What is Research?

Defining research, it is a systematic investigative process employed to increase or revise current

knowledge by discovering new facts.

It is used to establish or confirm facts, reaffirm the results of previous work, solve new or existing
problems, support theorems, or develop new theories.

It is divided into two general categories:

 Basic research is inquiry aimed at increasing scientific knowledge

 Applied research is effort aimed at using basic research for solving problems or developing new
processes, products, or techniques.

The Importance of Research In A Business

It is easy to believe that if an organization is runs smoothly with good profits and an excellent team of
professionals, it will continue to function in the same capacity.

Constant enhancement and development of the business and the team are essential to surpass others in
the market and have a competitive edge.
Research enables the management to take effective decisions through carefully analyzing the research
output for the long term benefit of the organizations.

To sustain themselves organizations need to keep up with market trends and innovations.

The key function of management is to take decisions and without help of the research and analysis of
present situation and future forecasting, decisions may not be effective.

So research helps management to take intelligent and well informed decisions such as; possibility of the
business to survive and succeed in a new geographical region, assessment about competitors, adopting
a suitable market approach for a product, acceptance of newly launched product.

Marketing Research

The American Marketing Association (AMA) formally defines Marketing Research as: The function that
links the consumer, the customer, and public to the marketer through information.

Marketing Research is the systematic and objective

 Identification
 Collection
 Analysis
 Dissemination and
 Use of information

For the purpose of improving decision making related to the

 Identification and
 Solution of problems and opportunities in marketing.

Classification of Marketing Research

Market Research can be separated into two basic categories: problem-identification research and
problem-solving research. Problem-identification research helps marketing teams identify what
types of problems they might have, while problem-solving research helps identify ways to solve
those problems through marketing mix and segmentation. There are many problem identification
and solving methods that can be completed through market research. Take a look at the examples
below to see which methods can benefit your company

Problem-Identification Research
By conducting new market research projects in your company, you might discover a
potential dilemma or opportunity that you have not considered before. You could discover
any of the following factors through problem-identification research:
 Brand Image: your customers’ perceptions of your brand. It’s extremely important
to be aware of how customers view your company. Determining which strategies you want
to use to positively influence your brand image can be done through researching your
consumers’ current perceptions and what they want from your company.
 Market Characteristics: the characteristics of your target market. You need to
consider all aspects that drive your different customers to purchase. Your customers on the
west coast are going to have different purchasing behaviors than those from the east coast.
Recognizing these differences between subcultures, and meeting the needs of those
differences, will help your business’ marketing strategies succeed.
 Market Potential: an estimate of your product’s potential profit. If you research
how consumers might react to advertising or price changes in your product before you take
action, you will be better prepared and market to your consumers more accurately.
 Market Share: percent of total product sales compared to your competitors. Market
share gives you an estimate of the amount of market your company holds and can give you
an idea of how you compare to your competitors. It also can reveal some of your
competitors' capabilities and strengths, so you can develop an appropriate strategy.

Problem-Solving Research
Once you identify your marketing problem, you need to research how to solve it. The
following research options will help you solve potential problems or capitalize on
opportunities identified by your company:

 Distribution Research: determining where your product should be sold and how
to get it there. Distribution Research helps you plan the best way to get your product from
the manufacturer to the retail shelf. In addition to deciding which retailers should carry
your product, you should determine where your inventory will be held.
 Market Segmentation: Grouping customers by similar backgrounds or similar
purchase behaviors. Utilizing problem-solving research can determine how to most
accurately accomplish this and even how to design advertisements to attract those groups.
You will need to collect both qualitative and quantitative data to accurately understand
your market segments.
 Pricing Research: determining the ideal price for your product. Setting the price for
your product is one of the most important marketing steps. You need to keep the customer
in mind as well as remember that the main goal is to maximize your profits. Consider
whether or not customers can be gained through lower prices. Can you maximize profit
through increasing price? How sensitive will your customers be if you begin slightly
increasing price? All aspects need to be well thought-out. Researching customer’s reactions
to price sensitivity is essential.
 Product Research: testing your new or revised products or completing test
marketing. Researching secondary data or observing how your products will be used can
allow you to effectively compete in the market. Testing different components can identify
new products or discover ways to modify existing products, for example, updating a
product to compete with newer products.
 Promotional Research: following up with the effectiveness of your advertising
strategies. If your company is using advertisements, there are factors you need to be
checking up on. Unless you are evaluating your advertising budget, if your ads are useful in
both retaining and gaining customers and researching what type of ads (online, commercial
or print) are most effective, you truly cannot know whether you’re wasting your company’s
money.

