Chapter 4 Conducting Marketing Research and Forecasting Demand
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  • SIMPLE: is obtained by choosing elementary units in such a way that each unit in the population has an equal chance of being selected. This is also free from sampling bias. STRATIFIED: is obtained by independently selecting a separate simple random sample from each population stratum. A population can be divided into different groups.CLUSTER: is obtained by selecting clusters from the population on the basis of the simple random sampling. The sample comprises a census of each random cluster selected.CONVENIENCE: researcher questions anyone who is available. This is quick and cheap.JUDGMENT: is obtained according to the discretion of someone who is familiar with the relevant characteristics of the population.QUOTA: sample audience is made up of potential purchasers of the product.

Chapter 4 Conducting Marketing Research and Forecasting Demand Chapter 4 Conducting Marketing Research and Forecasting Demand Presentation Transcript

  • Conducting MarketingResearch andForecasting Demand Donna Sia, Rhea Jardin, Shelle Caiga MBA Standard April 7, 2012 yourwebsite.com www.
  • Outline: Conducting Marketing Research and Forecasting Demand1. Defining Marketing Research2. Developing the research plan3. Metrics for measuring good marketing productivity4. Assessing ROI of marketing expenditures5. Measuring and Forecasting Demand yourwebsite.com www.
  • Marketing research is… important because it… Why? – Can lead to the success of a brand or a product. How? – By producing insight into the customer’s attitudes and buying behavior yourwebsite.com www.
  • Marketing Research is the…Systematic design Collection Analysis Reporting of data and findings relevant to a specific marketing situation facing the company. yourwebsite.com www.
  • Marketing Research Process involves…1.Defining the 2.Developing the 3.Collecting 4.Analyzing problem research plan information the information & objectives 5.Presenting the findings 6.Making the decision www.yourwebsite.com
  • Developing the Research Plan1. Data Sources2. Research instruments3. Research approach4. Sampling plan5. Contact methods yourwebsite.com www.
  • Developing the Research PlanResearchers can gather:Primary Data – Data freshly gathered for a specific purpose or for a specific research projectSecondary Data – Collected for another purpose and already exist somewhere yourwebsite.com www.
  • Developing the Research PlanMarketing Research can be approached in many ways:Observation Focused Group Survey Research Behavioral Data Experimentation www.yourwebsite.com
  • Developing the Research PlanThe following research instruments are usedto collect data:Questionnaires Qualitative Measures Technological Devices www. yourwebsite.com
  • Step 2: Developing the Research Plan Some popular Qualitative Research approaches are…Word association Projective techniques . LadderingBrand Personification Visualization www. yourwebsite.com
  • Developing the Research Plan Sampling Plan decisions: 1) Sampling plan unit: Who should we survey? 2) Sample size: How many people should we survey 3) Sampling procedure: How should we choose the respondents? yourwebsite.com www.
  • Step 2: Developing the Research PlanProbability and Non probability Samples: Probability Sample Non probability Sample 1) Simple random 1) Convenience sample sample 2) Stratified random 2) Judgment sample sample 3) Quota sample 3) Cluster Sample yourwebsite.com www.
  • Developing the Research Plan Contact Methods:Telephone Interview Personal Interview Online Interview Mail Questionnaire yourwebsite.com www.
  • Characteristics of good marketing research Research Multiple Interdependence ofScientific Method creativity methods models and data Value and cost Healthy skepticism Ethical marketing of information www.yourwebsite.com
  • Measuring Marketing Productivity -Marketing Metrics ExternalAwareness Market share Relative price Consumer Satisfaction & LoyaltyNumber of Distribution Total number of customerscomplaints www.yourwebsite.com
  • Marketing Mix Model Internal Awareness & Active support Resource adequacycommitment to goals Willingness Freedom Desire to learn to change Autonomy to fail www.yourwebsite.com
  • Marketing Dashboards to improve effectiveness and efficiencyCustomer Metrics Unit Metrics Cash-flow Brand www.yourwebsite.com
  • Marketing Measurement Pathway Technically Sound but Ad-hoc Efforts Across Multiple Measurement Silos Customer Unit Cash-Flow Brand Metrics Metrics Metrics Metrics Metrics Hierarchy Products/ Program & Brand Imagery/ of Effects Category Sales Company ROI AttributesSatisfaction/ Marketing Cost/ Media Mix Equity Drivers Experience Unit ModelsAttitude/Behavior Margin Initiative Portfolio FinancialSegment Margin Optimization Optimization Valuation www. yourwebsite.com
  • Marketingbut Ad-hoc Efforts Technically Sound Measurement Pathway Measurement Silos Across Multiple Customer Unit Cash-Flow Brand Metrics Metrics Metrics Metrics Metrics Hierarchy Products/ Result: Program & Brand Imagery/ of Effects Category Sales Company ROI Hundreds of reports but very Attributes Little knowledge integration or learningSatisfaction/ Marketing Cost/ Media Mix Equity Drivers Experience Unit synthesis ModelsAttitude/Behavior Margin Initiative Portfolio FinancialSegment Margin Optimization Optimization Valuation www.yourwebsite.com
  • Forecasting Demand and MeasurementPurpose: – Identify market opportunitiesHow: – Measure and forecast size, growth and profit potential of market opportunitiesWho: – Marketers are responsible for preparing sales forecast which are based on estimates of demand. yourwebsite.com www.
