Chapter Seven: Marketing Research TOOLS FOR INSTRUCTORS • Learning Objectives • Annotated Chapter Outline with Instructor’s Notes/Teaching Tips • Answers to End of Chapter Learning Aids Concept Review Marketing Application Questions Net Savvy Chapter Case Study • Video Activities Learning Objectives 1 Identify the five steps in the marketing research process 2 Describe the various secondary data sources 3 Describe primary data collection techniques and summarize the differences between secondary data and primary data 4 Outline ethical issues firms encounter when conducting marketing research Annotated Chapter Outline PowerPoint Slides Instructor’s Notes Chapter 7 will focus on marketing research. These questions are the learning objectives guiding the chapter and will be explored in more detail in the following slides. Opening Vignette: P&G Virtual store testing is one aspect of marketing research used by companies such as P&G. They can test package designs, shelf displays and store layouts and then make changes as needed. The research is also useful to determine product placement strategies. Per chapter introduction: the case study focuses on how virtual reality when applied to marketing research can provide manufacturers with valuable information on how consumers are likely to respond to new products & product displays. Marketing Research Improves Decision Making All types of organizations use marketing research, e.g. consumer packaged goods, non-profit organizations, governments, etc. 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 LO1: The Marketing Research Process Two Questions Help Determine the Appropriate Marketing Research Process. A. Will the research be useful, provide insights beyond what managers already know, and reduce uncertainty associated with the project? B. Is top management committed to the project and willing to abide by the results of the research? C. 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 Research Problem and Objectives • 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. Exhibit 7.2 Research Objectives This exhibit was designed to give students a better understanding of what real world research objectives entail. Ask students if any of them have been involved in research projects. Then ask what the objectives of the research were and how they were determined. Step 2: Design the Research Plan Researchers identify the type of data needed and determine the type of research necessary to collect it. After answering why and how, researchers must determine a plan that involves where they can find the data. Step Three: Data Collection Data collection begins only after the research design process ends. Depending on the nature of the research problem, data may be collected from primary or secondary sources. Both types of data are used depending on timing of research needs & budgets. Secondary and primary data are defined in the slide. Students should fully understand the differences between secondary & primary data. Sometimes they find these concepts confusing & as such some extra time & emphasis should be spent here. Step Four: Analyze Data and Develop Insights • 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. 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: A; see page 207 LO2: Secondary Data Secondary data are information collected from other sources, which usually are readily available. • Internal secondary data comes from the company’s own sales and other records. • External secondary data comes from a wide variety of sources and ranges from free to fairly inexpensive since the data has already been collected. • Syndicated data are available for a fee from commercial research firms. 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 secondary data at the same time? 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. • Scanner data 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 data 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. Answer: C; see page 215 LO3: Primary Data Collection Techniques Primary data address specific research needs and can be collected through observations of consumer behaviour, focus groups, or customer surveys. a. The major advantage of primary data is that they can be tailored to fit the pertinent research questions. b. Their major disadvantage is cost. c. 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 primary data can answer that secondary data cannot. Ask students: Should you use primary or secondary data to collect information for your research? Why? Qualitative and Quantitative Research Depending on the nature of the research problem, collection might entail either qualitative (exploratory) or quantitative (conclusive) research. • Qualitative research attempts to understand the phenomenon of interest and provides initial information when the problem lacks any clear definition. • Quantitative research provides the information needed to confirm insights and suggest appropriate courses of action. • Many research projects use qualitative research as a first phase, followed by quantitative research. Research often begins with simpler processes and then evolves into more elaborate and costly techniques. Qualitative research tends to be more exploratory, whereas quantitative research often relies on more conclusive methods. Group activity: Each group represents a hypothetical firm that needs marketing research. Describe the information needed and when qualitative or quantitative research would be more appropriate. Qualitative research methods a. 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. b. 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. c. 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. d. Social media can provide a wealth of research data from polls, Facebook surveys, blog comments, etc. e. 