The American Marketing Association formally defines marketing research as the following Marketing research is the function that links the consumer. customer. and public to the marketer through information information used to identify and define marketing opportunities and problems; generate, refine. and evaluate marketing actions; monitor marketing performance; and improve understanding of marketing as a process.
Marketing research specifies the information required to address these issues. designs the method for collecting information. manages and implements the data collection process. analyzes the results. and communicates the findings and their implications”
As of 2009. the American Marketing Association’s Web site. Marketing Power supplies marketing professionals with information on marketing careers. “Best Practices” articles. and industry trends. For the purpose of this book. which emphasizes the need for information for decision making. marketing research is defined as follows:
Marketing research involves the identification, collection, analysis, dissemination, and use of information. Each phase of this process is important. We identify or define the marketing research problem or opportunity and then determine what information is needed to investigate it. Because every marketing opportunity translates into a research problem 10 be investigated, the terms “problem” and “opportunity” are used interchangeably here. Next, the relevant information sources are identified and a range of data collection methods varying in sophistication and complexity are evaluated for their usefulness. The data are collected using the most appropriate method; they are analyzed and interpreted, and inferences are drawn. Finally, the findings, implications, and recommendations are provided in a format that allows the information to be used for marketing decision making and to be acted upon directly. The next section elaborates .on this definition by classifying different types of marketing research
A Classification of Marketing Research
Our definition states that organizations engage in marketing research for two reasons: (I) to identify and (2) to solve marketing problems. This distinction serves as a basis for classifying marketing research into problem-identification research and problem-solving research, as shown in Figure 1.1.
Once a problem or opportunity has been identified, problem-solving research is undertaken to arrive at a solution. The findings of problem-solving research are used in making decisions that will solve specific marketing problems. Most companies conduct problem-solving research? Table 1.1 shows the different types of issues that are addressed by problem-solving research, including segmentation, product, pricing, promotion, and distribution research.
Classifying marketing research into two main types is useful from a conceptual as well as a practical viewpoint. However, problem-identification research and problem-solving research go hand in hand, and a given marketing research project may combine both types of research. This was illustrated in the opening Boeing example. The consumer surveys identified potential demand for smaller planes (problem identification). Subsequent product research led to the introduction of the new versions of the Boeing 737, which cater to the 100- to 215-seat market (problem solving). Kellogg’s provides another example.
Marketing Research at Marriott Corporation
Marriott International. Inc is a leading worldwide hospitality company. Its heritage can be traced to a root beer stand opened in Washington, D.C., in 1927 by J. Willard and Alice S. Marriott. As of 2009, Marriott International has nearly 3.000 lodging properties located in the United States and 69 other countries and territories. Its brands include Marriott. Renaissance, Courtyard, Residence Inn.
Inn, Townspeople Suites. Spring hill Suites. and Ramada
Marketing research at Marriott is done at the corporate level through the Corporate Marketing Services (CMS). Its goals include providing Marriott managers with the information that they need to better understand the market and the customer
MS does many different types of research. It uses quantitative and qualitative research approaches such as telephone and mail surveys. focus groups, and customer intercepts to gain more information on market segmentation, product testing, price sensitivity of consumers, consumer satisfaction. and the like
The Role of Marketing Research in Marketing Decision Making
The nature and role of marketing research can be better understood in light of the basic marketing paradigm depicted in Figure 1.2.
The emphasis in marketing is on the identification and satisfaction of customer needs. In order to determine customer needs and to implement marketing strategies and programs aimed at satisfying those needs. marketing managers need information. They need information about customers. competitors, and other forces in the marketplace. In recent years. many factors have increased the need for more and better information. As firms have become national and international in scope, the need for information on larger and more distant markets has increased. As consumers have become more affluent and sophisticated, marketing managers need better information on how they will respond to products and other marketing offerings. As competition has become more intense, managers need information on the effectiveness of their marketing iools. As the environment changes more rapidly, marketing managers need more timely information.
J & J’s Gentleness Could Not Handle Pain
Johnson & Johnson is considered to be the world’s most broadly based manufacturer of health care products with more than 250 operating companies in 57 countries as of 2009. Despite its success ill the industry. Johnson & Johnson’s attempt to use its company name on baby aspirin proved to be unsuccessful. Johnson & Johnson baby products are perceived as gentle. but gentleness is not what people want in a baby aspirin. Although baby aspirin should be safe. gentleness per se is not a desirable feature. Rather. some. people perceived that a gentle aspirin might not be effective enough. This is an example of what intuitively seemed to be a natural move but without proper marketing research turned out to be an incorrect decision
Traditionally. marketing researchers were responsible for assessing information needs and providing the relevant information, whereas marketing decisions were made by the managers. However, these roles are changing. Marketing researchers are becoming more involved in decision making. whereas marketing managers are becoming more involved with research. This trend can be attributed to better training of marketing managers. the Internet and other advances in technology. and a shift in the marketing research paradigm in which more and more marketing research is being undertaken on an ongoing basis rather than in response to specific marketing problems or opportunities
As illustrated by the examples in the chapter overview and by the Power Decisions example. marketing and marketing research are becoming more and more integrated. IS Power Decisions Using market research and decision clarification tools. they help clients benefit from the right marketing research information for uncovering marketing strategy solutions that work. Power Decisions researches. evaluates. and facilitates its clients’ market entry and market share growth. Figure 1.3 is a pictorial representation of Power Decisions’ methodology.
A food-processing company approached Power Decisions for opportunity scanning and brand development. The client was a well-respected private-label food processor that held a strong position in Western markets. Top grocery chains stocked much of its canned vegetables line-it was known for packing quality product at competitive prices. The private-label business. however. grew more price competitive and profits began to erode. A proprietary brand strategy was required to deliver higher profits through restored margins.
Power Decisions’ role was to guide an IS-month multistage effort to discover the most appropriate product categories to pursue. They undertook a major consumer research product concept testing study, which consisted of the following steps:
• Scanned and evaluated more than 40 product groups, ecommending a shortlist of product category candidates.
• Conducted a consumer research study to find a set of canned food products with low consumer satisfaction and high interest in a new brand.
• Made I! trade-off analysis to calculate the price-quality blends that had the best chance of success.
• Worked closely with the client product development team as they formulated test runs of the final food product chosen to ensure that the test formulations held true to the product attributes formula derived from consumer research
The final stage was to manage the brand name development, package design, initial ad campaign, and test market plan. As a result, the new brand containing the blend of ingredients desired most by consumers was successfully introduced at a premium price level. The brand fast gained both trade and consumer acceptance and was later expanded to other products and institutional markets.
As shown by the experience of Power Decisions, marketing research can greatly enhance the information available to management. Marketing research also plays a special role in obtaining competitive intelligence