MARKETING RESEARCH 8TH EDITION CHAPTER 1-5

Marketing
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.
Marketing concept
is a business philosophy that holds that the key to achieving organizational goals consists of the company’s being more effective than competitors in creating, delivering, and communicating customer value to its chosen target markets.
Marketing strategy
consists of selecting a segment of the market as the company’s target market and designing the proper “mix” of the product/service, price, promotion, and distribution system to meet the wants and needs of the consumers within the target market.
Marketing research
is the process of designing, gathering, analyzing, and reporting information that may be used to solve a specific marketing problem.
Marketing research (AMA):
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 the understanding of marketing as a process
Marketing research VS Market research
a process used by businesses to collect, analyze, and interpret information used to make sound business decisions and successfully manage the business VS a process used to define the size, location, and/or makeup of the market for a product or service
Marketing research Function
links the consumer to the marketer by providing information that can be used in making marketing decisions
Uses of Marketing Research
•Identify marketing opportunities and problems
•Generate, refine, and evaluate potential marketing actions
•Monitor marketing performance
Market Opportunities and Problems
Some marketing research studies are designed to find out what consumers’ problems are and to assess the suitability of different proposed methods of resolving those problems
Generate, Refine and Evaluate Potential Marketing Actions
•Selecting target markets
•Product research
•Pricing research
•Promotion research
•Distribution research
Monitor Marketing Performance:
•Tracking data collected at point-of-sale terminals as consumer packages goods are scanned in grocery stores, mass-merchandisers, and convenience stores
•Tracking social media
Basic research
conducted to expand our knowledge rather than to solve a specific problem.
Applied research
conducted to solve specific problems.
The Marketing Information System (MIS):
Structure consisting of people, equipment, and procedures to gather, sort, analyze, evaluate, and distribute needed, timely, and accurate information to marketing decision makers.
The Marketing Information System (MIS) Components:
•Internal Reports System
•Marketing Intelligence System
•Marketing Decision Support System (DSS)
•Marketing Research System
Marketing Research System:
•It gathers information for a specific situation — not gathered by the other MIS component subsystems.
•Marketing research projects are not continuous — they have a beginning and an end.
2. Client-side research:
organizations that supply their own marketing research information.
Internal suppliers: Formal departments or individuals conduct research internally.
2. Supply-side research
External suppliers hired to fulfill a company’s marketing research needs.
Supplier or agency: firm specializing in marketing research that offers its services to buyers needing information to make more informed decisions
2.Industry Structure
Size
Type and specialty
2.Full-service supplier firms:
Have the capability to conduct the entire marketing research project for buyer firms.
2.Limited-service supplier firms:
specialize in one or, at most, a few marketing research activities.
2.Industry Performance: Industry Revenues and Profits
ESOMAR estimates worldwide revenues for the marketing research industry at $43 billion.
Top 50 firms generated more than $28 billion, led by Nielsen Inc.
The largest marketing research companies are truly international.
Revenues vary around the world.
2. Challenges Facing Marketing Research
New and evolving sources of data and methodologies
Need for the effective communication of results
Need for talented and skilled employees
2.Industry initiatives to address these challenges include:
Establishing “best practices”
Maintaining public credibility of research
Monitoring industry trends
Improving ethical conduct
2. Marketing Research Codes of Conduct
Fair Dealings with Respondents
Fair Dealings with Clients and Subcontractors
Maintaining Research Integrity
Concern for Society
2. Fair Dealings with Respondents
Participation is always voluntary
Respondent confidentiality must be maintained
Respondents will be treated professionally.
Respondents will not be given dishonest statements to secure their cooperation
Special provisions are required for doing research on minors
2. Fair Dealings with Clients and Subcontractors
All information obtained from clients shall remain confidential.
All research will be carried out according to the agreement with the client.
Client identity will not be revealed without proper authorization.
Secondary research will not be presented to the client as primary research.
Research results are the sole property of the client and will never be shared with other clients.
2. Maintaining Research Integrity
Data will never be falsified or omitted.
Research results will be reported accurately and honestly.
Researchers will not misrepresent the impact of the sampling method and its impact on sample data.
2. Concern for Society
Research released for public information will contain information to ensure transparency.
Researchers will not abuse public confidence in research.
Researchers will not represent a non-research activity to be research for the purpose of gaining respondent cooperation.
2. Qualified Research Professionals
Professionalism has been improved through:
Professional Researcher Certification (PRC)
Continuing education programs
3.Step 1: Establish the Need for Marketing Research
Is there a real need for marketing research?

