THE ROLE OF RESEARCH IN MARKETING, THE MARKETING RESEARCH INDUSTRY THINKING LIKE A RESEARCHER

DR. HJ. ALVI FURWANTI ALWIE, SE. MM

PASCASARJANA UNIVERSITAS RIAU

MARKETING RESEARCH

PART ONEthe role of reseach marketing

WHAT IS MARKETING?
THE RIGHT PHILOSOPHY : THE MARKETING CONCEPT THE RIGHT MARKETING STRATEGY

WHAT IS MARKETING RESEARCH? WHAT IS THE PURPOSE OF MARKETING RESEARCH WHAT ARE THE USES OF MARKETING RESEARCH?
IDENTIFYING MARKET OPPORTUNITIES AND PROBLEMS GENERATE, REFINE, AND EVALUATE POTENTIAL MARKETING ACTION MONITOR MARKETING PERFORMANCE IMPROVE MARKETING AS A PROCESS

CLASSIFYING MARKETING RESEARCH STUDIES Dr. Hj. Alvi Furwanti Alwie, SE, MM (Marketing Research)

WHAT IS MARKETING?
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Why talking about marketing?

Because marketing research is part of marketing, we cannot full appreciate the role of marketing research unless we know how it fits into the marketing process.

So, what is marketing ?

American Marketing Association (AMA) has defined marketing as the process of planning and executing the conception, pricing, promotion, nd distribution of Dr. Hj. Alviideas, goods, (Marketing Research) Furwanti Alwie, SE, MM and services to create exchanges that satisfy individual and
The

Meaning.
4

Companies or organizations, whether forprofit or not-for-profit, are seccessful marketers. Why are these companies and many others just like them so successful?
Because
the

marketers have correctly heard the consumers wants and needs and conceived a product (or service), price, promotion, and distribution method that satisfied those wants and needs. By listening to the customer, these companies know what it takes to SATISFY Dr. Hj. Alvi Furwanti Alwie, SE, MM (Marketing Research) consumer wants and needs.

Meaning.
5

Marketing conceive of what the market wants and exchange it for something else, usually money.

Examples :

Volvo exchanges well-design, safe automobiles for money Sony exchanges quality electronic entertainment devices for money. Farmers in USA willing to exchange their money for John Deere tractors because these tractors satisfy their wants and needs. The American Heart Association exchanges services designed to help detect and prevent Dr. Hj. Alvi Furwanti Alwie, SE, MM (Marketing Research) heart disease for donations

Meaning..
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Peter Drucker wrote that successful companies are those that know and understand the customer so well that the product conceived, priced, promoted, and distributed by the company is ready to be boving thught as soon as its available (2) If this is true, why do products fail? And indeed, many new products and services do fail? One way managers can avoid product failure is by having the right information so they can make the best decision. However, in addition to having the right information, success dictates that management must also have the right philosophy, which you have learned as the Dr. marketing concept, and then implements Hj. Alvi Furwanti Alwie, SE, MM (Marketing Research) strategies that satisfy customers.

The Right Philosophy: The Marketing Concept

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The marketing concept is a business philosophy that holds that the key to achieving organizational goals consists of the companys being more effective than competitors in creating, delivering, and communicating customer value to its chosen target markets (3)

Dr. Hj. Alvi Furwanti Alwie, SE, MM (Marketing Research)

Meaning..
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For many years, business leaders have recognized that this is the right philosophy. And although marketing concept is often used interchangeably which other terms such as customer oriented or market driven, the key points that this philosophy puts the customer first. The right philosophy is an important first step in being successful. Still, just appreciating the importance of satisfying consumer wants and needs isnt Dr. enough, firms must put together the right Hj. Alvi Furwanti Alwie, SE, MM (Marketing Research)

The right marketing strategy

A strategy is nothing more than a plan. The term strategy was borrowed from military jargon that stessed developing plans of attack that would minimize the enemys ability to respond. Firms my also have strategies in many different areas, such as financial strategy, production strategy, technology strategy, and so on. So what exactly is marketing strategy?
Dr. Hj. Alvi Furwanti Alwie, SE, MM (Marketing Research)

