Dr. Chen, Principle of Marketing Part 2 Part 2 MARKET RESEARCH AND TARGET MARKETS.

Dr. Chen, Principle of Marketing

Part 2MARKET RESEARCH AND TARGET MARKETS


4: Marketing Research and Information Systems

5: Target Markets: Segmentation and Evaluation


Chapter 4Marketing Research and

Information System

Professor Jason C. H. Chen, Ph.D.

School of Business Administration

Gonzaga University

Spokane, WA 99258

[email protected]

Dr. Chen, Principle of Marketing4

Marketing Applications


2. After observing customers’ traffic patterns, Bashas’ Markets repositioned the greeting card section in its stores, and card sales increased substantially. To increase sales for the following types of companies, what information might marketing researchers want to gather from customers?

a. Furniture stores b. Gasoline outlets service stations c. Investment companies d. Medical clinics


A sample of variety of ideas. Furniture stores:

traffic patterns; online research habits; responses to different payment options; responses to different promotions

Gasoline outlets service stations: traffic patterns; impulse purchase habits

Investment companies: the amount of personal contact desired by customers;

responses to different service packages

Medical clinics: reasons that customers choose to see a doctor or to not

seek medical help; responses to different payment options


5. You work as a marketing researcher for a manufacturer of energy drinks. Your company is designing a new product that will be targeted at college and university students. In order to learn more about energy drink consumption habits, the company plans to conduct a survey of the target market. After conducting some research, you determine that the best survey method that fits your firm’s budget is a mail survey. You know from past experience that the response rate for mail surveys is approximately 10 percent. Your manager tells you that he wants at least 550 completed surveys in order to make an informed decision. You also know that approximately 14 percent of respondents who mail surveys back to you fail to answer certain questions. Your manager tells you that he wants at least 550 completed surveys in order to make an informed decision. Given the low response rate and the rate of unfinished surveys, how large will the sample size need to be to comply with your manager’s request? With this estimated response rate and the number of surveys that the company plans to distribute, do you feel that this sample will be representative of the entire population of college and university students?


This is an example of the type of question that marketing researchers face. The logic and math behind this question is usually taught in a marketing research course, so we suggest using a survey random sample calculator like the one available at

http://custominsight.com/articles/random-sample-calculator.asp.

With a 10 percent response rate, you would need to send out 5500 surveys. However, 14 percent (77) of those will be incomplete. You would need to send 5577 surveys to comply with your manager’s request.

(77) = 14% x 550 with 100 confidence factor

http://custominsight.com/articles/random-sample-calculator.asp

http://custominsight.com/articles/random-sample-calculator.asp


#1. 100% Confidence shall be: _______ 77

#2. 5500 +77 shall be: _______ 5577


According to the National Center for Education Statistics, there were 20.4 million college students in 2009. For a 5 percent error rate and 95 percent confidence, you would need at least 384 completed surveys to ensure a representative sample. 550 completed surveys will likely be representative of the entire population of college and university students.


Internet Exercise – ESOMAR (p. 111)

ESOMAR ESOMAR, the European Society for Opinion and

Marketing Research, was founded in 1948. It is a nonprofit association for marketing research professionals. ESOMAR promotes the use of opinion and marketing research to improve marketing decisions in companies worldwide and works to protect personal privacy in the research process. Visit the association’s website at www.esomar.org.

http://www.esomar.org/


1. How can ESOMAR help marketing professionals conduct research to guide marketing strategy?

This information can be found under the “About ESOMAR”

tab. According to the website, “ESOMAR facilitates an on-going dialogue with its 4,900 members, in over 130 countries, through the promotion of a comprehensive program of industry specific and thematic conferences, publications and best practice guidelines.

ESOMAR also provides ethical guidance and actively promotes self-regulation in partnership with a number of associations across the globe.”


2. How can ESOMAR help marketers to protect the privacy of research subjects when conducting marketing research in other countries? This information can be found under Article 7 in the

International code (http://www.esomar.org/uploads/public/knowledge-and-standards/codes-and-guidelines/ESOMAR_ICC-ESOMAR_Code_English.pdf), which is located under the “Knowledge & Standards” tab. It includes standards about collection and use of research data.


3. ESOMAR introduced the first professional code of conduct for marketing research professionals in 1948. The association continues to update the document to address new technology and other changes in the marketing environment. According to ESOMAR’s code, what are the specific professional responsibilities of marketing researchers? This information can be found in the International code, which is located

under the “Knowledge & Standards” tab (#2 ). The code is currently 36 pages long, so be sure to specify how detailed student responses should be. The four basic principles are:

Market research shall be legal, honest, truthful and objective and be carried out in accordance with appropriate scientific principles.

Researchers shall not act in any way that could bring discredit on the market research profession or lead to a loss of public confidence in it.

Market research shall be conducted with professional responsibility and conform to the principles of fair competition, as generally accepted in business.

Market research shall be clearly distinguished and separated from non-research activities


Video Case 4.1 (p. 113)

MARKETING RESEARCH REVEALS MARKETING OPPORTUNITIES IN THE BABY BOOMER GENERATION


Summary This case illustrates how a variety of marketing research

techniques can help marketers meet the needs of a target market. Baby Boomers are a profitable demographic, and with approximately 20 percent of the U.S. population estimated to be 65 years or older by 2030, marketers are beginning to research better ways to market to this population (post World War II, between 1946-1964).

Baby Boomers desire to have a variety of products available to them, and many of the products traditionally thought to belong to the younger generation are actually bought the most by older generations, such as cars and technological products. As they age, Baby Boomers are also creating a market for new products and services.


1. Why are Baby Boomers such a lucrative market? Baby Boomer spending has been increasing, and they

are estimated to have $3.4 trillion in annual buying power. Baby Boomers desire to have a variety of products available to them, and many of the products traditionally thought to belong to the younger generation are actually bought the most by older generations, such as cars and technological products.

With approximately 20 percent of the U.S. population estimated to be 65 years or older by 2030, the spending potential for this market is growing.


2. How has the marketing research process been used to understand how Baby Boomers shop and interact in stores?

Because marketers often target younger generations

of consumers, little thought has been given to how accessible stores and products are for older generations.

Businesses are using marketing research to understand the customer preferences of Baby Boomers, including how they shop, what they desire in products, and how to customize promotions to attract this lucrative demographic.


3. How have stores used marketing research findings to tailor their stores and products to appeal to Baby Boomers?

Many businesses have used marketing research findings to

customize their retail environments and their products. CVS lowered its shelves, made its store lighting softer, and installed magnifying glasses for hard-to-read labels.

Diamond Foods Inc. designed the packaging of its Emerald snack nuts to be more easily opened and decreased the time it takes to rotate the caps to open its products. However, because Baby Boomers don’t like to be reminded that they are getting older, companies avoid directly mentioning how their changes help “aging” consumers.

Dr. Chen, Principle of Marketing Part 2 Part 2 MARKET RESEARCH AND TARGET MARKETS.

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