Market Research Theory

MARKETING INFORMATION SYSTEM AND MARKET RESEARCH

The marketing information system is the most important tool for management to solve problems and make decisions. Market research is one of the most important components of the marketing information system. This tool should be used in all phases of the company's marketing program. This is why we mentioned information management earlier in this book. We will refer to these tools when we mention the planting, Operation and evaluation of marketing programs.

NEEDS OF A MARKETING INFORMATION SYSTEM

Environmental forces are forcing all companies to handle their marketing information as appropriately as possible. Let us consider some of these forces and their relationships with information to management.

1. A decrease in executive time is achieved by allocating to decision making. The life cycle of products is often shorter than before. The company has been forced to develop and commercialize new products more rapidly. Marketing activity is becoming more complex and broader as the company is expanding its markets and becoming involved in multinational markets. Our knowledge of consumer behavior, although limited, is not enough to show us that there is a large amount of behavioral data that we need to know and understand. Shortages and energy and other raw materials mean that we have to make more efficient use of our resources and our manpower.A company needs to know which of its products is profitable and which should be phased out. Increasing consumer dissatisfaction is encouraged because management lacks adequate information about some aspects of its marketing program. The company may not realize that its product does not meet the expectations of its consumers, or that the intermediaries are not working properly. The explosion of knowledge (the explosion of information) is fantastic. We have enough sources of information. We just need to figure out what to do with them; how to handle it. Fortunately, with the continuous improvement of computers and other data processing equipment,management has fast, low-cost methods of processing large amounts of marketing information.

A marketing information system can help staff in that area handle all the dynamic elements. Many companies are apparently making a little effort to run modern. Currently many companies do not have a market research department.

A marketing information system (MIS) is a future-oriented, continuously interacting structure of personnel, equipment, and procedures. It is designed to generate and process the flow of information to support decision-making in a company marketing program.

A marketing information system is:

1. The concept of a system applied to information management for:
   1. Determine what data you need for decision making Generate (concentrate) information Process data (with the help of quantitative analytical techniques) Allow data storage and retrieval.
   Future oriented. Anticipates the prevention of problems, as well as their solution. Presents preventive and curative medicine for marketing. Constant operation; neither sporadic, nor intermittent. It is not used if the information is not used.

A marketing information system reminds us of military or diplomatic intelligence operations. Collect, process and store potentially useful information. That currently exist in a fragmented form although available in different places inside and outside the company. In a SIM we suggest the use of methods such as industrial espionage or hiring competitive personnel to learn their secrets. In most cases the company does not need to come up with such clandestine methods. The information that the company needs can be obtained through socially accepted means if a simple and adequate marketing information system is established.

A marketing information system relies on a computer and personnel with analytical skills. A modern SIM is not possible without a computer, due to the large amount of data that must be handled. The large number of types and prices of computers currently available allow most organizations to use a SIM

An organization generates, accumulates and has at its disposal a lot of information in its daily operations. But unless the company has some information retrieval and processing system, it is unlikely that it is using your marketing information properly. Without such a system, the information generated by these sources is usually lost, distorted or delayed.

A well-designed SIM can allow for a more complete, faster and less expensive information flow for management decision-making. Executives can receive more detailed and frequent reports. The storage and retrieval capabilities of a SIM allow you to capture and use a wider variety of data. Management can have continuous information on the behavior of products, markets, sellers and other market units with more precision.

A marketing information system is most valuable in a large company, where information can be lost or deformed and can become dispersed. Experience tells us that integrated information systems can have beneficial effects on the behavior of management in small and medium-sized companies.

Merck & company

The merck sharp & Dohme division is responsible for the production and marketing of vaccines and pharmaceuticals. The sales and marketing information subsystems include:

1. Visits and sales systems that generates information about visits Sales reporting system, which provides information on actual sales and all customers External marketing information system that reviews the marketing activities of competitors Information system branch operation that provides flow of financial and accounting information.

Vulcano Materials Company.

