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Chapter Four: Marketing Research Chapter Objectives 1 Describe the five steps in the marketing research process 2 Explain the differences between secondary data and primary data, and determine when each should be used 3 Identify various internal and external secondary data sources 4 Describe various primary data collection techniques 5 Discuss ethical issues firms encounter when conducting marketing research Annotated Chapter Outline PowerPoint Slides Instructor’s Notes The chapter objectives and roadmap are intended to help students understand the content to be discussed. Opening Vignette: E.D. Smith E.D. Smith used research in store aisles to get new product ideas. Taste tests showed that consumers wanted jams with less sugar, leading to three new product lines Marketing Research Improves Decision Making All Types of Organizations Use Marketing Research. Nonprofit organizations. Governments. The marketing research function links firms and organizations to their customers through data. By collecting data from customers, firms can better deliver products and services designed to meet their needs. Answer C A. Topic One: The Marketing Research Process Two Questions Help Determine the Appropriate Marketing Research Process. Will the research be useful, provide insights beyond what managers already know, and reduce uncertainty associated with the project? Is top management committed to the project and willing to abide by the results of the research? Research is very expensive and must be clearly beneficial to justify the cost. This slide can be used to introduce the marketing research process. More in depth slides follow for each step. Answers to some research questions are readily accessible, as a simple data search would show, while others require a more in-depth search and process. The Steps of the Marketing Research Process. Step One: Define the Objectives and Research Needs Establish exactly what information is required to answer the specific research questions and how that information should be obtained. Clearly defined objectives ensure that research efforts and resources are not wasted. To determine whether to conduct research, two questions must be addressed: What? How? Clearly defining the problem and research objectives helps to keep the scope of the project in check. Group activity: Have the students choose a research question. To get everyone on the same page, it is useful to choose a question concerning the university, such as, “What do students think about the food in the cafeteria?” Use this question throughout the class. Step 2: Design the Research Project Researchers identify the type of data needed and determine the type of research necessary to collect it. Secondary data are information collected from other sources, which usually are readily available. Syndicated data are available for a fee from commercial research firms. Primary data address specific research needs and can be collected through observations of consumer behaviour, focus groups, or customer surveys. After answering why and how, researchers must determine where they can find the data. Discuss how the types of data required determine the methods used to collect them. Secondary data are plentiful and often free. Some examples include internal sources (sales records), government sources (StatsCan), books, periodicals, trade associations, commercial data services (AC Nielsen), on-line databases and the internet. Syndicated data generally are more detailed but can be very costly. Ask students: Why might firms subscribe to a data service and collect their own primary and secondary data at the same time? Ask students: Should you use primary or secondary data to collect information for your research? Why? Answer D The major advantage of primary data is that they can be tailored to fit the pertinent research questions. Their major disadvantage is cost. Primary data collection also requires trained researchers. Group activity: As a group, tackle a problem for a company (e.g., local retailer who appears to be losing customers.) For this problem, list several research questions that secondary data can answer. Then list several questions that require primary data. Power of the Internet 4.1: Out with the Old and in with the New .Today, marketers are increasingly turning to the Internet to collect data for market research. This approach offers marketers many advantages including convenience, speed of collection and analysis (faster), better targeting of respondents, flexibility in administering data collection instruments, and it is relatively inexpensive. However, there are many drawbacks that marketers need to be aware of. These include(1) it does not always allow marketers to get a deep understanding of their customers, (2) it is not always representative, and (3) it may contain severe bias as it is difficult to control on the Internet. Marketers need to be aware of both the strengths and limitations of market research on the Internet. Step Three: Data Collection Data collections begin only after the research design process ends. Depending on the nature of the research problem, collection might entail either exploratory or conclusive research. Exploratory research attempts to understand the phenomenon of interest and provides initial information when the problem lacks any clear definition. Conclusive research provides the information needed to confirm insights and suggest appropriate courses of action. Many research projects use exploratory research as a first phase, followed by conclusive research. Research often begins with simpler processes and then evolves into more elaborate and costly techniques. Exploratory research tends to be more qualitative, whereas conclusive research often relies on quantitative methods. Group activity: Each group represents a hypothetical firm that needs marketing research. Describe the information needed and when exploratory or conclusive research would be more appropriate. Exploratory research methods Observation involves examining purchase and consumption behaviours through personal or video camera surveillance. The observation can be very brief or last for a long time. During in-depth interviews, trained researchers ask questions, listen to and record the answers, and then pose additional question to clarify or expand on a particular issue. In focus group interviews, several persons (usually 8–12) engage in an intense discussion about a particular topic. Using an unstructured inquiry method, a trained moderator guides the conversation according to a predetermined general outline of the topics of interest. Virtual focus groups use large groups of individuals and conduct similar research online. With projective techniques, subjects are provided a scenario and express their thoughts and feelings about it. Example of observation: When a museum wanted to know which exhibits people visited most often, it conducted a unique study to determine the wear patterns in the floor. This “human trace” evidence allowed the museum to study flow patterns. Interviews provide extremely valuable information, because researchers can probe respondents to elicit more information about interesting topics. Focus groups similarly provide a snapshot of customers’ opinions and allow some follow-up but also are relatively fast and inexpensive to conduct. Group activity: In groups, one person serves as the moderator and another as the note taker. Each moderator determines a product/service to discuss with the rest of the group, which represents the focus group. The note taker keeps track of the discussion. At the end of class, each group reports on its findings. Potential focus group topics include any current campus situation. For example, should drinking be allowed on campus? Alternatively, the moderators could choose a common product, such as: What makes