Research Assistance 2

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Chapter 1

Marketing Research for Managerial Decision

Making

Learning Objectives

• Describe the impact marketing research has on marketing decision making

• Demonstrate how marketing research fits into the marketing planning process

• Provide examples of marketing research studies

• Understand the scope and focus of the marketing research industry

Learning Objectives (continued)

• Recognize ethical issues associated with marketing research

• Discuss new skills and emerging trends in marketing research

Growing Complexity of Marketing Research

• Reasons

– Technology and growth of global business

– New data collection tools pose serious questions to consumer privacy

– Current variety of tools and techniques make method selection challenging

• Marketing research: Systematic process that links an organization to its market through the gathering of information

Tasks in Marketing Research

• Designing methods for collecting information

• Managing the information collection process

• Analyzing and interpreting results

• Communicating findings to decision makers

Role and Value of Marketing Research

• Draws on social sciences for methods and theory

• Methods are diverse

– Span a wide variety of qualitative and quantitative techniques

– Borrow from disciplines such as psychology, sociology, and anthropology

• Can be applied to problems involving price, place, promotion, and product

Marketing Research and Marketing Mix Variables

• Product decisions

– Include:

• New product development and introduction

• Branding

• Positioning products

– Concept and product testing help provide information

• Branding

– Regular research enables early detection of change in attitude and meaning toward a brand

Marketing Research and Marketing Mix Variables (continued 1)

• Positioning

– Perceptual mapping: Used to picture the relative position of products on two or more product dimensions important to consumer purchase decisions

• Place/distribution - Decisions include choosing and evaluating locations, channels, and distribution partners

Marketing Research and Marketing Mix Variables (continued 2)

– Retailing research: Focuses on trade area analysis, store image/perception, in-store traffic patterns, and location analysis

– Behavioral targeting: Displaying ads at one website based on a user’s previous surfing behavior

– Shopper marketing: Marketing to consumers based on research of the entire process consumers go through when making a purchase

Marketing Research and Marketing Mix Variables (continued 3)

• Promotion - Important influence on a company’s sales

– Reliable metrics should be in place to obtain good returns from promotional budgets

– Common research tasks in integrated marketing communications

• Advertising effectiveness studies

• Attitudinal research

• Sales tracking

Marketing Research and Marketing Mix Variables (continued 4)

• Price

– Pricing decisions involve:

• Pricing new products

• Establishing price levels in test marketing

• Modifying prices for existing products

Consumers and Markets – Segmentation Studies

• Segmentation studies

– Major focuses of a marketing research project

• Creating customer profiles

• Understanding behavioral characteristics

• Benefit and lifestyle studies: Examine similarities and differences in consumers’ needs

– Used to identify two or more segments within a market for a particular company’s products

Consumers and Markets – Segmentation Studies (continued)

• Marketers use ethnographic research that:

– Studies consumer behavior as activities embedded in cultural contexts and having identity

– Requires extended observation of consumers in context

Marketing Theory

• Important to many businesses

– Useful in thinking about business problems and opportunities

Types of Marketing Research Firms

Internal

• Organizational units that reside within a company

• Benefits – Research method consistency

– Shared information across the company

– Lower research costs

– Ability to produce actionable research results

External

• Perform all aspects of the research

• Benefits – Objective suppliers

– Less subject to company politics and regulations

– Match specific project requirements to specialized talent at the same cost

– Greater flexibility in scheduling studies

Types of Marketing Research Firms (continued)

• Brokers or facilitators

• Customized research firms: Provide tailored services for clients

• Standardized research firms

– Use an established format so that results of studies conducted for different clients can be compared

– Provide syndicated business services

• Include data made from a common database

Changing Skills for a Changing Industry

• Requirements for successfully executing projects change with the expansion of marketing research firms

• Top skills

– Ability to understand and interpret secondary data

– Presentation skills

– Foreign-language competency

– Negotiation skills

– Computer proficiency

Exhibit 1.1 - Ethical Challenges in Marketing Research

Research Provider

General Business Practices

Padding expenses

Selling unnecessary services

Not maintaining client confidentiality

Selling branded "black box" methodology

Conducting research below professional

standards

Research methodology will not answer research

question

Doing research to prove predetermined

conclusions

Cost-cutting in projects results in inconclusive

findings

Interviewer "curbstoning“

Respondent abuse

Not providing promised incentives

Stating that interviews are shorter than they are

Not maintaining respondent confidentiality

Not obtaining respondent agreement before

audio or videotaping or otherwise tracking

behavior (other than public behavior)

Privacy invasion

Selling under the guise of conducting research

(sugging or frugging)

Faking research sponsorship

Respondent deception (without debriefing)

Causing respondent distress

Internet issues

Providing insufficient information to Website

users about how their clickstream data are

tracked and used

Sending unwanted follow-up e-mails to

respondents

De-anonymizing data

Client/Research Buyer

Requesting proposals without intent to purchase

Deceptively promising future business

Overstating research findings

Unethical Activity by Respondent

Providing dishonest answers or faking behavior

Ethical Questions in General Business Practices

• Potential ethical pitfalls for research providers

– Unethical pricing

– Unnecessary or unwarranted research services

– Client confidentiality issues

– Use of black-box methodologies

• Branded black-box methodologies: Offered by research firms that are branded – Do not provide information about how the methodology

works

Conducting Research Not Meeting Professional Standards

• Reasons

– Fearful of losing a business entirely

– Client pressure to perform research to prove a predetermined conclusion

– Cost-cutting

– Interviewers working for research firms engaging in unethical behavior

• Curbstoning: Data collection personnel filling out surveys for fake respondents

Abuse of Respondents in Marketing Research

• Potential ways

– Not providing promised incentive to respondents for completing interviews or questionnaires

– Stating that interviews are very short when in reality they may last an hour or more

– Using fake sponsors

• At the end of any study involving deception, subjects must be debriefed

Abuse of Respondents in Marketing Research (continued)

– Subject debriefing: Fully explaining to respondents any deception that was used during research

• Sugging/frugging: Claiming that a survey is for research purposes and then asking for a sale or donation

• Deanonymizing data: Combining different publicly available information, mostly unethically, to find consumers’ identities

Unethical Activities

Client/research user Respondent

Requesting detailed research proposals from competing research providers without actually selecting a firm to conduct research

Providing dishonest answers

Promising a prospective research provider long-term relationships or additional projects to obtain a low price on the initial research project

Faking behavior

Overstating the results of a marketing research project

Marketing Research Codes of Ethics in ESOMAR's Code

• Marketing Research Society summarizes the central principles in ESOMAR’s code

Conform to all national and international laws

Behave ethically

Be particularly careful with children and other vulnerable groups

Ensure respondents are cooperating voluntarily and are well informed of risks

Respect rights of respondents

Protect personal data and use only for intended purpose

Conduct projects with accuracy, transparency, objectivity, and quality

Conform to principles of fair competition

Emerging Trends

• Increased emphasis on secondary data collection methods

• Movement toward technology-related data management

• Expanded use of digital technology for information acquisition and retrieval

• Broader international client base

• Movement beyond data analysis toward a data interpretation/information management environment

Marketing Research in Action Continuing Case: The Santa Fe Grill

• What kind of information about products, services, and customers should the owners of Santa Fe Grill consider collecting?

• Is a research project actually needed?

– Is the best approach a survey of customers?

– Should employees also be surveyed?

– Why or why not?