Vulcano is a major product of building materials (sand, gravel. Chemicals, aluminum, tin.) The company's 771 marketing information system for sales forecasts ("Improving our forecast assertions as charged damage improves sales chances of a player. ”It is a detailed, up-to-date sales forecasting system. It includes actual sales by market and feedback for correction by the sales force. It also provides information on:

1. Causes of loss of accounts Prices and other activities of competitors Final uses of the product by customers Shipments Special customers or market development.

The relationship between marketing information systems and market research each sees them differently. You want to see the SIM as a simple, computer-based extension of market research. (The first marketing information system was developed in the 1960s, market research as an independent activity was approximately 40 years ahead of the other. Other people see the two as different activities related only to the fact that they both have to do with information management. Companies that do not have a SIM have a broader activity in their market research group. If a company has a formal SIM, the market research activity will certainly be treated as part of the information system.

The essence of what we mean by market research is explained by Richar Crips' definition. Who defines research as markets as “systematic research. The objective and exhaustive of the relevant facts to any problem in the field of marketing ”. This definition mentions a systematic activity, which is the essence of a SIM. Market research as it has been practiced so far tends not to be systematic.

Market research is managed on a project basis; Each project has its starting and ending points. Projects are usually about problems. On a "fire extinguisher" basis. Contrast with the continuous flow of information in a marketing information system. Market research emphasizes collecting data from the past to solve problems. Information systems perform future-oriented activities designed to prevent problems.

We must recognize that many professional market researchers will disagree with these distinctions. He maintains that they are already doing many of the activities of us attributed a SIM. And they may be right if the company doesn't have a formal SIM. The market research activity will be much broader, including sales volume analysis, market cost analysis, forecasting, etc.

In a company that has a SIM, market research activity can be of great value. Market research projects represent an important source of data for a SIM. Let's go back to the topic of market research. We are going to analyze 1) the field of action; 2) typical procedures in market research; 3) the organizational structures used for market research, and 4) the current state of this field.

Market research departments have grown steadily over the past 60 years, reflecting the understanding that management places on the importance of this activity. In a study sponsored by the America Marketin Association, 75% of companies reported having a formal market research department (with more than one person.

Half of the departments started their activities in the last decade. The most common activities were the determination of the characteristics of the marking, the measurement of the market potential, market share analysis, sales analysis. It is interesting to note the considerable number of companies that have research on corporate responsibilities.

Researchers must be very clear about what they are trying to achieve with the research project: that is, what is the objective of the project. Usually the goal is to solve a problem, but it is not always. Many times the goal is to define the problem or to determine if the firm has a problem.

RESEARCH ACTIVITIES% of companies that

They have this activity

Advertising Research

Motivational Research 48

Advertising text research 49

Mass Media Research 61

Advertising effectiveness studies 67

Business and corporate research.

Short-term forecast (up to one year. 85

Long-term forecast (more than one year. 82

Market trend studies. 86

Price study. 81 *

Plant and winery location study. 71 *

Procurement and supply study. 69 *

Export and international study. 51 *

Research on cooperative responsibility

Study of “current” consumers 26 *

Ecological effect study 33 *

Study of legal restrictions in advertising and promotion 51 *

Studies of social and political values ​​40

Product research

Acceptance and potency of new products 84

Competitor Product Study 85

Current Product Test 75

Packaging investigation (designs or physical characteristics) 60

Sales and Market Research

Measures of market potentials 93

Market penetration analysis 92

Determination of market characteristics 93

Sales Analysis 89

Establishment of sales quotas, territory 75 *

Study of distribution channels 69 *

Market test, store audit 54 *

Consumer group operations 50

Incentive study 60

These activities are carried out in a department other than market research in more than half of the companies.

The general problem, as presented to an outside market research firm, was determining whether the company should add this product to its line. The problem was divided into five parts that could be handled by the investigation, which produced the following specific questions:

1. What is the market demand for this product? What devices are desirable: a price station sector or a signal station selector? What are the distribution channels that should be used for the product? What should be its price? What change will be required in the structure of the company's organization if the product is incorporated?

With this new exposition of the problem, the researchers are ready for the next stage of the process; analysis of the current situation.

The analysis of the current situation includes obtaining information about the company and its business environment through research in libraries (documentary) and interviews with company managers. Researchers try to get a general idea of ​​the problem situation.

