Marketing communications research (MR, unit 5)

ADVERTISING
usually measured by: MESSAGE DELIVERY, IMPACT, LIKEABILITY. PERSUASION (MILP)
success measured against objectives: awareness, attitudes, donations
CREATIVE DEVELOPMENT RESEARCH
Use qualitative techniques to feed into ideas or check understanding e.g. storyboards, roughs

PRE-TESTING

• predictive research
• measured quantatively against set criteria
• done via 'hall/studio tests' - audience shown with cluster of adverts with TV programme, or in portfolio of folders with others
• specialist agencies have normal values used to benchmark

TRACKING STUDIES
Buy into omnibus surveys which monitor pre-& post-advertising variables over time

• measure brand/product awareness (prompted and unprompted recall)
• attitudinal change
• imagery association

Panel surveys (barcode machine in homes to monitor purchases & switching)

COMMUNICATIONS RESEARCH - not just advertising

• Sales research - selling costs for different customers, is personal selling more effective
• Sales promotion research - what extra sales resulted from promotional spend? levels of retention post-promotion, what % to spend customer/trade?
• PR/publicity research - how to effective compared with others, how to measure attitudinal change, how much attention do people pay to editorial?

Distribution research (MR, unit 5)

Addresses...

• timeliness of distribution channels
• distribution options available
• profitability of various methods

Is distributor favouring own-brands or competitors in terms of shelf space

Price research (MR, unit 3)

WHY RESEARCH PRICE?

• use competitive pricing & offers as reference points
• calculate elasticity of demand (anticipated sales volumes based on price)
• benchmark product in market
• maximise profitability (identify more profitable customers & segments)

PRICE SENSITIVITY - varies considerably e.g. business traveller v. family on holiday

• customers have concept of 'just price'
• will search for info prior to purchasing, but forget soon after
• will buy a bargain without paying attention to need or actual price

PRICE PERCEPTION - can react to price increases by buying!

• expect more increases so stock up
• assume higher quality
• 'snob' appeal

FACTORS AFFECTING PRICING DECISIONS Intermediaries' objectives - conflict can arise between suppliers & intermediaries
Suppliers - may seek rise in price of supplies if they see products rising
Competitors' actions & reactions - petrol move in unison, supermarkets in price wars

Inflation - may rise, in periods of inflation, to maintain real prices (supplies, labour will increase)
Income effects - rising incomes means price is less important variable and vice versa

New product pricing - difficult as no reference points, find alternative references in another market
Multiple products - range of interrelated products means you can use 'loss leaders'. One product at very low price makes consumers buy others in range with higher price margins e.g. razors & blades. Supermarket own-brand.
Quality connotations

More product: attitude measurement & buyer motivation (MR, unit 5)

ATTITUDE MEASUREMENT

predisposition to act in a particular way

3 components:

• Cognitive - think, what they know or believe
• Affective - feel, emotional
• Conative - do, how disposed to behave

Measured using scaling techniques: Likert & Semantic differential scales

BUYER MOTIVATION
Motivation research techniques: in-depth interviews, focus groups, projective techniques
Patronage motives influence regular purchase (e.g. price, service, location, honesty)

Category management & product testing (MR, unit 5)

CATEGORY MANAGEMENT

managing categories as strategic business unit

categories are distinct groups that customers see as related or substitutable e.g. tinned veg
based on analysis of consumer data, EPOS, market research

PRODUCT TESTING
the evaluation and development of products from a marketing perspective

Consider (MMTTS):

• Management information required - what do they need? Concern re mixture of colour & shape, or decision whether to invest more?
• Market which it will sell in
• Type of product being tested - how new, how easily accessed
• Time & cost
• Need for standardisation - experienced researchers & comparable results

Differences between test centres:

• Sample size - weigh up cost and data reliability
• Type of people testing - current brand users, current product field users, current and potential users, cross-section of general population
  
• Type of test

• Monadic - one product to evaluate
• Comparative - two or more to compare (use for new product formulation)
• Sequential - one, wait, try second, then give opinion
• Conjoint - focuses on product features rather than identifying best
  
