Chapter Two

The Marketing
Research Process

Chapter Objectives
Identify major steps in marketing research process
Explain the interrelationship among and
interdependence of the process steps
Understand when to use external providers and how
to evaluate them
Develop your view of marketing research ethics and
describe some of the ethical gray areas that exist

Research Process
The Research Process is an interrelated
sequence of steps that make up a research
project
Research process steps

Justify the need for marketing research

Define the research objective
Identify data needs
Identify data sources

Research Process (Contd)

The steps are (contd)
Choose appropriate research design and data
collection method
Design the research instrument or form
Identify the sample
Collect data, including any relevant secondary data
Analyze and interpret the data
Present the research findings to decision makers

Exhibit 2.1
Research
Project Steps

Research Process - Interrelated

Example of Interrelationship:
At the first step the researcher must
understand what is involved in the
remaining stages

Justify the Need for Marketing Research

Four Considerations
Potential usefulness of the results
Management attitudes towards marketing
research
Resources available for implementation
Costs vs. benefits

Potential Usefulness of the Results

The extent to which findings are likely to
reduce uncertainty or provide relevant
information
KFC in Brazil
Tested how their product was perceived by
Brazilian consumers
They did not test their product against other
more traditional Brazilian chicken products
Result: research findings useless

Management Attitudes Towards

Marketing Research
Management must trust the research findings for
them to be useful
Whirlpool
Conducted marketing research in Europe that
determined consumers in different countries favored
different features
Whirlpool management had already decided to release
the World Washer to be sold in all countries
They ignored the research findings, thus making
the project worthless

Resources Available for Implementation

A company must have the resources to fully
implement recommended decisions for the
information to be useful
X-Disk Corporation
Operating at 95% Capacity
Marketing research determines there is a market for
new product
Capacity is not enough to meet new product demand
Back to square one, as the marketing research was
useless without the resources to implement

Costs vs. Benefits

A company must have the resources to fully
implement recommended decisions for the
information to be useful
Determining Research Costs
Quantify the necessary research steps

Determine the Benefits

Nature of the uncertainty it will alleviate
Projected financial benefits
Decision maker intuition

Do you think it is harder to determine cost or to

determine benefit?

Justify the Need for Marketing Research

(Contd)
Brenda Page is considering a new product for her
company. The product will require a 10% market
share to break even. Intuition and experience tell
Brenda that the product will probably receive 8%
market share.
Brenda has LOW potential benefit
Brenda is pretty sure that the product will not meet the
necessary market share. The marketing research
might determine that Brenda was incorrect and it will
meet the necessary market share, but it most likely will
not be high enough to be profitable.

Justify the Need for Marketing Research

(Contd)
Jerry Wilson is deciding between possible
commercials for a new product his company is
promoting. Both have been proven to have good
results on certain products and bad on others,
however neither commercial has been used on a
product similar to theirs.
Jerry has HIGH potential benefit
There is much more ambiguity in Jerrys decision and
the benefit of knowing the information is much higher

Conducting Small Budget

Marketing Research
Treat every employee as a marketing
researcher
Be on the look out for how your product or
your competitors products are being used
Watch for trends
Share informal reports at meetings

Send employees to observe customers

Conducting Small Budget Marketing

Research (Contd)
Send employees to interview tradeshow attendees
Costs as little as $1,000 compared to the traditional
$5,000

Use warranty cards or product registration cards to

collect information on your customers
Provided by David Gordon, CEO Angell Research &
past Chairman of AMA

Defining the Research Objective

Most Critical Step
Establishing the projects purpose through
effective communication between the decision
maker and the researcher allows them to
establish clear-cut and agreed upon research
objectives

Defining the Research Objective (Contd)

Key: Accurate definition of the problem and all
potential causes
Marketing Problem
Exploratory research fueled by client/researcher
communication
Potential cause
Decide which causes most directly effect the problem
Decide if these issues are worth following

Goal: Decide on clear cut research objectives

Pac-N-Sac Paper Products Company

Defining the Research Objective
Marketing Problem: Paper product sales down
Manager assumes that the potential cause is a promotional
problem
Team decides if these issues are worth following up on
They decide that the goal will be to find more effective
promotions
Actual Problem: Industry sales decreasing
Because they did not consider all the possible causes, they
missed the true cause of the sales decline
Faulty research objectives = Faulty recommendations

Avoiding Mistakes in Problem Definition

Accurate definition of a projects purpose
requires
Identifying all relevant issues
Deciding which of the issues are worth
examining further

Avoiding Mistakes in Problem Definition

Captain Morgan Gold
Strategy
Capture more of the ready-to-drink alcoholic beverage
market

Alternate Strategy
Revive sagging profits

Apparent Assumption
The popularity of Captain Morgan Rum would translate
into popularity for Captain Morgan Gold.

