Chapter 4
Marketing Research:
Gather, Analyze, and Use
Information
Chapter Objectives
1. List and explain the steps in the marketing
research process.
2. Differentiate between the types and sources
of primary and secondary data.
3. Fully cover the methods by which marketing
researchers collect primary data.
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Marketing
Research
Does anyone else find this disturbing?
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Heavy Users Consume 17 Pounds Per Year!!
The Marketing Research Function
Marketing research - The planning, collection,
and analysis of data relevant to marketing
decision making and the communication of the
results of analysis to company decision makers.
Two key roles of MR:
 Determine how effective the current marketing mix
is and drive changes where needed
 Explore new opportunities in the marketplace
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Marketing
Research
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Decisions That Draw on Marketing Research
Segmentation: deciding which segments should be
targeted & their benefits
Product: determining features, packaging, branding
Distribution: determining number and type of retailers
Advertising & Promotion: determining how much to
spend and on which media outlets
Personal selling: setting goals and sales force territories
and number of sales staff
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Price: setting pricing level, responding to competitors,
using pricing strategies
Customer Satisfaction: deciding on how to measure it
and developing a strategy to respond
Marketing
Research
Marketing Research and the 4
P’s: Holiday Inn Express
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Product
•What kind of hotel would “sell” in the marketplace?
•What should the hotel chain be named?
•What brand elements should be created?
Place
•Where should hotels be located?
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Promotion
•What advertising appeals would be most successful?
•How should the hotel be positioned?
•What media would be the most effective?
Price
•How much should be charged for room nights?
The
Marketing
Research
Process
7-7
Step 1: Define the Problem
What does the marketer want to know?
Avoid confusing symptoms of a problem
(ex: declining sales) with the problem itself
(ex: price disadvantage)
Defining the problem helps to prevent the
all-too-common tendency to spend
resources attempting to answer
“interesting, but not necessary” questions
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Step 2: Conduct exploratory research
Exploratory Research – An informal
investigation seeking to discover the cause
of a problem by discussing it with informed
internal and external sources
Can include evaluation of company
records such as sales and profit analyses
Can also include sales and profit
analyses of competitors’ products
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Step 3: Formulate a Hypothesis
Does the marketer have a theory
about the problem that can be tested?
Sets the stage for more in-depth
research by further clarifying what
researchers need to test
Not all marketing research tests
specific hypotheses
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Step 4: Create a Research Design
Research Design - A series of decisions that,
taken together, comprise a master plan or
model for conducting marketing research
Must ensure that the study will measure
what the marketer intends to measure
Must also ensure an appropriate selection
of respondents (“sample”)
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Designing the Sample
 Probability sampling:
Each member of the population has some known
chance of being included
Sample is representative of population, and
inferences about population are justified
 Nonprobability sample
Personal judgment used in selecting
respondents
Some members of population have no chance of
being included so sample is not representative of
population
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Step 5: Collect Data
Secondary data - data from previously
published or compiled sources (ex:
Census data). Data is not specifically for
the problem at hand
Primary data - data collected for the first
time specifically for a marketing research
study (ex: focus group)
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Marketing
Research
Secondary Data
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Secondary Data - data from previously
published or compiled sources (ex:
Census data)
• Someone else has done initial research who
had a similar or identical problem
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Secondary Data Sources
 Government Data
Companies’ most important source of
marketing data
Census information available at no charge
 Private Data (examples)
Starch Readership Reports – measures ads
A. C. Nielsen’s SalesNet scanner data from
supermarkets
 Online Sources of Secondary Data
Cyberspace simplifies the search for
secondary data
Online data can cost less and take less time
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Searching for Gold: Data Mining
 Data mining -- Includes sophisticated analysis
techniques to take advantage of the massive
amount of transaction information now available
 Analysts sift through data to identify unique
patterns of behavior among different customer
groups for use in target marketing
Ex: Amazon targeting potential buyers of
American Idol Season One box set
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Marketing
Research
Advantages of Secondary Data
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+ Can be obtained quickly
+ Is usually inexpensive or even free
+ Might provide a solution to a problem without
using an primary data
+ Is usually available from various sources
Marketing
Research
Disadvantages of Secondary Data
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- The right data needed to make decisions might
not be available
- The data might be outdated
- The source might be questionable - data may
have been “perfumed” or company not competent
- The way the data was collected may have been
incorrect
Marketing
Research
Primary Data
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Primary Data – data collected for the first time
specifically for a marketing research study .
• Directly acquired from customer/end user
• Can be expensive
• Generally for specific use related to research
issue
• Assumption is that no one has had this exact
problem before
• Includes surveys, focus groups, interviews,
observation studies, test marketing, and more
Primary Data
1. Interviews
 Best means for obtaining detailed info about
consumers
 Usually in person, but can be via technology
 Can be slow & expensive
2. Focus Groups - an information gathering procedure
that typically brings together 8 to 12 individuals to discuss
a given subject
 Can provide quick and relatively inexpensive insights
 May not produce completely honest responses
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Primary Data
3. Mail Surveys
 Are cost effective and provides anonymity that may
encourage candid answers.
 Usually low response rates and long time to conduct
4. Online Methods – Surveys, Observing chats,
Observing surfing, Online Focus Groups
 Benefits include the lack of geographic restrictions,
faster turn-around time, and dramatically lower costs
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Primary Data
5. Experimental Method
 A researcher manipulates test group(s) and compares
the results with those of a control group
 The most common example is test marketing
 Expensive to conduct
6. Observation Method
 Researchers actually view the research subjects
 Useful in helping to understand consumer behavior
 Includes counting passing cars or people meters
recording household TV-viewing habits
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Observation Methods
Wireless users at the
Connection Court are
easily observed
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Unobtrusive measures such as
Garbology look for physical evidence
that remains after some action has
been taken
Marketing
Research
Marketing Research
Brainstorming
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Q. What types of Marketing Research may
have been used in the development of the
following products:
 Red Bull
 NASCAR Hall of Fame
 Breathe-Right Strips
 Ugg Boots
American Idol
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Challenges to gathering primary data
in foreign countries
Differences in sophistication of research
operations
Infrastructure/transportation challenges
Lack of phones and/or low literacy rates
Local customs and cultural differences
Language translation difficulties
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Figure 4.5
Marketing Research Designs
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Step 6: Interpret and Present
Research Information
Findings must be presented to decisionmakers in a format that allows them to
make effective judgments
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Honda launches a unique vehicle
targeting a specific sought after
customer segment. What role do
you think Marketing Research
played?
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Marketing
Research
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Exercise -- Averting Failures via MR
Scenario – As a world-class MR firm with a knack
for seeing the future, what proactive Marketing
Research would you have done which would
have prevented/lessened the following failures?
Include the type of research you would have
conducted and the marketing actions you would
have recommended.
Group/Product
1. Microsoft Zune – gaining little market share
2. Powerade - dominated by Gatorade
3. 2006 Winter Olympics TV viewing – very low
4. TWA Airlines – bankrupt & absorbed by AA
5. Blockbuster Video – sales down, stores closing