MKT 335

The Role of Market Research
Marketing research gathers information on consumer needs to facilitate better production decisions.
Marketing Research Criteria
Criteria for effective marketing research
SYSTEMATIC
data gathering and analysis must be designed and organized in advance
OBJECTIVE
unbiased and impartial
INFORMATIONAL
collects data relevant to information needs of decision-makers
DECISION MAKING
data gathered and interpreted with the goal of reducing uncertainty in a decision situation
Variables in Marketing & Research
Independent variables
+inputs
–including:
—-situational factors
—–marketing courses of action to steer the market

dependent variables
+outputs, phenomena one seeks to explain
–including:
—-(behavioral) responses of consumers to the independent variables
—-performance measures

+connecting variables
—-relationships between independent and dependent variables discovered through marketing research

The Marketing Management Process
Informational feedback between the marketing system and decision making process
Marketing Management Process Steps 1-6
Formal decision-making process:
1.recognizing a problem or opportunity
2.clarifying the decision
3.identifying alternative courses of action (i.e., combinations of marketing mix variables)
4.evaluating alternatives
5.selecting a course of action
6.implementing the selected course of action and monitoring its effects
Conclusive (Evaluative) Research
+Conclusive research provides information to help choose optimal course of action from alternatives
+
Develop Decision Criteria
Decision criteria are rules for selecting among courses of action:
-series of “if-then” statements, given various data outcomes
Virtually all research fills one or more of these:
INNOVATE: identify opportunities and problems in marketing
EVALUATE: choose more effective actions in the marketplace
MONITOR: the effects of these actions
LEARN: build understanding of marketing processes
The Research Industry Today
Better performance than overall economy
consumer research
study of ordinary consumers
industrial research:
study of industrial purchasers (often not the actual consumers)
Researchers
operate in corporate and supplier environments. Primarily use proprietary quant and qual research to understand the consumer.

Ex: Users : P&G, COCA COLA
Suppliers: Nielsen, survery monkey

Planners
primarily in agencies. Role is to use secondary and limited primary data (usually qual) to provide insights which drive creative and media decisions.

ex: Agenceies (social media , digital,) trade associations

e

Centralized organizations
+single research department performs all research, often reports to CMO

+better coordination, control of research activity
+ economical, flexible facilities and personnel

Decentralized organizations
+divisions departments
+direct & Specific area of study
+specialization of divisions
+cooperation with division managers
The Management-Research Relationship
Effective research depends on ability of managers and researchers to work together.
role of researchers
support decision-making process in advisory capacity
role of managers
understand value and limitations of research in order to appropriately inform decisions
role of research suppliers
+work as needed
+provide special skills and greater objectivity
+High Varied Industry – Full service to DIY
+Highly fragmented , low barrier to entry
Global Themes in Marketing Research
+Global knowledge and experience is increasingly important.
– Growth strongest in developing and emerging markets
Global Themes in Marketing Research: Challenges
-language and cultural differences
-costs
-Less / Lower quality secondary data
– less infrastructure for syndicated data,
-government-mandated regulations
– fear of government surveillance affecting response rates or biasing responses
-Doing more with less
-Emergence of DIY solutions (e.g. Google Surveys)
-Replacement of primary research with secondary research
Is Research Needed?
Yes.
+ask the right questions to determine appropriate strategy or course of action
+ apply decsion making process to undertake research
Cost and Value of the Research
Cost-benefit analyses
+Research is more justifiable
-large markets than small
-greater level of uncertainty around alternative course of action
Obstacles to Effective Use of Research (4)
-research as a threat to status
-lack of planning & objectives
-isolation of mkt research personel to managers
-differences of emphasis and temperment
2013 Trends (8)
1.”Big Data” (including data visualization)
2.Increased use of social media tools (access, listening, embracing)
3.Increasing use of mobile
4.Increased use of communities
5.Gamification
6.Increased use of behavioral data (big data)
7.Increased focus on ROI
8.Behavioral economics and “non-rational” decision making
Ethics and Research
Ethical issues arise any time there is an explicit or implicit trust between 2 or more parties.
Ethics and Research # 1 Issue: Privacy
Always been an issue:
+Qualitative research – video tape “evidence”
+Quantitative research – personal information collected

+’big data’ has accelerated this issue.
information collected every day to the user.