Research takes time and costs money
Cost of information may outweigh value of information
Marketing research is not always needed.
We often have the information

3.When is marketing research NOT needed?
The information is already available
The timing is wrong to conduct marketing research
Funds are not available for marketing research
Costs outweigh the value of marketing research
3.Step 2: Define the Problem
The need to make a decision requires decision alternatives. If there are no alternatives, no decision is necessary.
3.Step 3: Establish Objectives
Research objectives state what the researchers must do.
Research objectives, when achieved, provide the information necessary to solve the problem identified in step 2.
3. Step 4: Determine Research design
Exploratory Research: collecting information in an unstructured and informal manner.
Descriptive research: research that describes the phenomena of interest.
Causal studies: attempt to uncover what factor or factors cause some event.
3.Step 5: Identify Information Types and Sources
Primary information: information collected specifically for the problem at hand

Secondary information: information already collected

3.Step 6: Determine Methods of Accessing Data
Secondary data is relatively easy to access
Primary data is more complex
3.Step 7: Design Data Collection Forms
The questionnaire must be worded objectively, clearly, and without bias in order to communicate with respondents.
If a focus group is used, a focus group guide must be developed.
If we observe respondents, the form is called an observation form.
Software programs are available to assist marketing researchers in preparing data collection forms.
3.Step 8: Determine Sample Plan and Size
A sample is drawn from an entire group or population. The sample plan describes how each sample element, or unit, is to be drawn from the total population. Gives you representativeness!

Sample size refers to determining how many elements of the population should be included in the sample. Gives you accuracy!

3.Step 9: Collect Data
Nonsampling errors in data collection will occur, so researchers must know the sources of these errors and implement controls to minimize them.

Researchers aim to minimize this possibility by undertaking a control referred to as validation.

Companies that specialize in data collection are referred to as field service firms.

3.Step 10: Analyze Data
Data analysis involves entering data into computer files, inspecting data for errors, and running tabulations and various statistical tests.
3. Prepare and Present the Final Research Report
Reporting, the last step, is one of the most important phases of marketing research.

Its importance cannot be overstated because it is the report, or its presentation, that properly communicates the results to the client.

3.Problems
situations calling for managers to make choices among decision alternatives.
3. Research objectives
are specific and tell the researcher exactly what information must be collected to solve the problem by facilitating selection of an alternative.

Specify from whom information is to be gathered

Specify what information is needed

Specify the unit of measurement used to gather
information

Word questions used to gather information using the respondents’ frame of reference

3.Hypotheses
are statements that are taken as true for the purposes of argument or investigation.
3.construct
is an abstract idea or concept composed of a set of attitudes or behaviors that are thought to be related.
What is the unit of measurement?
What is the proper frame of reference?
3. action standard
is a predesignation of some quantity of a measured attribute or characteristic that must be achieved for a research objective for a predetermined action to take place.
3. marketing research proposal
The marketing research proposal serves as the basis of a contract as it documents what the marketing researcher proposes to deliver to the client for some consideration, typically a fee.

When a client first contacts a marketing research supplier to conduct research, the client will generally request a proposal prior to agreeing to work with the firm in a process called an invitation to bid (ITB) or request for proposal (RFP) .

3.The Market Research Proposal Elements
Statement of the problem
The research objectives
The research method
Statement of deliverables
Costs
Timetable
4.Research design
set of advance decisions that make up the master plan specifying the methods and procedures for collecting and analyzing the needed information.
4.Why Is Research Design Important?
Good research design is the “first rule of good research”.
Knowledge of the needed research design allows advance planning so that the project may be conducted in less time and typically at a cost savings due to efficiencies gained in preplanning.
4.Objectives of Research Design
To gain background information and to develop hypotheses
To measure the state of a variable of interest
To test hypotheses that specify the relationships between two or more variables
4.Research Design: A Caution
In many cases research is an iterative process.
By conducting one research project, we learn that we may need additional research, which may result in using multiple research designs.
4.Three Types of Research Designs
Exploratory
Descriptive
Causal
4.Exploratory research
is usually conducted at the outset of research projects.
It is usually conducted when the researcher does not know much about the problems.
4.Uses of Exploratory Research
Gain background information
Define terms
Clarify problems and hypothesis
Establish research priorities
4.Exploratory Research Methods
Secondary Data Analysis: the process of searching for interpreting existing information relevant to the research topic

Experience Surveys: refers to gathering information from those knowledgeable on the issues relevant to the research problem

Key-informant technique: gathering information from those thought to be knowledgeable on the issues relevant to the problem
Lead-user survey: used to acquire information from lead users of a new technology

Case Analysis: a review of available information about a former situation(s) that has some similarities to the current research problem

Focus Groups: small groups brought together and guided by a moderator through an unstructured, spontaneous discussion for the purpose of gaining information relevant to the research problem

4.Descriptive research
is undertaken to describe answers to questions of who, what, where, when, and how.
It is desirable when we wish to project a study’s findings to a larger population, if the study’s sample is representative
4.Descriptive Research Classifications
Cross-sectional: studies measure units from a sample of the population at only one point in time (or “snapshot”).
Sample surveys are cross-sectional studies whose samples are drawn in such a way as to be representative of a specific population.
These studies are usually presented with a margin of error.

