Marketing Research & Analysis

marketing
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
marketing concept
business philosophy based on 1) consumer, 2) goal and 3) systems orientation
customer orientation
identification of and focus on people or firms most likely to buy a product and the production of a good/service that will meet their needs most effectively
goal
focus on accomplishment of corporate goals; a limit set on customer orientation
systems
creation of systems to monitor external environment and deliver desired marketing mix to target market
5 types of external environmental considerations
Social and cultural
Political and regulatory
Economic
Competitive
Technological
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
How does marketing research relate to 3 parts of marketing concept?
Marketing research tasks are 1) identifying target market needs and 2) finding market opportunities. This info must be fed back to the firm –> without feedback from marketplace, a firm is not truly consumer-oriented
3 functional roles of marketing research
descriptive
diagnostic
predictive
descriptive
gathering and presentation of statements of fact
diagnostic
explanation of data or actions
predictive
specification of how to use descriptive and diagnostic research to predict results of a planned marketing decision
return on quality
management objective based on principles that 1) quality being delivered is at a level desired by target market and 2) level of quality must have positive impact on profitability
What is the link between marketing research, satisfaction, and return on quality?
The ability to retain customers is based on an intimate understanding of their needs and this knowledge comes primarily from market research
What role does marketing research play in satisfaction and customer loyalty?
Huge link between satisfaction and loyalty, so by ensuring satisfaction through research and improvements, loyalty is increased
marketing strategy
plan to guide long-term use of a firm’s resources based on its existing and projected internal capabilities and on projected changes in external environment
applied research
research aimed at solving a specific, pragmatic problem – such as better understanding of marketplace, determination of why a strategy or tactic failed, or reduction of uncertainty in management decision making
basic research
research aimed at expanding frontiers of knowledge rather than solving a specific, pragmatic problem
selective research
used to test decision alternatives; typically conducted after several viable options have been identified by programmatic research — helps managers make best decision when multiple opportunities exist
programmatic research
conducted to develop marketing options through market segmentation, market opportunity analyses, or consumer attitude and product usage studies; arises from management’s need to obtain a market overview periodically — ex. Has target market changed? How? Are there new segmentation opportunities?
evaluative research
done to assess program performance; arises when effectiveness and efficiency of marketing programs must be evaluated. May be integrated into programmatic research when program changes or entirely new options are demanded due to present performance
when NOT to conduct research
– Resources are lacking
– Research results would not be useful
– Opportunity has passed
– Decision has already been made
– Managers cannot agree on what they need to know to make a decision
– Decision-making information already exists
– Costs of conducting research outweigh benefits
most critical step in marketing research process
correctly defining the problem/opportunity. if you do not accomplish this first step, then all of your research efforts will be in vain. managers, researchers and consumers should all be involved
exploratory research
preliminary research conducted to increase understanding of concept, to clarify exact nature of problem to be solved, or to identify important variables to be studied; end of exploratory research comes when marketing researchers are convinced they have found major dimensions of problem
types of exploratory research
pilot studies, experience surveys, secondary data analyses, case analyses, focus groups
symptoms
phenomenon that occurs because of existence of something else
marketing research objective
goal statement, defining the specific information needed to solve the marketing research problem
steps in marketing research process
“I Can Make Snow Cones And Run Fast”

1) Id problem and state research objectives
2) Create research design
3) choose Method of research
4) select Sampling procedure
5) Collect data
6) Analyze data
7) write/present Report
8) Follow-up

research design
plan to be followed to answer marketing research objectives; based on project’s objectives
descriptive studies
research studies that answer who, what, when, where, how
variable
symbol/concept that can assume any one of a set of values
cross-sectional survey
one-time snapshots of population, use same survey & different sample
longitudinal survey
identify market trends, use same survey & same sample, use tracking panels & groups
causal studies
research studies that examine whether value of one variable causes or determines value of another variable; must meet criterions of temporal sequence and concomitant variation
temporal sequence
appropriate causal order of events
concomitant variation
degree to which a presumed cause and a presumed effect occur or vary together
spurious action
relationship between a presumed cause and a presumed effect that occurs as a result of an unexamined variable or set of variables (aka other variables are causing changes in dependent variable)
3 types of research design
survey
observation
experiment
survey research
interviewer (except in mail and Internet) interacts with respondents to obtain facts, opinions and attitudes
observation
typically descriptive research that monitors respondents’ actions without direct interaction; examining patterns of behavior instead of asking consumer why they do what they do
experiments
measures causality, in which researcher changes 1+ independent variable and observes changed on dependent variable
probability sample
subset of a population where every element in population has a known nonzero chance of being selected
non-probability sample
subset of a population in which chances of selection for various elements in population are unknown
primary data
new data gathered to help solve the problem under investigation
secondary data
data that have been previously gathered and might be relevant to problem at hand

Internal: annual reports, reports to stockholders, sales data, customer profiles, purchase patterns, product testing results, etc.

