Course Introduction,
Backward Market Research, Market
Research Ethics
Market Intelligence
Julie Edell Britton
Session 1
August 7, 2009
Today’s Agenda
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Course Overview: The Big Picture
Some course details
Responsibilities & Ethics
Introduction to Backward Market Research
Who am I?
Education: Ph.D., M.S., Graduate School of
Industrial Administration, Carnegie-Mellon University;
B.A. University of Nebraska in math
Teaching: Fuqua in 1980, CRM, Mkt Intelligence,
Consumer Behavior, Statistics, Mkting Mgmt, …
Research: Consumer cognitive and emotional
response to marketing actions
Favorite Sports: Duke Basketball, Nebraska
Football (American), Soccer
Family: Married with 6 children, aged 20 – 29; 3
boys, 3 girls, 2 grandchildren and 2 cats
Who are You?
Name
City
Company
Job Function
Family
What you do for fun
Today’s Agenda
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Course Overview: The Big Picture
Some course details
Responsibilities & Ethics
Introduction to Backward Market Research
John Doerr - PC Guru
“There are basically four risks we have to confront in
each deal. There is technical risk: Can we split the
atom? There is people risk: Will the key players on
the team stay together? There is financial risk: Can
we keep the company well financed? And there is
market risk: Can we get the dogs to eat the dog
food? The most dangerous of these risks is market
risk. Removing market risk is expensive … we’re
risk takers but we will take a technology risk over a
market risk any day of the week.”
(Perkins & Perkins, 1999, The Internet Bubble, p. 74)
Market Intelligence: 3 Skills
 Backward market research:
 Imagine the end of the process
 Identify analysis to support choice among
alternatives and determine what information /
variables would be needed for the analysis
 Get the data needed for the analysis
 Analyze data & make recommendation
 Getting data & judging its quality
 Tools for classic marketing problems
3 Key Skills
 Backward market research (1,2)
 Getting data, judging its quality & analyzing (2-6)
 Analysis frameworks for classic marketing
problems
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Conjoint analysis for new product forecasting (7)
Segmentation (8)
Promotion Analysis (9)
Simulated Test Markets (9,10)
This course is designed…
 for users of market intelligence in consulting,
marketing management, entrepreneurship,
finance
 help you avoid drowning in data
 help you become a more sophisticated user by
assuming role of research provider and by
providing practice as evaluator of research
 improve your ability to use imperfect information
to make decisions
…decisions relating to…
 Segmentation: choosing a base, analysis
 New products:
 Beginning with exploratory (e.g., focus groups)
 Scientific methods for new product concept
screening: surveys, conjoint analysis,
simulated test markets
 Pricing
 Promotion
Today’s Agenda





Course Overview: The Big Picture
Some course details
Responsibilities & Ethics
Introduction to Backward Market Research
Set up Southwestern Conquistador Beer
case
Class Tools
Readings – Course Pack
Cases – Almost every class
Text – Essentials of Marketing
Research, 2nd Edition,
Kumar, Aaker and Day (KAD)
Data Analysis – SPSS Statistics 17.0
TA for Market Intelligence
Stephen Spiller
(SPSS Help)
Assignments
 Submit using online submission tool on the
platform.
 Follow submission deadlines on the platform.
 Major Team Cases: WEMBA A, WEMBA C
 Daily cases:
 Team cases: Southwestern Conquistador Beer
and WEMBA B
 Individual or Team (or Team Subset) - all others
Grading
Class participation (10%)
Use your tent card daily.
Be in class and prepared every day
I will cold-call.
Email me if you will be absent or unable to prepare for a class
I will avoid calling on you one day during the term.
Minor cases (15%)
Southwestern Conquistador Beer – with your team, National Insurance,
Colgate Oral Care, WEMBA B – with your team, IBM Global Mobile
Computing, and Nestle Refrigerated Foods: Contadina Pizza and Pasta
Major team cases (40%) – WEMBA A and WEMBA C
Midterm exam (35%) – To be taken between Sessions 6 and 7 by 9/16
Fuqua Grade Distribution for electives:
no more than 30% SP, 45% HP, and at least 25% P, LP, and F.
