978-0136074892 Solution Manual Chapter 03 Part 2

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Teaching Tips and Strategies from Barbara S. Faries, MBA

This chapter lays the foundation of a basic understanding of market research and

its role in corporate marketing and strategic decision-making. It introduces the student to

market research terminology as well as the basics of calculating market potential and

forecasting techniques.

Key Terms and Concepts Introduced Include:

·Marketing research

·Research process

·Problem definition

·Information needs

·Type of study or research

·Data collection

·Data analysis and Conclusions

·Reporting

·Secondary and primary information sources

·Qualitative and quantitative research

·Market potential and market forecast

·Forecasting

Note: Two recurring themes in this Instructor’s Manual will be the first two items:

·Link theory to practice.

·Engage students to link work experience to the concepts demonstrated

in the text.

·Instructors are encouraged to link theory to practice by finding current

examples in the corporate environment that demonstrate the key concepts

above.

·If your class contains those already working in the field, have them describe

how the concepts in theory match those in the actual workplace.

Few students will enter the market research field as a profession. However, almost

all will be exposed to marketing research within their corporations regardless of their

function (marketing management, product management, sales, sales promotion,

marketing communications, product development, etc.) Most will be expected to

understand the critical role marketing research plays in a successful organization. Most

will also be expected to understand the meaning of market size, market potential, and

sales potential as well as forecasting.

Students often have a difficult time with the following:

·The meaning and differences of qualitative research versus quantitative

research

·The meaning and differences of primary research versus secondary research

Suggested ways of addressing the above would be to use “real life examples” of

situations where qualitative research was used versus quantitative research. (The recent

US Census would be an excellent example of primary research as well as quantitative

research.)

This offers some excellent basic information on market sizing, market potential,

and forecasting. Students often reach graduate level or become marketing professionals

without having been exposed to these concepts. Most have never learned to calculate

market potential or forecast.

Suggested ways of linking theory to practice would be to develop to develop

some example where the students actually calculate market potential and forecast sales.

NOTE: In developing your examples, I suggest developing a business-to-business

example as well as a consumer example. A simple formula that proves helpful in

calculating basic market potential is:

Formula for Determining Basic Market Potential

Q = nqp

Q = Total Market Potential

n = Number of buyers in specific product/market under the given assumptions

q= Quantity purchased by average buyer

p = Price of product

Review Questions

1. Suppose that McDonald’s was considering bringing a new kind of hamburger to its

stores. What kind of research would it need to do in order to have some confidence

that the new product would sell well?

2. I’m interested in finding out if the demand for this textbook (new, not “pre-owned”

copies) is sensitive to higher or lower prices. Design an experiment that you could

run in the campus bookstore to determine this.

3. Pick a product that is used in everyday life. Observe your roommate, spouse, or some

other person’s use of this product. Ask him or her questions about their brand loyalty,

what they like/dislike about it, and anything else you want to know. How does this

information obtained differ from what you would get if you administered a survey?

4. Suppose that Microsoft was introducing a new PC operating system to replace

Windows 7. What kind of research would it need to do in order to have confidence

that the new software would sell well?

and customer service data to determine the need in the marketplace. More than likely,

they will also talk to PC manufacturers and other customers to determine whether or not

the new operating system will be acceptable to them. Finally, most software

manufacturers would conduct a beta test of a group of developers, users, or even PC

manufacturers to determine product usefulness, problems, or to eliminate bugs.

You can point out to the students that the company would not only collect

consumer data but also data from their business-to-business customers (PC

manufacturers, etc.) The beta test is a good example of a type of “experiment” to test the

5. What are the tradeoffs between all the kinds of research described in this chapter?

Suppose you worked for a small startup company with a small research budget.

Which of these kinds of research would be the most valuable?

6. Other than forecasting sales, what other uses are there for forecasting methods?

Exercises, Activities, and Projects

Purpose: To help students link theory to real life.

·Have the students develop a market research plan for products or services they

select. Use a business-to-business example and a business-to-consumer example.

·Develop and use an example in which they will calculate market potential, sales

potential, and forecast sales. (Students may use examples from their workplace.)