The Nature of Marketing Research

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The Nature of Marketing Research

• Chapter 1

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Market Research Defined

• MR is
• the systematic and objective search for and
  analysis of information relevant to the
  identification and solution of any problem in the
  field of marketing. textbook
• the function which links the consumer,
  customer, and public to the marketer through
  information American Marketing Association

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Goal of Market Research

• Good marketing research leads to better
  decisions
• Research is an aid to decision-making, not a
  substitute

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Good Marketing Research is
Clearly Defined Be able to state the goals and
objectives. Easily Completed Respondents must
be able to understand and follow your
questions. Smoothly processed Data must be
clean and validThoroughly Analyzed Useful,
reliable results through thorough
analysis. Timely The time between planning and
completion must produce results in time to make
a difference to your organization.
SOURCE The hows and whys of survey research,
SPSS Technical report WSRIWP-0402
5
SOURCE The hows and whys of survey research,
SPSS Technical report WSRIWP-0402
6
Areas for Survey Research
SOURCE The hows and whys of survey research,
SPSS Technical report WSRIWP-0402
7
Popular Research Questions
SOURCE The hows and whys of survey research,
SPSS Technical report WSRIWP-0402
8
Broad Categories of Research

• Fundamental / Basic / Pure Research
• Creates new understanding
• Applied / Decisional Research
• Uses existing knowledge to do something
• Primary Research
• New data generated by researcher through a survey
  or experiment
• Secondary Research
• Existing information gathered from published
  sources, like reports, journals, periodicals,
  government reports

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Types of Marketing Surveys

• 1 - Market Description Surveys To determine the
  size and relative market share of the market.
  Such studies provide key information about market
  growth, competitive positioning and tracking
  share of market.
• 2 - Market Profiling-Segmentation Surveys To
  identify who the customers are, who they are not,
  and why they are or are not your customers. This
  is often a descriptive market segmentation and
  market share analysis
• 3 - Stage in the Purchase Process / Tracking
  Surveys Where is the customer in the adoption
  process? This information shows market Awareness
  Knowledge Intention Trial Purchase
  Repurchase of the product.
• 4 - Customer Intention - Purchase Analysis
  SurveysDirected at understanding the current
  customer. What motivates the customer to move
  from interest in the product to actual purchase?
  This is key to understanding customer conversion,
  commitment and loyalty.
• 5 - Customer Attitudes and Expectations Surveys
  Does the product meet customer expectations?
  What attitudes have customers formed about the
  product and/or company. Used to direct
  advertising and improve customer conversion,
  commitment and loyalty.
• 6 - Customer Trust - Loyalty Retention Analysis
  SurveysEspecially for high priced consumer goods
  with long decision and purchase processes (time
  from need recognition to purchase), and depth of
  consumer attitudes formed about the product
  and/or company.

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Types of Marketing Surveys

• 7 - New Product Concept Analysis Surveys Concept
  test studies are appropriate in the initial
  screening of new product concepts. Likes and
  dislikes about the concept and evaluation of
  acceptability and likelihood of purchase are
  especially useful measures.
• 8 - New Product Acceptance and Demand Surveys
  (Conjoint Analysis) Primarily for estimating
  demand for new products that can be described or
  have been developed in drawing or concept, but
  have not yet been developed physically. Develops
  develop market share estimates of market
  potential for the alternative potential products.
• 9 - Habits and Uses SurveysDirected at
  understanding usage situations, including how,
  when and where the product is used. Habits and
  uses studies sometimes include a real or virtual
  pantry audit.
• 10 - Product Fulfillment Surveys (Attribute,
  Features, Promised Benefits) Evaluation of the
  products promised bundle of benefits (both
  tangible and image). Are expectations created for
  the product by advertising, packaging and the
  produce appearance fulfilled by the product?
• 11 - Product Positioning Surveys (Competitive
  Market Position) A Best Practices study of
  How does the market view us relative to the
  competition? Competitive positioning analyses
  often compare the attributes and benefits that
  make up the product using multidimensional
  preference and scaling analysis. 12 - Brand
  Equity Analysis Surveys What is psychological
  value that a brand holds in the market place?
  Brand equity is a composite of brand awareness,
  brand quality, brand associations and brand
  loyalty measures.

