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Chapter 3 provides more information on how theInternet can provide more information and how it can be used advantageously inthe course of research.. The American Marketing Association fo

TONY PROCTOR

Looking for a concise introduction to Market Research? Look no further.

Tony Proctor’s Essentials of Marketing Research, 4e offers a streamlined,

traditional introduction to all the major concepts of the field He alsodiscusses new developments, particularly in the areas of qualitative data analysis and marketing decision-support systems

Ideal for undergraduates studying marketing research for the first time, MBA students, and anyone who seeks a basic understanding of the topic,

Essentials of Marketing Research, 4e, strikes an excellent balance between

different topics

NEW TO THIS EDITION!

• New case studies

• Coverage of Internet databases and the use of the Internet

• Increased references to journal articles

To access additional Learning Resources, including an Instructor’s Manual

and Power Point Slides, visit www.pearsoned.co.uk/proctor_emr.

Tony Proctor, MA, MPhil, Phd, DipM, has had many years experience in the marketing research industry and is Professor in Marketing at the Chester Business School He has also authored several books and articles

on marketing and management creativity

“The simplicity of Proctor’s book differentiates it from other offerings in the

marketplace Many of my overseas students really find it an easy book to access

and its straightforward approach is the key here.”

Nigel Culkin, The Business School, University of Hertfordshire

“There are many books on Marketing Research, but they rarely cover qualitative

data analysis so well This is one of the key reasons why I chose Proctor as an

essential text I could not manage without this chapter.”

Dr Jane Hemsley-Brown, School of Management, University of Surrey

Essentials of Marketing Research

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ESSENTIALS OF MARKETING RESEARCH

FOURTH EDITION

TONY PROCTOR PhD

Professor in Marketing, Chester Business School

Pearson Education Limited

Edinburgh Gate Harlow Essex CM20 2JE England and Associated Companies throughout the world

Visit us on the World Wide Web at:

www.pearsoned.co.uk First published 1997 Second edition 2000 Third edition 2003

Fourth edition published 2005

© Pearson Professional Limited 1997

© Pearson Education Limited 2000, 2005 The rights of Tony Proctor to be identified as author of this work has been asserted

by him in accordance with the Copyright, Designs and Patents Act 1988.

All rights reserved No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without either the prior written permission of the publisher or a licence permitting restricted copying in the United Kingdom issued by the Copyright Licensing Agency Ltd, 90 Tottenham Court Road, London W1T 4LP.

All trademarks used herein are the property of their respective owners The use of any trademark in this text does not vest in the author or publisher any trademark ownership rights

in such trademarks, nor does the use of such trademarks imply any affiliation with or endorsement of this book by such owners.

ISBN 0 273 69494 4

British Library Cataloguing-in-Publication Data

A catalogue record for this book is available from the British Library

Library of Congress Cataloging-in-Publication Data

A catalog record for this book can be obtained from the Library of Congress

10 9 8 7 6 5 4 3 2 1

10 09 08 07 06 05 Typeset in 10/12.5pt Palatino by 35 Printed by Ashford Colour Press Ltd., Gosport

The publisher’s policy is to use paper manufactured from sustainable forests.

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Brief contents

14 Marketing research settings: business-to-business,

Supporting resources

Visit www.pearsoned.co.uk/proctor_emr to find valuable online resources

For instructors

• Complete, downloadable Instructor’s Manual

• PowerPoint slides that can be downloaded and used as OHTsFor more information please contact your local Pearson Education sales

representative or visit www.pearsoned.co.uk/proctor_emr

Marketing research as part of marketing strategy 18

Non-response as an issue in marketing research effectiveness 30

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Full contents

Case study 5.4 Opinion polling faces new scrutiny 159

ix

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Reliability and validity in questionnaire design 208

Case study 7.4 Attitudes of cat owners to cat food 215

Full contents

Case study 9.3 The Safe ‘T’ fireproof letterbox 273

Case study 12.1 The St Honoré de Mazarin Restaurant, Paris 364

Case study 13.3 Music in marketing communications 422

Case study 13.5 British divided into four types 425

14 Marketing research settings: business-to-business,

Case study 14.1 Management in the public sector 447

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Full contents

Case study 14.2 Orchestras aim to pass the baton 448

Case study 16.1 Demand for agricultural tractors 520

List of case studies

List of case studies

Further case studies

xv

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5 Desmond sizes up shopping 536

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‘Marketing research’ has often been called ‘market research’, and there has beenmuch confusion about what these terms actually mean Indeed, some writershave been so worried about the terminology that they have called their books