Captain Morgan Gold (Contd)

Examined Wrong Problem
Marketing Research centered around evaluating the
popularity of the Captain Morgan Rum brand and not
discovering adult consumer needs and preferences

Mistake
Failed to examine what adult consumers are looking
for in the ready to drink alcoholic beverage category
Focused on copying competitors

Avoiding Mistakes in Problem Definition

Effective Communication is a Must
Effective dialogue is critical for properly
diagnosing any situation calling for the use of
marketing research
Especially important when the purpose of
research is to explore opportunities
The chances that a wrong or nonexistent
problem will be researched are greatly
increased when there is a lack of
communication

Identifying Data Needs

Steps
Scrutinize the research purpose
List the types of data that will fulfill this
purpose

Identifying Data Sources

Primary Data
Data obtained directly from consumer to fulfill
a specific purpose

Secondary Data
Data that are readily available from other
sources

Choosing the Appropriate

Research Design
Exploratory Research: Used to gain initial
insights and may pave the way for further
research.
Conclusive Research: Used to verify insights
and select appropriate course of action. Can
be either descriptive or experimental.

Choosing the Appropriate

Research Design (Contd)
Research Proposal
Serves as a blueprint for the execution of the product

Explains

Purpose and scope of the project

The specific design of the project
Sample design
Data collection procedures
The data analysis plan
The project timetable
The estimated cost of the project

Choosing the Appropriate

Research Design (Contd)
Example Dialogue Questions

Why am I conducting this research?

How can I tell if my project has been a success?
When and where will data be collected?
Which pieces will be done internally and which will be
done externally?
How will results be communicated in the organization?

Goal
Stimulate meaningful dialogue between the researcher
and decision maker

Questions That Need to Be Answered by

the Client/Marketing Researcher Team

Why am I conducting this research ?

How will I tell if my project has been a success ?
What method will be used ?
What questions will be asked ?
Who will be interviewed ?
How will you get contact information for potential
respondents?
When and where data will be collected?
Which pieces will be done internally and which will be
done externally?
What statistical analysis will be performed ?
How will the results be communicated in the
organization?

Design the Research Instrument or Form

Relevant when you are using primary data

Interviews
Observation
The type of form used can seriously effect the
nature and/or the quality of the data.

Identifying the Sample

Who or what type of units?

From where should the

units come?

How should the units be

chosen?

How many units?

Collecting the Data

Interviewer-administered survey
Self-administered survey
Before data analysis there are two processes
Editing, or ensuring that the data is complete
and correctly filled out
Coding, or transforming into a suitable form for
analysis

Interrelationship Check
In order to create the data collection form, it is
important to know what type of data the
company or organization is planning to collect
and what type of sample is being used

Analyzing Data and Interpreting Results

The types of data analysis used depend on
the nature of the data
The nature of the data is determined by the
type of data collection method used as well
as other factors

External Providers of Marketing Research

Many organizations, even those with internal
marketing departments, call on external
research agencies.
The top 25 large marketing research firms
account for 75% of the dollar spend on
research services.

Factors to Consider in Deciding to Use

External Suppliers
Credibility: perceived trustworthiness of the
research and its findings
Competence: special capability or facilities
and external research firm can provide
Cost: in some cases can be less costly to
hire an external firm
Capacity: expand the capacity of the internal
research department to meet immediate
research needs

Exhibit 2.5 Criteria for

Evaluating External Suppliers

Nickelodeon Wants to Know You

How does Nickelodeon get a kids view point
about a TV Show?
Adopted a day-care center for testing new
shows or new characters
Conducted marketing research on a weekly
basis in a NJ school. Researchers quiz the
kids on all aspects of their lives

Nickelodeon Wants to Know You (Contd)

How does Nickelodeon get a kids view point
(contd)?
Children are given disposable cameras to
record their activities in photos and words
Conducts focus groups with school-age
viewers

What do you think about Nickelodeons

research methods? Are there any ethical
issues?

Code of Ethics
Marketing Research Ethics may be viewed as
Prohibiting selling or fundraising under the
guise of conducting research
Maintaining research integrity by avoidance,
misrepresentation, and omission of pertinent
research data
Treating outside clients and suppliers fairly

Stakeholders of Basic Ethical and

Business Principles

Research Suppliers
Field Service Firms
Research subjects or respondents
Clients
General public

Council for Marketing and Opinion

Research - Respondent Bill of Rights

An Ethical Situation -You Decide

For instance, take a respondents right of
privacy
Googles new Gmail service
Went beyond traditional e-mail services by
scanning mail for key words and then
delivering advertising along with the messages

An Ethical Situation -You Decide (Contd)

Gmail is also storing subscribers e-mails
even after they close their accounts
Google clearly spells out its policies for Gmail
in the conditions for using the service section
of the website
Do Gmails practices violate a consumers
right to privacy?

An Ethical Situation -You Decide (Contd)

Does this notice cover Googles ethical
responsibility to its customers?
Do you feel that technological advances are
eroding individuals privacy?

Differing Interpretations of the Codes

A marketing researcher working on a project
for a new client needs background
information on competitive trends in the
clients industry. She contacts an advertising
executive friend who formerly had the
account of the clients chief competitor.
How do you feel about the appropriateness of
the data collection method as described in
this scenario?