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Types of Marketing Surveys

• 13 - Advertising Value Identification and
  Analysis SurveysAdvertising value analysis
  focuses on mapping the hierarchical attributes,
  benefits and values that are associated with and
  portrayed by an advertisement. Means-end analysis
  is often part of this type of study.
• 14 - Advertising Message Effectiveness Surveys
  (Media and Message)Message effectiveness testing
  identifies the impressions, feelings, and
  effectiveness in moving the respondent to a
  desired goal (increased awareness, more product
  information, trial, repeat purchase).
• 15 - Sales Force Effectiveness SurveysA
  combination of measures that focus on the sales
  activities, performance and effectiveness in
  producing the desired and measurable effect or
  goal. Often measured as a 360 degree survey
  completed by the sales person, the client
  (evaluating the sales call) and the supervisor
  responsible for evaluating the sales person.
• 16 - Sales Lead Generation SurveysSales lead
  generation surveys for (1) assuring timely use
  and follow-up of sales leads, (2) qualifying
  sales leads (thereby saving valuable sales force
  time) and (3) providing more effective tracking
  of sales leads.
• 17 - Customer Service SurveysAkin to customer
  satisfaction surveys, but focus in detail on the
  actual customer service that was received, the
  process involved in receiving that service and
  the evaluation of the participants in the service
  process.

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Types of Marketing Surveys

• 18 - Customer Service Representative (CSR)
  Surveys Attitudes, Burnout, Turnover and
  Retention Customer Service Representatives hold
  attitudes that may reflect on their job related
  activities and interfaces including (1) the
  allocation of time (2) solutions to solving
  customer needs (3) information or tools to help
  improve their job (4) information and best
  practices (5) the evaluation of internal
  departments that help customers.
• Customer Service Representatives must conform to
  corporate policies and at the same time deal with
  problems that are sometimes unsolvable. CSR often
  exhibit frustration, burnout and high turnover.
  Surveys focus on retention analysis and reducing
  costs and increasing the quality of customer
  relationships.
• 19 - Sales Forecasting and Market Tracking
  SurveysSales forecasting and market tracking
  studies can take a number of forms and
  methodologies, including expert opinion (experts
  estimate the market), judgmental bootstrapping
  (rule based decisions derived from experts that
  describe how to use available secondary market
  information), conjoint analysis (estimation of
  consumer intentions based on product attributes
  that are important in the decision), and
  intentions evaluations (consumer self reported
  intentions of future purchases) are to be made.
• 20 - Price Setting Surveys and Elasticity of
  Demand AnalysisPrice surveys estimate the
  elasticity of demand and show optimal price
  points, including prices too low or too high.
  Price surveys may estimate the demand for
  different product or service segments, or
  different usage situations.
• Source Twenty Different Types of Surveys for
  "Market Analysis", Qualtrics.com Survey
  University.

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Objectivity in Research

• Objectivity means gathering data without bias
• Slanting research to arrive at predetermined
  results is a breach of professional ethics
• One-sided research to prove a prior opinion is a
  waste of time and resources

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Advocacy SurveysNot Objective

• Advocacy surveys are typically sent out by
  political causes and candidates
• Questions are worded so that everyone gives the
  desired response
• Goal is raising money instead of research

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What Market Researchers Do

• Provide informational and analytical inputs for
• Planning future marketing activity
• Controlling present marketing operations
• Evaluating marketing results
• On research projects, they
• Specify the information to be gathered
• Design methods for collecting the information
• Manage and implement the data collection process
• Analyze the results
• Communicate the findings and implications

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Stages of a Research Project
SOURCE The hows and whys of survey research,
SPSS Technical report WSRIWP-0402
21
Planning Steps

• Step 1 Planning and survey design
• Define your research objectives and goals
• Before you get started, you need to determine
  your goals, budget and resources in terms of
  money and expertise. No survey project should
  move very far forward without a clear statement
  of the purpose and goals of the survey. If you
  dont know why you and your organization want to
  conduct the survey, you may be collecting
  unnecessary data.
• Always write out explicit and specific goals so
  you can refer to them and share them with your
  organization. The objectives should be clear.A
  goal such as, We want to understand why
  customers of ABC Bank are satisfied is too
  vague. Focus on the particular issues that you
  wish to explore and measure. Satisfaction with
  service, interest rates offered, competitive
  offers, hours of operation, etc. Clear objectives
  lead to easier formulation of questions.