‘research for marketing decisions’ to overcome the problems The term marketingresearch, of which market research is but one element, encompasses the full range

of research and evaluation activities undertaken by marketing professionals toguide them in decision making, and it is marketing research that I address in thisbook

There have been vast changes in marketing research, largely as a result of thedevelopment of information technology Marketing research is, to some extent, aquantitative subject and although many of the techniques have been around formany years, using them was hindered by the lack of powerful and readily avail-able computational aids It is sobering to remember that in the mid-1960s theslide rule was the main calculating tool, mainframe computers were in theirinfancy and the mechanical Burroughs’ comptometers had only just given way tomore sophisticated electronic ones Now the problem is not so much lack of com-puting power as the need to acquire the skills necessary to select from and use themany sophisticated analytical methods that are available

SCOPE AND COVERAGE

This book looks at the traditional approach to marketing research and the tional tools of analysis It also discusses new developments – particularly in theareas of qualitative data analysis and marketing decisions support systems

tradi-I have tried to make the book into a teaching/study book designed primarily for undergraduates but of interest to MBA and other postgraduate or post-experience students wanting to get some idea of the subject matter In writingsuch a book, getting the balance right between different topics and the depth atwhich each is covered is constrained by the length of the book Because it isdesigned as a teaching book, I have devoted much of the available space to casestudies, illustrations and questions

The various chapters address different topics in marketing research:

• Chapter 1 looks at the nature of, and the need for, marketing research Anoverview is given of the process of marketing research and the chapter con-cludes by looking at the role of agencies and at ethical issues

• Chapter 2 pays attention to planning the research project and in particular tothe use of PERT analysis to guide the management of the project

• Chapter 3 examines the uses and limitations of secondary data, indicatingwhen secondary data may be useful in research and giving details of usefulinternal and external sources of data

• Chapter 4 examines the process of sampling Attention is given to all aspects ofsampling, including the sampling frame, sampling unit selection, samplingmethod, the sample size and the sampling plan

• Methods and applications of surveys are dealt with in Chapter 5 Sources oferror, methods of data collection, dealing with non-response, panel/syndicatedmarketing research and omnibus surveys are among the topics discussed

• Chapter 6 covers measurement, scales and attitude measurement The process

of measurement is discussed along with levels and variations in measurement

The chapter also looks at the nature of attitudes and their measurement

• Chapter 7 looks at questionnaire construction and development Particularattention is given to question content, question phrasing, kinds of responseformat, question sequence, question layout, pretesting and revising Validity,reliability and sensitivity are also considered

• Qualitative research methods are outlined in Chapter 8 Focus group sions, individual depth interviews and projective techniques are considered

discus-• Chapter 9 looks first at observation as a research method and then at mentation Details of many different experimental designs are given Thechapter also looks at test marketing, both in the marketplace and under simu-lated conditions

experi-• Chapter 10 examines data interpretation and the various tools of quantitativedata analysis A wide range of statistical methods is examined It is presup-posed that the reader is familiar with statistics at an introductory level

• Chapter 11 presents an aspect of marketing research that is not usually cussed in a textbook of this kind Qualitative data analysis is an importantdimension of marketing research The chapter looks at a variety of tools andmethods that can assist in the analysis of qualitative data

dis-• Chapter 12 discusses reports and their presentation Emphasis is placed on theuse of information technology to help prepare and present good reports

• Chapter 13 looks at a variety of examples of applied marketing research,including product research, segmentation research, competition research andpromotion research

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• Business-to-business marketing research, services research and research forinternal marketing are the subject matter of Chapter 14

• Global marketing research is the subject matter of Chapter 15

• Chapter 16 discusses marketing decision support systems Among the mostinteresting developments here are applications of neural network software asexpert systems

NEW TO THIS EDITION

This edition recognises that the Internet is becoming more and more important as

a source for information Chapter 3 provides more information on how theInternet can provide more information and how it can be used advantageously inthe course of research In particular, the focus of attention is directed towards theavailability of Internet databases which can provide very relevant information formarketers

In addition, all chapters have been re-examined, revised and updated asappropriate The list of references in the book has also been extended consider-ably and the questions at the end of each chapter have been modified andreduced in number New cases studies have replaced some of the older cases

These include case studies 1.2 Spirit of Magellan Enterprises, 2.2 Cheri, 11.3

Renault Clio, 13.1 Tourism in Bukhara, among others

ADDED BENEFITS

In addition the book also features:

• further case studies to promote thought on how marketing research as anentity can be applied in practice

