Chapter 1: The Purpose and Process of Marketing Research
TRUE/FALSE
1) The purpose of marketing research is to gather information that will improve managerial
decisions.
Answer: True
Information differs from raw data in its relevance to decision-making. Marketing research
collects information within this context, according to pre-defined information needs.
2) The criteria that research be systematic means that researchers strive to be unbiased and
impartial in conducting their research.
Answer: False
Researchers striving to be unbiased and impartial is what is meant by “objective.”
“Systematic” means that the research project must be planned and well-organized.
3) Dependent variables are inputs or causes used to explain a particular phenomenon.
Answer: False
Dependent variables are the effects or phenomena one seeks to explain, whereas independent
variables are used to explain the dependent variables.
4) In practice, decision-making rarely relies wholly on an input-output framework of
marketing research and formal statistical models, but combines them with managers’
experience, judgment, and intuition.
Answer: True
To make good decisions, managers can use the input of marketing research, but they also
must rely on their experience and personal judgment.
5) A systematic approach to researching the information needs of marketing management
facilitates good organizational planning in developing objectives, allocating marketing
resources, and auditing performance.
Answer: True
Marketing research can fulfill the information needs of marketing managers to facilitate
better decisions and better allocation of resources.
6) During the 1930s, sampling became a serious methodological issue in marketing research.
Answer: True
It was in the 1930s that sampling became a critical issue due to the emphasis on inferential
statistics compared to the reliance on purely descriptive statistics prior to this.
7) Despite major differences in consumer and industrial marketing research, the underlying
methods and skills are nearly identical.
Answer: True
Both fields are concerned with problem definition, research design, use of secondary data,
sampling, measurement, field work, data processing and analysis, and presentation of results.
8) The main disadvantage of the integrated structure of a marketing research department is
the isolation of researchers from day-to-day activities and problems and the difficulty of
finding qualified people.
Answer: False
Isolation of researchers is a disadvantage of centralized structures; difficulty of finding
qualified people is a disadvantage of decentralized structures. The integrated structure
combines the best features of centralized and decentralized structures. The main disadvantage
to the integrated system is the potential control conflicts over the research staffs and their
projects, particularly when the lines of authority in a company are not clearly delineated.
9) Because of their role in collecting, analyzing, and reporting data, marketing researchers are
often asked to make managerial decisions.
Answer: False
The role of researcher is advisory, it is the role of management to make the decisions.
10) Research suppliers can be used to conduct components of a research study, but they are
never given total responsibility for a research study in its entirety.
Answer: False
Research suppliers can be used in both manners: to participate in a part of the study or to
conduct the entire study.
11) Good horizontal relationships (teaming of researchers with product managers) are more
important than vertical ones (e.g., reporting to the senior marketing executive).
Answer: True
Open, frank communication between researchers and product managers is essential for
success. Without horizontal communication, research is not likely to succeed.
12) Research objectives answer the question, “Why is the project being conducted?”
Answer: True
Research objective specify why a research project is conducted.
13) Researchers must develop a data-collection procedure that establishes an effective link
between the information needs and the questions to be asked or the observations to be made.
Answer: True
The success of the study depends on the researcher’s skill and creativity in establishing this
link.
14) One of the steps in the research process is to process and code data. Coding involves
reviewing the data forms as to legibility, consistency, and completeness.
Answer: False
Coding involves establishing categories for responses or groups of responses so that numerals
can be assigned to represent the categories. Editing means reviewing the data for legibility,
consistency, and completeness.
15) Problems are performance measures, metrics, and diagnostics that signal the presence of
an opportunity.
Answer: False
Symptoms are performance measures, metrics, and diagnostics that signal a problem or
opportunity.
16) Decisions must aim at solving problems or taking advantage of opportunities, not at
treating symptoms.
Answer: True
It is important to discover the problem or opportunity, not make a decision about the
symptom.
17) Exploratory research can be used as an aid in defining the decision a manager must make
and developing hypotheses.
Answer: True
Once a manager recognizes the need for a decision, exploratory research can be used to help
define the decision. This initiates a process of interaction between hypotheses previously
formulated based on existing information and hypotheses developed from the exploratory
research findings.
18) The process of identifying problems and opportunities involves analyzing future
situations that a firm will face; the past is a sunk cost because it can no longer be changed.
Answer: False
The process of identifying problems and opportunities involves analyzing past, present, and
future situations facing an organization.
19) In identifying alternative courses of action, “doing nothing” or “status quo” is not a
feasible alternative.
Answer: False
“Status quo” or “doing nothing” is a feasible option and sometimes the best course of action.
