To be successful, products and marketing programs must meet the wants and needs of potential customers. So marketing research reduces risk by providing the vital information to help marketing managers understand those wants and needs and translate them into actions in their marketing activities.
Describe the four-step marketing research approach leading to marketing actions.
The first step of the four-step marketing research approach involves defining the problem, which requires setting the research objectives and identifying possible marketing actions. The second step, developing the research plan, involves identifying data needed and determining how to collect the data. The third step involves collecting the relevant information, which includes considering pertinent secondary and primary data. Analyzing the data, presenting findings, and making recommendations is the fourth step.
Describe how secondary and primary data are used in marketing, including the uses of questionnaires, observations, experiments, and panels.
Secondary data have been recorded prior to the project. Internal secondary data come from within the organization, such as sales reports and customer comments. The most widely used external secondary data are reports from the U.S. Bureau of the Census on characteristics of the country's population, manufacturers, and retailers. Primary data are collected specifically for the project and are obtained by either observing or questioning people. Observing people in marketing is done in various ways, including electronically with Nielsen people meters to measure TV viewing habits or personally, say, with mystery shoppers. Questionnaires involve asking people questions—in person, by telephone or fax, in a printed survey, or by Internet. Panels involve a sample of consumers or stores that are measured repeatedly through time to see if behavior changes. Experiments, such as test markets, involve measuring the effect of marketing variables like price or advertising on sales.
Describe three approaches to developing a sales forecast for a company.
One approach uses subjective judgments of the decision maker, such as direct or lost-horse forecasts. Surveys of knowledgeable groups is a second method. It involves obtaining information such as the intentions of potential buyers or estimates of the salesforce. Statistical methods involving extending a pattern observed in past data into the future is a third example. The best-known statistical method is linear trend extrapolation.
