“Problems” in Marketing
Research
MAR 6648: Marketing Research
January 6, 2010
Overview
• What are the steps we take when conducting
marketing research?
• How do figure out what to do with our
research?
• How do we decide when to do research?
Marketing Research is…
• The process of monitoring the environment:
– Customers, competitors, other influences (legal,
political, global…)
•
•
•
•
•
The eyes and ears of a corporation
A tool to help you get close to your customers
A decision aid for marketing strategies and tactics
A tool to reduce uncertainty in outcomes
Costly in terms of time, effort, and money
– It should be used when its value > its cost
Customer
groups:
•Consumers
•Employees
•Shareholders
•Suppliers
Controllable
marketing
variables:
•Product
•Price
•Place
•Promotion
Uncontrollable
environmental
factors:
•Economy
•Technology
•Competition
•Socio-cultural
•Legal/political
Assess information
needs
Marketing
Researchers
Provide
information
Make marketing
recommendations
Marketing
Managers:
•Segmentation
•Target segments
•Marketing
programs
•Performance
and control
The Marketing Research Process
Goal formulation
• Define research purpose and objectives
Research design
• Exploratory, descriptive, causal
Data collection
• Databases, survey design, sampling, target respondents
Data analysis and interpretation
Final report
• Communicate findings and recommendations
The Marketing Research Process
Goal formulation
• Define research purpose and objectives
Research design
• Exploratory, descriptive, causal
Data collection
• Databases, survey design, sampling, target respondents
Data analysis and interpretation
Final report
• Communicate findings and recommendations
Research Purpose and Objectives
• They may sound similar, but they’re not the
same thing
Research Purpose
Objective
1
Objective
2
Objective
3
…
So, What’s a “Research Purpose”?
• The Research Purpose is managements’
answer to the question:
• “Why should we do the research?”
Managerial
problem
Research Purpose
Managerial
opportunity
Problem-Driven Research
• It’s important to distinguish between
problems and their symptoms
– Oh no, we’re losing money!
• Symptoms arise due to an underlying cause
Cause
A
?
?
Symptom
?
Cause
B
Cause
C
Establishing Research Objectives
Symptom Identification
Research Purpose
Potential Causes of
Symptoms
Known
Information
Information
needed to
find actual
causes
Known
Informatio
n
Information
Gap
Research Objectives
Research Purpose vs. Objectives
• Example: Imagine you’ve been hired to help
the manager of an independent dog chew toy
company
– The company has experienced declining sales
– The manager is pretty sure this is related to the
online order experience
Research Purpose vs. Objectives
Research
Purpose
Research
Objectives
Opportunity-Driven Research
• With opportunity driven research, the
research problem is usually about how to
respond to the opportunity
?
Action
A
?
Opportunity
?
Action
B
Action
C
Establishing Research Objectives
Opportunity
Research Purpose
Potential Actions
Known
Information
Information
needed to
determine
best action
Known
Information
Information
Gap
Research Objectives
Research Purpose vs. Objectives
• Example: Imagine the dog chew toy company
would like to expand his business, to buffer
himself from declines in his dog toy business
– He wants to know whether he can successfully
branch into cat toy sales as well
Research Purpose vs. Objectives
Research
Purpose
Research
Objectives
So, a Research Objective…
• Translates management’s purpose into
specific questions that need to be answered
by the research
• States as precisely as possible what
information is needed to fulfill the research
purpose
– I.e., to close the information gap
The Marketing Research Process
Goal formulation
• Define research purpose and objectives
Research design
• Exploratory, descriptive, causal
Data collection
• Databases, survey design, sampling, target respondents
Data analysis and interpretation
Final report
• Communicate findings and recommendations
Backward Marketing Research
•
•
•
•
•
•
•
1. Determine how results will be implemented
2. Determine what final report will contain
3. Specify analyses needed to fill in the blanks
4. Determine data needed to carry out analysis
5. Scan secondary data sources
6. Design instrument and sample plan for data
7. Collect data, analyze it, and—finally—see it
used
Marketing Research Designs
Exploratory Research
Designs
•To provide insights and
understanding
•Information needed is
loosely defined
•Research process is flexible
and unstructured
•Sample is small and nonrepresentative
•Analysis is qualitative
•Results tentative
•Generally followed by
further conclusive research
Conclusive Research
Designs
Descriptive
Causal
•To test specific hypotheses and examine
relationships
•Information needed is clearly defined
•Research process is formal and structured
•Sample is large and representative
•Data analysis is quantitative
•Results conclusive
•Findings used as input into decision making
Secondary Data
Exploratory
Research
Qualitative Research
Research Design
Descriptive Research
Quantitative
Research
Causal Research
Which research design is best?
