It defines market research and describes its four basic components.
It is the systematic and objective approach to the development and provision of information for the decision-making process by marketing management.
The four basic components and their description are as follows:
- Systematic: Refers to the requirement that the research project must be well organized and planned: the strategic and tactical aspects of the research design must be detailed in advance, and the nature of the data to be collected and the type of analysis to be used.Objectivity: It implies that market research seeks to be neutral and without any emotional burden in the performance of its responsibilities. Market research can operate in circumstances different from those of the physical, social and medical sciences, but it shares its common standard of objectivity.Information: Marketing management's need for timely and reliable information to support its decision-making, the one you do not have at the time of request. Decision-making:When in situations where market research is used, it refers to non-routine decisions, identifying these as those situations in which the manager's experience and criteria are not enough to guide an adequate decision-making, since It is because this is a new or unique situation, which causes the normal decision-making approach to not clearly fit into this new scheme, which leads to following a more formal approach, which is called the decision-making process. decisions.Either because this is a new or unique situation, which causes the normal approach to decision-making not to clearly fit into this new scheme, which leads to a more formal approach called the process of decision-making decision making.Either because this is a new or unique situation, which causes the normal approach to decision-making not to clearly fit into this new scheme, which leads to a more formal approach called the process of decision-making of decisions.
From the Market Research examples contained in Chapter I, make and present the synthesis of the Black & Decker case.
This company has had great success bringing new products to market, while developing its technically complex, costly De Walt line geared toward professionals; they discovered a market gap for mid-priced tools that they did not fill; it was discovered in their research that a large number of consumers were price sensitive when it came to power tools. An independent research company was hired to carry out a study of 50 homeowners aged 25 to 54 years, these people were followed about the tools they used because they liked certain brands, how much they spent on their purchases, complement their study with customers who had sent their warranty cards. Consumer feedback was reviewed and produced what they wanted,The quantum team was developed with the characteristics that consumers wanted, the name of quantum was preserved because customers liked it, and according to a Black & Decker survey it is considered the 7th most powerful in the United States. Quantum was brought to market and generated huge profits and Black & Decker has become adept at taking market share away from rivals because they know the customers.
Presents the diagram containing the marketing system model and describes the following aspects:
Marketing system model
Marketing system diagram
- Interpretation of the relationship between independent variables and dependent variables. A variable is a property that assumes different values at different times. An independent variable is the assumed cause of the dependent variable, which is the expected effect. Interpretation and relationship of the controllable variables with the independent variables, as well as their effects on the dependent variables.
- The independent variables are classified according to the ease of manipulation or control by the sales organization. Those variables that can be controlled are identified as the components of the marketing mix of the product, price, distribution, promotion
Situational variables represent independent variables that are not under the control of the marketing organization. These variables build the natural state to which the sales organization must adapt to formulate and increase a marketing program, this state is made up of factors such as energy availability, competitive actions, economic climate, market trends and government regulations.
- Relationship that occurs between the behavioral response and the dependent variables, as well as their interaction with the independent variables.
Both sets of independent variables - marketing mix and situational factors combine to influence behavioral response such as purchase, purchase intentions, preference, and attitudes. This is a behavioral response is the dependent variable or the expected effect. A complex factor is the behavioral response that is influenced by past behavior in addition to the immediate influence of independent variable classes.
- Relationship that occurs between performance measures and the dependent variables and their interaction with the independent variables and performance responses.
The performance responses form the basis for adopting the organization's monetary and non-monetary performance measures. The monetary measures are sales, market share, profits, internal rate of return, return on investment. Monetary measures are the image of the organization, developing valid measures is essential for the effective management of the marketing system.
The decision-making process in marketing management is developed based on a sequence of six steps. It presents the diagram that contains them and makes a brief description of this procedure.
Decision-making process in marketing management
1. Recognize a decision situation
Marketing problems and opportunities result from the dynamic nature of situation factors and / or from the implementation of marketing programs. While performance measures often point to the presence of problems, monitoring of situational factors can point to the presence of problems and opportunities.