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A MARKETING STRATEGY CONSISTS OF SELECTING A SEGMENT OF THE MARKET AS THE COMPANYS TARGET MARKET AND DESIGN THE PROPER MIX OF PRODUCT/SERVICE, PRICE, PROMOTION, AND DISTRIBUTION SYSTEM TO MEET THE WANTS AND NEEDS OF THE CONSUMERA WITHIN THE TARGET MARKET.
Dr. Hj. Alvi Furwanti Alwie, SE, MM (Marketing Research)

Meaning..
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Note how this definition assumes that we have already adopted the marketing concept. A manager not having the marketing concept, for example wouldnt be concerned that his or her plan addressed any particular market segment and certainly wouldnt be concerned with consumers wants and needs. So, to continiu, we are thinking like enlightened managers; we have adopted the marketing concept. Now, as we shall se, because we have Dr. adopted the SE, MM (Marketing Research) Hj. Alvi Furwanti Alwie, marketing concept, we cant come up with just any strategy.

Meaning.
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We have do develop the right strategy - the strategy that allows our firm to truly meet the wants and needs of the customers within the market segmen we have chosen. Think of many questions we now must answer:
What is the market? How do we segment the market? What are the wants and needs of each segment? How do we measure the size of each market segment? What are our competitiors, how are they meeting the wants and needs of each segment? Which segment(s) should we target? Which model of a proposed product will best suit the target market? What is the best price? Which promotional method will be the most efficient? How should we distribute the product/service? Dr. Hj. Alvi Furwanti Alwie, SE, MM (Marketing Research)

Meaning..
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Now we see that many decisions must be made in order to develop the right strategy in order to develop the right strategy in order to succeed in business. In order to make a right decisions, managers must have objective, accurate, and timely information. Not only do managers need information to implement the right strategy now, but because environments are forever changing, this means marketers constanly need updated information about those environments. A strategy that is successful today may need to be changed as the competitive, economic, social, political, legal, global, and technological environments change. Managers must have the right information to understand when and how to modify their company Dr. Hj. Alvi Furwanti Alwie, SE, MM (Marketing Research) strategies.

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WHAT IS MARKETING RESEARCH?

Marketing research is the process of designing, gathering, analyzing, and reporting information that may be used to solve a specific marketing problem.
definition tells us that Marketing research is a process that results in reporting information and that information can be used to solve a marketing problem such as determining price, how to advertise, and so on. The focus, then, is on a process that results in information that will be used to make decisions. Dr. Hj. Alvi Furwanti Alwie, SE, MM (Marketing Research) Notice also thatour definition refers to
This

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The AMA definition is : Marketing Reseach 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 action; monitor marketing performance; and improve the understanding of marketing as a process.
Dr. Hj. Alvi Furwanti Alwie, SE, MM (Marketing Research)

WHAT IS THE PURPOSE OF MARKETING RESEARCH?

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The purpose of mar marketing research is to link the cunsumer to the marketer by providing information that can be used in making marketing decisions. In fact, by mentioning the consumer this implies that marketing research is consistent with the marketing concept because it links the consumerto the marketer.
Dr. Hj. Alvi Furwanti Alwie, SE, MM (Marketing Research)

WHAT ARE THE USES OF MARKETING RESEARCH?

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Identifying Market Opportunities and Problems

example: Mintel, a British consumer market research firm, looks for opportunities for new products. Some of its interests include baby milk sold in disposable bottles, tea and coffee that heat themselves, and spray that temporarily whitens teeth (4). Many research studies are being conducted today to determine the health effects of ingredients such as omega -3s, lecithin, Dr. Hj. Alvi Furwanti Alwie, SE, MM (Marketing Research) and soy and how best to offer the
For

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Generate, Refine, and Evaluate Potential Marketing Action.

