MARKETING RESEARCH: FROM INFORMATION TO ACTION

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CHAPTER
MARKETING RESEARCH FROM INFORMATION TO ACTION
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AFTER READING THIS CHAPTERYOU SHOULD BE ABLE TO

• Identify the reason for doing marketing research
  and describe the five-step marketing research
  approach leading to marketing actions.

• Describe how secondary and primary data are used
  in marketing, including the uses of
  questionnaires, observations, experiments, and
  panels.

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AFTER READING THIS CHAPTERYOU SHOULD BE ABLE TO

• Explain how information technology and data
  mining link massive amounts of marketing
  information to meaningful marketing actions.

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FIGURE 8-1 Marketing research questions asked in
test screenings of movies, and how they are used
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THE ROLE OFMARKETING RESEARCH

• What is Marketing Research?

• Why Good Marketing Research is Difficult

• Five-Step Marketing Research Approach to Make
  Better Decisions

• Decision

• Decision Making

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FIGURE 8-2 Five-step marketing research approach
leading to better marketing actions
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Concept Check
1. What is marketing research?
A Marketing research is the process of defining
a marketing problem and opportunity,
systematically collecting and analyzing
information, and recommending actions.
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Concept Check
2. What are the five steps marketing research
uses to help lead to marketing actions?
A The 5 steps are (1) define the problem (2)
develop a research plan (3) collect relevant
data (4) develop findings and (5) take
marketing actions.
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STEP 1 DEFINE THE PROBLEM

• Set the Research Objectives

• Objectives

• Three Kinds of Research

• Exploratory Research

• Descriptive Research

• Causal Research

• Identify Possible Marketing Actions

• Measures of Success

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STEP 2 DEVELOP THERESEARCH PLAN

• Determine How to Collect Data

• Specify Constraints

• Identify Data Needed for Marketing Actions

• Methods

• Concepts

• New-Product Concept

• Sampling

• Probability Sampling

• Nonprobability Sampling

• Statistical Inference

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Concept Check
1. What are the three kinds of marketing research?
A (1) exploratory research, which providesideas
about a relatively vague problem(2) descriptive
research, which tries to find the frequency that
something occurs or the extent of a relationship
between two factors and(3) causal research,
which tries to determine the extent to which the
change in one factor changes another one.
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Concept Check
2. What does constraints mean?
A Constraints in a decision are the restrictions
placed on potential solutions to a problem, such
as time and money.
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Concept Check
3. What is the difference between concepts and
methods?
A Concepts are ideas about productsor services,
whereas methods are the approaches that can be
used to collect data.
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STEP 3 COLLECTRELEVANT INFORMATION

• Data

• Secondary Data

• Primary Data

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FIGURE 8-3 Types of marketing information
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STEP 3 COLLECTRELEVANT INFORMATION

• Secondary Data

• Internal Secondary Data

• External Secondary Data

• Census Bureau

• Syndicated

• Periodicals/Journals

• Data Services

• Advantages and Disadvantages of Secondary Data

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WEB LINK
Online Databases and Internet Resources Useful
for Marketers
LexisNexis
Wall Street Journal
ProQuest
STAT-USA
Bloomberg
FirstGov
Google
Investors Daily
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Concept Check
1. What is the difference between secondary and
primary data?
A Secondary data are facts and figures that have
already been recorded before the project at hand,
whereas primary data are facts and figures that
are newly collected for the project.
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Concept Check
2. What are some advantages and disadvantages of
secondary data?
A Advantages include time savings, low cost, and
a greater level of detail. Disadvantages include
data may be out of date, the definitions or
categories may not be right, and not being
specific enough for the project.
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STEP 3 COLLECTRELEVANT INFORMATION

• Primary Data

• Observational Data

• Meter/Diary

• Mystery Shopper

• Ethnographic Research

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FIGURE 8-4 Nielsen ratings of the top 10
national television programs fromSeptember 27,
2004 through October 3, 2004
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FIGURE 8-5 Nielsen//NetRatings of the top 10
Internet websites for September 2004
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STEP 3 COLLECTRELEVANT INFORMATION

