Part 2
MARKET RESEARCH AND
TARGET MARKETS
Dr. Chen, Principle of Marketing
4: Marketing Research and
Information Systems
5: Target Markets:
Segmentation and Evaluation
Dr. Chen, Principle of Marketing
Chapter 4
Marketing Research and
Information System
Professor Jason C. H. Chen, Ph.D.
School of Business Administration
Gonzaga University
Spokane, WA 99258
chen@jepson.gonzaga.edu
Dr. Chen, Principle of Marketing
Marketing Applications
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 2. After observing customers’ traffic patterns,
Bashas’ Markets repositioned the greeting card
section in its stores, and card sales increased
substantially. To increase sales for the following
types of companies, what information might
marketing researchers want to gather from
customers?
 a. Furniture stores
 b. Gasoline outlets service stations
 c. Investment companies
 d. Medical clinics
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A sample of variety of ideas.
 Furniture stores:

traffic patterns; online research habits; responses to
different payment options; responses to different
promotions
 Gasoline outlets service stations:

traffic patterns; impulse purchase habits
 Investment companies:

the amount of personal contact desired by customers;
responses to different service packages
 Medical clinics:

reasons that customers choose to see a doctor or to not
seek medical help; responses to different payment options
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 5. You work as a marketing researcher for a manufacturer of energy
drinks. Your company is designing a new product that will be targeted at
college and university students. In order to learn more about energy drink
consumption habits, the company plans to conduct a survey of the target
market. After conducting some research, you determine that the best
survey method that fits your firm’s budget is a mail survey. You know from
past experience that the response rate for mail surveys is approximately 10
percent. Your manager tells you that he wants at least 550 completed
surveys in order to make an informed decision. You also know that
approximately 14 percent of respondents who mail surveys back to you fail
to answer certain questions. Your manager tells you that he wants at least
550 completed surveys in order to make an informed decision. Given the
low response rate and the rate of unfinished surveys, how large will the
sample size need to be to comply with your manager’s request? With this
estimated response rate and the number of surveys that the company plans
to distribute, do you feel that this sample will be representative of the entire
population of college and university students?
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 This is an example of the type of question that
marketing researchers face. The logic and math behind
this question is usually taught in a marketing research
course, so we suggest using a survey random sample
calculator like the one available at
 http://custominsight.com/articles/random-samplecalculator.asp.
 With a 10 percent response rate, you would need to send
out 5500 surveys. However, 14 percent (77) of those
will be incomplete. You would need to send 5577
surveys to comply with your manager’s request.
 (77) = 14% x 550 with 100 confidence factor
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#1. 100% Confidence shall be: _______
77
5577
#2. 5500 +77 shall be: _______
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 According to the National Center for Education Statistics, there were 20.4
million college students in 2009. For a 5 percent error rate and 95 percent
confidence, you would need at least 384 completed surveys to ensure a
representative sample. 550 completed surveys will likely be representative
of the entire population of college and university students.
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Internet Exercise – ESOMAR (p. 111)
 ESOMAR

 ESOMAR, the European Society for Opinion and
Marketing Research, was founded in 1948. It is a
nonprofit association for marketing research
professionals. ESOMAR promotes the use of
opinion and marketing research to improve
marketing decisions in companies worldwide and
works to protect personal privacy in the research
process. Visit the association’s website at
www.esomar.org.
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 1. How can ESOMAR help marketing professionals
conduct research to guide marketing strategy?

 This information can be found under the “About ESOMAR”
tab. According to the website, “ESOMAR facilitates an ongoing dialogue with its 4,900 members, in over 130
countries, through the promotion of a comprehensive
program of industry specific and thematic conferences,
publications and best practice guidelines.
 ESOMAR also provides ethical guidance and actively
promotes self-regulation in partnership with a number of
associations across the globe.”
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2. How can ESOMAR help marketers to protect the privacy of
research subjects when conducting marketing research in
other countries?

 This information can be found under Article 7 in the
International code
(http://www.esomar.org/uploads/public/knowledge-andstandards/codes-and-guidelines/ESOMAR_ICCESOMAR_Code_English.pdf), which is located under the
“Knowledge & Standards” tab. It includes standards about
collection and use of research data.
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3. ESOMAR introduced the first professional code of conduct for marketing
research professionals in 1948. The association continues to update the
document to address new technology and other changes in the marketing
environment. According to ESOMAR’s code, what are the specific professional
responsibilities of marketing researchers?

 This information can be found in the International code, which is located
under the “Knowledge & Standards” tab (#2 ). The code is currently 36 pages
long, so be sure to specify how detailed student responses should be. The four
basic principles are:
 Market research shall be legal, honest, truthful and objective and be carried
out in accordance with appropriate scientific principles.
 Researchers shall not act in any way that could bring discredit on the market
research profession or lead to a loss of public confidence in it.
 Market research shall be conducted with professional responsibility and
conform to the principles of fair competition, as generally accepted in
business.
 Market research shall be clearly distinguished and separated from nonresearch activities
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Video Case 4.1 (p. 113)
 MARKETING RESEARCH REVEALS
MARKETING OPPORTUNITIES IN
THE BABY BOOMER GENERATION
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 Summary

 This case illustrates how a variety of marketing research
techniques can help marketers meet the needs of a target
market. Baby Boomers are a profitable demographic, and
with approximately 20 percent of the U.S. population
estimated to be 65 years or older by 2030, marketers are
beginning to research better ways to market to this population
(post World War II, between 1946-1964).
 Baby Boomers desire to have a variety of products available
to them, and many of the products traditionally thought to
belong to the younger generation are actually bought the most
by older generations, such as cars and technological products.
As they age, Baby Boomers are also creating a market for
new products and services.
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 1. Why are Baby Boomers such a lucrative market?

 Baby Boomer spending has been increasing, and they
are estimated to have $3.4 trillion in annual buying
power. Baby Boomers desire to have a variety of
products available to them, and many of the products
traditionally thought to belong to the younger
generation are actually bought the most by older
generations, such as cars and technological products.
 With approximately 20 percent of the U.S. population
estimated to be 65 years or older by 2030, the
spending potential for this market is growing.
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 2. How has the marketing research process been
used to understand how Baby Boomers shop and
interact in stores?

 Because marketers often target younger generations
of consumers, little thought has been given to how
accessible stores and products are for older
generations.
 Businesses are using marketing research to
understand the customer preferences of Baby
Boomers, including how they shop, what they desire
in products, and how to customize promotions to
attract this lucrative demographic.
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 3. How have stores used marketing research findings to
tailor their stores and products to appeal to Baby
Boomers?

 Many businesses have used marketing research findings to
customize their retail environments and their products. CVS
lowered its shelves, made its store lighting softer, and
installed magnifying glasses for hard-to-read labels.
 Diamond Foods Inc. designed the packaging of its Emerald
snack nuts to be more easily opened and decreased the time
it takes to rotate the caps to open its products. However,
because Baby Boomers don’t like to be reminded that they
are getting older, companies avoid directly mentioning how
their changes help “aging” consumers.
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