They analyze the company, its market, its competition and the industry in general.

The analysis of the current situation researchers try to define the problem in the clearest way and develop hypotheses for future tests.

In a research project a hypothesis is a tentative assumption or a possible solution to a problem. It is something that is accepted for discussion or action purposes only. A well-conducted research project each hypothesis must be tested or discarded to meet the project objectives

Investigators are ready to conduct a preliminary inquiry now that you have initial knowledge of the problem. This stage takes place at the same time as the previous one, which involves getting feedback on the information within the companies or the library. The preliminary investigation consists of interviewing people outside the company; competing intermediaries, advertising agencies and clients. This important step is the research step to determine if a larger study is required.

If the preliminary investigation shows that the project is economically feasible, management determines what additional information is required. The next step for the researcher is to plan where and how to get the desired data.

Selecting the source of information in an investigation can use primary data, secondary data, or both. The raw data is original data taken especially for the project. The secondary data has been collected for some other purpose. For example, when researchers are in a supermarket and they see if people carry shopping lists, they are collecting primary data when they receive population census information, they are using secondary data.

One of the main mistakes made in marketing research is collecting primary data before analyzing all the information available from secondary sources. Secondary information can usually be collected much faster and even cheaper than primary data.

Secondary data source. Several sources of secondary information are available to the market researcher.

1. Libraries. A good library is probably the best source of secondary information. Contains posts from almost all sources mentioned here. Government. The federal government produces more marketing data than any other source, this data is available at low prices, although collecting it is very costly. The government has access to various types of information (business sales and profits, personal income) that a private company is practically impossible to obtain.

Tax records, license applications, and other systems of record provide much of the state and local information.

1. Trade, professional and business association. Private businesses. Market research agencies, advertising agencies, and manufacturers or distributors can provide information required by a researcher. Advertising media. Many periodicals and radio and television stations publish information that market researchers do not have available anywhere. University research institutions. Most large universities have research departments and publish results that are of great value to the business community. Foundations. Nonprofit research foundations like-minded groups carry out many types of research projects. In the United States, for example, statistical analyzes and reports are published on special topics,by groups such as The conference Board and The American Managemen Association.

Market research plays a critical role in providing information for planning and control functions. It is in response to these needs and formal planning and control that research is able to develop a systematic approach to management's information needs. Research activities can be built, in large part, around the needs of the planning process. The responsibility of the investigation is not only to have such information at hand, but also to organize and present it in such a way that it contributes to the planning and control activities of the organization. With a continuously updated information library available to facilitate decision making,the manager must be able to perform an effective task of 1) development of objectives, 2) allocation of marketing resources and 3) performance auditing. The balance of research activities will emerge ad doc, as problems and opportunities develop in the course of implementing the marketing plan.

SPECIAL ASPECTS OF GLOBAL MARKETS INVESTIGATION.

The effective implementation of a marketing research program requires a great understanding of the techniques, methods and concerns of marketing management, as well as skills in the internal context. This book is designed to provide the reader with the basic knowledge and skills necessary. Furthermore, these same aspects interest us in the context of global marketing.

Effective market research in the international environment raises additional concerns that will be explored throughout this book. Here we will simply mention them and they will be seen in detail in the respective sections of the book. These include:

• The marketing researcher often has to deal with different languages ​​and cultural dimensions that complicate the collection and interpretation of data There is often a lack of secondary data (data already collected and published somewhere) for marketing researchers to use In addition, these secondary data are usually of questionable quality by US data standards. The institutional structure of the market research company provides data for simultaneous publication, which selects samples for interviews. Etc. is often underdeveloped or lacking. In some countries,Cultural dynamics or concern about government pressure on citizens has a negative impact on the willingness of consumers or distributors to participate in the collection of data for market research or may skew the nature of the responses obtained. The implementation of market research internationally is complex and costs can be high.

These special concerns will be addressed throughout the book, in sections related to global market research.

TYPES OF ACTIVITIES CARRIED OUT BY THE COMPANIES

1. Business / economic and corporate research.

1. industrial market data and trends acquisition / diversification study market share analysis internal employee data (morale, communication, etc.)

