Marketing research techniques Flashcards
Total store sales is affected which two things
1) number of transactions
2) average euro/krona/dollar per transaction
From where does the ‘art’ of making market-related decisions come from?
Marketing-related decisions are based on intuition, the anticipation of new emerging trends, experience and judgement
From where does the ‘science’ of making market-related decisions come from?
Markets and marketing activities generate a lot of valuable information that allow for a rationale decision making
What are five common research approaches in market research and what do they in short entail?
1) Observational Research -Goal is to immerse the researcher into customers’ life to uncover unarticulated desires, meanings or behaviour. Bad because observations might be interpreted wrong, Eg if there is an unexpected thunder store everybody comes in the store –> not the reality. Also the person who gets observed might get suspicious and change behavior, observer applies bias. Expensive, limited information.
2) Focus groups - Assembling a small group of individuals with intention to discuss in-depth various topics of interest, use of moderator. Mainly for exploration. Limited generalisability, difficult to replicate.
3) Surveys - Leraning about peoples’ knowledge, beliefs, preferences and to measure magnitude thereof in population. You should ask ‘the right people’, so pay attention who answers the survey. E.g. if they like bio markets course, you should ask the people who have attended the course and not anyone else. Low response rates, potential survey errors and measurement errors.
4) Behavioral & Big data - customers leave traces of purchasing behaviour (e.g. customer databases, in store scanning data), subsequent (big) data analytics to identify patterns. May violate customer privacy, difficult to handle.
5) Experimental Research - capturing cause-and-effect relationships by eliminating interfering factors. Most reliable insights (but limited generalisability). Often artificial, ethical concerns, costly.
What are the two different categories of sampling in survey research?
1) Probability sample
2) Non-probability sample
What are the different types of probability sample?
- Simple random sample - every member of the population has an equal chance of selection
- Stratified random sample - The population is divided into mutually exclusive groups (such as age groups) and random samples are drawn from each group
- Cluster (area) sample - The population is divided into mutually exclusive groups (such as city blocks) and the researcher draws a sample of the groups to interview
What are the different types of non-probability sample?
- Convenience sample - the researcher selects the most accessible population members
- Judgement sample - the researcher selects population members who are good prospects for accurate information
- Quota sample - the researcher finds and interviews number of people in each of several categories
What is a conjoint analysis and what is an advantage?
A form of statistical analysis that firms use in market research to understand how customers value different components or features of their products or services. Potential customers are presented different combinations of product characteristics and asked to indicate their preferred one. E.g. smartphones (apple, Sony, Nokia –> price+operating system+screen size+camera resolution).
Advantage is the similarity to actual buying situation and that consumers do not need to make explicit statements about their most important criteria.
What is meant by decomposing the market demand?
Imagine the Russian doll, it fits several smaller dolls which in this case represent the different markets and by taking the ‘dolls’ a part you are decomposing the market.
From ‘biggest’ to ‘smallest’:
Potential market: set of consumers with a potential interest in a market offer
Available market: set of consumers with interest, income and access to a particular offer.
Target market: part of the available market the company decides to pursue
Penetrated market: set of consumers buying the company’s product
Besides this there is also levels to consider:
Space level: customer, Territory, region
Product level: all sales, industry sales, company sales, product line sales, product form sales, product item sales
Time level: short run, medium run, long run
How can the current demand (total market) be calculated?
The chain ratio method:
demand = population X % X % X %…..
AKA
Starting with a base number (population) and adjusting it for several percentages that reflect relevant sub-groups/segments. Overall outcome depends on accuracy of shares at every s page, errors magnify multiplicatively.
OR
The market-buildup method:
A method of calculating an industrial market’s revenue potential by recognizing the number of probable purchasers in the market and each purchaser’s requirements. Relying on formal (sub)sector definitions to measure demand. Easy to gather though databases such as ORBIS/OSIRIS. But not all firms report accurately their sales de-composed by market segment
Does marketing actions affect the value of the firm?
Yes, see slide 19 (lecture 6) on the chain of marketing productivity
What kind of indicators are there at various levels?
1) Corporate Financial metrics
2) Customer Metrics
3) Advertising/Promotion metrics
4) Product/Offering metrics
5) Direct Marketing metrics
6) Digital/social metrics
7) Salesforce & distribution metrics
1-3 are the ones we are focusing on
What are some firm performance measurements that can be used in consideration to financials and accounting?
- Sales growth
- Market value & market-to-book-value (Q)
- Return of equity (RoE)
- Return of Assets (RoA) –> maybe used the most to measure corporate success
- Return on Investment (ROI)
COGS stands for …. and is
Cost of Goods Sold and is manufacturing costs
SGA stands for
Selling, General and Administrative Expenditures
How do you calculate net income (explained simple)?
Sales + other income - operating expenditures (SGA, COGS, R&D) - depreciation - interests
