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�Conducting �Marketing Research

1

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What is Marketing Research?

Marketing research is the systematic design, collection, analysis, and reporting of data and findings relevant to a specific marketing situation facing the company.

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Types of Marketing Research Firms

Syndicated

Custom

Specialty-line

Most companies use a combination of marketing research resources to study their industries, competitors, audiences, and channel strategies. Companies normally budget marketing research at 1 percent to 2 percent of company sales and spend a large percentage of that on the services of outside firms.

Marketing research firms fall into three categories:

1. Syndicated-service research firms—These firms gather consumer and trade information, which they sell for a fee. Examples include the Nielsen Company, Kantar Group,Westat, and IRI.

2. Custom marketing research firms—These firms are hired to carry out specific projects. They design the study and report the findings.

3. Specialty-line marketing research firms—These firms provide specialized research services. The best example is the field-service firm, which sells field interviewing services to other firms.

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The Marketing Research Process

Define the problem
Develop research plan
Collect information
Analyze information
Present findings
Make decision

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Step 1: Define the Problem

Define the problem
Specify decision alternatives
State research objectives

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Types of Research

Exploratory

Descriptive

Causal

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Step 2: Develop the Research Plan

Data sources
Research approach
Research instruments
Sampling plan
Contact methods

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Data sources

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Research Approaches

Observational and ethnographic
Focus group
Survey
Behavioral
Experimental

Researchers can gather fresh data by observing the relevant actors and settings unobtrusively as they shop or consume products. Sometimes they equip consumers with pagers and instruct them to write down what they’re doing whenever prompted, or they hold informal interview sessions at a café or bar. Photographs can also provide a wealth of detailed information. Ethnographic research is a particular observational research approach that uses concepts and tools from anthropology and other social science disciplines to provide deep cultural understanding of how people live and work. The goal is to immerse the researcher into consumers’ lives to uncover unarticulated desires that might not surface in any other form of research. Companies undertake surveys to assess people’s knowledge, beliefs, preferences, and satisfaction and to measure these magnitudes in the general population. Customers leave traces of their purchasing behavior in store scanning data, catalog purchases, and customer databases. Marketers can learn much by analyzing these data. Actual purchases reflect consumers’ preferences and often are more reliable than statements they offer to market researchers. The most scientifically valid research is experimental research, designed to capture cause-and-effect relationships by eliminating competing explanations of the observed findings. If the experiment is well designed and executed, research and marketing managers can have confidence in the conclusions. Experiments call for selecting matched groups of subjects, subjecting them to different treatments, controlling extraneous variables, and checking whether observed response differences are statistically significant.

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Focus Groups

A focus group is a gathering of 6 to 10 people carefully selected by researchers based on certain demographic, psychographic, or other considerations and brought together to discuss various topics of interest at length. Participants are normally paid a small sum for attending. A professional research moderator provides questions and probes based on the marketing managers’ discussion guide or agenda. In focus groups, moderators try to discern consumers’ real motivations and why they say and do certain things. They typically record the sessions, and marketing managers often remain behind two-way mirrors in the next room. To allow for more in-depth discussion with participants, focus groups are trending smaller in size. Focus-group research is a useful exploratory step, but researchers must avoid generalizing from focus-group participants to the whole market, because the sample size is too small and the sample is not drawn randomly.

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Research Instruments

Questionnaires
Qualitative Measures
Technological Devices

A questionnaire consists of a set of questions presented to respondents. Because of its flexibility, it is by far the most common instrument used to collect primary data. Researchers need to carefully develop, test, and debug questionnaires before administering them on a large scale. The form, wording, and sequence of the questions can all influence the responses. Closed-end questions specify all the possible answers and provide answers that are easier to interpret and tabulate. Open-end questions allow respondents to answer in their own words and often reveal more about how people think.

Qualitative research techniques are relatively unstructured measurement approaches that permit a range of possible responses. Their variety is limited only by the creativity of the marketing researcher. There has been much interest in recent years in various technological devices.

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Qualitative Techniques

Word Associations

Visualization

Projective Techniques

Laddering

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Questionnaire Do’s and Don’ts

Ensure questions are free of bias
Make questions simple
Make questions specific
Avoid jargon
Avoid sophisticated words
Avoid ambiguous words

Avoid negatives
Avoid hypotheticals
Avoid words that could be misheard
Use response bands
Use mutually exclusive categories
Allow for “other” in fixed response questions

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Question Types - Dichotomous

In arranging this trip, did you contact American Airlines?

⬜ Yes ⬜ No

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Question Types – Multiple Choice

With whom are you traveling on this trip?

⬜ No one

Spouse
Spouse and children
Children only
Business associates/friends/relatives
An organized tour group

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Question Types – Likert Scale

Indicate your level of agreement with the following statement: Small airlines generally give better service than large ones.

⬜ Strongly disagree

Disagree
Neither agree nor disagree
Agree
Strongly agree

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Question Types – �Semantic Differential

American Airlines

Large ………………………………...…….Small

Experienced………………….….Inexperienced

Modern……………………….…..Old-fashioned

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Question Types – �Importance Scale

Airline food service is _____ to me.

⬜ Extremely important

Very important
Somewhat important
Not very important
Not at all important

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Question Types – Rating Scale

American Airlines’ food service is _____.

