QUESTIONS
Second Exam
MKT 346
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The instructor mentioned four characteristics that a good market research questionnaire
should have. What were these?
In designing market research questionnaire, what factors must the researcher determine as
background?
The instructor cited 10 steps in developing and implementing a questionnaire. What are
these 10 steps? (The first is to obtain certain background information)
What is the difference between an open-end question and a closed-end question?
What did the instructor say is the difference between probing and clarifying?
What is a dichotomous rating question?
What defines a multiple choice question?
In addition to numbers, what other elements must a numerical rating scale have?
What is a slider scale?
What is the difference between a 1 stage and a 2 stage rating format? Give an example of a
2 stage format.
What is said to be an advantage of an odd number of points in a balanced rating scale over
an even number of points.
What is a balanced rating scale versus an unbalanced scale?
Why does an unbalanced rating scale sometimes make more sense than a balanced scale?
What is the advantage of a rating scale over a ranking scale?
What is a Constant Sum scale?
What is a semantic differential scale?
What is a ‘top 2 box’ score in presenting data from a rating scale?
What did the instructor say was a problem in presenting mean scores from responses to a
rating scale?
For what reasons did the instructor suggest that percentage are superior to means in
presenting results of a rating scale?
What is a Net Promoter Score in presenting results of a satisfaction rating scale?
What is a determinant attitude?
What is a problem with using a 7 point agreement scale in a study conducted with kids 5-8?
What is the problem with each of the following questions used in a study of the general
adult public? (NOTE: 1 of these might be chosen for the exam)
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I’m going to ask you to rate some upscale department stores. Do you think that
overall Nordstrom’s is Excellent, Very good, Good, Fair, or Poor?
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How far do you live from your closest supermarket?
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How much do you agree or disagree that McDonald’s fast food restaurants are
convenient? Do you Agree completely, Agree somewhat, Neither agree nor disagree,
Disagree Somewhat, or Disagree completely?
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On a rating scale of 1 to 10, where 1 means Poor and a 10 means Excellent, how
would you rate Trix candy bars on its taste and texture?
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When did you first hear about McDonald’s restaurants?
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50.
Here are the names of 15 candy bars. (Then list them. E.g., Nestle Crunch, Trix,
Butterfingers, Life Savers, Snickers, M&M’s, etc.) Please place them in rank order in
terms of your overall preference, with 1 being the most preferred.
What is a counterbiasing statement in attitude measurement, and when might one be
used?
What is a screening question in a market research questionnaire?
Which did the instructor say should generally come before the other on a questionnaire –
likes and dislikes about a product OR ratings of the product on selected attributes? And
why?
If a questionnaire is too long, what did the instructor mean by splitting the questions?
For what kinds of factors might a questionnaire be pretested? (Length is one)
What does a slow start mean in internet studies?
What is a Contact Record Sheet, and why is it used?
What is a Validation Form, and why is it used?
How is measurement defined?
What does it mean to define a concept operationally?
What are the four basic levels of measurement?
What are the characteristics of each of the following types of measurement scales?
(NOTE: 1 of these might be chosen for the exam)
Nominal
Ordinal
Interval
Ratio
How does the type of possible measurements from ratio scales differ from the possible
measurements from nominal scales?
Give 2 examples of a nominal scale in market research.
Give 2 examples of a ratio scale in market research.
Give 2 examples of an ordinal scale in market research.
How does an interval scale differ from an ordinal scale?
What did the instructor say regarding whether rating scales are truly interval scales?
What defines a measurement as being reliable?
Three types of measures of reliability were cited by the instructor. What were these?
What defines a measure as being valid?
What is the difference between reliability and validity, and what is the relationship
between them?
What does face validity refer to?
What does content validity refer to?
What do face validity and content validity have in common?
What should the instructor of this course to ensure that the exams he give have content
validity?
How are predictive validity and concurrent validity similar, and what is the difference
between them?
51.
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63.
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69.
What makes a market research study an experiment, rather than some other type of
study?
What is the difference between an independent and a dependent variable?
Give 3 examples of typical independent variables in market research.
Give 3 examples of typical dependent variables in market research.
What is the difference between a test group and a control group in experiments?
To prove causation what three elements must be demonstrated?
In terms of experimentation, what is the difference between external validity and internal
validity?
What is the difference between field settings and laboratory (or simulated) settings in
market research experiments?
Give examples of a field setting AND a laboratory (or simulated) setting for a market
research experiment.
What are the 4 basic approaches to control extraneous variables in experiments?
What does physical control mean in market research experiments, and provide an
example.
What is wrong or missing in the following experimental design in order to establish
causation? O1 X O2
In this course, what does test marketing refer to?
What types of information, useful for marketing, can be obtained in field test marketing
experiments?
Describe how different management decisions might be made if, in field test marketing, it
is found that the product is strong and marketing is weak VS. product is weak and
marketing is strong.
Provide reasons why in some cases it might be a good idea for a company NOT to
conduct field test marketing.
What are some considerations in selecting particular markets for field test marketing.
Discuss the length of time to run field test marketing. How long should the test be run,
once implemented?
List or describe the advantages of simulated (or laboratory) test marketing over field test
marketing.
FM.indd 09/15/2014 Page i
FM.indd 09/15/2014 Page iii
Marketing
Research
Tenth Edition
FM.indd 09/15/2014 Page v
Marketing
Research
Tenth Edition
Carl McDaniel, Jr.
Professor Emeritus
University of Texas at Arlington
Roger Gates
DSS Research
FM.indd 09/15/2014 Page vi
Dedicated to
Mimi Olsen
Abby, Will, Connor, Will, Cole, Jake, Knox
VICE PRESIDENT & EXECUTIVE PUBLISHER George Hoffman
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FM.indd 09/15/2014 Page vii
Preface
THE WORLD OF MARKETING
RESEARCH HAS CHANGED
Some research pundits would say that the world of marketing research has completely
changed since the last edition of this text was published in 2012. While we aren’t willing
to go that far, we do agree that several innovations and trends have had a substantial
impact on the field of marketing research. The era of Big Data has arrived! Big data analytics can offer profound insights into customers, potential customers, and markets like
never before. We introduce big data in Chapter One and discuss it, where applicable,
throughout the text. Further, not isolated to big data, the area of analytics has arrived
with clients demanding tools that provide more direction and insight for decision
making. This trend is noted at appropriate places in the text, but particularly in Chapter
Eighteen.
The trend toward mobile and social media marketing research is changing how
decision making information is obtained and, in some cases, what data is gathered. This
is discussed extensively in Chapter Seven. The availability of online survey tools, such
as those offered by Survey Monkey, has resulted in many more firms diving into do-ityourself (DIY) marketing research. We cover the benefits and dangers of the trend toward
DIY marketing research in Chapter Twelve.
AS IN EVERY PAST EDITION, WE
OFFER: REAL DATA/REAL RESEARCH/
REAL RESEARCHERS
Real Data – A new Nationwide Survey on Quick
Service Restaurants Created Exclusively For This Text
Our new case examines how Americans 18 to 34 years old view, patronize and consume
food from Quick Service Restaurant (QSR) chains such as McDonalds, Taco Bell and
many more. By analyzing the data you can gain insights on what factors caused consumers to patronize a particular chain and which chains perform the best on factors such as
quality of food, menu variety, atmosphere and others. The case also features a host of
demographic characteristics to enable you to analyze preferences, likes and dislikes by
attitudes toward health and nutrition, level of education, income, living situation, and
other variables.
We have retained our three popular data cases, which are based on a nationwide
sample of 2,000 college-aged students. The sample was drawn by the world leader in
sampling solutions, Survey Sampling International. You can find out more about them
at www.surveysampling.com. Each of the three cases focuses on topics of interest to college students. They include an Online Dating Service, an Online Student Travel Service,
and a new chain of combination fast-food and convenience store located near college
campuses. Not only do we have demographic and attitudinal data for each respondent,
FM.indd 09/15/2014 Page viii
viii
Preface
but working with Claritas, a leading provider of marketing databases (www.claritas.com), we
offer students a chance to work with PRIZM NE appended to our data sets. This version of
the original PRIZM is the most widely used target marketing system in the United States!
PRIZM NE is a 66-segment model. These segments are arranged to make up two standard
sets of groups: Social Group and Lifestage Group.
In addition to these cases, we have retained the data case, Rockingham National Bank
Visa Card Survey, for the tenth edition. This was done in response to many requests from
our users. We know that you will enjoy working with this student favorite!
Real Research
What could be more real than a new nationwide study on quick service restaurants. The
sample was drawn, the questionnaire created, and data gathered by marketing research professionals at DSS Research. All end-of-chapter cases are real and most are new for this tenth
edition. It is part of our commitment to you to bring the student the most authentic, realworld marketing research text on the market.
Real Market Researchers
Our world-view is that of marketing research. We are here every day, not as observers,
but participants. Roger Gates, one of your co-authors is President of DSS Research, one
of America’s largest health-care marketing research firms. You can learn more at www.dssresearch.com. Carl McDaniel was a co-founder of a marketing research company that is
vibrant today. He also was a co-founder of the Master of Science in Marketing Research
program at the University of Texas at Arlington. Along with Roger Gates and several others,
Carl created the MSMR Advisory Board. The Advisory Board consists of leaders and shakers in the marketing research industry (go to www.uta.edu/msmr/advisory-board/advisoryboard-members.com). You are holding the only text written by marketing research insiders.
It is like writing about football as you witness the game from the stands or writing about
the sport as a player on the field. We are not spectators viewing marketing research from
afar. Unlike authors of other research texts, we are on the field and continue to offer you the
global leader in marketing research texts.
AS THE FIELD OF MARKETING
RESEARCH CONTINUES TO
TRANSFORM, WE ARE THERE, EVERY
STEP OF THE WAY, PROVIDING THE
LATEST TRENDS AND METHODOLOGY
IN EVERY CHAPTER
New Content by Chapter:
Chapter One – The Role of Marketing Research in Management Decision Making
New section on “The Era of Big Data” and its impact on marketing research. New
box on forces that are poised to change the world of marketing research. Dynamic
new examples throughout.