  • Major Concepts in Demand Measurement1. Market Demand2. Company Demand• Demand function• Sales forecast• Potential yourwebsite.com www.
  • Ninety Types of DemandMeasurement yourwebsite.com www.
  • The Measures of Market DemandWays to break down the market:1. Potential Market2. Available Market3. Target Market4. Penetrated market yourwebsite.com www.
  • Market Forecast and Market PotentialMarket Forecast – Market demand corresponding to the level of Industry marketing expenditure.Market Potential – Is the limit approached by the market demand as an industry marketing expenditures approach infinity for a given marketing environment. www.yourwebsite.com
  • Marketing Demand as a function of Marketing ExpenditureMarket Demand in the Specific Period Market potential, Q2 Market forecast, QF Planned expenditure Market minimum, Q1 Industry Marketing Expenditure yourwebsite.com www.
  • Marketing Demand as a function of Marketing ExpenditureMarket Demand in the Specific Period Market Potential (prosperity) Prosperity Market Recession Potential (recession) Industry Marketing Expenditure yourwebsite.com www.
  • Market Demand and Company Demand Market Demand – total volume that would be bought …. A defined Marketing Programby a defined in a defined in a defined in a definedcustomer group geographical area time period marketing environment www.yourwebsite.com
  • Market Demand and Company DemandCompany Demand – Is the company’s estimated share of market demand at alternative levels of company marketing effort at a given time period www.yourwebsite.com
  • Company Sales Forecast a nd Sales PotentialCompany Sales Forecast – Is the expected level of company sales based on a chosen marketing plan and an assumed target marketCompany Sales Potential – is the sales limit approached by company demand as a company marketing effort increases relative to that of competitors www.yourwebsite.com
  • Estimating Current DemandMarketing executives would like to estimate.. 1. Total Market Potential 2. Area Market Potential 3. Total Industry Sales and Market share yourwebsite.com www.
  • Estimating Current Demand Total Market Potential is the Marketing effort and environment maximum available to all the during a givenamount of sales firms in an industry period yourwebsite.com www.
  • Estimating Current Demand Area Market Potential Estimating market potential of different Marketing effort and environment during a given maximum in an area (city, state or nation) periodamount of sales www.yourwebsite.com
  • Estimating Current DemandThe 2 Major Methods of assessing area market potential are…1. Market-Build-up Method – Identify all the potential buyers in each market and estimate their potential purchases2. Multiple-Factor Index Method -assigning weights to different factors (income, sales, population, buying power) yourwebsite.com www.
  • Estimating Current DemandCalculating the Brand Development Index: Territory Percent of Percent of BDI US Brand US Category Sales Sales (a/b) x100 Seattle, CA 3.09 2.71 114 Portland, OR 6.74 10.41 65 Boston, MA 3.49 3.85 91 Toledo, OH 0.97 0.81 120 Chicago, IL 1.13 0.81 140 Baltimore, 3.12 3.00 104 MD www. yourwebsite.com
  • Estimating Current DemandIndustry Sales and Marketing Shares – identifying competitors and estimating their sales – Derive data from: industry trade association – Buy reports from marketing research (E.g. Nielsen) – Industry Data, Competitors Data – Over-all or Brand by Brand www.yourwebsite.com
  • Estimating Future DemandGood forecasting is a key factor in success Macro econo mic Industry Company Forecast yourwebsite.com www.
  • Estimating Future DemandAll forecasts are built on one of the three information bases: 1. What people say. (Survey) 2. What people do (Test Market) 3. What people have done. (Buying History) yourwebsite.com www.
