Principles of Marketing: Chapter 4: Marketing Research and Information Systems

Marketing Research
Why is it important?
The systematic design, collection, interpretation, and reporting of information to help marketers solve specific marketing problems or take advantage of marketing opportunities.

Inform an organization about customers’ needs and desires, marketing opportunities for particular goods and services, and changing attitudes and purchase patterns of customers.

Benefits of Marketing Research
-Helps firms stay in touch with customers’ changing attitudes and purchase patterns
-Aids in the development of marketing mixes that match the needs of customers
-Assists in better understanding of market opportunities
-Determine the feasibility of a particular marketing strategy
-*Improves marketer’s ability to make decisions
Five Steps of the Marketing Research Process
1. Locating and Defining Problems or Issues
2. Designing the Research Project
3. Collecting Data
4. Interpreting Research Findings
5. Reporting Research Findings
Locating and Defining Research Problems or Issues
Focusing on uncovering the nature and boundaries of a situation or question related to marketing strategy or implementation.
Defining the Problem
-Symptoms are not problems!
-Look for departures from normal or expected marketing results (bad or good departures)
-Determine precisely what is the aim of the research
-How will this research be used?
-All remaining stages depend on this one*
Research Design
“Research Design”
-An overall plan for obtaining the information needed to address a research problem or issue (aka a “methodology”)
2 Parts to Designing a Research Project
1. Formulating a Hypothesis:
-An informed guess or assumption about a certain problem or set of circumstances
-“Rejected” or “Not Rejected” hypotheses act as conclusions for the research effort
H0: µexam1 9:25 = µexam1 1:10
HA: µexam1 9:25 ≠ µexam1 1:10

Choosing Between Different Types of Research

Exploratory Research
Exploratory Research:
Often called “qualitative research”
-Research conducted to gather more information about a problem or to make a tentative hypothesis more specific
Conclusive Research
Conclusive Research
-Often called “quantitative research”
-Research designed to verify insights through objective procedures and to help marketers in making decisions
Two types of conclusive/quantitative research:
Descriptive Research
Experimental Research
Descriptive Research
Research conducted to clarify the characteristics of certain phenomena to solve a particular problem
Experimental Research
Research that allows marketers to make causal inferences about relationships
Reliability of a Measure
A condition existing when a research technique produces almost identical results in repeated trials (aka “repeatability”)
Validity of a Measure
A condition existing when a research method measures what it is supposed to measure
Can you have reliability and not have validity?
Yes
Can you have validity and not have reliability?
No
What are data?
Abstractions (usually quantitative) of real world phenomenon (e.g. MCATs, GMATs, LSATs, results of examinations, etc.)
Types of Data
Primary data: data observed and recorded or collected directly from respondents
Secondary data: data compiled both inside and outside the organization for some purpose other than the current investigation
Problems with Managing Data
Collection process may be unknown

Data are vulnerable (Altered or Missing)

