Ch. 1-The Role of Marketing Research in Management Decision Making

marketing
the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.
marketing concept
A business philosophy based on (1) a consumer orientation, (2) a goal orientation, (3) a systems orientation.
consumer orientation
means that firms strive to identify the people (or firms) most likely to buy their product (the target market) and to produce a good or offer a service that will meet the needs of target customers most effectively in the face of competition.
goal orientation
A focus on the accomplishment of corporate goals; a limit set on consumer orientation.

E.g.: The goals of profit-making firms usually center on financial criteria, such as a 15% ROI.

systems orientation
The creation of systems to monitor the external environment and deliver the desired marketing mix to the target market.
marketing mix
the unique blend of product/service, pricing, promotion, and distribution strategies designed to meet the needs of a specific target market.

this must be altered because of changes in the environment in which consumers and businesses exist, work, compete, and make purchasing decisions.

marketing research
the planning, collection, and analysis of data relevant to marketing decision making and the communication of the results of this analysis to management.

Virtually, marketing research is conducted to better understand the market, to find out why a strategy failed, or to reduce uncertainty in management decision making.

Marketing research can be viewed as playing with 3 functional roles?
(1) descriptive, (2) diagnostic, and (3) predictive.
descriptive function
the gathering and presentation of statements of fact.
diagnostic function
the explanation of data or actions.
predictive function
specification of how to use descriptive and diagnostic research to predict the results of a planned marketing decision.
return on quality
a management objective based on the principles that (1) the quality being delivered is at a level desired by the target market and (2) the level of quality must have a positive impact on profitability.
marketing strategy
a plan to guide the long-term use of a firm’s resources based on its existing and projected internal capabilities and on projected changes in the external environment.
applied research
Research aimed at solving a specific, pragmatic problem-such as better understanding of the marketplace, determination of why a strategy or tactic failed, or reduction of uncertainty in management decision making.

Undertaken by business because it is cost-effective and of demonstrable value to the decision maker vs. basic research.

basic, or pure, research
research aimed at expanding the frontiers of knowledge rather than solving a specific, pragmatic problem.

Basic research is conducted to validate an existing theory or learn more about a concept or phenomenon. Mostly conducted in universities.

Marketing research studies can be classified into 3 broad categories…
(1) programmatic, (2) selective, (3) evaluative
programmatic research
Research conducted to develop marketing options through market segmentation, market opportunity analyses, or consumer attitude and product usage studies.
selective studies
Research used to test decision alternatives.
evaluative research
research done to assess program performance.

it includes tracking advertising recall, doing organizational image studies, and examining customer attitudes on a firm’s quality of service.

Manifest variables
observable, objective; the subject can and will share. e.g. what color is the car that you drive?
Latent variables
hidden, subjective; subject may not want or be able to share. e.g. are you an alcoholic? what is the avg # of books you read in a yr?
Institutions involved in Market Research
Level 1-Ultimate users
Level 2-Intermediate users
Level 3-Research designers & suppliers
Level 4-Field service firms
Level 5-Independent specialty support
Level 6-All others, incl. govt & universities.