  • Estimating Future DemandSurvey of Buying IntentionsForecasting – Is the art of anticipating what buyers are likely to do under a given set of conditions. Do you intend to buy a car in the next 6 months?Purchase probability scale 0.00 0.20 0.40 0.60 0.80 1.00 No Chance Slight Fair Good High Certain Possibility Possibility Possibility Possibility www. yourwebsite.com
  • Estimating Future DemandComposite of Sales Force Opinion – Sales representativesExpert Opinion – dealers, distributors, suppliers, marketing consultants and trade associationsPast-sales Analysis – Time series analysis, Exponential smoothing, Statistical demand analysis (causal factors), Econometric AnalysisMarket-Test Method www.yourwebsite.com
  • Summary: 1.Defining the problem & objectives Sample plan, Sources, Contact Methods, Instruments 2.Developing the research plan 3.Collecting Sales Force, Experts, History and Market Sales information Market and company Demand 4.Analyzing Total and Area Market Potential, industry sales & market share the information 5.Presenting the findingsCustomer is happy The brand is profitable Employees are satisfied 6.Making the decision www. yourwebsite.com
  • Conducting MarketingResearch andForecasting Demand Donna Sia, Rhea Jardin, Shelle Caiga MBA Standard April 7, 2012 yourwebsite.com www.
  • Conducting MarketingResearch andForecasting Demand Donna Sia MBA Standard April 7, 2012 yourwebsite.com www.
  • Outline: Conducting Marketing Research and Forecasting Demand1. Defining Marketing Research2. Developing the research plan3. Metrics for measuring good marketing productivity4. Assessing ROI of marketing expenditures5. Measuring and Forecasting Demand yourwebsite.com www.
  • Marketing research is… important because it… Why? – Can lead to the success of a brand or a product. How? – By producing insight into the customer’s attitudes and buying behavior yourwebsite.com www.
  • Marketing Research is the…Systematic design Collection Analysis Reporting of data and findings relevant to a specific marketing situation facing the company. yourwebsite.com www.
  • Marketing Research Process involves…1.Defining the 2.Developing the 3.Collecting 4.Analyzing problem research plan information the information & objectives 5.Presenting the findings 6.Making the decision www.yourwebsite.com
  • Developing the Research Plan1. Data Sources2. Research instruments3. Research approach4. Sampling plan5. Contact methods yourwebsite.com www.
  • Developing the Research PlanResearchers can gather:Primary Data – Data freshly gathered for a specific purpose or for a specific research projectSecondary Data – Collected for another purpose and already exist somewhere yourwebsite.com www.
  • Developing the Research PlanMarketing Research can be approached in many ways:Observation Focused Group Survey Research Behavioral Data Experimentation www.yourwebsite.com
  • Developing the Research PlanThe following research instruments are usedto collect data:Questionnaires Qualitative Measures Technological Devices www. yourwebsite.com
  • Step 2: Developing the Research Plan Some popular Qualitative Research approaches are…Word association Projective techniques . LadderingBrand Personification Visualization www. yourwebsite.com
  • Developing the Research Plan Sampling Plan decisions: 1) Sampling plan unit: Who should we survey? 2) Sample size: How many people should we survey 3) Sampling procedure: How should we choose the respondents? yourwebsite.com www.
  • Step 2: Developing the Research PlanProbability and Non probability Samples: Probability Sample Non probability Sample 1) Simple random 1) Convenience sample sample 2) Stratified random 2) Judgment sample sample 3) Quota sample 3) Cluster Sample yourwebsite.com www.
  • Developing the Research Plan Contact Methods:Telephone Interview Personal Interview Online Interview Mail Questionnaire yourwebsite.com www.
  • Characteristics of good marketing research Research Multiple Interdependence ofScientific Method creativity methods models and data Value and cost Healthy skepticism Ethical marketing of information www.yourwebsite.com
  • Measuring Marketing Productivity -Marketing Metrics ExternalAwareness Market share Relative price Consumer Satisfaction & LoyaltyNumber of Distribution Total number of customerscomplaints www.yourwebsite.com
  • Marketing Mix Model Internal Awareness & Active support Resource adequacycommitment to goals Willingness Freedom Desire to learn to change Autonomy to fail www.yourwebsite.com
  • Marketing Dashboards to improve effectiveness and efficiencyCustomer Metrics Unit Metrics Cash-flow Brand www.yourwebsite.com
  • Marketing Measurement Pathway Technically Sound but Ad-hoc Efforts Across Multiple Measurement Silos Customer Unit Cash-Flow Brand Metrics Metrics Metrics Metrics Metrics Hierarchy Products/ Program & Brand Imagery/ of Effects Category Sales Company ROI AttributesSatisfaction/ Marketing Cost/ Media Mix Equity Drivers Experience Unit ModelsAttitude/Behavior Margin Initiative Portfolio FinancialSegment Margin Optimization Optimization Valuation www. yourwebsite.com
  • Marketingbut Ad-hoc Efforts Technically Sound Measurement Pathway Measurement Silos Across Multiple Customer Unit Cash-Flow Brand Metrics Metrics Metrics Metrics Metrics Hierarchy Products/ Result: Program & Brand Imagery/ of Effects Category Sales Company ROI Hundreds of reports but very Attributes Little knowledge integration or learningSatisfaction/ Marketing Cost/ Media Mix Equity Drivers Experience Unit synthesis ModelsAttitude/Behavior Margin Initiative Portfolio FinancialSegment Margin Optimization Optimization Valuation www.yourwebsite.com
  • Forecasting Demand and MeasurementPurpose: – Identify market opportunitiesHow: – Measure and forecast size, growth and profit potential of market opportunitiesWho: – Marketers are responsible for preparing sales forecast which are based on estimates of demand. yourwebsite.com www.
