used to monitor marketingperformance.

For example: Bruzzone Research Company monitors the

effectiveness of these high-priced ads in orderto provide information to companies that wantto monitor the impact of their investmet (7).

Tracking research is used to monitor how wellproduct of companies such as Campbells,Kelloggs, and Heinz are performing in thesupermarkets. These consumer packaged-goods firm want to monitor the sales of their

brands and sales of their competitors brands


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Improve Marketing as a ProcessThis means that somemarketing research is

conducted to expand our basic knowledge of

marketing. Typical of such research would beattempts to define, and classify marketingphenomena and to develop theories thatdescribe, explain, and predict marketingphenomena.

Such knowledge is often published in journals such

as thejournal of marketing research. Much ofthis research is conducted by marketingprofessors at colleges and universities and byother organizations, such as the marketingscience institute (the latter us could bedescribed as the only part of marketing researchthat is basic research).

Basic Research is conducted to expand ourknowledge rather than to solve a specificproblem. Research conducted to solve specificproblems is called applied research, and thisrepresents the vast majority or marketing

research studies. Example : Marketing research application page 11

Cl if i M k ti R h


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Classifying Marketing ResearchStudies

Another way ti introduce you to marketingresearch is to look at a classification of thedifferent types of marketing research beingconducted in the industry.

We organize the major types of studies under

the usage categories from the AMA definition. A. Identifying Market Opportunities and Problem

(As the title implies, the goal of these studies isto find opportunities or problems with anexisting strategy. Examples of such studiesinclude the following): Market-demand determination Market segmen identification Marketing audits SWOT analysis. Product/service-use studies Environmental analysis studies

Competitive analysis.


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B. Generating, Refining, and EvaluatingPotential Marketing Action.

Marketing actions could be as proposedmarketing strategy or as narrow as a tactic(a specific action taken to carry out astrategy). Typically these studies deal withone or more of the marketing-mix

variables> examples include the following: Proposed marketing-mix evaluation testing Concepts tests prototype testing New-product prototype testing Reformulating existing product testing

Pricing tests Advertising pretesting In-store promotion effectiveness studies Distribution effectiveness studies.


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D. Improving Marketing as a Process. A small portion of marketing research is

conducted to expand our knowledge ofmarketing as a process rather than to solvea specific problem facing a company. Byhaving the knowledge generate from thesestudies, managers may be in a much betterposition to solve a specific problem within

their firms. This types of research is oftenconducted by institutes, such as themarketing science institue, or universities.Examples: How managers learns about the market

Consumer behavior differences in e-businesstransactions Determining the optimum amount that should

be spent on e-business and measuringsuccess in e-business

Predictors of new-product success

The impact of long-term advertising onconsumer choice


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THE MARKETING INFORMATIONSYSTEM

So far we have presented marketing research asif it were the only source of information. Marketing decision makers have a number of

source of information available to them. Wecan understand these different information

sources by examining the components of themarketing information system (MIS). An MIS is a structure consisting of people,

equipment, and procedures to gather, sort,analyze, evaluate, and distribute needed,

timely, and accurate information to marketingdecision makers (8). The role of the MIS is to determine decision

makers information needs, acquire theneeded information, and distribute that

informations to the decision makers in a formand at a time when they can use it for decision


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Components of an MIS

the MIS is designed to assess managersinformation needs, to gather thisinformation, and to distribute theinformation to the marketing managers

who need to make decisions. Information is gathered and analyzed by

the four subsystem of the MIS: Internal reports

Marketing intelligence Marketing decision support system (DSS) And marketing research.


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Marketing intelligenceThe marketing intelligence system is definedas a set of procedures and sources used bymanagers to obtain everyday informastionabout pertinent developments in theenvironment.

Such system include both informal and formalinformation-gathering procedures.

Informal Information-gathering proceduresinvolve such activities as scanning news-papers, magazines, and trade publications.

Formal Information-gathering activities maybe conducted by staff members who areassigned the spesific task of looking foranything that seems pertinent to thecompany or industry.


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How Marketing research differs fromthe other three MIS components.

1.The marketing research system gathersinformation not gathered by the other MIScomponent subsystem: marketingresearch studies are conducted for a

specific situation facing the company. It is unlikely that other components of an MIS

have generated the particular informationneeded for the specific situation.

Whenpeople magazine want to know which ofthree cover stories it should use, can itsmanagers obtain that information frominternal reports, Intelligence system orDSS? Nothis, then, is how marketing

research plays a unique role in the total


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By providing information for a specific problem athand, it provides information not provided by othercomponent of the MIS. This is why people in theindustry sometimes refer to marketing researchstudies as ad hoc studies.Ad hoc is Latinmeaning with respect to a specific purpose.