Using research for problem identification and problem solving is essential when you want
to make your company the best in its market. Classifying your problem should always come
before attempting to solve them. Otherwise, you might be spending money to solve the
wrong problem.

Advantages of Market Research

1. Indicates Current Market Trends:
Marketing research keeps business unit in touch with the latest market trends and offers guidance
for facing market situation with confidence. It facilitates production as per consumer demand and
preferences.
2. Pinpoints Deficiencies in Marketing Policies:
MR pinpoints the deficiencies as regards products, pricing, promotion etc. It gives proper guidance
regarding different aspects of marketing. They include product development, branding, packaging
and advertising.
3. Explains Customer Resistance:
MR is useful for finding out customer resistance to company’s products. Suitable remedial measures
are also suggested by the researcher to deal with the situation. This makes the products agreeable
to the consumers.
4. Suggests Sales Promotion Techniques:
Marketing research enables a manufacturer to introduce appropriate sales promotion techniques,
select most convenient channel of distribution, suitable pricing policy for the products and
provision of discounts and concessions to dealers. It facilitates sales promotion.
5. Guidance to Marketing Executives:
Marketing research offers information and guidance to marketing executives while framing
marketing policies. Continuous research enables a company to face adverse marketing situation
boldly. It acts as an insurance against possible changes in market environment.
6. Selection and Training of Sales Force:
Marketing research is useful for the selection and training of staff in the sales Organization. It
suggests the incentives which should be offered for motivation of employees concerned with
marketing.
7. Facilitates Business Expansion:
Marketing research enables a business unit to grow and expand its activities. It creates goodwill in
the market and also enables a business unit to earn high profits through consumer oriented
marketing policies and programmes.
8. Facilitates Appraisal of Marketing Policies:
Research activities enable marketing executives to have an appraisal of the present marketing
policies in the fight of research findings. Suitable adjustments in the policies are also possible as per
the suggestions made.
9. Suggest Marketing Opportunities:
Marketing research suggests new marketing opportunities and the manner in which they can be
exploited fully. It identifies existing and emerging market opportunities.
10. Facilitates Inventory Study:
Marketing research is useful for the evaluation of company’s inventory policies and also for the
introduction of more efficient ways of managing inventories including finished goods and raw
materials.
11. Provides Marketing Information:
MR provides information on various aspects of marketing. It suggests relative strengths and
weaknesses of the company. On the basis of such information, marketing executives find it easy to
frame policies for the future period. MR provides information, guidance and alternative solutions to
marketing problems.
12. Suggests Distribution Channels:
Marketing research can be used to study the effectiveness of existing channels of distribution and
the need of making suitable changes in the distribution system.
13. Creates Progressive Outlook:
Marketing research generates a progressive and dynamic outlook throughout the business
Organization. It promotes systematic thinking and a sense of professionalization within the
company. It also creates enthusiasm among executives concerned with marketing. This brings
success and stability to the whole business unit.
14. Social Significance:
Marketing research is of paramount importance from the social angle. It acts as a means by which
the ultimate consumer literally becomes king of the market place.
Disadvantages of Marketing Research:
1. Offers Suggestions and not Decisions:
Marketing research is not a substitute for decision making process. Ready-made decisions on
marketing problems are not provided by the researcher. Marketing research does not solve any
marketing problems directly. It only aids management in decision making and problem solving
process.
2. Fails to Predict Accurately:
In marketing research, efforts are made to predict the possible future situation. For this, certain
research studies are undertaken. However, the predictions arrived at may not be perfect. Future is
always uncertain and exact prediction about the future is just not possible through marketing
research.
3. Cannot Study All Marketing Problems:
Marketing research cannot study all marketing problems particularly where it is difficult to collect
relevant data. Similarly, research study is not possible where value judgments are involved. Thus,
all marketing problems are not researchable and all research problems are not answerable. MR is
not a ‘panacea’.
4. Resistance to Research by Marketing Executives:
Researchers study marketing problems and offer guidance to marketing executives in their
decision-making process. However, some executives are reluctant to use the solutions suggested by
the researchers.
They feel that such use will act as a threat to their personal status. Marketing executives also feel
that researchers give solutions which are academic in character and lack practical utility.
5. Time-Consuming Activity:
MR is a time-consuming activity. The research work takes longer period for completion and the
findings when available may prove to be outdated. Even data collected very soon become old due to
fast changing market environment.
6. Costly/Expensive Activity:
MR activity is costly as research work requires the services of experts. Advanced training in
economics, computer technology, sociology, etc. is also necessary on the part of research staff. Even
giving responsibility of research work to an advertising agency or to a management consultant is
costly.
7. Dearth of Qualified Staff:
For scientific MR, professional marketing researchers with proper qualifications, experience and
maturity are required. Research work is likely to be incomplete /unreliable in the absence of such
expert staff.
8. Complexity of the Subject:
MR fails to give complete and correct guidance to the management on marketing issues. This is
because MR is not an exact science. It is concerned with the study of human behaviour which is
always difficult to predict. As a result, the conclusions drawn and recommendations made are not
cent per cent correct.
9. Uncertainty of Conclusions:
Consumer is the focal point in marketing research. However, consumer’s buying motives are
difficult to judge precisely and accurately. This brings some sort of uncertainty in the conclusions
drawn from the MR.
10. Limitations of Data Used:
MR process solely depends on the data collected and used for analyzing the marketing problem, for
drawing conclusions and making recommendations. However, the whole process will come in
danger if data collected are inadequate and unreliable.

