CH-4 Managing Marketing Information – Essentials of Marketing Management : Exam Guide

Chapter 04 Managing Marketing Information True/False Questions 1. A major problem for most managers today is not having enough information. Answer: False Rationale: Marketers scan the environment and accumulate a lot of information. So a significant problem for most managers today is that they have too much information. 2. A market information system is a software package that companies purchase to help decision makers cope with critical information. Answer: False Rationale: A market information system is not a software package, but a continuing process of identifying, collecting, analyzing, accumulating and dispensing critical information. 3. Market information systems serve as a bank where important information is stored until it is needed. Answer: True Rationale: A market information system is an "information bank" where data relevant to the company's marketing efforts are collected and stored until such time as management needs to "withdraw" it. 4. Customers are not a good source of competitor information because they tend to be biased in their opinions. Answer: False Rationale: Customers are excellent sources of competitor information if appropriate research methods are used. 5. The most effective use of market information systems is to identify what problems are currently occurring. Answer: False Rationale: Identifying currently occurring problems is one of the uses of a marketing information system. But it is not the most effective use. The most effective use of market information systems is to proactively address issues before they become a problem. 6. Managers are typically aware of all of the information in their own company. Answer: False Rationale: Managers are often not aware of all the information in their own company and make poor decisions as a result. 7. Secondary data was collected for some other purpose than the problem currently being considered, but has relevance to the current problem. Answer: True Rationale: Secondary data is collected for some other reason than the research project at hand, but holds information that can be used to answer the current research question. 8. Companies have traditionally had formal systems of collecting and analyzing data from the sales force. Answer: False Rationale: Formal systems for collecting data from salespeople frequently do not exist and, when information is collected, it is not made available to everyone. 9. By analyzing demographics, a company can define the "typical" customer but not the market at large. Answer: False Rationale: By analyzing demographics, a company can define not only the "typical" customer but also its market at large. 10. Microeconomics is the study of economic activity by individuals, households and firms. Answer: True Rationale: Microeconomics is the study of individual level economic activity. 11. MSN and Yahoo control the majority of Internet ad placements. Answer: False Rationale: Google and Yahoo (and not MSN) are the controllers of a majority of Internet ad placements. 12. The research problem defines exactly what information is needed to help management make their decision. Answer: True Rationale: Once the management research deliverable has been identified, the next step is to define the research problem which tells what information is needed to help management make their decision. 13. Causal research is useful for identifying characteristics of a target market or determining how customers use a product. Answer: False Rationale: Descriptive (and not causal) research is more appropriate for identifying characteristics of a target market and determining how customers use a product. Causal research tries to discover the cause and effect between variables. 14. Primary data is the data collected for some other purpose than the problem currently being considered. Answer: False Rationale: Secondary data is the data collected for some other purpose than the problem currently being considered. Primary data is the data collected for the research problem currently being examined. 15. The more strategic the decision the greater the need for secondary data. Answer: False Rationale: The more strategic the decision the more important the information and the greater the need for primary data. If the decision is tactical, secondary data will likely be sufficient to make the decision. 16. Results of a focus group are generalizable to a population of interest. Answer: False Rationale: Results of a focus group are not generalizable to a population of interest. Focus groups are not a representative sample, and care should be taken to interpret the results properly. 17. Open-ended questions allow respondents to express themselves freely in their responses, which tend to result in more detailed responses that are useful for exploratory research. Answer: True Rationale: Open-ended questions are often used in exploratory research because of the depth and richness of information the respondent can provide to illuminate the research question. 18. Using the Internet to find secondary data requires careful screening to verify the validity of the data and the credibility of the source. Answer: True Rationale: Researchers must evaluate the validity and the reliability of data found online as the quality of the data used in a research project determines the quality and usefulness of the results. 19. An online focus group is an appropriate alternative to a traditional focus group format, and it offers distinct advantages in terms of convenience and cost-efficiency. Answer: True Rationale: Online focus groups offer distinct advantages in terms of convenience and cost-efficiency by providing data quickly and in a format that is usually easier to read and analyze. They do not require transcribing the spoken words into a transcript as everything is already recorded by computer. 20. Statistical software packages such as SPSS and SAS have made it easier for managers to assess data and conduct sophisticated analyses. Answer: True Rationale: One of the benefits of market research technology is the ability to put powerful statistical software such as SPSS and SAS in the hands of front-line managers. With the proper training and data, it is now possible for managers to conduct analyses that were not possible even five years ago. Multiple Choice Questions 21. A significant problem for most managers today is not having too little information but having too much. Which of the following is required to tackle this problem? A. Search engines B. Information systems C. Logistics management tools D. Order routing systems E. Office automation tools Answer: B. Information systems Rationale: Companies need information systems that can collect and analyze huge amounts of information and then keep it for the right time and circumstance. 22. Hoover's and similar Web sites are good sources of _______________ information. A. Environmental B. Political C. Internal D. Competitor E. Customer Answer: D. Competitor Rationale: Online sites such as Hoover's provide detailed information on thousands of companies, much of it at little or no cost. 23. John Smith is the CEO of Really Big Corporation and Joe Jones is his sales manager. John requires monthly total sales projections while Joe needs weekly sales figures across product lines. This demonstrates the importance of _______________ in a market information system. A. Intelligence B. Knowledge C. Flexibility D. Divisibility E. Intuition Answer: C. Flexibility Rationale: A good market information system is flexible enough for managers to customize the information they receive and, in some cases, the format they receive it in. Thus in this case, the MIS must be flexible enough to generate both, monthly sales projections and weekly sales figures. 24. A company uses its information system to explore ways of reducing the wait time for technical support calls from its customers. In this example, the information system is helping address a _______________ issue. A. Tacit B. Sporadic C. Paradoxical D. Strategic E. Tactical Answer: E. Tactical Rationale: Formal information systems provide a great deal more information that can help guide strategic decisions (changes in demographics can lead to new market opportunities) or address critical tactical issues (shorten call wait times for customer service). 25. Marketing research about competitive packaging, packaging trends, defining brand image descriptors, identifying of brand name/symbol, and package development or redesign are related to the _______________ aspect of the marketing mix. A. Product B. Price C. Place D. Promotion E. Management Answer: A. Product Rationale: Packaging and Branding are key components of the product component of the marketing mix. 26. In order to gather _______________, the sales manager at XYZ Company collects, analyzes, and stores data from the macro environment on a continuous basis. A. Sales data B. Target market information C. Marketing intelligence D. External resources E. Internal projections Answer: C. Marketing intelligence Rationale: Staying connected to the business environment is no longer optional, and as a result, most companies engage in collecting, analyzing, and storing data from the macro environment on a continuous basis known as marketing intelligence. 27. The marketing manager for Ned's Bar and Grill notices that his typical customer is a 21-year-old male college student. He is using _______________ to define his market. A. Stereotyping B. Estimation C. Visual cues D. Demographics E. Instincts Answer: D. Demographics Rationale: Demographics can be defined as the statistical characteristics of human populations, such as age or income, used to identify markets. Here the typical customer is represented as a 21-year-old male college student. 28. Jan Smith, the marketing manager of Big Wheel Autos, has noticed that in many European countries more of the population is moving into urban centers. This has resulted in an increased demand for subcompact cars that can maneuver through these tighter quarters rather than full size automobiles. This is an example of how _______________ can influence marketing management decisions. A. Movement B. Geographic changes C. Economic trends D. External forces E. Environmental factors Answer: B. Geographic changes Rationale: Subcompact cars suit the urban environment. Hence, as more and more people start living in urban centers, which is basically a change in the geographic location, the demand for subcompact cars will keep on increasing. This is an example of how geographic changes can influence marketing management decisions. 