• a glossary to reinforce key terms

• a full bibliography offering additional references

AUTHOR’S ACKNOWLEDGEMENTS

My thanks are due to Jim Blythe for the case studies that he has contributed

In addition, I extend thanks to Lucy, Carol and Zoë for their contributions Thefollowing reviewers provided useful feedback for this edition:

Nigel Culkin, University of HertfordshireJouan de Kervenoael, Lancaster UniversityRod Harradwe, Teeside Business SchoolKathy Mouat, Napier UniversityJane Hemsley-Brown, University of SurreyRichard West, University of Westminster

I would also like to thank the editorial team at Pearson for making this4th edition a reality Thanks to Thomas Sigel, Senior Acquisitions Editor; PeterHooper, Editorial Assistant; Anita Atkinson, Senior Desk Editor; Helen Baxter,Copy Editor

Tony Proctor Spring 2005

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We are grateful to the following for permission to reproduce copyright material:

Figures 2.3, 2.4, 2.5, 2.6 and 16.8 featuring Microsoft’s Windows ™ browser bar,screen shots reprinted by permission from Microsoft Corporation; Table 4.1 from

‘The “Marketing Research Services Classification’ of Social Class,’ in National

Readership Survey, JINCARS 1981, National Readership Surveys Ltd; unnumbered

table on pp 118 –19 from http://www.caci.co.uk/acorn/acornmap.asp, 22 April

2005, © 2005 CACI Limited, Acorn is a registered trade mark of CACI Limited;

Figure 11.3 a screen shot from NUD*IST, Version 6, Work Interactions Project,

NUD*IST is developed by QSR Pty Ltd; Figure 16.2 a screen shot from SNAP

soft-ware, Mercator Research Group Ltd; Table 16.13 from Kotler, Philip, Marketing

Management, 11thedition, © 2003, p 499, reprinted by permission of PearsonEducation, Inc., Upper Saddle River, NJ

The American Marketing Association for a definition of ‘Marketing Research’;

Editions Rebondir for extracts adapted from ‘Small business ideas and studying

the local market’ published in Rebondir no 12 1996; The Market Research Society

for the following extracts; ‘How a spoonful of research helps the medicine godown’ by Tracey Sanderson April 1996, ‘With growing demands for data, willpurity prove only theoretical?’ by Peter Mouncey May 1996, ‘Quality will markthe route to deeper client relationships’ by Bryan Bates March 1996, Extracts

adapted from Research Plus ‘Homelink’ September 1993, ‘Get a helping of the

sugar-free chips game’ by Sue White September 1993, ‘The launch went fine –then the devil’s in the dealing’ by Andrew Scott April 1996, ‘In Europe’s complexmarket, check the price is right’ by A.J Bowditch April 1996, ‘The cascade theorythat shows practical gains’ by Peter Gorle October 1995, ‘Now business research

is every agency’s research’ by D Jamieson October 1995, ‘The world shrinks,maybe, but there’s still the need to travel’ by M Goodyear May 1996, ‘Why wewon’t keep taking pills’ by A Branthwaite and J Bruggemann April 1996, ‘Nowthat India’s got GATT, a massive market beckons’ by Sue Bunn April 1996, and

‘The markets are emerging – and research is hard on their heels’ by Mia

Bartonova January 1996; Marketing Week for extracts adapted from Marketing

Week ‘Research needs more creativity’ by Clare Nutall 29thApril 1996, ‘Working

on site’ 26th April 1996, ‘Commercial TV audiences rise’ by Paul McCann

26thApril 1996, ‘The data game’ by David Reed 3rd May 1996, ‘PepsiCo needsnew strategy for iced tea’ by Jon Rees 16thApril 1996, and ‘Poster watch’ 26thApril

1996; Rene Spindler for an extract adapted from her MSc dissertation, OdenseUniversity 1991; Zoe Cooper for an extract adapted from her MBA dissertation,Keele University; Carol Fry for extracts adapted from her MBA dissertation,Keele University; Marketing for extracts adapted from ‘Research propels innova-tion’, and ‘Avon ads praise the real woman’ by Ruth Nicholas published in

Marketing 27thJanuary 1994, and ‘Eastern Promise is worth all the pain of red

tape’ by Bob Tyrell published in Marketing 3rdFebruary 1994; Business

Oppor-tunity World for an extract adapted from ‘Safety letterbox’ published in Business

Opportunity World May 1996; Lucy Double for an extract adapted from her MBA

dissertation, Keele University 1991; Marketing News for an extract adapted from ‘Delphi technique can work for new product development’ by Gianni