Does the researcher know the question?
Yes
Does the
respondent
know the
answer? Will
she tell you?
Descriptive Research
Yes
(Surveys)
No
Descriptive Research
(Observation, Projection,
Counterbiasing)
Causal Research
(Experiments)
No
Exploratory Research
(Focus Groups, In-Depth
Interviews)
Phenomenological (PostPositivism)
Secondary Research
(Internal/External)
The Marketing Research Process
Goal formulation
• Define research purpose and objectives
Research design
• Exploratory, descriptive, causal
Data collection
• Databases, survey design, sampling, target respondents
Data analysis and interpretation
Final report
• Communicate findings and recommendations
Data Collection and Survey Design
Database
Mail survey
Internet survey
SAMPLE?
Phone Interview
Test market
Observation
Personal Interview
The Marketing Research Process
Goal formulation
• Define research purpose and objectives
Research design
• Exploratory, descriptive, causal
Data collection
• Databases, survey design, sampling, target respondents
Data analysis and interpretation
Final report
• Communicate findings and recommendations
Data Analysis
?
Data
Insights
Analysis
Note: The framework used for analysis determines, in part, which data we collect!
Interpretation
• Insights:
– What have we learned from the analysis?
• Recommendations:
– Can the findings be put into actions?
– If so, how?
– Is more research needed?
The Marketing Research Process
Goal formulation
• Define research purpose and objectives
Research design
• Exploratory, descriptive, causal
Data collection
• Databases, survey design, sampling, target respondents
Data analysis and interpretation
Final report
• Communicate findings and recommendations
Communication: Client and Researcher
• Most important factor in predicting a good
outcome of the research:
– Having a close relationship between the
researcher and the corporate decision maker
• Work out precise and specific objectives of the
research—jointly with the decision maker
Communication: Client and Researcher
• Typical problems:
– Research questions are too broad
• Manager wants to know everything
– Internal/political bias
• Incentives for the researcher?
• Think through all possible findings—how can
they lead to possible actions?
– Construct scenarios
– This will likely sharper the original research questions
(or suggest new ones) by eliciting more specific goals
for the client
The Marketing Research Process
Goal formulation
• Define research purpose and objectives
Research design
• Exploratory, descriptive, causal
Data collection
• Databases, survey design, sampling, target respondents
Data analysis and interpretation
Final report
• Communicate findings and recommendations
The Value of Research
• Research can be expensive!
• We do not want to do research unless it is
valuable to us
• Before embarking on a research project, we
need to carefully evaluate costs and benefits
– Is it worth it?
– Should we always do research?
First question
• Will research findings change our actions?
The Value of Research
• Case A: Consider the following scenario:
– You are considering introducing a new product
– If you introduce
• With a 60% change of success ($4 million)
• With a 40% change of failure (-$2.5 million)
– If you don’t introduce
• $0 for sure
– If you do research you will learn the likely outcome
(success or failure)
• What’s the maximum amount of $ you should
spend on research?
The Value of Research
• Case B: Consider the following scenario:
– You are considering introducing a new product
– If you introduce
• With a 60% change of success ($4 million)
• With a 40% change of failure ($1 million)
– If you don’t introduce
• $0 for sure
– If you do research you will learn the likely outcome
(success or failure)
• What’s the maximum amount of $ you should
spend on research?
The Value of Research
• Case B: Consider the following scenario:
– You are considering introducing a new product
– If you introduce
• With a 0% change of success ($4 million)
• With a 100% change of failure (-$2.5 million)
– If you don’t introduce
• $0 for sure
– If you do research you will learn the likely outcome
(success or failure)
• What’s the maximum amount of $ you should
spend on research?
Remember…
• Research is valuable only if it causes us to
change the optimal decision in a way that
increases the expected return from the
decision
Summary
• Marketing Research can be used to integrate a
lot of information about products, customers,
markets, etc.
• There is a general research framework to
follow
– Start with the end, and work your way back when
planning your research
• It is also important to think about whether
you’ll do research