29. As the marketing manager for ABC Company, you are charged with developing marketing strategies for an area that is composed of a diverse population from a variety of countries. In order to reach this diverse populace you might want to consider efforts that focus on specific _______________ when generating strategies. A. Income levels B. Educational background C. Age-groups D. Gender E. Ethnic groups Answer: E. Ethnic groups Rationale: Many countries are becoming more ethnically diverse as individuals increase their mobility; the market challenge then becomes developing effective marketing strategies across different ethnicities living in the same area. 30. Concerned by recent negative trends in economic indicators such as the Consumer Price Index, Gross Domestic Product, and inflation, the marketing manager of Kevin's Kayaks recommends that the company reduce its advertising spending. His recommendation is based on _______________ data. A. Microeconomic B. Macroeconomic C. Government D. Numerological E. Incomplete Answer: B. Macroeconomic Rationale: Macroeconomics gives a "big picture" perspective for an economy and indicates broad economic trends. The indicators such as Consumer Price Index, Gross Domestic Product, and inflation, are macroeconomic indicators. 31. Small portable computers, powerful statistical software packages and Internet enabled supply chain management systems are all examples of how _______________ influences marketing. A. Knowledge B. Information C. Economics D. Technology E. Training Answer: D. Technology Rationale: Technology has been one of the major catalysts for change in the marketplace. Faster, smaller, and easier-to-use computers and powerful software facilitate sophisticated analyses right on the desks of front-line managers from anywhere in the world. 32. As the marketing manager of Big Wheel Motors, you notice an increased demand for "green" cars that use less fossil fuel and emit fewer pollutants. The key focus of the consumers who desire these cars is the _______________. A. Style B. Cost C. Natural world D. Competition E. Mileage Answer: C. Natural world Rationale: Two key issues related to the natural world are, scarcity of resources and pollution. A green car that uses less fossil fuel and emits fewer pollutants takes care of both these issues. 33. The marketing manager for Dream Weaver Textiles reads in a trade magazine that the Federal Trade Commission is in the process of revising content labeling requirements for textiles that claim to be natural. This represents the _______________ part of external forces that affect marketing decisions. A. Economic B. Demographic C. Technological D. Political/Legal E. Competitive Answer: D. Political/Legal Rationale: Various government agencies monitor business activity with the help of several laws and regulations. Political judgments and, more broadly, the legal environment significantly affect company decisions and sometimes an entire industry. 34. Since there are so many other companies that operate in the food services industry, the marketing manager of Gourmet Dining pays detailed attention to other restaurants that offer similar meals, prices and services. This focus is based on the _______________ part of external forces that affect marketing decisions. A. Demographic B. Competitive C. Political/Legal D. Technological E. Economic Answer: B. Competitive Rationale: In highly competitive markets, companies are constantly adjusting their strategies to the competition. In this example, the marketing manager would like to know as much as possible about competitors' products and strategies so that he can adjust his own strategies accordingly. 35. _______________ relies on the methodological identification, collection, analysis, and distribution of data in order to discover and solve marketing problems or enhance decision-making. A. Studying B. Market research C. A marketing information system D. Investigating E. Searching Answer: B. Market research Rationale: Market research is the methodical identification, collection, analysis, and distribution of data related to discovering then solving marketing problems or opportunities and enhancing good decision making. 36. As a marketing manager you want to know whether the target market will be receptive to a new advertising campaign. _______________ is the best way to answer this question. A. An Internet search B. Asking employees C. Historical analysis D. Gut instinct E. Market research Answer: E. Market research Rationale: Market research involves methodical identification, collection, analysis, and distribution of data. It can be used for solving marketing problems. 37. The marketing manager for Brand A Razors, a strong national brand, believes he knows how customers will react to a new product offering, but he conducts marketing research in order to provide justification for this new product. This violates the _______________ aspect of the definition of marketing research. A. Systematic B. Validity C. Impartial and objective D. Scientific E. Reliability Answer: C. Impartial and objective Rationale: Good marketing research does not prejudge the information or develop answers to fit an already decided outcome; rather, it enhances good decision making. Since the manager is conducting market research in order to justify his belief, the research would not be impartial and objective. 38. Since they conduct so much research on a continuous basis, McDonald's decided it would be economical to create a(n) _______________ marketing research group. A. External B. Internal C. Freelance D. Designer E. Covert Answer: B. Internal Rationale: McDonald's has an internal market research group. Companies that conduct a lot of market research sometimes create internal research groups. 39. Descriptive research can be used for all of the following EXCEPT: A. Identifying the characteristics of our target market. B. Assessing competitor actions in the marketplace. C. Developing hypotheses for testing in causal research. D. Determining how customers use our product. E. Discovering differences across demographic characteristics. Answer: C. Developing hypotheses for testing in causal research. Rationale: To develop hypotheses for testing in causal research, exploratory (and not descriptive) research should be used. It is used for all other issues/steps mentioned in the question. 40. Apex Jerseys, a manufacturer of sports apparel and sporting equipment, has experienced a sharp drop in sales over the last quarter. The marketing manager has asked the research department to investigate this alarming development. The first step taken by the researchers in their investigation should be to _______________. A. Design a questionnaire to gather pertinent data B. Decide which statistical procedure to use C. Determine sources of internal secondary data D. Identify the sample of customers to survey E. Formulate a specific research problem Answer: E. Formulate a specific research problem Rationale: Defining the research problem helps the researchers identify exactly what information is needed to help management in this situation. This is the first step in the marketing research process. 41. Questions such as "How big is a potential target market?" "How do we reach this potential target market?" and "How will this potential target market react to our product?" each represent _______________ that must be prioritized. A. Research problems B. Marketing research deliverables C. Economic problems D. Segmentation problems E. Information system problems Answer: A. Research problems Rationale: There may be several research problems related to a given situation and they must be prioritized based on what needs to be dealt with first. 42. JJ. Sanchez is the marketing manager for Really Big Corporation and she is facing the marketing research problem of declining sales among her target market. She is unclear as to why the sales are dropping and wants a better understanding of what she should be looking for to solve this problem. The best type of research to perform at this time would be _______________. A. Causal B. Descriptive C. Random D. Academic E. Exploratory Answer: E. Exploratory Rationale: Exploratory research is really about discovery and it helps in clarifying the research problem. It is ideal in this situation since the manager is not clear about why the sales are dropping. 43. Which of the following would require the use of exploratory research? A. Identify the characteristics of our target market. B. Assess competitor actions in the marketplace. C. Clarify the research problem. D. Determine how customers use our product. E. Discover differences across demographic characteristics. Answer: C. Clarify the research problem. Rationale: Exploratory research is about discovery. To clarify the research problem, exploratory research should be used. Descriptive research should be used for all other issues mentioned in the question. 44. Shabreka Lopez, marketing manager for Yaard-Vark Lawn Tractors, is interested in the relationship between the prices of lawn tractors and the level of sales. To test whether increasing prices will lead to a change in sales and how much of a change, she should use _______________ research. A. Causal B. Descriptive C. Random D. Academic E. Exploratory Answer: A. Causal Rationale: Causal research tries to discover the cause and effect between variables. In this example, it will help find out relationship between the prices of lawn tractors and the level of sales. 45. You are product manager for Brand X diapers, a national brand. Brand X has been declining in absolute level of sales for the last four consecutive months. You ask the marketing research department to do a study to determine why sales have declined. The most appropriate research type would be _______________. A. A laboratory experiment B. A field experiment C. A descriptive study D. An exploratory study E. A causal study of actual and potential customers Answer: D. An exploratory study Rationale: Exploratory research is about discovery and it can be used to answer a research question. 