Bolongaro published in Marketing News 3rdJanuary 1994; MapInfo Limited forextracts from their website www.mapinfo.co.uk/products/spftware.cfm andcompany literature; South Africa Tourism Board for an extract adapted from

South Africa: a World in One Country, 1996; International Wrist Watch for an extract

adapted from ‘The French Connection’ published in International Wrist Watch

1995, Issue 31; Rushuang Xiong for an extract adapted from an MBA tion, Keele University 1994; Mercator Research Group Limited for ‘SNAP’;

disserta-Emerald Group Publishing Limited for an extract adapted from ‘Forecasting:

the key to managerial decision-making’ by D Waddell and A.S Sohal published

in Management Decision, 32(1) 1994 © MCB University Press Limited; and The

Lake Lucerne Navigation Company, Switzerland, 2005, for information in ‘LakeLucerne Navigation Company (SGV)’

We are grateful to the Financial Times Limited for permission to reprint the lowing material:

fol-‘Potential benefits of market research’, from Marketing wake-up, © Financial

Times, 3 June 1997; Golden nuggets on a long and winding road, © Financial Times, 3 December 1997; Data loss, © Financial Times, 23 January 1997; Opinion

polling faces new scrutiny, © Financial Times, 21 March 1997; Baby boomers get the message, © Financial Times, 26 May 1997; Shoppers under the microscope,

© Financial Times, 5 December 1997; Caught in the neighbours’ tangled web, ©

Financial Times, 15 August 1997; Public puts faith in brand names, © Financial Times, 13 October 1997; Soft drinks switch to PET leaves industry struggling, © Financial Times, 22 October 1997; ‘Newspapers are a source of information about

competitiors’, from ‘Nike’ part of the Lex column, © Financial Times, 20 December

1997; ‘Electronic revolution in the retailing world’, from Pressures in the

market-place, © Financial Times, 3 September 1997; British divided into four types, ©

Financial Times, 5 September 1997; Deceptive appearance, © Financial Times,

3 February 1997; Orchestras aim to pass the baton, © Financial Times, 26 May 1997;

The decline of frills, © Financial Times, 28 April 1997; Noteworthy response, ©

Financial Times, 26 October 2004; Moving images, © Financial Times, 19 October

2004; Going below the surface, © Financial Times, 28 September 2004; Desmond sizes up shopping, © Financial Times, 19 October 2004; Is fizzing up its look

.

enough?, © Financial Times, 26 October 2004; Now interacting with lots of new partners, © Financial Times, 12 October 2004.

We are grateful to the following for permission to use copyright material:

Why researchers are so jittery from The Financial Times Limited, 3 March 1997,

© Winston Fletcher; The future lies abroad from The Financial Times Limited,

30 June 1997, © Sir Martin Sorrell; One strike and you’re down from The Financial

Times Limited, 5 October 2004, © Richard Gillis; They might as well be men

from The Financial Times Limited, 5 October 2004, © Jasmine Montgomery.

In some instances we have been unable to trace the owners of copyright material, and we would appreciate any information that would enable us to

do so

xxiii

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Last A Head on Spread

Nature of marketing research

Objectives

After reading this chapter, you should be able to:

• define marketing research, understand the philosophy of science andunderstand how marketing research relates to marketing decision makingand planning

• appreciate the major divisions of marketing research and how it is part ofmarketing strategy

• recognise the role played by marketing research agencies and the kind ofservices they provide

• understand the ethical issues involved in marketing research

• understand how the Internet can be used in marketing research

• appreciate the need for creativity in marketing research

• appreciate problems created by non-response in marketing research

Keywords

1

Plan of Chapter 1

Marketing research: a definition 3

Outside research companies, or agencies, offer a wide range of services, ranging

from off-the-peg studies to tailor-made studies to meet the needs of individualclients As is the case with many other services involving obtaining informationfrom firms and members of the public, ethical considerations are an importantissue In a rapidly changing environment, the need to come up with new ideas isalso extremely important and priority needs to be given to introducing creativityinto marketing research

MARKETING RESEARCH: A DEFINITION

Peter Chisnall (1992)1points out that although the term ‘market research’ is now

largely used as a synonym for ‘marketing research’ there was originally a distinctdifference between the scope of the activities they covered Some confusion hasbeen caused by the term ‘market research’ being rather freely used to describe thefull range of activities properly covered by marketing research Chisnall (1992)notes, however, that market or marketing research is essentially about the dis-ciplined collection and evaluation of specific data in order to help suppliers tounderstand their customer needs better Moreover, since decision making neces-sarily involves some element of risk, the collection and evaluation of such datashould be used to reduce and control, to some degree, the parameters of risk sur-rounding particular marketing proposals