Marketing Research Suppliers & Services

 Internal Suppliers - Departments Located within a firm.

 External Suppliers - Outside MR Companies hired to supply marketing Research Services.
External Suppliers are further divided into two
1. Full Service Supplier
 Syndicated Services: Sells Pool of Data designed to serve information needs shared by a
number of clients.
 Standardized Services: Companies that use standardized procedures to provide marketing
Research clients.
 Customized Services : Companies that tailor research procedures to best meet the needs of
each client
 Internet Services: Companies specializing in conducting marketing research on the internet.
2. Limited Service Supplier
 Field services: Expertise in collecting data for research projects.
 Coding & Data Entry: Expertise in converting completed surveys or interviews into a usable
data base for conducting statistical analysis.
 Analytical services: Companies that provide guidance in the development of Research
Design.
 Data Analysis Services : Analysis of Quantitative Data.
 Branded MR Products : Developed to address specific types of MR Problems.

Indian Firms

 Market Resonance : Mumbai

 Accel Knowledge : Noida
 Spade Healthcare : New Delhi
 Robas Research : Bangalore
 Maction Consulting Private Limited : Ahmedabad
 RNB Research : New Delhi
 Market Xcel Data Matrix Private Limited : New Delhi
 Hansas Research : Mumbai
 Ipsos : Mumbai
 Majestic MRSS : Mumbai
 Market Insight Consultants : Noida
 Q&Q Research Insights Pvt Limited : Mumbai
 TechSci Research : Noida
 Kantar IMRB : Mumbai - Consumer Research in the field of art, humanities, behavioral
 and physical sciences)

Marketing Research Process

Step 1: PROBLEM DEFINITION

Here the background of the problem is understood by analyzing the background.

