The most popular technique for gathering primary data is

Marketing Portfolio

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Chapter 9

Marketing Research

Chapter 9 Decision Support Systems and Marketing Research

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Define marketing research and understand its importance to marketing decision making

Identify steps involved in conducting a marketing research project

Appreciate the profound impact of the Internet on marketing research

Discuss the growth of scanner-based research

Understand when marketing research should be conducted

Apply the concept of competitive intelligence

Learning Goals:

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Chapter 9 Decision Support Systems and Marketing Research

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Goal #1: Define marketing research and understand its importance to marketing decision making

The Role of
Marketing Research

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Chapter 9 Decision Support Systems and Marketing Research

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The Role of
Marketing Research

Marketing research is the process of planning, collecting, and analyzing data relevant to a marketing decision.

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Three Role of
Marketing Research

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Notes:

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Descriptive: What is the historic sales trend in the industry? What are consumers’ attitudes toward a product?

Diagnostic: What was the impact on sales after a change in the package design?

Predictive: “What if questions,” such as how can descriptive and diagnostic research be used to predict the results of a planned marketing decision?

Three Role of
Marketing Research

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Management Uses of Marketing Research

Marketing research can help managers in several ways:

It improves the quality of decision making
It helps managers trace problems
It can help managers serve their customers accurately and efficiently
It helps managers gauge the perceived value of their goods and services, as well as the level of customer satisfaction
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Management’s Uses of

Marketing Research

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Improve the quality of decision making

Trace problems

Focus on keeping existing customers

Understand the marketplace

Alert them to marketplace

trends

Gauge the value of goods

and services, and the level

of customer satisfaction

Chapter 9 Decision Support Systems and Marketing Research

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Goal #2: Identify steps involved

in conducting a marketing

research project

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Steps in a Marketing
Research Project

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Exhibit 9.1
The Marketing Research Process

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Step #1. Identify the Problem

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The Marketing Research Project

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Sources of
Secondary Data

Secondary data is data previously collected for any purpose other than the one at hand.

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Notes:

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Advantages of
Secondary Data

Saves time and money… if it is on target

Aids in determining direction for primary data collection

Pinpoints the kinds of people to approach

Serves as a basis of comparison for other data

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Disadvantages of
Secondary Data

May not give adequate detailed information

May not be on target with the research problem

Quality and accuracy of data may pose a problem

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The New Age of Secondary Information: The Internet

The rapid development of the Internet has eliminated much of the drudgery associated with the collection of secondary data.

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© Cengage Learning Inc. 2015. All Rights Reserved.

Chapter 9 Decision Support Systems and Marketing Research

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Notes:

Gathering secondary data has traditionally been a tedious boring job.
The researcher often had to write to government agencies, trade associations, or other secondary data providers and then wait days or weeks for a reply that might never come.
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Planning the Research Design

Research design specifies which research questions must be answered, how and when the data will be gathered, and how the data will be analyzed.

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Primary Data

DEF: Information collected for the first time. Used for solving the particular problem under investigation.

Advantages:

Answers a specific research question

Data are current

Source of data is known

Secrecy can be maintained
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Disadvantages of
Primary Data

Primary data can be very expensive.

Disadvantages are usually offset by the advantages of primary data.

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Survey Research

The most popular technique for gathering primary data, in which a researcher interacts with people to obtain facts, opinions, and attitudes.

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Forms of Survey Research

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In-home personal interviews: Provide high-quality information, but are expensive because of travel time and mileage costs for the interviewer. Not a popular survey tool in the U.S. and Europe.

Mall Intercept interviews: Conducted in shopping malls or in a marketing research office in the mall. Surveys must be brief. It is hard to get a representative sample of the population. However, probing is possible.

Telephone interviews: Cost less and provide one of the best samples of any traditional survey procedure. Many facilities for telephone interviews utilize computer-assisted interviewing, where information is directly input into a computer application. The federal “Do Not Call” law does not apply to survey research.

Mail Surveys: Benefits are the low cost, elimination of interviews, centralized control, and anonymity for respondents. However, mail questionnaires usually produce low response rates. Consequently, the resulting sample may not represent the surveyed population. However, mail panels, consisting of a sample of households recruited to participate for a given period, yield response rates of 70 percent.