• Analysis techniques used on data will vary
  

Product Life Cycle (research, MR5)

useful model for marketing planning & control, difficult to predict precisely

3 areas:

• Product class - broad generic category e.g. cars (long maturity)
• Product form - e.g. 5-door hatchback, 2-seater sports (classic PLC)
• Brand/make - Ford, Vauxhall (erratic)

Classic:

RELEVANCE OF PLC TO PLANNING & CONTROL
Assess:

• Product's stage of life cycle
• How much longer product will contribute significantly to profits
• When new products need to launch in order to prevent cashflow problems (new products need to generate profit before cash cows enter decline)

So must regularly review existing products and analyse their future through:

• analysis of past sales and profit trends
• history of other products
• market research
• competitor analysis

Then either continue selling, prolong (modify, increase advertising, cut costs, increase promotion), or stop.

Product research (MR, unit 5)

market oriented research & development
examines the product & customer's reactions to it

PROCESS OF PRODUCT RESEARCH

Screening new ideas for:

• low profit potential/insufficient market potential
• high cost & high risk
• do not conform to organisational objectives
• require too many resources to produce & distribute

If passes screening, test market in selected areas but beware of leaks to competitors.

Reviewing the product range (VPS)

• Variety reduction - insufficient sales or need to reduce costs
• Product diversification - introduce new items & wide range of products (good for image)
• Segmentation - secure new customer class for an existing range

Potential sales, concentration ratios and more (MR, unit 5)

Research into potential sales

Estimates the part of the market within possible reach of a product

Decision to exploit sales potential depends on the cost of sales promotions and selling, which are required to realise that potential.
The market is dynamic & market research should reveal changing situations

Potential depends on:

• how essential to customers
• is it a durable commodity with postponable purchase?
• size of possible market
• competition

Other aspects to investigate;

• inc. or dec. demand in a market segment
• inc. or dec. demand in a geographic area
• timing of demand (cyclical/seasonal)

Concentration ratios
Express market research is to assess % of market held by top firms e.g. top 3 have 60%, top 5 have 68%, top 10 have 85%

Market research

About customer attitudes and behaviours. Based on mathematical and statistical techniques to reduce uncertainty.

MARKET FORECASTS & SALES FORECASTS
Always undertake together
Market forecast carried out first and over longer period

MARKET FORECAST - mainly assessing environmental factors outside org control which affect demand
3 components:

• Economic review - national economy, govt policy, population, GNP
• Specific market research - data about specific markets, forecasts about demand
• Evaluate total market demand for firm & similar products - profitability and market potential

SALES FORECASTS - estimate sales of product...

• in a future period
• at a given price
• using stated promotional materials (which will cost a given amount)

Factors: product life cycle, extent of competitors, performance of major products, sales promotions, categories of customer
Expressed in: volume, value & profit

Research proposals

Prepared by research agencies (similar structure to brief but more detailed)

BOAR

• Background - sets out agency's understanding of organisation, products, marketplace; research rationale; you understand task (6 marks)
• Objectives - same as in brief but more defined; clarify & broaden; form a case; may point to agency's knowledge of research techniques (12 marks)
• Approach & method - how do you spend money to meet research objectives; types of research (Q or Q); method; scope; incentives (16 marks)
• Report - how final info presented, if interim reports available (4 marks)
• Timings - (2 marks)

45 mins: B 7mins; O 13mins; A 20mins; R 4mins; T 1min

The research brief

Brief prepared by commissioning organisation
1a of exam (10 marks)

BOOR

• Background & rationale - relevant information about organisation, products, market place; why we need info and what we intend to do with it (3 marks)
• Objectives - precise information that relates to rationale (2 marks)
• Outline method - brief, e.g. scale of search, mix of qualitative & quantitative, what segments to target (3 marks)
• Report - how to be presented (1 mark)
• Timing - impacts on scale & type of info (1 mark)

15 mins: B 4.5, O 3, O 4.5, R 1.5, (T)1.5