MARKETING
RESEARCH
Marketing
“ The process of planning and
executing the conception, pricing,
promotion, and distribution of
ideas, goods and services to create
exchanges that satisfy individual
and organizational objectives.”
McDaniel & Gates
What is Research?
Investigation or experimentation
aimed at the discovery and
interpretation of facts
What is Marketing Research?
“The planning, collection, and analysis
of data relevant to marketing decision
making and the communication of the
results of this analysis to
management”
McDaniel and Gates
What functions should be performed to successfully market this product?
What are all the potential research activities needed to support each of
these marketing functions?
Why Should
Organizations Spend
Money on Market
Research?
“TO GUESS IS CHEAP, TO GUESS WRONGLY IS EXPENSIVE”
Chinese proverb
Marketing research is an investment that produces a return on
investment by reducing the possibility of failure and enhancing the
success of marketing strategies and decision-making. In a word it
reduces risk.
How does research achieve
reduction in risk?
Why should research be
hypothesis driven?
Indigo books has noticed that many
customers abandon the shopping
process part way through.
What might be the reasons for this?
What sort of decisions does
management face that require
information (i.e. Marketing research)
Product
Price
Promotion
Place
What Qualities of the data will be
relevant to marketing decision making?
Accurate
R elevant
Timely
What are the Two main types of information?
Qualitative
• “How do people feel about the your product?”
• Not predictive of market behavior
• Qualify needs, wants, preferences
• Focus Groups, In-depth interviews
Quantitative
• “How many people like your product?”
• Predictive if done correctly
• Surveys: Telephone, Mail, Intercept, Internet
What are Two main sources of information?
– Secondary Research
• Existing studies, census data, articles
• Internet, library, trade journals
• Non-specific and often dated
– Primary Research
• data originated specifically for the study at hand
• Create your own questions and find your own
answers by asking people what they think, feel,
know, etc.
• Common methods include:
– Focus groups, surveys
What are the Major Sources of
Information?
•
•
•
•
Marketing Research
Customer Databases
Internal Reporting Systems/ Scanner Data
The Internet / On-line Sources
Types Of Research
• Exploratory
• Descriptive
• Causal
Uncertainty Influences The Type Of Research
EXPLORATORY
ABSOLUTE AMBIGUITY
Exploratory Research
(Unaware of Problem)
COMPLETELY CERTAIN
Descriptive Research
(Aware of Problem)
CAUSAL OR
DESCRIPTIVE
Causal Research
(Problem Clearly Defined)
“Our sales are declining and “What kind of people are “Will buyers purchase more of
buying our product?
we don’t know why.”
our products in a new package?
“Would people be interested Who buys our
competitor’s product?”
in our new product idea?”
“What features do
buyers prefer in our
product?”
“Which of two advertising
campaigns is more effective?”
Exploratory Research
• Initial research conducted to clarify and
define the nature of a problem
• Does not provide conclusive evidence
• Helps develop hypotheses but does not test
them
• Subsequent research expected
• Published sources, depth interviews, focus
groups
• characterized by its flexibility
Descriptive Research
• Describes characteristics of a population or
phenomenon (who, what, where, when, why,
and how)
• Some understanding of the nature of the
problem
• Tends to be more quantitative than
qualitative
• Tests hypotheses and provides conclusive
information
• more rigid than exploratory research
Causal Research
• Conducted to identify cause and effect relationships, especially to
see how actions now will affect a business in the future
• accomplishes goal through laboratory and field experiments
• For example, if a clothing company
currently sells blue denim jeans,
casual research can measure the
impact of the company changing the
product design to the colour white.
• Following the research, company
bosses will be able to decide whether
changing the colour of the jeans to
white would be profitable.
Determining When to Conduct
Marketing Research
•
•
•
•
Time constraints
Availability of data
Nature of the decision
Benefits versus costs
When would you not want to conduct
Market Research?