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? Answer: C; see page 222 Ethical Dilemma 7.1: 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 Envirosell did in Staples stores. 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? Quantitative research methods Can be either descriptive or experimental in nature. Can be collected through • Surveys • Panel of consumers • Experiments 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 survey systematically collects information from people, usually with a questionnaire. 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. 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? 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. 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. Answer: C; see page 227 Entrepreneurial Marketing 7.1: 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 LO4: Emerging Technology and The Ethics of Using Customer Information Marketing Research Makes Ethical Abuses Possible. A. Because they can link data sets and build enormous databases, firms must be careful not to abuse their access to customer data. B. Firms must provide assurances to customers that they have control over their data and how it is used. C. Government regulations now cover data access. D. Firms must adhere to ethical practices when conducting marketing research. E. Research should produce only unbiased, factual information. As Chapter 18 highlights, 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. Answer: C; see page 231 Concept Review: Generally, the concept questions are designed to achieve a single purpose – to encourage students to test their knowledge and understanding of the theoretical content of the chapter. These questions encourage recall and reflection, which will better prepare students to answer the marketing applications questions based on their understanding of the theory. 1. Is marketing research necessary? Defend your answer. Answer: Marketing research improves decision-making substantially and thus it is considered necessary among marketers. It does not guarantee success but it can serve as a roadmap to direct you from where you are to where you want to be, help to avoid costly mistakes, reveal unforeseen opportunities, and improve marketing strategy and marketing efforts. Marketing research can range is scope from a small-scale observational study or examining the company sales records to large-scale, rigorous study involving several data collection methods and respondents. The scope of the study or the research techniques used will invariably be based on the research question or problem at hand, the time available before answers are needed (i.e. the urgency), and the cost of undertaking the study. Marketers often make trade-offs between cost and time but should not compromise the rigour and quality of the research. A reduced scope that is conducted in a rigorous manner is preferable than cutting corners just to speed-up the process or cut costs. Poor marketing research could lead to poor or faulty decisions or action plans. 2. Briefly describe the steps in the marketing research process. Explain why it is important to clearly define the problem and research objectives from the very outset of the process. Answer: Step 1: Defining the Problem and Objectives - define the problem correctly and the questions that need to be answered Step 2: Designing the Research Plan - identify the type of data needed and determine the type of research necessary to collect it Step 3: Data Collection Process – perform the collection of date, either exploratory or conclusive research. Step 4: Analysing Data and Interpreting Findings - analyse and interpret the data—should be both thorough and methodical Step 5: Presenting Results - prepare the results and present them to the appropriate decision makers Clear definition of the problem is critical because if you define the problem incorrectly, you will more than likely end up with the wrong solution even though the rest of the process is done perfectly. Even more dangerous, this solution may be accepted as right and acted on after the cost and time invested in the research. 3. What is the difference between secondary and primary data? What are some of the advantages of each type of data? When should each type of data be used? Answer: Primary data is new data collected to address specific research needs. The advantage to this type of data is that it is often more relevant, accurate and timely since it is collected with the research problem in mind, and that it can be tailored to meet specific needs. Secondary data is existing data collected from other sources. The benefits here are lower costs, and the ready availability of this data. Secondary data are usually not collected with the particular research question in mind. Each data type is appropriate in different cases – and some motivating factors are a) budget available, b) importance of project or inherent risk assumed, and c) availability of existing data. 4. In data collection methods, researchers may choose between qualitative research methods or quantitative research methods or use both methods. What considerations guide their choice of data collection methods? Answer: There are many considerations to the choice of data collection methods. Often qualitative research is used when little is known about the topic, or when the problem lacks clear definition. Quantitative research works to prove or disprove a hypothesis, and is used when firm answers are needed. Also, other factors can influence the type of research performed, such as time, (how quickly the marketer needs an answer to the research question), availability of skilled or experienced researchers to collect data, and available budget. 