MARKETING RESEARCH AS DEFINED BY THE AMERICAN MARKETING ASSOCIATION

Marketing research is the function that links the consumer, customer and public tothe marketer through information – information used to identify and define marketingopportunities and problems; generate, refine, and evaluate marketing actions; monitormarketing performance; and improve understanding of marketing as a process

Marketing research specifies the information required to address these issues; designsthe method for collecting information; manages and implements the data-collectionprocess; analyses the results; and communicates the findings and their implications

Source: AMA 2

Any definition of marketing research has to take account of the changing role

of research in modern marketing Marketing research connects the consumer, thecustomer and the public to the marketer through the medium of information

This information is used to distinguish and define marketing opportunities andthreats or problems It is also used to create, improve and assess marketingactions and to monitor marketing performance It also helps to improve under-standing of marketing as a process Marketing research identifies the informationrequired to address these issues It comprises methods for collecting data, ana-lysis of data collected and their interpretation and communication of the findingsand their implications It takes account of experience, the present situation andthe likely future so that marketing executives can make sound decisions

This definition of marketing research underlines the role of research in allphases of marketing, assisting and guiding the marketing efforts of the organisa-tion (see Figure 1.1) Marketing research involves more than studies of specificproblems or specific situations, for it prevents problems arising in the first place

There is a need for marketing research to be at the centre of decision making.3, 4It

is a fact-finding and forecasting function that is used by all phases of marketingand even by other functional aspects of an organisation

PHILOSOPHY OF SCIENCE

All academic research is said to be grounded in a philosophical perspective

Easterby-Smith et al.5provide a useful summary as to why a philosophical spective on any research study is important For example, it can help to clarifyresearch design in terms of its overall configuration, what kind of evidence isgathered and from where, and how this can be interpreted to provide answers tothe question(s) asked It can help recognise those designs that are likely to workand those that will not, and highlight limitations of particular approaches It canhelp the researcher identify research designs that may be outside his/her pastexperiences

per-There continues however to be a great deal of debate among academicresearchers around the most appropriate philosophical position from which

methods of research should be derived In this instance, the competing schools of

thought are often described as positivist and phenomenological These schools of

thought are perhaps best viewed as extremes on a continuum Each school has itsown set of assumptions and a range of methodological implications associatedwith its position However, there is a danger of oversimplification if this distinc-tion is taken too literally It is important to recognise that rarely does any piece ofresearch work fit neatly into a particular school of thought Rather a piece ofresearch tends to subscribe to a particular school of thought

The researcher’s methodological, epistemological and ontological premises can

be termed a paradigm or interpretive framework that encompasses a set of beliefsthat guide the research action This comprises:

Philosophy of science 5

FIGURE 1.1 Role of marketing research

• Methodology: focuses on how we gain knowledge about the world.

• Epistemology: asks: How do we know the world? What is the relationship

between the inquirer and the known? (It is concerned with how things can bemade known to the researcher.)

• Ontology: ontology raises basic questions about the nature of reality (It is

con-cerned with assumptions about the kind of things there are in the world.)Research methodologies will differ according to both their ontological and epi-stemological assumptions, although generally there are two types of researchmethodology:

in similar ways, and where people understand and react to these structures in similar ways The epistemological assumptions in this approach are that theresearcher is independent of what is being researched and their role is to observeand measure social structures A positivist approach is therefore deductive innature; for example, taking a theory from literature and researching it to confirm

or refute the proposition

Phenomenology

Phenomenology is the main alternative to the positivist approach in socialresearch and is an interpretive methodology The ontological assumption here isthat people are not passive in simply responding to structures but instead reality isitself socially constructed The epistemological assumption is that the researcherinteracts with the subjects of the research and that their role is to understandpeople’s interpretation of events rather than the events themselves The focuswith this approach is to discover meaning rather than measurement A pheno-menological approach is therefore inductive in nature, as the investigation willguide the construction of a theory

To understand fully the traditions of each school of thought, and its theoreticalbasis, is a significant field of study in its own right and is beyond the scope of this

Marketing research and decision making

book (To gain a fuller appreciation of the theoretical foundations of each school

of thought see: Allison et al;6Bekesi;7 and Embree.8)

It is important that the research study and its findings are fully accepted by itstarget audience, if it is to have any actionable value A positivist approach willhelp to overcome some of these reservations given that its approach is widelyadopted in this environment as a means of research Allison et al argue that

positivism and phenomenology are in fact complementary rather than

incom-patible and that there are many similarities between the two schools of thought