Honor Code Violations
 Lying: Lying includes, but is not limited to,
communicating untruths in order to gain an unfair
academic advantage.
 Cheating: Cheating includes, but is not limited to,
using unauthorized materials to complete an
assignment; copying the work of another person;
unauthorized providing of material or information
(e.g., proprietary course information) to another
person; using the work of another without giving
proper credit (e.g., plagiarism); and working on
course material outside of the time constraints
imposed by the instructor.
Honor Code Violations
 Stealing: Stealing includes, but is not limited to,
taking the property of another member of the Duke
Community without permission, defacing or
vandalizing the property of Duke University.
 Failure to Report: Any party having knowledge of
an Honor Code violation without reporting it will be
considered an accessory to the violation and
subject to penalty if found guilty.
Honor Code Applied to
Marketing Intelligence
 Graded exams, cases, assignments
 Don’t consult old exams and cases or
solutions or people who have done them
 Put your name on cases submitted by your
team only if you contributed materially to
the solution
Class Schedule
Sat. 8/8 - Problem definition & information needs, Secondary data
Hypothesis formulation & elementary data analysis and reporting.
Read: KAD Ch 4, 5, 12 (pp. 361-366) and “What’s Behind the Numbers?”
Case Discussion – Southwestern Conquistador Beer
Fri. 8/21 - Database hypothesis testing exercise, Identifying customer
needs, SPSS Tutorial
Read: KAD pp. 384-390, “The Elaboration Model.” (pp. 402-403), Review
SPSS online Tutorial and Help Session handout.
Sat. 8/22 - Intro to survey research, Measurement
Read: KAD pp. 178-191; 197-202; 209-229; 247-266; and “Comparative
Advertising: Measurement Scales and Data Analysis”
Case Discussion - National Insurance
Fri. 9/4 – Focus Groups, Questionnaire design, Survey sampling
Read: KAD pp. 283-290; 306-316; “Conducting the Focus Group,” and
“Thoughts on Qualitative Research…”
Case Discussion – Colgate Oral Care Focus Group
Class Schedule
Sat. 9/5 – Causal Research and Experiments
Read: KAD pp. 97-101
Case Discussions – Milan Foods SPSS Sampling Assignment (no
slides) and Wall Street Journal/ Harris Interactive Survey of MBA
Program Recruiters (no slides)
Fri. 9/25 – New Product Concept Screening and Conjoint Analysis
Read: “Factorial Designs,” pp. 357-359 and “Conjoint Analysis: A
Manager’s Guide”
Case Discussion – WEMBA B and Entitle Direct Title Insurance (no
slides)
Sat 9/26 – Market Segmentation
Read: “Segmenting Markets” including the appendix
Case discussions – Cola Exercise and IBM Mobile Computing
Class Schedule
Fri. 10/9 – Regression analysis for promotion analysis, Debrief WEMBA
C Case, Simulated Test Markets
Read: “Regression Analysis Applied to Sales Promotion,” and “It’s
Better to Fly a Simulator Than Crash the Real Thing”
Sat 10/10 – Course Wrap-Up
Case discussions – Nestle Refrigerated Foods: Contadina Pasta
and Pizza (A)
Other Important Dates
9/3 – 8 pm Colgate Case Slides Due
9/16 – 8 pm Mid-Term Exam Due
9/20 – 8 pm WEMBA A Team Case Write-up Due
9/24 – 8 pm WEMBA B Team Case Slides Due
9/25 – 10 pm IBM Global Mobile Computing Case Slides Due
10/8 – 10 pm WEMBA C Team Case Write-up Due
10/10 – 8 am Nestle: Contadina Pasta Case Slides Due
Questions
Today’s Agenda




Course Overview: The Big Picture
Some course details
Responsibilities & Ethics
Introduction to Backward Market Research
Responsibilities
 3 Parties in the Research Process:
 Client (User, Sponsor)
 Supplier (Market Research Firm, Provider)
 Respondent (Customer, Subject)
 Respondents’ Rights (for primary research)
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Privacy (informed consent)
Safety
Be informed of research purpose
Learn of research results
Client’s Responsibilities
 To respondents:
 avoid using respondent list for sales leads
 avoid deception (no sugging or frugging)
 To suppliers
 Avoid dishonesty (free-riding)
 Provide accurate inputs to research
 To business partners, investors, colleagues:
 Decision research, not advocacy research
 Non-zero value of information
Nonzero Value of Information
Many managers use
Market Research the
way a drunk uses a
light pole – more for
support than
illumination
“Decision Research” =
Nonzero Value of Information
Supplier’s Responsibilities
 Client confidentiality
 Freedom from conflict of interest
 Proper execution of research
 Technically sound
 Limitations disclosed
 Meet time and $ budget agreed upon
Approaches to Ethics
 Deontological versus Consequentialist
You are the market research director of a
pharmaceutical company, and the
executive director suggests to you that
company interviewers telephone
physicians under the name of a fictitious
market research agency. The purpose of
the survey is to help assess the perceived
quality of the company’s products.