SOURCE Edited from The hows and whys of survey
research, SPSS Technical report WSRIWP-0402
22
Planning Steps

• Outline your research
• Plan for the Results Be prepared to know which
  statistics youll need to run for your analysis,
  along with what initial relationships and
  patterns you expect to find.
• Establish a project budget
• Mapping an action plan helps you justify your
  study and budget. It also helps you determine the
  scope and size of your survey. Before beginning a
  study, many organizations must prove that the
  research has a viable chance of producing
  results. Be sure to askHow much will the
  survey cost? What can I do to reduce costs
  change methods?
• How long will it take to complete the survey and
  produce results?
• Plan your schedule
• Assume your survey will take longer than you
  expect. Reduce the total time dramatically by
  using existing questionnaires and electronic
  methods of data collection. Dont shortchange
  the time needed for questionnaire development,
  pre-testing and analysis. Dont shortchange the
  reporting end of the process, which is often
  rushed. Anticipate the tables and graphics to be
  constructed to get a head start on the tasks.

SOURCE Edited from The hows and whys of survey
research, SPSS Technical report WSRIWP-0402
23
Planning Steps

• Define the population
• You need to consider your population before you
  can develop questions and format your survey.
  Some things to consider are your populations
  age, education, attention span, language level.
• Estimate the required sample size
• If the sample size is too small, you risk not
  finding any significant results and will have to
  start over. On the other hand, if the sample size
  is too big, you will waste money because a
  smaller sample size would be sufficient.
• Select a method of data collection
• As you plan a survey, you need to determine which
  method or methods you should use to collect
  data from respondents. Telephone, Mailed
  questionnaire, Face-to-face interview, E-mail, or
  other electronic methods. Sometimes, it takes a
  combination of methods to get the best results.
• The method you use depends on factors such as
• The population to be surveyed
• The sampling methodology
• The types of questions to be asked
• The resources (funds and personnel available)

SOURCE Edited from The hows and whys of survey
research, SPSS Technical report WSRIWP-0402
24
Planning Steps

• Determine how you will use the results
• One part of the planning stage is thinking about
  how you will use the results. Some things to
  consider include
• The research answers you will report on
• The type of analysis you hope to do
• What reports you will write
• How the information will be used
• Often, people want to use the information they
  collect to change policies, practices, products
  or procedures to increase their effectiveness.
• For example Ask commuters about their potential
  use of a new subway line if your survey is
  intended to determine potential demand for a new
  subway line.

SOURCE Edited from The hows and whys of survey
research, SPSS Technical report WSRIWP-0402
25
Planning Steps

• Write the questions
• The key to a successful survey is to ensure that
  your questions address the research question and
  are concise and easy-to-understand.
• Poor questions will reduce the value of the data
  gathered.
• Use well-written and tested pre-existing
  questions as much as possible, especially from
  surveys done in your specific industry or topic
  area. No question is usable in every situation
  so you have to examine the questions for your
  particular survey research.
• Pretest questions to determine if they are
  correct for your survey.