20) Exploratory research can be helpful in identifying innovative courses of action.
Answer: True
In addition to helping managers define the decision that must be made, it can also be used to
generative innovative alternatives to be considered.
21) Not only are research objectives rarely relayed to the marketing researcher at the outset of
a research project, but decision-makers seldom formulate objectives accurately.
Answer: True
The success of a research project depends on identifying the objectives of the research.
Objectives often have to be extracted by the researcher from the decision-maker, who may
phrase objectives in terms of platitudes that lack operational significance.
22) The decision-maker, who has a clear perspective on the specific information needed to
reduce the uncertainty surrounding the decision situation, should be actively involved in
formulating the information needs for a research project.
Answer: True
Failure to involve the decision-make , as the only one with this knowledge, him or her at this
stage can severely hamper the success of the research project.
23) It is rather easy to calculate the benefits of a research project, but calculating costs is
much more difficult.
Answer: False
It is just the reverse. Costs are easy to quantify, benefits are much more vague and not always
tangible.
24) As a general rule, frequently purchased consumer goods can support more expensive
marketing research than can high-cost durable goods.
Answer: False
The higher the cost of an item, normally the greater are the margins in terms of dollars, and
therefore, the more likely research will be used.
25) Non-sampling errors tend to decrease as the sample size increases while sampling errors
tend to increase as the sample size increases.
Answer: False
It is the reverse. Sampling error tends to decrease as the sample increases while non-sampling
errors increase with the sample size.
MULTIPLE CHOICE
1) The process of marketing research involves five steps designed to aid managerial decisionmaking. After determining what information is needed, the next step would be to
a. manage the data collection
b. design a method for collecting information
c. communicate the findings
d. analyze and interpret the results
Answer: B
The five steps in the process are 1) determine what information is needed, 2) design a method
for collecting the information, 3) manage the data collection, 4) analyze and interpret the
results, and 5) communicate the findings.
2) If syndicated research companies collect data through large-scale consumer panels and
track what its participants do, buy, and think, then marketing research is playing a role in
a. marketing
b. the firm
c. the marketing research industry
d. in society
Answer: C
In the role of the marketing research industry, marketing research collects general
information that firms do not carry out themselves.
3) The main criteria for marketing research includes all of the following except
a. systematic
b. objective
c. related to the 4 P’s
d. targeted for decision-making
Answer: C
Criteria for marketing research includes it should be systematic, objective, and targeted for
decision-making.
4) Dependent variables are
a. predictors of a phenomenon
b. covariates or causes of a phenomenon
c. used to explain independent variables
d. phenomena one seeks to explain
Answer: D
Dependent variables are phenomena one seeks to explain, while independent variables are
used to explain dependent variables.
5) Elements of the marketing mix, such as pricing and ad spending, are viewed as decision
variables that the firm can use to steer the market. Therefore, in developing a model these
decision variables would be considered
a. independent variables
b. dependent variables
c. connecting variables
d. statistical variables
Answer: A
Independent variables include decision variables that the firm can control, such as pricing,
distribution, and ad spending.
6) The first step in the marketing research decision-making process is
a. developing a hypothesis
b. collecting relevant data
c. outlining a process that can be used to collect the necessary information
d. recognizing a unique marketing problem or opportunity
Answer: D
The first step in the decision-making process is recognizing a unique marketing problem or
opportunity. Often, these are two faces of the same situation.
7) In the marketing management process, essential sets of information required for planning
include all of the following except
a. marketing mix variables
b. situational variables
c. marketing mix variables
d. performance variables
Answer: A
For the purpose of planning, marketing researchers seek to answer questions regarding three
essential sets of information, corresponding to the measurable types of variables in the
marketing system: situational variables, marketing mix variables, and performance measures.
Marketing mix variables are those under the firm’s control.
8) An example of a situational analysis would be an analysis of
a. desired product features
b. demand
c. the firm’s advertising program
d. the best price
Answer: B
Examples of situational analysis include an analysis of demand, understanding the
competition, evaluating trends, and assessment of internal resources available.
9) The formal beginning of marketing research was
a. in 1900
b. between 1910-1920
c. between 1925-1940
d. in the 1950s
Answer: B
Although marketing research was used occasionally before 1910, the period from 1910-1920
is recognized as the formal beginning of marketing research.
10) The growth of marketing research activity dramatically increased after World War II
because of
a. increased computer technology
b. mass production of goods
c. the development of television
d. the acceptance of the marketing concept
Answer: D
It was the acceptance of the marketing concept after World War II that spurred the dramatic
growth of marketing research activity.
