THE MARKETING RESEARCH PROCESS (Continued):CONSUMER MARKET

<< THE MARKETING RESEARCH PROCESS:Developing the Research Plan, Research Approaches

CONSUMER BUYING BEHAVIOR:Model of consumer behavior, Cultural Factors >>

Principles of Marketing MGT301

Lesson 13

Lesson overview and learning objectives:

In last Lesson we discussed the marketing research process first two steps were discussed in that

Lesson today we will continue the same topic and will be discussing the remaining steps of the

marketing research process. Second topic of today's Lesson is an introduction to the consumer

behavior.

So our today's topics are:

A. THE MARKETING RESEARCH PROCESS (Continued)

B. CONSUMER MARKET

Contact Methods:

Contact methods are used to obtain the information Contact methods can be listed as:

1. Mail questionnaires--used to collect large amounts of information at a low cost.

2. Telephone interviewing--good method for collecting information quickly.

3. Personal interviewing (which can be either individual or group interviewing).

A form of personal interviewing is "focus group interviewing".

Focus-group interviewing consists of inviting six to ten people to gather for a few hours with a

trained interviewer to talk about a product, service, or organization. The interviewer "focuses"

the group discussion on important issues.

4. Online (Internet) marketing research can consist of Internet surveys or online focus groups.

Many experts predict that online research will soon be the primary tool of marketing researchers.

5. Computer interviewing is a new method being used in the technology age. Consumers read

questions from a computer screen and respond.

Sampling plans are used to outline how samples will be constructed and used.

A sample is a segment of the population selected for marketing research to represent the

population as a whole.

Marketing researchers usually draw conclusions about large groups of consumers by

studying a small sample of the total consumer population.

Designing a sample calls for three decisions:

a. Who is to be surveyed (what sampling unit)?

b. How many people should be surveyed (what sample size)?

c. How should the sample be chosen (what sampling procedure)?

Kinds of samples include:

a. Probability samples--each population member has a known chance of being

included in the sample, and researchers can calculate confidence limits for sampling

error.

b. Nonprobability samples--sampling error cannot be measured.

Research Instruments:

In collecting primary data, marketing researchers have a choice of two main research

instruments--the questionnaire and mechanical devices. The questionnaire is by far the most

common instrument, whether administered in person, by phone, or online. Questionnaires are very

flexible--there are many ways to ask questions. However, they must be developed carefully and

tested before they can be used on a large scale. A carelessly prepared questionnaire usually contains

several errors.

Principles of Marketing MGT301

In preparing a questionnaire, the marketing researcher must first decide what questions to ask.

Questionnaires frequently leave out questions that should be answered and include questions that

cannot be answered, will not be answered, or need not be answered. Each question should be

checked to see that it contributes to the research objectives.

The form of each question can influence the response. Marketing researchers distinguish between

closed-end questions and open-end questions. Closed-end questions include all the possible

answers, and subjects make choices among them. Examples include multiple-choice questions and

scale questions. Open-end questions allow respondents to answer in their own words. Open-end

questions often reveal more than closed-end questions because respondents are not limited in their

answers. Open-end questions are especially useful in exploratory research, when the researcher is

trying to find out what people think but not measuring how many people think in a certain way.

Closed-end questions, on the other hand, provide answers that are easier to interpret and tabulate.

Researchers should also use care in the wording and ordering of questions. They should use

simple, direct, unbiased wording. Questions should be arranged in a logical order. The first

question should create interest if possible, and difficult or personal questions should be asked last

so that respondents do not become defensive.

Although questionnaires are the most common research instrument, mechanical instruments also

are used. We discussed two mechanical instruments, people meters and supermarket scanners,

earlier in the chapter. Another group of mechanical devices measures subjects' physical responses.

Step 3 Implementing the Research Plan

The researcher next puts the marketing research plan into action. This involves collecting,

processing, and analyzing the information. Data collection can be carried out by the company's

marketing research staff or by outside firms. The company keeps more control over the collection

process and data quality by using its own staff. However, outside firms that specialize in data

collection often can do the job more quickly and at a lower cost.

The data collection phase of the marketing research process is generally the most expensive and

the most subject to error. The researcher should watch fieldwork closely to make sure that the plan

is implemented correctly and to guard against problems with contacting respondents, with

respondents who refuse to cooperate or who give biased or dishonest answers, and with

interviewers who make mistakes or take shortcuts.

Step 4 Interpreting and Reporting the Findings

The final step in the marketing research process is interpreting and reporting the findings. The

researchers should keep from overwhelming managers with numbers and fancy statistical

techniques. Researchers should present important findings that are useful in the major decisions

faced by management. Interpretation should not be left only to researchers. Marketing managers

will also have important insights into the problems. Interpretation is an important phase of the

marketing process. The best research is meaningless if the manager blindly accepts wrong

interpretations from the researcher.

The researcher must now interpret the findings, draw conclusions, and report them to

management. The researcher should not try to overwhelm managers with numbers and fancy

statistical techniques. Rather, the researcher should present important findings that are useful in

the major decisions faced by management.

