Process of Marketing Research- MBS MBA BBA BBS BBM BIM TU Notes- TU solution

To  take  advantage  of  all  the  resources  and  practices  available,  good  marketers  adopt  a  formal  marketing research process that follows the six steps shown below. We illustrate these steps in the following situation based on Philip Kotler's Marketing Management. Assume that American Airlines  is  reviewing  new  ideas  for  serving  first-class  passengers  on  very  long  flights,  mainly  businesspeople  whose  high-priced  tickets  pay  most  of  the  freight.  Among  these  ideas  are:  (1)  ultra  high-speed  Wi-Fi  service,  (2)  124  channels  of  high-definition  satellite  cable  TV,  and  (3)  a  250-CD  audio  system  that  lets  each  passenger  create  a  customized  in-flight  playlist.  The  marketing  research  manager  will  investigate  how  first-class  passengers  would  rate  these  services, specifically ultra high-speed Wi-Fi, and how much extra they would be willing to pay. 

Step 1: Define the Problem, Decision Alternatives, and Research Objectives 

Marketing  managers  must  not  define  the  problem  too  broadly  or  too  narrowly  for  the  marketing  researcher.  In  this  case,  the  researcher  and  the  marketing  manager  are  defining  the  problem as follows: “Will offering ultra high-speed Wi-Fi service create enough incremental preference and  profit  to  justify  its  cost  against  other  service  enhancements  American  might  make?”  They  specify  five research objectives:

i.    What types of first-class passengers would respond most to ultra high-speed Wi-Fi service?  

ii.   How many are likely to use it at different price levels? 

iii.  How many might choose American because of this new service?  

iv.  How much long-term goodwill will this service add to American’s image?

v.   How  important  is  ultra  high-speed  Wi-Fi  service  to  first-class  passengers  relative  to  other  services, such as a power plug?

Not all research can be this specific. Some is exploratory—its goal is to identify the problem and to  suggest  possible  solutions.  Some  is  descriptive—it  seeks  to  quantify  demand,  such  as  how  many  first-class  passengers  would  purchase  ultra  high-speed  Wi-Fi  service  at  $25.  Some  research is causal—its purpose is to test a cause-and-effect relationship.

Step 2: Develop the Research Plan 

To design a research plan, marketing managers need to make decisions about the data sources, research approaches, research instruments, sampling plan, and contact methods. 

Data Sources

The  researcher  can  gather  secondary  data,  primary  data,  or  both.  Secondary  data  are  data  that  were collected for another purpose and already exist somewhere. Primary data are data freshly gathered  for  a  specific  purpose  or  project.  Researchers  usually  start  by  examining  secondary  data.  If  the  needed  data  don’t  exist  or  are  dated,  inaccurate,  incomplete,  or  unreliable,  the  researcher will need to collect primary data.

Research Approaches

Marketers collect primary data in five main ways: through observation, focus groups, surveys, behavioural data, and experiments.

1.   Observational   research: 

Researchers  can  gather  fresh  data  by  observing  unobtrusively  as  customers  shop  or  consume  products  or  by  holding  informal  interview  sessions  at  their  convenient place such as a cafĂ© or bar. Ethnographic research uses concepts and tools from anthropology and other social science disciplines to provide deep cultural understanding of how people live and work. The American Airlines researchers might meander around first-class lounges to hear how travellers talk about different carriers or sit next to passengers on planes.

2.   Focus  group  research:

Marketers  can  also  use  focus  group  research.  A  focus  group  is  a  gathering of 6 to 10 people selected for demographic, psychographic, or other considerations and convened to discuss various topics at length, with a professional moderator, for a small payment.  In  the  American  Airlines  research,  the  moderator  might  start  with  a  broad  question,  such  as  “How  do  you  feel  about  first-class  air  travel?”  Questions  then  move  to  how  people  view  different  airlines,  existing  services,  proposed  services,  and,  specifically,  ultra  high-speed Wi-Fi service. 