5. Today, information and communications technologies (ICT) including the Internet are not only changing the way marketing is practiced but how market research is conducted. In response, many companies are using a wide variety of observational methods (GPS, RFID, Video Camera, Audio devices, ethnography, etc.) to gather customer data. Discuss the ethical issues underlying the increasing use of observational research methods using technology. Answer: Many ethical issues arise with respect to technology. The primary issues pertain to informed consent and violation of privacy. Observing uninformed consumers very well may lead to important insights that would not otherwise be discovered, however, it is unethical to observe a customer without his/her informed consent. The customer being unaware they are being observed will not know what the data will be used for – the purpose for collecting the data, who will have access to the data, and with whom the information will be shared. Thus, there are no guarantees with respect to anonymity and confidentiality. 6. Marketing research is designed to help marketers make better decisions on various aspects of their businesses. The quality of research findings is as good as the quality of the data on which they are based. What are some things marketers could do to ensure that they obtain the best quality data? Answer: Some ways to ensure accurate data are: 1) use large sample sizes and correct sample units i.e. customers who fit your sampling criteria, 2) use a sampling plan that would reduce sampling bias, researcher bias, and self-selection bias, 3) use a multiple data collection methods and different sources, 4) the survey questionnaire or interview protocol must be clear, concise, easy to understand, and minimise recall that goes too long back in time. 7. Explain the main advantages and disadvantages of using the Internet for marketing research versus conventional offline methods. Answer: Advantages include higher response rates to online surveys, inexpensive access to many respondents, and quick turnaround times. Disadvantages of internet research include inability to verify the source, inability to observe respondents and conflicting information available. 8. Identify and explain the ways in which the design of a market research study could reduce the reliability and validity of the study. Can a market research study that has high reliability lack validity? Can a study that has high validity lack reliability? Explain your answers. Answer: A poorly designed market research study could reduce reliability and validity in a number of ways. The main ways this could happen are during the design stage, where a survey or other data collection method is poorly designed, or during the collection phase, if the sample is chosen in an improper way, or if the data collection method (e.g., survey or focus group) is administered poorly. A market study that has high reliability but lacks validity could easily exist. For example, if you wanted to ask teenagers about clothing choices, you could survey high school students every Tuesday at lunch time and get the same answers consistently, proving reliability. However, if you only visited high schools in one region, the data would not be valid for the entire province – it would only reflect one region’s tastes. A market study that has high validity but lacks reliability could exist. A market research firm could design an online survey to send to Canadians in every province, asking them scaled questions about their opinions on Canadian Blood Services. The questions could be designed properly, without bias, and with clear language, asking if the respondents are familiar with the organisation’s work. If they performed the survey on the same random sampling of Canadians three separate times – January, June and November, and received completely different replies each time, the survey would not be reliable. 9. What do you think are some of the differences between qualitative data collection methods, which are mainly exploratory, and quantitative research methods, which are more conclusive in nature? Which type of methods should a research prefer and why? Answer: The main difference between the two types is depth of response. Qualitative or exploratory methods generate in-depth information that is often difficult or impossible to capture with more quantitative methods (e.g., respondents’ body language or detailed in focus groups, interviews, or other observational methods). The sample sizes are usually much smaller, they tend to take a longer time to administer, and there is substantial room for researcher’s bias. Quantitative or conclusive research methods provide more standardised answers to the same questions, which can be analysed using statistical analysis methods. There tends to be less researcher’s bias, they are faster to administer, easier to analyse, and cost less to administer. However, poorly designed survey instruments could lead to misinterpretation of the question and therefore incorrect answers. Conclusive research is generally used to confirm hypotheses whereas exploratory research is used to get abetter understanding of the research question or problem. Thus, exploratory research is usually followed up with conclusive research. 