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SECTION 18
MARKET RESEARCHAND MARKETING
Frank M. Gryna
INTRODUCTION
18.2
QUALITY IN THE MARKETING FUNCTIONOF LEADING ORGANIZATIONS
18.2
CUSTOMER SATISFACTION VERSUSCUSTOMER LOYALTY
18.3
Level of Satisfaction for CustomerLoyalty
18.3
Economic Worth of a Loyal Customer
18.4
CONCEPT OF FIELD INTELLIGENCE
18.6
Sources of Field Intelligence Information
18.6
Analysis of Available Field Intelligence
18.7
Planning for Field Intelligence
18.8
The Data Plan
18.8
Data Sources
18.8
The Sampling Concept
18.9
CUSTOMER BEHAVIOR CONCEPTS
18.10
Customer Needs
18.10
Customer Expectations
18.11
Customer Satisfaction
18.11
Customer Perception
18.11
Spectrum of Customers
18.11
MARKET RESEARCH—TOOLS ANDTECHNIQUES
18.12
Telephone Calls to Customers
18.12
Visits to Individual Customers
18.12
Special Arrangements with IndividualCustomers
18.12
Focus Groups
18.13
Mail Surveys
18.14
COMPETITIVE EVALUATIONS BY FIELDSTUDIES
18.15
Examples of Field Studies
18.15
AMERICAN CUSTOMER SATISFACTIONINDEX
18.18
LINKING CUSTOMER SATISFACTIONRESULTS TO CUSTOMER LOYALTYANALYSIS AND TO PROCESSES
18.18
Ask About Repurchase Intention
18.18
Track Retention and Loyalty Information
18.19
Assure Understanding of Results
18.19
Present Results for Action
18.19
Link Results to Processes
18.20
Analyze Complaints
18.21
Analyze Competitive Studies
18.21
Determine the Reasons for Defections
18.21
MARKET RESEARCH FOR NEW ANDMODIFIED PRODUCTS
18.22
Identify User Needs and Quantify UserViews
18.22
Analyze the Present Use of the Product
18.22
Visit the Scene of Action
18.22
Analyze the Total System of Use of theProduct
18.23
Discover Opportunities for New Products
18.24
Linking Market Research Results to NewProduct Development
18.25
QUALITY ACTIVITIES WITHIN THEMARKETING FUNCTION
18.25
Quality in Sales Activities: CustomerRelationship Process
18.26
Advertising of Quality
18.27
Objective Evidence
18.27
Warranty: Industrial Products
18.27
Warranty: Consumer Products
18.28
Role of the Marketing Function duringthe Launching of New Products
18.28
QUALITY IMPROVEMENT IN MARKETING
18.29
QUALITY MEASUREMENT IN MARKETING
18.30
BENCHMARKING FOR QUALITY INMARKETING
18.30
REFERENCES
18.30
18.1
 
INTRODUCTION 
This section addresses the quality-related issues associated with the marketing function. The discus-sion is divided into two parts:market research for quality and quality activities within the marketingfunction.Among the concepts and methodologies covered are the distinction between customer satisfactionand customer loyalty; concept of field intelligence; difference between customer needs,expectations,satisfaction,and perception; tools and techniques of market research on current and new products;importance of measuring customer satisfaction relative to competition; significance of determiningthe relative importance of various product attributes; role of sales and marketing in quality-relatedactivities; applying quality concepts to improve the effectiveness of the marketing function.We will follow the convention of using the term “product”to denote goods or services.
QUALITY IN THE MARKETING FUNCTION OF LEADING ORGANIZATIONS 
As an overview to this section,we will examine how some leading organizations in quality trans-formed their marketing function from the traditional to the quality-focused. Hurley (1994) collectedinformation through in-depth interviews at seven organizations:Federal Express,GlobeMetallurgical,Marriott,Texas Instruments Defense Systems and Electronics,Toyota Motor SalesUSA,Xerox Corp.,and Zytec Corp. Five of these organizations were Baldrige Award winners. Thefindings revealed that the companies:(1) learn,in detail,the customer view of quality; (2) know thecompany core processes and how they relate to customer satisfaction; and (3) develop a culture witha strong external orientation. The findings suggest that some fundamental changes in marketingoccur when quality management is initiated; e.g.,an integrated organizational approach to market-ing and selling replaces the traditional functional approach. In achieving this transformation,twoframeworks are helpful—one strategic and the other tactical.The concepts of strategic quality planning (see Section 13,Strategic Deployment) apply tothe mar-keting function. A marketing group within the Digital Equipment Corporation started with a missionand developed six strategies to achieve the mission (Kern 1993). Working through several phases,atree diagram relates mission,strategies,customers,and demands (Figure 18.1). This diagram focus-es on the strategy of “customer-driven marketing and quality”and the “Sales”customer. Thus,the“demands”column represents the needs of the sales function as a customer of the marketing func-tion. Follow-up activity includes rating the importance of each demand,and evaluating Marketing’scurrent performance in satisfying the demands,performance of competitors,and the impact that animprovement would have in enabling Sales to meet goals with the end customer.Going to the tactical level,we can identify the steps the marketing function must take to improvecustomer satisfaction. Stowell (1989) proposes the following steps:
1.
Understand customer requirements (e.g.,identify customers,document customer decision-makingprocesses).
2.
Identify Marketing’s products and processes (e.g.,brochures,market research,information delivery).
3.
Match customer requirements to Marketing’s products and processes.
4.
Eliminate ineffective products and processes (of the marketing function).
5.
Improve the remaining processes (e.g.,use process management concepts and tools to improvemarketing processes).
6.
Add new marketing processes as required (e.g.,a process to provide customers with certain infor-mation to make decisions).
7.
Review the processes for each new product (i.e.,examine marketing products and processes whenthe organization brings a new product or service to the market).
18.2
SECTION EIGHTEEN
 
8.
Improve the customer buying process (e.g.,by making it easier for the customer to get and useinformation on products or services).
9.
Involve employees in marketing quality (e.g.,by participation in quality improvement teams asdescribed in Section 5,The Quality Improvement Process).From these frameworks for developing quality in marketing,we proceed to examine the role of market research and other roles of the marketing function to achieve both customer satisfaction andcustomer loyalty. Some books on marketing now discuss the integration of quality throughout mar-keting activities,e.g.,see Churchill and Peter (1995).
CUSTOMER SATISFACTION VERSUS CUSTOMER LOYALTY 
The importance of achieving customer satisfaction is a key theme of this handbook. That thememeans not only meeting formal requirements on the product but also addressing other customerneeds to achieve a satisfied customer. It is useful,however,to go further and make a distinctionbetween customer satisfaction and customer loyalty (see Table 18.1) In brief,a satisfied customerwill buy from our company but also from our competitors; a loyal customer will buy primarily (orexclusively) from our company. A dissatisfied customer is unlikely to be loyal but a satisfied cus-tomer is not necessarily loyal (see below).
Level of Satisfaction for Customer Loyalty.
Sometimes acceptable levels of customersatisfaction still result in a significant loss of new sales. Table 18.2 presents two examples from thetelephone service industry. For example,although 92 percent of the customers who rated AT&T as
MARKET RESEARCH AND MARKETING
18.3
FIGURE 18.1
Final tree diagram. (
Kern 1993.
)
of 00

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