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Marketing Research

McGraw-Hill/Irwin

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© 2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

CHAPTER

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© 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

Chapter 10 – Marketing Research

Identify the five steps in the marketing research process.

Describe the various secondary data sources.

Describe the various primary data collection techniques.

Summarize the differences between secondary data and primary data.

Examine the circumstances under which collecting information on consumers is ethical.

Marketing Research

LO1

LO2

LO3

LO4

LO5

LEARNING OBJECTIVES

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These are the learning objectives for this chapter.

Procter & Gamble (P&G)

Courtesy Accenture.

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Ask students: How did Procter & Gamble conduct research and what did they learn? Students should realize that exploratory research was very important. With this they realized that the menu should be expanded and that taste is paramount.

McDonald’s Makeover

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McDonald’s conducted extensive research for this redesign of their restaurants. In fact, the research let them to the conclusion that they have several segments of customers who used the space in different ways.

Note: Please make sure that the video file is located in the same folder as the PowerPoint slides.

Market Research Outcome

What might have Chef Boyardee learned in research to design this product and this print ad?

Ad Courtesy of ConAgra Foods

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It appears from the message in the ad that research showed that consumers did not like to open the cans – it took an “easy” product and made it easier.

Marketing Research

DATA

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Consists of a set of techniques and principles for systematically collecting, recoding, analyzing and interpreting data that can aid decision makers involved in marketing goods, services or ideas

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

Collecting

Recording

Analyzing

Interpreting

Decision Making

What Would You Do?

He has just finished giving a successful presentation to a major client.

The client has asked for a list of companies that participated in the study and copies of all the completed surveys.

Meet Aaron, a marketing researcher:

CASRO Website

Ryan McVay/Getty Images

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Confidentiality is one of the first rules under the Code of Ethics. Aaron should not give information to the client unless the research respondents have consented to his doing so.

Bottom Line: Marketing research should be used only to produce unbiased, factual information. This web link brings you to the Council of American Survey Research Organizations code of ethics

The Marketing Research Process

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Answers to some research questions are readily accessible, as a simple data search would show.

Defining the objectives and research needs

Designing the research

Data collection process

Analyzing data and developing insights

Action plan and implementation

Step 1: Defining Objectives and Research Needs

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To determine whether to conduct research, two questions must be addressed: What? How?

What information is needed to answer specific research questions?

How should that information be obtained?

Step 2: Designing the Research

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In this step, researchers identify the type of data needed and determine the type of research necessary to collect it.

Type of data

Type of research

Step 3: Data Collection Process

Secondary data

Primary data

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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. If you can connect to your college library – look at some of the data sources at your own school. Dabases like mintel, tablebase, ABI inform and Business Source Premier are excellent sources of data.

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. Then list several questions that require primary data.

Converting data into information to explain, predict and/or evaluate a particular situation.

Step 4: Analyzing Data and Developing Insights

©Getty Images

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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.

For the cookie taste test example discussed earlier, suppose the average mean for the group who saw the national brand cookie was 5.4 (1=poor taste and 7=great taste) and the store brand cookie was (2.3. These two means are significantly different. 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: Action Plan and Implementation

Digital Vision/Getty Images

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A typical marketing research report would start with a two page 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

Executive Summary

Body

Conclusions

Limitations

Supplements including tables, figures, appendices

CHECK YOURSELF

What are the steps in the marketing research process?

What is the difference between data and information?

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Define objectives and research needs, designing the research project, deciding on the data collection process and collecting the data. analyze and interpret the data, prepare the findings for presentation.

Data can be defined as raw numbers or other factual information that, on their own, have limited value to marketers. However, when the data are interpreted, they become information.

External Secondary Data Syndicated Data

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Secondary data are plentiful and free, whereas 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 primary and secondary data at the same time?

External Secondary Data Scanner Research

Information Resources, Inc.

AC Nielsen

What if I reduce my price by 10%?

Courtesy The Nielsen Co

IRI Website

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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. This web link brings you to IRI homepage – explore their many products with the students.

External Secondary Data Panel Research

Group of consumers

Survey or sales receipts

What are they

buying

or not buying?

©BananaStock/PunchStock

Flying Colours Ltd/Getty Images

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In recent years, response rates to marketing research surveys have declined, which has increased usage of research panels.

Internal Secondary Data

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Every day, consumers provide wide-ranging data that get stored in increasingly large databases.

Ask students: How might firms and organizations collect information about you? Do you always know when you are providing such data? Who uses these data? In the United States, firms use opt-out programs, so when consumers fill out a registration form or application, the firm automatically has permission to market to that customer and share information with its partners, unless consumers explicitly revoke this permission. In contrast, the EU regulations state that customers must opt-in to such information uses.

Data Warehouse

Data Mining

CHECK YOURSELF

What is the difference between internal and external secondary research?

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Secondary data might come from free or very inexpensive external sources, such as census data, information from trade associations, and reports published in magazines. Secondary sources can also be accessed through internal sources, including the company’s sales invoices, customer lists, and other reports generated by the company itself.

Qualitative versus Quantitative Data Collection Techniques

Data

collection

research

Qualitative research

Quantitative research

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Managers commonly use several exploratory research methods: observation, in-depth interviewing, focus group interviews, and projective techniques.

If the firm is ready to move beyond preliminary insights, it likely is ready to engage in conclusive research, which provides the information needed to confirm those insights and which managers can use to pursue appropriate courses of action.