FM.indd 09/15/2014 Page ix
Preface
Chapter Two – The Marketing Research Industry and Research Ethics
New material on big data analytic firms. New list of America’s largest research firms.
New section on online, mobile, and Big Data analytic tracking firms. All new discussion on the state of the marketing research industry including material on
research in a period of great change.
Chapter Three – Problem Definition, Exploratory Research, and the
Research Process
Completely rewritten section on research objectives as hypothesis. New Practicing
Marketing Research box on making marketing research more strategic.
Chapter Four – Secondary Data and Big Data Analytics
Completely rewritten chapter emphasizing the nature of secondary data and Big
Data. New section on what advantages Big Data offers a firm and a discussion on
how Big Data came about. New material on making Big Data actionable. A section
on the growing importance of data visualization.
Chapter Five – Qualitative Research
Revised material on key attributes of a good focus group moderator. Discussion of a
new trend in focus groups entitled “the rotated opposed view.” New discussion on
getting the right respondents for focus groups. Detailed, new examples on individual depth interviews and “story telling”.
Chapter Six – Traditional Survey Research
New material on telephone refusal rates. New discussion on predictive dialing. New
Practicing Marketing Research box on respondent respect. Important new data on
the maximum length of interviews.
Chapter Seven – Online Marketing Research – The Growth of Mobile and
Social Media Research
Major new sections on mobile internet research and social media marketing
research. New material on using blogs as a form of individual depth interviews.
New discussion on online bulletin board focus groups. New section on webcam
online focus groups. New section on improving virtual focus groups with telepresence. Completely revised material on online individual depth interviews
and participants in a research community. New discussion on the quality of
online samples.
Chapter Eight – Primary Data Collection: Observation
Expanded discussion on ethnography. New section on neuromarketing. Completely
revised section on eye tracking. New section on in-store tracking. All new material
on television audience measurement and tracking. Major new sections on online
tracking and social media tracking. In-depth examples of Facebook, Pinterest, and
Twitter.
Chapter Nine – Primary Data Collection: Experimentation and Test Marketing
Eliminated some sections and focused the chapter more on the practical problems
of doing experiments including new material on simulated test markets. New commentary and examples are offered throughout the chapter.
Chapter Ten – The Concept of Measurement
New material on construct equivalence. New Practicing Marketing Research box on
designing a better questionnaire.
ix
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Preface
Chapter Eleven – Using Measurement Scales to Build Marketing Effectiveness
Expanded discussion of graphic rating scales as “sliders.” Major new section on Net
Promoter Scores.
Chapter Twelve – Questionnaire Design
Discussed the changing nature of data collection in marketing research. Added new
coverage of issues related to designing questionnaires for mobile devices, including
Practicing Marketing Research covering tips for effective mobile interviewing. New
discussion on how to approach the appropriate data collection method based on the
options available today. Updated discussion of online interviewing tools and
options. Added information on benefits and dangers of DIY research, including
best practices. New case covers mobile survey research example.
Chapter Thirteen – Basic Sampling Issues
Major new discussion of sampling issues related to big data and social media.
Updated the role of data collection methods and sampling related to mobile data
collection and big data. Added Practicing Marketing Research feature discussing the
blending of social media and online panels. New information on the comparability
of online panel and telephone survey results is provided.
Chapter Fourteen – Sample Size Determination
A number of new examples are given and a new end-of-chapter case.
Chapter Fifteen – Data Processing and Fundamental Data Analysis
New section on quality assurance procedures for online data collection. Updated
coding discussion with discussion of automated coding systems, text processing
software and word clouds with an extended Practicing Marketing Research on text
processing. Addressed the need for some type of text processing to address big data
and the analysis of social media feeds. Also added a Practicing Marketing Research
feature covering an application of Semantria text analytics and how this system can
be utilized to improve market insights. Discussed the declining reliance on crosstabs
and the reasons for this decline. Added case that asks students to compare traditional coding results with what they can get from Semantria. Data provided, access
to Semantria is free.
Chapter Sixteen – Statistical Testing of Differences and Relationships
New material on statistical testing in the context of big data. New Practicing
Marketing Research feature that discusses, in simple terms, the logic behind statistical testing.
Chapter Seventeen – Bivariate Correlation and Regression
New Practicing Marketing Research feature on regression. A second Practicing
Marketing Research feature discusses using regression analysis in key driver analysis.
New case provides a very realistic and current example requiring the application of
regression analysis.
Chapter Eighteen – Multivariate Data Analysis
New Practicing Marketing Research feature covers the high demand for data scientists in marketing research. Fuzzy clustering added to cluster analysis discussion,
and also neural networks. Conjoint analysis section updated with recent developments. The application of multivariate techniques to big data was added. Also,
material on predictive analytics, which includes a detailed discussion of the predictive analytics process and predictive analytics implications in marketing research.
Interesting finding from predictive analytics (“How Target Figured Out a Teen Girl
FM.indd 09/15/2014 Page xi
Preface
Was Pregnant Before Her Father Did”) added as a Practicing Marketing Research
feature. Case added covering predictive analytics in retail.
Chapter Nineteen – Communicating The Research Results
New Practicing Marketing Research feature added with tips for preparing a marketing research report for a contemporary audience. Also added a feature covering the
importance of telling a story in the research report and a Practicing Marketing
Research feature on how to give more effective research presentations.
Chapter Twenty – Managing Marketing Research
Added more emphasis on project management and provided a new Practicing
Marketing Research feature covering project management. Added discussions of the
RFP process and proposal preparation. Feature added on the elevation of marketing
research in the corporate hierarchy and, added feature on how the future marketing
organization might look. New case added covering the process of selecting a research
supplier.
Outstanding Resources
For All Teaching Needs
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grow. Through a personalized experience, students create their own study guide while they
interact with course content and work on learning activities.
WileyPLUS Learning Space combines adaptive learning functionality with a dynamic
new e-textbook for your course—giving you tools to quickly organize learning activities,
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You can:
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Guide students through what’s important in the e-textbook by easily assigning specific
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Learn more at www.wileypluslearningspace.com. If you have questions, please contact
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Classroom-Tested Instructor’s Manual
We have done everything possible to facilitate your teaching marketing research with a comprehensive instructor’s manual. Each chapter contains the following:
▪
▪
▪
Suggested Lesson Plans. Suggestions are given on how to decide the chapter material,
based on the frequency and duration of your class period.
Chapter Scan. A quick synopsis highlights the core material in each chapter.
Learning Objectives. The list of learning objectives found in the text is repeated here.
xi
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Preface
▪
▪
▪
▪
▪
General Chapter Outline. The main headers provide a quick snapshot of all the content areas within the chapter.
List of Key Terms. The key terms introduced to the students in the text are repeated here.
Detailed Chapter Outline. This outline fleshes out the general outline given previously. It also indicates where ancillary materials fit into the discussion: PowerPoint
slides, exhibits from the text, learning objectives, and review questions. Boxed features
are also included in this outline.
Summary Explaining Learning Objectives. An explanation of how the learning objectives are satisfied by chapter material is the basis of the Instructor’s Manual summary.
Answers to Pedagogy. Suggested answers and approaches to the critical thinking questions, the Internet activities, the cases, the cross-functional questions, and the ethical
dilemmas are offered at the end of each chapter or part.
Instructors can access the electronic files on the Instructor Companion Site at www.
Wiley.com/College/Mcdaniel.
Comprehensive PowerPoint Package
We have created a comprehensive, fully interactive PowerPoint presentation with roughly
400 slides in the package. You can tailor your visual presentation to include the material you
choose to cover in class. This PowerPoint presentation gives you the ability to completely
integrate your classroom lecture with a powerful visual statement of chapter material. Keep
students engaged and stimulate classroom discussion! The entire collection of slides will be
available for download from our Web site at www.Wiley.com/College/Mcdaniel.
Classroom-Tested Comprehensive Test Bank
Our test bank is comprehensive and thoroughly classroom-tested. The questions range from
definitions of key terms to basic problem-solving questions to creative-thinking problems.
This new and improved test bank includes approximately 60 questions per chapter consisting of multiple-choice, true/false, and essay questions. Regardless of the type and level of
knowledge you wish to test, we have the right questions for your students. A computerized
version of this newly created test bank is also available on the book’s companion Web site so
that you can customize your quizzes and exams. Instructions can access the electronic files
on the Instructor’s Companion Site at www.Wiley.com/College/Mcdaniel.
Focus Group Video and Lecture Launches
Additional Real Research is offered through a focus group video conducted by another one
of our research partners. Jerry Thomas, president of Decision Analyst (www.decisionanalysis
.com). Decision Analyst, Incorporated is a large international marketing research firm. The
focus group subject is online dating data case. We also offer several interviews featuring Jerry
Thomas and your author, Carl McDaniel, discussing key topics in marketing research. For
more information on this 45-minute video, available on DVD, please contact your local
Wiley representative.
New Wiley Marketing Research Video Series
New interview-style video clips of top marketing research companies. Each video, six to
eight minutes in length, presents interviews with key personnel to discuss how they apply
the major concepts of marketing research to their business. The Marketing Wiley Research
Video Series can be accessed on the student and Instructor’s Companion site at www.Wiley.
com/College/Mcdaniel.
FM.indd 09/15/2014 Page xiii
Preface
Acknowledgments
As with all texts, this book is a team effort that could not have been brought to print without their support. Carl McDaniel continues to marvel at the excellent job Pam Rimer does
in typing his portion of the manuscript. Thanks also Pam for the many great editorial
suggestions.
Roger Gates thanks Mike Foytik for his input on big data issues and analytics in general
and extend special thanks to Jan Schneider for her outstanding work in keeping everything
straight in his chapters. Could not have done it without her very competent assistance.
