BUS235 Lecture 01
The role of marketing research,
the research process, problem
definition
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Unit Details
• Lectures and Tutorials/Labs
• Tutorial and labs in one
• Externals will need to buy SPSS
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Research Uses
• Advertising development and Tracking eg. Visa
• Social eg. Road Safety
• Needs analysis eg. Mobile needs of Telstra Mobiles
Corporate clusters
• Satisfaction tracking – almost everyone
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The nature of marketing research
• Marketing research is one of the principal tools for
answering questions because it:
– links the consumer, customer and public to the
market through information used to identify and
define marketing opportunities and problems
– generates, refines and evaluates marketing
actions
– monitors marketing performance
– improves the understanding of marketing as a
process.
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Marketing research defined
• The systematic and objective process of generating
information for aid in making marketing decisions
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Basic research
• Basic or pure research:
– attempts to expand the limits of knowledge
– not aimed at solving a particular pragmatic
problem
– generally cannot be immediately implemented by
a marketing executive
– conducted to verify the acceptability of a given
theory, or to learn more about a certain concept.
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Applied research
• Applied research is:
– conducted when a decision must be made about a
specific real-life problem
– undertaken to answer questions about specific
problems or to make decisions about particular
courses of action or policies.
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The scientific method
• The techniques and procedures used to recognise
and understand marketing phenomena
• Involves the analysis and interpretation of empirical
evidence (facts from observation or experimentation)
to confirm or disprove prior conceptions
• Used in both basic and applied research
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The managerial value of marketing research
• Effective marketing management requires research.
• Marketing research reduces the uncertainty of marketing
strategies and tactics.
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Developing and implementing a
marketing strategy in four stages
Identifying and evaluating opportunities
Analysing and selecting target markets
Planning and implementing a marketing mix
Analysing market performance
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Identifying and evaluating opportunities
• Marketing research involves investigating potential
opportunities to identify attractive areas for company
action.
• For example:
– Telstra Mobiles New product Development.
– Cruising research Perth – for Investors also.
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Analysing and selecting target markets
• Marketing research is a major source of information for
determining which characteristics of market segments
distinguish each segment from the overall market.
– For example, a typical cruiser bike customer is middle
aged, empty nester, money spare
– Bank of Queensland – profile of customers?
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Planning and implementing
a marketing mix
• Marketing research may be needed to support specific
decisions about the marketing mix.
– For example, advertising research found that Visa ads
confused with Mastercard - stopped.
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Planning and implementing
a marketing mix
• Product: Coke introduced different flavours/drinks for
Australian market
• Pricing: Banks - on fees
• Distribution: Store location eg. ANZ, Nandos
• Promotion: Using different modes in China than in
Hong Kong. Facebook, English
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Analysing marketing performance
• Marketing research informs managers whether planned
activities were properly executed and have
accomplished what they were expected to achieve.
– For example, Telstra produced a service report to
show that the organisation could meet the needs of
stakeholders and customers.
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When is marketing research needed?
• The determination of the need for marketing research
centres on:
– time constraints
– the availability of data
– the nature of the decision
– benefits compared to costs.
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When is marketing research
needed?
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Marketing research in the 21st century
• Global marketing research
– Marketing research has become increasingly global.
– Companies that conduct business in foreign countries
must understand the nature of those particular
markets. (eg Visa)
• Growth of the internet
– The internet has changed the way millions of people
think about getting and distributing information, which
is the essence of marketing research.
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Stages in the research process
• The systematic enquiry of research requires careful
planning of an orderly investigation.
• The stages are:
1. defining the problem
2. planning a research design
3. planning a sample
4. collecting the data
5. analysing the data
6. formulating the conclusions and preparing
the report.
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Stages in the research process
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Discovering and defining the problem
• The research process begins with problem discovery.
• This concept must encompass a broader context that
includes analysis of opportunities.
• Often, at the outset of the research process, only
symptoms of the problem are apparent.