  • Major Concepts in Demand Measurement1. Market Demand2. Company Demand• Demand function• Sales forecast• Potential yourwebsite.com www.
  • Ninety Types of DemandMeasurement yourwebsite.com www.
  • The Measures of Market DemandWays to break down the market:1. Potential Market2. Available Market3. Target Market4. Penetrated market yourwebsite.com www.
  • Market Forecast and Market PotentialMarket Forecast – Market demand corresponding to the level of Industry marketing expenditure.Market Potential – Is the limit approached by the market demand as an industry marketing expenditures approach infinity for a given marketing environment. www.yourwebsite.com
  • Marketing Demand as a function of Marketing ExpenditureMarket Demand in the Specific Period Market potential, Q2 Market forecast, QF Planned expenditure Market minimum, Q1 Industry Marketing Expenditure yourwebsite.com www.
  • Marketing Demand as a function of Marketing ExpenditureMarket Demand in the Specific Period Market Potential (prosperity) Prosperity Market Recession Potential (recession) Industry Marketing Expenditure yourwebsite.com www.
  • Market Demand and Company Demand Market Demand – total volume that would be bought …. A defined Marketing Programby a defined in a defined in a defined in a definedcustomer group geographical area time period marketing environment www.yourwebsite.com
  • Market Demand and Company DemandCompany Demand – Is the company’s estimated share of market demand at alternative levels of company marketing effort at a given time period www.yourwebsite.com
  • Company Sales Forecast a nd Sales PotentialCompany Sales Forecast – Is the expected level of company sales based on a chosen marketing plan and an assumed target marketCompany Sales Potential – is the sales limit approached by company demand as a company marketing effort increases relative to that of competitors www.yourwebsite.com
  • Estimating Current DemandMarketing executives would like to estimate.. 1. Total Market Potential 2. Area Market Potential 3. Total Industry Sales and Market share yourwebsite.com www.
  • Estimating Current Demand Total Market Potential is the Marketing effort and environment maximum available to all the during a givenamount of sales firms in an industry period yourwebsite.com www.
  • Estimating Current Demand Area Market Potential Estimating market potential of different Marketing effort and environment during a given maximum in an area (city, state or nation) periodamount of sales www.yourwebsite.com
  • Estimating Current DemandThe 2 Major Methods of assessing area market potential are…1. Market-Build-up Method – Identify all the potential buyers in each market and estimate their potential purchases2. Multiple-Factor Index Method -assigning weights to different factors (income, sales, population, buying power) yourwebsite.com www.
  • Estimating Current DemandCalculating the Brand Development Index: Territory Percent of Percent of BDI US Brand US Category Sales Sales (a/b) x100 Seattle, CA 3.09 2.71 114 Portland, OR 6.74 10.41 65 Boston, MA 3.49 3.85 91 Toledo, OH 0.97 0.81 120 Chicago, IL 1.13 0.81 140 Baltimore, 3.12 3.00 104 MD www. yourwebsite.com
  • Estimating Current DemandIndustry Sales and Marketing Shares – identifying competitors and estimating their sales – Derive data from: industry trade association – Buy reports from marketing research (E.g. Nielsen) – Industry Data, Competitors Data – Over-all or Brand by Brand www.yourwebsite.com
  • Estimating Future DemandGood forecasting is a key factor in success Macro econo mic Industry Company Forecast yourwebsite.com www.
  • Estimating Future DemandAll forecasts are built on one of the three information bases: 1. What people say. (Survey) 2. What people do (Test Market) 3. What people have done. (Buying History) yourwebsite.com www.