Understanding the environmental context facilitates the identification of the management

decision problem.

Tasks involved in problem definition process are:

 Discussion with the decision makers: Researcher needs to understand the nature of the
decision managers face & hope to learn from the research. Problem audit is a useful
framework for interacting with DMs, it is a comprehensive examination of marketing
problem with the purpose of understanding its origin & nature. Following problems are
illustrated in PA;
History of the problem
Alternate courses of action available
Criteria used to evaluate the alternative courses of action.
Potential actions likely to be suggested based on research findings.
Information needed to answer DM’s question.
Manner in which each item of information is used in decision making.
Seven C’s required for fruitful interaction between DM & researcher: communication,
co-operation, confidence, candor, closeness, continuity & creativity.
 Interview with industry experts: Interviews with experts & knowledgeable persons can
help formulate the marketing research problem. It does not lead to conclusive solution.
Useful in situations where technical products are in question, new products where
relatively less information is available on them.
 Secondary data analysis: Data collected for some other purpose than the problem at
hand. Secondary data is quick & economical source of background information(govt.
sources, commercial MR firms & computerized databases). Essential to fully analyze
secondary data before collecting primary data.
  Qualitative research: Sometimes information gained from industry experts, secondary
data or discussions with DM may not be sufficient to formulate problem definition.
Qualitative research is undertaken to support the study, usually unstructured,
exploratory & based on small samples (P&G CoverGirl). Techniques such as focus
groups, depth interviews, pilot surveys & case studies may also be undertaken.

ENVIRONMENTAL CONTEXT OF THE PROBLEM

Step 2: Developing An Approach- COMPONENTS OF THE APPROACH
Objective/Theoretical Framework: Research should be based on objective evidence & supported by
theory. Theory is a conceptual scheme based on foundation statements called axioms, which are
assumed to be true. Objective evidence is evidence that is unbiased & supported by emperical
evidence. It is gathered by compiling relevant findings from secondary sources. An appropriate
theory to guide the research might be identified by reviewing academic literature contained in
books, journals & monographs.

Analytical Model: Set of variables & their interrelationships designed to represent, in whole or in
part, some real system or process. Most common models used are;

 Verbal model : the variables & their relationships are stated in prose form.
 Graphical model : are used to isolated variables & to suggest directions of relationships.
 Mathematical model : explicitly specify the relationship among variables, usually in
equation form.

RESEARCH QUESTIONS: They are refined statements of the specific components of the problem.
Research questions (RQ) ask what specific information is required with respect to the problem
components. If the RQs are answered by research then the information obtained should aid the
decision maker. The analytical model & theoretical framework guide in the RQ formulation.

HYPOTHESES: A hypothesis is an unproven statement or proposition about a factor or phenomenon

that is of interest to the researcher. Hypotheses are statements of relationships rather than mere
questions. Often, a hypothesis is a possible answer to the research questions. An important role of
hypothesis is to suggest variables to be included in the research design.

Step 3: Research Designs

Research design: a framework or blueprint for conducting the marketing research project.

It specifies the details of the procedures necessary for obtaining the information needed to
structure and / or solve marketing research problems.

The components of research design are

 Design the exploratory, descriptive and/or causal phases of the research.

 Define the information needed
 Specify the measurement & scaling procedures- There are four basic measurement
techniques: Questionnaires, Attitude scales, Observation, Depth interviews & projective
techniques.
 Construct a questionnaire or an appropriate form of data collection.
 Specify the sampling process & sample size.
 Develop a plan of data analysis.

Research Design Classification

In general, quantitative research is divided into 2 groups:

1. Exploratory research
Exploratory research is research that is usually done to find out in more detail
an issue, topic, or problem. Typically, this research is conducted when the
scope of research is unclear or too broad.

This research is usually carried out as a preliminary form of research that is

more structured to test various concepts and definitions that are uncertain. In
exploratory research, it may be that the results obtained are objectives,
problem formulations, sampling designs, or better methodologies for future
research.