Executive interviews: Involves interviewing businesspeople at their offices regarding industrial products or services. This type of interviewing is expensive, due to the process of finding, qualifying, and interviewing respondents.

Focus groups: A type of personal interviewing, characterized by seven to ten people gathered in a meeting place. The interaction provides group dynamics, with an interplay of responses yielding richer information than individual interviews.

Forms of Survey Research

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Questionnaire Design

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Questionnaire Design

Clear and concise

No ambiguous language

Avoid two questions in one

Avoid leading questions

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Observation Research

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DEF: Observation research is the systematic process of recording the behavioral patterns of people, objects, and occurrences without questioning them.

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Notes

Exhibit 9.4
Observational Situations

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Situation Example
People watching people Observers stationed in supermarkets watch consumers select frozen Mexican dinners; the purpose is to see how much comparison shopping people do at the point of purchase.
People watching phenomena Observer stationed at an intersection counts traffic moving in various directions.
Machines watching people Movie or videotape cameras record behavior as in the people-watching-people example above.
Machines watching phenomena Traffic counting machines monitor traffic flow.
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Observational Research

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Two common forms of “people-watching-people research” are one-way mirror observations and mystery shoppers.

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Social Media and Big Data

Through social media monitoring, a researcher can learn what is being said about the brand and the competition.

Monitoring social media and tracking shopping behavior online are only two inputs into the new era of big data.

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Big data is the exponential growth in the volume, variety, and velocity of information and the development of complex, new tools to analyze and create meaning from such data.

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Ethnographic Research

The study of human behavior in its natural context; involves observation of behavior and
physical setting.

Ethnographic research comes from the field of anthropology and is becoming popular in marketing research. Ethnographers directly observe the population they are studying to gain richer insights into the culture and behavior of people.

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Virtual Shopping

Advantages of virtual shopping:

Creates an environment with a realistic level of complexity and variety.
Allows quick set up and altering of tests.
Low production costs.
High flexibility.
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Experiments

An Experiment is a method a researcher can use to gather primary data.

Experiment Variables

Price

Package design

Shelf space

Advertising theme

Advertising expenditures

Notes:

An experiment is

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Mobile Research

Mobile devices and laptops are being used for all kinds of marketing research. Techniques now employed using mobile devices include:

Location-based surveys
Product scanning during the shopping process
Using cameras on mobile devices to upload digital images and videos
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Once the researchers decide how to collect primary data, the next step is to select the sampling procedures being used. Not all possible users of a new product can be interviewed, therefore, a researcher must select a sample or a subset of the larger population.

The population or universe must first be defined.
Then it is determined if the sample must be representative of the population. If the answer is yes, a probability sample is needed.
The Research Sample

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Sampling Procedure

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Exhibit 9.6 Types of Samples

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Probability Samples

Probability

Sample

A sample in which every element in the population has a known statistical likelihood of being selected.

Random

Sample

A sample arranged so that every element of the population has an equal chance of being selected.

The most desirable feature of a probability sample is that statistical rules can be used to ensure that the sample represents the population.

One type of probability sample is the random sample—where every element of the population has an equal chance of being selected as part of the sample.

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Notes:

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Nonprobability Samples

Nonprobability

Sample

Convenience

Sample

Any sample in which little or

no attempt is made to get a representative cross-section of the population.

A form of nonprobability sample

using respondents who are

convenient or readily

accessible to the researcher.

Convenience sample, such as employees, relatives, or friends. Because of their lower cost, nonprobability samples are the basis of much marketing research.

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Types of Errors

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Collecting the Data

Most primary data is collected by marketing research field service firms.

Field service firms conduct interviews, provide focus-group facilities, mall intercept locations, test product stores, and kitchen facilities to prepare test food products.

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Organizing the Data

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Data is organized using (1) one-way frequency counts, (2) cross-tabulations, and (3) more sophisticated statistical analysis.

One-way frequency tables record the responses to a question and provide a general picture of the study’s results.
A cross-tabulation looks at the associations between certain responses, such as association between gender and product choice.
Organizing the Data

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Analyzing the Data

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The purpose of data analysis is to interpret and draw conclusions from the collected data.

Chapter 9 Decision Support Systems and Marketing Research

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After data analysis is completed, the report is prepared; conclusions and recommendations are communicated to management.