We also extend our deep appreciation to the John Wiley & Sons team for making
this text a reality. In particular, a special thank you goes to the team at Wiley: Brian Baker
(Project Editor), Lisé Johnson (Executive Editor), and Jacqueline Hughes (Editorial
Assistant).
xiii
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Contents
PREFACE vii
1 The Role of Marketing Research in Management
Decision Making 1
Nature of Marketing 1
The Marketing Concept 2
Opportunistic Nature of Marketing Research 2
External Marketing Environment 2
Marketing Research and Decision Making 3
Marketing Research Defined 3
Importance of Marketing Research to
Management 4
Understanding the Ever-Changing Marketplace 6
Social Media and User-Generated Content 6
Proactive Role of Marketing Research 6
Applied Research versus Basic Research 7
Nature of Applied Research 7
Decision to Conduct Marketing Research 8
Development of Marketing Research 11
Inception: Pre-1900 11
Early Growth: 1900–1920 11
Adolescent Years: 1920–1950 11
Mature Years: 1950–2000 12
The Connected World: 2000–2010 13
ERA of Big Data: 2010–Present 14
Summary 15
Key Terms 16
Questions For Review & Critical Thinking 16
REAL-LIFE RESEARCH 1.1: Give Me a Coupon That I
Can Use Online! 17
REAL-LIFE RESEARCH 1.2: Can Anyone Be a Market
Researcher? 18
2 The Marketing Research Industry and Research
Ethics 19
Evolving Structure of the Marketing Research
Industry 20
Organizations Involved in Marketing Research 20
Consumer and Industrial Goods and Services
Producers 20
Governments and Universities 22
Media Companies 22
Custom Research Firms 22
Syndicated Service Firms 22
Limited-Function Research Firms 23
Online and Mobile Tracking Firms 23
Big Data Analytic Firms 24
Specialized Service Suppliers 24
Consumer and Industrial Corporate Marketing
Research Departments 25
Research Suppliers 26
Consumer Watch 26
Consumer Buy 27
Using Marketing Research—A Corporate
Perspective 28
External Clients 28
Internal Clients 29
The State of the Marketing Research Industry 31
Marketing Research Ethics 32
Ethical Theories 32
Research Supplier Ethics 33
Client Ethics 36
Field Service Ethics 38
Respondents’ Rights 38
Ethics and Professionalism 40
Summary 42
Key Terms 42
Questions For Review & Critical Thinking 42
Working the Net 43
REAL-LIFE RESEARCH 2.1: Respondent Recruiters—
Clean Up Your Act 43
REAL-LIFE RESEARCH 2.2: Coke Juices up a Market
Test 44
3. Problem Definition, Exploratory Research, and the
Research Process 46
Critical Importance of Correctly Defining the
Problem 46
Recognize the Problem or Opportunity 47
Find Out Why the Information Is Being Sought 48
Understand the Decision-Making Environment with
Exploratory Research 48
Use the Symptoms to Clarify the Problem 50
Translate the Management Problem into a Marketing
Research Problem 51
Determine Whether the Information Already
Exists 51
Determine Whether the Question Can Be
Answered 52
State the Research Objectives 52
Research Objectives As Hypotheses 52
Marketing Research Process 53
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Contents
Creating the Research Design 54
Choosing a Basic Method of Research 55
Selecting the Sampling Procedure 56
Collecting the Data 56
Analyzing the Data 57
Writing and Presenting the Report 57
Following Up 58
Managing the Research Process 58
The Research Request 58
Request for Proposal 59
The Marketing Research Proposal 59
What to Look for in a Marketing Research Supplier 61
What Motivates Decision Makers to Use Research
Information? 61
Summary 62
Key Terms 63
Questions For Review & Critical Thinking 63
Working the Net 64
REAL-LIFE RESEARCH 3.1: Let’s Go Out to Eat! 64
APPENDIX 3A: A Marketing Research Proposal 69
Background 70
Objectives 70
Study Design 70
Areas of Questioning 70
Data Analysis 71
Personnel Involved 71
Specifications/Assumptions 71
Services 71
Cost 72
Timing 72
4. Secondary Data and Big Data Analytics 73
Nature of Secondary Data 73
Advantages of Secondary Data 74
Limitations of Secondary Data 75
Internal Databases 77
Creating an Internal Database 77
Data Mining 77
Behavioral Targeting 78
Big Data Analytics 79
Defining Relationships 79
The Big Data Breakthrough 79
Making Big Data Actionable 81
Data Visualization 81
Battle over Privacy 81
Geographic Information Systems 86
Decision Support Systems 87
Summary 88
Key Terms & Definitions 89
Questions For Review & Critical Thinking 89
Working the Net 89
REAL-LIFE RESEARCH 4.1: The Interesting and Curious
World of Nate Silver 90
5. Qualitative Research 92
Nature of Qualitative Research 92
Qualitative Research versus Quantitative Research 93
Popularity of Qualitative Research 93
Limitations of Qualitative Research 94
Focus Groups 95
Popularity of Focus Groups 95
Conducting Focus Groups 96
Focus Group Trends 102
Benefits and Drawbacks of Focus Groups 104
Other Qualitative Methodologies 106
Individual Depth Interviews 106
Projective Tests 110
Future of Qualitative Research 115
Summary 116
Key Terms 116
Questions for Review & Critical Thinking 117
Working the Net 117
REAL-LIFE RESEARCH 5.1: McDonald’s Listening Tour 117
6 Traditional Survey Research 119
Popularity of Survey Research 119
Types of Errors in Survey Research 120
Sampling Error 120
Systematic Error 121
Types of Surveys 125
Door-to-Door Interviews 125
Executive Interviews 125
Mall-Intercept Interviews 125
Telephone Interviews 126
Self-Administered Questionnaires 128
Mail Surveys 129
Determination of the Survey Method 131
Sampling Precision 131
Budget 133
Requirements for Respondent Reactions 133
Quality of Data 133
Length of the Questionnaire 134
Incidence Rate 134
Structure of the Questionnaire 135
Time Available to Complete the Survey 135
Summary 135
Key Terms 136
Questions for Review & Critical Thinking 136
REAL-LIFE RESEARCH 6.1: Pitney Bowes Places a
Premium on Satisfaction 137
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7 Online Marketing Research—The Growth of Mobile
and Social Media Research 139
The Online World 140
Using the Internet for Secondary Data 140
Sites of Interest to Marketing Researchers 140
Newsgroups 140
Blogs 143
Online Qualitative Research 144
Webcam Online Focus Groups 144
Improving Virtual Focus Groups with
Telepresence 144
Using Channel M2 to Conduct Online
Focus Groups 145
Using the Web to Find Focus Group Participants 146
Online Individual Depth Interviews (IDI) 146
Marketing Research Online Communities
(MROC) 147
Online Survey Research 149
Advantages of Online Surveys 149
Disadvantages of Online Surveys 150
Methods of Conducting Online Surveys 152
Commercial Online Panels 154
Panel Recruitment 154
Respondent Participation 156
Panel Management 156
Mobile Internet Research—
The Future Is Now 157
Advantages of Mobile 157
A Few Bumps at the Beginning 158
Designing a Mobile Survey 158
Social Media Marketing Research 159
Conduction a Facebook Focus Group 160
Conducting Surveys 161
Summary 161
Key Terms 162
Questions For Review & Critical Thinking 162
Woking the Net 163
REAL-LIFE RESEARCH 7.1: Procter & Gamble Uses Its
Online Community to Help Develop Scents for a New
Product Line 163
8 Primary Data Collection: Observation 165
Nature of Observation Research 165
Conditions for Using Observation 166
Approaches to Observation Research 166
Advantages of Observation Research 168
Disadvantages of Observation Research 168
Human Observation 169
Ethnographic Research 169
Mystery Shoppers 174
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One-Way Mirror Observations 175
Machine Observation 176
Neuromarketing 176
Facial Action Coding Services (FACS) 179
Gender and Age Recognition Systems 180
In-Store Tracking 180
Television Audience Measurement and Tracking 181
TiVo Targeting 182
Cablevision Targeting 182
Symphony IRI Consumer Network 182
Tracking 183
Your E-Reader Is Reading You 184
Social Media Tracking 184
Observation Research and Virtual Shopping 187
Summary 188
Key Terms 189
Questions for Review & Critical Thinking 189
Working the Net 190
REAL-LIFE RESEARCH 8.1: Eating Well and Doing
Good 190
9 Primary Data Collection: Experimentation and Test
Markets 193
What Is an Experiment? 194
Demonstrating Causation 194
Concomitant Variation 194
Appropriate Time Order of Occurrence 195
Elimination of Other Possible Causal Factors 195
Experimental Setting 195
Laboratory Experiments 195
Field Experiments 196
Experimental Validity 196
Experimental Notation 196
Extraneous Variables 197
Examples of Extraneous Variables 197
Controlling Extraneous Variables 199
Experimental Design, Treatment, and Effects 200
Limitations of Experimental Research 201
High Cost of Experiments 201
Security Issues 201
Implementation Problems 202
Selected Experimental Designs 202
Pre-Experimental Designs 202
True Experimental Designs 204
Quasi-Experiments 205
Test Markets 207
Types of Test Markets 210
Costs of Test Marketing 212
Decision to Conduct Test Marketing 212
Steps in a Test Market Study 213
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Other Types of Product Tests 217
Summary 218
Key Terms 218
Questions For Review & Critical Thinking 219
Working the Net 220
REAL-LIFE RESEARCH 9.1: Texas Red Soft Drinks 220
REAL-LIFE RESEARCH 9.2: Alcon 221
10 The Concept of Measurement 222
Measurement Process 222
Step One: Identify the Concept of Interest 223
Step Two: Develop a Construct 224
Step Three: Define the Concept Constitutively 224
Step Four: Define the Concept Operationally 224
Step Five: Develop a Measurement Scale 226
Nominal Level of Measurement 226
Ordinal Level of Measurement 227
Interval Level of Measurement 228
Ratio Level of Measurement 228
Step Six: Evaluate the Reliability
and Validity of the Measurement 229
Reliability 232
Validity 234
Reliability and Validity—A Concluding Comment 238
Summary 238
Key Terms 239
Questions for Review & Critical Thinking 239
Working the Net 240
REAL-LIFE RESEARCH 10.1: Profiles on Women
Shoppers 240
11 Using Measurement Scales to Build Marketing
Effectiveness 241
Attitudes, Behavior, and Marketing Effectiveness 241
Link between Attitudes and Behavior 242
Enhancing Marketing Effectiveness 243
Scaling Defined 243