46. The sole proprietor of Sam's Swings is interested in gaining a better understanding of his current customers in terms of certain demographic and lifestyle characteristics so he may better serve their needs. He decides that conducting _______________ research will give him the information he needs. A. Causal B. Descriptive C. Random D. Academic E. Exploratory Answer: B. Descriptive Rationale: Descriptive research seeks to describe or explain some phenomenon and it can be used to identify the characteristics of the target market. It is ideal here because the proprietor is interested in understanding demographic and lifestyle characteristics of his customers. 47. The marketing manager of Kim's Cleaners is concerned about the choice of advertising media in the local area. She is not sure if advertising placed in the local newspaper is reaching the target market. A research project is launched to determine the relationship between newspaper readership and use of maid service. _______________ research will result in the most appropriate data for this project. A. Descriptive B. Exploratory C. Relational D. Causal E. Advertising Answer: A. Descriptive Rationale: Descriptive research identifies associations between variables. Since the manager wants to determine the relationship between newspaper readership and use of maid service, he should use descriptive research. 48. When Mom-And-Pop's Bakery decided to conduct research about its current and potential customers, they decided to examine the demographic information for the surrounding zip codes. The best kind of data for this research project would be _______________ data. A. Primary B. Internet C. Secondary D. Survey E. Experimental Answer: C. Secondary Rationale: Secondary data allows researchers to search a wide variety of sources and compiling additional information provide greater insight to the research problem, and often this data is available on a zip code level basis such as the Economic Census. 49. Brand Electronics' marketing manager would like to know about the typical consumer that purchases handheld computers. He begins by searching online and in databases for this information, but soon discovers that a product is too new for the sources to be of help. In this instance he will need _______________ data in order to solve his research problem. A. Secondary B. Governmental C. Experimental D. Primary E. Observational Answer: D. Primary Rationale: Primary data is data that is collected specifically for the current research question. Since the manager is not able to gather the required data from existing sources, he will have to collect the data as per his requirements. 50. Burger Bistro recently experienced a decline in hamburger sales after salmonella was discovered during a health inspection at one of the restaurants. The marketing manager was interested in finding out how other restaurants had dealt with similar situations. _______________ data would be the most appropriate way to find answers related to this marketing problem. A. Secondary B. Governmental C. Experimental D. Primary E. Observational Answer: A. Secondary Rationale: Secondary data are data that were collected for some other purpose than the problem currently being considered. The data that the manager needs already exists. 51. Since they were unsure of why sales were declining, marketing managers of Brand K Watches decided that exploratory research was needed, but because their situation was unique they also decided that primary data was necessary. The best approach is to use _______________ research because it is less structured and may generate unanticipated insights into the research problem. A. Quantitative B. Qualitative C. Survey D. Numerological E. Behavioral Answer: B. Qualitative Rationale: Qualitative research is less structured than quantitative research and is often used in exploratory research. 52. The marketing managers of Brand Z Shoes has a clearly defined their research problem as "If we increase our promotions expenditures by what percent will it increase sales?" They have also decided that they need primary data to answer this question; _______________ research would be the best approach to collecting this primary data. A. Qualitative B. Mechanical C. Exploratory D. Quantitative E. Case-based Answer: D. Quantitative Rationale: Quantitative research is used to develop a more measured understanding using statistical analysis to assess and quantify the results. 53. Vegan Videos has decided to conduct exploratory research to clarify its marketing related research problem. They have decided that they need to collect primary data, but they only have one week to collect this qualitative data from 10 customers and they only have 1 researcher. They should use a(n) _______________ technique to collect the data in order to meet their deadline. A. In-depth interview B. Experimental C. Questionnaire D. Survey E. Focus group Answer: E. Focus group Rationale: A focus group is a qualitative research technique which involves a meeting of 6 to 10 people, moderated by a professional, who carefully moves the conversation through a defined agenda in an unstructured, open format. Vegan Videos can meet its deadline using focus group. 54. The marketing managers of Sean's Smoothies need to conduct some exploratory research to help them develop a survey for some descriptive research in the future. The best data collection technique for this research would be _______________ because the firm has time and is worried that talking to multiple customers simultaneously may taint the results. A. Focus groups B. In-depth interviews C. Experiments D. Surveys E. Observation Answer: B. In-depth interviews Rationale: An in-depth interview is an unstructured interview with an individual and it is done one on one rather than in a group. By using in-depth interviews, the organization can collect the required information without worrying about talking to multiple customers simultaneously. 55. The marketing manager for Joe's Shoe-Mart has decided to conduct descriptive research and knows that she needs primary data. Based on some preliminary research of trade journals and interviews with customers she knows what questions she wants to ask. However, the customers she wants information from, are spread out over many stores in several states. The best technique for her to collect this data would be _______________. A. Interviews B. Observation C. Focus Groups D. Experiments E. Surveys Answer: E. Surveys Rationale: Surveys are structured questionnaires given to a sample group of individuals representing the population of interest and are intended to solicit specific responses to explicit questions. Since the customers are spread out in several states, a survey would be the easiest and the most cost-effective technique for collecting the data. 56. The marketing manager of Low Cost Retailer wants to gather descriptive research about what customers buy, when they purchase, and how often they purchase certain products. To gather this information he implements a frequent shopper program to track the purchases of participating customers. He is collecting _______________ data to answer his research problems. A. Survey B. Qualitative C. Behavioral D. Observational E. Interview Answer: C. Behavioral Rationale: Behavioral data include information about when, what, and how often customers purchase products. This is exactly what the manager of Low Cost Retailer wants to find out. 57. The manager of Gina's Groceries wanted to see how customers would react to some new displays. To collect this information, she posted employees where they could see the display and had them record how long customers looked at it, whether they picked up the item, and if they took the item with them. She is collecting _______________ data to solve her research problem. A. Survey B. Qualitative C. Focus Group D. Observational E. Interview Answer: D. Observational Rationale: Observational data are the behavioral patterns among the population of interest, and it is possible to get a lot of insight about people by simply watching what they do in various situations. 58. XYZ Marketing Research is testing how customers react to a proposed advertising campaign for Go Fast Sports Cars. They have consumers sit in an MRI machine and monitor which areas of the brain are activated as the participants watch a series of commercials and print ads. They are using _______________ to collect the data needed to solve the research problem. A. Qualitative recording B. Mechanical devices C. Behavioral measures D. Surveys E. Focus Groups Answer: B. Mechanical devices Rationale: An MRI is one type of mechanical device that can be used in marketing research. 59. Juan Martinez, a researcher for ABC Research group, is working on crafting a survey for a client. He is concentrating on framing the questions, selecting response choices, refining the wording and determining how many questions to ask. He is focusing on the _______________ activity of the research design process. A. Type of Research B. Nature of Data C. Nature of Data Collection D. Information Content E. Sampling Plan Answer: D. Information Content Rationale: A critical part of research design involves determining exactly what information is needed and how to frame the questions to get that information. It is done in the information content part of research design. 60. You are creating a survey for your company. The question you are currently working on asks your business-to-business customers to describe the ideal purchasing transaction. You are utilizing a(n) _______________ question to collect the desired information. A. Behavioral B. Open-ended C. Observational D. Closed-ended E. Probing Answer: B. Open-ended Rationale: Open-ended questions encourage respondents to be expressive and offer the opportunity to provide more detailed, qualitative responses. Since customers have to describe the ideal purchasing transaction, this becomes an open-ended question. 