Hannabuss,9citing the work of Gummesson,10provides a useful summary of thedifferences between a positivistic and hermeneutic approach The positivisticapproach stresses rules by which we can explore and explain phenomena objec-tively, defining valid knowledge and inquiry in scientific terms It focuses ondescription and explanation There exist clear distinctions between facts andvalues, rationality and logic, statistical techniques and detachment, and explicittheories and hypotheses

Academics agree that there is no one research method that is the most priate for all research problems Each research study has its own distinctiveness,assumptions, bias and degrees of usefulness It is generally argued that the choice

appro-of research design imposes intellectual and practical constraints on a researcher interms of reliability, validityand generalisability.11

MARKETING RESEARCH AND DECISION MAKING

There are elements of uncertainty and risk attached to all business decisions and

Common sense suggests that the availability of good information reduces therisk After all, having perfect information all the time would make the job of exer-cising choice much easier since there would be no risk in making marketingdecisions Correct answers to such questions as how much to spend on advertisingand what message should be contained in the advertising would always be known

The first step in the decision-making process is the identification of neededinformation Incorrect specification of requirements will provide only uselessinformation, so it is necessary to ensure that the specification is correct Poor ormisleading information not only costs time and money but also generates confu-sion, chaos and badly informed decisions One must determine what information

is needed to make a particular decision Next, consideration has to be given towhether the information can be obtained within a reasonable time and at a rea-sonable cost, and whether one can afford to spend both the time and the money

to obtain it

Information used in the right way can be a powerful aid to marketing Acompetitive advantage can be achieved with the help of accurate, relevantinformation since it helps marketers make better decisions Inaccurate, irrelevantinformation is both misleading and dangerous in the extreme

7

POTENTIAL BENEFITS OF MARKET RESEARCH

Plastics chemist Graham West thought marketing was an expensive exercise inwoolly thinking

He is the managing director of Belgrade Insulations, a plastics and forming company based in Wellingborough In 1991 a Department of Trade andIndustry official called to talk about the department’s Marketing Initiative to helpsmaller businesses write a marketing plan As a result of changes partly inspired

vacuum-by the programme, West says: ‘I realised I had been lacking direction for years Wehad been simply unable to look for markets where we could apply the company’sskills.’ A recent study by the Marketing Council and Warwick Business Schoollooked at companies, including Belgrade Insulations, that had taken part in the DTIscheme It found that some simple marketing tasks had fostered significant salesgrowth

John Stubbs, chief executive of the Marketing Council, thinks the findings shouldencourage personal business advisers at Business Links, the government-led sup-port service, to think hard about how to help sharpen marketing skills

West had been running his own company for 20 years without a thought of keting In 1991 the building industry, to which he supplied a variety of productsincluding lids for cold water tanks, ‘stopped dead’ Worse, Belgrade Insulations was dependent for at least 60% of its sales – and ‘far more’ of its profits – on asingle customer The company had a healthy balance sheet, with no borrowing, butturnover seemed to have plateaued at about £3m – producing pre-tax profits ofabout £230,000

mar-West hired a sales development manager But he already had a sales executive

‘All I had done was put another man in the field with a scattergun approach We had

to look outside the building industry, but we did not know where.’

So West was receptive when he heard about the DTI scheme A marketing sultant was allocated to him and spent part of two or three weeks producing areport The government paid half the consultant’s fee ‘He was very sharp He couldsee our problems and didn’t talk down to us But he probably went too far Therewas such an enormous list of things to do.’ More pertinently, the report assumedmarketing knowledge ‘It didn’t quite get us off the ground.’

con-Shortly after, attracted by cheap training, he took part in the Investors in Peoplescheme, one of whose consultants had a marketing background Building on theDTI report, West says: ‘We sat down and identified the company’s strengths andweaknesses and what we could bring to the table that our competitors could not –which was actually very little.’

