Inputs for Marketing Planning

Inputs for Marketing Planning This section presents topics that are classified as inputs for marketing planning. Prior to striking a m a r keting plan, the marketing manager must have a thorough understanding of the customer, be it a PA R T consumer or business organization. Understa n d i n g c u sto m e rs fre q u e n t ly invo lves the co l lection of d a ta and information through marketing re s e a rc h . Ch a p ter 3 examines in detail the ro le and pro ce ss 2 of marketing re s e a rch and shows how org a n i z a - tions co l lect information that ass i sts in the planning of their marketing activities. Ch a p ter 4 presents the elements of co n s u m e r behaviour, the purchase decision pro ce ss, and the fa c to rs that influence it. Ch a p ter 5 focuses on the behavioural tendencies of b u s i n e ss, industry, and governments, and the ste p s i n vo lved in their decisions to purchase goods and s e r v i ce s . CH A P T E R 3 Ma r keting Researc h Learning Objective s Af ter studying this chapter, you will be able to 3. Describe the methodologies for collecting 1. Define the role and scope of marketing secondary and primary research data. research in contemporary marketing 4. Explain what uses are made of secondary and organizations. primary research data in resolving marketing problems. 2. Outline the basic stages in the marketing research process. Since a considerable amount of money is invested in the design, development, and marketing of goods and services, a marketing organization is very concerned about protect- ing its investment. In addition, its desire to remain competitive and be knowledgeable about consumers’ changing needs makes it necessary to collect appropriate information before and after critical decisions are made. Carefully planned marketing research is the tool that provides organizations with the insight necessary to take advantage of new opportunities. This chapter will discuss the marketing research process and the impact it has on making business decisions and planning marketing strategies. Marketing Research: Role and Scope 1. Define the role and scope Research provides an organization with data. The data do not guarantee that the firm of marketing research in contemporary marketing will take proper decisions and actions since data are always open to interpretation. The organizations. old saying that “some information is better than no information” puts the role of marketing research into perspective. A vital marketing tool, it is used to help reduce or elim- inate the uncertainty and risk associated with making business decisions. In many ways, marketing research is a form of insurance—it ensures that the action a company might take is the right action. To demonstrate, consider the decision Ikea made when it opened a new store in Vaughan (on the outskirts of Toronto). Ikea is well known for its maze-like layout—people must follow a set pattern and see all of the mer- chandise before they reach the checkout counters. Such a pattern encourages impulse buying, which means that customers frequently leave the store with far more than they intended to buy. Why would Ikea change this winning formula? Research among customers revealed a more conventional layout was preferred. Shoppers indicated they wanted an environment that was less confusing. “If it was less confusing we would return more frequently,” was a common response. So, Ikea evaluated impulse buying and its traditional layout against a more conventional layout that would generate more store visits. Deciding on the latter option, Ikea implemented a conventional layout that features a central corridor that opens onto aisles set at right angles every few metres.1 The moral of this story is simple: research provides useful information to develop an effective marketing strategy. It’s all about keeping the customer satisfied! The American Marketing Association defines marketing research as the function marketing re s e a rc h that links the consumer/customer/public to the marketer through information— information used to define marketing opportunities and problems; to generate, refine, and evaluate marketing actions; to monitor marketing performance; and to improve the understanding of marketing as a process. Ma rketing re s e a rch specifies the inform a ti on requ i red to ad d ress these issu e s ; de s i gn s the met h od for co ll ecting inform a ti on ; m a n a ges and implem ents the inform a ti on co ll ec- ti on proce s s ; a n a ly zes the re su l t s ; and com mu n i c a tes the findings and their implicati on s . 2 5 7 5 8 PART 2 Inputs for Marketing Planning THE SCOPE OF MARKETING RESEARCH market analy s i s Generally speaking, marketing research covers three main areas: market analysis, which product re s e a rc h produces information about the marketplace; product research, which produces infor- consumer analy s i s mation about how people perceive product attributes; and consumer analysis, which produces information about the needs and motivations of consumers. The testing of new product concepts is the single most common task asked of market research firms by their clients. Other uses of marketing research include testing advertising for impact and effectiveness; conducting surveys to measure customer satis- faction; tracking brand awareness versus the competition; pre-testing of advertising strategies; and measuring the influence of pricing tests. Regardless of the nature of the research study, the information obtained will assist managers in their decision making. How do managers go about collecting information? Prudent marketing decision makers combine their intuition and judgment with all other information sources avail- able. They use the scientific method, which implies that the data generated are reliable and valid. re l i a b i l i t y Reliability refers to similar results being achieved if another study were undertaken va l i d i t y under similar conditions. Validity refers to the research procedure’s ability to actually scientific method measure what it was intended to. The key elements of the scientific method are: 1. The awareness of a problem is reached through exploratory investigations. 2. Information sources and methodologies of collecting information are implemented properly. 3. Alternative solutions are thoroughly evaluated. 4. Data are properly analyzed and interpreted. 5. Specific actions taken are based on research findings. Here’s a quick illustration of how proper research influenced a decision at Wal-Mart Canada. A research study was undertaken to analyze how customers navigate Wal-Mart stores. The research involved one-hour, videotaped “shop-along” interviews with 20 recruited female customers from various demographic backgrounds. From the interviews Wal-Mart learned that shoppers wanted better signage. They thought the place- ment of signs could be better and there could be a lot less clutter. Signs should be at eye level and their design should be more eye-catching. Wal-Mart implemented the sug- gested changes in a test store and then did the same research again. Customers indicated they were aware of the new signs (since they were different from other Wal-Mart stores) and were generally quite happy with what they saw. Wal-Mart is implementing the sign changes nationwide.3 The Marketing Research Process 2. Outline the basic stages in the marketing research The re s e a rch process is a sys tem a tic one with many step s : probl em aw a ren e s s , process. exploratory research, secondary data collection, primary research, data transfer and pro- cessing, data analysis and interpretation, and recommendations and implementation (Figure 3.1). PROBLEM AWA R E N E S S In the problem awareness stage, an attempt is made to specify the nature of the diffi- culty. For example, a company or product may be experiencing declining sales, but the decline itself is not the problem. Instead, it is a symptom that makes people aware that there is a deeper problem within the organization that must be identified. Many practi- tioners of marketing research state that the proper identification of a problem is the first CHAPTER 3 M a r k eting Researc h 5 9 FI G U R E 3.1 Marketing Research Process step in finding its solution. Therefore, it is essential that a problem be precisely defined. After all, a business organization does not want to waste valuable time and money collecting information that will not lead to action. Currently, market research projects are usually commissioned to address a specific decision that has to be made, and good research projects are designed to address that decision alone. Once such data are avail- able, they may be linked to other research projects at a later date. Defining a problem involves developing a clearly worded statement that provides direction for further research on the topic to be investigated. To define a problem precisely, a company usually performs some form of exploratory research. EX P L O R ATORY RESEARCH Exploratory research is research that helps define the precise nature of a problem ex p lo rat ory re s e a rc h through the use of informal analysis. This informal analysis is often referred to as the funnelling process. Funnelling is the process of dividing a subject into manageable vari- fu n n e l l i n g ables and thereby narrowing down the field so that specifically directed research can be conducted.

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