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 .

Questions

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.