Data are mis-interpretable

Data may be out-of-date

Preparing to Collect Data: Population, Sample, Sampling
Population: All the elements, units, or individuals of interest to researchers for a specific study
Sample: A limited number of units chosen to represent the characteristics of a total population
Sampling: The process of selecting representative units from a total population
Probability Sampling
Techniques in which every element in the population being studied has a known chance of being selected
-Simple Random Sampling
-Systematic Random Sampling
-Stratified Sampling
Simple Random Sampling
equal & known chance, random generator
Systematic Random Sampling
Divide population ÷ sample size = k;
Use factor to select every kth element beginning with random start (e.g. 1000/100 = 10 = k; select every tenth element)
Stratified Sampling
Study population divided into “like” groups
Assures proportional representation
Best use of a priori knowledge to researcher’s advantage
Non-Probability Sampling
Techniques in which there is no way to calculate the likelihood that a specific element of the population will be chosen
-Quota Sampling
-Snowball Sampling
Quota Sampling
Quota sampling: Researchers divide the population into groups and then arbitrarily choose participants from each group
Snowball Sampling
Allow first chosen to recommend next selection
Survey Methods
Mail (Questionnaires by Mail)
Telephone (Answers Recorded by Interviewers on Phone)
Online (Answer Questions on Website or email)
“Crowdsourcing”: Taking tasks usually performed by a marketer and outsourcing them to a potential market through an open call for ideas
Personal interview surveys: Participants respond to survey questions face-to-face
Least Expensive Survey Method
Online Surveys
Most Expensive Survey Method
Personal Interview Surveys
Most Flexible Survey Method
Personal Interview Surveys
Most Inflexible Survey Method
Mail Surveys
Which survey method eliminates interviewer bias?
Mail Surveys
Which survey method may result in bias?
Personal Interview Surveys
Personal Interviewers
-In home/Door-to-door: Takes place at respondents’ homes
-Shopping mall intercept: Interviewing a percentage of people in malls
-On-site computer interview: Variation of the shopping mall intercept
Questionnaire Construction
Open-Ended Questions
Dichotomous Questions
Multiple-Choice Questions
Example of an Open-Minded Question
What is your general opinion about coffee shops?
Example of a Dichotomous Question
Have you ever purchased a coffee product? Yes or No
Example of a Multiple Choice Question
What income group are you in? A, B, C, D
Observation Methods
-Direct contact with subject is avoided to reduce possible awareness of observation process.

-Physical conditions, subject actions, and demographics can be noted.

-Observations may be combined with same subject interviews

-Data gathered may be influenced by observer bias.

Interpreting Research Findings
-The data must be analyzed & interpreted:
Data ≠ Information
Information = data + value added
-Displaying the data in table format is a good way to start!
-Managers must understand the research results and relate them to a context that permits effective decision making
Statistical Interpretation
-Analysis of what is typical and what deviates from the average:
-How widely the responses vary (variance/dispersion)
-Which hypotheses are supported (Do not reject Ho)
-Which hypotheses are rejected (Reject Ho)
-Whether construction errors have invalidated the survey’s results (several biases possible)
Reporting Research Findings
-Marketers must objectively assess how well the findings answer the research question
-Prepare a formal written document
-Determine level of detail
-Clear and objective presentation
-Consider the intended audience
-Point out all deficiencies in the data
-Summary/recommendations first!
Ethics
Professional standards by which research can be judged as necessary
Issues in Marketing Research
Confidentiality vs. Anonymity:

Non-Response issues:

Ethical considerations:
Honesty
“Sugging”
Propriety

International issues:
Modification of data-gathering methods to provide broader collection of information and account for regional differences
Use of broader approach to accommodate cultural
differences

Marketing Information System
A framework/apparatus for the management and structuring of information gathered regularly from sources inside and outside an organization
“Ka-Chunka-Ta” apparatus
24/7/365
All environments
Database
A collection of information arranged for easy access and retrieval
Single Source Data
Information provided by a single marketing research firm
Marketing Decision Support Systems
-Customized computer software that aids marketing managers in decision making
-Capability to create market models based on changes in marketing variables
-Artificial Intelligence (AI) assists in customer support
-“Behavioral segmentation”
-“Predictive analytics”
(Target’s Customer ID System)
Customer Advisory Boards
Small groups of actual customers who serve as sounding boards for new product ideas and offer researchers insights into their feelings and attitudes toward a firm’s strategy, including products, promotion, pricing, and distribution.
Focus group
An interview that is often conducted informally, without a structured questionnaire, in small groups of 8 to 12 people, to observe interaction when members are exposed to an idea or a concept
Technology Depth Interview
An interview that combines the traditional focus group’s ability to probe with the confidentiality provided by telephone surveys
Where are data for marketing research obtained?
Internal Sources:
These refer to the sources of information within the organization. Internal sources include accounting information, salesmen’s reports, and statistics. Information from internal sources is easily available and no financial burden is involved in gathering the information.

External Sources:
External sources are of immense importance and utility in case where research needs detailed and thorough investigation. External sources data can be divided with two categories (a) Primary data: Salesmen, Dealers, Consumers (b) Secondary data: Newspapers, Reports, Surveys

If a survey of all homes with listed telephone numbers is to be conducted, what sampling design should be used?
Telephone Survey Method