⬜ Excellent

Very good
Good
Fair
Poor

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Question Types –�Intention to Buy Scale

How likely are you to purchase tickets on American Airlines if in-flight Internet access were available?

⬜ Definitely buy

Probably buy
Not sure
Probably not buy
Definitely not buy

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Question Types –�Intention to Buy Scale

How likely are you to purchase tickets on American Airlines if in-flight Internet access were available?

⬜ Definitely buy

Probably buy
Not sure
Probably not buy
Definitely not buy

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Question Types –�Completely Unstructured

What is your opinion of American Airlines?

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Question Types –�Word Association

What is the first word that comes to your mind when you hear the following?

Airline ________________________

American _____________________

Travel ________________________

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Question Types –�Sentence Completion

When I choose an airline, the most important consideration in my decision is: ________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________.

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Question Types –�Story Completion

“I flew American a few days ago. I noticed that the exterior and interior of the plane had very bright colors. This aroused in me the following thoughts and feelings.” Now complete the story. _______________________________________________________________________________________________________________________________________________________________________________

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Technological Devices

Galvanometers
Tachistoscope
Eye cameras
Audiometers
GPS

Galvanometers can measure the interest or emotions aroused by exposure to a specific ad or picture. The tachistoscope flashes an ad to a subject with an exposure interval that may range from less than one hundredth of a second to several seconds. After each exposure, the respondent describes everything he or she recalls. Eye cameras study respondents’ eye movements to see where their eyes land first, how long they linger on a given item, and so on. Technology has now advanced to such a degree that marketers can use devices such as skin sensors, brain wave scanners, and full body scanners to get consumer responses. Some researchers study eye movements and brain activity of Web surfers to see which ads grab their attention. Technology has replaced the diaries that participants in media surveys used to keep. Audiometers attached to television sets in participating homes now record when the set is on and to which channel it is tuned. Electronic devices can record the number of radio programs a person is exposed to during the day, or, using Global Positioning System (GPS) technology, how many billboards a person may walk or drive by during a day.

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Sampling Plan

Sampling unit: Who is to be surveyed?
Sample size: How many people should be surveyed?
Sampling procedure: How should the respondents be chosen?

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Contact Methods

Researchers can collect data using mail, telephone, personal, and online interviews. The mail questionnaire is one way to reach people who would not give personal interviews or whose responses might be biased or distorted by the interviewers. Mail questionnaires require simple and clearly worded questions. Telephone interviewing is a good method for gathering information quickly; the interviewer is also able to clarify questions if respondents do not understand them. Interviews must be brief and not too personal. Personal interviewing is the most versatile method. The interviewer can ask more questions and record additional observations about the respondent, such as dress and body language. At the same time, however, personal interviewing is the most expensive method, is subject to interviewer bias, and requires more administrative planning and supervision. An approach of increasing importance, the Internet offers many ways to do research. A company can embed a questionnaire on its Web site and offer an incentive to answer it, or it can place a banner on a frequently visited site such as Yahoo!, inviting people to answer some questions and possibly win a prize.

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Pros and Cons of �Online Research

Advantages

Inexpensive
Fast
Accuracy of data
Versatility

Disadvantages

Small samples
Skewed samples
Technological problems
Inconsistencies

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Barriers Limiting the Use of �Marketing Research

A narrow conception of the research
Uneven caliber of researchers
Poor framing of the problem
Late and occasionally erroneous findings
Personality and presentational differences

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Table 4.3 Characteristics of �Good Marketing Research

Scientific method
Research creativity
Multiple methods
Interdependence
Value and cost of information
Healthy skepticism
Ethical marketing

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What are Marketing Metrics?

Marketing metrics are the set of measures that helps marketers quantify, compare, and interpret marketing performance.

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Table 4.4 Marketing Metrics

External

Awareness
Market share
Relative price
Number of complaints
Customer satisfaction
Distribution
Total number of customers
Loyalty

Internal

Awareness of goals
Commitment to goals
Active support
Resource adequacy
Staffing levels
Desire to learn
Willingness to change
Freedom to fail
Autonomy

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What is Marketing-Mix Modeling?

Marketing-mix models analyze data from a variety of sources, such as retailer scanner data, company shipment data, pricing, media, and promotion spending data, to understand more precisely the effects of specific marketing activities.

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Figure 4.2 Marketing Measurement Pathway

There are four common measurement “pathways” marketers are pursuing today as shown in Figure 4.2.

The customer metrics pathway looks at how prospects become customers, from awareness to preference to trial to repeat purchase, or some less linear model. This area also examines how the customer experience contributes to the perception of value and competitive advantage. The unit metrics pathway reflects what marketers know about sales of product/service units—how much is sold by product line and/or by geography; the marketing cost per unit sold as an efficiency yardstick; and where and how margin is optimized in terms of characteristics of the product line or distribution channel. The cash-flow metrics pathway focuses on how well marketing expenditures are achieving short-term returns. Program and campaign ROI models measure the immediate impact or net present value of profits expected from a given investment. The brand metrics pathway tracks the development of the longer term impact of marketing through brand equity measures that assess both the perceptual health of the brand from customer and prospective customer perspectives as well as the overall financial health of the brand.

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For Review

What constitutes good marketing research?
What are the best metrics for measuring marketing productivity?
How can marketers assess their return on investment of marketing expenditures?

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