2.Another characteristic of marketing researchthat differentiaties it from the other MIScomponents is that marketing researchprojects, unlike the previous components, arenot continuous-they have a beginning and an

end. This is why marketing research studiesare sometimes referred to as projects. Theother components are available for use on anongoing basis. However, marketing researchprojects are launched only when there is a

justifiable need for information that is not

available from internal reports, intelligence,

PART TWO th k ti


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PART TWO the marketingresearch industry

EVOLUTION OF THE INDUSTRYTHE BEGINNING

GROWTH OF THE NEEDS

CLASSIFYING FIRMS IN THE MARKETINGRESEARCH INDUSTRY

INTERNAL SUPPLIER

EXTERNAL SUPPLIER CHALLENGES TO THE MARKETING

RESEARCH INDUSTRY

Th M k ti R h


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The Marketing ResearchIndustry

Evolution of the industryThe Beginning Robert Bartels, a marketing historian, wrote

that the earliest questionnaire surveysbegan as early as 1824, and that in 1879

a study was conducted by N.W. Ayers andCompany to study grain production bystates for a client.

However, Bartels believes the firstcontinuous and organized research was

started in 1911 by Charles CoolidgeParlin, a schoolmaster from a small city inWisconsin.

Parlin was hired by the Curtis PublishingCompany to gather information about

customers and markets to help Curtis selladvertisin s ace. Parlin was successful


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34 Growth of the Need

While there are a few reported instances ofthe use of marketing research in the earlydays of the history of the United States. Itwasnt until the 1930s that marketingresearch efforts became widespread.

The reason for this was that prior to theIndustrial Revolution, businesses werelocated close to the customers, becausewhwn the industriial revolution led tomanufactures producing goods for distantmarkets they didnt know their cunsumersneeds and wants.

Since the 1960s the marketing researchindustry has seen technological advances, in

the form of many new products andservices, which have inreased productivity


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Classifying Firm in the MarketingResearch Indusrtry

In the marketing research industry, werefer to providers af marketing researchinformation as research suppliers.

There are several ways we can clasisifysuppliers. We use a classificationdevelop by Naresh Malhotra(9).


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Reseach Suppliers

Internal External

Full Service Limited Service

Syndicated Customized Field Sample Data

Data Services Services Services&design Analysis

Distribution Services

Services

Standardize Online Market Specialized Services Research Segment research ServicesSpecialists techniques

services


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Internal Suppliers

When a firm is an internal suppliers, it meansthat an entity within the firm suppliesmarketing research. It has been estimatedthat these firms spend roughly 1% of saleson marketing research, whether it is

supplied internally (10). How do Internal Suppliers Organize the

Research Function? Its a several methods, they may:

Have their own formal departments, Have no formal department but place at least a

single individual or a committee in charge ofmarketing research, or

Assign no one responsibility for conducting

marketing researxh.


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Challenges to the Marketing ResearchIndustry.

The marketing research industry is doingreaonably good job, there is room forimprovement (11).

Mahajan and Wind, recommend thatresearchers: Focus on diagnosing problems Use informations technology to increase

speed and efficiencyTake an integrative approach, and

Expand the startegic impact of marketingresearch.


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D Hj Al i F ti Al i SE MM (M k ti R h)

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Reference1. Bennet, P. D. (Ed.). (1995). Dictionary of marketing terms (2nd ed). Chicago:

American Marketing Association/NTC Books, p. 166.

2. Drucker, P. (1973) Management: Tasks, responsibilities, practices. New York:Harper & Row, pp. 64-65

3. Kotler P (2003), marketing management(11th ed). Prentice Halls, p.19

4. See www.Mintel.com

5. Scientific research pumps up new products: The benefits of health andwellness ingredients (2003 March). Stagnitos New Products Magazine,Vol.3 no.3, 30

6. Lipson, S (2001). Giving the contomer the drivers seat;the power of theresearch manager. A presentation made at the AMAs 22nd AnnualMarketing Research Conference, Atlanta.

7. Bruzzone, D., and Rosen, D (2001, March). All the right moves. QuirksMarketing Research Review, vol.15, no.3, 56-76.

8. The description of the MIS is adapted from Kotler, P., (1997) MarketingManagement; Analysis, planning, implementation, andd control (9th

ed.) Upper Saddle River, NJ: Prentice Hall, pp 100ff.9. Malhotra, N. K. (1999). Marketing Research (3rd ed). Upper Saddle River, NJ:

Prentice Hall, pp.16-19.

10.Kinnear, T. C., and Root, A.R. (1994). Survey of marketing research;organization function, budget, and compensation. Chicago: AMA, p.38

11.See Neal, W. D. (2002, September 16). Shortcomings plague . Marketingresearch, vol 36, no. 19, p.37ff
http://www.mintel.com/http://www.mintel.com/

i. the role of research in marketing, the

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