1. price fixing
   1. cost data profile data elasticity data - price demand analysis
      1. market potential sales potential sales forecast
      competitive pricing data

SUMMARY

1. The need for market research is parallel to the acceptance of the concept of Marketin. Organizations of all kinds integrate and direct their activities to satisfy the needs of the market. Increasing acceptance of the concept of marketing has increased the need for a formal process for acquiring information, ie market research. Market research can provide information regarding many aspects of the marketing system. This spectrum ranges from monitoring and describing situational factors, to evaluating Marketing programs and measuring the performance of these programs. The main purpose of market research is to provide information for decision making.Information from market research could be useful at all stages of the decision-making process. It ranges from initial information to help recognize that a decision situation exists, to information that will guide the selection of a course of action.Currently the emphasis of Marketin management on planning and control functions has influenced the nature of the market research activity; this requires a more systematic and continuous flow of information. Thus, market research activities must be designed in accordance with the requirements of the planning and control process. Market research is needed to have a library of continuously updated information to facilitate the decision-making process.Most marketing decisions involve limited market research resources. This decision is repetitive by nature, and the manager's experience and judgment provide adequate information to make sound decisions. Marketing information is generally the primary resource for non-repetitive decision-making situations. The concept of a market research system implies a broadly defined role for market research in the marketing management process. Here management perceives marketing research as an information center for decision making, as opposed to an activity of simply gathering and analyzing data.Market research is defined as the systematic and objective approach to the development and provision of information with the decision-making process by the Marketin management. This definition emphasizes the applied research approach of this book. Information based on management experience and judgment differs from information obtained in market research, in terms of objectivity and how systematically the data was collected and processed. Market research is becoming even more useful. for marketing managers as the company becomes more global in the markets they serve. This is because managers with experience and acumen for a country or region cannot apply them when entering unfamiliar or foreign contexts.

Many firms have conducted extensive research studies in the past, only to discover upon completion of the job that the information was meaningless, impossible to project, or unproductive. Therefore, the objective of any market research project must be directly related to the marketing or corporate objective. When market research is viewed from this point of view, all misguided research will be eliminated.

Every business should know the answers to these five questions:

What is the target group?

What do customers want?

What does the competition offer you?

What can I offer you?

What do they think I'm offering them?

When I visit a company for the purpose of consulting and ask the marketing staff on the first day of my stay, they know the answer to the above questions, they invariably answer yes.

They asked me to list the different job classifications, but when asked about how each person should be cataloged or weighted, they ended up admitting they didn't know.

When I concluded my day-long consultation work with this company, the marketing staff came to the conclusion that, in truth, they were unaware of the answers to any of the five questions. They had a pretty good idea about some of the questions, but were unable to back up their answers with accurate data.

The customer's need.

When determining the answers to the question "what do customers want?" You are looking for the benefits and not the hallmarks, it is worth emphasizing once again that these benefits should be ranked in order of importance.

The toothpaste industry, as mentioned in Chapter 5, is an example of what has just been said. In industrial marketing, there may be 5 to 15 people in the same company involved in the decision to buy or not your product or service. At this point you must be sure that each of them is seeking the same benefit.

The competition.

After determining what the customer wants, you must find out what the competition offers. As mentioned in the chapter, one of the best ways to determine how to market your own product or service is to first examine what your competition is doing. In general it is not advisable to attack the competition head-on, especially when these companies have a more or less large share of the market.

Listerine, the market leader, had the highest ranking for each of the main benefits sought, except for one: taste. In this respect he was in last place.

What you offer.

The next question is "what could you offer the customer?" If your market is segmented, as in the toothpaste industry, you will have to decide which segment you want to reach. In reality, this decision must be made before designing or developing the product, in order to produce the benefit seeking but that specific segment of the market. Aqua-fresh offers both fluoride for cavities prevention and sparkling teeth for the socially inclined.

If you have an industrial product and you are in an industry in which different members of each company's buyer groups are looking for different benefits, you will need to consider running separate campaigns for each segment. The standard procedure followed by Procter & Gamble and other large packaged goods companies is to first find out what the customer wants and then develop a product that meets that need.