SOURCE Edited from The hows and whys of survey
research, SPSS Technical report WSRIWP-0402
26
Planning Steps

• Design the questionnaire
• Poorly formatted surveys can deter people from
  responding to your survey. Design your
  questionnaire to
• minimize measurement error and
• reduce non-response.
• Your questionnaire should be constructed so that
• Respondents are interested and motivated to
  complete it
• The questions are understood i.e., read
  easily, correctly, thoroughly
• Respondents understand how to respond to each
  question and move through the questionnaire

SOURCE Edited from The hows and whys of survey
research, SPSS Technical report WSRIWP-0402
27
Planning Steps

• Pretest the questionnaire
• A pretest is a formal review of a questionnaire
  and the associated data collection methodology.
• By conducting a pretest, you can
• Find problematic questions and get the
  opportunity to rewrite them
• Estimate the cost of data collection
• Estimate the response rate and thus the
  necessary sample size
• Estimate the results on key variables
• Determine interviewer effectiveness
• Use 30 - 75 respondents for a pretest. The
  pretest population should be similar in
  characteristics to the population of your actual
  survey.

SOURCE Edited from The hows and whys of survey
research, SPSS Technical report WSRIWP-0402
28
Planning Steps

• Step 2 Data collection
• Once you have planned and designed your survey,
  you can begin collecting the data. In order for
  this step in the survey research process to be a
  success, you need to collect clean, unbiased and
  up-to-date data in an efficient manner.
• Methods of data collection
• There is no best method of data collection. Each
  has its strengths and weaknesses.
• For example,
• Mail surveys relatively low costs, and low
  response rates requires considerable follow-up.
• E-mail even lower cost, but cant be used for the
  general population, not everyone has e-mail.
• Face-to-face interviews are prohibitively
  expensive, but the lengthiest questionnaires can
  be used.
• Electronic methods, in general, can be used to
  collect data more rapidly.

SOURCE Edited from The hows and whys of survey
research, SPSS Technical report WSRIWP-0402
29
Planning Steps

• Failure from non-response
• Failure to collect data from a large portion of
  those contacted results in a problem called
  non-response. Non-response, by itself, should
  not be a cause for concern. However if
  non-respondents differ from respondents in
  relevant ways, you have to account for the bias.
  Typically this involves weighting results to
  match the population values.
• Failure from item non-response
• Another problem you might encounter in the data
  collection stage is item non-response.
• This is when people who do respond, fail to
  answer an individual item. This can be avoided
  completely through electronic surveys. You can
  use software that creates rules that wont allow
  respondents to continue if they dont answer a
  question.

SOURCE Edited from The hows and whys of survey
research, SPSS Technical report WSRIWP-0402
30
Planning Steps

• Step 3 Data access, preparation and
  managementGet the data ready for analysis
• When examining a new data set, perform data
  verification and cleaning, which helps ensure
  that your analytical results are accurate. For
  example, if you have gender data in which 1 is
  for male and 2 is for female, your data
  shouldnt have 3 as a response.
• If your respondents are entering in their own
  data through electronic surveys, you can set up
  rules that only accept approved responses, such
  as 1 or 2.
• Verify your data so that you dont analyze bad
  data and get bad results.
• Set up the codebook
• During the data preparation and management step,
  youll also want to set up codebook
  information, which is any variable definition
  information. This includes variable names,
  variable formats and descriptive variable labels
  (data such as gender or income level) and value
  labels (numbers assigned to data, such as 1 for
  male, 2 for female).

SOURCE Edited from The hows and whys of survey
research, SPSS Technical report WSRIWP-0402
31
Planning Steps

• Step 5 Data analysis
• Data analysis lets you extract useful information
  from your collected data so you can make informed
  decisions. You will better understand your
  research problem with more detailed analysis.
• Different statistical procedures are appropriate
  depending on what you want to learn and the level
  of measurement of the variable.
• Keep track of what you do the analyses you run
  and how you do them. When performing complex
  analyses, keep a record of the procedures you
  perform and the way you create new variables.
  This record will help you reconstruct your
  analyses if any questions arise when you write
  your report.