Ex: Facebook content of people profiles

Ethical Themes in Preforming Research
Examples, performing research:
+”Sugging”
+integrity of the data
+treatment of participants and clients
+Misdirection/deception
+Bias/misinterpretation
+study design errors
+data not stored securely
+Espionage
+Free will
Ethical Themes in using research
+deception of research suppliers to steal proposed designs

+pressure on researchers to favor personal viewpoint

+misuse of statistics

+details withheld to make a pet project look better

+social context issues, such as pollution, not covered by the research

Regulating Ethics
Multiple codes of ethics:
ESOMAR
AMA
MRA
ARF
CASRO
MRS
ESOMAR : Basic Principles
1. research shall be legal, honest, truthful and objective and be with appropriate scientific principles.

2. not discredit the market research profession
lead to a loss of public confidence in it.

3. professional responsibility
fair competition, as generally accepted in business.

4. distinguished and separated from non-research activities including any commercial activity directed at individual respondents (e.g. advertising, sales promotion, direct marketing, direct selling etc.)

Overview of the Research Process 9 steps
1. Establish need for information
-possible exploratory research
2. Detail research objectives and information needs –
3. Design research and data sources
4. Design data-collection procedure
5. Design sample
6. Collect data
7. Process and code data
8. Analyze data
9. Present results – oral presentation and/or written report
Errors in Marketing Research: Two Main types
sampling errors
non-sampling errors
sampling errors:Definition
+unavoidable inaccurate samples to estimate quantities in the population

+ difference between the sample value and the true underlying population value

non-sampling errors
+errors that occur in the research process over and above the sampling error

-inadvertent mistakes
faulty problem definition – solving the wrong problem
incorrect population definition – wrong sample-

deliberate deception

Research Design
delineates what data to collect and how to collect them. It must specify:
– type of information to be collected
– possible data sources
– data collection procedure
Types of Research
Exploratory research
Conclusive/evaluative research
performance monitoring research
Exploratory Research: Definition, Approach, Examples
+Determining the ‘Space’ of Possible Marketing Actions
+appropriate when
1.identifying problems or opportunities
2.gaining perspective on the nature of the problem
3.gaining perspective on variables involved
4.establishing priorities
5.formulating possible courses of action
6.identifying possible pitfalls in doing conclusive research

Examples:
+Market structure analysis
+Segmentation
+Needs/gap analysis
+Ethnography
+Habits and usage study

Conclusive (Evaluative) Research: Definition, Types, Use, Examples
+Narrowing Down Strategic Alternatives, aims to narrow the field of strategic alternatives down to one.

Two types
+Descriptive research: without testing for cause-and-effect relationships. It is used for: determining
– frequency of certain phenomena
– degree of association between variables
– making predictions regarding phenomena

+Causal research: gathers evidence on cause-and-effect relationships through experimentation.

examples:
+Concept testing
+Ad testing
+A/B testing
+Product test (formulation)

Longitudinal Design and Panel-Based Research: Definition, Advantages, Disadvantages
Definition : Consumer panels monitor performance continuously for a fixed sample measured repeatedly over time

Advantages
+ reveals consumer behavior
+ gathers more accurate data than cross-sectional surveys
+gathers extensive background and geo-demographic
+reduce bias
+cost less per data point than surveys

Disadvantages
+ unrepresentative sampling – panels can differ from the target population in certain characteristics

+Response bias – panel members’ responses are affected by being on the panel
– believing they are experts
– wanting to look good or give the ‘right’ answer
– becoming biased from boredom and fatigue
– over-reporting measured behaviors
– Learned from previous testing

Marketing Research Applications: Sources of Marketing Data (4)
Respondents (people)
analogous situations
experimentation
secondary data
Respondents (people)
+ communication with respondents
– verbal response through focus group or in-depth interviews
+observation of respondents
– accurately records what people do and how
– omits reporting of underlying attitudes
analogous situations
+case histories
+Simulations (including agent based modeling)
experimentation
+to test cause-and-effect relationships
– direct manipulation to see affect on variables
secondary data: Definition : two types defined & advantages
Definition: data already collected for some other purpose