The car components industry looked relatively promising – and, unlike the ing trade, was still ticking over, in spite of the recession A telephone survey wasconducted, and West followed up every inquiry, however small – ‘odds and ends,orders no one else wanted’

build-At the same time, West decided that he needed to bolster research and ment capabilities and hired a pattern maker who could concentrate on developingprototypes from the new customers’ requests Some sizeable orders materialised

develop-FT

Divisions of marketing research

‘I have to say we lost money on the majority, but we had gone up a very steep learningcurve The ideas were tumbling out.’ Now the company could produce a prototype

in a week or less – rather than the month or two it had previously taken

Eighteen months ago West brought in a full-time marketing man with a brief tohunt out growth industries where the company’s skills – including its sharperresearch and development capabilities – could be used In addition to car com-ponents, Belgrade Insulations is now selling to the leisure industry, to heating andventilation companies and to the general engineering sector It has recentlyfocused on waste disposal as another growth area where it is working with customers to fashion new products ‘We can charge whatever is the going rate, weare not beholden to one customer.’ The company to which West was once selling60% of his goods now accounts for less than 25% of sales, and he hopes that willreduce further as expansion continues elsewhere

In the year to August 1996 pre-tax profits rose to about £500,000 on sales of

£4.8m and he is aiming for sales of £7m by 1999 Belgrade Insulation’s financialstrength, its R&D skills and, as West puts it, the ‘team effort’ have played a crucialrole in its development But it was some simple marketing, he reckons, that reallyawoke the business

Source: Campbell 12 (reprinted with permission)

DIVISIONS OF MARKETING RESEARCH

Marketing research has developed a number of broad divisions covering therange of problems and decisions with which executives have to deal These areindicated in Figure 1.2

Customer or market research

markets and market segments, for example, the size of the market in terms

of both unit sales and value When these data are collected over time, it allowsone to identify trends and helps to predict future sales It can also provide information on where customers are located, their spending patterns, their earn-ings and their creditworthiness It can also explain why customers prefer onebrand to another and what price they are willing to pay Market research can alsoprovide information about market share of all the firms operating in a market ormarket segment

9

FIGURE 1.2 Divisions of marketing research

CUSTOMER MARKET RESEARCH PROVIDES INFORMATION ON:

• market and market segment sizes

• trends in the market that can be used for forecasting

• brand shares

• customer characteristics and motivations

• competitors’ brands shares

Divisions of marketing research

Advertising and promotion research

Advertising research measures the success of advertising campaigns in ship to their objectives It also helps users of advertising in selecting the mostappropriate promotional media and methods that are likely to produce the mosteffective results Advertising research can provide information on which medium

relation-is most likely to reach the target audience for specific campaigns It also providesinformation about what messages are most likely to appeal to the target audience

Research also helps in the process of evaluating in advance the likely impact of acampaign by testing out advertisements on a limited scale Through trackingstudiesthe effectiveness of a campaign can be monitored at all stages of its implementation

PROMOTIONAL RESEARCH PROVIDES INFORMATION ON:

• the most suitable method of promotion

• the most suitable copy and campaign material

• the most suitable media to use

• the effectiveness of the communications in achieving objectives

Product research

Product research helps to find additional uses for existing and potential products

or services It also helps, in the case of new product ideas, to test out the product

conceptwith potential users and purchasers before the expensive process ofproduct development If a product concept is found to be sound and is thendeveloped, product research can test the product out on potential users before thelaunch This latter information can be used to remove any apparent design faults

in a product Product research helps to provide an effective assessment of thestrengths and weaknesses of a product or service in comparison with compet-itors’ products or services Research also provides information on the appropriatepackaging of a product, helping to design it in such a way as to promote theimage of the product (or service)

PRODUCT RESEARCH PROVIDES INFORMATION ON:

• opportunities for new product development

• product design requirements

• comparative performance vis-à-vis competitors’ offerings

• packaging

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Distribution research

Research helps to find the best channels of distribution for a product and helps inthe selection of distribution channel members With regard to physical distribu-tion, research indicates the best sites for warehouse and retail locations

DISTRIBUTION RESEARCH PROVIDES INFORMATION ON:

• suitable distribution methods

• appropriateness of channel members

• best location for warehouses and retail outlets

Sales research

Sales research helps to assess and measure the effectiveness of different methods

or techniques of selling It helps to ensure that sales patches are roughly ent in size so that sales staff are not unfairly discriminated against when it comes

equival-to setting sales targets Sales research provides information on the suitability ofremuneration methods and levels for motivating the salesforce Research is alsoconcerned with sales training and can provide extensive feedback on the quality

of sales presentations made by sales staff

SALES RESEARCH PROVIDES INFORMATION ON:

• effectiveness of sales methods and techniques

• establishing sales territories

• the adequacy of remuneration methods

• sales training requirements

Marketing environment research

This division of marketing research examines the political, economic, social andtechnological influences that may impact on a firm’s marketing operations

In the case of the political aspect of the environment, changes in governmentcan affect trading conditions and these need to be anticipated on a worldwidebasis Clearly, the economic climate within which a business operates exerts aneffect These effects may be temporary or more permanent Attention has to be