3.   Survey   research:

Companies  undertake  surveys  to  assess  people’s  knowledge,  beliefs,  preferences,  and  satisfaction  and  to  measure  these  magnitudes  in  the  general  population. Cash register receipts from large retail institutions include an invitation to fill out a survey with a chance to win a prize. American Airlines might prepare its own survey questions, or it might add questions to an omnibus survey that carries the questions of several companies at  a  much  lower  cost.  It  can  also  pose  questions  to  an  ongoing  consumer  panel,  have  researchers  survey  people  in  a  shopping  mall,  or  add  a  survey  request  at  the  end  of  customer service calls. 

4.   Behavioural   data:

Customers  leave  traces  of  their  purchasing  behaviour  in  store  scanning  data,  catalogue  purchases,  and  customer  databases.  Actual  purchases  reflect  consumers’  preferences  and  often  are  more  reliable  than  statements  they  offer  to  market  researchers.  American Airlines can analyze ticket purchase records and online behaviour. 

5.   Experimental   research:

The  most  scientifically  valid  research  is  experimental  research,  designed to capture cause-and-effect relationships by eliminating competing explanations of the findings. American Airlines might introduce ultra high-speed Wi-Fi service on one of its international  flights,  charging  $25  one  week  and  $15  the  next  week.  If  the  plane  carried  approximately  the  same  number  of  first-class  passengers  each  week  and  the  particular  weeks  made  no  difference,  the  airline  could  relate  any  significant  difference  in  the  number  of passengers using the service to the price charged. 

6.   Research   instruments:  

Marketing  researchers  use  three  main  research  instruments  in  collecting  primary  data:  questionnaires,  qualitative  measures,  and  technological  devices.  A  questionnaire  consists  of  a  set  of  questions  presented  to  respondents.  Because  of  its  flexibility, it is by far the most common instrument used to collect primary data. The form, wording,  and  sequence  of  the  questions  can  all  influence  the  responses,  so  testing  and  de-bugging  are  necessary.  Closed-end  questions  specify  all  the  possible  answers,  and  the  responses  are  easier  to  interpret  and  tabulate.  Open-end  questions  allow  respondents  to  answer  in  their  own  words.  They  are  especially  useful  in  exploratory  research,  where  the  researcher is looking for insight into how people think.

Some  marketers  prefer  qualitative  methods  for  gauging  consumer  opinion  because  they  feel  consumers’ actions don’t always match their answers to survey questions. Qualitative research techniques  are  relatively  indirect  and  unstructured  measurement  approaches,  limited  only  by  the  marketing  researcher’s  creativity,  that  permit  a  range  of  responses.  They  can  be  an  especially  useful  first  step  in  exploring  consumers’  perceptions  because  respondents  may  be  less guarded and reveal more about themselves in the process.

Technological  devices  are  also  used  for  marketing  research.  Galvanometers  can  measure  the  interest  or  emotions  aroused  by  exposure  to  a  specific  ad  or  picture.  The  tachistoscope  flashes  an  ad  to  a  subject  with  an  exposure  interval  that  may  range  from  a  fraction  of  a  second  to  several seconds. After each exposure, respondents describe everything they recall. Researchers have also benefited from advances in visual technology techniques studying a consumer’s eyes and  face.  Technology  now  lets  marketers  use  skin  sensors,  brain  wave  scanners,  and  full-body  scanners to get consumer responses. For example, biometric-tracking wrist sensors can measure electrodermal activity, or skin conductance, to note changes in sweat levels, body temperature, and so on.

Sampling Plan

After choosing the research approach and instruments, the marketing researcher must design a sampling plan. This calls for three decisions:

1.Sampling  unit:  

Whom  should  we  survey?  In  the  American  Airlines  survey,  should  the  sampling unit consist of first-class business travellers, first-class vacation travellers, or both? Should  it  include  travellers  under  age  18?  With  the  sampling  unit  chosen,  marketers  must  next develop a sampling frame so everyone in the target population has an equal or known chance of being sampled. 

2.Sample  size:  

How  many  people  should  we  survey?  Large  samples  give  more  reliable  results,  but  it’s  not  necessary  to  sample  the  entire  target  population  to  achieve  reliable  results.  Samples  of  less  than  1  percent  of  a  population  can  often  provide  good  reliability  with a credible sampling procedure. 

3.Sampling  procedure:  

How  should  we  choose  the  respondents?  Probability  sampling  al-  lows marketers to calculate confidence limits for sampling error and makes the sample more representative.

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