Attitude Measurement Scales 244
Graphic Rating Scales 244
Itemized Rating Scales 245
Traditional One-Stage Format 248
Two-Stage Format 248
Rank-Order Scales 248
Paired Comparisons 250
Constant Sum Scales 250
Semantic Differential Scales 250
Stapel Scales 252
Likert Scales 253
Purchase-Intent Scales 254
Scale Conversions 257
Net Promoter Score (NPS) 258
Considerations in Selecting a Scale 259
The Nature of the Construct Being Measured 259
Type of Scale 259
Balanced versus Nonbalanced Scale 260
Number of Scale Categories 260
Forced versus Nonforced Choice 260
Attitude Measures and Management
Decision Making 261
Direct Questioning 261
Indirect Questioning 262
Observation 262
Choosing a Method for Identifying
Determinant Attitudes 262
Summary 264
Key Terms 264
Questions For Review & Critical Thinking 265
Working the Net 265
REAL-LIFE RESEARCH 11.1: Improving the Long-Term
Prognosis of Pharmaceutical Brands 266
12 Questionnaire Design 271
Role of a Questionnaire 271
Criteria for a Good Questionnaire 272
Does It Provide the Necessary
Decision-Making Information? 272
Does It Consider the Respondent? 273
Does It Meet Editing and Coding Requirements? 273
Does It Solicit Information In An Unbiased Manner:
Questionnaire Design Process 275
Step One: Determine Survey Objectives, Resources,
and Constraints 275
Step Two: Determine the Data-Collection
Method 276
Step Three: Determine the Question Response
Format 281
Step Four: Decide on the Question Wording 287
Step Five: Establish Questionnaire Flow and
Layout 290
Model Introduction/Opening 292
Model Closing 292
Step Six: Evaluate the Questionnaire 293
Step Seven: Obtain Approval of All Relevant
Parties 293
Step Eight: Pretest and Revise 294
Step Nine: Prepare Final Questionnaire Copy 294
Step Ten: Implement the Survey 295
Field Management Companies 296
Impact of the Internet on Questionnaire
Development 297
Adapting to Mobile Device Questionnaires 300
Costs, Profitability, and Questionnaires 302
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Summary 304
Key Terms 304
Questions for Review & Critical Thinking 304
Working the Net 305
REAL-LIFE RESEARCH 12.1: Understanding Buyer
Behavior 305
REAL-LIFE RESEARCH 12.2: Sonic Goes Mobile 307
13 Basic Sampling Issues 308
Concept of Sampling 308
Population 309
Sample versus Census 309
Developing a Sampling Plan 309
Step One: Define the Population of Interest 310
Step Two: Choose a Data-Collection Method 312
Step Three: Identify a Sampling Frame 313
Step Four: Select a Sampling Method 314
Step Five: Determine Sample Size 316
Step Six: Develop Operational Procedures for Selecting
Sample Elements 316
Step Seven: Execute the Operational
Sampling Plan 317
Sampling and Nonsampling Errors 318
Probability Sampling Methods 318
Simple Random Sampling 319
Systematic Sampling 320
Stratified Sampling 321
Cluster Sampling 323
Nonprobability Sampling Methods 325
Convenience Samples 325
Judgment Samples 325
Quota Samples 326
Snowball Samples 326
Internet Sampling 326
Summary 328
Key Terms 328
Questions for Review & Critical Thinking 328
Working the Net 329
REAL-LIFE RESEARCH 13.1: The Research Group 329
REAL-LIFE RESEARCH 13.2: Community Bank 330
14 Sample Size Determination 331
Determining Sample Size for Probability Samples 331
Budget Available 334
Rule of Thumb 334
Number of Subgroups Analyzed 334
Traditional Statistical Methods 335
Normal Distribution 335
General Properties 335
Standard Normal Distribution 336
Population and Sample Distributions 337
Sampling Distribution of the Mean 337
Basic Concepts 338
Making Inferences on the Basis of a Single
Sample 341
Point and Interval Estimates 341
Sampling Distribution of the Proportion 343
Determining Sample Size 343
Problems Involving Means 343
Problems Involving Proportions 345
Determining Sample Size for Stratified
and Cluster Samples 346
Sample Size for Qualitative Research 346
Population Size and Sample Size 346
Determining How Many Sample Units Are
Needed 350
Statistical Power 350
Summary 351
Key Terms 352
Questions For Review & Critical Thinking 352
Working the Net 353
REAL-LIFE RESEARCH 14.1: Concomm 353
REAL-LIFE RESEARCH 14.2: Building a Village 354
SPSS Jump Start For Chi-Square Text 355
15 Data Processing and Fundamental
Data Analysis 358
Overview of the Data Analysis Procedure 358
Step One: Validation and Editing 359
Validation 359
Editing 362
Step Two: Coding 366
Coding Process 367
Automated Coding Systems and Text
Processing 368
Step Three: Data Entry 372
Intelligent Entry Systems 373
The Data Entry Process 373
Scanning 374
Step Four: Logical Cleaning of Data 374
Step Five: Tabulation and Statistical
Analysis 375
One-Way Frequency Tables 375
Cross Tabulations 377
Graphic Representations of Data 379
Line Charts 380
Pie Charts 381
Bar Charts 381
Descriptive Statistics 383
Measures of Central Tendency 383
Measures of Dispersion 384
Percentages and Statistical Tests 386
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Summary 386
Key Terms 387
Questions For Review & Critical Thinking 387
Working the Net 389
REAL-LIFE RESEARCH 15.1: Waffle World 389
REAL-LIFE RESEARCH 15.2: Tico Taco 390
SPSS Exercises for Chapter 15 391
16 Statistical Testing of Differences and
Relationships 395
Evaluating Differences and Changes 395
Statistical Significance 396
Hypothesis Testing 398
Steps in Hypothesis Testing 399
Types of Errors in Hypothesis Testing 402
Accepting H0 versus Failing to Reject (FTR) H0 403
One-Tailed versus Two-Tailed Test 403
Example of Performing a Statistical Test 404
Commonly Used Statistical Hypothesis Tests 408
Independent versus Related Samples 408
Degrees of Freedom 409
Goodness of Fit 409
Chi-Square Test 409
Hypotheses about One Mean 416
Z Test 416
t Test 417
Hypotheses about Two Means 421
Hypotheses about Proportions 422
Proportion in One Sample 422
Two Proportions in Independent Samples 423
Analysis of Variance (ANOVA) 425
P Values and Significance Testing 428
Summary 429
Key Terms 430
Questions For Review & Critical Thinking 430
Working the Net 432
REAL-LIFE RESEARCH 16.1: Analyzing Global Bazaar
Segmentation Results 432
REAL-LIFE RESEARCH 16.2: AT &T Wireless 433
SPSS Exercises For Chapter 16 434
17 Bivariate Correlation and Regression 438
Bivariate Analysis of Association 438
Bivariate Regression 439
Nature of the Relationship 439
Example of Bivariate Regression 441
Correlation for Metric Data: Pearson’s Product–Moment
Correlation 452
Summary 458
Key Terms 458
Questions For Review & Critical Thinking 458
Working the Net 460
REAL-LIFE RESEARCH 17.1: Axcis Athletic Shoes 460
REAL-LIFE RESEARCH 17.2: Lambda Social Hotspot 461
SPSS Exercises For Chapter 17 462
18 Multivariate Data Analysis 464
Multivariate Analysis Procedures 464
Multivariate Software 466
Multiple Regression Analysis 468
Applications of Multiple Regression Analysis 469
Multiple Regression Analysis Measures 470
Dummy Variables 470
Potential Use and Interpretation Problems 471
Multiple Discriminant Analysis 472
Applications of Multiple Discriminant Analysis 473
Cluster Analysis 473
Procedures for Clustering 473
Factor Analysis 476
Factor Scores 477
Factor Loadings 478
Naming Factors 479
Number of Factors to Retain 479
Conjoint Analysis 479
Example of Conjoint Analysis 479
Considering Features Conjointly 480
Estimating Utilities 481
Simulating Buyer Choice 482
Limitations of Conjoint Analysis 484
Big Data and Hadoop 484
Predictive Analytics 484
Using Predictive Analytics 485
Privacy Concerns and Ethics 487
Commercial Predictive Modeling Software
and Applications 487
Summary 488
Key Terms 488
Questions for Review & Critical Thinking 489
Working the Net 490
REAL-LIFE RESEARCH 18.1: Satisfaction Research for Pizza
Quik 491
REAL-LIFE RESEARCH 18.2: Gibson’s Uses Predictive
Analytics 492
APPENDIX: Role of Marketing Research in the Organization and Ethical Issues 494
SPSS Exercises For Chapter 18 496
19 Communicating the Research Results 499
The Research Report 499
Organizing the Report 501
Interpreting the Findings 502
Format of the Report 504
Formulating Recommendations
The Presentation 505
504
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Making a Presentation 508
Presentations by Internet 513
Summary 514
Key Terms 514
Questions For Review & Critical Thinking 514
Working the Net 514
REAL-LIFE RESEARCH 19.1: The United Way 515
REAL-LIFE RESEARCH 19.2: TouchWell Storefront Concept and Naming Research 516
xxi
Measuring Marketing Research’s Return on Investment
(ROI) 546
Summary 549
Key Terms 549
Questions for Review & Critical Thinking 550
Working the Net 550
REAL-LIFE RESEARCH 20.1: Walther Research Deals with
Managing Project Managers 550
REAL-LIFE RESEARCH 20.2: Johnny Jets Drive-Ins 551
20 Managing Marketing Research 522
Marketing Research Supplier Management 523
What Do Clients Want? 523
Consolidating the Number of Acceptable
Suppliers 525
Communication 525
The Key Role of the Project Manager 526
Managing the Research Process 527
Organizing the Supplier Firm 527
Data Quality Management 529
Time Management 530
Cost Management 531
Client Profitability Management 532
Staff Management and Development 533
Managing a Marketing Research Department 535
Allocating the Research Department Budget 535
Prioritizing Projects 536
Retaining Skilled Staff 537
Selecting the Right Marketing Research Suppliers 538
Moving Marketing Research into a
Decision-Making Role 540
APPENDIX ONE: Statistical Tables
A-1
APPENDIX TWO: Considerations in Creating a
Marketing Plan (Online)
APPENDIX THREE: Comprehensive Cases
(Online)
A Biff Targets an Online Dating Service for College
Students A-14
B Freddy Favors Fast Food and Convenience for College
Students A-17
C Superior Online Student Travel—A Cut Above A-21
D Rockingham National Bank Visa Card Survey A-25
ENDNOTES E-1
GLOSSARY
G-1
QSR SURVEY
INDEX
I-1
QSR-1
© Yuri/iStockphoto
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1
C H A P T E R
The Role of Marketing
Research in Management
Decision Making
LEAR N I N G O B J ECTI V ES
1. Review the marketing concept and the marketing mix.
2. Comprehend the marketing environment within which managers must
make decisions.