The Bank of Montreal has been trying to sell its services online but finds
that new web users are not signing up for services. Management
wonders whether or not they should invest in a guided tour.
Should they conduct market research to help them decide?
A guided tour involves a considerable
financial risk. There are also concerns
about brand image. So they decide to
proceed with the research. What do
they need to know?
What are some hypotheses as to
why users are not signing up?
How might they discover which, if
any, of these possible reasons is
correct?
Assume they discover that the reason was a poor portrayal of the
value proposition, I.e.people did not understand why they should
use the service. What would be the next step?
Anecdotal evidence suggests that although customers like
the performance and comfort of the Ford Crown
Victoria, they are not overly enthusiastic about it’s design
which has changed little since the last major design
change in 1992. Ford has decided to hire an external
market research company (i.e. you) to find out how the
public are likely to feel about a new design. What steps
would you take to provide this information?
1992
2006
The Marketing Research Process
1. Problem identification
2. specifying what information is required – define
research objectives (hypothesis driven)
3. designing the method for collecting information (,
exploratory, survey, observation, secondary,
experiment)
4. Select sample
5. managing and implementing the collection of data
6. Preparing, analyzing and interpreting the data
7. communicating the findings and their implications.
1. Define the problem
 Do we really need research?
◦ Expensive. Valuable?
 When we should NOT conduct research:
◦ No time or money
◦ Insufficient payback
◦ Information already available
 Must ask the right questions
◦ Asking the wrong ones is at best, useless;
◦ at worst, it will lead to the wrong decision
 Example: Sales of Barbie have declined
2. specifying what information is required
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
3. Determine Research Design
 Exploratory:
◦ Initial, unstructured, informal
◦ When you don’t know much
◦ Focus groups, lit review, case study, pilot study, secondary
data, experience survey
 Descriptive:
◦ Answers who, what, why and how
◦ Surveys, observation
 Causal:
◦ Relationships between variables
◦ Experiments
Information types & sources
• Two types of data:
– Secondary: already exists
– Primary: you collect it
• Data sources:
– Internal
– External
4. Select Sample
 Subjects
◦ Census = all
◦ Sample = portion
 Identify target population
◦ Cost vs. generalizability
 Identify unit of analysis
◦ Individual, household, community
 How will you select subjects?
◦ Probability vs. nonprobability
5. Collect Data
 Determine data gathering methods
◦ Secondary data:
 Internal records, reports for purchase, library, web
◦ Primary data:
 Telephone, web, in person, mail, observation (in person,
electronic)
 Properly prepare
◦ Pretest, pilot test, main study
6. Analyze Data
• Edit data
• Code data
• Select appropriate analysis method
• Use to summarize findings
• Use to interpret results
– Will the findings hold for the general
population?
7. Prepare Report
• SUMMARY:
• What was done and what was found
• Goal: clear, unbiased conclusions
• Write for your audience
The Marketing Research Process
Problem
Discovery
Selection of
Sample Design
Exploratory
Research
Collection of the
Data
Selection of the
Basic Research
Method
The Research Process (cont.)
Editing and
Coding
Data Processing
Interpretation of
the Findings
Report
Would you talk only to men?
Would you talk only to current owners?
Would you talk to only 10 people?
Would it matter if you asked them about
the Ford Escalade?
Would it matter if you did a multiple
regression analysis?
Marketing research works because, by talking to a
relatively small number of people, it is possible to find
out about a far larger number.
But…..
 it only works if you talk to the right number of
people
 it only works if you talk to the right type of
people
 it only works if you ask the right questions and
 it only works if you analyze the data in the
right way.
“The formulation of the problem is
often more essential than its solution”
Albert Einstein
The Management Problem versus
the Marketing Research Problem
A distinction must be made between the management
problem and the marketing research problem.
Management Problem
Marketing Research
Problems
• Focus on symptoms
• Focus on causes
• Action oriented
• Data oriented