11) Syndicated data sources
a. solve client-specific problems
b. collect data and then sell these data on a subscription basis
c. provide specific services, such as field interviewing or data analysis
d. undertake complete research studies for client organizations
Answer: B
Syndicated marketing research firms collect specific types of information that is then sold on
a subscription basis to any organization that will buy it.
12) All of the following are characteristics of industrial marketing research except
a. difficult to find good executive interviewers
b. respondent definitions are usually fairly simple
c. study costs per interview are higher than for consumer research
d. respondent cooperation is a major concern
Answer: B
In industrial marketing research, respondent definitions are somewhat more difficult because
the user and decision-maker are often not the same individual.
13) A centralized marketing research department offers all of the following advantages except
a. researchers are “are close to the action” of marketing problems and implementation of their
recommendations
b. more economical and flexible use of facilities and personnel
c. greater institutional prestige and credibility to marketing research
d. greater likelihood of attracting top-notch researchers and securing an adequate budget
Answer: A
Researchers are closer to the action of marketing problems and implementation of
recommendations in a decentralized structure, not in a centralized structure.
14) Obstacles (or barriers) to the effective use of marketing research by management include
all of the following except
a. viewing research as a threat to their personal status as decision makers
b. inability to work with researchers or use their knowledge and skills
c. insistence on considering experience and personal judgment in decision process
d. differences in emphasis and temperament
Answer: C
Research is used to aid decision-making in combination with managerial judgment and
experience. The correct time for judgment and experience to be applied is in determining the
decision criteria.
15) Conflicts between researchers and management is not uncommon. Common attitudes
among marketing researchers regarding top management include all of the following except
a. required research is generally too costly
b. top management is anti-intellectual
c. there are too many non-researchable, “fire-fighting,” and proof-of-concept requests
d. top management is generally unsympathetic to the importance of problem definition, often
re-defining the problem after the research is under way
Answer: A
Top management tends to think marketing research costs too much, while marketing
researchers believe “you get what you pay for.”
16) Challenges in conducting effective marketing research internationally include all of the
following except
a. markets in less developed countries are less likely to have good secondary data
b. in some countries cultural dynamics or concerns about government surveillance may
negatively impact results
c. marketing research techniques used in the United States are not applicable in other
countries
d. logistical dimensions of implementing marketing research are complex and, therefore, tend
to cost more
Answer: C
While the methodology may sometimes need to be modified, marketing research techniques
are still applicable throughout the world.
17) _______________ answers the questions, “What specific information is required to attain
the objectives?”
a. Symptoms
b. Research design
c. Information needs
d. Data sources
Answer: C
Once research objectives are determined, it is important to determine the specific information
that is needed to achieve the objective (“information needs”).
18) In designing the sample, researchers need to clearly define all of the following except
a. the questions to be asked
b. the population from which the sample is to be drawn
c. method used to select the sample
d. the sample size
Answer: A
Sample design involves designating the population, the methods used to select the sample,
and the sample size.
19) During which step in the research process would a large proportion of the research budget
be spent and a sizeable proportion of the “total error” be incurred?
a. designing the data collection procedure
b. collecting data
c. processing and coding data
d. analyzing data
Answer: B
Collecting data typically involves a large proportion of the research budget and a sizeable
proportion of the “total error” in the research results.
20) If a product’s share of the market is below the forecasted share, then this would be an
example of a(n)
a. problem
b. opportunity
c. symptom
d. both a and b
Answer: C
Symptoms are performance measures, metrics, and diagnostics that signal the presence of a
problem or an opportunity.
21) Variables directly under the control of management that lead the organization’s
performance to fall short of objectives are
a. symptoms
b. problems
c. opportunities
d. information needs
Answer: B
In marketing research, the word “problem” refers to the variables, particularly variables under
direct managerial control, that lead the organization’s performance measures to fall short of
stated objectives.
22) Situations where performance can be improved by a change in activities are
a. symptoms
b. performance measures
c. opportunities
d. information needs
Answer: C
Opportunities often go unnoticed because managers tend to focus on problems rather than on
activities that can be changed to create greater performance.
23) An example of a problem would be
a. market share has declined by 3 percent since last year
b. brand awareness has declined by 5 percent
c. the advertising campaigns used over the last year have been less effective
d. all of the above
Answer: C
Problems are variables under a manager’s control and lead to an organization’s performance.
If the advertising campaign has been less effective, then that is a problem. The first two
examples are symptoms.
24) An example of an opportunity would be
a. an ad campaign was not as effective as forecasted
b. a hotel experiences a decline in revenues
c. a competitor has more effective advertising
d. consumer preferences for snack foods shifted to products free of wheat gluten
Answer: D
Opportunities are situations where performance can be improved by changing activities, such
as adding a gluten-free snack food line to take advantage of the change in consumer
preferences.