10. Explain some of the problems and challenges market researchers face in the data analysis and interpretation stage of the marketing research process. Should they report these problems when presenting their research report? Why or why not? Answer: It is important for market researchers to analyse and interpret the data in an objective manner and do not try to hide or skew findings. Misinterpreting the findings or manipulating the statistics could lead to the wrong decision, which could have serious consequences for marketers. The temptation to lie with statistics is something market researchers have to always be aware of and try to avoid. Any assumptions or calculation methods used during these stages must be clearly reported in the results in order to avoid misunderstandings and to provide the best possible information to readers, users or managers. Marketing Applications 1. A large department store collects data about what its customers buy and then stores these data in a data warehouse. If you were the store’s buyer for children’s clothing, what would you want to know from the data warehouse that will help you become a more successful buyer? Instructor’s Notes: In answering this question, students must not only express their understanding of data warehouses and data mining but also consider what information might be important in this scenario. By taking the perspective of a children’s clothing buyer, students should gain a better understanding of the types of data available and their potential uses. Example answers: Information about the top-selling items, how frequently they are purchased, who makes the purchase, how much that person usually spends in the store, what that person bought in addition to these items, and whether the purchased items were at full or a discounted price would offer a better profile of the type of people who buy children’s clothing, including how frequently they shop and their cost consciousness. As a buyer for children’s clothing, I'd want to know: 1. Sales Trends: What items are selling well and which are not. 2. Customer Demographics: Age, gender, and location of the buyers. 3. Seasonal Patterns: Peak buying seasons and trends throughout the year. 4. Inventory Levels: Current stock levels and turnover rates. 5. Promotional Impact: Effectiveness of past promotions on sales. 6. Customer Preferences: Popular brands, styles, and sizes. 7. Return Rates: Frequency and reasons for returns. 2. Identify a nonprofit organization that might use marketing research, and describe one example of a meaningful research project that it might conduct. Discuss how this project would be useful to the organization. Instructor’s Notes: By focusing on a scenario involving a nonprofit organization, this question illustrates that such research can be used by any organization that is trying to market itself to consumers, for-profit businesses, or other nonprofit organizations. Example answers: One nonprofit organization that might use marketing research is the United Way, which might conduct in-depth interviews with a random sample of people who have donated in the previous year to determine their motivations for donating. By conducting such research, the United Way could better focus its marketing efforts to highlight those motivations and perhaps increase the amount of donations it receives. Nonprofit Organization: American Red Cross Research Project: Survey on Donor Preferences and Motivations Description: The American Red Cross could conduct a survey to understand why donors give, their preferred methods of donation, and their motivations. Usefulness: This research would help the organization tailor its fundraising strategies, improve donor engagement, and increase donations by aligning campaigns with donor interests and preferences. 3. Marketing researchers do not always go through the steps in the marketing research process in sequential order. Provide an example of a research project that might not follow this sequence. Instructor’s Notes: This exercise is designed to test students’ knowledge of the marketing research process and their understanding of how and why that process is not necessarily linear. Example answers: An exploratory/qualitative study focused on observing a group of target consumers using a company’s product might find that the target group does not actually use the product at all, in which case the research project would not follow a traditional sequence. Instead, the company would need to go from the observation stage back to a previous stage to determine if its research addresses the right question, let alone the right target group. Example: A company launching a new product may start by analyzing existing market trends and competitor activity (secondary research) before defining specific research objectives or designing surveys (primary research). Reason: They may need immediate insights from market trends to quickly adjust their product strategy before detailed consumer research. 4. A new men’s clothing store is trying to determine if there is a significant market for its type of merchandise in a specific location where it is considering putting a store. Would it be most likely to use primary or secondary data, or a combination of the two, to answer this question? Instructor’s Notes: In considering both types of research, students must consider what data might already be available, how to leverage those data to answer specific questions, and in what areas data might be lacking. Example answers: The clothing store should use a combination of both primary and secondary data to answer the question. It could use secondary research, such as Census results, the number of clothing stores in the area, and the amount of traffic that passes the location every day, to determine market size, competition, and exposure to passers by. It probably needs primary research to find more up-to-date or unavailable information, such as fashion trends for the targeted demographic and whether men in the area would be willing to buy new clothes. The store would likely use a combination of both primary and secondary data. Secondary data would provide insights into general market trends and demographics, while primary data (such as surveys or focus groups) would offer specific information about local consumer preferences and demand for their merchandise. 