Marketing Research:Gathering, Analyzing, and

Using Information

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Chapter Objectives

• Explain the role of the marketing information system and the marketing decision support system in marketing decision making

• List and explain the steps in the marketing research process

• Appreciate the differences among exploratory, descriptive, and casual research

• Describe the different types of data-collection methods and types of consumer samples that research use

• Understand the impact of the growing use of online research

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Real People, Real Choices

• Meet Cindy Turgate at Plan-it Marketing, a marketing research firm

• Priceline needed help in planning its business. Would its name-your-own-price strategy fly?

• The decision: What marketing research strategy would maximize results within a reasonable budget? Option 1: conduct exploratory qualitative study Option 2: conduct quantitative survey of 700+ leisure and

business travelers Option 3: conduct viability study with both qualitative exploratory

study and confirmatory quantitative study

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Knowledge is Power

• Accurate, up to date, relevant information is the fuel that runs the marketing engine

5

The Marketing Information System

• Determines what information marketing managers need, then gathers, sorts, analyzes, stores, and distributes information to system users

Figure 4.2

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Internal Company Data

• Information from within the company to produce reports on the results of sales and marketing activities

• Intranet: internal corporate communications network that links company departments, employees, and databases.

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Marketing Intelligence

• Monitoring everyday sources and using “mystery shoppers”

• Futurists specialize in predicting consumer trends

HSX.COM

8

Marketing Research

• Collecting, analyzing, and interpreting data about customers, competitors, and the business environment to improve marketing effectivenessSyndicated researchCustom research

MEDIAMARK RESEARCH

GfK ARBOR LLC

9

Acquired Databases

• From other companies

• Government databases

• Misuse of databases can be problematic and has led to do-not-call lists and antispam laws

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Marketing Decision Support Systems

• MDSS: data plus analysis and interactive software allow marketing managers to access MIS data and conduct analyses

Figure 4.3

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Searching for Gold: Data Mining

• Analysts sift through data to identify unique patterns of behavior among different customer groups

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What Marketers Can Do with Data Mining

• Customer acquisition

• Customer retention and loyalty

• Customer abandonment

• Market basket analysis

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Steps in the Marketing Research Process

• Step 1: Define the research problemSpecifying research objectives Identifying consumer population of interest Placing the problem in an environmental context

• Step 2: Determine the Research DesignSpecifying exactly what information marketers will

collect and what type of study they will do

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Figure 4.5:Marketing Research Design

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Secondary Versus Primary Research

• Secondary data have been collected for some purposes other than the problem at hand

• Primary data is information collected directly from respondents to specifically address the question at hand

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Secondary Research Web Sites

DIALOG.COM

MARKETINGTOOLS.COM

LEXIS-NEXIS

CENSUS.GOV

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Exploratory (Qualitative) Research

• Research techniques that generate insights for future, more rigorous studies

• Researchers conduct one-on-one discussions with consumers

• Focus group: a product-oriented discussion among a small group of consumers

LOOK-LOOK.COM

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Exploratory (Qualitative) Research (cont’d)

• Projective techniques: participants respond to some object

• Case study: comprehensive examination of a particular firm

• Ethnography: Marketers visit homes or participate in consumer activities to learn how products are used

Wild PlanetVideo

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Group Activity

• Break into small groups and pick a product category of interestAssume a company wants to create a new or

modified product to compete for market share in that category

• Create a couple of questions for a focus group moderator to guide discussionEach group sits with another group and takes turns

conducting an informal focus group

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Descriptive (Quantitative) Research

• Probes systematically into the problem

• Bases conclusions on large numbers of observations

• Results typically expressed in quantitative terms (averages, percentages, other stats)Cross-sectional designLongitudinal design

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Causal Research

• Cause-and-effect relationships: a change in one thing causes a change in something else Independent (cause) vs. dependent (change in

outcome) variablesExperiments: test predicted relationships among

variables in a controlled environment

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Steps in the Marketing Research Process (cont’d)

Step 3: Choose the Method for Collecting Primary Data

• Survey Methods: interview respondents

• Questionnaires: loosely, moderately, or completely structured

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Questionnaires

• Mail questionnaires

• Telephone interviews

• Face-to-face interviews

• Online questionnaires

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Discussion

• Are you willing to divulge personal information to marketing researchers?

• How much are you willing to tell?

• Where would you draw the line?

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Group Activity

• In small groups, choose a topic below and analyze the advantages and disadvantages of mail questionnaires, telephone interviews, face-to-face interviews, and online questionnaires: The amount of sports nutrition drinks consumed in a city Why a local bank has been losing customers What local doctors would like to see changed in hospitals Consumers’ attitudes toward several sports celebrities

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Observational Methods

• Observation: data collection where the researcher records consumers’ behaviors, often without their knowledgePersonal observation Mechanical observationUnobtrusive measures

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Discussion

• Do you think marketers should have to right to go through a competitor’s garbage? Is it ethical?

