978-0134167404 Chapter 1 Lecture Note

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CHAPTER 1

INTRODUCTION TO MARKETING RESEARCH

LEARNING OBJECTIVES

In this chapter you will learn:

• 1.1 To know the relationship of marketing research to marketing, the marketing concept, and

marketing strategy

• 1.2 To know how to define marketing research

• 1.3 To understand the function and uses of marketing research

• 1.4 To describe a marketing information system (MIS) and understand why marketing

research occupies a place in an MIS

CHAPTER OUTLINE

Introduction to Marketing Research

Marketing Research is Part of Marketing

Meeting needs profitably. An activity and process for creating, communication,

delivering, and exchanging offerings that have value for customers, clients, partners,

and society

The Philosophy of the Marketing Concept Guides Managers’

Decisions

The “Right Marketing Strategy”

What is Marketing Research?

What Are the Uses of Marketing Research?

• Generating, refining, and evaluating potential marketing actions

o Select target markets

o Product research

The Marketing Information System

• Consists of people, equipment, and procedures to gather, sort, analyze, evaluate, and

distribute needed, timely , and accurate information to decision makers

• Components of an MIS

o Internal reports system to gather data generated within the firm

o Marketing intelligence system is the set of procedures and sources used by

managers to obtain information about developments in the environment

o Marketing decision support system is collected data that may be accessed and

analyzed using tools and techniques that assist managers indecision making

o Marketing research system gathers information not gathered by the other MIS

subsystems, and looks for specific situations facing the company

KEY TERMS

Crowdsourcing Marketing concept

Marketing strategy Marketing research

Market research Function of marketing research

Basic research Applied research

Marketing information system Internal reports system

Marketing intelligence system Marketing decision support system (DSS)

Marketing research system

TEACHING SUGGESTIONS

1. The purpose of the first section in the chapter is to review marketing, the marketing concept,

marketing strategy, and the environments that affect marketing activities. A way to test

students (and to bring their thinking back to school because this will be the first week in a

new term) is to have them role-play as marketing managers for a new brand version of a

particular product. In the following examples, what would be the target market, salient

marketing activities, positioning strategy, and environmental factors?

• Launching a new brand of sparkling water fruit drink

• Marketing an online apartment finder that assists college students in finding an

apartment. The finder would search for apartments based on criteria, check on vacancies,

and let the user place a refundable deposit to hold the apartment for 24 hours while he/she

checked it out.

• Being the new vice president of the ABC Interactive Television Programs Division

• Positioning the iPhone against other similar products

2. The AMA definition makes clear that marketing research exists to create information to be

used in marketing decisions. Product failures are good class examples of how marketing

information should have been used to design products, packaging, or services. Students can

often recall products or services that were disappointing or otherwise failures in their eyes.

Class discussion can be stimulated with the question, “What product or service can you think

of or have encountered that would have benefited from good marketing research?” On the

flip side, students may relate products that they believe are especially successful. College

student–oriented products are a good category because all students can relate to them. The

objective with successful product/service examples is the same.

3. The website for New Product Works (GfK Custom Research) is www.gfkamerica.com. As

an exercise, tell students to visit the Web site to see what it is all about. Class discussion can

focus on the marketing research aspects of the new product development process outlined

and described there and this company’s services.

4. To drive home the importance of marketing research information in marketing decisions, ask

students what type of restaurant they would build and operate right off campus. They will opt

for one that is appropriate for college students—maybe a late night hangout or a takeout

service. Then ask what type they would build if the location were beside a university in a

distant state. They will most likely give the same answer. Now, move the location to a

foreign university (say mainland China where all college students live in dorms, eat in dining

halls, have free tuition, don’t drive cars, etc.). If possible, use a country that you are familiar

with and that is quite different from your students’ situations. They will come to realize that

they need information in order to make reasonable decisions about the restaurant.

5. Hold a class brainstorming session on marketing opportunities. Select one of the examples

below or use your own to generate several different directions in which these companies

could go. Ask the class what marketing research information would be useful to evaluate the

success potential of each opportunity.

What marketing opportunities are there for:

A zoo?

A family restaurant?

A pet food company?

6. Perhaps using one of your own applied research experiences, such as a consultation, to

illustrate the various characteristics of marketing research (applied rather than basic,

sometimes inaccurate, and shaped by budget and time constraints). Note: if you use class

projects where surveys are done for sponsors, you can bring one of these into the class and

describe how it illustrates the characteristics. You may want to bring a recent copy of an

academic marketing journal to class to provide some examples of basic research.

7. Because it is a complicated and abstract concept, it is worthwhile to go over the components

of an MIS. To make it more real, use a company example and ask students what they think

would be involved with each component. Possible examples are: a hotel chain such as

Marriott, a fast food chain such as Taco Bell, or a periodical such as People magazine. Ask

students to provide examples for each component of an MIS. For instance, marketing

intelligence might be a “clipping” service on relevant competitors, internal reports might be a

salesperson’s reports and notes, marketing research might be an annual customer satisfaction

survey, and so forth.