Methods used : Survey of experts, Pilot Surveys, Analysis of secondary data,

qualitative research.

In this case the information needed is loosely defined.

Research process that is adopted is flexible & unstructured.

2. Conclusive research
Conclusive research is a type of research that aims to get conclusions based
on objectives and problems.

Conclusive research is divided into 2 types

Potential Sources of Error

Several potential sources of error can affect a research design. A good research design attempts to
control the various sources of error. These errors are discussed in great detail in subsequent chapters,
but it is pertinent at this stage to give brief descriptions.

The total error is the variation between the true mean value in the population of the variable of interest
and the observed mean value obtained in the marketing research project. For example, the average
annual income of the target population is $75,871, as determined from the latest census records, but
the marketing research project estimates it as $67,157 based on a sample survey.

As shown in Figure 3.2, total error is composed of random sampling error and non sampling error.
Random Sampling Error: Random sampling error occurs because the particular sample selected is an
imperfect representation of the population of interest. Random sampling error is the variation between
the true mean value for the population and the true mean value for the original sample. For example,
the average annual income of the target population is $75,871, but it is only $71,382 for the original
sample, as determined from the mail panel records that are believed to be accurate. Random sampling
error is discussed further in Chapters 11 and 12.

Non sampling Error: Non sampling errors can be attributed to sources other than sampling, and they
may be random or nonrandom. They result from a variety of reasons, including errors in problem
definition, approach, scales, questionnaire design, interviewing methods, and data preparation and
analysis. For example, the researcher designs a poor questionnaire, which contains several questions
that lead the respondents to give biased answers. Non sampling errors consist of non response errors
and response errors.

NON RESPONSE ERROR: Non response error arises when some of the respondents included in the
sample do not respond. The primary causes of non response are refusals and not-at-homes (see Chapter
12).

RESPONSE ERROR: Response error arises when respondents give inaccurate answers or their answers
are misrecorded or misanalyzed. Response error is defined as the variation between the true mean
value of the variable in the net sample and the observed mean value obtained in the marketing research
project. For example, the average annual income is $69,467 for the net sample, but is estimated as
$67,157 in the marketing research project. Response errors can be made by researchers, interviewers,
or respondents.

Errors made by the researcher include surrogate information, measurement, population definition,
sampling frame, and data analysis errors.

Surrogate information error may be defined as the variation between the information needed for the
marketing research problem and the information sought by the researcher. For example, instead of
obtaining information on consumer choice of a new brand (needed for the marketing research
problem), the researcher obtains information on consumer preferences since the choice process cannot
be easily observed.

Measurement error may be defined as the variation between the information sought and the
information generated by the measurement process employed by the researcher. While seeking to
measure consumer preferences, the researcher employs a scale that measures perceptions rather than
preferences.

Population definition error may be defined as the variation between the actual population relevant to
the problem at hand and the population as defined by the researcher. The problem of appropriately
defining the population may be far from trivial, as illustrated by the case of affluent households.
Sampling frame error may be defined as the variation between the population defined by the
researcher and the population as implied by the sampling frame (list) used. For example, the telephone
directory used to generate a list of telephone numbers does not accurately represent the population of
potential consumers because of unlisted, disconnected, and new numbers in service.

Data analysis error encompasses errors that occur while raw data from questionnaires are transformed
into research findings. For example, an inappropriate statistical procedure is used, resulting in incorrect
interpretation and findings. Response errors made by the interviewer include respondent selection,
questioning, recording, and cheating errors.

Respondent selection error occurs when interviewers select respondents other than those specified by
the sampling design or in a manner inconsistent with the sampling design.

Module 3 - Research Data: Secondary Data & Primary Data

Primary data are originated by a researcher for the specific purpose of addressing the problem at hand.
The collection of primary data involves all six steps of the marketing research process (Chapter 1).
Obtaining primary data can be expensive and time consuming.