For example: as AT&T grew from being the longdistance telephone company to participating in all forms of the fast-paced telecommunications industry, it wanted a brand image that would connote being a dynamic, unique, creative, and fast-moving company with advance products and services in many areas. It conducted research that generated theBoundless brand advertising campaign. Then it conducted research to evaluate the effectiveness of the campaign (6). AT&T is a good example of a firm using marketing research to generate, refine, and evaluate a Dr. Hj. Alvimarketing action. In this case, the action was Furwanti Alwie, SE, MM (Marketing Research) developing a brand that conveyed the image

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Monitor Marketing Performance

The

AMA definition also states that marketing research may be used to monitor marketing performance. For example:
Bruzzone Research Company monitors the effectiveness of these high-priced ads in order to provide information to companies that want to monitor the impact of their investmet (7). Tracking research is used to monitor how well product of companies such as Campbells, Kelloggs, and Heinz are performing in the supermarkets. These consumer packagedgoods firm want to monitor the sales of their Dr. Hj. Alvi Furwanti Alwie, SE, MMsales of Research) brands and (Marketing their competitors brands

Improve Marketing as a Process

This means that somemarketing research is conducted to expand our basic knowledge of marketing. Typical of such research would be attempts to define, and classify marketing phenomena and to develop theories that describe, explain, and predict marketing phenomena. Such knowledge is often published in journals such as the journal of marketing research. Much of this research is conducted by marketing professors at colleges and universities and by other organizations, such as the marketing science institute (the latter us could be described as the only part of marketing research that is basic research). Basic Research is conducted to expand our knowledge rather than to solve a specific problem. Research conducted to solve specific problems is called applied research, and this represents the vast majority or marketing Dr. Hj. Alviresearch studies. Furwanti Alwie, SE, MM (Marketing Research) Example : Marketing research application page 11

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Classifying Marketing Research Studies

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Another way ti introduce you to marketing research is to look at a classification of the different types of marketing research being conducted in the industry. We organize the major types of studies under the usage categories from the AMA definition.

A. Identifying Market Opportunities and Problem (As the title implies, the goal of these studies is to find opportunities or problems with an existing strategy. Examples of such studies include the following):

Market-demand determination Market segmen identification Marketing audits SWOT analysis. Product/service-use studies Environmental analysis studies Competitive analysis. Dr. Hj. Alvi Furwanti Alwie, SE, MM (Marketing Research)


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B. Generating, Refining, and Evaluating Potential Marketing Action.

Marketing

actions could be as proposed marketing strategy or as narrow as a tactic (a specific action taken to carry out a strategy). Typically these studies deal with one or more of the marketing-mix variables> examples include the following:
Proposed marketing-mix evaluation testing Concepts tests prototype testing New-product prototype testing Reformulating existing product testing Pricing tests Advertising pretesting In-store promotion effectiveness studies Distribution effectiveness studies.

Dr. Hj. Alvi Furwanti Alwie, SE, MM (Marketing Research)

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C. Monitoring Marketing Performance

The

studies are control studies. They allow a firm that already has a marketing mix placed in the market to evaluate how well that mix is performing. Examples include the following:
Image

analysis Tracking studies Customer satisfaction studies Employee satisfaction studies Distribution satisfactio studies Web site evaluation
Dr. Hj. Alvi Furwanti Alwie, SE, MM (Marketing Research)


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D. Improving Marketing as a Process.

A

small portion of marketing research is conducted to expand our knowledge of marketing as a process rather than to solve a specific problem facing a company. By having the knowledge generate from these studies, managers may be in a much better position to solve a specific problem within their firms. This types of research is often conducted by institutes, such as the marketing science institue, or universities. Examples:

How managers learns about the market Consumer behavior differences in e-business transactions Determining the optimum amount that should be spent on e-business and measuring success in e-business Predictors of new-product success The Alwie, SE, of long-term advertising on Dr. Hj. Alvi Furwanti impact MM (Marketing Research) consumer choice