Observation

In-Depth interviews

Focus groups

Social media

Experiments

Scanner

Survey

Panel

Data Collection

In-Store Tracking Analytics

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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.

Video: “The Brave New World of Shopper-Tracking Technology”

Ask students what are the advantages to a company in tracking a customer’s behavior inside a store?

Ask students what are the advantages to a company of combining a customer’s in-store behavior with their online shopping behavior?

Qualitative Research

Observation

Social Media

Focus group

In-depth interview

Describing the benefits

How could Ziploc use qualitative research to design this ad?

SC Johnson Co

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They might have observed how people tested the durability of bags – perhaps several turned them upside down. They may have conducted interviews about problems, and leaking was a very big issue. Finally, during a focus group, they might have had one participant mention leaking and another to discuss how you would test for leaking – turning the bag upside down.

CHECK YOURSELF

What are the types of qualitative research?

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Observation, In-Depth Interviews, Focus Groups, and Social Media.

Survey Research

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Marketing research relies heavily on questionnaires, and questionnaire design is virtually an art form. Ask students the advantages and disadvantages of each type of question (unstructured and structured).

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?

Web Surveying

Response rates are relatively high

Respondents may lie less

It is inexpensive

Results are processed and received quickly

Simon Fell/Getty Images

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Ask students: Do you fill out internet surveys? If so, were you honest in your responses. Ask students whether they took their time with the survey and gave quality responses.

How do firms successfully use web surveying?

Using Web Surveying

The McGraw-Hill Companies, Inc/

John Flournoy, photographer

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The Internet offers researchers a new way to reach customers, but its use requires adaptations and new research methods.

Experimental Research

AP Photo/Mary Altaffer

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Using an experiment, McDonald’s would “test” the price of a new menu item to determine which is the most profitable

This web link is to a YouTube ad (always check before class) by Microsoft for Vista. It is called the Mojave experiment and is designed to show the relationship between the Vista name and “liking” of a computer system.

An example of an experiment could involve two groups of subjects. One taste 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.

Advantages and Disadvantages of Secondary and Primary Data

Type	Examples	Advantages	Disadvantages
Secondary Research
Primary Research

Census data

Sales invoices

Internet information

Books

Journal articles

Syndicated data

Saves time in collecting data because they are readily available

Free or inexpensive (except for syndicated data)

May not be precisely relevant to information needs

Information may not be timely

Sources may not be original, and therefore usefulness is an issue

Methodologies for collecting data may not be appropriate

Data sources may be biased

Observed consumer behavior

Focus group interviews

Surveys

Experiments

Specific to the immediate

data needs and topic at hand

Offers behavioral insights

generally not available from

secondary research

Costly

Time consuming

Requires more sophisticated

training and experience to design

study and collect data

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A summary of the advantages and disadvantages of each type of research.

CHECK YOURSELF

What are the types of quantitative research?

What are the advantages and disadvantages of primary and secondary research?

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Experiments, Survey, Scanner, and Panel

see Exhibit 10.9

Debating Domestic Eavesdropping

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This video covers domestic eavesdropping…as companies and the government get more technical, they are able to collect much more information. The question in this video is whether the government has the right to eavesdrop on citizen’s communications.

Note: Please make sure that the video file is located in the same folder as the PowerPoint slides.

The Ethics of Using Customer Information

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A strong ethical orientation must be an integral part of a firm’s marketing strategy and decision making. It is extremely important for marketers to adhere to ethical practices when conducting marketing research.

Strong ethical orientation

Adhere to ethical practices

CHECK YOURSELF

Under what circumstances is it ethical to use consumer information in marketing research?

What challenges do technological advances pose for the ethics of marketing research?

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Many customers demand increasing control over the information that has been collected about them. Companies must disclose their privacy practices to customers before using information.

As technology continues to advance though, the potential threats to consumers’ personal information grow in number and intensity.

Data are raw numbers or other factual information that, on their own, have limited value to marketers.

Glossary

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Data are raw numbers or other factual information that, on their own, have limited value to marketers.

Experimental research is a type of quantitative research that systematically manipulates one or more variables to determine which variables have a causal effect on another variable.

Glossary

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Experimental research is a type of quantitative research that systematically manipulates one or more variables to determine which variables have a causal effect on another variable.

Marketing research consists of a set of techniques and principles for systematically collecting, recording, analyzing, and interpreting data that can aid decision makers involved in marketing goods, services, or ideas.

Glossary

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Panel research is a type of quantitative research that involves collecting information from a group of consumers (the panel) over time.

Glossary

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Panel research is a type of quantitative research that involves collecting information from a group of consumers (the panel) over time.

Scanner research is a type of quantitative research that uses data obtained from scanner readings of UPC codes at check-out counters.

Glossary

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Scanner research is a type of quantitative research that uses data obtained from scanner readings of UPC codes at check-out counters.

A survey is a systematic means of collecting information from people that generally uses a questionnaire.

Glossary

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A survey is a systematic means of collecting information from people that generally uses a questionnaire.

Syndicated data are data available for a fee from commercial research firms such as Information Resources Inc. (IRI), National Purchase Diary Panel, and ACNielsen.

Glossary

Return to slide

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Syndicated data are data available for a fee from commercial research firms such as Information Resources Inc. (IRI), National Purchase Diary Panel, and ACNielsen.