25) Typical motives for “pseudo-research” include all of the following except
a. using marketing research as a way to gain visibility and power in the organization
b. informing a decision among several possible courses of action
c. establishing a scapegoat for marketing decisions that do not accomplish objectives
d. promoting service organizations such as advertising agencies and media to attract new
business and impress current clients
Answer: B
Justification of a past decision would be considered pseudo-research, but using it to select an
alternative is correct use of marketing research.
26) Increasing market share by 3 percent by next year would be an example of a(n)
a. symptom
b. problem
c. opportunity
d. decision objective
Answer: D
Decision objectives include organizational goals, such as increasing marketing share by 3
percent by next year.
27) The value or benefit of formal marketing research is typically commensurate with
a. the cost of conducting the research
b. the amount of time it takes
c. the clarity of the decision to be made
d. the ability of the research to reduce uncertainty in the decision-making process
Answer: D
Although costs and time required to conduct marketing research is important, the value or
benefit is commensurate with how the research impacts the uncertainty of the alternatives.
28) Conclusive research is meant to provide information to help the decision-maker
a. evaluate and select a specific course of action from among the options previously identified
b. select the correct sampling procedure
c. identify the information needs based on the research objectives
d. clarify the problem or opportunity being faced
Answer: A
A research study designed to evaluate alternative courses of action typically is considered the
formal research project itself, referred to as conclusive research.
29) _______________ research is often needed to facilitate the development of the statement
of problems and opportunities.
a. Conclusive
b. Exploratory
c. Pseudod. Causal
Answer: B
Because managers often do not know the problem and/or opportunity, exploratory research is
often used to assist in this step of the process.
30) The objective “to study consumer reactions to cartoon characters in advertising” is
insufficient for all of the following reasons except
a. it does not indicate what type of market will be studied
b. it does not indicate what is to be measured
c. it does not indicate the cost of the study
d. it does not indicate how the information will be used
Answer: C
Research objectives should state what is to be studied, how it is to be studied, and how the
information will be used.
31) Often decision-makers can identify gaps in the original list of research needs by
a. visualizing the research findings
b. developing concrete objectives
c. selecting the correct sample
d. specifying the information needs
Answer: A
Often the decision-maker can identify gaps in the original list of research needs by
visualizing the research findings, which can then be easily corrected during this preliminary
stage of the research project.
32) When visualizing the research findings, the data chosen for presentation in the mock-up
should represent all of the following possible results except
a. optimistic
b. pessimistic
c. collected data
d. most likely
Answer: C
At this stage of the research process, no data has yet been collected. The visualization should
include data values judged to be optimistic, most likely, and pessimistic.
33) Mocked-up data used to visualize the results of a study will tend to lack uncooperative
features present in real-world data such as all of the following except
a. missing fields
b. insufficient sample size
c. miscodes
d. self-selection bias
Answer: B
A danger in using mocked-up data is that the data tend to lack uncooperative features present
in almost all real-world data, such as missing fields, high multi-collinearity, miscodes, and
self-selection bias.
34) Decision criteria are rules for
a. choosing objectives, given various information needs
b. choosing sampling procedures, given the size of the sample
c. choosing the appropriate quantitative analysis, given the form of the collected data
d. selecting among courses of action, given various data outcomes
Answer: D
Before anyone learns what the actual results are, it is important to develop the decision
criteria that will be used for selecting the best course of action. Decision-makers must be
involved in determining these criteria for the project to be pertinent.
35) Contribution margin is
a. selling price minus variable costs
b. selling price minus fixed costs
c. selling price minus variable and fixed costs
d. profit per unit divided by variable costs
Answer: A
By definition, contribution margin is the price minus variable costs.
36) It is easier to justify the cost of research as the market size _______________ and as the
ratio of variable costs to selling price _______________.
a. increases, increases
b. increases, decreases
c. decreases, increases
d. decreases, decreases
Answer: B
The larger the market and the larger the contribution margin (i.e., the lower the ratio of
variable costs to selling price), the easier it is to justify research projects because more money
is available.
37) The difference between a sample value and the true underlying population value is called
a. sampling error
b. non-response error
c. measurement error
d. systematic error
Answer: A
Sampling error is the difference between the true population value and the value obtained
from a sample drawn from the population.
38) The sum of all errors that may occur in the research process over and above the sampling
error is called
a. measurement error
b. population error
c. non-sampling error
d. systematic bias
Answer: C
Non-sampling errors refer to all errors that may occur in the research process over and above
the sampling error.