8. The DSS concept is intuitive to students who are computer literate. They should know about

spreadsheet programs, database managers, word processors, and graphics programs. Some

will have experience with integrated “office” packages. Ask students what computer

hardware, software and analytical tools they think they will need to be good marketing

decision makers.

9. There is a comment that technological advances such as the “information highway” will be

important to marketing research, and especially MIS, in the future. Some students will have

experience with GaleNet, ABI/Inform, Lexis-Nexis, or other such information highway

services. Have them tell about the many different features of these services to help the other

students understand the power of these systems.

ACTIVE LEARNING EXERCISES

Golf Anyone?

What kind of information would a marketing research company provide? To gain a better

understanding of the role that marketing research plays, go to the website

www.sportsandleisureresearch.com and go to DOWNLOADS. Here you can read some of the

reports written by this research firm. Take a look at the content of some of the reports. Can you

think of the kinds of decisions that may be facilitated by having access to this information?

Students will find report on these topics:

• Perspectives – golf facts and figures

• Consumer outlook

• Travel perspectives

• Profiles in golf

• Travel and Destination

• Women & Golf

• Women’s golf market

Create Your Own Intelligence System

Thanks to the information age, Google Alert represents an efficient way for even small firms to

maintain their own intelligence system.

The free trial recommended for students is an example of how a constant monitor will alert them

to some news or “happening” on their topic. It works like a marketing intelligence system that

watches everything on the Internet – news, blogs, videos, etc. – that pertains to the key work

search topics.

ANSWERS TO END-OF-CHAPTER QUESTIONS

1. What is marketing? What is the relationship of marketing research to marketing?

2. Why is it important for decision makers to have philosophies? What is the marketing concept

and what is its relationship to marketing research?

A philosophy may be thought of as a system of values, or principles, by which you live.

There are many different philosophies that managers may use to guide them in their daily

decision making.

The marketing concept is a business philosophy that holds that the key to achieving

organizational goals consists of the company being more effective than competitors in

creating, delivering, and communicating customer value to its chosen target markets.

3. What is a marketing strategy, and why is marketing research important to strategy makers?

A marketing strategy consists of selecting a segment of the market as the company’s target

market and designing the proper “mix” of product/service, price, promotion, and distribution

4. Define marketing research. What is the difference between marketing research and market

research?

5. What is the function of marketing research?

6. Name four major uses of marketing research. Provide one example of each of the uses.

to pay more for organic food?

• Monitor Marketing Performance – tracking how many units of a product are sold, and

what type of distributor is selling the most product.

• Improve Marketing as a Process – research conducted for an industry instead of a

company or product, such as the cellular phone service industry.

7. Which use of marketing research is considered basic research?

8. Give your own example to illustrate a marketing research study that may be used in

Students can provide examples from the text or come up with their own examples.

9. List three product failures and explain the most important reason that they failed. Could

these failures have been avoided with better research information?

10. Distinguish among MIS (marketing information system), marketing research, and DSS

(decision support system).

11. What is an example of crowdsourcing used to create a product? To develop advertising?

on. Research would have shown that people use smartphones to text, not talk; therefore the

need for privacy was less important for the consumer.

Chobani launched an advertising campaign that focused on online advertising instead of

traditional media such as TV. Based on the success of the online advertising, Chobani

extended and expanded the campaign.

12. Go to your library, either in person or online, and look through several business periodicals

such as Advertising Age, Business Week, Fortune, and Forbes. Find three examples of

companies using marketing research.

13. Select a company in a field in which you have a career interest and look up information on

this firm in your library or on the Internet. After gaining some knowledge of this company, its

products and services, customers, and competitors, list five different types of decisions that

you believe this company’s management may have made within the last two years. For each

decision, list the information the company’s executives would have needed in order to make

these decisions.

1. In the following situations, what component of the marketing information system would a

manager use to find the necessary information?

a. A manager of an electric utilities firm hears a friend at lunch talk about a new

CASE SOLUTIONS

Case 1.1 Anderson Construction

Case Objective

This case illustrates how movie productions are investment decisions and how directors and

producers must take into account the level of success expected for the movie. There is a great

deal that is unknown about the audience’s reaction to a movie. Consequently, marketing

research can assist by providing information.

Answers to Case Questions

1. Explain why you think Larry Anderson should look into doing marketing research or not

doing marketing research?

2. In thinking about the components of a marketing information system, which components

would you suggest Larry use and why?

Case 1.2 The Integrated Case: Auto Concepts

Case Objective

This is the introduction to the integrated case that is used throughout the textbook. It describes

how an automobile manufacturer that has built its reputation and profit on large automobiles

senses a change in consumer sentiment as a result of environmental (global warming) and

Answers to Case Questions

1. In the development of new automobile models, which of the following should Nick be

primarily concerned with and why?

a. Engineering and production feasibility

b. The brand image of his division’s parent U.S. automobile manufacturer

c. Technological innovation

d. Consumer references

Nick will need all aspects of the MIS. Each component and its value to Nick at the present are

listed below.

• Internal reports system – useful to see past sales patterns by model, by country, and within

countries such as by major cities or regions.

2. Should Nick Thomas use marketing research?