Longitudinal studies: repeatedly measure the same sample units of a population over time.
Since they involve multiple measurements over time, they are often described as “movies” of the population.

4.Descriptive Research Studies
Continuous panels ask panel members the same questions on each panel measurement.

Discontinuous panels vary questions from one panel measurement to the next.
These are sometimes referred to as omnibus panels (omnibus meaning “including or covering many things or classes”).

Discontinuous panels are demographically matched to some larger entity, implying representativeness.
Discontinuous panels represent sources of information that may be quickly accessed for a wide variety of purposes.

4.Discontinuous panel
are demographically matched to some larger entity, implying representativeness.
Discontinuous panels represent sources of information that may be quickly accessed for a wide variety of purposes.
4.Discontinuous panels
are demographically matched to some larger entity, implying representativeness.
Discontinuous panels represent sources of information that may be quickly accessed for a wide variety of purposes.
4. Continuous Panels
Brand-switching studies: studies examining how many consumers switched brands.

Market-tracking studies are those that measure some variable(s) of interest — such as market share or unit sales — over time.

4.Causal Research
Causality may be thought of as understanding a phenomenon in terms of conditional statements of the form “If x, then y.”
Causal relationships are often determined by the use of experiments.
4. Experiment
is defined as manipulating an independent variable to see how it affects a dependent variable, while also controlling the effects of additional extraneous variables.
4.Independent variables
variables which the researcher has control over and wishes to manipulate… the 4 P’s.
For example: level of ad expenditure; type of ad appeal; display location; method of compensating salespersons; price; type of product.
4 .Dependent variables
variables that are measured in response to changes in independent variable.
4.Extraneous variables
variables that may have some effect on a dependent variable yet are not independent variables.
4.Experimental design
procedure for devising an experimental setting such that a change in a dependent variable may be attributed solely to the change in an independent variable.
4. Symbols of Experimental Design
O = measurement, or observation, of a dependent variable
X = manipulation, or change, of an independent variable
R = random assignment of subjects to experimental and control groups
E = experimental effect (change in the dependent variable due to independent variable)
4. Pretest
refers to the measurement of the dependent variable taken prior to changing the independent variable.
4. Posttest
refers to measuring the dependent variable after changing the independent variable.
4. Experimental Design
Control group: control of extraneous variables is typically achieved by the use of a second group of subjects

Experimental group: the group that has been exposed to a change in the independent variable

4. Before-After with Control Group
design may be achieved by randomly dividing subjects of the experiment in two groups:
4. An experiment is valid if
The observed change in the dependent variable is due to the independent variable;
The results of the experiment apply to the “real world” outside the experimental setting.
4. Internal validity
is concerned with the extent to which the change in the dependent variable is actually due to the change in the independent variable.
4. External validity
refers to the extent that the relationship observed between the independent and dependent variables during the experiment is generalizable to the “real world.”
4. Laboratory experiments
are those in which the independent variable is manipulated and measures of the dependent variable are taken in a contrived, artificial setting for the purpose of controlling the many possible extraneous variables that may affect the dependent variable.
4. Field experiments
are those in which the independent variables are manipulated and the measurements of the dependent variable are made on test units in their natural setting.
4.Test marketing
the phrase commonly used to indicate an experiment, study, or test that is conducted in a field setting.

Main uses of test markets:
To test sales potential for a new product or service
To test variations in the marketing mix for a product or service

4.Types of Test Markets
The standard test market is one in which the firm tests the product or marketing mix variables through the company’s normal distribution channels.

Controlled test markets are conducted by outside research firms that guarantee distribution of the product through prespecified types and numbers of distributors.

Electronic test markets are those in which a panel of consumers has agreed to carry identification cards that each consumer presents when buying goods and services.

Simulated test markets (STMs) are those in which a limited amount of data on consumer response to a new product is fed into a model containing certain assumptions regarding planned marketing programs, which generates likely product sales volume.