2. Definition of the decision problem
The manager needs to define and clarify the main aspects and the causal factors that operate in the decision situation. It is not always easy to identify which fundamental variables are causing problems and which need to be corrected.
3. Identification of alternative courses of action.
In marketing, a course of action involves specifying some combination of the variables in the marketing mix. "Do nothing new", "maintain the status quo" is as valid a course of action as effecting a change in marketing activities. The process of identifying courses of action is a creative process similar to the first stage of the decision-making process.
4. Evaluate courses of action.
In order to make a decision, there must be at least two identified courses of action and uncertainty regarding which course of action will maximize the achievement of management objectives.
5. Select a course of action.
Through the use of market research a valuable tool is available in the evaluation of alternatives and courses of action. This makes the manager interested in market research information as a way to reduce the uncertainty inherent in selecting a course of action.
6. Implementation of the selected course of action.
Again, market research provides the means to monitor the effectiveness of the selected action and the situational variables that influence the performance of the program.
Present and describe the diagram that represents the interrelationship that occurs between the decision-making process and the marketing system.
Interrelation between the decision-making process and the marketing system.
Diagram of interrelation that occurs between the decision-making process and the market system
Organizations collect information to support the decision-making process, which can be grouped into three large areas:
a) Situational Analysis, b) Marketing Mix and c) Performance Measures.
It presents a brief description of the characteristics of each one of them.
a) Situational analysis
1 Demand analysis
1.1 Characteristics and behavior of the buyer:
- Who buys? What buys? Where do you buy? Why do you buy? How do you buy? When do you buy? How much do you buy?
1.2. Market characteristics:
- Market Size Potential Segments Selective Demand Future Market Trends
2 Competition
2.1 Who are the competitors?
2.2 Competitor characteristics:
- Market programs Competitive behavior Resources
3 General environment
3.1 Government regulations
3.2 Political climate
3.3 Technological trends
4 Internal environment
- Market Resources and Skills Financial Resources and Skills Production Resources and Skills
b) Market mix
1 Product
- What attributes and benefits of the product are important? How should the product differentiate itself? Which segments will it attract?
2 Distribution
- What types of distributors should handle the product? What forms of physical distribution are needed?
3 Price
- What is the elasticity of demand? What should the price of the product line be?
4 Promotion
- What is the optimal promotional budget? What is the right promotional mix? What advertising copy is the most effective?
c) Performance measures
What are the current sales by product line?
- What is the current participation by product line? What is the level of awareness of our promotion?
It presents a general analysis of the relevant aspects of Market Research in the globalization of markets.
One of the aspects that a marketing researcher must deal with is speaking with people of other nationalities, with other languages and cultures and this can complicate the interpretation of the results of the data interpretation, also a limitation is that frequently the Secondary data is not of high quality that is questioned whether it is really not valid or does not have the quality of the US standards, there is also another relevant aspect is the underdeveloped or lacking institutional structure of market research companies, there is also that in some countries the culture or government pressure on citizens has a high negative impact on consumers and their willingness to participate in data collection in research,Likewise, there is another factor that is the logistics of implementing Market Research at an international level are very expensive.
In general, there are barriers in language, culture, publication of secondary data information, government pressure, logistics at the international market research level is very expensive, market researchers must be prepared and inform very well so that they do not fall into this type of difficulties.
How could the following organizations use marketing research effectively?
Wal-Mart: You can use market research in an effective way, foreseeing opportunities to improve your image, to obtain greater profits, to decide if there is a market for you to expand more in the state and if so, you can put another store and win ground to its close competitors, also so that you can decide if in the future you need to introduce another type of product that is not now introduced in these types of stores, it is also to use market research in a more efficient way, taking advantage of growth opportunities in your sector.
SEARS: You can use market research in a more effective way to see in what prices the products that the competition has fluctuate, to solve a certain type of problem that they have, to decide at what prices to sell to consumers and what type of Market segment can be covered later and be able to see opportunities in what others see problems.