3. Examine the history of marketing research.
Welcome to the fascinating world of marketing research! How does marketing research
help managers reach their goals? How did the field of marketing research evolve? What big
changes are occurring? We will explore this topic in Chapter 1.
Nature of Marketing
Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.1 Good customer relationships often result in exchanges; that
is, a good or service is exchanged for money. The potential for exchange exists when
there are at least two parties and each has something of potential value to the other.
When the two parties can communicate and deliver the desired goods or services,
exchange can take place.
How do marketing managers attempt to stimulate exchange? They follow the “right”
principle. They attempt to get the right goods or services to the right people at the right
marketing
The process of planning and
executing the conception,
pricing, promotion, and
distribution of ideas, goods,
and services to create
exchanges that satisfy individual
and organizational objectives.
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THE ROLE OF MARKETING RESEARCH IN MANAGEMENT DECISION MAKING
place at the right time at the right price, using the right promotion techniques. The “right”
principle describes how marketing managers control the many factors that ultimately determine marketing success. To make the “right” decisions, management must have timely
decision-making information. Marketing research is a primary channel for providing that
information.
The Marketing Concept
marketing concept
A business philosophy based
on consumer orientation,
goal orientation, and systems
orientation.
consumer orientation
The identification of and focus
on the people or firms most
likely to buy a product and the
production of a good or service
that will meet their needs most
effectively.
goal orientation
A focus on the accomplishment
of corporate goals; a limit set
on consumer orientation.
systems orientation
The creation of systems
to monitor the external
environment and deliver the
desired marketing mix to
the target market.
To efficiently accomplish their goals, firms today have adopted the marketing concept,
which requires (1) a consumer orientation, (2) a goal orientation, and (3) a systems orientation. A consumer orientation means that firms strive to identify the people (or firms)
most likely to buy their product (the target market) and to produce a good or offer a service that will meet the needs of target customers most effectively in the face of competition. The second tenet of the marketing concept is goal orientation; that is, a firm must be
consumer-oriented only to the extent that it also accomplishes corporate goals. The goals
of profit-making firms usually center on financial criteria, such as a 15 percent return on
investment.
The third component of the marketing concept is a systems orientation. A system is an
organized whole—or a group of diverse units that form an integrated whole—functioning
or operating in unison. It is one thing for a firm to say it is consumer-oriented and another
actually to be consumer-oriented. First, systems must be established to find out what consumers want and to identify market opportunities. As you will see later, identifying target
market needs and finding market opportunities are the tasks of marketing research. Next,
this information must be fed back to the firm. Without feedback from the marketplace,
a firm is not truly consumer-oriented.
Opportunistic Nature of Marketing Research
Marketing research is an excellent tool for discovering opportunities in the marketplace.
Midmarket hotel chains, such as Holiday Inn, (especially those with less than 150 rooms),
often don’t generate enough traffic to support a full-service restaurant. Holiday Inn surveyed 10,000 guests and found that its guests were mostly business people, sales people, and
government employees. These people revealed that they had no desire to simply sit in their
room. They wanted to be around other people.
Holiday Inn management decided that the bar should play a bigger role at the hotels.
The social hub would tailor Holiday Inn’s lunch and dinner menus to bar fare that can be
shared, such as gourmet meatballs, sesame chicken wings, hamburgers, and a few significant
entrees, such as steaks and salmon club sandwiches.
Those changes allow for more food to be served by the bar staff, which, in turn, allows
Holiday Inn’s franchisees to limit their labor costs by reducing restaurant staff, especially at
slow times of the day.2
External Marketing Environment
marketing mix
The unique blend of product/
service, pricing, promotion,
and distribution strategies
designed to meet the needs of
a specific target market.
Over time, the marketing mix must be altered because of changes in the environment in
which consumers and businesses exist, work, compete, and make purchasing decisions.
Some new consumers and businesses will become part of the target market, while others
will drop out of the market; those who remain may have different tastes, needs, incomes,
lifestyles, and purchase habits than the original target consumers.
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Marketing Research and Decision Making
Although managers can control the marketing mix, they cannot control elements in the
external environment that continually mold and reshape the target market. Unless management
understands the external environment, the firm cannot intelligently plan its future, and organizations are often unaware of the forces that influence their future.
Marketing research is a key means for understanding the environment. Knowledge of
the environment helps a firm not only alter its current marketing mix but also take advantage of new opportunities. John Deal, a St. Louis resident, commissioned a marketing
research study to determine the potential demand for a small (two- to three-store) chain in
the local area that would feature bath and kitchen appliances and accessories. The survey
results were positive and John decided to move forward. One issue that concerned John was
what role the Internet should play in his stores. Fortunately, he was able to acquire a study
titled “Seamless Retail” by Accenture. A few highlights were:
Forty-nine percent of consumers believe the best thing retailers can do to improve the shopping
experience is to better integrate in-store, online and mobile shopping channels. Eighty-nine percent
of consumers said it is important for retailers to let them shop for products in the way that is most
convenient for them, no matter which sales channel they choose.
The report says that consistency weighs heavily on the consumer experience: 73 percent of consumers expect a retailer’s online pricing to be the same as its in-store pricing, and 61 percent expect
a retailer’s online promotions to be the same as it in-store promotions.
Asked what kind of information would be useful to have from their favorite retailers before
going to a physical store, 82 percent of consumers selected having access to current product availability as their top choice.
Forty-nine percent of those surveyed are influenced by in-store offers (promotional displays,
salespeople), 56 percent are influenced by e-mail coupons and offers, and an equal amount
say they are influenced by coupons mailed to their home. Sixty-nine percent and 62 percent,
respectively, said that online pop-up ads and mobile banner ads would never influence their
purchasing.3
After having read the report, John was then in a position to craft an effective integrated
retailing strategy involving the web and a traditional store.
Marketing Research and Decision Making
Marketing research plays two key roles in the marketing system. First, as part of the marketing intelligence feedback process, marketing research provides decision makers with data
on the effectiveness of the current marketing mix and offers insights into necessary changes.
Second, marketing research is the primary tool for exploring new opportunities in the marketplace. Segmentation research and new product research help identify the most lucrative
opportunities for a firm.
Marketing Research Defined
Now that you have an understanding of how marketing research fits into the overall marketing system, we can proceed with a formal definition of the term, as stated by the American
Marketing Association:
Marketing research is the function that links the consumer, customer, and public to the marketer through information—information used to identify and define marketing opportunities and
problems; generate, refine, and evaluate marketing actions; monitor marketing performance; and
improve understanding of marketing as a process. Marketing research specifies the information
3
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required to address these issues, designs the method for collecting information, manages and implements the data collection process, analyzes the results, and communicates the findings and their
implications.
marketing research
The planning, collection, and
analysis of data relevant to
marketing decision making
and the communication of
the results of this analysis to
management.
descriptive function
The gathering and presentation
of statements of fact.
diagnostic function
The explanation of data or
actions.
predictive function
Specification of how to use
descriptive and diagnostic
research to predict the results
of a planned marketing
decision.
We prefer another definition: Marketing research is the planning, collection, and analysis of data relevant to marketing decision making and the communication of the results of
this analysis to management.
Importance of Marketing Research to Management
Marketing research can be viewed as playing three functional roles: descriptive, diagnostic, and predictive. Its descriptive function includes gathering and presenting statements
of fact. What is the historic sales trend in the industry? What are consumers’ attitudes and
beliefs toward a product? Opening a pack of bacon is a messy job. Bacon lovers have to
reach into the package, and if they only pull out a few slices, there’s no easy way to store the
remainder. Oscar Mayer marketing researchers hear plenty from consumers about what they
disliked about its former bacon packaging. So marketers figured the best solution would be
a packaging innovation that eliminated the chore of placing the opened pack in a resealable
plastic bag or wrapping it in plastic or foil. This unwanted task was done so that the last
piece of bacon would be as fresh as the first.
Oscar Mayer Center Cut Bacon was introduced in a new “Stay-Fresh Reclosable Tray.”
The flip-top lid allows easy access to the bacon inside. The top snaps closed, making it readily resealable. The flat tray makes for simplified storage in the refrigerator.
The second role of research is the diagnostic function, wherein data and/or actions
are explained. For example, what was the impact on sales when the Oscar Mayer package
design was changed? How can product/service offerings be altered to better serve customers
and potential customers? Since kids eat over 5 billion ounces of ketchup each year, Heinz
decided that the heavy users (kids) should have a lot to say (via marketing research) about
how to make ketchup fun. Heinz listened and watched children using ketchup, which
resulted in a new bottle design and name selection. The true ketchup connoisseurs helped
create Heinz EZ Squirt ketchup!