– For example, sales may be declining, but
management may not know the exact nature of the
problem.
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Discovering and defining the problem
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Defining the problem
• An orderly definition of the research problem lends a
sense of direction to the investigation.
• Every marketing problem or decision-making
situation can be classified on a continuum ranging
from complete certainty to absolute ambiguity.
• Uncertainty influences the type of research selected.
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Selection of the basic research method
• The nature of the problem will determine whether the
research is exploratory, descriptive or causal.
– Exploratory research for ambiguous problems
– Descriptive research for partially defined problems
– Causal research for sharply defined problems
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Selection of the basic research method
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Statement of research objectives
• After identifying and clarifying the problem, the
researcher should make a formal statement of the
problem and the research objectives.
• The best expression of a research objective is a wellformed, testable research hypothesis.
• A hypothesis is a statement that can be refuted or
supported by empirical data.
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Planning the research design
• A research design is a master plan that specifies the
methods and procedures for collecting and analysing the
needed information.
• The researcher must also determine the sources of
information, the design technique, the sampling
methodology, the schedule and the cost of the research.
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Exploratory research
• Usually conducted during the initial stage of the
research process
• Not intended to provide conclusive evidence
– For example, a Chinese fast-food restaurant
considering a breakfast menu
• Its purpose is to narrow the scope of the research
topic and transform ambiguous problems into
well-defined ones that incorporate specific research
objectives.
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Exploratory research
• Researchers can employ techniques from four basic
categories:
– secondary data analysis
– pilot studies
– case studies
– experience surveys.
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How realistic are research results?
• Exploratory research is used prior to product introduction
but sometimes it may be wrong.
– Styling mousse is popular but it flopped in initial US
market tests – described as ‘goopy and gunky’.
– Consumers reacted negatively to market tests of
telephone answering machine.
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Secondary data
• Data previously collected and assembled for some
project other than the one at hand
– Secondary sources include the ABS.
– Literature reviews are surveys of published
articles and books.
• Can almost always be gathered more quickly and
inexpensively than primary data
• But may be outdated or may not exactly meet
researchers’ needs
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Pilot studies
• Collection of data from the actual research subjects
to serve as a guide for a larger study
• Data collection methods are informal and findings
may lack precision.
• Focus group interview to obtain qualitative
information.
– For example, the National Drugs campaign used
focus groups to identify attitudes and motivations
of youth towards the use of illicit drugs.
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Descriptive research
• Major purpose is to describe characteristics of a
population.
– Determine the answers to who, what, when, where
and how questions
• Provides evidence that answers questions of fact
necessary to determine a course of action
• Accuracy is of paramount importance.
• Based on some previous understanding of the
problem
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Survey
• Most common method of descriptive research
• A survey is a research technique in which information
is gathered from a sample of people using a
questionnaire.
• There are different survey methods to contact
respondents:
– telephone or mail
– on the internet
– in person.
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Secondary data and observation
• An example of descriptive research using secondary
data includes a mathematical model to predict sales
on the basis of past sales.
• Generally, the quantitative analysis of secondary data
is more sophisticated than that of exploratory studies.
• Observation methods involve recording behaviour
without relying on reports from respondents.
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Causal research
• Main goal is to identify cause-and-effect relationships
among variables.
• Researchers seek certain types of evidence to help
them understand and predict relationships.
• No causal relationship exists if there is no association
between two variables.
– Concomitant variation is a requirement.
• Marketing experiments, such as test marketing, hold
the greatest potential for causal studies.
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Experiments Edward McQuarrie (JCR, 92)
• Experiments on TVC’s
• Compare different creatives
• Ambiguity in creativity increases recall and impact of the
ad.
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The ‘best’ research design
• It is argued that there is no single best research
design.
• There are no hard-and-fast rules for good marketing
research.
• This does not mean that the researcher faces chaos
and confusion.
• It means that the researcher can choose among
many alternative methods for solving a problem.