  • Estimating Future DemandSurvey of Buying IntentionsForecasting – Is the art of anticipating what buyers are likely to do under a given set of conditions. Do you intend to buy a car in the next 6 months?Purchase probability scale 0.00 0.20 0.40 0.60 0.80 1.00 No Chance Slight Fair Good High Certain Possibility Possibility Possibility Possibility www. yourwebsite.com
  • Estimating Future DemandComposite of Sales Force Opinion – Sales representativesExpert Opinion – dealers, distributors, suppliers, marketing consultants and trade associationsPast-sales Analysis – Time series analysis, Exponential smoothing, Statistical demand analysis (causal factors), Econometric AnalysisMarket-Test Method www.yourwebsite.com
  • Summary: 1.Defining the problem & objectives Sample plan, Sources, Contact Methods, Instruments 2.Developing the research plan 3.Collecting Sales Force, Experts, History and Market Sales information Market and company Demand 4.Analyzing Total and Area Market Potential, industry sales & market share the information 5.Presenting the findingsCustomer is happy The brand is profitable Employees are satisfied 6.Making the decision www. yourwebsite.com
  • Conducting MarketingResearch and ForecastingDemand Donna Sia MBA Standard April 7, 2012 yourwebsite.com www.
  • Conducting Marketing Research & Forecasting Demand Marketing Management Submitted to Prof. de Ungria Shelle Caiga 04.27.2012 yourwebsite.com www.
  • yourwebsite.comwww.
  • Data Research Sources Approach Research SamplingInstruments Plan Contact Methods yourwebsite.com www.
  • Etnographic Focus Group Behavioral Data yourwebsite.comwww.
  • Questionnaires: DO’sEnsure questions are FREE of BIASK.I.S.S. (Keep It Short & Simple)Make it SPECIFICNo to JARGONSNo to SOPHISTICATED wordsNo to AMBIGUOUS words www.yourwebsite.com
  • Questionnaires: DON’TsNo negativesNo hypotheticalNo words that could be misheardUse response bandsUse mutually exclusive categoriesAllow for “other” in fixed response questions www. yourwebsite.com
  • Word Association Projective Techniques Visualization Brand Personification Laddering yourwebsite.comwww.
  • Sampling UnitSample SizeSampling Procedure yourwebsite.com www.
  • PROBABILITY NON-PROBABILITY Sample Sample Involve random selection x Doesn’t involve random selection yourwebsite.com www.
  • MAILS FACE-TO-FACE PHONE ONLINEQUESTIONNAIRES INTERVIEW INTERVIEW INTERVIEW yourwebsite.com www.
  • yourwebsite.comwww.
  • Distribution Awareness Number of complaintsRelative price Market shareTotal # of customers Customer satisfaction Loyalty yourwebsite.com www.
  • Awareness of goals Commitment of goals Active support Desire to learnStaffing levels Freedom to fail Willingness to change Resource adequacy Customer satisfaction Autonomy www. yourwebsite.com
  • An EXEMPLARY MARKETING RESEARCH will definitely result to an EXCELLENT CUSTOMER SATISFACTIONNobody counts the number of ads you run; they just remember the impression you make. – Bill Bernbach, advertising pioneer and founder of DDB www. yourwebsite.com
  • Marketing Researchand ForecastingDemand MARKMASubmitted to Prof. de Ungria Rhea G. Jardin April 27, 2012 yourwebsite.com www.
  • 1. Marketing ResearchCharacteristics of good Marketing Research 1. Scientific method 2. Creativity 3. Multiple research methods 4. Accurate model building 5. Cost-benefit analysis 6. Healthy skepticism 7. Ethical focus yourwebsite.com www.
  • 2. Marketing MetricsA. Short-term results 1. Sales turnover 2. Shareholder valueB. Changes in brand equity 1. Customer awareness, attitudes and behaviors 2. Market share 3. Price premium 4. Number of complaints 5. Distribution and availability 6. Total number of customers 7. Perceived quality, loyalty and retention www.yourwebsite.com
  • Marketing Metrics Short term Sales turnover Shareholder value yourwebsite.com www.
  • Marketing Metrics Brand Equity Distribution and availability Price premiumCustomerawareness, attitudesand behaviors Number of complaints Total number of customers Market share do-RE-mi.. so-la-TI - ON Perceived quality, loyalty and retention www. yourwebsite.com
  • Marketing Researchand ForecastingDemand MARKMASubmitted to Prof. de Ungria Rhea G. Jardin April 27, 2012 yourwebsite.com www.