THE MARKETING INFORMATION SYSTEM

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So far we have presented marketing research as if it were the only source of information. Marketing decision makers have a number of source of information available to them. We can understand these different information sources by examining the components of the marketing information system (MIS). An MIS is a structure consisting of people, equipment, and procedures to gather, sort, analyze, evaluate, and distribute needed, timely, and accurate information to marketing decision makers (8). The role of the MIS is to determine decision makers information needs, acquire the needed information, and distribute that informations to the decision makers in a form Dr. Hj. Alvi Furwanti Alwie, SE, MM (Marketing Research) and at a time when they can use it for decision

Components of an MIS
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the MIS is designed to assess managers information needs, to gather this information, and to distribute the information to the marketing managers who need to make decisions. Information is gathered and analyzed by the four subsystem of the MIS:
Internal

reports Marketing intelligence Marketing decision support system (DSS) And marketing research.
Dr. Hj. Alvi Furwanti Alwie, SE, MM (Marketing Research)

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Internal reports
internal reports system gathers information generated by internal reports, which includes orders, billing, receivables, inventory levels, stockouts, sales-call records, and so on. In many cases, the internal reports system is called the accounting information system. A good internal reports system can tell a manager a great deal of information about what has happened within the firm Dr. Hj. Alvi Furwanti Alwie, SE, MM (Marketing Research) in the fast.
The

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Marketing intelligence
The

marketing intelligence system is defined as a set of procedures and sources used by managers to obtain everyday informastion about pertinent developments in the environment. Such system include both informal and formal information-gathering procedures. Informal Information-gathering procedures involve such activities as scanning newspapers, magazines, and trade publications. Formal Information-gathering activities may be conducted by staff members who are assigned the spesific task of looking for anything that seems pertinent to the company or industry.

Dr. Hj. Alvi Furwanti Alwie, SE, MM (Marketing Research)

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Marketing decision support system (DSS)

DSS

is defined as collected data tat may be accessed and analyzed using tools and techniques that assist managers in decision making.

Marketing research system.

Is

the fourth component of an MIS. That is, if marketing research and an MIS are both designed to provide information for decision makers, how are the two different?

Dr. Hj. Alvi Furwanti Alwie, SE, MM (Marketing Research)

How Marketing research differs from the other three MIS components.
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1.The marketing research system gathers information not gathered by the other MIS component subsystem: marketing research studies are conducted for a specific situation facing the company.
is unlikely that other components of an MIS have generated the particular information needed for the specific situation. When people magazine want to know which of three cover stories it should use, can its managers obtain that information from internal reports, Intelligence system or DSS? Nothis, then, is how marketing Dr. Hj. Alvi Furwanti Alwie, SE, MM (Marketing Research) research plays a unique role in the total
It

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By providing information for a specific problem at hand, it provides information not provided by other component of the MIS. This is why people in the industry sometimes refer to marketing research studies as ad hoc studies. Ad hoc is Latin meaning with respect to a specific purpose.

2.Another characteristic of marketing research that differentiaties it from the other MIS components is that marketing research projects, unlike the previous components, are not continuous-they have a beginning and an end. This is why marketing research studies are sometimes referred to as projects. The other components are available for use on an ongoing basis. However, marketing research projects are launched only when there is a justifiable need for information that is not Dr. Hj. Alvi Furwanti Alwie, SE, MM (Marketing Research) available from internal reports, intelligence,

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PART TWO the marketing research industry

EVOLUTION OF THE INDUSTRY

THE

BEGINNING GROWTH OF THE NEEDS

CLASSIFYING FIRMS IN THE MARKETING RESEARCH INDUSTRY INTERNAL SUPPLIER EXTERNAL SUPPLIER CHALLENGES TO THE MARKETING RESEARCH INDUSTRY
Dr. Hj. Alvi Furwanti Alwie, SE, MM (Marketing Research)

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The Marketing Research Industry