Ethical Dilemma 3
John Rider is the Senior VP at ESPN The Magazine.
His background is in publishing, running Spin and
Rolling Stone magazines, each of which is targeted
at young male readers. He describes the process of
designing and launching ESPN The Magazine. He
chose age as a strategic basis for segmentation and
chose to design a sports magazine for 18-34 year
old men. The key to his strategy is the fact that he is
actually selling to two markets – readers of sports
magazines and advertisers. Most of his revenue is
to come from the latter. Advertisers will pay a
premium to have a highly targeted vehicle to reach
Ethical Dilemma 3 (Cont.)
the young male audience. For this all-important
advertiser market, ESPN The Magazine is more
attractive if it loses older customers and builds
circulation among young men. The other mix
element that these advertisers are sensitive to is
“respectability.” Sports magazines are
respectable. The alternative, highly targeted
vehicles for reaching young men tend to be notso-respectable music and sex magazines. Thus,
ESPN The Magazine would deliver the benefits
these advertisers sought.
Ethical Dilemma 3 (cont.)
He is convinced of the ESPN The Magazine concept,
but his bosses at ESPN are skeptical. Rider reports
that he used relatively little research in launching his
magazine. He relied on syndicated research showing
the aging characteristics of the Sports Illustrated
franchise, he ran focus groups, and he did very limited
concept testing in which he showed the mock-up
magazine to target readers. He confides that this
limited research was more for his bosses’ consumption
than for his own enlightenment. “Sometimes you do a
research study to convince your bosses that you are
right.”
Ethical Dilemma 1
Jim Horsky, a marketing manager at Bell
Atlantic wanted to develop a logical portfolio
of access solutions for a “Custom Select”
offering: The manager and internal research
supplier sought to build a model that allows
Bell Atlantic to simulate revenue and profit
streams for all permutations of price and
access combinations being considered,
thus enabling the selection of the profitmaximizing solution. The process
Ethical Dilemma 1 (cont.)
was to identify 5 research suppliers and ask
them to bid on the project. Typically, Bell
Atlantic would ask 2-3 suppliers to bid, but
Horsky had several new managers on board
and he wanted to train them to develop their
ability to manage the research process. The
suppliers each developed bids and research
proposals, all of which were presented to
Bell Atlantic managers back-to-back in a
single grueling day.
Ethical Dilemma 2
Bell Atlantic develops long term
relationships with research suppliers. A key
research supplier drops Bell Atlantic and
takes a large account with Sprint.
Conclusions
 Understand the ethical responsibilities of the client (that’s you!)
and recognize behaviors that might amount to a failure to
honor those responsibilities.
 Understand what behaviors are not unethical, though they
seem on the surface to clash with an ethical responsibility.
 Generate creative solutions to ethical dilemmas that serve
your ethical principles while still doing what seems to be in the
best interest of one’s firm.
 Key is often whether the other parties are informed of facts that would cause
them to change their investment in activities with you, the client.
 Unethical behavior can produce negative consequences for
the client and the firm in the long run.
Recap
This course is for users of market research
Lots of moving parts, but platform will help
you keep track of things
Responsibilities & Ethics
Recognize affected parties, Seek 3rd alternative
when apparent ethical conflicts arise
Next time: SWC Beer, Backward Market
Research, Secondary data, Hypotheses
formulation