5. A high-tech firm has just developed a new technology to correct bad vision without surgery or contact lenses. The company needs to estimate the demand for such a service. Would it use primary or secondary data, or a combination of the two? Instructor’s Notes: Similar to the previous question, this question prompts students to explore the difference between primary and secondary research in a different business scenario. Example answers: The firm should use a combination of primary and secondary research to determine demand, particularly because its offering involves a new technology that consumers will not be familiar with and therefore cannot have researched previously. However, secondary research might gather the percentage of the population that wears contacts or glasses and thus indicate who might be interested in this product. The primary research could then fine-tune this information by, for example, conducting surveys to discover what percentage of wearers of contacts or glasses would consider the new technology. The company would use a combination of both. Secondary data could offer insights into existing market trends and consumer behavior related to vision correction, while primary data (such as surveys or focus groups) would provide specific information on potential demand for their new technology. 6. A bank manager notices that by the time customers get to the teller, they seem irritated and impatient. She wants to investigate the problem further, so she hires you to design a research project to figure out what is bothering the customers. The bank wants two studies: (a) several focus groups of their customers and (b) an online survey of 500 customers. Which study is of qualitative and which is quantitative? Instructor’s Notes: Students must recall what the definitions and appropriate uses of qualitative versus quantitative research to develop their answers. Example answers: Because the bank manager does not yet know or have a hypothesis about why customers are irritated and impatient, the research should be qualitative in nature; that is, it should explore the potential reasons for this behaviour. Quantitative research would be inappropriate, because it requires preliminary insights or hypotheses that it can validate or disprove. • Focus Groups: Qualitative study • Online Survey: Quantitative study 7. Pom Wonderful has developed a coffee-flavoured pomegranate beverage and it wants to determine if it should begin to market it throughout Canada. The company used two separate studies to help develop the advertising campaign: • A focus group to identify the appropriate advertising message for the new beverage, and • A survey to assess the effectiveness of the advertising campaign for the new Po Wonderful beverage. Which study was qualitative and which was quantitative? Instructor’s Notes: To further the discussion started in the previous question, students should provide a clearer explanation of the two types of research. Example answers: The qualitative study refers to the focus group, which was used to formulate an appropriate marketing message, whereas the quantitative study includes the survey used to confirm whether the previously formulated marketing message was appropriate. • Focus Group: Qualitative study • Survey: Quantitative study 8. What other studies would you recommend Pom Wonderful undertake? Instructor’s Notes: To further the discussion started in the two previous questions, students should be able to suggest other research options that may be of benefit when a company considers a new product launch. Example answers: Po Wonderful also might consider direct observations of how people react when they first see the new marketing message or in-depth interviews that ask respondents how the marketing message makes them think or feel. Pom Wonderful should consider: 1. Market Segmentation Analysis: To identify target demographics and preferences. 2. Product Testing: To gather consumer feedback on the coffee-flavored pomegranate beverage before a full launch. 3. Competitive Analysis: To evaluate similar products and market positioning. 4. Sales Forecasting: To estimate potential sales and market demand. 9. Suppose your university wants to modify its course scheduling procedures to better serve students. What are some secondary sources of information that might be used to conduct research into this topic? Describe how these sources might be used. Describe a method you could use to gather primary research data about the topic. Would you recommend a specific order in obtaining each of theses types of data? Explain your answer. Instructor’s Notes: Every undergraduate student can relate to the scenario of registering for academic courses. Students need to put the various research concepts together to structure a research project that might improve this often frustrating, time-consuming process. Example answers: The university could use secondary sources of information such as how the process has been done in the past, the length of time it takes for the average student to register, the number of complaints received, the number of students waitlisted for courses, the amount of drop/add activity after registration, ages, academic class (freshman/sophomore/junior/senior), and gender. This information could indicate how long and arduous the process is; whether students can get the classes they want in the first round of registration, how much class-swapping occurs because of the poor registration process, and whether particular types of students have more trouble than others. In terms of primary research, the school could conduct direct observations of registration, in-depth interviews with students who have gone or are going through the process, focus groups with students who have been through registration and surveys of all registered students immediately after they complete registration. However, because of the limited time and patience that many college undergraduates have, as well as the limited budgets of many schools, the school might consider an initial Web survey to gather more responses for less money. In order, the other methods it should use are direct observation (which is inexpensive and involves students in the process), focus groups (because students could be lured by pizza, for example, to participate actively), and in-depth interviews (with a few randomly selected students to delve deeper into potential issues in the registration process using more open-ended questions). Secondary Sources: 1. Student Surveys and Feedback: Previous surveys on course scheduling, if available. 