4. Selecting Test-Market Cities
Three main criteria:
Representativeness
Degree of isolation
Ability to control distribution and promotion
4. Pros and Cons of Test Marketing
Advantages:
Test marketing allows for the most accurate method of forecasting future sales, and it allows firms the opportunity to pretest marketing-mix variables.

Disadvantages:
Test markets do not yield infallible results
Competitors may intentionally try to sabotage test markets
Test markets bring about exposure of the product to the competition
Test markets may create ethical problems

5.Big data
defined simply as large amounts of data from multiple sources.
The term has been popularized in recent years in response to the numerous types and huge amounts of data to which companies now have access in real time.
5.Primary Versus Secondary Data
Primary data: information that is developed or gathered by the researcher specifically for the research project at hand.
Secondary data: information that has previously been gathered by someone other than the researcher and/or for some other purpose than the research project at hand.
5.Uses of Secondary Data
Secondary data has many uses in marketing research and sometimes the entire research project may depend on the use of secondary data.

Applications include economic-trend forecasting, corporate intelligence, international data, public opinion, and historical data.

5.Internal secondary data
data that have been collected within the firm, such as sales records, purchase requisitions, and invoices.
5.Database marketing
is the process of building, maintaining customer (internal) databases and other (internal) databases for the purpose of contacting, transacting, and building relationships. Example: data mining.
5.Internal databases
consist of information gathered by a company, typically during the normal course of business transactions.

Companies use their internal databases for purposes of direct marketing and to strengthen relationships with customers, which is referred to as customer relationship management (CRM).

Data mining is the name for software that helps managers make sense out of seemingly senseless masses of information contained in databases.
Micromarketing refers to using a differentiated marketing mix for specific customer segments, sometimes fine-tuned for the individual shopper.

5.Ways Companies Use Databases
To identify prospects
To decide which customers should receive a particular offer
To deepen customer loyalty
To reactivate customer purchases
To avoid serious customer mistakes
5.External databases
are databases supplied by organizations outside the firm:
Published sources
Official data
Data aggregators

Published sources: sources of information prepared for public distribution and normally found in libraries or a variety of other entities, such as trade organizations.

Official statistics are information published by public organizations, including government institutions and international organizations

Data aggregators are services or vendors that organize and package information on focused topics.

Syndicated services data: provided by firms that collect data in a standard format and make them available to subscribing firms – highly specialized and not available in libraries.

5.Advantages of Secondary Data
obtained quickly
inexpensive
readilly available
Enhance existing primary data
May achieve research objective
5.Disadvantages of Secondary Data
Reporting units may be incompatible
Measurement units do not match
Class definitions are not usable
May be outdated
May not be credible
5.The American Community Survey
is an example of an official external secondary data source that is available for free from the U.S. Census.
5.Packaged information
type of secondary data in which the data collected and/or the process of collecting the data are prepackaged for all users.

There are two broad classes of packaged information:

Syndicated data
Packaged services

5.Syndicated data
form of external, secondary data that are supplied from a common database to subscribers for a service fee
5.Packaged services
refers to a prepackaged marketing research process that is used to generate information for a particular user
5.Advantages of Syndicated Data
Shared costs
Quality of the data collected is typically very high
Speed
5.Disadvantages of Syndicated Data
Buyers have little control over what information is collected

Firms often must commit to long-term contracts when buying syndicated data

No strategic information advantage in purchasing syndicated data

5.Advantages of Packaged Services
Advantage of the experience of the research firm offering the service
Reduced cost of the research
Speed of the research service
Ability to obtain benchmarks for comparison
5.Disadvantages of Packaged Services
Inability to customize aspects of a project when using a packaged service.
The company providing the packaged service may not know the idiosyncrasies of a particular industry.
5, Marketing Applications of Packaged Information
Measuring consumer attitudes and opinions
Market segmentation (often using geodemographics)
Monitoring media usage and promotion effectiveness
Market tracking studies
5.Sentiment
is the ratio of positive to negative comments posted about products and brands on the web.
5.Social media data
also termed user-generated content (UGC), is any information that is created by users of online systems and intended to be shared with others
Examples:
Reviews
Tips
New uses
Competitors
5.Social Media Data Advantages vs Disadvantages
Advantages
Currency
Inexpensive
Unprompted
Can track trends

Audience may not be representative
Consumers not identifiable
Review websites subject to manipulation
Shallow content

5.The Internet of Things
is defined as the network of physical objects that are embedded with software or sensors that allow them to gather and distribute data.
5.Passive data
are information that is collected without overt consumer activity.
5.Wearables
or wearable technology, are clothing or accessories that are equipped with computer technology or sensors that allow the collection and sharing of data.