• Primary Data

• Questionnaire Data

• Individual Interviews

• Focus Groups

• Cool Hunters

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STEP 3 COLLECTRELEVANT INFORMATION

• Primary Data

• Questionnaire Data

• Types of Surveys

• Personal Interview

• Mail

• Telephone

• E-mail/Fax/Internet

• Mall Intercept Interview

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FIGURE 8-A Comparison of three kinds of surveys
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FIGURE 8-6 Typical problems in wording questions
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STEP 3 COLLECTRELEVANT INFORMATION

• Primary Data

• Questionnaire Data

• Question Formats

• Open-Ended

• Closed-Ended/Fixed Alternative

• Dichotomous

• Semantic Differential Scale

• Likert Scale

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FIGURE 8-7A Sample questions from Wendys survey
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FIGURE 8-7B Sample questions from Wendys survey
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STEP 3 COLLECTRELEVANT INFORMATION

• Primary Data

• Panels and Experiments

• Panel

• Experiment

• Drivers

• Test Markets

• Advantages and Disadvantages of Primary Data

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Concept Check
1. What is the difference between observational
and questionnaire data?
A Observational data are facts and figures
obtained by watching, either mechanically or in
person, how people actually behave.
Questionnaire data are facts and figures obtained
by asking people about their attitudes,
awareness, intentions, and behaviors.
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Concept Check
2. Which survey provides the greatest flexibility
for asking probing questions mail, telephone, or
personal interview?
A personal interview survey
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Concept Check
3. What is the difference between a panel and an
experiment?
A A panel is a sample of consumers or stores
from which researchers take a series of
measurements.An experiment involves changing a
variable in a customer purchase and seeing what
happens.
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STEP 3 COLLECTRELEVANT INFORMATION

• Using Information Technology to Trigger Marketing
  Actions

• The Marketing Managers View of Sales
  Drivers

• Data vs. Information

• Information Technology

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FIGURE 8-8 Product and brand drivers factors
that influence sales
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STEP 3 COLLECTRELEVANT INFORMATION

• Using Information Technology to Trigger Marketing
  Actions

• Key Elements of an Information System

• Data Warehouse

• Sensitivity Analysis

• Data Mining A New Approach to Searching
  the Data Ocean

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FIGURE 8-9 How marketing researchers and
managers use information technology to turn
information into action
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STEP 4 DEVELOP FINDINGS

• Set the Research Objectives

• Analyze the Data

• Present the Findings

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FIGURE 8-10 Presenting findings to Tonys
marketing manager that lead to recommendations
and actions
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FIGURE 8-10A Presenting findings to Tonys
marketing manager
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FIGURE 8-10B Presenting findings to Tonys
marketing manager
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FIGURE 8-10C Presenting findings to Tonys
marketing manager
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FIGURE 8-10D Presenting findings to Tonys
marketing manager
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STEP 5 TAKE MARKETING ACTIONS