61. While writing a customer satisfaction questionnaire, the marketing director for Brand X Bank came up with a set of questions that the customer should answer by circling a number between 1 and 7 where 1 meant that they were very dissatisfied by that aspect of their experience and 7 meant that they were very satisfied by that aspect of their experience. He is using _______________ questions to collect this information. A. Behavioral B. Open-ended C. Observational D. Closed-ended E. Probing Answer: D. Closed-ended Rationale: Closed-ended questions are precise and provide specific responses; as a result, they allow for more quantitative analysis. Since the customers have to select a number between 1 and 7, the available answer options are already decided and thus it becomes a close-ended question. 62. You are the marketing manager for XYZ Corporation, and have hired a marketing research firm. Together, you and the researchers decide that you need data from current customers and non-customers who fit a specific demographic and lifestyle profile. The selection of these individuals as targets for data collection represents the _______________ research design activity. A. Type of research B. Nature of Data C. Nature of data collection D. Information content E. Sampling plan Answer: E. Sampling plan Rationale: A sample is a subgroup of the population selected for participation in the research. The sampling plan defines who will be selected to participate in the research. Selecting people only from specific demographic and lifestyle profile thus represents the sampling plan activity. 63. You run a small automotive supply business that sells to a few large retailers. You want to conduct marketing research to assess how the companies you sell to feel about the reorder process and your billing system. Because there are so few companies on the list of potential respondents, it would be best to collect data from a _______________ of current customers. A. Probability Sample B. Random Sample C. Convenience Sample D. Non-probability Sample E. Census Answer: E. Census Rationale: A census involves attempting to include each individual in the population of interest in a research project. 64. The marketing director of Bank Y decides to conduct a survey of 5,000 current customers to gather information to answer the research problem of what the bank can do to improve its services and customer satisfaction. She starts with a database of 50,000 current customers and randomly picks a name on the list to start. She then selects every tenth person as she goes down the list to receive a survey. She is using a _______________ method to select the participants in this study. A. Probability Sample B. Random Sample C. Convenience Sample D. Non-probability Sample E. Census Answer: A. Probability Sample Rationale: Probability sampling uses a specific set of procedures to identify individuals from the population to be included in the research. Since the director is randomly selecting people from the list, it becomes an example of probability sampling. 65. The manager of Big Brand Clothing wants to get a feel for what items consumers are looking for this Christmas so that he can plan his orders. He decided to gather this data by stationing employees outside the store on a particular Saturday with a list of questions to ask to some willing shoppers. He is using a _______________ method to select respondents. A. Probability Sample B. Random Sample C. Systematic Sample D. Nonprobability Sample E. Census Answer: D. Nonprobability Sample Rationale: In nonprobability sampling, the probability of everyone in the population being included in the sample is not identified. Exactly how many people will visit the store on that Saturday cannot be predicted and so the probability of everyone in the population being included in the sample can not be identified. 66. The marketing manager for Moderate-Mart is planning a new promotional campaign to the zip codes in a 3-mile radius around each of his stores. In order to be effective with this campaign he would like demographic information on these zip codes. _______________ would be the best secondary sources of data for this information. A. Surveys B. Market Research Organizations C. Government Sources D. The library E. Observation Answer: C. Government Sources Rationale: Federal, state, and local governments are an important resource in collecting information on a variety of topics and often this information is available by zip codes. 67. The CEO of Big Wheel automotive is concerned about declining sales. He has identified his research problem as the fact that his competitors are drawing away his business. He purchases access to automobile rankings from J.D. Power and Associates to learn about possible reasons for the shift in consumer purchasing. He is using _______________ for secondary data about his research problem. A. Surveys B. Market Research Organizations C. Government Sources D. The library E. Observation Answer: B. Market Research Organizations Rationale: A number of market research organizations (like J.D. Power and Associates) publish data helpful to marketers. 68. The marketing manager is considering a new advertising campaign for Guzzle Beverages. He purchases six months of scanner data for Cruncheez Snack Foods, a company that recently ran a similar campaign. He wants to use this information to determine their campaigns effectiveness before implementing it for Guzzle. He is using _______________ to research his problem and make an informed decision. A. Surveys B. Interviews C. Government Sources D. Secondary Data E. Primary Data Answer: D. Secondary Data Rationale: Secondary data is data collected for some other purpose than the problem currently being considered. In this example, the scanner data for Cruncheez Snack Foods is already available. 69. You are the marketing manager for Brand X-Stream Fishing Rods. You are interested in gathering secondary data on the quality of competitor product offerings before you collect primary data on new products that your target market desires. To collect this data you use an Internet search engine to find websites with the desired information. You decide to use the information found on the Consumer Reports Web site rather than that found on Wikipedia. The reason for you selecting the Consumer Reports data is because it comes from a more _______________ source than the data from Wikipedia. A. Timely B. Complete C. Modern D. Focused E. Reliable Answer: E. Reliable Rationale: It is now possible to access a huge amount of information using search engines; however, care should be taken to evaluate the validity of the data and the reliability of the source. The Consumer Reports data is a more reliable source of information than Wikipedia. 70. While researching the possible impact of economic conditions on a proposed new product introduction on the Internet, you find an article in Business Week Online that reviews how new products have fared during times of rising inflation. This secondary data was found on a _______________ Web site. A. Market research organization B. General Knowledge C. Open use D. Community generated E. File sharing Answer: B. General Knowledge Rationale: General knowledge sites such as business publications and academic research sites may be secondary data sources that have data applicable to the research problem. 71. Sheila Smith, the marketing manager of Big Kid Toys, decided to collect and analyze some secondary data before engaging in primary data collection to determine the types of toys that are going to be in the biggest demand this Christmas. After only a few hours she had found several sources of information related to her problem. This demonstrates the _______________ advantage of secondary data. A. Timeliness B. Cost C. Speed D. Fit E. Accuracy Answer: C. Speed Rationale: Secondary data is a fast way to get information; just a few minutes on a search engine can yield a lot of information. 72. The owner of a small furniture-manufacturing firm is considering conducting marketing research. He should consider examining secondary data before collecting primary data because secondary data offers a(n) _______________ advantage over primary data. A. Specificity B. Cost C. Customization D. Fit E. Accuracy Answer: B. Cost Rationale: The cost of collection of secondary data is relatively less than that of primary data collection. Though it may not be very accurate, specific, customized, or exactly suited to your specific needs, it has an advantage of being less expensive. 73. The account manager of a marketing research firm is conducting secondary research on consumer preferences in energy drinks for his clients. His client's drink is 100% organic, but all of the secondary data he has found is for beverages that contain a majority of artificial ingredients. This is an example of the _______________ disadvantage of using secondary data. A. Timeliness B. Cost C. Speed D. Fit E. Accuracy Answer: D. Fit Rationale: Secondary data will almost always not fit the research problem exactly, so a specific answer to the research problem will not be possible using secondary data alone. 74. The owner of Joe's Pool Hall found some secondary data online that measured consumer reactions to certain amenities in Bars and Nightclubs. However, Joe is concerned about how the data was collected and whom it was collected from. This represents the _______________ concerns associated with secondary data. A. Validity B. Cost C. Speed D. Fit E. Age Answer: A. Validity Rationale: Without a clear understanding of the methodology used to collect and interpret the secondary data, one should be a little skeptical about its validity. Joe's concerns are directly related to the validity of the data. 75. The marketing manager for Brand K retail stores is in the process of collecting primary data from customers to learn which current products need improvement. She is using a probability sampling method, but is having trouble figuring out how to contact customers and get them to participate. She is also debating alternative ways to recode the responses so that they can be analyzed. She is concerned with the _______________ part of the marketing research process. A. Problem definition B. Research design C. Data collection D. Data analysis E. Reporting Answer: C. Data collection Rationale: Data collection involves access and distribution of the survey to the respondent then recording the respondent's responses and making the data available for analysis. In this example, the manager is concerned about the data collection part dealing with contacting the customers and alternative ways of recoding their responses. 