Marketing Exam 1

Question 1

Define Marketing Research

Answer 1

The systematic and objective identification, collection, analysis, dissemination, and use of information for the purpose of improving decision making related to the identification of problems, solutions, and opportunities within marketing.

-link between firms and the market.
-link between customers/the public to the market.

-That information is then organized by business intelligence (BI) & other software domains.

Question 2

-Marketing Intelligence (MI):

Answer 2

Is the process of acquiring and analyzing information in order to…

-Better understand the market for both existing and potential customers.

-Determine the current and future needs, preferences, attitudes and behaviors of the market.

-Assess changes in the business environment that may affect the size and nature of the market in the future.

Question 3

Marketing Research Successes & Failures:

Answer 3

Starbucks: While trying to expand their menu, Starbucks implemented a new online platform service called “My Starbucks Idea” that engaged and encouraged customers to submit new drink creations. Allowing them to see what was most desirable among consumers before the expansion.

A blind taste test showed consumers liked the “new” coke formula over the “old” coke one. But when the product launched, the campaign was a huge flop. Their MR only took into consideration taste being the deciding factor when in reality it was the emotional connection consumers associated Coke with.

Question 4

Role of Marketing Research in Managerial Decision Making

Answer 4

MR serves management by providing information which is relevant to the decision making process. MR itself does not make the decisions, nor does it guarantee success.

Managerial decision making is risky due to the high levels of uncertainty, therefore making the job of marketing research only to reduce that amount of uncertainty.

Question 5

The 4 Step Marketing Planning Process

Answer 5

Situation Analysis:
-Develop an understanding of the environment and your market by identifying threats, opportunities, and assessing competitor positioning. (Externally)

Strategy Development:
-Define your business scope, identify your market segments, set performance objectives, and begin establishing a competitive advantage. (Internally)

Marketing Program Development:
-Establish product decisions, channel decisions, communication decisions, pricing decisions, & personal selling decisions. (The 4 P’s)

Implementation:
-Monitor performance then refine strategies.

Question 6

Define Information Systems

Answer 6

A continuing and interacting structure of people, equipment, and procedures, designed to gather, sort, analyze, evaluate, and distribute pertinent, timely, and accurate information to decision makers.

Question 7

Decision Support System (DSS):

Answer 7

Within the information system, the database is used to organize and store the information and decision support system is used to retrieve data and transform it into usable information and disseminate to users.

Question 8

-Marketing Decision Support System (MDSS):

Answer 8

Combines marketing data from diverse sources into a single database, enabling product managers, sales planners, market researchers, financial analysts, and production schedulers to use and share information

Question 9

Characteristics of MDSS

Answer 9

Interactive, flexible, Discovery oriented and user friendly.

Question 10

-Components of MDSS:

Answer 10

Database, Analysis Capabilities, Models, Reports and Displays

Question 11

-The Marketing Research Process:

Answer 11

Is the systematic and planned approach to a research project that ensures all aspects of the research project are consistent with each other.

Question 12

-The 5 Questions The MRP Should Answer:

Answer 12

Why should we do research?

What research should be done?

Is it worth doing the research?

How should the research be designed to achieve
our objectives?

What will we do with the research?

Question 13

What are the 7 total stages of the MRP?

Answer 13

Define the problem.
Establish research objectives.
Estimate the value of information.
Design the research.
Collect the data.
Prepare and analyze the data.
Report the research results and provide recommendations.

Question 14

Explain the 1st step that should be taken in the MRP.

Answer 14

Research Problem / Management Problem Formulation

Problems or opportunities analysis:

Question 15

Research Purpose/Management Decision Problem

Answer 15

ii. Decision alternatives -
* For research to be effective, it must be associated with a decision.
* The researcher and decision maker need to discuss all possible
criteria in advance and choose those that are appropriate.
* Timing and importance are always pivotal issues in the research
process.

iii. Research Users—Decision Makers
* The major benefit from trying to reach all the decision makers is
▫ To get the research purpose specified more adequately.
▫ To absorb a good deal about the resources that are available to
deal with the problem

Question 16

What is MDP?

Answer 16

When a situation arises that necessitates the management of a company to make a decision that necessitates research

Question 17

MDP vs MRP

Answer 17

MDP

Asks what the decision maker needs to do.
Action orientated.
Focuses on symptoms.

MRP

Asks what information is needed/ how to get it.
Information Orientated.
Focuses on the underlying causes.

Question 18

Defining the research purpose/problem is the most important
step in marketing research process (True / False)

Answer 18

True

Question 19

Step 2 of the MRP - Research Objective

Answer 19

Research objective should be framed to ensure information obtained
will satisfy research purpose

A good research objective should have 3 components: Research Questions, Research Hypothesis, and a Research Scope.

Question 20

What is a Research Question?

Answer 20

Asks what Specific Information is required to successfully
fulfill the research purpose

One Research Purpose can have multiple research
questions

Question 21

What makes a Good Research Question?

Answer 21

Clear – never leave room for ambiguity or interpretation
Focused – narrow down the scope
Complex – leave room for analysis

Question 22

What is a Hypothesis?