The final role of research is the predictive function. How can the firm best take
advantage of opportunities as they arise in the ever-changing marketplace? Bonobos
is the largest apparel brand ever built on the web in the United States. They attribute
customer dialogue (marketing research) for helping them create a signature line of better-fitting men’s pants. Their research brings the customer into the design process to
create successful product offerings. Marketing research has identified different target
markets for Bonobos such as the “Sporty Guy,” “Guy Next Door,” and “Men Who Wear
Red Pants.”4
The Unrelenting Drive for Quality and Customer Satisfaction Quality and
customer satisfaction are the key competitive weapons in today’s marketplace. U.S. automobile manufacturers have been among the most battered in recent years but now are running
side by side with the imports. The watchwords are quality and customer service. As one auto
executive puts it:
If you go back to even a very short time ago, our whole idea of a customer was that we would
wholesale a car to a dealer, the dealer would then sell the car to the customers, and we hoped we
never heard from the customer—because if we did, it meant something was wrong. Today, we want
to establish a dialogue with the customer throughout the entire ownership experience. We want to
talk to our customers every step of the way. We want to be a consumer-products and services company that just happens to be in the automotive business.5
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Marketing Research and Decision Making
Where does marketing research come into play? The J. D. Power Awards rank cars
based on the level of customer satisfaction. This, in turn, drives sales of specific companies
and models. Lexus has always done well in a number of quality and customer satisfaction
studies. This has helped increase sales of the IS, LS, and RX models. At some Lexus dealers,
you can get a manicure and a massage while having your oil changed. Automobile manufacturers use marketing research to aid designers, determine what new features to add to
specific models, and learn how their cars stack up with those of the competition.
Quality that means little to customers usually doesn’t produce a payoff in improved
sales, profits, or market share; it represents wasted effort and expense. Today, the new
mantra is return on quality, which means that (1) the quality being delivered is the
quality desired by the target market and (2) the added quality must have a positive
impact on profitability. For example, banking giant Bank of America measures every
improvement in service quality, from adding more tellers to offering new products, in
terms of added profitability. REI, the Seattle-based outdoors sporting goods chain, has
earned a nickname, “Return Everything Inc.” Hundreds of returned items are stacked in
bins, hanging on racks and lining shelves. Tags detail the customer complaints: “Suddenly not waterproof ” on a frayed, blue, men’s rain jacket from a previous decade;
“Don’t fit well” on a pair of thick, black, women’s clogs so well-worn that their original
design as faded.
At another REI store, a customer recently returned a pair of women’s sandals, designed
for hiking and wading in rivers. The problem? According to the tag, “not sexy enough.”
Several years ago, a customer in Washington State successfully returned an REI snowsuit he
bought to climb Mount Rainier in 1970.6
In 2013, though, the chain announced it would henceforth take back items only within
a year of purchase. In this case, over-the-top service quality was having a negative impact on
the return on quality.
Paramount Importance of Keeping Existing Customers An inextricable
link exists between customer satisfaction and customer loyalty. Long-term relationships
don’t just happen; they are grounded in the delivery of service and value, as the REI
example shows. Customer retention pays big dividends for firms. Powered by repeat sales
and referrals, revenues and market share grow. Costs fall because firms spend less funds
and energy attempting to replace defectors. Steady customers are easy to serve because
they understand the modus operandi and make fewer demands on employees’ time.
A firm’s ability to retain customers also drives job satisfaction and pride, which leads to
higher employee retention. In turn, long-term employees acquire additional knowledge
that increases productivity.
A Bain & Company study estimates that a 5 percent decrease in the customer defection
rate can boost profits by 25 to 95 percent.7 Another study found that the customer retention rate has a major impact on the value of the firm.8
The ability to retain customers is based on an intimate understanding of their needs.
This knowledge comes primarily from marketing research. For example, British Airways
recast its first-class transatlantic service based on detailed marketing research. Most airlines
stress top-of-the-line service in their transatlantic first-class cabins. However, British Air
research found that most first-class passengers simply want to sleep. British Air now gives
premium flyers the option of dinner on the ground, before takeoff, in the first-class lounge.
Then, once on board, they can slip into British Air pajamas, put their heads on real pillows,
slip under blankets, and enjoy an interruption-free flight. On arrival at their destination,
first-class passengers can have breakfast, use comfortable dressing rooms and showers, and
even have their clothes pressed before they set off. These changes in British Air’s first-class
service were driven strictly by marketing research.
return on quality
Management objective based
on the principles that (1) the
quality being delivered is at
a level desired by the target
market and (2) the level of
quality must have a positive
impact on profitability.
5
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THE ROLE OF MARKETING RESEARCH IN MANAGEMENT DECISION MAKING
Understanding the Ever-Changing Marketplace
Marketing research also helps managers to understand trends in the marketplace and to take
advantage of opportunities. Marketing research has been practiced for as long as marketing
has existed. The early Phoenicians carried out market demand studies as they traded in the
various ports on the Mediterranean Sea. Marco Polo’s diary indicates he was performing
a marketing research function as he traveled to China. There is evidence that the Spanish
systematically conducted marketing surveys as they explored the New World, and examples
exist of marketing research conducted during the Renaissance.
Social Media and User-Generated Content
In the past few years, the world of promotion has been turned upside down. Previously,
marketers created a message and then one, or a series, of traditional media, TV, print,
radio, billboards to deliver that message to a target market. Now, more people than ever
participate in blogs, forums, online communities, product/service reviews—think Trip
Advisor—and social media sites that created user-generated content (UGC). The opinions
expressed in the venues are unsolicited, typically honest, candid, and passionate and can
be extremely thoughtful. Social media such as Twitter, Facebook, and Linked-In generate
millions of comments a day about products and services. About 20 percent of all Tweets
are about brands.9
In 2003, digital media accounted for less than 10 percent of advertising spending,
relative to TV and print. In 2008, its share was in the low teens. By 2013, it exceeded
20 percent, according to Zenith Optimedia and TNS Media Intelligence.10
Marketing researchers are tapping into these huge streams of data to determine
what people think about their products and services, as well as those of the competition.
Researchers are building profiles of persons online and using this data to target their promotional efforts. Other researchers tap online communities to build new products and services.
Smartphones are causing major changes in the way media are used and buying decisions
are made. Add in tablets, traditional computers, and TV, and one finds that the consumer
may be looking at four different screens at the same time! Researchers must now measure
consumers’ consumption of content and their exposure to advertising across all four screens.
ESPN, the sports network, is now gathering data across five platforms: radio, television,
computers, smartphones, and tablets.11
Asking the right questions
in marketing research can
be as important as getting
good answers. UPS found
that customers wanted
more interaction with
their UPS driver. Go to
http://www.ups.com to
find out how UPS uses
marketing research to
better serve its customers.
© David R. Frazier Photolibrary, Inc./Alamy
Proactive Role of
Marketing Research
Understanding the nature of the marketing
system is a necessity for a successful marketing orientation. By having a thorough
knowledge of factors that have an impact
on the target market and the marketing
mix, management can be proactive rather
than reactive. Proactive management alters
the marketing mix to fit newly emerging
patterns in economic, social, technological, and competitive environments, whereas
reactive management waits for change to
have a major impact on the firm before
deciding to take action. It is the difference
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between viewing the turbulent marketing environment as a
threat (a reactive stance) and seeing it as an opportunity (a
proactive stance). Apple, for example, has been very proactive about bringing cutting-edge technology products to the
marketplace. This, in turn, has generated huge profits for the
company.
A proactive manager not only examines emerging markets
but also seeks, through strategic planning, to develop a longrun marketing strategy for the firm. A marketing strategy
guides the long-term use of the firm’s resources based on the
firm’s existing and projected internal capabilities and on projected changes in the external environment. A good strategic
plan is based on good marketing research. It helps the firm
meet long-term profit and market share goals.
7
Rex F. May
Marketing Research and Decision Making
“I don’t know what I’m doing—this is pure research!”
Applied Research versus Basic Research
Virtually all marketing research is conducted to better understand the market, to find
out why a strategy failed, or to reduce uncertainty in management decision making. All
research conducted for these purposes is called applied research. For example, should
the price of DiGiorno frozen pizza be raised 40 cents? What name should Toyota select
for a new sedan? Which commercial has a higher level of recall: A or B? By contrast,
basic, or pure, research attempts to expand the frontiers of knowledge; it is not aimed
at a specific pragmatic problem. Basic research is conducted to validate an existing theory
or learn more about a concept or phenomenon. For example, basic marketing research
might test a hypothesis about high-involvement decision making or consumer information processing. In the long run, basic research helps us understand more about the world
in which we live. Managers usually cannot implement the findings of basic research in the
short run. Most basic marketing research is now conducted in universities; the findings
are reported in such publications as The Journal of Marketing Research and The Journal of
Marketing. In contrast, most research undertaken by businesses is applied research because
it must be cost-effective and of demonstrable value to the decision maker.
Although basic research is still important at some firms, particularly high tech, the
notion of time-to-market has changed. That is, the basic research can be fairly long term
but must have a focus on ultimately solving real-world problems. Companies conducting basic research include Genentech, Cisco Systems, and Google. Google, for example,
has done basic research that has led to applied research that resulted in the creation of a
self-driving car.
Nature of Applied Research
Marketing research studies can be classified into three broad categories: programmatic,
selective, and evaluative. Programmatic research is conducted to develop marketing
options through market segmentation, market opportunity analysis, or consumer attitude
and product usage studies. Selective research is used to test decision alternatives. Some
examples are testing concepts for new products, advertising copy testing, and test marketing.
Evaluative research is done to assess program performance; it includes tracking advertising recall, doing organizational image studies, and examining customer attitudes on a firm’s
quality of service.