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given to such influences when planning, and research helps to assess the impact

of political and economic factors

Social influences can also have a substantial impact on some businesses

Population explosions or declines directly influence the demand for certaingoods Research provides information on which factors are relevant and howthey impinge on the organisation’s activities

Technological influences can have a sudden and dramatic impact on the fortunes

of a business A sudden technological breakthrough can make currently ful products and processes obsolete in a very short space of time Research canmonitor technological progress and provide advance notice of new developments

success-MARKET ENVIRONMENT RESEARCH PROVIDES INFORMATION ON:

a problem can be agreed on For example, someone may come up with the ideafor a new service Preliminary research may concern such matters as: whether themarket for such a service is regional or national; who would use the service; andwhat substitute services people use Answers to these kinds of question can help

to define the nature and scope of more complete research

A review of earlier research may be helpful It is possible, for example, that thesuggestion put forward as an idea for a new service has been previouslyresearched There may even be already published sources of information that canprovide pertinent information Government publications might mention the ser-vice, for example, or some trade publication may have mentioned it and evenconsidered its use

Conclusive research

Conjectures or hypotheses are developed in the preliminary search and in the

course of defining the marketing problem Conclusive research is carried out

to produce evidence to support these hypotheses In conducting conclusiveresearch, a thorough search of already published data is made Fieldwork mayalso be conducted.

Performance research

mar-keting actions are being carried out and what benefits in terms of the objectivesset are being realised Performance research monitors the effectiveness of market-ing management It questions the definition of the problem that has directed thework to date It makes one review whether a new study is desirable because certain questions remain unsatisfactorily resolved

Marketing research provides information for marketing decision making andproblem solving and it may thus be regarded as part of the marketing informa-tion system In the last chapter in the book, we look in detail at the marketinginformation system However, because of its relationship to marketing research

we introduce the subject in this chapter

SMALL BUSINESS IDEAS AND STUDYING THE LOCAL MARKET

When you have got some idea of the national market for your idea and someinsights into the most suitable openings that relate to the activities in which you areinterested, the next step is to study possibilities in the local market

You need to immerse yourself in the environment Start by making a tour of thestreets in the town and the town’s commercial centres Note the neighbouringkinds of business, particularly those that offer similar or complementary kinds ofproducts or services to those you want to offer Take note of the kind of clientelethey attract

This study will give you a better understanding of the neighbourhood You canthen find out from your local Chamber of Commerce how long certain kinds of busi-nesses on particular streets have been there – a good indicator of your ownparticular chances of long-term survival You may also find out what kind of busi-nesses have been unsuccessful either in general or in particular areas and, more

to the point, why this has been the case

Source: Rebondir13

MARKETING INFORMATION SYSTEMS

Marketing information systems have been around for a long time – conceptuallythere is nothing particularly new about them The original ones were paper-basedsystems in which summarised information was stored in large banks of filing

Marketing information systems

cabinets In comparison with current notions of information systems, the earlypaper-based systems were relatively inefficient With the advent of computers,particularly desktop computers, the opportunity developed for marketing infor-mation systems to become more sophisticated and efficient

A marketing information system is a way of systematically gathering andgiving helpful marketing information to the right people on a continuous basisand at the right time Since information needs, sources and costs alter with time, areview of any information system is desirable from time to time Such a reviewshould specify individual people’s information requirements, at what times infor-mation is required and where it can be found

Marketing managers use many different types of information and there aremany ways of putting together a marketing information system The requiredinformation can be classified in a number of different ways One way of classify-ing the information is:

ana-An information system facilitates this process

External information refers to the size and structure of the market (or potentialmarket) and to trends, opportunities and threats in the environment It also includesinformation on competitors and customers, both existing and potential Employees,customers and distributors contribute this form of marketing information

Position information is created by combining internal and external mation For example, one might combine the enterprise’s sales and the overallsales of the enterprise and its competitors in the market to calculate market share

infor-In a similar fashion, internal strengths and weaknesses can be compared to those

of competitors to find competitive advantage and unique selling points, and toascertain whether any competitive advantage is sustainable

Decision information results from various analyses which can involve ematical and statistical treatmentof data

math-Forecast information can be based on either subjective opinions, ascertained bysurvey, or on statistical analysis of trends

Some of this information can be obtained cheaply, while other forms take time

to gather and analyse There is a tradeoff between the value of information and itscost – in terms of both time and money Executives must know which informationaffects which decisions and which information is essential

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