76. An account manager for XYZ research firm is writing a research report for a client. He should focus on the _______________ as it is the key section for the decision maker. A. Data Sources B. Executive Summary C. Sampling Plans D. Questionnaire Design E. Analysis Methods Answer: B. Executive Summary Rationale: For managers, the key section of the report is the Executive Summary as it presents a summation of the analysis and essential findings. 77. The marketing manager for ABC Corp. decides to scour his CRM and supplier databases to see if any helpful information comes to light. He uses a software package to run a variety of analyses. The problem with what he is doing is that he did NOT _______________. A. Hire a statistician B. Include employee information C. Ask customer permission D. Consider his supplier reactions E. Implement a research process Answer: E. Implement a research process Rationale: Without implementing the market research process, no amount of technology can create worthwhile results. The manager is simply using the software without properly defining and implementing the market research process. 78. M. Jones, the marketing manager for Big Brand Furniture, is conducting an analysis of internal sales data. This data is collected and stored electronically on site by each store. He is able to access this data on his computer at the corporate headquarters. He is gathering this information via a(n) _______________. A. CRM System B. Information Broker C. Marketing research organization D. Online database E. Sales force automation system Answer: D. Online database Rationale: An online database is data stored on a server that is accessed remotely over the Internet or some other telecommunications network. In this case, data is collected and stored electronically on site by each store and the manager is accessing it remotely using the Internet. 79. The manager of an automotive after-market specialties firm is interested in collecting secondary data. He is concerned with the future of the industry and his competition. He would like to find industry research reports along with industry and company analyses of his competitors. His best sources of this information would be _______________. A. Independent online databases B. In-depth interviews C. Mechanical devices D. Online focus groups E. Sales force automation systems Answer: A. Independent online databases Rationale: Independent online databases available from government and other sources are extremely useful tools in market research. These services, some of which are paid, make it possible to review market research reports, industry and company analyses, even market share information. 80. As the marketing manager for National Household Cleaner Company, you are interested in collecting some qualitative primary data about what outcomes consumers want from your products. However, the difficulty you have encountered is that you want information from a wide range of customers from across the country. The best way to overcome this obstacle is to use a(n) _______________. A. Online database B. Survey study C. Mechanical device D. Online focus group E. CRM system Answer: D. Online focus group Rationale: The virtual focus group offers distinct advantages in terms of convenience and cost-efficiency. By using online focus groups, the manager can quickly collect the desired data from consumers across the country. 81. Joan Doe is a participant in an online focus group for a processed food company. However, during one of the sessions her children are acting up and, as a result, she does not give much thought to her responses. This is an example of the _______________ problem that companies that use online focus groups face. A. Access limitation B. Identity verification C. Environmental control D. Family issue E. Qualification Answer: C. Environmental control Rationale: Traditional focus groups create an environment where participants are required to focus on the questions while online focus groups enable participants to be at home, work, or even a remote location with wireless access. As a result, participants can become distracted and environmental factors can affect their concentration and responses. 82. XYZ Nutritional Supplements is conducting an online focus group to learn more about the nutritional habits of senior citizens and the underlying causes of these behaviors. They are having problems because many of the members of their target market do not own computers or are not savvy enough to understand how to access the focus group. This is an example of the _______________ problem that companies who use online focus groups face. A. Access limitation B. Identity verification C. Environmental control D. Family issue E. Qualification Answer: A. Access limitation Rationale: The primary disadvantage of online focus groups is that participants are limited to those with access to a computer or workstation. 83. This is considered the single best source for competitive information because most publicly traded companies will post annual report, press kits, company news and biographies of senior management. A. Government Sources B. Company Web site C. Business Publications D. Search Engines E. Salespeople Answer: B. Company Web site Rationale: The single best source for competitive information is the company's own Web site. Most publicly traded companies will post annual report, press kits, company news in the "investor relations" area on their Web site. 84. Zang Xie, a marketing research consultant, want to use the Internet to quickly gather competitor information for a client, but want to target specific types of information. Her best option would be to use _______________. A. Government Sources B. Social Networking Sites C. General Search Engines D. Competitor Web site E. Fee-based search engines Answer: E. Fee-based search engines Rationale: Fee-based search engines such as ProQuest and Lexis/Nexis can access more data with sophisticated filters that will target specific information more easily. 85. The marketing manager of Sid's Steel, a foundry that sells exclusively to other manufacturers wants to better understand the competition she faces. One of her best sources would be her _______________ because of their access to information from suppliers and customers. A. Brokers B. Frontline Managers C. Salespeople D. Retailers E. Wholesalers Answer: C. Salespeople Rationale: In the business-to-business environment, salespeople are frequently the most important link between the company and external marketing information. Sid's Steel is operating in a business-to-business environment. 86. Juan Martinez, a marketing researcher, is conducting a study for a client that includes merchandising display assessment, inventory management assessment, location/site analysis and market exposure assessment. His research is related to what element of the marketing mix? A. Product B. Price C. Distribution D. Transportation E. Promotion Answer: C. Distribution Rationale: The distribution element of the marketing mix deals with merchandising display assessment, inventory management assessment, location/site analysis and market exposure assessment. 87. The marketing manager of a large clothing retailer asks his marketing research consultant to conduct a series of studies including message assessment, content analysis and media assessment. This research is intended to help with decisions related to which element of the marketing mix? A. Product B. Price C. Distribution D. Transportation E. Promotion Answer: E. Promotion Rationale: The promotion element of the marketing mix deals with message assessment, content analysis and media assessment, copy testing and media buy assessment. 88. A marketing research firm is collecting data for a client that sells cold weather apparel. The client is interested in a promotion effectiveness study and an assessment of effectiveness of marketing mix. The client is focusing on what stage of marketing planning? A. Situation Analysis B. Target Market Selection C. Marketing Mix Planning D. Marketing Control E. Logistic Design Answer: D. Marketing Control Rationale: Marketing control stage of the marketing planning process deals with promotion effectiveness study and an assessment of effectiveness of marketing mix. 89. A manufacturer of food products is looking at entering several new markets. Before they do this, they want to conduct a needs assessment, a determination of purchase criteria, a buyer behavior analysis, and a market demand estimation. They are examining which stage of marketing planning? A. Situation Analysis B. Target Market Selection C. Marketing Mix Planning D. Marketing Control E. Logistic Design Answer: B. Target Market Selection Rationale: Target market selection stage of the marketing planning process involves needs assessment, a determination of purchase criteria, a buyer behavior analysis, market demand estimation and identification of segmentation bases. 90. As a marketing researcher, you receive a call from a client requesting that you conduct a series of research studies for them that includes a trend analysis, a positioning analysis, and an identification of public and key issues concerns. They are most likely concerned with what stage of the marketing planning process? A. Situation Analysis B. Target Market Selection C. Marketing Mix Planning D. Marketing Control E. Logistic Design Answer: A. Situation Analysis Rationale: Situation analysis stage of the marketing planning process deals with trend analysis, positioning analysis, identification of public and key issues concerns, analysis of sources of competitive advantage, and competitive barrier analysis. Short Answer Questions 91. Identify the five major types of internal information sources and give an example of the information found in each one. Answer: See Exhibit 5.2 The five major types of internal information sources are: 1. Sales Data: Information on sales transactions, such as product sales volume and revenue figures. 