Secondary data are data that have already been collected for purposes other than the problem at hand.
These data can be located quickly and inexpensively.

Advantages and Uses of Secondary Data

As can be seen from the foregoing discussion, secondary data offer several advantages over primary
data. Secondary data are easily accessible, relatively inexpensive, and quickly obtained. Some secondary
data, such as those provided by the U.S. Bureau of the Census, are available on topics for which it would
not be feasible for a firm to collect primary data. Although it is rare for secondary data to provide all the
answers to a non routine research problem, such data can be useful in a variety of ways. Secondary data
can help you:

1. Identify the problem.

2. Better define the problem.
3. Develop an approach to the problem.
4. Formulate an appropriate research design (for example, by identifying the key variables).
5. Answer certain research questions and test some hypotheses.
6. Interpret primary data more insightfully.

Disadvantages of Secondary Data

Because secondary data have been collected for purposes other than the problem at hand, their
usefulness to the current problem may be limited in several important ways, including relevance and
accuracy. The objectives, nature, and methods used to collect the secondary data may not be
appropriate to the present situation. Also, secondary data may be lacking in accuracy, or they may not
be completely current or dependable. Before using secondary data, it is important to evaluate them on
these factors. These factors are discussed in more detail in the following section.

Classification of Secondary Data

Secondary data may be classified as either internal or external.

Internal data are those generated within the organization for which the research is being conducted.

 This information may be available in a ready-to use-format, such as information routinely

supplied by the management decision support system.
 On the other hand, these data may exist within the organization but may require considerable
processing before they are useful to the researcher. For example, a variety of information can
be found on sales invoices. Yet this information may not be easily accessible; further processing
may be required to extract it.
 Database marketing: Database marketing involves the use of computers to capture and track
customer profiles and purchase detail. . For many companies, the first step in creating a
database is to transfer raw sales information, such as that found on sales call reports or on
invoices, to a microcomputer. This consumer purchase information is then enhanced by
overlaying it with demographic and psychographic information for the same customers
 Extensive analysis was conducted on internal secondary data in the department store patronage
project. This provided several rich insights. For example, sales were analyzed to obtain: Sales by
product line Sales by major department (e.g., menswear, housewares) Sales by specific stores
 Sales by geographical region Sales by cash versus credit purchases Sales in specific time periods
Sales by size of purchase Sales trends in many of these classifications

External data are those generated by sources outside the organization. These data may exist in the
form of published material, computerized databases, or information made available by syndicated
services. Before collecting external secondary data, it is useful to analyze internal secondary data.

Published External Secondary Sources: Sources of published external secondary data include federal,
state, and local governments, nonprofit organizations (e.g., Chambers of Commerce), trade
associations and professional organizations, commercial publishers, investment brokerage firms,
and professional marketing research firms. In fact, so much data are available that the researcher
can be overwhelmed. Therefore, it is important to classify published sources. Published external
sources may be broadly classified as general business data or government data. General business
sources are comprised of guides, directories, indexes, and statistical data. Government sources may
be broadly categorized as census data and other publications.

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General Business Data

Businesses publish a lot of information in the form of books, periodicals, journals, newspapers,
magazines, reports, and trade literature. Moody’s (www.moodys.com) and Standard and Poor’s
(www.standardandpoors.com) provide information on U.S. and foreign companies. Another useful
source for industrial brand and trade information is ThomasNet (www.thomasnet.com). Valuable
marketing and marketing research information may be obtained from www.SecondaryData.com. A
variety of business-related sites can provide sales leads, mailing lists, business profiles, and credit ratings
for American businesses. Many sites supply information on businesses within a specific industry. For
example, you can gain access to the full-text American Demographics and Marketing Tools publications
at www.marketingtools.com. All of American Marketing Association’s publications can be searched by
using keywords at www.marketingpower.com. Encyclopedia Britannica provides free online access to
the entire 32 volumes (www.britannica.com). Data on American manufacturers and key decision makers
can be obtained from Harris InfoSource (www.harrisinfo.com). Another good source is USAData.com.
Guides, indexes, and directories can help in locating information available from general business
sources. Sources are also available for identifying statistical data. A brief description of each of these
resource categories follows.