VIP`S: You can use market research in a more efficient way to see what kind of food, coffee, etc. Consumers like to pay attention, increase their sales, improve their prices, improve their image and see if there is a market to introduce new branches.
GOVERNMENT OF THE STATE: you can use this tool more effectively to improve the image that it has towards citizens, it can also serve you this tool to decide if it is feasible to carry out future public works, how it will impact the population.
What is the formal investigation process?
The formal market research project can be thought of as a series of steps called the research process. To effectively carry out a research project, it is essential to anticipate all the steps and recognize their interdependence.
Briefly present and describe the nine steps that make up the formal market research process.
- Information need. As a first step in the research process, there is the
establishment of the need for information, which from the beginning faces difficulties such as lack of identification, definition and recognition by marketing management. It is difficult for the researcher to find in the initial definition of the marketing manager the true definition of the problem and the information requirements. It is the marketing manager's responsibility to explain the situation surrounding your request for assistance and to establish the type of research information that will facilitate the decision-making process; However, the researcher is a participant in the establishment and detailed understanding of both the problem and the information requirements.
The researcher should always keep in mind that marketing managers often react to hunches and clues rather than clearly decision situations.
identified. For this reason, establishing the need for research information is a critical and difficult phase of the research process.
Research objectives and information needs. The research objectives should be presented together with the list of the specific information needs of the research project. Research objectives answer the question "why is this project being done?" Information needs answer the question "What specific information is required to achieve the objectives?"
Data sources and research design. Based on the study objectives and information needs, the formal research project is designed and the appropriate data sources for such study are identified. A research design is the basic plan that guides data collection and analyzes the stages of the research project. The frame of reference is one that specifies the type of information to be collected, the data sources, and the procedures and analysis of data collection.
Data sources can be internal by external to the organization. Internal sources contain the company's previous research studies and background. External sources include business research reports, business magazines or industry reports, government reports, and so on.
If the data required in the study are not available from internal or external sources, the researcher should give way to the collection of new data through interviews, observation, experimentation or simulation; what makes up the remaining steps of the market research process.
Procedure for data collection. In developing the procedure for data collection, the researcher must establish an effective link between the information needs and the questions to be asked or observations to be recorded. The success of the study depends on the researcher's ability and creativity to establish this link. The responsibility for this task rests primarily with the researcher.
Sample design. The clear definition of who or what should be included in the sample is closely related to the precise definition of the population from which the sample is to be drawn. Having covered this first point, the researcher must determine the methods to be used to select said sample, which can be probabilistic or non-probabilistic.
Supported in the previous steps, the sample size is determined.
Data collection. This step is considered critical, since it generally involves a large percentage of the research budget and a large part of the total error of the research results.
Data processing. In this step, the editing and coding functions of the collected information are carried out. Editing includes reviewing the data formats for readability, consistency, and completeness of the data. Coding involves establishing categories for responses or groups of responses so that numbers can be used to represent the categories.
Analysis of data. For data analysis, compatibility with the information needs requirements identified in step 2 should always be kept in mind.
Presentation of the results. The presentation of research results is usually carried out by two methods, mutually complementary: a written report and an oral presentation. It is extremely important that the research findings are presented in a simple format and directed towards the information needs of the decision situation. Regardless of how efficiently the above eight steps are carried out, the project will be no more successful than the research report.
It presents a synthesis of the case that in relation to the recognition and definition of the problem of the plastic packaging industry, is presented in the textbook.
The plastic packaging industry has experienced dynamic growth, achieving penetration in the most conventional packaging markets, sales represent 10% in the industry. The society of plastic industries revealed that plastic packaging offers advantages over other materials, the future perception was optimistic but at a slow growth rate, because there were several restrictions for its future growth: uncertainty about raw materials, future competitive movements of glass, paper, debate on environmental aspects and plastic safety, potential markets are saturated, growth in the last decade has resulted in the modernization and expansion of facilities, and current manufacturing capacity is larger than demand,the concern of these members was to develop programs to identify new markets and capture market potential. I hired a market research company and a meeting was scheduled, the purpose of the meeting was to explain why the market research information was needed, this would be achieved through presentations that characterized the industry in its past, present situation and future. The research company requests a formal statement of objectives, potential courses of action to achieve the objectives.this would be achieved through presentations that characterized the industry in its past, present and future situation. The research company requests a formal statement of objectives, potential courses of action to achieve the objectives.this would be achieved through presentations that characterized the industry in its past, present and future situation. The research company requests a formal statement of objectives, potential courses of action to achieve the objectives.