2. Customer Data: Details about customers, including contact information, purchase history, and preferences. 3. Inventory Data: Information on stock levels, turnover rates, and inventory valuation. 4. Financial Data: Financial records such as income statements, balance sheets, and cash flow statements. 5. Employee Data: Details about employees, including performance reviews, payroll information, and training records. 92. Compare the contents of open and close ended questions. Explain which type of research for which each is best suited. Answer: Open-ended questions encourage respondents to be expressive and offer the opportunity to provide more detailed, qualitative responses. As a result, these kinds of questions are often used in exploratory research. Closed-ended questions, on the other hand, are more precise and provide specific responses. As a result, they allow for more quantitative analysis and are most often used in descriptive research. 93. Define behavioral data, list its benefits and give examples of how to collect it. Answer: Behavioral data include information about when, what, and how often customers purchase products and services as well as other customer "touches" (for example, when they contact the organization with a complaint or question). When companies match this kind of information with demographic and psychographic information they can see differences in purchase patterns. Behavior is usually more reliable than surveys because it is based on what the respondents actually do rather than what they say they are going to do. Examples of how to collect behavioral data include reward club cards that allow retailers to match purchasing behavior to demographic information. 94. Define the ways in which economic data can be examined and explain why this information is important to marketing decision makers. Answer: Microeconomics: The study of individual economic activity (firm, household, or prices). Macroeconomics: The study of economic activity in terms of broad measures of output and input as well as the interaction among various sectors of an entire economy. Both are important for marketing managers. Microeconomics helps marketing managers understand how individuals set priorities and make buying decisions. Macroeconomics, on the other hand, gives a "big picture" perspective for an economy and can be helpful at looking for broad economic trends. Indicators such as the GDP measure the health of an economy and are helpful in spotting trends. 95. How do technology transformations affect marketing decisions? Answer: Technology has been one of the major catalysts for change in the marketplace. Marketing managers need to know the role of technology in their business today and also, perhaps even more importantly, its role in the future. Successfully assimilating technology into a business takes time and money. Almost every organization has had at least one negative experience with technology. 96. Why should firms consider the natural world when making marketing decisions? Answer: Everyone lives on planet Earth, and business operates within the constraints of available natural resources. Two key issues drive marketers' need to know about the natural world. First, individuals, governments, and business all recognize the need to manage the available resources well. Governments and businesses are concerned about the effect of increasing energy costs on economic growth. A second concern regarding the natural world is pollution. In some parts of the world, pollution takes a significant toll on the quality of life and economic growth in a community. These concerns influence marketers as they make decisions about how and where products are manufactured. 97. Why are marketing managers concerned with competition when making marketing decisions? Give an example. Answer: Companies want to know as much as possible about competitors' products and strategies. In highly competitive markets, companies are constantly adjusting their strategies to the competition. Airlines, for example, track competitor pricing and adjust their pricing almost immediately to changes in the marketplace. When one airline offers a sale in a specific market, competitors will soon follow with sales in the same market. Identifying, analyzing, and effectively dealing with competitors is key to making successful decisions. 98. How can political/legal trends influence marketing decisions? Give an example. Answer: Political judgments and, more broadly, the legal environment significantly affect company decisions and sometimes an entire industry. Local, state, and federal legislatures pass more business-related legislation than ever before. In addition, government agencies are more active in monitoring business activity. In 2003, the National Do Not Call Registry was created to minimize intrusive telemarketing calls. By registering, individuals protect themselves from telemarketing calls. Telemarketing companies are subject to significant fines if they call someone listed on the register. Millions of people signed up, and many companies were forced to reconfigure their marketing communications strategy. 99. Explain why the final report of marketing research is so critical. Identify the most important section of the report and explain why it is so critical. Answer: The best research projects are only as good as the final report and presentation. If the research is done well but the report is poorly written and presented, managers will not benefit from the research. For managers the key section of the report is the Executive Summary as it presents a summation of the analysis and essential findings. Keep in mind that managers are not really interested in the number of secondary data sources, questionnaire design, or sampling plan; rather, they want to see the findings. 100. Why do firms employ marketing research systems? Answer: Marketing managers are confronted with an unlimited number of problems, opportunities, and issues that require specific answers. Sometimes the information needed is not available from other sources or even from the company's own market information system. To get specific answers to important management questions, marketing research is necessary. 101. Define marketing research. What are the keys for good marketing research that come from this definition and what do they mean? Answer: Marketing research is the methodical identification, collection, analysis, and distribution of data related to discovering then solving marketing problems or opportunities and enhancing good decision-making. Keys: Follows a well defined set of activities and does not happen by accident. Rather, it comes as a result of the methodical identification, collection, analysis, and distribution of data. Enhances the validity of the information. Anyone can "Google" a topic and come up with a lot of information. However, following the market research process enhances the confidence that the research will discover then solve marketing problems and opportunities. Is impartial and objective. It does not prejudge the information or develop answers to fit an already decided outcome; rather, it enhances good decision-making. 102. List the activities in the research design process and the key question each asks. Answer: 103. Compare the two approaches to collecting primary data and when each type should be used. Answer: Qualitative research is less structured and used more often in exploratory research. While it can employ methods such as surveys and interviews to collect the data, qualitative research employs small samples and is not meant to be used for statistical analyses. Quantitative research is used to develop a more measured understanding using statistical analysis to assess and quantify the results. 104. Define and give the advantages of the two major types of qualitative data. Answer: Focus group: A meeting of 6 to 10 people that is moderated by a professional who carefully moves the conversation through a defined agenda in an unstructured, open format. The value of focus groups lies in the richness of the discussion. A good moderator can draw out a lot of information from the participants. In-depth interview: An unstructured (or loosely structured) interview with an individual who has been chosen based on some characteristic of interest, often a demographic attribute. This technique differs from focus groups in that the interview is done one on one rather than in a small group. The value lies in the richness of the data. 105. Define and give examples of the 3 major types of quantitative data. Answer: 1) Surveys: Structured questionnaires given to a sample group of individuals representing the population of interest and are intended to solicit specific responses to explicit questions. 2) Behavioral data: Information about when, what, and how often customers purchase products and services as well as other customer "touches". 3) Observational data: Watching the behavioral patterns among the population of interest. 106. Define the two ways to collect observational data and give an example of each. Answer: Mechanical observation uses a device to chronicle activity. Examples include turnstiles, traddic counters, video cameras, etc. Mechanical devices collect data on physiological reactions and are more invasive. Examples are eye cameras, the galvanometer, and MRI's. 107. Identify the difference between a census and a sample. Name the types of sampling. Answer: A census is a comprehensive record of each individual in the population of interest; that is data is gathered from all members of a population. A sample is a subgroup of the population selected for participation in the research, that is only a portion of the population is selected to participate. The 2 approaches to sampling are probability and nonprobability sampling. 108. Define the approaches to sampling. When should each be used? Answer: Probability sampling: A specific set of procedures used to identify individuals from the population to be included in the research and is useful when the goal is to perform statistical analyses and generalize conclusions beyond the sample itself. Nonprobability sampling: The probability of everyone in the population being included in the sample may be zero or not known. This type of sampling is often done when time and/or financial constraints limit the opportunity to conduct probability sampling. 