Evolution of the industry

The

Beginning

Bartels, a marketing historian, wrote that the earliest questionnaire surveys began as early as 1824, and that in 1879 a study was conducted by N.W. Ayers and Company to study grain production by states for a client. However, Bartels believes the first continuous and organized research was started in 1911 by Charles Coolidge Parlin, a schoolmaster from a small city in Wisconsin. Parlin was hired by the Curtis Publishing Company to gather information about Dr. Hj. Alvi Furwanti Alwie, SE, MM and markets to help Curtis sell customers (Marketing Research) advertising space. Parlin was successful

Robert

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Growth of the Need

While there are a few reported instances of the use of marketing research in the early days of the history of the United States. It wasnt until the 1930s that marketing research efforts became widespread. The reason for this was that prior to the Industrial Revolution, businesses were located close to the customers, because whwn the industriial revolution led to manufactures producing goods for distant markets they didnt know their cunsumers needs and wants. Since the 1960s the marketing research industry has seen technological advances, in Dr. Hj. Alvithe form of many new products and Furwanti Alwie, SE, MM (Marketing Research) services, which have inreased productivity

Classifying Firm in the Marketing Research Indusrtry

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In the marketing research industry, we refer to providers af marketing research information as research suppliers. There are several ways we can clasisify suppliers. We use a classification develop by Naresh Malhotra(9).

Dr. Hj. Alvi Furwanti Alwie, SE, MM (Marketing Research)

Reseach Suppliers
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External

Internal

Full Service Limited Service Syndicated Customized Services Field Services Services

Sample Data Services design &

Data Analysis

Distribution Services Standardize Specialized Services research Specialists techniques Online Research

Market Segment Services

Dr. Hj. Alvi Furwanti Alwie, SE, MM (Marketing Research)

services

Internal Suppliers
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When a firm is an internal suppliers, it means that an entity within the firm supplies marketing research. It has been estimated that these firms spend roughly 1% of sales on marketing research, whether it is supplied internally (10). How do Internal Suppliers Organize the Research Function?
Its

a several methods, they may:

Have their own formal departments, Have no formal department but place at least a single individual or a committee in charge of marketing research, or Assign no one responsibility for conducting Dr. Hj. Alvi Furwanti Alwie, SE, MM (Marketing Research) marketing researxh.

Challenges to the Marketing Research Industry.

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The marketing research industry is doing reaonably good job, there is room for improvement (11). Mahajan and Wind, recommend that researchers:
Focus on diagnosing problems Use informations technology to increase speed and efficiency Take an integrative approach, and Expand the startegic impact of marketing research.

Dr. Hj. Alvi Furwanti Alwie, SE, MM (Marketing Research)

Reference
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1. Bennet, P. D. (Ed.). (1995). Dictionary of marketing terms (2nd ed). Chicago: American Marketing Association/NTC Books, p. 166. 2. Drucker, P. (1973) Management: Tasks, responsibilities, practices. New York: Harper & Row, pp. 64-65 3. Kotler P (2003), marketing management (11th ed). Prentice Halls, p.19 4. See www.Mintel.com 5. Scientific research pumps up new products: The benefits of health and wellness ingredients (2003 March). Stagnitos New Products Magazine, Vol.3 no.3, 30 6. Lipson, S (2001). Giving the contomer the drivers seat; the power of the research manager. A presentation made at the AMAs 22nd Annual Marketing Research Conference, Atlanta. 7. Bruzzone, D., and Rosen, D (2001, March). All the right moves. Quirks Marketing Research Review, vol.15, no.3, 56-76. 8. The description of the MIS is adapted from Kotler, P., (1997) Marketing Management; Analysis, planning, implementation, andd control (9th ed.) Upper Saddle River, NJ: Prentice Hall, pp 100ff. 9. Malhotra, N. K. (1999). Marketing Research (3rd ed). Upper Saddle River, NJ: Prentice Hall, pp.16-19. 10.Kinnear, T. C., and Root, A.R. (1994). Survey of marketing research; organization function, budget, and compensation. Chicago: AMA, p.38 11.See Neal, W. D. (2002, September 16). Shortcomings plague . Marketing research, vol 36, no. 19, p.37ff

12.

Dr. Hj. Alvi Furwanti Alwie, SE, MM (Marketing Research)