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Data Quality:Garbage In, Garbage Out

• How much faith should marketing managers place in research?ValidityReliabilityRepresentativeness

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Discussion

• Do you think marketers should be allowed to conduct market research with young children? Why or why not?

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Reality TV: Group Activity

• Each group comes up with a new “Reality Each group comes up with a new “Reality TV” show…TV” show… Design a short survey to get information to help you Design a short survey to get information to help you

develop the best showdevelop the best show Hand it out to your classmates to completeHand it out to your classmates to complete Use the information to create your showUse the information to create your show

• Describe your thoughts, feelings, and Describe your thoughts, feelings, and behaviors during this activitybehaviors during this activity

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Online Research

• Information gathered via consumer surfing and Web site/email/chat room questionnaires/focus groups

• Cookies allow a Web sponsor to track a surfer’s moves

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Online Research Applications

• New product development

• Estimating market response

• Exploratory research (online focus groups)

• IM (Instant Messaging)

ITRACKS.COMTHERE.COM

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Advantages of Online Data Collection

• The same amount of data in a fraction of the time

• Convenience of survey completion

• Elimination of interviewer bias and data entry errors

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Disadvantages of Online Data Collection

• Non-representativeness of respondents

• Limited computer access for poor and elderly

• Self-selection bias (people who like to take part in online studies)

• Hackers and competitors influencing/intercepting results

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Step 4: Design the Sample

• Probability sample• Each member of the population has some

known chance of being included• Sample is representative of population,

and inferences about population are justified - Simple random sampling - Systematic sampling - Stratified sampling

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Step 4: Design the Sample (cont’d)

• Nonprobability sample• Personal judgment used in selecting respondents• Some members of population have no chance of being

included• No way to ensure that sample is representative of

population• *Christine: next two should be lower-level (black)*• Convenience sampling • Quota sampling

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Discussion

• Why wouldn’t you select all the individuals or elements of a population to be in your study?

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Step 5: Collect the Data

• Challenges to gathering data in foreign countriesDifferences in sophistication of research operations Infrastructure/transportation challenges Lack of phones Low literacy ratesLocal customs and cultural differencesLanguage translation difficulties

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Group Activity

• Break into small groups and choose one of the following countries. Generate a list of difficulties a firm would expect to encounter when developing plans for marketing research: South Africa Spain China Saudi Arabia Canada Argentina Australia Germany

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Step 6: Analyze andInterpret the Data

• Data need analysis for them to have Data need analysis for them to have meaningmeaning

• Tabulation: arranging data in a table or Tabulation: arranging data in a table or other summary form to get a broad picture other summary form to get a broad picture of overall responsesof overall responses

• Cross-tabulation: examining the data by Cross-tabulation: examining the data by subgroups to see how results vary subgroups to see how results vary between categoriesbetween categories

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Table 4.4: Data Tabulation and Cross-Tabulation Tables

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Step 7: Prepare the Research Report

• Executive summary• Description of research

methodology• Discussion of results

including tabulations, cross-tabulations

• Limitations of study• Conclusions and

recommendations

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Discussion

• What is your overall attitude toward marketing research?

• Do you think it is a beneficial activity from a consumer’s perspective?

• Or do you think it merely gives marketers new insights on how to convince consumers to buy something they really don’t want or need?

44

Real People, Real Choices

• Plan-it Marketing (Cindy Turgate)

• Cindy chose option 3: conduct viability study with both qualitative exploratory study and confirmatory quantitative study Priceline.com was launched

nationally in April 1998, and it continues to flourish

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Marketing Plan Exercise

• Select a company that makes a product you use. For the firm you selected: Define one specific problem it could address through marketing

research What type of research design do you recommend for addressing

that problem, and why? What is the most appropriate way to collect the data? Justify

your choice How will you ensure high validity, reliability, and

representativeness of the data? Design an appropriate sampling plan

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Marketing in Action Case:You Make the Call

• What is the decision facing Acxiom?

• What factors are important in understanding this decision situation?

• What are the alternatives?

• What decision(s) do you recommend?

• What are some ways to implement your recommendation?

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Keeping it Real: Fast Forward to Next Class Decision Time at Wild Planet

• Meet Danny Grossman, CEO and founder of Wild Planet Toys.

• Room Gear: a product line that lets kids decorate their rooms met with sharply different gender appeals

• The decision: the future direction of the Room Gear line