the best chocolate chip cookie? Ethical Dilemma 4.1: Watching Consumers Often there is a huge disconnect between what consumers tell you in surveys and focus groups and what they actually do when shopping in stores. Thus, market researchers turn to observational research to help uncover information that would not be accessible to them through more traditional marketing research means – as Frito Lay did. the use of other observational research methods where consumers may be unaware that they are being studied in their natural habitat is on the rise Many firms now have “ears wide open” programs to collect employee observations about consumer behaviour. Rarely do customers know that they are being observed or that the observations are being recorded. Ask students: What do you think of this practice? Answer D Conclusive research methods Can be either descriptive or experimental in nature. Can be collected through scanner data or a panel of consumers. A survey systematically collects information from people, usually with a questionnaire. Research can describe a phenomenon or determine a causal relationship. Provide two research questions: How do you feel about the new Audi S4? Describe a situation in which researchers manipulate some variables. For instance, they can have the Audi S4 priced at different prices in different, yet similar markets. Then describe how 1 is descriptive and 2 is experimental. A questionnaire includes questions designed to gather information from respondents. Unstructured questions are open-ended and allow respondents to answer in their own words. Structured questions are closed-ended and provide a discrete set of response alternatives or specific answers for respondents to evaluate. Marketing research relies heavily on questionnaires, and questionnaire design is virtually an art form. Group activity: Create a questionnaire. First determine the form of the questions (i.e., structured versus unstructured). On the basis of these questions, what types of analysis will you be able to perform on your collected data? This line of questioning can be as simple or advanced as you like. You can illustrate that it is difficult to tabulate open-ended questions, compared to more structured questions. Or, you can go into the types of analyses that are possible with ordinal and interval data. A good survey must avoid certain practices and elements. Ask students: Why is each question good or bad? Web surveys have steadily grown as a percentage of all quantitative surveys because Response rates are relatively high. Respondents tend to lie less. They are inexpensive. Results can be processed and received quickly. vi. The Internet also provides a means to collect other forms of data. Ask students: Have you received any Internet surveys? For example, Amazon.com sometimes asks customers to report on their satisfaction with a recent transaction. Did you complete the survey? If so, were you honest in your responses? Answer C Case-in-Point Series The Internet offers researchers a new way to reach customers, but its use requires adaptations and new research methods. Experimental research, a type of quantitative research, systematically manipulates one or more variables to determine which have causal affects on others. An example of an experiment could involve two groups of subjects. One tastes cookies with a national brand and the other with a store brand. Each group rates the cookie on a seven point scale from poor to great taste. The group with the branded name tends to rate the cookie as better tasting, demonstrating the power of a brand name. Group Activity: Ask students to design a taste test experiment for Coke vs. Pepsi. Case-in-Point Series Most students do not think of scientific experiments when they think of marketing research. Ask students: Ever wonder why it smells like Christmas in October? By changing the ambient elements in a store (e.g., smell, sounds), retailers can prompt consumers to spend more. Scanner research uses data obtained from scanner readings of UPC codes at checkout counters. Students may not remember a time before grocery stores used scanners, but highlight how the installation of scanners created a huge new data source for marketers. Ask students: What can researchers take from scanner data? Students might note that researchers can discover which consumers purchase what products together and how often. They also can immediately track the impact of any price or promotional adjustments. Panel research involves collecting information from a group of consumers (the panel) over time, whether with a survey or from a record of their purchases. In recent years, response rates to marketing research surveys have declined, which has increased usage of research panels. Step Four: Analyzing Data Methodical analysis and interpretation generates meaningful information. Data are raw numbers or other factual information that, on their own, have limited value for marketers. Information results from the organization, analysis, and interpretation of data, which puts the data into a form that is useful to decision makers. Converting data to information allows marketers to describe, explain, predict, and/or evaluate a particular situation The problem today is not too little data but, in many instances, too much. Firms are drowning in data, and their challenge is to convert that data into information. For the taste test example discussed earlier, suppose the average mean for the group who saw the national brand cookie was 5.4 (1=poor taste and 7=great taste) and the store brand cookie was 2.3. These two means are significantly different. It would be important for the students to realize that the data helps marketing managers make decisions – in this case – creating and cultivating that the brand is important. Step 5: Present Action Plan The analyst prepares the results and presents them to the appropriate decision makers. A typical marketing research report includes an executive summary, the body of the report, conclusions, limitations, and appropriate supplemental tables, figures, and appendixes. A typical marketing research report would start with an executive summary. This would highlight the objectives of the study, methodology and key insights. The body of the report would go through the objectives of the study, issues examined, methodology, analysis and results, insights and managerial implications. We would end with conclusions and any limitations or caveats. Many consultants today, provide an executive summary, power point presentation of the report, questionnaire and tabulated study results. Answer B Topic Two: The Ethics of Using Customer Information Marketing Research Makes Ethical Abuses Possible. Because they can link data sets and build enormous databases, firms must be careful not to abuse their access to customer data. Firms must provide assurances to customers that they have control over their data and how it is used. Government regulations now cover data access. Firms must adhere to ethical practices when conducting marketing research. Research should produce only unbiased, factual information. As Chapter 3 highlighted, marketing research is susceptible to ethical dilemmas. Researchers who do not follow ethical practices destroy their credibility. Visit the Code of Ethics Web site (click on the link in the slide) and review the criteria for ethical research. Entrepreneurial Marketing 4.1: Marketing Research on a Shoestring Budget Although market research is normally quite expensive, it is still possible to do proper marketing research on a small budget. This box lists many ways in which effective marketing research can be done on a limited budget by making use of publicly available information that is often free or relatively inexpensive. Instructor Manual for Marketing Dhruv Grewal, Michael Levy, Shirley Lichti, Ajax Persaud 9780071320382, 9780070984929