It is also possible to make customers believe that only your product or service can provide a certain benefit, even though your brand is identical to that of the competition.

Within many product categories, there is little or no difference between competing brands. Remember, after a single alcoholic drink, very few people can distinguish between Coca-Cola, 7-up, and Canada Dry Ginger Ale. If you can convince the public that you and no one else are offering a key benefit, as BudWeiser and Maxwell House did, it is difficult to be evicted by the competition, even though it may provide the same benefit.

The expectations of the audience.

The fifth question - "What does the target group believe that I am offering them?" - is overlooked very often, albeit by more experienced marketing companies. Several years ago, Kool cigarettes established their brand as a “cool and pleasant” cigarette. The commercial showed the moment when a chain was breaking to graphically illustrate how to break the "hot cigarette" habit and switch to Kool. Breaking the chain was like giving up the habit of smoking one cigarette after another.

You should also be very careful when trying to change your brand image or alter the way the target group is currently perceiving your product or service.

The representative of a company that makes a watch known for its strength and low price recently informed me that the management of his company wanted to reposition the brand as a leader in technology. I advised him to do careful research and get guidance as to whether such a change was possible.

Of course, market research involves much more than finding the answers to five previous questions. It is necessary to make use of this research to determine the current position of your brand in relation to that of the competition, in terms of market share, distribution, price setting, product line penetration, advertising and activity in the field of sales promotion, vertical integration, in the size of the sales team, the development of new products, and all other factors involved in the marketing function.

Data collection.

However, if there is agreement as to the need for market research and if the objectives to obtain said information have already been defined. The next question is how to collect the data, the first step is to carry out extensive research in order to determine what information is currently available.

The contact they give you may not be correct; however, this contact may, in turn, refer you to someone else. If you are persistent in your search, you may discover a wealth of marketing statistics about your industry.

In fact, in light of freedom of information legislation, you need to be very careful about the marketing information that the government gives you. Another example that could be cited is that of the Federal Aviation Agency, which, at the request of a request, provided its competitor with all the engineering details for a new life raft design.

An excellent additional source of marketing data, especially for industrial advertisers, is the trade associations. Today, practically every industry has a trade group, and one of its main functions is to collect and disseminate information.

You should also investigate your own company's files. You may be surprised to find that much of the data you are looking for is directly in front of you.

Some sellers tend to skew the information, accommodating it to their own needs, so be careful with these practices.

Then I will present some guidelines for an original investigation or adjusted to the needs of each client. Which could be done by yourself or by an independent research firm.

Market research firms.

Audits & Surveys, Inc, is headquartered at 1 Park Avenue New York NY10016. it also has offices in Washington, DC, and San Francisco. The firm operates through subsidiary companies in many foreign countries. In the United States, Audits & Surveys employs about 300 full-time staff, including a professional staff of statisticians, psychologists, sociologists, and economists, plus a team of more than 2,500 trained auditors and interviewers nationwide.

Another of the Audits & Surveys divisions lead to a National Audit of the Total Market, which provides merchants in consumer products with a quick and accurate measurement of the retail sales of the products, of the retail inventories of the products, of the retail inventories of retail buyers and the availability levels of various products.

The company also conducts special audits in experimental markets, including, if you wish, distribution management.

The Nielsen Retail Index Services measures consumer reaction at the point of sale for national or regional manufacturers of food and drug products, health and beauty products, and alcoholic beverages. Audits disclose sales or consumers, retail inventories, brand distribution, out-of-stock conditions, pricing and business support - for both your competing brands and yours.

The Nielsen Television Index Services (MTI) is a network of services that provides estimates of national television audiences. The sample encompasses approximately 1,200 families with televisions, each equipped with an instant storage audimeter.

The Nielsen Station Index provides an assessment of local television audiences in approximately 220 markets. For each total market measurement cycle over four weeks, the Nielsen computer draws a new sample of approximately 220 families with telephones.

Nielsen compiles these records, market by market, publishes detailed reports, which are used by advertisers and advertising agencies in time acquisition, by stations and their representatives for the purposes of sales and time and program evaluation.