Internal: secondary data generated within the organization
-lower cost
-accurate
-more available

External : generated by government or syndicated sources
government publications
-trade association data
-books
-bulletins
-reports
-periodicals

External Data – Syndicated ; defined w/ exampels
A companies core business that collects and sells standardized data to other firms.

examples:
-consumer data
-retail data
-wholesale data
-advertising evaluation data
-media and audience data

single sourcing
+using a marketing research provider with a comprehensive, integrated database for conducting client marketing research programs
marketing intelligence systems: includes
-a system for the collection and storage of recurring data
-a statistical model for interpreting the data
-a presentation or interface for accessing this information
Role of secondary Data
Step 1 of data collection: determine whether the data have already been collected
Advantages and Disadvantages of Secondary Data 4each
advantages
-less expensive and time-consuming
-aid formulation of decision problem
-suggest methods for meeting information needs
-source of comparative data for primary data

disadvantages of secondary data
-don’t exactly fit the information needs of the project
-aggregated without the breakdown required by the project
-accuracy difficult to evaluate
-may be outdated

Syndicated Data: Definition / Examples
Data collected once and sold to multiple buyers.
-UPC data
-Website traffic
-Media consumption (TV show ratings, magazine newspaper readership)
-Consumption (food/beverage/toys/books/music)

+Syndicated data is very often a currency – used to compare the value/success of different options.

Advantages & disadvantages of Syndicated Data
+Advantages:
– makes comparison by different parties easy
-Costs are spread across multiple buyers.
-Consistency allows for substantial databases

+Disadvantages
-May or may not meet the client’s exact needs
-Expensive, even with cost sharing
-Historically data only.

+Data can also be controversial since it publicly identifies winners/losers.
-Has led to very tight quality control.

Qualitative Techniques for Exploratory Research
Information sources:
-Secondary and syndicated data
-Qualitative approaches
-focus group
-in-depth interviews

depends on uncertainty & acceptable risk level
– crucial decisions need accurate information
-low-risk decision options may not require conclusive research

Qualitative data: Definition and Appropriateness
Quality of insights
-exploratory and inductive
-smaller sample sizes
-in- person

Approriatness
-In-depth interviews: interviewer/consumer interaction
-Observation: no active involvement with consumer
-Text analysis: review/mining of written documents

Quantitative data : definition and appropriateness
Quanitity of Data
-larger size of sample
-number focused
-multiple data collection approaches

Appropriateness
-The need to develop hypotheses
-Achieving a deep understanding of the issues
-When you can trade off detail for generalizability
-When you have budget restrictions

Qualitative Interviews
Multiple techniques – key difference is how many people are included in the session.
MROC’s/Communities
– a recruited group of consumers with similar interests who participate in on-going, varied and frequent research projects.
Advantages of Communities
1. Agile – can engage the community in real time and results can be available as early as 24 hours (or even real time)
2. Consistent, continuous feedback
3. Cost effective
4. Flexible – can execute multiple types of projects
Types of Communities
+Quantitative – execute frequent, quick surveys
-Simplest technology
-Original application, still most popular
+Socialized – add a qualitative component (online forums, co-creation activities)
-Allows you to address broader set of objectives
+Fully immersive – “always on” dialogue between consumers and consumer to researcher. Ideal for:
-Innovation and product development
-Staying on top of emerging consumer needs
-On-going feedback on “why” of performance measures
Communities : Private vs. Public
Private – more control, more security (particularly important when testing new product ideas, ads).

Public – when scale counts more than control.
Can develop huge communities and increase the odds of finding “big idea”
Also used to increase consumer engagement with brand (e.g., fan pages)
Harder to keep people engaged, less certain about where the ideas are coming from.

Types Of Observation Data
Natural versus contrived:
-Natural – real world/environment
– Contrived – laboratory setting

Disguised versus Undisguised (whether the consumer knows they are being observed)

Structured versus unstructured
-Structured: hypothesis testing; monitoring specific behavior
– Unstructured: more general/observational