External: government (federal, state, local) departments and agencies that compile and publish summaries of business data, trade and industry association, business periodicals, news media

internal database
collection of related info developed from data within an organization
database marketing
marketing that relies on creation of a large computerized file of customers’ and potential customers’ profiles and purchase patterns to create a targeted MM; aka micromarketing
data mining
use of statistical and other advanced software to discover nonobvious patters hidden in a database

objective: identify patterns that markets can use in creating new strategies and tactics to increase a firm’s profitability

potential uses:
– Customer acquisition
– Customer retention
– Customer abandonment
– Market basket analysis

behavioral targeting
use of online and offline data to understand a consumer’s habits, demographics, and social networks in order to increase effectiveness of online advertising
qualitative research
research whose findings are not subject to quantification or quantitative analysis
quantitative research
research that uses mathematical analysis
popularity of qualitative reseach
– can be cheaper than quantitative and save time, depending on the project
– Provides deeper insights; attitudes, values, beliefs, emotions
– Can improve efficiency and design of quantitative research (and vice versa)
focus group
group of 8-12 participants who are led by a moderator in an in-depth discussion on one particular topic or concept. Goal is to learn and understand what people have to say and why
4 main steps in conducting a focus group
1) Prepare for the group; select a facility and recruit participants
2) Select a moderator and create discussion guide
3) Conduct focus group
4) Prepare focus group report
in depth interview (IDI)
1:1 interviews that probe and elicit detailed answers to questions, often using non directive techniques to uncover hidden motivations
IDI advantages
– Group pressure and influence is eliminated → can attain a singular viewpoint
– Respondent feels important and wanted and is more aware
– Encourages revelation of new info
– Respondents can be questioned at length to reveal feelings/motivations
– Greater flexibility for questioning and location of interview
– Interviewer is more sensitive to nonverbal feedback
IDI disadvantages
– Costs (time/money)
– Less client involvement
– Don’t cover as much material in one day
– Don’t allow for group dynamics; discussion and resolution
– Some respondent reactions cannot be generated from 1:1 session
projective test
technique for tapping respondents’ deepest feelings by having them project those feelings into an unstructured situation
popularity of survey research
– They need to know why. Critical need to have some idea about why people do or do not do something. Used to develop some idea of the causal forces at work (does not mean that they can prove causation)

– They need to know how. Necessary to understand the process consumers go through before taking some action.

-They need to know who. Who the person is from a demographic or lifestyle perspective for the identification and definition of market segments.

random sampling error
error that results from chance variation
chance variation
difference between the sample value and the true value of the population mean; can be reduced by increasing sample size
systematic error
error that results from problems or flaws in the execution of the research design; sometimes called non-sampling error
sample design error
systematic error that results from an error in the sample design or sampling procedures

– Frame Error (based on sampling frame)
– Population Specification Error
– Selection Error (frame and population were both executed correctly but procedures are not followed correctly)

measurement error
systematic errors that results from a variation between the info being sought (true value) and what is actually obtained by measurement process

– Surrogate Information Error
– Interviewer Error (or, Interviewer Bias)
– Measurement Instrument Bias
– Processing Errors
– Nonresponse Bias
— refusal rate
– Response Bias
— deliberate falsification
— unconscious falsification

CATI
computer assisted telephone interviews; interviewer uses a script provided by software application, which speeds up collection/editing of data and allow for customized flow of questions based on answers
survey types
SCAMMED

door-to-door interviews
executive interviews
mall-intercept interviews
call center telephone
self administered questionnaires
ad hoc mail survey/one shot mail survey
mail panels

popularity of online research
– World’s internet population is almost 2 billion (aka 30% of the population!)

– US & Canada: over 77% of population is online, growth at almost 150% since year 2000 SO for the U.S. our population is well-represented on the internet (older consumers not online tend to not be a target market)

– For Middle East and Africa, growth has been at over 2000%

– Has replaced CATI as the most popular form of data collection

online focus groups pros/cons
– Traditional (at same time, moderator gives q’s, 8-10 participants provide their comments) or online bulletin boards (questions are posted and the participants have all day to respond, usually run for 2 or 3 days)

– Advantages: cutting costs in half, faster turnaround time, respondents can be located anywhere, more openness without real presence of moderator, better interaction between moderator and client and doesn’t disrupt focus group, can reach hard to reach people like doctors and lawyers

– Disadvantages: cannot view the group dynamics, can’t see the nonverbal inputs, client has no direct interface with consumers, can’t use external stimuli such as advertising copy, less techniques for moderator to use behind a computer

online survey research advantages
– Rapid deployment & real-time reporting
– Reduced costs & less time/labor
– Ready personalization
– High response rates- take less time, more stimulating with graphics and links
– Ability to contact the hard-to-reach
– Simplified and enhanced panel management- panels provide feedback and counsel to research firms and their clients
– External Internet panels simplify life for research suppliers
online survey research disadvantages
– Internet penetration rate needs to exceed 20% to be equivalent to the results from telephone/mail surveys
– Unrestricted Internet sample: a self-selected sample group consisting of anyone who wishes to complete an Internet survey; only representative of Web surfers
– The sample frame needed may not be represented on the Internet
– Lack of callback procedures to clarify open-end responses
– Lack of bandwidth
what is observation research
the systematic process of recording patterns of occurrences or behaviors without normally communicating with the people involved
three conditions for using observation
ORS

1. needed information must be either *Observable* or inferable
2. behavior should be *Repetitive,* frequent, or in some manner predictable
3. behavior must be relatively *Short* in duration

what is the nature of observation research
– natural vs. contrived: are you observing a naturally occurring event or is the setting made up by the researcher?