2. Institutional Reports: Past reports on course enrollment, scheduling conflicts, and academic performance. 3. Academic Studies: Research on best practices in course scheduling from other universities. Primary Research Method: • Conducting Surveys: Distribute surveys to students and faculty to gather their opinions and preferences on course scheduling. Recommended Order: 1. Start with Secondary Data: To understand existing patterns and identify gaps. 2. Conduct Primary Research: To gather specific, current feedback from stakeholders. This approach ensures you build on existing knowledge and obtain targeted, actionable insights. 10. Tony’s company is planning to launch a new shampoo and is trying to decide what features and price would interest consumers. He sends a request for proposal to four marketing research vendors, and three respond, as described in the table below. Vendor A Vendor B Vendor C Tony’s company has used this vendor in the past. It estimates it can complete the job for $200,000 and in two months. The vendor plans to do a telephone-based survey analysis and use secondary data. Tony’s key competitor has used this vendor, which claims that it can get the job done for $150,000 and in one month. This vendor plans to do a telephone-based survey analysis and use secondary data. During a discussion about to its price and time estimates, the vendor indicates it will draw on insights it has learned from a recent report prepared for a competitor. This well-known vendor has recently started to focus on consumer packaged good clients. It quotes a price of $180,000 and a time of one month. The vendor plans to conduct a Web-based survey analysis and use secondary data. Which vendor should Tony’s company use? Explain your rationale for picking this vendor over the others. Instructor’s Notes: Students might believe ethical issues are not at play here and therefore choose a vendor solely on the basis of the price, timeframe, and effectiveness and response rate of the research methods employed; alternatively, they may include ethical business practices as one of the selection criteria. Students’ answers will vary according to the degree to which they consider ethics a viable selection criterion. Example answers: In line with ethical business practices, Tony should include ethics as one of his selection criteria, in addition to the cost, timeframe, and research method. Therefore, he should immediately eliminate Vendor B from consideration, because it is unethical to share competitive information, even if it benefits Tony’s company. In comparing Vendor A and Vendor C, Tony should recognize that Vendor C offers to conduct the research faster, for lower cost, and with a more cost-effective research method and a higher potential response rate. Therefore, Tony should choose Vendor C. Tony’s company should consider using Vendor B. Vendor B offers the lowest price at $150,000 and the shortest timeline of one month. It uses telephone-based surveys and secondary data, similar to Vendor A. However, Vendor B has an additional advantage: it provides insights from a recent report prepared for a competitor, potentially offering valuable competitive insights. Vendor A is more expensive at $200,000 and has a longer timeline. Vendor C, while also quick, is priced at $180,000 and focuses on Web-based surveys, which might not align with Tony's needs as closely as telephone-based surveys. Net Savvy 1. Go to the Web site of either Decima Research (http://www.decima.com) or Ipsos Canada (www.ipsos.ca) that administers public opinion polls. Search the site for results from any recent survey that is available for free. Print out the results. Identify the objective(s) of the survey. Discuss one of the major findings, and provide an interpretation of the data. Instructor’s Notes: This exercise provides students with access to the immense breadth and variety of research that a company like Decima or Ipsos conduct on a regular basis. The sites’ topics range from politics to entertainment, so there should be something to pique each student’s interest. Example answers: In July 2014, Ipsos Canada reported the results of one of a survey of prospective home buyers in Ontario. (Condos Rank as Second Most Popular Real Estate Choice for Prospective Ontarian Homebuyers http://www.ipsos-na.com/news-polls/pressrelease.aspx?id=6559) One of its major findings is that the detached home is still the standard choice with 59% of buyers looking for such a home. However, 28% of buyers now list condos as their second choice. The survey also tracked views of the housing market in terms of positive sentiments (35% felt the market was stronger than a year ago, with 28% saying the market is very favourable.) The survey also asked people how likely they were to buy in the next two years. This finding may help home sellers and realtors maximize their effectiveness, gain an understanding of how Ontario residents view the housing market, and understand some of the reasons for purchasing a home (e.g. sense of pride, investment). To complete this task, follow these steps: 1. Visit the Website: • Go to either [Decima Research](http://www.decima.com) or [Ipsos Canada](http://www.ipsos.ca). 2. Find Recent Survey Results: • Look for the section on recent surveys or public opinion polls. 3. Print Out Results: • Download and print the survey results available for free. 4. Identify Objectives: • Determine the survey's objectives from the summary or description of the survey. 