109. Define secondary data and list its advantages and disadvantages. Answer: Definition: Data originally collected for some other purpose than the current problem being considered Advantages: 1) Speed, a few minutes on a search engine can yield a lot of information. 2) Cost, secondary data are relatively less expensive than conducting a primary research study. Disadvantages: 1) Secondary data will, almost by definition, not fit the research problem exactly, so a specific answer to the research problem will not be possible using secondary data alone. 2) Secondary data are not current. Sometimes the information may be only a few weeks or months old or it may be dated to the point where it is no longer useful for the current project. 3) Without a clear understanding of the methodology used to collect and interpret it one should be a little skeptical about its validity. 110. What are the benefits of statistical software for managers/decision makers? Answer: Front-line managers, with the proper training and data, can now conduct analyses that were not possible even five years ago. Statistical software combines an easy-to-use interface with powerful statistical tools in a format that managers at all levels can use. Other advantages of these packages are their ability to take the findings of the data analysis and create tables and reports. Essay Questions 111. Define marketing information systems and marketing research systems. How are they similar? How are they different? Give an example of a problem or decision that would be best solved with a marketing information system. Give an example of a problem or decision that would be best solved with a marketing research system. Answer: A market information system (MIS) is a continuing process of identifying, collecting, analyzing, accumulating, and dispensing critical information to marketing decision makers. Marketing research is the methodical identification, collection, analysis, and distribution of data related to discovering then solving marketing problems or opportunities and enhancing good decision-making. Similarities: Both make use of data to solve marketing problems or enhance marketing decisions and may be from internal or external sources. Differences: MIS utilizes data the company collects on an on going basis from a wide array of internal and external sources and stores data until it is needed. MRS is only used to collect data in response to a specific problem or decision and this data can be tailored to the issue at hand. 112. Define demographics and explain why they are useful to marketers. What specific demographic trends are of interest to marketers and why? Answer: Demographics can be defined as the statistical characteristics of human populations, such as age or income, used to identify markets; it provides a statistical description of a group of people. Demographics are extremely useful in marketing for two reasons. 1) Demographics help define a market. How old is a typical customer? How educated? What is the typical customer's income? These are all demographic characteristics that help describe a market. By analyzing demographics, a company can define not only the "typical" customer but also its marketing at large. 2) Studying demographics helps identify new opportunities. Companies that deal directly with consumers develop customer profiles based on demographic information and compare their profiles against those of competitors. Companies even create pictures of their "average" customer, highlighting key demographic data (age, gender, and ethnicity). Specific trends. Populations of Interest Marketers are not interested in all groups, only populations of interest. The difficult part for many marketers is separating relevant demographic data from irrelevant. Ethnic Groups Many countries are becoming more ethnically diverse as individuals increase their mobility. While some countries, such as the United Arab Emirates in the Middle East, have populations composed of a single ethnic group, others like the United States are much more ethnically diverse. The market challenge then becomes developing effective marketing strategies across different ethnicities living in the same area. Geographic Changes People are moving not only in the United States but also around the world. The changes present opportunities but also challenges. Companies must adjust their marketing strategies to fit the unique needs of these consumers. Downsizing products is a strategy consistent with the migration of people to urban centers. 113. Identify the six major external forces that affect marketing decisions and explain how each one can affect marketing strategies. Give an example of each one in action. Answer: 1) Demographics can be defined as the statistical characteristics of human populations, such as age or income, used to identify markets. It provides a statistical description of a group of people and is extremely useful in marketing for two reasons. First, demographics help define a market. How old is a typical customer? How educated? What is the typical customer's income? These are all demographic characteristics that help describe a market. Second, studying demographics helps identify new opportunities. Companies that deal directly with consumers develop customer profiles based on demographic information and compare their profiles against those of competitors. 2) Economic Conditions Companies are keenly interested in the ability of their customers to purchase products and services. It is not surprising then that a good understanding of current and future economic trends is important in an effective market information system. Microeconomics helps marketing managers understand how individuals set priorities and make buying decisions. Macroeconomics, on the other hand, gives a "big picture" perspective for an economy and can be helpful at looking for broad economic trends. Indicators such as the GDP measure the health of an economy and are helpful in spotting trends. 3) Technology transformation Technology has been one of the major catalysts for change in the marketplace. Marketing managers need to know the role of technology in their business today and also, perhaps even more importantly, its role in the future. Successfully assimilating technology into a business takes time and money. Almost every organization has had at least one negative experience with technology. 4) Natural World Everyone lives on planet Earth, and business operates within the constraints of available natural resources. Two key issues drive marketers' need to know about the natural world. First, individuals, governments, and business all recognize the need to manage the available resources well. Governments and businesses are concerned about the effect of increasing energy costs on economic growth. A second concern regarding the natural world is pollution. In some parts of the world, pollution takes a significant toll on the quality of life and economic growth in a community. These concerns influence marketers as they make decisions about how and where products are manufactured. 5) Political/legal Political judgments and, more broadly, the legal environment significantly affect company decisions and sometimes an entire industry. Local, state, and federal legislatures pass more business-related legislation than ever before. In addition, government agencies are more active in monitoring business activity. Laws can force companies to reconfigure their marketing communications strategy. 6) Competition Companies want to know as much as possible about competitors' products and strategies. In highly competitive markets, companies are constantly adjusting their strategies to the competition. Identifying, analyzing, and effectively dealing with competitors is key to making successful decisions. 114. List and describe the four factors that help to determine the kind of research that needs to be done. Explain why each is an important consideration and give a specific example of how failing to account for each could harm the research process. Answer: Benefit versus cost: Before making any other decisions about the type of marketing research to use, it is essential to assess the benefits versus the costs. Put simply, if the benefits of doing the research do not exceed the cost, don't do the research. Time until decision: Decision makers sometimes have very little time between realizing a need for additional information and making the decision. When time is very short (a matter of days) it is simply not possible to conduct in-depth marketing research. The Internet can cut the time needed for a study from months to weeks, but when time is short researchers may have to rely on more exploratory research and the use of secondary data. Nature of the decision: The more strategic the decision, the more important the information and the greater the need for primary data. Conversely, if the decision is primarily tactical secondary data, like reviewing a media's demographics and rate card, will likely be sufficient to make the decision. Availability of data: Companies already have a lot of data as a result of CRM and other internal information systems. Consequently, it may not always be necessary to collect primary data when existing or secondary data will provide the necessary answers to the research problems. 