What is the importance of recognizing and quantifying the errors of a market research?
A professionally designed and managed research study must recognize potential sources of error and manage the size of such errors according to the precision required by the manager's decision situation, since ignoring them generates true misinformation.
What are the two types of errors in market research and what are their characteristics?
- Show them errors. These errors are those that are generated as the difference between the value of the sample and the real value of the population it represents. The above is generated by virtue of the need to work in research with representative samples of the population.
The sampling error has two characteristics that make it useful for the researcher:
(1) can be measured and (2) decreases as the sample size increases.
- Errors don't show them. These types of errors include all those that occur in the market research process, with the exception of sampling errors. This includes all aspects of the investigation process where errors and deliberate alterations can occur. Therefore, we must be aware of:
(1) What non-show errors can occur, (2) What effects can these errors have on the results and
(3) What steps can we take to reduce those errors.
Perform the analysis corresponding to the diagram that contains the Link between the Decision Process and the Investigation Process.
The decision process begins with the recognition that there is a unique marketing problem or that an opportunity is present, which may be signaled by symptoms. A decision problem is present in situations where the manager is faced with the decision to choose between alternative courses of action in which there is uncertainty regarding the outcome of the decision. Once the decision problem has been formulated, the next step is to identify alternative courses of action. Once the alternatives are established, the manager can resort to the use of conclusive research, which provides information for evaluating courses of action. The first step in the conclusive investigation process is to establish the need for information, thenthe person making the decisions must be clearly identified and must establish the objectives of the decision situation as well as the information needs, determine the data source, develop the data collection formats, design the sample, collect, process and analyze the data and present the results in writing and orally.
Within the process of recognition of a decision situation it is required to differentiate between the following concepts: Problem, Opportunity, and Symptom. Make and present the identification and characteristics of them.
Issue. The word "problem" has a connotation of difficulty; something is wrong and needs attention. There is a problem when goals are set and a performance measurement indicates that those goals are not being met.
By "problem" we mean those independent variables that prevent the organization's performance measures from meeting the objectives.
Opportunity. By "opportunity," we do not mean the presence of a situation where performance can be improved by undertaking new activities. Opportunities differ from problems in that the manager may not have to do anything about them. Most opportunities do not put as much pressure on managers as problems, since it is more common to have formal methods by which problems can be detected than methods for monitoring opportunities. It should be noted that the difference between problems and opportunities is not clearly defined. Problems are usually associated with adversity, but even in adversity there may be an opportunity in disguise.
Performance measures act as this signal to marketing management.
SYMPTOM. It is a condition that signals the presence of a problem or an opportunity. Symptoms are not the same as problems and opportunities, a symptom can be seen as the result of a problem or an opportunity.
The root causes of the symptoms are what is called problems.
It is extremely important to recognize the difference between symptoms, problems, and opportunities.
An illustrative example could be the decrease in the volume of sales below the predicted levels, this situation of decrease is the symptom since the problem will be the one that can be identified as the cause of such decrease. It is rare that a problem or opportunity can be adequately identified with the mere presence of a symptom. It should always be kept in mind that decisions are made in order to solve problems and / or to seize opportunities, and not to treat symptoms. Effective decision making depends on a clear establishment of the basic problem and opportunity.
Define Decision problem together with its two components.
Once the existence of a decision situation is recognized, the next step is to reach the definition of the problem on which decisions will have to be made, which, when it is correctly defined, manifests two components:
- A complete understanding of the goals surrounding the decision situation
(2) A statement of the problems and opportunities present in the decision situation.
Describe the role that the decision maker plays in defining the decision problem.