Answer 22

An unproven statement or proposition about a factor or phenomenon that is
of interest to the researcher.

• It is a possible answer to a research question
• Hypotheses should be specific and testable

Question 23

What is Research Scope

Answer 23

Defines research boundaries-
* Entire population or subset?
* Overall customer satisfaction or just product return experience?

Explains any kind of ambiguity present in the research objectives.

Answers desired precision or accuracy

Question 24

Step 3 of the MRP - Is it worth doing the research.

Answer 24

Value is dependent on the importance of decision, uncertainty that surrounds it, and the influence of research information on the decision.

Question 25

What is the Cost Benefit Analysis?

Answer 25

The systematic approach to estimating the strengths and weaknesses of alternatives.

Question 26

Expected Value of Product Launch:

Answer 26

% Success Rate X Success Generation Amount + % Failure Rate X (-Failure Generation Amount)

Question 27

Expected Value of Product Launch Example:

Answer 27

Success Rate = 60% (0.6)
Success Revenue = 4 Mill

Failure Rate = 40% (0.4)
Failure Revenue = 2.5 Mill.

Expected value = 0.6 x 4 + 0.4 X (-2.5) = 1.4 Million

SIGN DOES MATTER HERE

Question 28

Expected value of perfect information

Answer 28

Here, you just calculate y our failure rate.

Failure Rate = 40% (0.4)
Failure Revenue = 2.5 Mill.

=0.4 X 2.5 = 1 Million

Question 29

Expected Value Under Certainty:

Answer 29

Same as expected Value of product launch just without the negative sign for failure generation amount.

Question 30

Expected Value under Certainty Example:

Answer 30

Success Rate = 60% (0.6)
Success Revenue = 4 Million

Failure Rate = 40% (0.4)
Failure Revenue = 2.5 Million

= 0.6 x 4 + 0.4 X 2.5 = 3.4 Million

Question 31

Exploratory Research:

Answer 31

Used when seeking the general nature of a problem, the possible decision alternatives, relevant variables that need to be considered.

Little prior knowledge, searching for interesting ideas and clues.

-Hypothesis:
Vague, ill-defined, or does not exist.

-Method:
Flexible, unstructured, and qualitative.
Literature reviews, interviews, case studies.

Question 32

Chapter Four - Research Design & Implementation:

Question 33

Descriptive Research:

Answer 33

Provides an accurate snapshot of some aspect of the market environment.

Most used research approach.
More specific than exploratory.
To describe the characteristics of certain groups - “Average user”
To estimate the proportion of people in a specified population who behave in a certain way - “Percentage of Customers”

-Requires better understanding of …
What specific factors or situations are found to be useful?
How can specific factors or situations help solving the problem?
Identify the cause of something that is happening.
Improved knowledge, convincing/concrete evidence is needed.

-Hypothesis:
Exists, not necessarily causal, may be tentative and speculative.

-Method:
Well-defined, structured, quantitative.
Surveys, experiments, mathematics, statistics.

Question 34

Casual Research:

Answer 34

Used when it is necessary to show that one variable causes or determines the values of other variables.

-A strong link between cause & outcome.
-Show that a change in one variable can cause the outcome to change.
-Very strict research approach requiring reasonable proof of causal factors preceding
the outcome and causal factors can be manipulated by the researcher.

-Hypothesis:
Well-defined and very specific.
-Method:
Very well-defined, carefully structured, and must be quantitative.
Experiment, data analysis.

Question 35

The 3 Research type Examples:

Answer 35

Exploratory:
What benefits do people seek from the product.
Why ways are there to provide lunch for children?

Descriptive:
What kinds of people buy the product, and who buys our brand?
What is our current Image?

Causal:
What is the impact of price increase on sales?
What would get people out of cars and into public transit?

Question 36

• Research tactics –

Answer 36

Specifics of measurement
Plan for choosing the sample
Methods for analyses
Variables of interest

Question 37

Define a Sampling Error, Non Sampling Error, & Total Sampling Error:

Answer 37

Sampling Error:
The Difference between a measure obtained from a sample of population and the true measure that can be obtained only from the entire population

Non Sampling Error:
All other errors associated with a research project

Total Error:
Sampling Error + Non Sampling Error

Question 38

What are the 4 non-sampling Error types?

Answer 38

Design:
Selection error, population specification error, sampling frame error, surrogate information error, measurement error, or experimental error.

Administrative:
Questioning error, recording error, or interference error on behalf of the survey provider.

Response:
Occurs when any error is introduced into the survey results due to respondents providing untrue or incorrect information whether it be intentional or not.

Non-Response:
Occurs when the survey fails to get a response to one, or possibly all, of the questions, or there is failure in contacting one or all members of the focus group.

Question 39

What is the difference between Primary Data & Secondary Data,

Answer 39

Primary Data:
Facts and figures newly collected for the project

Secondary Data:
Facts are figures already collected prior to the project.

Question 40

Define the two types of Primary Data.

Answer 40

Observational:
Watching People -
Mechanical and electronic approaches,
personal approaches.

Questionnaire Data:
Asking People,

-Idea generation through interviews and focus groups.