Preparing the Research Report

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The report should be tailored to the audience, beginning with a (1) statement of the problem; (2) description of the research objectives; followed by a brief (3) explanation of the research design. A (4) summary of major findings is next, followed by (5) conclusions drawn; and concluding with (6) recommendations for actions.

Elements the Research Report

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Following Up

Were the recommendations followed?

Was sufficient decision-making information included in the report?

What could have been done to make the report more useful to management?

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GOAL #3: Appreciating the profound impact of the Internet on marketing research

The Profound Impact of the Internet

On Marketing Research

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Impact of the Internet

In the U.S., 245 million people—78 percent of the population—are online, spanning every ethnic, socioeconomic, and educational divide.

More than 90 percent of America’s marketing research companies conduct some form of online research.

Online survey research has replaced computer-assisted telephone interviewing (CATI) as the most popular mode of data collection.

Internet data collection is rated as having the greatest potential for further growth.

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Advantages of
Internet Surveys

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Uses of the Internet by
Marketing Researchers

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Methods of Conducting Online Surveys

Web Survey Systems
Survey Design and Web Hosting Sites
Online Panel Providers
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Advantages of Online
Focus Groups

Ease of use

Better participation rates

Cost-effectiveness

Broad geographic scope

Accessibility

Honesty

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Ease of use: the respondent does not have to do any work to see the stimuli

Better participation rates: Conducted over the course of days, participants less likely to pull out.

Cost-effectiveness: Face-to-face groups incur costs for facility rental, airfare, hotel, food, etc.

Broad geographic scope: Time is flexible online, providing a world-wide respondent pool.

Accessibility: Give access to participants who might otherwise be difficult to recruit.

Honesty: Anonymity makes respondents tend to talk more freely.

Advantages of Online
Focus Groups

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Web Community Research

A carefully selected group of consumers who agree to participate in an ongoing dialogue with a particular corporation.
Web communities:
Engage customers
Achieve customer-derived innovations
Establish brand advocates
Offer real-time results
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Web communities help companies create a customer-focused organization by putting employees into direct contact with consumers, as well as providing cost effective, flexible research.

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Role of Consumer-Generated Media in Marketing Research

Consumer-generated media (CGM) Is that media that consumers generate themselves and share among themselves

CGM comes from various sources: blogs, message boards, review sites, podcasts, and more.

It is trusted more than traditional advertising.

It can be influenced but not controlled by marketers.

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GOAL #4: Discuss the growing importance of

scanner-based research

Scanner-Based Research

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Scanner-Based Research

A system for gathering information from a single group of respondents by continuously monitoring the advertising, promotion, and pricing they are exposed to and the things they buy.
BehaviorScan

InfoScan

Research program that tracks the purchases of 3,000 households through store scanners in each research market

Sales-tracking service for the consumer packaged-goods industry

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Scanner-Based Research

BehaviorScan

With such a measure of household purchasing, it is possible to manipulate marketing variables, such as television advertising or consumer promotions, or to introduce a new product and analyze real changes in consumer buying behavior.

InfoScan

Retail sales, detailed consumer purchasing information (including measurement of store loyalty and total grocery basket expenditures), and promotional activity by manufacturers and retailers are monitored and evaluated for all bar-coded products.

Data are collected weekly from more than 70,000 supermarkets, drugstores, and mass merchandisers.

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GOAL #5: Explain when marketing research should be conducted

When Should Marketing Research Be Conducted?

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When Should Marketing
Research Be Conducted?

Depends on managers’ perceptions of its quality, price, and timing
When the expected value of research information exceeds the cost of generating the information
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Identify customer relationships

Store and integrate
customer data using IT

Capture customer data
based on interactions

Identify best customers

Understand interactions
with current customer base

Leverage customer
information

Exhibit 9.8
A Simple Flow Model of the Customer Relationship Management System

CRM is described as a closed-looped system that builds relationships with customers.

Chapter 21 Customer Relationship Management (CRM)

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The CRM cycle is initiated by identifying customer relationships within the organization.
Next the company must understand the interaction each customer has with the company, building on the initial information collected and developing a useful database.
Based on knowledge of the customer and his/her interaction with the company, the company can then acquire and capture all relevant information about the customer.
Technology plays a critical part in a CRM system. Technology is used to store and integrate customer data.
Not all customers are equally important to a business. Consequently, the company must use data mining to determine its profitable and unprofitable customer segments.
Once the customer data are analyzed, they are leveraged. Data are transformed into information and disseminated throughout the organization—to the right person in the right place at the right time.
Flow Model of the Customer Relationship Management System

Goal #6: Explain the concept

of competitive intelligence

Competitive Intelligence

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Competitive Intelligence (CI)

An intelligence system that helps managers assess their competition and vendors in order to become more efficient and effective competitors.