The decision maker has two approaches to defining the decision problem. The first consists of formulating the decision problem based on the analysis of existing information.
The second approach is to use exploratory research to help define the decision problem.
In order to enter into the study of the decision problem definition process, it is important to clearly understand what a decision problem means, and emphasis should be placed on the role and responsibility of the decision maker, as a guide for the definition of the decision problem. decision problem; aspects that are explored below:
What is a decision problem? It will always be a situation in which management has a goal to meet and is faced with a situation involving two or more courses of action to achieve the goal. In addition, there must be uncertainty regarding the best course of action.
In decision problems there may be situations related to problems and opportunities. Uncertainty may exist regarding the best course of action to solve a problem and how to seize an opportunity. Consequently, the decision problem arises in situations related to problems and opportunities.
The role of the decision maker. It is essential that the decision maker, after recognizing that there is a potential decision problem, ensures that the objectives of the decision are specified and that the problems and opportunities are clearly identified.
What is the purpose of the decision?
In general, the decision-making process has 2 sources of objectives. The main source of objectives is that of the organization, for example an organization may aim to increase its earnings per share by 10%. The second source comprises the personal goals of the individual making the decision and those that influence that individual.
What are Alternative Courses of Action?
It is to specify how the resources of an organization should be used in a certain period of time. Defining alternative courses of action is a crucial step in formulating the decision problem. The real challenge for management is to identify the best course of action that results in high performance and therefore the possibility of a competitive advantage.
Make a brief but objective presentation of the preliminary considerations to conduct a conclusive investigation.
Research study designed to evaluate alternative courses of action is called conclusive research. This formal research project encompasses a series of nine steps called the research process. At this point, the analysis was focused on the three initial stages of the research process: (1) establishing the information need, (2) determining the research objectives, and (3) specifying the information needs.
Establish the need for information. Establishing the information market research decision is a critical step in the research process and largely determines the success or failure of that research project.
Role of the researcher. On rare occasions the manager's initial request for help adequately establishes the need for investigative information. The investigator should ask the following questions at this initial stage:
1 Who makes the decisions?
2 What are your goals?
3 Has a clear and concise presentation of the problems and / or opportunities been formulated?
4 What are the courses of action to be evaluated?
The person who makes the decisions. The researcher must differentiate between the decision-maker and those who represent that person. If the investigator insists on meeting directly with the person who has primary responsibility for decisions, it can save valuable time and effort.
Goals of the decision maker. Decisions are made for achieved objectives. The success of a research study depends on a clear understanding of the decision objectives. A very important task of the market researcher is to skillfully identify the objectives of the organization and be sensitive to the personal objectives that are behind the decision process. A successful researcher is one who can design research to effectively meet the needs of the organization while at the same time enhancing the personal goals of the decision maker.
Effective presentation of problems and opportunities. Clear and concise presentation of problems and / or opportunities is critical to the success of the formal investigation process. Very often, this task is the most overlooked phase when starting the research project. An inadequate definition of the problem or opportunity can easily invalidate all efforts aimed at providing useful information for decision-makers.
Courses of action The investigator should be satisfied that management has identified and approved the relevant courses of action. Nothing can be more destructive to a successful research study than discovering that a key alternative has not been evaluated.
Describe some of the factors that interfere in the management-researcher relationship.
Some factors that interfere are:
- Job responsibilities Professional goals Educational background
Now it is more common for research to be specialized using experts in statistics, psychology, mathematics, computer science and economics among others; a research specialist who is not focused on management may not clearly establish what the research need is. Many managers see researchers as people who are more interested in applying new study and research techniques than in providing the necessary information for decision-making, this tends to hinder the communication process between manager and researcher, especially in reports on the results of the investigation.
On many occasions, researchers can lose sight of the fact that their role is only that of an advisor and cannot make decisions that are the responsibility of management. The researcher should not participate in decision-making because it may affect the objectivity of the research process, since he would consider the research findings in a special way; At this point the manager can consider the importance of these findings based on her experience and knowledge.
Download the original file
