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Marketing Research: Process and Systems for Decision Making I. The Role of Marketing Research • Marketing research is the process by which information about the environment is

generated, analyzed, and interpreted for use in marketing decision making. • Marketing research does not make decisions, but it can substantially increase the chances

that good decisions are made. • Marketing managers should recognize that:

o Even the most carefully executed research can be fraught with errors. o Marketing research does not forecast with certainty what will happen in the future. o They should make decisions in light of their own knowledge and experience, since

no marketing research study includes all of the factors that could influence the success of a strategy.

• Although marketing research does not make decisions, it can reduce the risks associated with managing marketing strategies.

• Marketing research is also vital for investigating the effects of various marketing strategies after they have been implemented.

• Today, many marketing researchers work hand-in-hand with marketing managers throughout the research process and have responsibility for making strategic recommendations based on the research.

II. The Marketing Research Process • Marketing research can be viewed as the systematic process for obtaining information to

aid in decision-making. • There are many types of marketing research, and the framework illustrated in Figure 2.1

represents a general approach to the process. A. Purpose of the Research • The first step in the research process is to determine explicitly why the research is

needed and what it is to accomplish. • Quite often a situation or problem is recognized as needing research, yet the nature of

the problem is not clear or well defined nor is the appropriate type of research evident. • Managers and researchers need to discuss and clarify the current situation and develop a

clear understanding of the problem. • Managers and researchers should agree on the following points:

o The current situation involving the problem to be researched o The nature of the problem o The specific question or questions the research is designed to investigate

• This step is crucial since it influences the type of research to be conducted and the research design.

B. Plan of the Research • A research plan spells out the nature of the research to be conducted and includes an

explanation of such things as the sample design, measures, and analysis techniques to be used.

• The following three critical issues influence the research plan are: o Whether primary or secondary data are needed o Whether qualitative or quantitative research is needed o Whether the company will do its own research or contract with a marketing

research specialist Primary versus Secondary Data • Primary data are data collected specifically for the research problem under

investigation. • Secondary data are those that have previously been collected for other purposes but

can be used for the problem at hand. • Secondary information has the advantage of usually being cheaper than primary data,

although it is not always available for strategy-specific research questions. • There are many types of secondary data that could be useful for understanding a

market and for answering a particular research question. • Some of these data can be found from sources internal to the organization such as

sales invoices, quarterly sales reports, and marketing research done by the organization for other purposes but useful for the problem at hand.

• Other secondary data must be obtained from sources external to the organization and include information such as the types listed in Figure 2.2.

• Organizations can get such information from a number of sources. o One source is syndicated data providers, such as ACNielsen and J.D. Power

Associates. o Another external source is the volume of data and information provided by the

government, such as U.S. census data, Guide to Industrial Statistics, U.S. Industrial Outlook, Survey of Current Business, and Guide to Foreign Trade Statistics.

o Finally, much useful information about competitors can be found by analyzing their websites, other published reports about them, and their annual reports.

Qualitative versus Quantitative Research • Qualitative research typically involves face-to-face interviews with respondents

designed to develop a better understanding of what they think and feel concerning a research topic.

• The two most common types of qualitative research in marketing are focus group and long interviews. o Focus groups typically involve discussions among a small number of

consumers led by an interviewer and are designed to generate insights and

ideas about products and brands. o Long interviews are conducted by an interviewer with a single respondent for

several hours. • Quantitative research involves more systematic procedures designed to obtain and

analyze numerical data. • Four common types of quantitative research in marketing are observation, surveys,

experiments, and mathematical modeling. o Observational research involves watching people and recording relevant facts

and behaviors. o Survey research involves the collection of data by means of a questionnaire

either by mail, phone, online, or in person. o Experimental research involves manipulating one variable and examining its

impact on other variables. o Mathematical modeling often involves secondary data, such as scanner data

collected and stored in computer files from retail checkout counters. Company versus Contract Research • Most large consumer goods companies have marketing research departments that can

perform a variety of types of research. • In addition, many marketing research firms, advertising agencies, and consulting

companies do marketing research on a contract basis. C. Performance of the Research • Performance of the research involves preparing for data collection and actually

collecting them. • In terms of actual data collection, a cardinal rule is to obtain and record the maximal

amount of useful information, subject to the constraints of time, money, and respondent privacy.

• Failure to obtain and record data clearly can obviously lead to a poor research study, while failure to consider the rights of respondents raises both practical and ethical problems.

• Thus, both the objectives and constraints of data collection must be closely monitored. D. Processing of Research Data • Processing research data includes the preparation of data for analysis and the actual

analysis of them. • The appropriate analysis techniques for collected data depend on the nature of the

research question and the design of the research. • Qualitative research data consist of interview records that are content analyzed for ideas

or themes. • Quantitative research data may be analyzed in a variety of ways depending on the

objectives of the research. • A critical part of this stage is interpreting and assessing the research results.

• Marketing researchers should always double-check their analysis and avoid overstating the strength of their findings.

E. Preparation of the Research Report • The research report is a complete statement of everything done in a research project and

includes a write-up of each of the previous stages as well as the strategic recommendations from the research.

• Figure 2.5 illustrates the types of questions marketing researchers and managers should discuss prior to submitting the final research report.

• Research reports should be clear and unambiguous with respect to what was done and what recommendations are made.

• Researchers should work closely with managers to ensure that the study and its limitations are fully understood.

F. Limitations of the Research Process • Many problems and difficulties must be overcome if a research study is to provide

valuable information for decision making. • The major goal of most test marketing is to measure new product sales on a limited

basis where competitive retaliation and other factors are allowed to operate freely. • Problems that could invalidate test marketing study results are listed below.

o Test market areas are not representative of the market in general in terms of population characteristics, competition, and distribution outlets.

o Sample size and design are incorrectly formulated because of budget constraints. o Pretest measurements of competitive brand sales are not made or are inaccurate,

limiting the meaningfulness of market share estimates. o Test stores do not give complete support to the study such that certain package

sizes may not be carried or prices may not be held constant during the test period. o Test-market products are advertised or promoted beyond a profitable level for the

market in general. o The effects of factors that influence sales, such as the sales force, season, weather

conditions, competitive retaliation, shelf space, and so forth, are ignored in the research.

o The test-market period is too short to determine whether the product will be repurchased by customers.

• Careful research planning, coordination, implementation, and control can help reduce such problems and increase the value of research for decision making.

III. Marketing Information Systems • Most marketers use computer-based systems to help them gather, sort, store, and distribute

information for marketing decisions. • These marketing information systems consist of a coordinated collection of data, tools,

techniques, and models by which marketers gather and interpret relevant information for decision making.

• These systems require three types of software: o Database management software for sorting and retrieving data from internal and

external sources o Model base management software that contains routines for manipulating data in

ways that are useful for marketing decision making o A dialog system that permits marketers to explore databases and use models to

produce information to address their decision-making needs • Marketing information systems are designed to handle data from both internal and external

sources. • External information is gathered from outside the organization and concerns changes in the

environment that could influence marketing strategies.