MarketingManagement.pdf

■ Using the Internet:A company can collect considerable information at very little
cost by examining competitors’ Web sites, monitoring chat rooms, and accessing
published data.

■ Checking out rivals: Many small companies routinely visit their competitors. Tom
Coohill, a chef who owns two Atlanta restaurants, gives managers a food al-
lowance to dine out and bring back ideas. Atlanta jeweler Frank Maier Jr., who
often visits out-of-town rivals, spotted and copied a dramatic way of lighting dis-
plays.^12

Companies normally budget marketing research at 1 percent to 2 percent of com-
pany sales. A large percentage is spent buying the services of outside firms. Market-
ing research firms fall into three categories:

■ Syndicated-service research firms:These firms gather consumer and trade informa-
tion, which they sell for a fee. Examples: Nielsen Media Research, SAMI/Burke.

■ Custom marketing research firms:These firms are hired to carry out specific proj-
ects. They design the study and report the findings.

■ Specialty-line marketing research firms:These firms provide specialized research
services. The best example is the field-service firm, which sells field interviewing
services to other firms.

THE MARKETING RESEARCH PROCESS

Effective marketing research involves the five steps shown in Figure 1-11. We will il-
lustrate these steps with the following situation:

American Airlines is constantly looking for new ways to serve its passengers. One

manager came up with the idea of offering phone service. The other managers got

excited about this idea. The marketing manager volunteered to do some preliminary

research. He contacted a major telecommunications company to find out the cost

of providing this service on B747 coast-to-coast flights. The telecommunications

company said that the equipment would cost the airline about $1,000 a flight. The

airline could break even if it charged $25 a phone call and at least 40 passengers

made calls during the flight. The marketing manager then asked the company’s mar-

keting research manager to find out how air travelers would respond to this new

service.

Step 1: Define the Problem and Research Objectives
Management must not define a problem too broadly or too narrowly. A marketing
manager who tells the marketing researcher, “Find out everything you can about air
travelers’ needs,” will collect a lot of unnecessary information. Similarly, a marketing
manager who says, “Find out if enough passengers aboard a B747 flying between the
East Coast and West Coast would be willing to pay $25 to make a phone call so that
American Airlines would break even on the cost of offering this service,” is taking too
narrow a view of the problem. To get the information she needs, the marketing re-
searcher could say: “Why does a call have to be priced at $25? Why does American
have to break even on the cost of the service? The new service might attract enough
new passengers to American so that even if they don’t make enough phone calls,
American will make money out of attracting new passengers.”
In discussing the problem, American’s managers discovered another issue. If the
new service were successful, how fast could other airlines copy it? Airline marketing
competition is replete with examples of new services that were so quickly copied by
competitors that no airline gained a competitive advantage. How important is it to
be first and how long could the lead be sustained?
The marketing manager and marketing researcher agreed to define the problem as
follows: “Will offering an in-flight phone service create enough incremental prefer-
ence and profit for American Airlines to justify its cost against other possible invest-
ments American might make?” They then agreed on the following specific research
objectives:

Gathering Information

and Measuring

Market Demand^105

Develop the

research plan

Collect the

information

Define the

problem and

research

objectives

Analyze the

information

Present the

findings

FIGURE 1-11

The Marketing Research Process