5. Discuss Major Findings: • Choose one major finding from the survey. 6. Interpret Data: • Provide an interpretation of the chosen finding based on the data. For example, if you found a recent survey on public opinion about environmental policies, the objective might be to gauge public support for new green initiatives. A major finding could be that 70% of respondents support increased government investment in renewable energy. This suggests strong public backing for green policies, which could influence policy-making and business strategies in the energy sector. 2. Select two online survey tools (e.g., SurveyMonkey, Qualtrics, Zoomerang, Survey Solutions) and compare and contrast them in terms of their features, capabilities, ease of use, support service, pricing models, clientele, and any other characteristics you think would be useful for a market researcher to know. Instructor’s Notes: Online consumer surveys are becoming increasingly popular and so are the number of tools and vendors available to fulfill this need. Students could develop a better appreciation of the capabilities, costs, limitations and services of the available tools through this exercise. Example answers: Zoomerang My Survey Lab Fluid Surveys SurveyMonkey Unlimited surveys yes yes yes yes Templates yes no no yes Branching or skipping yes yes yes yes Language Support yes no no yes Closing page yes yes yes yes Duplicate survey yes yes yes yes Customization yes no no yes Upload email contacts yes yes no yes Publish by URL yes yes yes yes Publish by email yes yes no yes Export to CSV yes yes no yes Free plan yes yes yes yes Starting plan (monthly) $19 currently free $14.95 $19.95 Source: Comparing Survey Applications: http://www.listio.com/reviews/2009/01/comparing-survey-applications-zoomerang-surveymonkey-fluidsurveys-and-mysurveylab/ (accessed October 25, 2011) This table should help you compare and contrast the two survey tools based on their features, ease of use, support, pricing, clientele, and customization options. End-of-Chapter Case Mobile Surveys Provide Real-time Customer Insights 1. What do you consider to be the strengths and limitations of the FACES tool that Shoeless Joe’s is using to capture information to make location decisions based on customers’ insights? Instructor’s Notes: This question is designed to get students to think about the strengths and limitations of using technologies, specifically mobile devices, to capture data. The setting must also be considered. Students may find this question challenging. Example answers: The FACES tool is basically and hand-held device (much like PDA) that is preloaded with a short questionnaire, which patrons at Shoeless Joe’s are asked to “fill-out” while visiting the restaurant. While the actual hand-held device does not have any drawbacks in itself (except some patron may have difficulty reading on a small screen), there are drawbacks in the way it is being used to administer the survey. Employees ask patrons the questions and input their answers or patrons are given the device with the questionnaire and asked to fill in their answers to the questions. Experience with this technology may be a factor to consider in whether patrons complete the survey or not. Those who are familiar with the device may not have any problem but others who are not may inadvertently submit an incomplete survey or ask for a second attempt. Such an event will add noise to the data. Also, in a social setting, some patrons may be hesitant or uncomfortable filling out the survey because of the risk of being embarrassed. The benefits of FACES are that it provides instant results and feedback from actual patrons and most consumers may find it easy to use given the widespread use of PDAs in Canada. The impact of the setting is discussed below in questions 2 & 3. Strengths of the FACES tool: 1. Customer-Centric Insights: Provides direct feedback from customers, aligning location decisions with their preferences. 2. Data-Driven Decisions: Facilitates objective, accurate location selection based on quantifiable data. 3. Improved Accuracy: Enhances location selection accuracy compared to assumptions or less targeted data. 4. Market Understanding: Offers insights into market trends and demographics for strategic planning. Limitations of the FACES tool: 1. Data Quality and Bias: Accuracy depends on the representativeness of the data, which might be biased. 2. Cost and Complexity: Implementation and maintenance can be expensive and complex. 3. Limited Context: May not capture the full context behind customer preferences. 4. Dynamic Market Conditions: May not quickly adapt to changes in customer preferences or market conditions. 5. Over-Reliance on Data: Risk of ignoring qualitative factors like local competition and site visibility. 2. What are the methodological drawbacks from the way in which Shoeless Joe’s employees go about collecting survey responses from customers? Instructor’s Notes: This question is designed to get students to think of methodological issues associated with data collection involving electronic surveys and how they are administered. Students may find this question challenging. Example answers: ○ Employees can introduce their own biases by selecting patrons they think would answer the questions or they believe are the right candidates. This could lead to a situation where there are no ground rules for selecting patrons or no way of ensuring if there are rules, that they were followed. ○ Employees may select the option they think patrons are suggesting or they may even suggest answers to patrons when patrons seems unsure or unaware of the answers ○ The number of patrons chosen on any given day may depend on how busy the restaurants are and so there may be little consistency from one data collection point to the next ○ Patrons may provide answers that they think employees want to hear ○ In a social setting such as in a bar, friends and family members sitting at the table may influence the answers provided. Thus, this would be a group response as opposed to an individual response, thereby adding noise to the data. Methodological Drawbacks in Collecting Survey Responses: 1. Sampling Bias: Responses may not represent the entire customer base if collected from a limited or non-representative sample. 