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Sources of
Competitive Intelligence

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The Nederlander Organization

The Nederlander Organization is at the forefront of using technology to understand its customers and the ways that those theatre-goers purchase tickets. This video clip discusses specific ways the Nederlander Organization collects data and then leverages that information to the benefit of the customer.

CLICK TO PLAY

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Review

The owner of a small chain of local coffeehouses could use _____ to determine why customers do not seem to like the location of her new coffeehouse.

transactional marketing

public relations

an EDI system

market synergy

marketing research

Marketing research has three functional roles. These roles are:

normative, descriptive, and explanatory

predictive, normative, and persuasive

descriptive, diagnostic, and predictive

flexible, interactive, and discovery-oriented

descriptive, explanatory, and predictive

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Review

Volkswagen developed an 18-month-long project to gain a better understanding of the American culture so it could develop cars more appealing to this market. The research project was called Moonraker. Moonraker was intended to play a(n) _____ role in Volkswagen’s marketing research.

a. diagnostic
b. descriptive
c. predictive
d. heuristic
e. demonstrative
Through marketing research, the Boston Symphony Orchestra (BSO) learned it has an older market and is not attracting younger concertgoers. It next conducted marketing research to determine if an integrated advertising campaign targeted to the younger market would be successful. In its second use of research, BSO employed _____ marketing research.

historical

descriptive

predictive

normative

objective

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Review

The first step in the marketing research process is to:

specify the sampling plan

collect the data

analyze the marketplace

plan the research design

identify and formulate the problem/opportunity to be studied

A small brewery has noticed a 20 percent decrease in the sale of its dark beer over the last three years. The company’s owner wants to determine why the decline has occurred and how to reverse the trend. Once the owner has identified the problem as a consumer perception that dark beer is bitter and calorie laden, its next step in the marketing research process should be to:

collect the data

recognize the marketing problem

analyze the marketplace

plan the research design

specify the sampling plan

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Review

Data previously collected for purposes other than the one at hand are an important source of information as the researcher defines the problem. These data are called _____ data.

single-source

secondary

primary

consensual

convenience

Information collected for the first time for the purpose of solving a particular problem under investigation is called _____ data.

primary

secondary

dichotomous

observation

convenience

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Review

When Wilson, a manufacturer of tennis racquets, sent a team of researchers, designers, and tennis pros out to visit with 40 women tennis players of various abilities in locations from California to Florida to find out what women players want in a racquet, what kind of research were they conducting?

Heuristic

Primary

Cohesive

Random

Secondary

What is the chief advantage of primary data?

Low cost compared to secondary data

Answers specific research questions that secondary data cannot answer

Availability to any interested party for use

Accessibility through computerized databases

Avoiding interviewer biases

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Review

Describe survey research and explain how it differs from observation research. Name six popular forms of survey research

Survey research is the most popular technique for gathering primary data. A survey involves the researcher interacting with people to obtain facts, opinions, and attitudes.

Observation research does not rely on direct interaction with people. Popular forms of survey research include (1) in-home personal interviews, (2) mall

intercept interviews (both computer-assisted personal interviewing and computer assisted self-interviewing), (3) telephone interviews, (4) mail surveys, (5) executive interviews, and (6) focus groups.

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Review

Explain how researchers conduct an experiment and discuss the characteristic of a good experiment.

An experiment is a method for gathering primary data. It is characterized by the researcher changing one or more variables (such as price, package design, or advertising theme) while observing the effect of those changes on another variable (usually sales).The best experiments are those in which all factors are held constant except the ones being manipulated. This allows the researcher to observe the changes in the variable of interest.

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Chapter 9 Decision Support Systems and Marketing Research

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Gathering secondary data has traditionally been a tedious boring job.
The researcher often had to write to government agencies, trade associations, or other secondary data providers and then wait days or weeks for a reply that might never come.
Chapter 9 Decision Support Systems and Marketing Research

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An experiment is

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Chapter 21 Customer Relationship Management (CRM)

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