Case Study - Research Process
Tomzak and Hale inc was a medium sized marketing research firm located in a large mind western city. Bob Lynn a marketing vice president with a large cigarette firm told jim tomzak he was going to authorize research to investigates the markets response to two new cigarette brands being introduced by two major competitors of Mr. Lynn firm. Both of the new brands of cigarettes were beings introduced in the states surrounding the city in which tomzak and hale inc was located.
Lynn total tomzak that both new brands would contain 25 cigarettes in each pack instead of the traditional 20. A newly introduced brand called century was being promoted with the theme. Taste that delivers in the money saving 25 pack. Another large competitor was about to introduction the Richland 25 brand and to promote it with the theme. Taste the good times five extra times a pack Lynn expected that both brands would be priced the same as brands containing the traditional 20 cigarettes. On a price pr cigarette basis such a practice would have the effect of a 20 percent price reduction.
The cigarette industry traditionally has competed on a non price that is all brands were price the same several years earlier however a number of food and drug store chains had begun to sell generic or no name cigarettes priced 10-15 cents less per pack or approximately $1.50 less per cartoon than branded cigarettes.
Once cooperative wholesaler began distributing generic cigarettes in 30 states. While the wholesaler indicated that the cigarettes were only moderately successful a number of supermarket operators reported being very pleased with the sales of generic cigarette. Some supermarkets reported that generic cigarettes were accenting for as much as 10 -15 percent of their total cigarette sales.
The federal excise tax on cigarettes had doubled at the beginning of the current year as a result smokers were paying an additional 10 cents a pack or eve more for cigarettes. A number of industry experts felt that the price increases would result in a 2 -4 percent decline in industry sales. Currently generic cigarettes accounted for about 2.5- 3.0 percent of industry sales and some industry observers thought this percentage was likely to increase.
Many industry officials felt that generic cigarettes were not as popular as they might be because in part they did not have a favourable image among smokers. It was commonly believed in the industry that a cigarette brands image was in important factor in the brands acceptability. Lynn thought that the two new 25 pack brands were attempts to attract smokers who were concerned with the increasing price of cigarettes by offering lower price cigarettes which had a more favourable image than did generic cigarettes.
Since both new brands were being introduced in the states surrounding the city in which tomzak and hale. Inc was headquartered, Lynn had contacted tomzak because of his firm advantageous location. After having heard the information described above tomzak agreed that he would submit a written proposal for marketing research that would help Lynn company determine what actions if any they could take n response to the new development .
a.What kind of research situation do the two new brands present for Mr. Lynn company?
b.What objectives should be specified for any research which might be undertaken?
c.What information would be needed in order to achieve the research objectives ?
d.Describe the marketing research project that tomzak should propose to Lynn and explain why you think that it is the best project to use.