THE PROCESS OF SCIENCE
• What is different?
– 1. Falsification!
• The ability to find out that you’re wrong
– 2. Theories and observation
• Movement between concepts and observation
– 3. Not very efficient
• Slow. Lots of work.
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THE MARKETING RESEARCH PROCESS
• Five critical questions:
– 1. What do we want to know?
– 2. How would we conduct the research?
– 3. What would it cost?
– 4. How else could we conduct the research?
– 5. Should we conduct research?
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1. What do we want to know?
It's important to ask the right questions
– asking the wrong ones is at best, useless;
– at worst, it will lead to the wrong decision
• Examples:
– audio CD players
– New Coke
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“The formulation of the problem is
often more essential than its solution.”
Albert Einstein
The Process of Problem Definition
Ascertain the
decision maker’s
objectives
Determine unit of
analysis
Understand
background of
the problem
Determine
relevant variables
Isolate/identify
the problem, not
the symptoms
State research
questions and
objectives
The Iceberg Principle
• The most dangerous part of many
business problems is neither visible
to nor understood by managers.
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2. How would we do the research?
Are there useful insights that exist?
– e.g., everyday low pricing
• perhaps not for your product, but
theoretically applicable
– seasonality, loyalty, stockpiling
• Is there existing data we can use?
– has our or the competitors price varied?
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3. What would it cost?
• estimate:
– a. staff * hours
• (double how long you think it would take)
– b. survey or experiment costs
– c. incentives for participants
• cost-benefit comparison
• potential gain versus loss
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Managing Costs
Things take at least twice as long and
cost at least twice expectations
Cost overruns:
Identify over budget situations and report
cost overruns to management
have options and suggestions
(e.g. smaller samples, shorter interviews)
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4. How else could we do the research?
• if cost-benefit fails:
– is there a cheaper way to go?
• a. easier way to go?
• b. smaller sample?
• c. other ways to save $?
• cost-benefit comparison
• potential gain versus loss
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5. Should we conduct research?
• cost-benefit calculation
– are there more benefits than costs?
• capital of the company
– can we afford it?
• extension of existing product
– if we already produce something similar...
• confidence in factors identified
– do we know what we need to know?
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Case
•
Women's clothing store
–
four years decreasing profits
–
niche: conservative wear, not trendy
–
competition: aim at young, fashionable
–
idea: less conservative, younger buyer
• What are the useful research questions?
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Examples of possible projects
1. Movie trailors
2. Warning labels
3. Celebrity effects
4. Athletic attendance
5. Perceptions of wine
6. “Social Marketing” issues
7. Internet shopping versus purchasing
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The End
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