MKTG 2P91 Chapter 7

controlled experiment
Scientific investigation in which a researcher manipulates a test group (or groups) and compares the results with those of a control group that did not receive the experimental controls or manipulations.
data mining
Process of searching through customer databases to detect patterns that guide marketing decision making.
Delphi technique
Qualitative sales forecasting method that gathers and redistributes several rounds of anonymous forecasts until the participants reach a consensus.
exploratory research
Process of discussing a marketing problem with informed sources both within and outside the firm and examining information from secondary sources.
exponential smoothing
Quantitative forecasting technique that assigns weights to historical sales data, giving the greatest weight to the most recent data.
focus group
Simultaneous personal interview of a small group of individuals, which relies on group discussion about a certain topic.
full-service research supplier
Marketing research organization that offers all aspects of the marketing research process.
hypothesis
Tentative explanation for some specific event.
interpretative research
Observational research method developed by social anthropologists in which customers are observed in their natural setting and their behaviour is interpreted based on an understanding of social and cultural characteristics; also known as ethnography, or going native.
jury of executive opinion
Qualitative sales forecasting method that assesses the sales expectations of various executives.
limited-service research supplier
Marketing research firm that specializes in a limited number of research activities, such as conducting field interviews or performing data processing.
mall intercepts
Interviews conducted inside retail shopping centres.
marketing decision support system (MDSS)
Marketing information system component that links a decision maker with relevant databases and analysis tools.
marketing information system (MIS)
Planned, computer-based system designed to provide managers with a continuous flow of information relevant to their specific decisions and areas of responsibility.
marketing research
Process of collecting and using information for marketing decision making.
nonprobability sample
Sample that involves personal judgment somewhere in the selection process.
population (universe)
Total group that researchers want to study.
probability sample
Sample that gives every member of the population a chance of being selected.
qualitative forecasting
Use of subjective techniques to forecast sales, such as the jury of executive opinion, Delphi technique, sales force composite, and surveys of buyer intentions.
quantitative forecasting
Use of statistical forecasting techniques such as trend analysis and exponential smoothing.
sales analysis
In-depth evaluation of a firm’s sales.
sales force composite
Qualitative sales forecasting method based on the combined sales estimates of the firm’s salespeople.
sales forecast
Estimate of company revenue for a specified future period.
sampling
In marketing research, the process of selecting survey respondents or research participants; in sales promotion, free distribution of a product in an attempt to obtain future sales.
secondary data
Previously published information.
survey of buyer intentions
Qualitative sales forecasting method that samples opinions among groups of present and potential customers concerning their purchase intentions.
syndicated service
Organization that provides standardized data on a periodic basis to its subscribers.
test-marketing
Marketing research technique that involves introducing a new product in a specific area and then measuring its degree of success.
trend analysis
Quantitative sales forecasting method that estimates future sales through statistical analyses of historical sales patterns.
Learning Objective 1: Describe the development of the marketing research function and its major activities.
Marketing research, or the collection and use of information in marketing decision making, is changing faster than ever before. Today, the most common marketing research activities are (1) determining market potential, market share, and market characteristics and (2) conducting sales analyses and competitive product studies. Most large companies now have internal marketing research departments. However, outside suppliers still remain vital to the research function. Some perform the complete research task, while others specialize in a limited area or provide specific data services.
Learning Objective 2: Explain the steps in the marketing research process.
The marketing research process can be divided into six specific steps: (1) defining the problem, (2) conducting exploratory research, (3) formulating hypotheses, (4) creating a research design, (5) collecting data, and (6) interpreting and presenting the research information. A clearly defined problem focuses on the researcher’s search for relevant decision-oriented information. Exploratory research refers to information gained both within and outside the firm. Hypotheses, tentative explanations of specific events, allow researchers to set out specific research designs—that is, the series of decisions that, taken together, make up master plans or models in order to conduct the investigations. The data collection phase of the marketing research process can involve either or both primary (original) and secondary (previously published) data. After the data are collected, researchers must interpret and present the results in a way that will be meaningful to management.
Learning Objective 3: Distinguish between primary and secondary data and identify the sources of each type.
Primary data can be collected by the firm’s own researchers or by independent marketing research companies. Three principal methods of primary data collection are observation, survey and interview, or experiment. Secondary data can be classified as either internal or external. Sources of internal data include sales records, product evaluation, sales force reports, and records of marketing costs. Sources of external data include the government and private sources, such as business magazines. Both external and internal data can also be obtained from computer databases.
Learning Objective 4: Explain the different sampling techniques used by marketing researchers and identify the methods by which marketing researchers collect primary data.
Samples can be categorized as either probability samples or nonprobability samples. A probability sample is one in which every member of the population has a known chance of being selected. Probability samples include simple random samples, in which every item in the relevant universe has an equal opportunity to be selected; stratified samples, which are constructed such that randomly selected subsamples of different groups are represented in the total sample; and cluster samples, in which geographic areas are selected from which respondents are drawn. A nonprobability sample is arbitrary and does not allow application of standard statistical tests. Nonprobability sampling techniques include convenience samples, in which readily available respondents are picked, and quota samples, which are divided so that different segments or groups are represented in the total sample.

The methods marketing researchers use to collect primary data include observation, survey and interviews, and experiments. Observation data are gathered by observing consumers via devices such as people meters or videotape. Survey and interview data can be collected through telephone interviews, mail surveys, personal interviews, focus groups, or a variety of online methods. Telephone interviews provide over half of all primary marketing research data. They give the researcher a fast and inexpensive way to get small amounts of information but generally not detailed or personal information. Personal interviews are costly but allow researchers to get detailed information from respondents. Mail surveys are a means of conducting national studies at a reasonable cost; their main disadvantage is potentially inadequate response rates. Focus groups elicit detailed, qualitative information that provides insight not only into behaviour but also into consumer attitudes and perceptions. Online surveys can yield fast responses but face obstacles such as the adequacy of the probability sample. The experimental method creates verifiable statistical data through the use of test and control groups to reveal actual benefits from perceived benefits.

Learning Objective 5: Explain the challenges of conducting marketing research in global markets and outline the most important uses of computer technology in marketing research.
The major challenge of conducting marketing research in global markets is finding information. Many resources are available to help organizations research global markets. Government resources include Statistics Canada, Industry Canada, small-business development centres, and foreign embassies. Private companies, such as marketing research firms and companies that distribute research from other sources, are another resource. Electronic networks offer online international trade forums, in which marketers can establish global contacts.

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Important uses of computer technology in marketing research include (1) a marketing information system (MIS)—a planned, computer-based system designed to provide managers with a continuous flow of information relevant to their specific decision-making needs and areas of responsibility; (2) a marketing decision support system (MDSS)—a marketing information system component that links a decision maker with relevant databases and analysis tools; (3) data mining—the process of searching through consumer information files or data warehouses to detect patterns that guide marketing decision making; (4) business intelligence—the process of gathering information and analyzing it to improve business strategy, tactics, and daily operations; and (5) competitive intelligence—the form of business intelligence that focuses on finding information about competitors using published sources, interviews, observations by salespeople and suppliers in the industry, government agencies, public filings such as patent applications, and other secondary methods, including the Internet.

Learning Objective 6: Identify the major types of forecasting methods.
There are two categories of forecasting methods. Qualitative methods are more subjective since they are based on opinions rather than exact historical data. They include the jury of executive opinion, the Delphi technique, the sales force composite, and the survey of buyer intentions. Quantitative methods are more factual and numerical measures such as test markets, trend analysis, and exponential smoothing.