Programmatic research arises from management’s need to obtain a market overview
periodically. For example, product management may be concerned that the existing market information base is inadequate or outdated for present decision making, or marketing
marketing strategy
A plan to guide the long-term
use of a firm’s resources based
on its existing and projected
internal capabilities and on
projected changes in the
external environment.
applied research
Research aimed at solving a
specific, pragmatic problem—
better understanding of the
marketplace, determination of
why a strategy or tactic failed,
or reduction of uncertainty in
management decision making.
basic, or pure, research
Research aimed at expanding
the frontiers of knowledge
rather than solving a specific,
pragmatic problem.
programmatic research
Research conducted to
develop marketing options
through market segmentation,
market opportunity analyses,
or consumer attitude and
product usage studies.
selective research
Research used to test decision
alternatives.
evaluative research
Research done to assess
program performance.
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plans may call for the introduction of new products, ad campaigns, or packaging. Whatever
the specific situation, current information is needed to develop viable marketing options.
Typical programmatic research questions include the following:
▪
▪
▪
▪
Has its target market changed? How?
Does the market exhibit any new segmentation opportunities?
Do some segments appear to be more likely candidates than others for the firm’s
marketing efforts?
What new product or service opportunities lie in the various segments?
Equidistant between Los Angeles and San Francisco in the Eastern Sierra Nevada
Mountains, Mammoth Mountain has been serving the skiers and snowboarders of central California for more than 50 years. With the summit reaching above 11,000 feet and
average annual snowfall hitting 400 inches, thousands of customers flock to the slopes and
the lodges annually.
Yet, the resort’s longstanding direct-mail program just wasn’t driving the traffic. While the
resort wasn’t losing visitors (most resort traffic industrywide comes from existing skiers and
snowboarders rather than those new to the sports), executives hoped to gain some ground in
an overall stable market by injecting some life into what had become an out-of-date marketing
campaign—and to increase the frequency of visits by the 900,000 customers in its database.
Resort executives used programmatic research collected from an annual survey, the
National Skier and Snowboarder Opinion Survey conducted on behalf of resorts across
the country, and found that 94 percent of Mammoth’s users in particular acknowledge using
the Internet to find information about everything from weather advisories to checking room
rates at one of Mammoth’s lodges.
This information led to the creation of an e-mail marketing system that reaches 18,000
subscribers. The format is chatty and informing. For example, “The weather has been
beautiful here lately, and with a 12- to 14-foot base you can’t go wrong anywhere on the
mountain. At 1:15 p.m. the temperature is 34 degrees at Main Lodge with clear skies and
moderate to gusty winds. It’s extremely windy and cold on top at 17 degrees, so be sure to
bundle up.” Skier visit numbers have been increasing 5 percent or more annually as a result
of the programmatic research!1
Selective research typically is conducted after several viable options have been identified
by programmatic research. If no one alternative is clearly superior, product management
usually will wish to test several alternatives. However, selective research may be required
at any stage of the marketing process, such as when advertising copy is being developed,
various product formulations are being evaluated, or an entire marketing program is being
assessed, as in test marketing.
The need for evaluative research arises when the effectiveness and efficiency of marketing programs must be evaluated. Evaluative research may be integrated into programmatic
research when program changes or entirely new options are demanded because of current
performance, such as at Mammoth Mountain.
Decision to Conduct Marketing Research
A manager who is faced with several alternative solutions to a particular problem should
not instinctively call for applied marketing research. In fact, the first decision to be made
is whether to conduct marketing research at all. In a number of situations, it is best not to
conduct research.
▪
Resources are lacking. There are two situations in which a lack of resources should
preclude marketing research. First, an organization may lack the funds to do the
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Marketing Research and Decision Making
▪
▪
▪
▪
▪
research properly. If a project calls for a sample of 800 respondents but the budget
allows for only 50 interviews, the quality of the information would be highly suspect. Second, funds may be available to do the research properly but insufficient to
implement any decisions resulting from the research. Small organizations in particular sometimes lack the resources to create an effective marketing mix. In one case, for
example, the director of a performing arts guild was in complete agreement with the
recommendations that resulted from a marketing research project. However, two
years after the project was completed, nothing had been done because the money
was not available.
Research results would not be useful. Some types of marketing research studies measure
lifestyle and personality factors of steady and potential customers. Assume that a
study finds that introverted men with a poor self-concept, yet a high need for
achievement, are most likely to patronize a discount brokerage service. The management of Charles Schwab’s discount brokerage service might be hard-pressed to use
this information.
The opportunity has passed. Marketing research should not be undertaken if the opportunity for successful entry into a market has already passed. If the product is in the late
maturity or decline stage of the product life cycle (such as cassette recorders or blackand-white television sets), it would be foolish to do research on new product entry. The
same may be true for markets rapidly approaching saturation, such as super-premium
ice cream (Häagen-Dazs, Ben and Jerry’s). For products already in the market, however,
research is needed to modify the products as consumer tastes, competition, and other
factors change.
The decision already has been made. In the real world of management decision making and company politics, marketing research has sometimes been used improperly. Several years ago, a large marketing research study was conducted for a bank
with over $800 million in deposits. The purpose of the research project was to
guide top management in mapping a strategic direction for the bank during the
next 5 years. After reading the research report, the president said, “I fully agree
with your recommendations because that was what I was going to do anyway! I’m
going to use your study tomorrow when I present my strategic plan to the board of
directors.” The researcher then asked, “What if my recommendations had been
counter to your decision?” The bank president laughed and said, “They would
have never known that I had conducted a marketing research study!” Not only was
the project a waste of money, but it also raised a number of ethical questions in the
researcher’s mind.
Managers cannot agree on what they need to know to make a decision. Although it may
seem obvious that research should not be undertaken until objectives are specified, it
sometimes happens. Preliminary or exploratory studies are commonly done to better
understand the nature of the problem, but a large, major research project should not
be. It is faulty logic to say, “Well, let’s just go ahead and do the study and then we will
better understand the problem and know what steps to take.” The wrong phenomena
might be studied, or key elements needed for management decision making may not
be included.
Decision-making information already exists. Some companies have been conducting
research in certain markets for many years. They understand the characteristics of their
target customers and what they like and dislike about existing products. Under these
circumstances, further research would be redundant and a waste of money. Procter &
Gamble, for example, has extensive knowledge of the coffee market. After it conducted initial taste tests, P&G went into national distribution with Folgers Instant
9
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Coffee without further research.
The Sara Lee Corporation did the
same thing with its frozen croissants, as did Quaker Oats with
Chewy Granola Bars. This tactic,
however, does not always work.
P&G thought it understood the
pain reliever market thoroughly, so
it bypassed marketing research for
Encaprin, encapsulated aspirin.
The product failed because it
lacked a distinct competitive
advantage over existing products
and was withdrawn from the
market.
© Pictorium /Alamy
The super-premium ice
cream market is reaching
saturation. At this point, it
might not be wise to enter
this market. However,
marketing research is
necessary to keep products
already in the market
ahead of the competition.
▪
The costs of conducting research
outweigh the benefits. Rarely does a
manager have such tremendous confidence in her or his judgment that additional
information relative to a pending decision would not be accepted if it were available
and free. However, the manager might have sufficient confidence to be unwilling to
pay very much for it or wait long to receive it. Willingness to acquire additional decision-making information depends on a manager’s perception of its quality, price, and
timing. The manager would be willing to pay more for perfect information (that is,
data that leave no doubt as to which alternative to follow) than for information that
leaves uncertainty as to what to do. Therefore, research should be undertaken only
when the expected value of the information is greater than the cost of obtaining it.
Two important determinants of potential benefits are profit margins and market size.
Generally speaking, new products with large profit margins are going to have greater potential benefit than products with smaller profit margins, assuming that both items have the
same sales potential. Also, new product opportunities in large markets are going to offer
greater potential benefits than those in smaller markets if competitive intensity is the same
in both markets (see Exhibit 1.1).
EXHIBIT
1.1
Deciding Whether to Conduct Marketing Research
Market Size
Small Profit Margin
Large Profit Margin
Small
Costs likely to be greater than benefits
(e.g., eyeglass replacement screw, tire
valve extension). DON’T CONDUCT
MARKETING RESEARCH.
Benefits possibly greater than cost
(e.g., ultra-expensive Lamborghini-type
sportswear, larger specialized industrial
equipment such as computer-aided
metal stamping machines). PERHAPS
CONDUCT MARKETING RESEARCH.
LEARN ALL YOU CAN FROM EXISTING
INFORMATION PRIOR TO MAKING
DECISION TO CONDUCT RESEARCH.
Large
Benefits likely to be greater than costs
(e.g., Stouffers frozen entrees, Crest’s
teeth whitener strips). PERHAPS
CONDUCT MARKETING RESEARCH.
LEARN ALL YOU CAN FROM EXISTING
INFORMATION PRIOR TO MAKING
DECISION TO CONDUCT RESEARCH.
Benefits most likely to be greater than
costs (e.g., medical equipment like
CAT scanners, 3D printers). CONDUCT
MARKETING RESEARCH.
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Development of Marketing Research
Development of Marketing Research
The many benefits that accrue to management from using marketing research served as the
initial impetus to begin conducting marketing research in the United States. In light of the
competitive advantage a company can gain from engaging in marketing research, it is surprising that the industry did not move out of its embryonic stage until 1900.
Inception: Pre-1900
The first recorded marketing research survey was taken in July 1824 by the Harrisburg Pennsylvanian. It was an election poll in which Andrew Jackson received 335 votes; John Quincy
Adams, 169; Henry Clay, 29; and William H. Crawford, 9. Later the same year, another
newspaper, the Raleigh Star, canvassed political meetings held in North Carolina, “at which
the sense of the people was taken.” Perhaps the first marketing researcher was John Jacob
Astor, who in the 1790s employed an artist to sketch the hats worn by fashionable New
York women so that he could keep abreast of fashion trends.13
The first documented use of research to make informed marketing decisions was carried
out by the advertising agency N. W. Ayer in 1879. That systematic effort was a simple survey of state and local officials to determine expected levels of grain production. The purpose
of the research was to develop the scheduling of advertising for a producer of farm equipment. The second documented instance of marketing research appears to have been at E. I.
duPont de Nemours & Company toward the end of the nineteenth century. It involved the
systematic compilation of salespersons’ reports on a variety of customer characteristics. The
response to this second research effort was a harbinger of things to come. The salespersons
who were responsible for obtaining and reporting the data were outraged because they didn’t
like the extra paperwork.