However, interpretation should not be left only to the researchers. They are often experts in

research design and statistics, but the marketing manager knows more about the problem and the

Principles of Marketing MGT301

decisions that must be made. In many cases, findings can be interpreted in different ways, and

discussions between researchers and managers will help point to the best interpretations. The

manager will also want to check that the research project was carried out properly and that all the

necessary analysis was completed. Or, after seeing the findings, the manager may have additional

questions that can be answered through further sifting of the data. Finally, the manager is the one

who ultimately must decide what action the research suggests. The researchers may even make the

data directly available to marketing managers so that they can perform new analyses and test new

relationships on their own.

Interpretation is an important phase of the marketing process. The best research is meaningless if

the manager blindly accepts faulty interpretations from the researcher. Similarly, managers may be

biased--they might tend to accept research results that show what they expected and to reject

those that they did not expect or hope for. Thus, managers and researchers must work together

closely when interpreting research results, and both must share responsibility for the research

process and resulting decisions

A. Consumer Market:

a. Defining Consumer Market:

All individuals and households who buy or acquire goods and services for personal consumption

are termed as consumers. Markets have to be understood before marketing strategies can be

developed. People using consumer markets buy goods and services for personal consumption.

Consumers vary tremendously in age, income, education, tastes, and other factors. Consumer behavior

is influenced by the buyer's characteristics and by the buyer's decision process. Buyer characteristics

include four major factors: cultural, social, personal, and psychological.

All individuals and

households who buy or

Consumer Markets:

acquire goods and

Consumer Buying Behavior refers to the buying

behavior of final consumers--individuals and

services for personal

households who buy goods and services for

consumption

personal consumption.

The world consumer market consists of more than 6 billion people. At present growth rates, the

world population will reach almost 8 billion people by 2025

Consumers around the world vary tremendously in age, income, education level, and tastes. They

also buy an incredible variety of goods and services. How these diverse consumers connect with

each other and with other elements of the world around them impacts their choices among various

products, services, and companies. Here we examine the fascinating array of factors that affect

consumer behavior.

b. Why to Study Consumer Behavior:

Basic objective of the studying consumer behavior is that the firm needs to know who buys their

product? How they buy? When and where they buy? Why they buy? How they respond to

marketing stimuli. Because they study consumer behavior (CB) what Consumer Behavior is about?

Principles of Marketing MGT301

How, why, where and when consumers make purchase decisions? Considers who influences the

decisions? What is Consumer Behavior about? All these are important questions, which are to be

known to the companies so that they can design, and implement marketing strategies to satisfy the

customers. Consumers determine the sales and profits of a firm by their purchase decisions, thus

the economic viability of the firm. In late 1990, US consumers were spending enough dollar bills to

stretch from the Earth to the Sun and back, with enough left over for over 600 lines to the moon!

Along with these questions companies should also be knowing some other factors like what is

Disposable income and what is Discretionary income what is the stage of family life cycle stage

because these all these factors influence the consumer behaviors which are very important to the

marketers.

c. Consumer Behavior

Consumer behavior is the process through which the ultimate buyer makes purchase decisions.

This can be defined as the processes involved when individuals or groups select, purchase, use, or

dispose of products, services, ideas, or experiences to satisfy needs and desires (Solomon, 1996).

Those actions directly involved in obtaining, consuming and disposing of products and services,

including the decision processes that precede and follow those actions (Engel et al. 1995).

Consumer behavior examines mental and emotional processes in addition to the physical activities

as by (Wilkie 1990).

d. Marketing Applications:

Consumer behaviors plays important role in almost all types of decisions to be made in marketing.

For the reason being that all functions performed in marketing revolve around the customers and

consumers. Like:

Positioning: Arranging for a product to occupy a clear, distinctive, and desirable place relative to

competing products in the minds of target consumers.

Some firms find it easy to choose their positioning strategy. For example, a firm well known for

quality in certain segments will go for this position in a new segment if there are enough buyers

seeking quality. But in many cases, two or more firms will go after the same position. Then, each

will have to find other ways to set itself apart. Each firm must differentiate its offer by building a

unique bundle of benefits that appeals to a substantial group within the segment.

The positioning task consists of three steps: identifying a set of possible competitive advantages

upon which to build a position, choosing the right competitive advantages, and selecting an overall

positioning strategy. The company must then effectively communicate and deliver the chosen

position to the market.

Segmentation: Dividing a market into distinct groups of buyers on the basis of needs,

characteristics, or behavior who might require separate products or marketing mixes. Market

segmentation reveals the firm's market segment opportunities. The firm now has to evaluate the

various segments and decide how many and which ones to target. We now look at how companies

evaluate and select target segments. The company also needs to examine major structural factors

that affect long-run segment attractiveness. For example, a segment is less attractive if it already

contains many strong and aggressive competitors. The existence of many actual or potential substitute

products may limit prices and the profits that can be earned in a segment. The relative power of buyers

also affects segment attractiveness. Buyers with strong bargaining power relative to sellers will try

to force prices down, demand more services, and set competitors against one another--all at the

expense of seller profitability. Finally, a segment may be less attractive if it contains powerful suppliers

who can control prices or reduce the quality or quantity of ordered goods and services.

Product development: A strategy for company growth by offering modified or new products to

current market segments. Developing the product concept into a physical product in order to

ensure that the product idea can be turned into a workable product.

Principles of Marketing MGT301

Product development--offering modified or new products to current markets.

Market development: A strategy for company growth by identifying and developing new market

segments for current company products.

International marketing

Table of Contents: