PAPER

EXHIBIT 4.6 The Market Research Process

Definethe Research Problem

Establishthe Research

Design

Search Secondary Sources

Collect the Data

Analyze the

Data

Report the

Findings

Define the Research Problem One of the biggest challenges facing a market researcher is accurately defining the problem. What exactly is the

issue/opportunity/problem? Often managers are not clear about the problem and need help defining it. It is not uncommon for a market

research professional to get a call that starts something like this: “I have a problem. Sales have been falling for six months and I am losing

business to my competitors.” The researcher knows that the real problem is not the company’s declining sales; falling sales are the result, a

symptom, of the real issue. Market research can be a useful tool helping senior managers identify and deal with the real issue.

Given that management often does not have a clear understanding of the problem, defining the research problem involves two distinct

steps. First, management, working with researchers and marketing decision makers, defines the management research deliverable. Exactly what does management want to do with this research? Keep in mind that decision makers are looking for information to help

them make better, more informed decisions. For example, if you are the director of advertising for McDonald’s, you want to increase sales

of a new sandwich, and a new advertising campaign can help accomplish that goal. However, before you decide to spend a lot of money

on the campaign, you want to know if it is going to be successful.

Once the management research deliverable has been identified, the next step is to define the research problem. Exactly what

information is needed to help management in this situation? In our example, that means assessing the target market’s response to the new

advertising campaign.

In the McDonald’s example, the research problem is fairly straightforward. However, there are often multiple research problems, and

researchers will have to prioritize which problems to study first. Consider the example of Harley-Davidson motorcycles and let’s presume

they wish to explore the potential to target more female purchasers and riders. Management may want to know: (1) How many women

are likely to be in the market for a motorcycle in general or for a Harley in particular? (2) What are the preferences women have for

particular features in a motorcycle? (3) And if Harley-Davidson were to find that a good-sized potential market exists among females who

enjoy motorcycling, how would the addition of one or more new products impact the overall product line? These important questions all

can be addressed with the right market research.

Establish the Research Design Following problem definition, companies must establish a research design, or a plan of action for attacking the research problem.

Research designs consist of five activities, each of which is designed to address a specific question about the research process, as shown in

Exhibit 4.7. It is critical that researchers develop and execute a research design so that decision makers can have confidence in the

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research findings. Effective market research is dependent on creating a research design and then executing it. Conversely, and this is a

problem for decision makers, bad market research cannot yield good information. When this happens, it severely limits management’s

confidence in the results.

While multiple designs often could work in any research situation, it is important to specify one design and follow it throughout the

research. Decisions made at the research design stage affect the rest of the project, and it is not appropriate to start over once a project

has begun. Let’s examine each of these activities.

Type of Research: What Kind of Research Needs to Be Done? Not all market research involves complex, costly studies. People do market

research all the time and don’t think of it that way. For example, a salesperson who visits a website to learn more about a customer before

a sales call is engaged in market research. The key is to fit the research to the unique requirements of the situation.

There are three basic types of research: exploratory, descriptive, and causal. While the complexity and methodology change for

each type of research, it is not necessarily true that causal research is better than exploratory. Let’s look at each research type more

closely.

As the name implies, exploratory research is really about discovery. Reasons for conducting exploratory research include:

Many times conducting exploratory research will provide sufficient information to answer the research question. Even if more

sophisticated research is needed, exploratory research is usually the first step.

Descriptive research seeks to describe or explain some phenomenon. Often this involves something going on in the marketplace and

can include issues such as:

Descriptive research uses many different methods including secondary data, surveys, and observation. Some of these methods are also

used in exploratory research. The difference is how you use the information. Descriptive research uses a different, more restrictive and

rigorous methodology than exploratory research.

Descriptive research identifies associations between variables; for example, the customers for Harley-Davidson motorcycles tend to be

middle-aged, successful men. Causal research tries to discover the cause and effect between variables.

In our Harley-Davidson example, does an increase in Harley-Davidson advertising directed toward men lead to increased sales of Harley-

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EXHIBIT 4.7 Research Design Activities

Activity Question to Be Answered

Type of research What kind of research needs to be done?

Nature of data What kind of data do we need?

Nature of data collection How should we collect the data?

Information content What do we need to know?

Sampling plan Who should be included in the research?

Clarifying the research problem.

Developing hypotheses for testing in descriptive or causal research.

Gaining additional insight to help in survey development or to identify other research variables for study.

Answering the research question.

Identifying the characteristics of our target market.

Assessing competitors’ actions in the marketplace.

Determining how customers use our product.

Discovering differences across demographic characteristics (age, education, income) with respect to the use of our product or that of

our competitors.

Davidson motorcycles? This can be particularly useful in making important marketing decisions. Consider a critical decision faced by all

marketing managers: What effect will a price increase have on sales? Causal research can determine the change in the number of sales for

different price levels. The types of research vary a great deal, so the question becomes: What kind of research is appropriate in a given

circumstance? The following factors help make that determination.

Nature of Data: What Kind of Data Do We Need? Once the type of research has been determined, the next step is to evaluate what kind

of data is needed for the research. The nature of the data will determine how the data are collected and is driven by the kind of research

the company is undertaking. The basic question is, does the research require primary data—data collected specifically for this research

question—or will secondary data—data collected for some other purpose than the problem currently being considered—be sufficient?

Even if primary data are collected, almost all research involves some secondary data collection, which we will talk about in the next

section.

Primary data are collected using one of two approaches: qualitative and quantitative. Qualitative research is less structured and can

employ methods such as surveys and interviews to collect the data; qualitative research employs small samples and is not meant to be

used for statistical analyses. Quantitative research is used to develop a more measured understanding using statistical analysis to assess

and quantify the results. Now let’s look at the nature of data collection.

Nature of Data Collection: How Should the Data Be Collected? No one technique is better than another, but it is important to use the

right technique based on an assessment of the research problem and research type. Let’s evaluate the various approaches to collecting

primary data. Exploratory research techniques include focus groups and in-depth interviews.

Without question, the most widely used qualitative research technique is focus groups. Perhaps for this reason, it is also one of the most

misused. A focus group is a meeting (either in person or increasingly online) of 6 to 10 people that is moderated by a professional

who carefully moves the conversation through a defined agenda in an unstructured, open format. Generally, the participants are selected

on the basis of some criteria. Companies like Walmart and Unilever make use of web panels that allow companies to collect relevant

information quickly and cost-effectively. For example, they may be current customers or possess certain demographic characteristics

(age, income, education), but they will all have at least one shared attribute.

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Benefit versus cost: Before making any other decisions about the type of marketing research to use, it is essential to assess the benefits

versus the costs. Put simply, if the benefits of doing the research do not exceed the cost, don’t do the research.

Time until decision: Decision makers sometimes have very little time between realizing a need for additional information and

making the decision. When time is very short (a matter of days), it is simply not possible to conduct in-depth market research. The

internet can cut the time needed for a study from months to weeks, but when time is short, researchers may have to rely on more

exploratory research and the use of secondary data.

Nature of the decision: The more strategic the decision, the more important the information and the greater the need for primary data.

Conversely, if the decision is primarily tactical (for example, decisions about where to place advertising), secondary data, like reviewing

a medium’s demographics and rate card, will likely be sufficient to make the decision.

Availability of data: Companies already have a lot of data as a result of CRM and other internal information systems. Consequently, it

may not always be necessary to collect primary data when existing or secondary data will provide the necessary answers to the research

problems.

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The value of focus groups lies in the richness of the discussion. A good moderator can draw out a lot of information from the

participants. For example, the marketing manager for Harley-Davidson might use focus groups to learn how women relate to motorcycles.

The trade-off is a deeper understanding of each participant versus a more superficial knowledge of additional people. Herein lies the

mistake many people make with focus groups. They assume that the results of a focus group are generalizable to a population of interest.

This is not the case. Focus groups are not a representative sample, and care should be taken to interpret the results properly. However,

focus groups do provide insights on an issue that are useful to researchers as they develop quantitative research techniques. Focus group

data provide a good starting point from which researchers can develop specific questions used in survey instruments.

Another common qualitative technique is the in-depth interview. An in-depth interview is an unstructured (or loosely

structured) interview with an individual who has been chosen based on some characteristic of interest, often a demographic attribute.

This technique differs from focus groups in that the interview is done one-on-one rather than in a small group. The same advantages and

disadvantages are present here as with focus groups, so researchers most often use this technique to help formulate other types of

research (surveys, observational research).

In order to develop new products that offer greater appeal to female riders, Harley-Davidson relies heavily on market research to determine what women like from a motorcycle experience. Ramzi Haidar/AFP/Getty Images

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Descriptive research techniques include surveys, behavioral data, and observational data. Of the quantitative research techniques used to

collect primary data, surveys, in their various forms, are the most prevalent. While they can be used informally in exploratory research,

their most common purpose is in descriptive research. Surveys are structured questionnaires given to a sample group of individuals

representing the population of interest and are intended to solicit specific responses to explicit questions.

There are a number of survey methods. Historically, mail and telephone surveys were the most common. Today, electronic surveys have

become widely adopted for their speed, ease of use, and relatively low cost. E-surveys can easily be done over the internet using services

such as SurveyMonkey.

Behavioral data include information about when, what, and how often customers purchase products and services as well as other

customer “touchpoints” (for example, when they contact the organization with a complaint or question). When companies match this

kind of information with demographic and psychographic information, they can see differences in purchase patterns. Behavior is usually

more reliable than surveys because it is based on what the respondents actually do rather than what they say they are going to do.

It is possible to get a lot of insight about people by simply watching what they do in various situations. Observational data are the

behavioral patterns among the population of interest. One of the most common uses of this type of research is in retailing. Retailers

watch how people move through a store, noting what aisles they go down and where they spend their time. In recent years a more

intrusive approach to observational data has been used to actually examine people in a personal setting (for example, their homes). In this

approach, the observer enters into the world of the individual rather than standing back and simply watching activities. Researchers see

people in a very personal environment to better understand how people use and interact with products.

A variation of observational data is mechanical observation. Mechanical observation uses a device to chronicle activity. Some forms of

mechanical observation are benign and not intrusive on the individual. Turnstiles, for example, record people coming into or going out of

an area. Traffic counters record the number of cars on a given street for a set time period.

There are, however, mechanical devices that are more invasive. Mechanical devices can be very useful for researchers but are often used

sparingly because of the cost and also the bias associated with the respondent’s awareness of the device. Eye cameras can track the

movement of an eye as the individual watches an ad. From this researchers can determine what the person sees first, what he is focusing

on in the ad, and how his eyes move around the ad. Another device, the galvanometer, is attached to the skin and measures subtle changes

in skin temperature. Researchers can then determine if the respondent found the ad interesting. With the advent of sophisticated home

assistants, it is possible to track people right in their homes. Alexa, from Amazon, is a home assistant that helps users carry out various

Qualtrics is a cloud-based platform for creating and distributing web-based surveys. Billing itself as a broad-based experienced management enabler, Qualtrics empowers companies to capture and act on customer, product, brand, and employee experience insights all in one place. Source: Qualtrics

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functions around the home. At the same time, it collects all the information generated around each interaction and sends it to Amazon.

Information Content: What Do We Need to Know? A critical part of research design involves determining exactly what information is

needed and how to frame the questions to get that information. From the questions used in focus groups to long questionnaires, it is

important to consider the structure and wording as well as the response choices. Most often this issue comes up in designing

questionnaires. As the most commonly used primary research technique, the survey questionnaire allows a lot of variability in its design

and structure. Some surveys, such as comment cards, are short and ask only a few questions. Others, such as new car satisfaction surveys,

can be much longer and ask dozens of questions. No matter what the situation, careful attention must be paid to the design, structure,

and format of each question. For years marketers have been interested in building and measuring customer loyalty.

Today, researchers must also consider the method of survey delivery. For example, mail surveys differ significantly from

telephone surveys because respondents interact with the questions differently. Electronic surveys present a different challenge, although

their structure is more easily adapted from a mail questionnaire.

Researchers must consider which of the many types of question formats is most appropriate for the situation. One of the most basic

decisions is whether to use open-ended or closed-ended questions. Open-ended questions encourage respondents to be expressive and

offer the opportunity to provide more detailed, qualitative responses. As a result, these kinds of questions are often used in exploratory

research. Closed-ended questions, on the other hand, are more precise and provide specific responses. As a result, they allow for more

quantitative analysis and are most often used in descriptive research. Frequently, questionnaires will contain a mix of open-ended and

closed-ended questions to get both qualitative and quantitative information in a single survey.

Sampling Plan: Who Should Be Included in the Research? Once the other elements of the research design have been developed, it is time

to consider who will be selected for the research. The most basic decision is whether to conduct a census or to sample a group of

individuals from the population. A census is a comprehensive record of each individual in the population of interest, whereas a sample is a subgroup of the population selected for participation in the research. A census may seem like the better approach because everyone in

the population is included in the study. Unfortunately, most of the time the number and diversity of the population are so large that it is

simply not physically or financially possible to communicate with everyone. As a result, sampling is by far the preferred method of

selecting people for market research.

There are two basic approaches to sampling: probability and nonprobability sampling. It is important to keep in mind that one is not

necessarily better than the other; rather, the key to making the right choice is to match the sampling approach with the research.

Budgetary constraints will also likely influence the decision. Probability sampling uses a specific set of procedures to identify

individuals from the population to be included in the research. From here, a specific protocol is identified to select a number of

individuals for the research. As an example, suppose Bank of America is interested in finding out more about a group of its customers

holding a certain kind of credit card. Let’s assume there are 10 million customers holding this particular card. The bank wants to

randomly choose 5,000 individuals for the survey. That means that everyone has a 5,000/10,000,000 = .0005 chance of being selected.

Next, Bank of America will create an algorithm to randomly identify 5,000 individuals from the list of 10 million. The algorithm ensures

that, while everyone has a .0005 chance of being selected, only 5,000 will be sampled from the entire group.

A second approach is called nonprobability sampling and, as the name implies, the probability of everyone in the population being

included in the sample is not identified. The chance of selection may be zero or not known. This type of sampling is often done when

time and/or financial constraints limit the opportunity to conduct probability sampling. The most significant problem with nonprobability

sampling is that it significantly limits the ability to perform statistical analyses and generalize conclusions beyond the sample itself.

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Search Secondary Sources Secondary data are almost always part of market research. Searching a wide variety of sources and compiling additional information

provide greater insight to the research problem and supplement the primary data collected for a specific study. We have already discussed

the availability of information inside the company, so let’s turn our attention to outside-company sources of secondary data.

Government Sources Federal, state, and local governments are an important resource in collecting information on a variety of

topics. For example, the U.S. Census Bureau publishes a library full of reports on business and consumer demographic trends. In 2017,

the Census Bureau released the most recent Economic Census providing an in-depth analysis of business activity in the United States.

Often, data are available by zip code, which can be useful for marketers in targeting specific groups of people. Expanded Census Bureau

data is set for release in late 2021. States also publish additional data on economic activity. Finally, local governments publish records

such as business licenses, as well as general economic activity in that area. Governments provide a great deal of information on a variety

of activities. From here marketers can identify areas, even down to specific streets, and get detailed demographic information, which is

very useful in a number of ways, including targeted marketing communications campaigns.

Market Research Organizations A number of market research organizations publish data helpful to marketers. One resource many people

are familiar with is Nielsen Media Research’s TV ratings. The ratings are the basis for establishing national, cable, and local advertising

rates. Another service well known to automobile enthusiasts is the J.D. Power automobile quality and customer satisfaction rankings.

While automobile manufacturers pay a fee for more detailed information, the public has access to the overall rankings.

Other organizations publish data that can be useful to marketers in particular industries. For example, MMGY Global publishes several

reports on both the leisure and business travel markets every year. These reports profile travel patterns and market segments in the travel

industry. They are very useful for any business connected to the travel industry such as airlines, hotels, and cruise lines.

There are also information data services such as Information Resources, InfoScan, and Nielsen’s ScanTrack that track scanner data from

thousands of retailers. These organizations match sales data with demographic records to give a detailed picture of how well a product is

doing in a particular area or within a certain target market. This information is useful for consumer products companies that want to

assess the success of specific marketing activities (for example, how well an advertising campaign is working with a target market).

The Internet It is now possible to access a huge amount of information using search engines to identify hundreds, even thousands, of

information sources. Care should be taken, however, to evaluate the validity of the data and the reliability of the source. Generally two

kinds of data sources can be found on the internet. The first is market research organizations (such as the ones we just discussed) willing

to share or sell market data. A second source is “general knowledge” sites such as business publications, academic research sites, or other

independent sources that have data applicable to the research problem.

Advantages and Disadvantages of Secondary Data Sources As we discussed earlier, secondary data are almost always the first place to go in

conducting a market research project. Even if primary data are collected, it is a good idea to see what has been done already that may be

applicable now. Secondary data come with two primary advantages. First, it’s a fast way to get information. Just a few minutes on a search

engine can yield a lot of information. Of course, it takes much longer than that to look through it all. A second and related advantage is

cost. Secondary data are relatively less expensive. Even if a company chooses to subscribe to organizations such as J.D. Power and

Associates, thereby getting access to more detailed data, it is still more cost-effective than conducting a primary research study.

Of course, there are very distinct disadvantages. First and most important, secondary data will, almost by definition, not fit the research

problem exactly. As a result, a specific answer to the research problem will not be possible using secondary data alone. Second, most

secondary data are not current. Sometimes the information may be only a few weeks or months old, or it may be dated to the point where

it is no longer useful for the current project. Third, without a clear understanding of the methodology used to collect and interpret the

secondary data, one should be a little skeptical about its validity.

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Collect the Data Now it is time to find and engage the respondent to collect the data. Data collection involves access and distribution of the

survey to the respondent, then recording the respondent’s responses and making the data available for analysis. A company can choose to

collect the data using its own resources or hire a market research firm to administer the data collection. The choice often depends on the

company’s internal expertise in market research as well as the resources required to complete the job.

This stage in the market research process presents several unique challenges. First, data collection is often the most costly element in the

market research process. Second, the greatest potential for error exists as data are collected. For example, respondents may not respond

to certain questions or may fill out the survey incorrectly. Finally, the people collecting the survey may be biased or make mistakes.

Technology, in the form of online surveys, can help to mitigate some of the issues with data collection. For example, electronic survey

methods are often more cost-effective than other survey methodologies. In addition, there is less chance of transcription error as no one

has to input the data into a computer. Unfortunately, not everyone has access to a computer. As a result, certain target markets may be

underrepresented if a survey requires completion of an online survey. Additionally, people may still input inaccurate responses. We will

talk about online research tools in the next section.

Photopia, which bills itself as “the next generation of slideshow software that takes slideshow creation to all new heights,” is one example of numerous presentational software packages market researchers might use. Ensuring a great look and feel for a presentation to accompany the research report can greatly enhance credibility and acceptability of the recommendations. Source: Photopia

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Analyze the Data Once the data are collected, coded, and verified, the next step is to analyze the information. The appropriate analysis is performed based

on the research questions developed at the beginning of the research. A common mistake is using unsuitable analyses that are not

supported by the data.

Analysis of the data will lead to findings that address the research questions. These findings are, in a sense, the “product” of the research.

In most cases, researchers will also interpret the findings for decision makers.

Report the Findings Ultimately, the best research projects are only as good as the quality of the final report and accompanying presentation. It is critical to

judge the needs of the particular audience to whom you are presenting. For example, senior management will appreciate a great Executive

Summary in the report and a brief and concise “top line” presentation. In contrast, when the audience is the group who will be using the

results to make decisions, more detail concerning both the methodology and interpretation of the results will be highly appreciated.

Market Research Technology Market research has benefited from better, more cost-effective technology. The use of powerful software tools and online technologies

brings research to any level in the organization. Sales managers can survey customers, analyze the results, and make decisions without

costly, time-consuming external studies. Sophisticated software incorporating CRM and marketing decision support systems can do in-

depth analyses that offer unique insights about customers or market trends not possible just a few years ago. In most respects, making

market research tools available throughout the company has been a big success. Unfortunately, as the access to market research

technology has increased, so has the misapplication of the technology. Without implementing the market research process presented

earlier, no amount of technology can create worthwhile results.

LO 4-6

Illustrate current research technologies and how they are used in market research.

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Online Research Tools Online research tools fall into three categories: databases, focus groups, and sampling. Each of these three categories offers unique

opportunities to expand the reach and usefulness of market research. Let’s examine each more closely.

Online (Cloud) Databases An online database is data stored on a server that is accessed remotely over the internet or some other

telecommunications network. Many, if not most, companies now have databases available to employees, suppliers, even customers.

Information on orders, shipments, pricing, and other relevant information is available to salespeople and customer service personnel who

need to access it.

Independent online databases available from government and other sources are extremely useful tools in market research. Organizations

such as the National Archives and Records Administration offer a wide range of databases with topic-specific data, all of which can be

accessed for free. Fee-based services, while expensive, offer access to a wide range of information. Lexis/Nexis, for example, enables

market researchers to access thousands of business and trade publications and market studies. Another company, IBISWorld, allows

members to access hundreds of industry overviews and analyses that have been conducted through research. These services make it

possible to review market research reports, industry and company analyses, even market share information.

Online Focus Groups The virtual focus group is becoming a viable alternative to the traditional focus group format (6 to 10 people in a

room). Offering distinct advantages in terms of convenience and cost-efficiency, online focus groups provide data quickly and in a format

that is usually easier to read and analyze. Traditional focus groups require someone to transcribe the spoken words into a transcript. With

online focus groups, everything is already recorded by computer. With the increased use of mobile devices, it is even easier to conduct

online focus groups and collect data even as the customer is experiencing the product or service.

The primary disadvantage of online focus groups is that participants are limited to those with access to a computer or workstation. In

addition, as people often participate remotely, it is not possible to verify who is actually responding to the questions. Measures can be

employed to verify participation (for example, passwords), but the reality is that, in most cases, you must rely on the individual to be

honest. One final problem is the lack of control over the environment. Traditional focus groups create an environment where participants

are required to focus on the questions. Online focus groups enable participants to be at home, work, or even a remote location with

wireless access. As a result, participants can become distracted and environmental factors can affect their concentration and responses.

Online Sampling If someone has access to a computer with an internet connection, that person can complete a questionnaire. Online

sampling has become increasingly popular as a data collection methodology. As with online focus groups, the primary advantages are

convenience and cost-efficiency. Respondents are free to complete the survey when it is best for them, and sending a survey online is

essentially free. Online survey companies such as QuestionPro offer a complete service from survey design and a variety of delivery

methods (traditional e-mail, popup surveys, company newsletter integration, and others) to data analysis and presentation of findings.

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Statistical Software One of the real benefits of market research technology today is the ability to put powerful statistical software in the hands of front-line

managers. With the proper training and data, it is now possible for managers to conduct analyses that were not possible even five years

ago. Two software packages dominate desktop statistical analysis—IBM SPSS and SAS. IBM SPSS offers a range of marketing analytical

tools. Its statistical software combines an easy-to-use interface with powerful statistical tools in a format that managers at all levels can

use. The other widely used package is called SAS, and it offers many of the same features. One of the real advantages of these packages is

their ability to take the findings of the data analysis and create tables and reports.

Interestingly, while dedicated statistical packages offer powerful analytical tools and outstanding reporting capabilities, probably the most

widely used tool for analyzing business data is one almost everyone already has on his or her computer—Excel spreadsheets. Part of the

Microsoft Office suite of products, Excel offers the ability to analyze data using formulas created by the user or statistical functions

already embedded in the software. While not a dedicated statistical package, it is certainly a useful tool in basic data analysis.

Market Research Challenges in Global Markets From the perspective of a U.S.-based marketing manager, a key difference between doing market research domestically versus

internationally is that it is more expensive, more challenging to get the needed data, and often more difficult to interpret the data when it

is collected outside versus inside the United States. Let’s examine some of the challenges market researchers may face in finding,

collecting, and then analyzing data.

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Primary Data Essential information about economic and general business trends can be gathered from secondary sources, but to get specific market

data such as customer preferences, primary data are necessary. Collecting primary data presents many challenges for marketers that are

almost always compounded in global markets. Some of the specific problems of international primary data collection include the

following issues.

Unwillingness to Respond Cultural, gender, and individual differences create wide disparities in the willingness to provide personal

information. The United States has an open information culture and people are much more willing to respond, but this openness is not

shared around the world. In addition, government agencies such as the Securities and Exchange Commission require publicly traded

companies to provide accurate business information including valid financial results. Nongovernment agencies such as trade associations

report studies widely used in business. The National Realtors Association, for example, publishes quarterly data on the housing industry

that is considered an accurate assessment of the real estate market in the United States.

As we discussed earlier, many people don’t respond because they are concerned about government interference or additional taxes.

However, concerns about privacy and how personal data are used generate a broad distrust of surveys among consumers and businesses.

It is not difficult to understand these concerns. In countries formerly under the control of the Soviet Union (Czech Republic, Poland,

Hungary, and others), for example, people were concerned that personal information provided to authorities could be used against them.

After the fall of the Soviet Union, the historical problems created by decades of living in a closed society made it very difficult for

companies such as A.C. Nielsen to collect valid consumer opinions and business data.

Unreliable Sampling Procedures Related to the quality of data noted earlier is the problem of unreliable or inadequate demographic

information to conduct primary research. In many countries, there is no way to locate or identify who lives where or even how many

people live in a given location, something businesspeople in the United States take for granted. In the United States, sophisticated global

positioning system (GPS) devices can direct people to specific locations based on maps and other data stored on a hard drive. Consider

the problem, then, if you are in a medium or small South American or Asian city where maps do not exist and street names are not even

posted. The lack of reliable census information coupled with an inadequate infrastructure leaves market researchers in many countries

with no accurate sampling frame from which to draw respondents.

Inaccurate Language Translation and Insufficient Comprehension Getting people in global markets to actually complete a survey presents

three challenges. First, simply translating surveys can be a challenge. For example, Chinese is written with characters known as hànzi,

with each character representing a syllable of spoken Chinese with its own meaning. To read fluently in Chinese requires knowledge of

more than 3,000 symbols. Second, word usage changes dramatically around the world. In the United States and Western Europe, “family”

generally refers to the immediate family unit, including a father, mother, and their children, while in many Latin and Asian cultures

“family” almost always includes the extended family, including all aunts, uncles, cousins, and grandparents. When a survey asks about

family members, then, the responses could vary dramatically.

A final problem is insufficient language comprehension. In many parts of the world illiteracy rates are high, which rules out most

survey methodologies. In addition, some countries use multiple languages, making translation costly and increasing the likelihood of

mistranslation. India, for example, recognizes 14 official languages, with many additional nonofficial languages. Imagine writing a survey

that would translate well into over a dozen languages.

Secondary Data Note that while the United States and, to a lesser extent, Japan and the European Union are data-rich market environments, they are also

among the most expensive countries in which to conduct marketing research. Unfortunately, that level of information is not found

anywhere else in world. In certain areas, such as Central Europe, this is because they have only recently moved to open market

economies. In other parts of the world, such as China and India, the culture does not encourage the free flow of information. This makes

it difficult for any organization, even governments, to collect good information. Let’s consider three major challenges researchers face as

they collect data around the world.

Data Accessibility In the United States, businesspeople are accustomed to easily accessing information that simply does not exist in

much of the world. The U.S. Census Bureau provides detailed information across a wide range of business sectors, including retailing and

distribution, as well as specific data on many different economic and personal criteria such as income per capita, population by county,

and zip code (broken down by gender, age, ethnic mix, and many other characteristics). From government sources (U.S. Census Bureau,

Department of Commerce, EU Business Development Center), nongovernment business organizations (U.S. Chamber of Commerce,

OECD), and private research organizations, a great deal of information is available to managers. The quantity and quality of data found

in the United States are not available in most of the world.

Data Dependability A second major issue is the reliability of the data. Can the information be considered accurate? Regrettably, in many

cases it cannot. Government agencies, particularly in developing countries, will distort data to present a more favorable analysis. The data

are often reported incorrectly because people do not want the government to know the true figures, usually because of higher tax

concerns. In other cases, governments want to present optimistic results that support government policies, so they alter the data to reflect

government accomplishments.

Data Comparability Comparing secondary data from foreign markets risks three other problems. First, developing countries often lack

historical data, making it much harder to assess long-term economic or business trends. Second, the available data are outdated so they

are ineffective for making decisions in the current economic environment. Finally, terms used in reporting information are not consistent.

Standardized business terminology used in industrialized countries has not been adopted by many developing regions, making it difficult

for researchers to interpret data.