The Nielsen Clearing House (NCH) handles the work associated with coupon processing and reimbursement: to manufacturers, it provides coupon processing and reimbursement services that were redeemed in the marketplace; this includes validating coupon submissions, and interpreting the results of individual promotions using coupons.

The executive caravan is carried out quarterly, 500 high and middle level executives are interviewed in their offices (each time it is a different sample), in order to collect data for different clients. Each customer partners to get answers to specific questions addressed in the survey and pays on this basis. The client gets only the data that he ordered, and nobody else sees that information. As an addendum to the executive caravan, ORC asks interviewees which magazine from a list of 36 publications they regularly read. These reading patterns of the top managers are made available to participating clients.

The Simmonds Market Research Bureau (SMRB), Inc, does for the magazine industry what Nielsen does for television. SMRB is located at 219 reporting on newspaper and supplement stewardship, radio and television tuning, and outdoor exposure, it also reported on average and cumulative media audiences.

Basic demographic characteristics were tabulated both individually and by selected combination. These data were used to describe the audience of the various media and the consumers of the products. There are many other market research firms that specialize in specific areas, but due to limited space, they are not included in the list just given.

However, as in selecting an advertising agency, the quality of the firm's staff and their ability to help other companies is of great importance.

Reference study.

The first type of activity you should consider after selecting a research firm is a benchmark study. In other words, what position does it currently hold versus the competition in the minds of a target group? Basically, this means finding the answers to the five questions posed at the beginning of this chapter.

The size of the probabilistic sample will depend on three factors:

1. the percentage of favorable responses the acceptable margin of error the acceptable probability that the error interval is reliable

For example, suppose you have no idea the percentage of favorable responses. In this case you must assume that it is 50 percent. This may require a larger sample, but we guarantee an adequate basis. (Actually in most research studies, including baseline surveys, you will ask more than one question, so in general it is prudent to assume that the answer to at least one question will be close to 50/50).

Based on these assumptions, the correct sample size would be approximately 400. If the answer to a question was 30 percent favorable (or unfavorable), you would have a 95 percent probability that the answer was between 25 percent. one hundred and 35 percent.

You can determine the correct sample size for any combination of the three variables listed above with the help of graphical tables from a statistics book or from any market research firm.

Advertising research will be covered in more detail with the next chapter. Your benchmark study can also be devoted to topics such as competitive market share, distribution, pricing, product line penetration, advertising, and sales promotion spending, but these are generally less expensive. Subscribe to special studies that concentrates on these areas. Some of the sources for this kind of information have already been disclosed in this chapter.

Survey methods.

There are basically three methods of conducting a survey: personal interviews, telephone interviews, and mail questionnaires. Each has its advantages and questionnaires by mail. Each has its advantages and disadvantages. Personal interviews offer you the opportunity to ask the maximum number of questions; the interviewer can probe or ask follow-up questions; the possibility of showing the product or using visuals is given; the interviewer can record the observations he or she makes; and the rate of completion of questions and interviews is higher.

The advantages of telephone surveys are the reduced determination time, their lower cost compared to personal interviews, and the ability to call back when the interviewee is busy. The disadvantages are that only a few questions can be asked; the person you want to talk to may not come to the phone; and it is not possible to use graphics.

The advantage of e-mail questionnaires is their anonymous nature; interviewees can answer questions calmly; and of the three methods it is the least expensive. The disadvantages consist of a low return of questionnaires that may not be representative of the universe; there is no possibility of eliminating confusion; and the completed questionnaires take a long time to arrive.

Communications research.

The purpose of communications research is to determine whether your communications activities (advertising, sales promotion, and public relations) are achieving your objectives. Even when your communications budget is only $ 10,000, it is wiser to spend $ 1,000 on research to determine if the remaining $ 9,000 is working than to waste the entire $ 10,000.

This is particularly true of consumer product advertisers. And mass services and mass services constitute it as well as all the average citizen. This does not mean that he is ignorant. However, most of the people active in marketing and those who give their approval to current advertising campaigns, represent the top 10 percent of the country in terms of education and intelligence.

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