Ch 1 - Role of Research in Business Decision Making

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Ch 1 - Role of Research in Business Decision
Making

• Understand the marketplace and identifying
  problems and opportunities (SWOT).
• Diagnosis and Assessment.
• Selecting and Implementing a course of Action
  (Improved decision making).
• Monitor/Evaluate performance and correct errors.

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• Development of a Marketing Plan and the kind of
  research required at each step.

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Marketing Plan.

• Analysis of the environment.
• Market segmentation and selection of a Target
  Market.
• Positioning and development of the marketing mix.
• Implementation and control.

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Analysis of the Environment.

• Internal environment - strengths and weaknesses
  of the firm.
• External environment - Market/Competitive,
  Economic, Political/legal, technological,
  socio-cultural environments.
• SWOT analysis.

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Market Segmentation and Target Market(s).

• Basis for segmentation - Demographic,
  Psychographic, Geographic. etc.
• Characteristics of consumers in each segment.
• Competitive activity in each segment.
• Unfulfilled need.

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Positioning and Dev. of a Marketing Mix.

• Overall positioning and 4 Ps.
• Focus on the target market.

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Implementation and Control.

• Scheduling, Budgeting, assignment of
  responsibility.
• Evaluation and correction of errors.

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• Research Requirements at each stage.

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Analysis of the Environment

• Mostly secondary research on internal and
  external environments.
• Some Primary research.
• External - Industry analysts, Syndicated
  agencies, Government agencies, Trade
  associations, other published (or web) data .

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Examples of External Research.

• Forecasting.
• Business and industry trends.
• Market share analysis.
• Inflation and pricing studies.
• Studies of Global Environments.

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Examples of Internal Research.

• Sales Invoices.
• Accounting Records.
• Previous Market Research.
• Consumer databases.
• Portfolio analysis.
• Employee productivity.

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Market Segmentation and Target Market(s).

• Starting with mostly secondary research.
• Especially if mature market.
• E.g., Market segmentation, market share analysis,
  market potentials, market characteristics, etc.

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Market Segmentation and Target Market(s).

• Moving towards more primary research as we focus
  on a target market
• Buyer characteristics, perceptions, attitudes,
  purchase intentions etc.
• Surveys, focus groups, observation, etc.

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Positioning and Dev. of a Marketing Mix.

• Mainly Primary Research.
• Surveys, focus groups, observation, Experiment,
  Advertising research, etc.
• Alternative courses of action.
• New product concept tests, test market studies.

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Implementation and Control.

• Mainly Primary Research.
• E.g., Establishment of sales quotas, territories
  Effectiveness of various promotional methods
  Sales analysis Customer satisfaction studies
  etc.

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Applied vs. Basis Research.

• Basic Research attempts to expand the limits of
  knowledge. It does not directly involve the
  solution to a particular pragmatic problem.
• Applied Research is undertaken to answer
  questions about specific problems or to make
  decisions about a particular course of action or
  policy.

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BASIC RESEARCH EXAMPLE

• Is executive success correlated with high need
  for achievement?
• Are members of highly cohesive work groups more
  satisfied than members of less cohesive work
  groups?
• Do consumers experience cognitive dissonance in
  low-involvement situations?

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APPLIED RESEARCH EXAMPLE

• Should McDonalds add Italian pasta dinners to
  its menu?
• Business research told McDonalds it should not.
• Should McDonalds add a Whopper Stopper burger
  to its menu?
• Now being researched.

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Types of Research.

• Exploratory.
• Descriptive.
• Causal or Predictive.

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Determining When to Conduct Business Research

• TIME CONSTRAINTS
• AVAILABILITY OF DATA
• NATURE OF THE DECISION
• BENEFITS VERSUS COSTS

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Determining When to Conduct Business Research
Availability of Data
Benefits vs. Costs
Conducting Business Research
Time Constraints
Nature of the Decision
Is sufficient time available before a
managerial decision must be made?
Is the infor- mation already on hand inadequate
for making the decision?
Is the decision of considerable strategic or
tactical importance?
Does the value of the research
information exceed the cost of conducting
research?
Yes
Yes
Yes
Yes
No
No
No
No
Do Not Conduct Business Research
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Reasons for not Conducting Research.

• Lack of resources.
• Research Results would not be useful.
• Decision has already been made.
• Managers cannot agree on info. required

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