– open vs. disguised: does the subject know the purpose of the research?

observation research advantages
– you see what people actually do rather than what they say they do
– firsthand information is less prone to bias
– the observational data can be executed quickly and relatively accurately
– electronic collection such as scanners is more efficient than manual counts
– clients can also observe their customers along with the researcher
observation research disadvantages
– Only physical or behavior can be measured.
– Can’t measure attitudes, beliefs, intentions, or feelings.
– Not always a good representation of the general population.
– Interpretation is somewhat subjective depending on observation type.
– Data analysis is generally more qualitative than quantitative.
– It can be expensive and time-consuming if subjects not readily available.
– Data can be time-sensitive, making predictive analysis tricky
ethnographic observation research
study of human behavior in its natural context (at that moment), involving observation of behavior and physical setting
mystery shopping
People who pose as customers and shop at a company’s own stores or those of its competitors to collect data about customer-employee interactions and to gather observational data. They might also compare prices, displays, and the like

Why?
– enables organization to monitor compliance with product/service delivery standards and specifications
– enables marketers to examine gap between promises made through advertising/sales promos and actual service delivery
– helps monitor impact of training and performance improvement initiatives
– identifies differences in customer experience across different times of day, locations, product/service types, etc.

internet tracking
– another form of observation research using “cookies” to track
– Modeling surfing patterns along with demographic and psychographic data to predict consumer behavior.
– Website should mirror the customers’ buying process
– Click sequence/patterns should enhance predictive capability.
– “comScore” tracks the Internet with a panel of over 2 million users
– “Scraping the Web” used to develop a cohesive message from thousands of conversation threads in newsgroups, chat-rooms, listservs, message boards, etc.
traffic counters
machines used to measure vehicular flow over a particular stretch of highway
physiological measurement devices
measures to study a person’s activation; when an individual is aroused or feels inner tension or alertness (MRI)
galvanic skin responses (GSR)
a change in the electric resistance of the skin associated with activation responses; also called electrodermal response –> assesses emotional reaction to a stimulus
eye tracking
– yields valuable information about which features are most eye-catching

– online advertising can use this to pin-point best ad placement on a web page.

people reader
a machine that simultaneously records a respondent’s reading material and eye reactions
portable people meter
a device worn by people that measures the radio and TV programming to which the participant is exposed during the day
virtual shopping
– duplicates the distracting clutter of an actual market
– can set up and alter tests quickly
– production costs are low after set up
– very flexible
What is an experiment?
– Fundamentally different from survey/observation research because researcher is actively involved in process
– One variable is manipulated (independent, treatment) to observe the effect on something else (dependent variable)
– For marketing: dependent is usually a measure of sales while independent is a marketing mix variable
– Extraneous factors affect the ability to tell the causal relationship between the tested variables
extraneous factors
affect ability to tell the causal relationship between the tested variables

– history
– maturation
– instrument variation
– selection bias
– mortality
– testing effects
– regression to the mean

confounding/controlling extraneous variables
– randomization
– physical control
– design control
– statistical control
treatment
the independent variable that is manipulated; one of four factors in an experimental design
What is causal research?
research designed to determine whether a change in one variable likely caused an observed change in another
3 things causal research must demonstrate
1. Concomitant variation (correlation; positive or inverse relationship exists)
2. Appropriate time order of occurrence (change in IV must come before observed change in DV)
3. Elimination of other possible causal factors
concomitant variation
– varying together in a predictable fashion
– positive (ex. adv and sales) or inverse (ex. price and sales)
Appropriate time order of occurrence
To prove A caused B, need to prove that A happened before B; change in IV must come before observed change in DV
Elimination of Other Possible Causal Factors
– Most difficult to prove that something else did not cause change in DV
– One or a combination of other factors can have influence (ex: economy in the area had a boost, change in competitive environment, etc)
– Want to design experiments in order to eliminate or adjust for the effects of other possible causal factors
2 settings for an experiment
lab: conducted in a controlled setting
field: conducted outside lab, in actual market environment
lab experiment
Advantages:
– can control extraneous causal factors (temp. light, humidity) and focus on the effect of change
– focus on first two elements of proving causation since 3rd is effectively controlled
– greater internal validity

Disadvantages:
– Not a good representation of the marketplace
– Therefore, results don’t always hold up in market
Greater problems with external validity

field experiments
– Test markets are frequently used
– Major problem: cannot control the external factors that could influence the dependent variable aka problems with internal validity