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Sampling
• Sampling involves any procedure that uses a small
number of items or a portion of the population to
make a conclusion regarding the whole population.
• A sample is a subset of a larger population.
• Results of a good sample should have the same
characteristics as the population as a whole.
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Sampling
• When errors are made, samples do not give reliable
estimates of the population.
– For example, a survey by Literary Digest wrongly
predicted the outcome of the US presidential
election because of error due to sampling.
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Sampling issues
• Target population: Who is to be sampled?
• Sample size: How big should the sample be?
• Sampling method: How to select the sampling
units?
• Sampling techniques: Probability sampling
versus nonprobability sampling?
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Gathering data
• Data may be gathered by humans or recorded by
machines.
• Many research techniques involve various methods
of data gathering.
• Two phases of data gathering: pretesting and the
main study
– Pretests are an advanced opportunity for an
investigator to check the data collection form to
minimise errors due to improper design.
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Processing and analysing data
• Editing: Checking the data collection forms for
omissions, legibility and consistency in classification
• Coding: Developing rules for interpreting, categorising,
recording and transferring the data to the data storage
media
• Analysis: Application of reasoning to understand data
that have been gathered
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Drawing conclusions and preparing a report
• Researchers should look at the analysis of information
collected and ask, ‘What does this mean to
management?’
• Consists of interpreting information and making
conclusions for managerial decisions
• Research reports should effectively communicate the
findings of the research.
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The research program strategy
• Marketing research is not a one-shot activity, but a
continuous process.
• Management should view marketing research at a
strategic planning level.
• The program strategy involves a plan that places each
marketing research project in the context of the
company’s marketing plan.
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Problem definition and the
research process
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The importance of proper
problem definition
• The right answer to the wrong question may be
worthless or even harmful.
– Coca-Cola and ‘new’ Coke
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The process of defining the problem
• A problem definition:
– indicates a specific marketing decision to be clarified
or problem to be solved
– specifies research questions to be answered and the
objectives of the research
– involves several interrelated steps.
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The process of problem definition
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Ascertain the decision-maker’s objectives
• Researchers must attempt to satisfy decision-makers’
objectives.
• Managerial goals should be expressed in measurable
terms.
• The iceberg principle is the idea that the dangerous part
of many marketing problems is neither visible to nor
understood by marketing managers.
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Understand the background of the problem
• Exercising managerial judgement
• Situation analysis: Informal gathering of background
information to familiarise researchers or managers with
the decision area
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Isolate and identify the problems,
not the symptoms
• Problems and symptoms can be confusing and may
only be symptoms of deeper problem.
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Stage 1: Problem definition
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What is the purpose of the study?
How much is already known?
Is additional background information necessary?
What is to be measured? How?
Can the data be made available?
Should research be calculated?
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Stage 2: Selection of basic
research design
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What types of questions need to be answered?
Are descriptive or causal findings required?
What is the source of the data?
How quickly is the information needed?
How should survey questions be worded?
How should experimental manipulations be made?
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Stage 3: Selection of sample
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Who or what is the source of the data?
Can the target population be identified?
Is a sample necessary?
How accurate must the sample be?
Is a probability sample necessary?
Is a national sample necessary?
How large a sample is necessary?
How will the sample be selected?
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Stage 4: Data gathering
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Who will gather the data?
How long will data gathering take?
How much supervision is needed?
What operational procedures need to be followed?
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Stage 5: Data analysis and evaluation
• Will standardised editing and coding procedures
be used?
• How will the data be categorised?
• Will computer or hand tabulation be used?
• What is the nature of the data?
• What questions need to be answered?
• How many variables are to be investigated
simultaneously?
• What are the criteria for evaluation of performance?
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Stage 6: Type of report
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Who will read the report?
Are managerial recommendations requested?
How many presentations are required?
What will be the format of the written report?
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Overall evaluation of the
research design
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How much will the study cost?
Is the time frame acceptable?
Is outside help needed?
Will this research design attain the stated research
objectives?
• When should the research begin?
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