• Make Action Recommendations

• Implement the Action Recommendations

• Evaluate the Results

• Evaluating the Decision Itself

• Evaluating the Decision Process Used

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Concept Check
1. What does a marketing manager mean when she
talks about a sales driver?
A Drivers are the factors that influence
buying decisions of a household or organization
and, hence, sales.
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Concept Check
2. How does data mining differ from traditional
marketing research?
A Marketing research identifies possible drivers
and then collects data. In contrast, data mining
extracts hidden predictive information already
collected and stored in databases.
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Concept Check
3. In the marketing research for Tonys Pizza,
what is an example of (a) a finding and (b) a
marketing action?
A (a) Figure 8-10A shows a finding that depicts
annual sales from 2001 to 2004. (b) Figure 8-10D
shows a finding(the decline in pizza sales) that
leads toa recommendation to develop an ad
targeting children 6 to 12 years old.
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WHATS NEW INMARKETING RESEARCH?
GOING ONLINE
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Going Online
1. Click on the News link on WorldOpinions
home page to read about the current news and
issues facing the market research industry.
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Going Online
2. Click on the Frame link, a set of online
articles published by Survey Sampling,
International.
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COMMON FALLACIESIN DEFINING A MARKETING
PROBLEM THE CHATTER TELEPHONE EXAMPLE
SUPPLEMENTALLECTURE NOTE 8-1
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KINDS OF PROBABILITYAND NONPROBABILITY
SAMPLES USED IN MARKETING RESEARCH
SUPPLEMENTALLECTURE NOTE 8-2
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FIGURE 8-B Kinds of samples used in marketing
research
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WHAT IS TRUTHIN REPORTINGSURVEY RESULTS?
SUPPLEMENTALLECTURE NOTE 8-3
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FIGURE 8-C How ethical is this claim in an
advertisement that is based on a survey of
doctors?
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FORD CONSULTING GROUP FROM DATA TO ACTIONS
VIDEO CASE 8
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VIDEO CASE 8 Ford Consulting Group
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VIDEO CASE 8 Ford Consulting Group
1. Study Table 1. (a) How does the situation in
the Northeast compare with the other regions in
the United States? (b) What appears to be the
reason(s) that sales are soft?(c) Write a
150-word e-mail with attachments to Mark Rehborg,
your boss, giving your answers to (b).
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VIDEO CASE 8 Ford Consulting Group
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VIDEO CASE 8 Ford Consulting Group
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VIDEO CASE 8 Ford Consulting Group
2. Study Table 2. (a) What do you conclude from
this information? (b) Summarize your conclusions
in a 150-word e-mail with attachments to Mark,
who needs them for a meeting tomorrow with
Margaret, the Northeast region sales manager.
(c) What actions might your memo suggest?
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VIDEO CASE 8 Ford Consulting Group
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HOM FURNITURE WHERE KEEN OBSERVATION PAYS
APPENDIX D CASE D-8
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APPENDIX D CASE D-8 HOM Furniture
1. (a) Identify the data sources HOM Furniture
uses in its marketing information system. (b)
Which would you classify as secondary data
sources? (c) Which would be considered primary
data sources?
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APPENDIX D CASE D-8 HOM Furniture
2. When HOM Furniture advertises,it looks for a
resulting spike in sales using their extensive
database.(a) What are the advantages of this
approach? (b) What are the possible shortcomings
of this approach and how would you address them?
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APPENDIX D CASE D-8 HOM Furniture
3. Assume that you have been hired as a
marketing consultant by HOM Furnitures
management. (a) What specific types of
information should HOM collect to measure
customer satisfaction with its stores and
services? (b) For each type of information you
identified in (a), how would HOM Furniture make
use of that information to improve customer
satisfaction?
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Marketing Research
Marketing research is the processof defining a
marketing problem and opportunity, systematically
collectingand analyzing information, and
recommending actions.
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Decision
A decision is a conscious choice from among two
or more alternatives.
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Measures of Success
Measures of success are criteria or standards
used in evaluating proposed solutions to a
problem.
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Constraints
Constraints in a decision are the restrictions
placed on potential solutions to a problem.
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Sampling
Sampling involves selecting representative
elements from a population.
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Probability Sampling
Probability sampling involves using precise rules
to select the sample such that each element of
the population has a specific known chance of
being selected.
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Nonprobability Sampling
Nonprobability sampling involves using arbitrary
judgments to select the sample so that the chance
of selecting a particular element may be unknown
or 0.
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Statistical Inference
Statistical inference involves drawing
conclusions about a population from a sample
taken from that population.
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Data
Data are the facts and figures relatedto the
problem, and are divided into two main parts
secondary data and primary data.
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Secondary Data
Secondary data are facts and figuresthat have
already been recorded before the project at hand.
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Primary Data
Primary data are facts and figuresthat are newly
collected for the project.
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Observational Data
Observational data are the facts and figures
obtained by watching, either mechanically or in
person, how people actually behave.
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Questionnaire Data
Questionnaire data are the facts and figures
obtained by asking people about their attitudes,
awareness, intentions, and behaviors.
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Information Technology
Information technology involves a computer and
communication system to satisfy an organizations
needs for data storage, processing, and access.
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Data Mining
Data mining is the extraction of hidden
predictive information from large databases.
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