Chapter 2

Marketing research

Lecture objectives

After going through this chapter, you should be able to:

explain the role marketing research plays in decision-making in the hospitality industry

identify sources of marketing information available to hospitality organizations

define secondary and primary data collection explain the differences between qualitative and quantitative

research methods recognize how bias and sampling errors can distort marketing

research findings describe how hospitality organizations conduct online research

Introduction

Managers are paid to make decisions The purpose of marketing research is to inform and improve

decision-making by reducing uncertainty Marketing research can be defined as the systematic

gathering and analysis of data to provide relevant information to aid decision-making

Marketing research is a planned process Market research describes the investigation of consumer and

organizational markets Marketing research includes research into all the marketing

mix variables and the macro (PESTE) and micro-environments

International marketing research

Presents unique problems because of the cultural and technological differences between countries:

translation difficulties variations in customer behaviour because of different

cultural backgrounds variations in customers’ product knowledge difficulties in obtaining comparable samples different cultural responses to market research surveys differences in the infrastructure

Marketing information systems

Hospitality managers need relevant, accurate, current and reliable information to be able to make effective decisions that will influence the future of the business

Small, single-unit, owner-operated companies rely on informal approaches to data collection and interpretation

Larger organizations need to develop more sophisticated marketing information systems to ensure

that corporate executives understand complex environment

The marketing information system helps marketers to identify trends and plan for the future

Figure 2.1 The hospitality marketing information system

Sources of information – internal

Internal information is held by the organization Accommodation businesses hold a wealth of

information about customers because of legal requirements

Information sources include: customer records guest history departmental reports marketing and sales reports

Sources of information – external

External information can be collected via the Internet and publications including: international and national government

organizations marketing research organizations publicly quoted companies “Annual Accounts” trade associations hospitality industry trade press financial press universities and academic publishers

Secondary (or desk) data collection

Secondary (desk) data are data that have already been collected It is relatively easy to obtain secondary data since the information

has already been published Limitations to secondary data include:

data have been collected and analysed by another organization

some organizations may deliberately manipulate data other organizations may have inadvertently introduced bias information is generally available to competitors secondary data and analysis can often be ‘dated’ because of

the long time between carrying out the research and publishing

the findings

Primary data collection Primary data consist of original information collected by an

organization for a specific purpose The data have not been published before The organization conducting or commissioning the research

determines the research objectives and research questions Data are collected directly to provide answers to those questions Primary research is usually more costly than the secondary

research Advantages of primary research include the following:

the ability to frame the research questions to the needs of the organization

research is current and not dated research is confidential

Primary data can enable a hospitality company to gain competitive advantage if competitors are not carrying out similar research

Qualitative data

Qualitative research aims to provide a deep understanding of people’s contextualized behaviour

It aims to explain how and why people behave in certain ways

Qualitative research in hospitality uses: observation in-depth interviews focus groups (also known as group discussions) qualitative questions in surveys

Quantitative data

Quantitative research uses a wide range of methods to obtain and analyse numerical data

Quantitative research counts numbers, in terms of either volume or value. For example: the number of customers, passengers, residents,

diners, room nights, room occupancy restaurant unit’s sales; or a hotel chain’s room

sales If data are numeric then the research is

quantitative

Quantitative research

Quantitative research techniques are founded upon statistical theory

Correct statistical methods are required to reduce possible error and bias

Possible errors include: sampling errors respondent errors investigator errors administrative errors

In large surveys, statistical software packages are used to process the quantitative research data

Quantitative research methods

Exit surveys Mystery customer audits Telephone (including mobile phone)

surveys Online surveys Omnibus surveys

Closed and open questions Closed questions provide a number of alternative answers from which the

respondent chooses one answer, for example questions about: respondent’s age, sex, employment, income

Closed questions use a structured format which creates a data set thatcan be efficiently analysed using statistical methods

Closed questions are essential if a quantitative research method is used Open-ended questions allow respondents to provide their own answers Examples include ‘Where would you stay tonight if this hotel was fully booked?’

and ‘How did you feel about the quality of service?’ Open questions allow respondents to use their own words to describe their

experience, feelings and opinions Qualitative research findings using open questions provide ‘rich’ data Researchers usually ask a combination of both closed and open questions and

combine qualitative and quantitative analysis Compare Le Meridien and Malmaison in-room customer questionnaires

Figure 2.2 Le Meridien customer questionnaire

Figure 2.2 (cont) Le Meridien customer questionnaire

Figure 2.3 Malmaison comment card

Marketing research process

There are six steps in the marketing research process:

formulation of research objectives development of a research plan data collection data analysis assess the reliability and validity of data presentation of findings

Online research Advantages of online research include:

significant cost savings in the design and administration of questionnaires and discussion groups

the ability to accurately target surveys to current, former or potential customers

Often, customers are incentivized to participate in online surveys

Post-consumption e-surveys provide customers with a convenient tool to give feedback on service quality and customer satisfaction

Tools such as blogs and social networking sites are useful to obtain unsolicited such for customer- generated comment

The Internet is available to all sizes of hospitality companies

Criticisms of marketing research

Academics and practitioners have criticized modern marketing research for a number of reasons:

the focus on collecting data and performing statistical analysis, which does not provide new insights for the business or inform decision-making

flawed marketing research methodologies that introduce unacceptable levels of bias or error

the emphasis on research stifles creativity in marketing

Despite these criticisms, major hospitality companies recognize the importance of marketing research and carry out extensive customer and competitor research on a continuous basis

References and further reading Altinay, L. and Paraskevas, A. ( 2008 ). Planning Research in

Hospitality and Tourism. Butterworth-Heinemann. Bowie, D. and Buttle, F. (2011)., Hospitality Marketing:

Principles and Practice. Butterworth-Heinemann. Brown, S. ( 2001 ). Marketing: The Retro Revolution. Sage. Chaffey, D., Ellis-Chadwick, F., Johnston, K. and Mayer, R.

(2009 ). Internet Marketing: Strategy, Implementation and Practice ( 4th ed. ). Pearson Education.

Daymon, C. and Holloway, I. ( 2002 ). Qualitative Research Methods in Public Relations and Marketing Communications. Routledge.

Saunders, M. K., Thornhill, A. and Lewis, P. ( 2009 ). Research Methods for Business Students ( 5th ed.). Financial Times/Prentice Hall.

Usunier, J. C. and Lee, J. ( 2009 ). Marketing Across Cultures (5th ed.). Financial Times/Prentice Hall .