Developing the market research plan

In this article we are discussing the MR plan with an example of American Airlines exclusive facility.

Problem, the decision alternatives, and the research objectives

Marketing management must be careful not to define the problem too broadly or too narrowly for the marketing researcher. A marketing manager who instructs the marketing researcher to “Find out everything you can about first-class air travelers’ needs,� will collect a lot of unnecessary information.

One who says, “Find out if enough passengers aboard a B747 flying direct between Chicago and Tokyo would be willing to pay $25 for an Internet connection so that American Airlines would break even in one year on the cost of offering this service,� is taking too narrow a view of the problem. The marketing researcher might even raise this question: “Why does the Internet connection have to be priced at $25 as opposed to $10, $50, or some other price? Why does American have to break even on the cost of the service, especially if it attracts new users to AA?�

In discussing the problem, American’s managers discover another issue. If the new service were successful, how fast could other airlines copy it? Airlines marketing research is replete with examples.

The marketing manager and marketing researcher agreed to define the problem as follows: “Will offering an in-flight Internet service create enough incremental preference and profit for American Airlines to justify its cost against other possible investments American might make?.’ To help in designing the research, management should first spell out the decision it might face and then work backward.

Suppose management spells out these decisions:

1. Should American offer an Internet connection?
2. If so, should the service be offered to first-class only, or include business class, and possibly economy class?
3. What price (s) should be charged?
4. On what types of planes and lengths of trips should it be offered?

Now management and marketing researchers are ready to set specific research objectives:

1. What types of first-class passengers would respond most to using an in-flight Internet service?
2. How many first-class passengers are likely to use the Internet service at different price levels?
3. How many extra first class passengers might choose American because of this new service?
4. How much long-term goodwill will this service add to American Airlines’ image?
5. How important is Internet service to first class passengers relative to providing other services such as a power plug, or enhanced entertainment?

Develop the Research Plan

The second stage of marketing research calls for developing the most efficient plan for gathering the needed information. The marketing manager needs to know the cost of the research plan before approving it. Designing a research plan calls for decisions on the data sources, research approaches, research instruments, sampling plan, and contact methods.