115. In primary data collection one important decision is determining the information content. Why is this so important and what considerations should be taken during this part of the process? Answer: This part of the process answers the question "what do we need to know" and involves determining exactly what information is needed and how to frame the questions to get that information. From the questions used in focus groups to long questionnaires, it is important to consider the structure and wording as well as the response choices. Most often this issue comes up in designing questionnaires. As the most commonly used primary research technique, the survey questionnaire allows a lot of variability in its design and structure. Some surveys, such as the comment cards, are short and ask only a few questions. Others, such as new car satisfaction surveys, can be much longer and ask dozens of questions. No matter what the situation, careful attention must be paid to the design, structure, and format of each question. Today, researchers must also consider the method of survey delivery. For example, mail surveys differ significantly from telephone surveys because respondents interact with the questions differently. Electronic surveys present a different challenge, although their structure is more easily adapted from a mail questionnaire. Researchers must consider which of the many types of question formats is most appropriate for the situation. One of the most basic decisions is whether to use open-ended or closed-ended questions. Open-ended questions encourage respondents to be expressive and offer the opportunity to provide more detailed, qualitative responses. As a result, these kinds of questions are often used in exploratory research. Closed-ended questions, on the other hand, are more precise and provide specific responses. As a result, they allow for more quantitative analysis and are most often used in descriptive research. 116. Outline the steps in the marketing research process and explain why each is important. Answer: Define the Research Problem One of the biggest challenges facing a marketing researcher is accurately defining the problem. What exactly is the issue/opportunity/problem? Often managers are not clear about the problem and need help defining it. Establish the Research Design Following problem definition, companies must establish a research design, or a plan of action for attacking the research problem. It is critical that researchers develop and execute a research design so that decision makers can have confidence in the research findings. Effective market research is dependent on creating a research design and then executing it Search Secondary Sources Secondary data are almost always part of marketing research. Searching a wide variety of sources and compiling additional information provides greater insight to the research problem and supplements the primary data collected for a specific study. Collect the Data Data collection involves access and distribution of the survey to the respondent then recording the respondent's responses and making the data available for analysis. A company can choose to collect the data using its own resources or hire a market research firm to administer the data collection. Analyze the Data Once the data are collected, coded, and verified, the next step is to analyze the information. The appropriate analysis is performed based on the research questions developed at the beginning of the research. A common mistake is using unsuitable analyses that are not supported by the data. Analysis of the data will lead to findings that address the research questions. These findings are, in a sense, the "product" of the research. In most cases, researchers will also interpret the findings for decision makers. Report the Findings The best research projects are only as good as the final report and presentation. If the research is done well but the report is poorly written and presented, managers will not benefit from the research. For managers, the key sections of the report are the Executive and Management Summaries. 117. Identify the purpose of each basic type of research and give reasons for conducting each. Give an example of when a firm might want to use each type. Answer: 1) Exploratory research: Discovery. Reasons for conducting exploratory research include clarifying the research problem, developing hypotheses for testing in descriptive or causal research, gaining additional insight to help in survey development or to identify other research variables for study, and answering the research question. 2) Descriptive research: Describe or explain some phenomenon. Reasons for conducting descriptive research include issues such as identifying the characteristics of the target market, assessing competitor actions in the marketplace, determining how customers use our product, discovering differences across demographic characteristics with respect to the use of our product or our competitors. 3) Causal research: Discover the cause and effect between variables. This can be particularly useful in making important marketing decisions such as when we want to determine how much one variable (i.e. sales) changes when we change another variable (like price). 118. Explain the ethical dilemma faced by users and providers of pay-per-click Internet advertising. How would you solve this if you were a user? How would you solve this if you were a provider? Answer: Click fraud, estimated at $1 billion, has become a big issue for many Internet advertisers. First, the user contracts with the provider to advertise on the Internet and negotiates the fee they will pay for each click from their ad to the company Web site. Second, the provider displays the ad on legitimate Web sites but also sends the ad to domain parking Web sites. Third, these sites distribute the ads to parked Web sites that are often just lists of ads. Fourth, the owner of the parked Web site sends out a list of sites to individuals known collectively as "paid-to-read groups." These individuals' role is to click on ads for which they receive a small payment. Finally, the provider charges the user for the click then shares part of the revenue with the domain parking Web site, which shares it with the other participants in the fraud. 119. Identify and define the categories of online research tool. What are the advantages and disadvantages of each? Give an example of when a firm would want to employ each. Answer: Online Databases: Data stored on a server that is accessed remotely over the Internet or some other telecommunications network. Many companies now have databases available with orders, shipments, pricing, and other relevant information. Independent online databases available from government and other sources are useful tools in market research. These services make it possible to review market research reports, industry and company analyses, even market share information. Online Focus Groups: Virtual focus group, viable alternative to the traditional focus group format. Advantages in terms of convenience and cost-efficiency, online focus groups provide data quickly and in a format that is usually easier to read and analyze. Disadvantage of online focus groups is that participants are limited to those with access to a computer or workstation. If people participate remotely, it is not possible to verify who is actually responding to the questions. Lack of control over the environment. Online Sampling: Completing questionnaires over an Internet connection. Primary advantages are convenience and cost-efficiency. Respondents are free to complete the survey when it is best for them, and sending a survey online is essentially free. 120. Identify the various sources for collecting competitive intelligence and give examples of the types of information that can be obtained from each. Answer: Company Web Site The single best source for competitive information is the company's own Web site. Publicly traded companies will post their annual report and other data, often in the "investor relations" area. Many companies have press kits available online that include current company news and biographies of senior management. New-product introductions, detailed explanations of existing products, changes in personnel, even new programs and strategies are frequently located on the company Web site. Government Sources Federal, state, and local governments are an important resource in collecting information on a variety of topics. The Securities and Exchange Commission is a great source for company information, but other government sites also provide helpful information. The United States Trademark and Patent Office provides details about patent applications and is an excellent source of information about competitor's new-product developments. New-product developers spend a great deal of time investigating possible patents that may conflict with a new product or seeking product opportunities. Local governments are a good source of information about competitor operations in that area. For example, if a competitor is seeking to expand manufacturing capacity, any legal notices will be filed with the appropriate local or state agencies. Business Publications There is no shortage of business publications and Web sites. The Wall Street Journal, BusinessWeek, Fortune, Forbes, and many others feature articles in every issue on industry trends as well as analyses of individual companies. In addition, online sites such as Hoover's provide detailed information on thousands of companies, much of it at little or no cost. Search Engines Popular search engines tap an unlimited supply of information. In a matter of minutes it is possible to get hundreds, even thousands, of links. The problem then is sorting through all the available data to find the most relevant information. One way to sort is to use fee-based search engines such as ProQuest and Lexis/Nexis. These search engines can access more data with sophisticated filters that will target specific information more easily. Salespeople In the business-to-business environment, salespeople are frequently the most important link between the company and external marketing information. Their access to customers and suppliers is a vital source of competitor information. At trade conferences, at supplier meetings, and in customer offices, salespeople often hear information about competitor strategies including new-product launches and marketing communication campaigns. Customers Another underutilized source of competitor information is the company's own customers. Through appropriate market research, it is possible to get a great deal of information about the competition by simply asking customers specific and relevant questions. In retailing, for example, consumers are frequently asked about their shopping habits. Where do you purchase this product? Which company has the best customer service? Who has the lowest price? This information is all part of the competitive analysis. Test Bank for Essentials of Marketing Management Greg W. Marshall, Mark W. Johnston 9780078028786, 9780071082020, 9780077400187