-Idea evaluation by mail, online telephone, and personal surveys.
-Very specific and
can control quality
-Expensive and time
consuming

Question 41

Define the two types of secondary data.

Answer 41

-Internal:
Financial statements, research reports, files, customer letters, sales calls reports, and customer list.

-External:
US Census reports, trade association studies and magazines, and internet based reports.
-Quick and cheap
-Outdated and not specific

Question 42

What are the uses and advantages of secondary data and the 6 criteria for evaluating it?

Answer 42

Uses:
-Identify the problem.
-Better define the problem.
-Develop an approach to the problem.
-Formulate an appropriate research design.
-Answer certain research questions and test some hypotheses.
-Interpret primary data more insightfully.

Critera:
Specifications: Methodology used to collect the data.
Error: Accuracy of the data.
Currency: When the data were collected.
Objective: The purpose for which the data was collected.
Nature: The content of the data.
Dependability: Overall, how dependable is the data?

Question 43

What source of secondary data is sufficient for certain research questions? Define your answer.

Answer 43

Published market research data often includes high-level quantitative information, which can assist in market size and share analyses.

These reports, for a fee, can provide a great overview of an industry, including quantitative data you might not find elsewhere related to market size, growth rates, and industry participant market share.

Question 44

Was is the definition of Internal Records and the problem associated with it?

Answer 44

Data that originated within the organization. Or data that was created, recorded, or generated by the organization internally.

Problems with Internal Records:
Data Format Issues - Accounting data is often highly aggregated data for summary results. And marketing decisions require an understanding of customer behavior and often needs the disaggregated, raw data to operate best.

Data Quality Issues - Reports of salespeople’s call activities can be exaggerated if salespeople’s evaluation is based on them

Question 45

Define Standardized Sources of Marketing Data:

Answer 45

syndicated sources that normally consist of data that have been collected and compiled according to some standardized procedure. And data is primarily provided by external sources as a result of their analysis and studies conducted

Question 46

6.2 - What are the five standardized sources of data?

Answer 46

Syndicated Services
Retail Store Audits
Consumer Panel Data
Scanner Data
Media Standardized Sources

Question 47

6.3 - Define Syndicated Data: (⅕)

Answer 47

Companies that collect and sell common pools of data of known commercial value designed to serve a number of clients.

-Syndicated sources can be classified based on the unit of measurement (households/consumers or institutions)

-Household/consumer data may be obtained from surveys, diary panels, or electronic scanner services.

-Institutional data may be obtained from retailers, wholesalers, or industrial firms.

Question 48

Define Retail Store Audits: (⅖)

Answer 48

Used to measure a retailer’s effectiveness and efficiency. Gather the information that can improve your business and your bottom line. They tell you about inventory, shelf prices, display space, special displays, and in-store promotion activities.

-Example: Every two months, a team of auditors from a research firm visits a sample of stores to count the inventory on hand and record deliveries to the store since the last visit.

-Benefits: Measure a retailer’s effectiveness and efficiency. Gather information that can improve your business and your bottom line.

Question 49

Define Consumer Panel Data & list the Advantages and Disadvantages: (⅗)

Answer 49

The records of all consumer purchases over time.
-Retail audits data can’t be linked to household (consumer) characteristics.

Benefits:
-Provide information on aggregate sales activity, forecast sales, brand shares, shifts in buyer characteristics, types of retail outlets.
-Provide sequence of purchases in order to analyze, heavy buyers and their characteristics, brand-switching rates and the extent of loyal purchases, cumulative market penetration and repeat purchase rates for new products, and promotion effectiveness

Limitations:
Selection bias, high refusal rates, lack of representativeness of the entire population, under-represent minorities, mortality effect, dropout rate in excess of 20% annually, testing effects, new members report unusual levels of purchasing, and missing purchases

Question 50

6.6 - Define Scanner Data and provide an example: (⅘)

Answer 50

Universal Product Code (UPC) scanner system provides data of behaviors in individual households and the impact of marketing activities on sales/revenue.

-Benefits:
High degree of accuracy, time saving, and provides the ability to study very short time periods of sales activity.

-Applications:
Study customer behavior and customer response to different marketing mix strategies (Price, product, place, promotion), and study the forecast sales of new products.

-Example:
What did Wal-Mart stock before the Hurricane?
“We didn’t know in the past that strawberry Pop-Tarts increase in sales, like seven times their normal sales rate, ahead of a hurricane, and that the pre-hurricane top-selling item was beer

Question 51

What are the 4 Media Standardized Sources? (5/5)

Answer 51

Nielsen Television Index (NTI): National TV audiences

Nielsen Audio: Both regional and national radio and podcast.

Starch Scores: Print media

Simmons Multi Media Services: Magazine, TV, newspaper, and radio.

Question 52

Know the Applications of Standardized Data:

Answer 52

Measure Promotional Effectiveness = Scanner Data & Consumer Panels

Measure Ad Exposure Effectiveness = Starch Scores, Nielsen Audio, Multimedia Services, & NTI

Measure Product Sales & Market Share = Scanner Data, Consumer Panels, & Internal Records

Estimate & Evaluate Models = Consumer Panels, Retail Audits, Scanner Data, & Internal Records