Academic researchers entered into marketing research about 1895, when Harlow Gale,
a professor of psychology at the University of Minnesota, introduced the use of mail surveys
to study advertising. He mailed 200 questionnaires and received 20 completed questionnaires, a 10 percent response rate. Gale’s work was quickly followed by the pioneering work
of Walter Dill Scott at Northwestern University. Scott introduced the use of experimentation and psychological measurement to the fledgling practice of advertising.
Early Growth: 1900–1920
It was not until after the turn of the century that consumer demand surged; the growth
of mass production meant larger and more distant markets. No longer was America characterized by cottage industries where the craftsman–seller was in daily contact with the
marketplace. The need arose to understand consumers’ buying habits and attitudes toward
manufacturers’ wares. In response to this need, the first formal marketing research department was established by the Curtis Publishing Company in 1911. The research focused primarily on the automobile industry, as manufacturers had decided that everyone who had
the money and inclination to buy a car had done so. The manufacturers were seeking a new
group of consumers to which to target their promotions. A few years later, Daniel Starch
pioneered recognition measures of advertising response, and E. K. Strong introduced recall
measures and scaling to marketing research.
Adolescent Years: 1920–1950
Percival White developed the first application of scientific research to commercial problems.
White’s words express his realization of the need for systematic and continual marketing
research:
11
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Perhaps the greatest advantage of the company’s having its own market analysis department is that
the work then becomes a continuous process, or at least a process which is carried forward at periodic intervals, so that altered conditions in the market and in the industry at large are always kept
in view. The necessity for regarding markets as constantly changing and not as fixed phenomena
should not be lost sight of.14
White’s book bore scant resemblance to this text. For example, the book avoided the
use of statistics and mathematics, only briefly mentioning the U.S. Census.
The 1930s saw widespread use of survey research. A. C. Nielsen entered the research
business in 1922. He expanded on White’s earlier work by developing the “share of market”
concept and many other services that became the foundation for one of America’s largest
marketing research organizations. It was not until the late 1930s that formal courses in
marketing research became common on college campuses; a substantial body of knowledge
developed within both the practice and academic communities. Two events—the spread of
broadcast media and World War II—helped the fledgling discipline coalesce into a welldefined profession. Social scientists found that broadcast media created interesting new phenomena and increased the variability of human behavior.
By the end of the 1930s, simple examinations of respondents’ replies were becoming
categorized and compared across groups classified by differences in income, gender, or family status. Simple correlation analysis came into use but was not widespread; those who
would use it had to be able to go directly to the statistical sources for such techniques, using
texts by some of the pioneers in the field at this time, including G. Udney Yule, Mordecai
Ezekiel, and Horace Sechrist.
The requirements of World War II pressed social scientists into service on a number of
fronts. Tools and methods that had been novelties before the war were adopted and adapted
to study the consumer behavior of soldiers and of their families on the home front. Among
those tools were experimental design, opinion polling, human factors research, and operations research techniques.
In the 1940s, focus groups developed under the leadership of Robert Merton. During the late 1940s, the importance of random selection in sampling became widely recognized, and major advances were made in sampling techniques and polling procedures. A
small number of psychologists who had been assigned to work in the Army Quartermaster
Corps found their way into industry, where they introduced techniques for consumer tests
of products.15
Mature Years: 1950–2000
The change from a seller’s market to a buyer’s market (resulting from post–World War II
pent-up demand) necessitated better marketing intelligence. No longer could producers sell
all of anything they made. The rising costs of production “tooling up,” advertising, inventories, and other factors made the price of failure much higher than it had been in the past.
Thus, research became much more important. Now, marketing research first determines
what the market wants and then goods are crafted to meet those needs.
The mid-1950s brought the concept of market segmentation, based largely on easily
identifiable demographic characteristics of customers. The same period gave rise to motivation research, with its emphasis on why consumers behave as they do. The underlying
concepts of segmentation and motivation analysis, combined with the power of survey techniques, led to such innovations as psychographics and benefit segmentation. In the 1960s,
mathematical models were developed for description and prediction—stochastic models,
Markovian models, and linear learning models. Even more significant was the development
of the computer during the early 1960s, greatly enhancing the researcher’s ability to quickly
analyze, store, and retrieve large amounts of data.
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Development of Marketing Research
The Connected World: 2000–2010
The Internet has brought profound changes to marketing research. In a global survey,
94 percent of the research firms stated that they were conducting online research.16 Some
firms are beginning to focus on mobile interviewing—mobile self-completion on a smartphone, iPhone, Blackberry, Droid, and the like. Today, 56 percent of American adults own a
smartphone17 and over 98 percent of the U.S. population has Internet access.18
The Internet has produced many benefits for marketing researchers:
▪
▪
▪
▪
Provides more rapid access to business intelligence, which allows for better and faster
decision making.
Improves a firm’s ability to respond quickly to customer needs and market shifts.
Facilitates conducting follow-up studies and longitudinal research.
Slashes labor- and time-intensive research activities (and associated costs), including
mailing, telephone solicitation, data entry, data tabulation, and reporting.
Conducting surveys and analyzing mountains of user data are not the sum total of the
Internet revolution in marketing research. The Internet has also greatly enhanced management of the research process and dissemination of information. Specifically, the Internet has
greatly affected several key areas:
▪
▪
▪
▪
▪
▪
Libraries and various printed materials, which may be virtually replaced as sources of
information. On its website, the Bureau of Census (http://www.census.gov) indicates
that it plans to gradually make the Internet the major means of distributing census
data. The same is true for a number of other government agencies. Information from
countless databases (both governmental and nongovernmental) can be called up
almost instantaneously on the user’s desktop, notebook, smartphone, Kindle, iPad, or
other E-reader.
The distribution of requests for proposals (RFPs) and the proposals themselves. Companies
can now quickly and efficiently send RFPs to a select e-mail list of research suppliers. In
turn, the suppliers can develop proposals and e-mail them back to clients. A process
that used to take days now occurs in a matter of hours.
Collaboration between the client and the research supplier in the management of a research
project. Both the researcher and the client might look at a proposal, RFP, report, or some
type of statistical analysis at the same time on their computer screens while discussing it
over the telephone. This is very effective and efficient, as changes in sample size, quotas,
and other aspects of the research plan can be discussed and changes made immediately.
Data management and online analysis. Clients can access their survey via the research
supplier’s secure Web site and monitor the data gathering in real time. The client can
use sophisticated tools to actually carry out data analysis as the survey develops. This
real-time analysis may result in changes in the questionnaire, sample size, or types of
respondents interviewed. The research supplier and the client become partners in “justin-time” marketing research.
Publishing and distribution of reports. Reports can be published directly to the Web from
such programs as PowerPoint and all the latest versions of leading word processing, spreadsheet, and presentation software packages. This means that results are available to appropriate managers worldwide on an almost instantaneous basis. Reports can be searched for
content of specific interest, with the same Web browser used to view the report.
Oral presentations of marketing research surveys, which now can be viewed by widely
scattered audiences. Managers throughout the world can see and hear the actual client
presentation on password-protected websites. This saves firms both time and money, as
managers no longer need to travel to a central meeting site.
13
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ERA of Big Data: 2010–Present
Big Data
The accumulation and analysis
of massive quantities of
information.
The hottest buzzword in marketing research is Big Data. Interestingly enough, most authors
never bother to define the term, so it is unclear whether people are always speaking about
the same thing. For our purposes, we will define Big Data as the accumulation and analysis
of massive quantities of information. Every day, three times per second, we produce the
equivalent amount of data that the Library of Congress has in its entire print collection.
Up until recently, managers were limited to analyzing structure data. Structured data
consists of fixed answers and numbers that can be arranged in rows and columns. These data
are easily stored, categorized, queried, analyzed, and reported. A few examples of structured
data formatting are: (1) Are you (A) male, (B) female?; (2) Did you find the restaurant (A)
excellent, (B) good, (C) fair or (D) poor? The data in question 2 can be crossed with the
gender data to ascertain how many men and how many women found the restaurant to be
“excellent.” The analysis is simple, direct, and straight-forward.
The breakthrough came in 2009 when new algorithms were created to analyze unstructured and free-form data. Now, data scientists can analyze YouTube videos, social media
posts, web-click behavior, GPS tracking data, satellite imagery, video streams, public surveillance videos, in-store tracking cameras, and more.
So how do marketers use Big data to improve their profitability? Here is one example.
Chico’s FAS Inc., Fort Myers, Florida-based specialty retailer of private branded women’s apparel,
listens to what consumers say about its brand on Facebook, Twitter and YouTube, and in discussion
forums and blogs. With social media analytic tools, Chico’s can find key influencers for the brand
and determine how their brand-related online conversations affect business results. Such findings
ultimately guide brand and communication strategies, and customer-focused efforts. Chico’s works
in real time to identify tweets related to its brands, and categorizes them based on their sentiment
and the author’s degree of influence. The company can then respond to the important comments.20
McKinsey & Company, an international consulting firm, says that companies who use
Big Data and the proper analytics can deliver productivity and profit gains that are 5 to 6
percent higher than the competition.21 The tremendous value of Big Data means that big
data technology and services market will grow at a 31 percent rate, with revenues reaching
$24 billion by 2016.22
The mathematics used in analyzing Big Data goes far beyond the scope of this text. We
will, however, take a more detailed look at the nature and benefits of Big Data from a managers’ or users’ perspective in Chapter 4.
Big Data is not the only change agent swirling around in the marketing research environment, as our Practicing Marketing Research box shows.
P R A C T I C I N G
M A R K E T I N G R E S E A R C H
A Few Forces That May Change the
World of Marketing Research
Joseph Rydholm is the editor of Quirk’s Marketing Research
Review, the industry’s most popular and influential trad...
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