2. Response Bias: Customers may provide biased answers based on their interaction with employees, potentially skewing results. 3. Data Accuracy: Inconsistent survey administration or data entry by employees can lead to inaccuracies. 4. Limited Depth: Short or poorly designed surveys might not capture comprehensive customer insights. 5. Survey Fatigue: Frequent or poorly timed surveys may lead to low response rates or disengaged participants. 3. How do the drawbacks identified in question 2 above, affect the validity and reliability of the data collected? Discuss? Instructor’s Notes: This question is designed to get students to think about what factors would reduce the reliability and validity of the study. Validity will not be affected by the way the study is administered but by the appropriateness or accuracy of the items that measure certain constructs (see definition of validity). Reliability will, however, be affected by the way the survey is administered since it will be difficult to replicate if there are no fixed criteria or they were not followed and monitored to ensure compliance. Most students will find this question difficult. Example answers: ○ Employees’ bias in selecting the sample respondents without always following a set criteria ○ Employees may select patrons that appear friendly or may even ask several members from the same table in order to quickly reach the quota for the day – this may lead to group think or patrons giving misleading answers ○ The setting may not be conducive for respondents to offer their true opinions or they may be influenced by friends or family ○ Respondents provide information that they think employees want to hear especially if employees are reading the questions and filling-in the responses. The identified drawbacks affect the validity and reliability of the data as follows: 1. Sampling Bias: Affects validity by producing results that may not represent the broader customer base, leading to inaccurate conclusions. 2. Response Bias: Impairs validity by skewing responses based on customer interactions, affecting the accuracy of the data. 3. Data Accuracy: Reduces reliability due to potential inconsistencies or errors in data entry, impacting the consistency of results. 4. Limited Depth: Compromises validity by failing to capture comprehensive insights, which may lead to incomplete or misleading conclusions. 5. Survey Fatigue: Lowers reliability by causing inconsistent responses or reduced participation, impacting the consistency and dependability of the data. 4. Would you recommend that Shoeless Joe’s also uses other methods to collect the data it needs? What are the advantages of the methods you would recommend over the method it currently uses Instructor’s Notes: This question is designed to get students to think about how different data collection methods can be combined to generate data that either corroborates other data or reveal new insights. Students will find this question fairly easy although they may not always provide complete answers. Example answers: ○ Shoeless Joe’s may consider replicating its FACES survey using a telephone survey in order to get comparative data, which may shed light on whether the setting influences the responses. ○ They may also choose to conduct in-depth interviews with loyal customers or even use focus groups to get a deeper understanding of patrons’ views and perceptions. Yes, I recommend using additional methods. Recommended Methods and Advantages: 1. Online Surveys: • Advantages: Reach a broader audience, reduce sampling bias, and provide convenience for respondents, leading to more representative data. 2. Focus Groups: • Advantages: Offer in-depth qualitative insights and context that can complement survey data, revealing deeper customer motivations and preferences. 3. Social Media Analytics: • Advantages: Provide real-time feedback and trends from a larger and diverse audience, capturing sentiments and behaviors not covered in surveys. Using these methods alongside current surveys can enhance the validity and reliability of the data by providing a more comprehensive view of customer preferences and behaviors. Video Activities Video: Kraft: Marketing Research to Aid Kraft's Launch of Ritz Chips Learning Objective: LO3 Description: This video provides a clear view of the nature and importance of market research in the launch of new products even from highly successful and recognizable consumer brand marketers. Key Words: market research; product development; focus group Activity: Ask students to view the video and then (1) identify the main problem Kraft was trying to address and how did that problem ultimately influence the outcome, (2) discuss what kinds and sources of information Kraft used to get insights to solve their problem, (3) use a table to match the kinds of information to the sources of information and the purpose they serve in terms of the problem at hand, e.g., kinds of information (e.g. primary data - give details), sources of information (e.g. company records & research), and purpose (to understand customer perception of differences between chips and crackers), and (4) explain to what extent and why they believed the success of the new Kraft Chip was due to the market research undertaken. Solution Manual for Marketing Dhruv Grewal, Michael Levy, Shirley Lichti, Ajax Persaud 9781259030659, 9781259104312
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