SOURCE Edited from The hows and whys of survey
research, SPSS Technical report WSRIWP-0402
32
Planning Steps

• Descriptive data analysis
• First understand your data. Descriptive data
  analysis lets you see whats going on. For
  example, a simple data analysis allows you to
  discover the satisfaction level of your average
  customer.
• In descriptive data analysis, you want to asking
  questions such as Whats the distribution of my
  data? or, How did my respondents answer each
  question?
• The goals of descriptive data analysis are to
• Summarize your data
• Get an accurate description of the variables of
  interest

SOURCE Edited from The hows and whys of survey
research, SPSS Technical report WSRIWP-0402
33
Planning Steps

• Advanced data analysis
• Inferential data analysis helps you predict
  future outcomes, such as customers most likely to
  be satisfied or employees most likely to leave
  your organization.
• Find out which predictors are important and
  determine the level of importance. For example,
  if you are trying to predict customer
  satisfaction, you can determine the importance of
  factors such as the length of time a person has
  been a customer, the impact of various
  promotions, geographic location and more.

SOURCE Edited from The hows and whys of survey
research, SPSS Technical report WSRIWP-0402
34
Planning Steps

• Step 6 Reporting
• Once you have analyzed your data, you need to
  report the results. Create easy-to-understand
  results from your data analysis that decision
  makers can quickly understand and act upon.
• Highlight the information you want to emphasize.
  You want to get your point across clearly with
  reports that are easy to read and easy to
  interpret.
• If your audience doesnt understand the point,
  then your thorough analysis is wasted.Generate
  a Powerpoint Summary of your research.Also
  generate a Microsoft Word document with
  tablesUse software that lets you create
  interactive, customizable reports.

SOURCE Edited from The hows and whys of survey
research, SPSS Technical report WSRIWP-0402
35
Planning Steps

• Step 7 Deployment
• Dont do the research if you are not going to
  deploy or take action on the results.
• Take action on the results
• Let your audience interact with the reports.
• Share information easily
• Allow your clients to view your reports using a
  standard Web browser.

SOURCE Edited from The hows and whys of survey
research, SPSS Technical report WSRIWP-0402
36
Benefits of Marketing Research

• Discover options available to managers facing
  decisions
• Reduce the risk of a terrible decision
• But Marketing results will never be 100 certain
• Ideas, strategies, and tactics cannot be proved
  before implementation
• Not all information is equally valuable
• Dont waste large amounts of time and resources
  on information that isnt as valuable

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Your Research Process???
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Ethical Considerations in Treatment of Subjects
and Respondents

• Deceptive practices, Invasion of privacy, and
  Lack of consideration.
• Unrealized promise of anonymity
• Use of disguised questionnaires and interviews
• Faked sponsor identification
• Implication of required response
• Lying about research procedure
• Faked testing in experimental research
• Promise of undelivered compensation
• Sales solicitation
• The following are examples of invasions of
  privacy
• Observation without informed consent
• Questions concerning people other than the
  subject
• Projective techniques
• Personal classification data
• Full disclosure and use of optional
  participation

• All of the following practices exhibit a lack of
  consideration for subjects or respondents
• Overuse of public (i.e., research placing an
  unreasonable demand on the time and energy of
  respondents)
• Research in subject areas with a depressing
  effect on respondents
• Subjects of no immediate interest to respondents
• Poor interviewers
• Contacts at inconvenient times
• No mention of procedural aspects
• Failure to debrief
• Failure to present subject with option to
  discard results upon completion
• Of specific concern to many are excessive
  interviewing, lack of consideration for and abuse
  of respondents, and the use of marketing research
  as a sales ploy (McDaniel, Verille, Madden,
  1985).

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Overview

• Give the big picture of the research process
• Explain how all the individual topics fit together

• Develop into the Research Report

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Most Common Research Studies

• Qualitative
• Product / service tests
• Brand / advertising tracking
• New product screening tests
• External market volume / share
• Advertising pre-test
• Marketing strategy
• Customer Satisfaction
• Name / packaging tests

• New product forecasting
• Pricing
• Purchase / usage panels
• Demographics
• Market information systems
• Database marketing
• Sales / marketing mix models
• Product Category Management

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Sources of Marketing Research

• Internal research staff
• Commercial research firms, syndicated studies
• Gartner selling same report to many clients
• Commercial research firms, commissioned reports
• Advertising agencies
• Media viewing habits, testing advertising
  concepts
• Trade associations
• Insurance Institute for Highway Safety, crash
  tests
• Government and nonprofit organizations
• Federal census, demographic data