39) All of the following are types of non-sampling errors except
a. faulty problem definition
b. incorrect population definition
c. sampling frame is not representative of the population
d. small sample size
Answer: D
Small sample size is the cause of sampling error; all of the other responses are types of nonsampling error.
40) In selecting a sample for a telephone company, a researcher used the local telephone
book. Given that individuals with an unlisted number, individuals with cell phones, and
individuals without any type of phone would not be included, this illustrates which type of
non-sampling error?
a. incorrect population definition
b. sampling frame non-representative of the population
c. non-response errors
d. faulty problem definition
Answer: B
The sampling frame must match the defined population, or sampling frame errors occur.
SHORT ANSWER
1) The field of marketing research amounts to a set of methodologies designed to aid
managerial decision-making. What are the essential steps in this approach?
Answer: The essential steps are:
1) Determine what information is needed.
2) Design a method for collecting this information.
3) Manage the data collection.
4) Analyze and interpret the results.
5) Communicate the findings in a way that clarifies the implications for decision-making.
2) Explain the difference between independent and dependent variables.
Answer: Dependent variables are phenomena a researcher seeks to explain, whereas
independent variables are used to explain them.
3) List the topics that should be considered in a research proposal.
Answer: Topics to include are:
1) problem
2) objectives
3) alternatives
4) informational needs
5) personnel qualifications
6) evaluation
7) budget
8) timetable
4) What is the contribution margin if the selling price is $25.00, variable costs are $13.00,
and fixed costs are $50,000.
Answer: $12.00 (25 – 13)
5) A research project costs $80,000. Selling price is $30.00 and variable costs are $20.00.
What is the break even point to cover the costs of the research?
Answer: 8,000 units ((80,000/(30 – 20))
ESSAY
1) What is meant by the term “market”?
Answer: Generically, the market is everyone who could possibly participate in buying,
leasing, subscribing, or trading for a specific product or service and everything that could
plausibly be involved in these activities.
Another distinct meaning of “market” is more akin to “marketplace,” an arena in which
similar products or firms that compete with one another.
2) Compare and contrast consumer versus industrial marketing research.
Answer: Consumer marketing research involves a large population, respondent accessibility
is fairly easy, respondent cooperation has become increasingly more difficult to obtain,
sample size can usually be drawn as large as is needed, respondent definitions are usually
fairly simple, interviewers can be readily trained, and the key dictators of study costs are
sample size and incidence. In comparison, industrial marketing research involves a small
population, respondent accessibility is difficult, respondent cooperation is a major concern,
sample size is usually much smaller than for a consumer sample, respondent definitions are
more difficult, interviewers are more difficult to train, and study costs per interview are
usually considerably higher than for consumer research.
3) The general approach and techniques of marketing research applies to both domestic and
international contexts, but additional issues that must be considered in international research.
Discuss these issues that are unique to the international arena.
Answer: The level of uncertainty pervading the entire enterprise will be greater in the
international than in the domestic context. The cost of doing marketing research is often
much higher outside areas in which there is a highly developed research infrastructure.
Markets in developing areas are often not as large, so potential revenue an profits are more
modest. A great deal of attention must be paid to translation of language and sensitivity to
cultural differences to avoid big marketing blunders.
4) Discuss the concepts of symptoms, problems, and opportunities. Give an example of each.
Answer: Symptoms are performance measures, metrics, and diagnostics that signal the
presence of a problem or opportunity. In marketing research, the word “problem” refers to
those variables—particularly variables under direct managerial control—that lead the
organization’s performance measures to fall short of objectives. An opportunity refers to a
situation where performance can be improved by a change in activities.
Student examples will vary greatly. Examples of symptoms should refer to a metric (such as
declining sales) divorced from its underlying cause. Examples of problems should refer to
something that leads to an underperformance (such as an ineffective advertising strategy).
Examples of opportunities should refer to an instance where a change in a condition opens a
new possibility for improved performance (such as adding a new line of product when
consumer tastes shift).
5) Discuss the nature and various types of non-sampling error.
Answer: Non-sampling error refers to all errors that may occur in the research process over
and above the sampling error, including those arising from both inadvertent mistakes and
deliberate deceptions. Specific types of non-sampling error include faulty problem definition,
incorrect population definition, sampling frame non-representative of the population, nonresponse errors, poor questionnaire design, measurement error, and improper causal
inferences.
Test Bank for Modern Marketing Research: Concepts, Methods, and Cases
Fred M. Feinberg, Thomas Kinnear, James R. Taylor
9781133188964, 9781133191025, 9780759391710