GUIDES: Guides are an excellent source of standard or recurring information. A guide may help identify
other important sources of directories, trade associations, and trade publications. Guides are one of the
first sources a researcher should consult. Some of the most useful are the American Marketing
Association Bibliography Series, Business Information Sources, Data Sources for Business and Market
Analysis, and Encyclopedia of Business Information Sources. You can find guides on the Internet.
@BRINT (www.brint.com) is a guide to business technology management and knowledge management
sites with editorial comments.

DIRECTORIES: Directories are helpful for identifying individuals or organizations that collect specific
data. Some of the important directories include Directories in Print, Consultants and Consulting
Organizations Directory, Encyclopedia of Associations, FINDEX: The Directory of Market Research
Reports, Fortune 500 Directory, Million Dollar Directory: Leading Public and Private Companies,
Standard Directory of Advertisers, and Thomas Register of American Manufacturers. You can also find
directories on the Internet, for example the Google directory at www.google.com/dirhp and the Yahoo!
directory at dir.yahoo.com.

INDEXES: It is possible to locate information on a particular topic in several different publications by

using an index. Indexes can, therefore, increase the efficiency of the search process. You can also find
indexes on the Internet, for example the Librarian’s Internet Index at www.lii.org. CI Resource Index
(www.ciseek.com) contains sites for competitive intelligence information. Several were used in the
department store project.

NONGOVERNMENTAL STATISTICAL DATA: Business research often involves compiling statistical data
reflecting market or industry factors. A historic perspective of industry participation and growth rates
can provide a context for market share analysis. Market statistics related to population demographics,
purchasing levels, television viewership, and product usage are just some of the types of
nongovernmental statistics available from secondary sources. Important sources of nongovernmental
statistical data include A Guide to Consumer Markets, Predicasts Basebook, Predicasts Forecasts, Sales
and Marketing Management Survey of Buying Power, Standard & Poor’s Statistical Service, and Standard
Rate and Data Service.
Government Sources

The U.S. government also produces large amounts of secondary data. Its publications may be divided
into census data and other publications.

CENSUS DATA

 The U.S. Bureau of the Census is the world’s largest source of statistical data. Its monthly catalog
lists and describes its various publications.
 More convenient, however, is the Guide to Economic Census. Census data are useful in a variety
of marketing research projects.
 The demographic data collected by the Census Bureau includes information about household
types, sex, age, marital status, and race.
 Consumption detail related to automobile ownership, housing characteristics, work status, and
practices as well as occupations are just a few of the categories of information available.
 What makes this demographic information particularly valuable to marketers is that these data
can be geographically categorized at various levels of detail.
 These data can be summarized at various levels: city block, block group, census tract,
metropolitan statistical area (MSA), consolidated metropolitan statistical area (CMSA), region
(Northeast, Midwest, South, and West), or they can be aggregated for the nation as a whole.
 Census tracts have a population of more than 4,000 and are defined by local communities. In
urban areas, the MSAs have a population of at least 50,000 and comprise counties containing a
central city. In addition, census data are available by civil divisions, such as wards, cities,
counties, and states. The quality of census data is high and the data are often extremely
detailed.
 Furthermore, one can purchase computer tapes or diskettes from the Bureau of the Census for a
nominal fee and recast this information in a desired format.
 Many private sources update the census data at a detailed geographic level for the between-
census years. Important census data include Census of Housing, Census of Manufacturers,
Census of Population, Census of Retail Trade, Census of Service Industries, and Census of
Wholesale Trade.

OTHER GOVERNMENT PUBLICATIONS In addition to the census, the federal government collects and
publishes a great deal of statistical data. The more useful publications are Business America, Business
Conditions Digest, Business Statistics, Index to Publications, Statistical Abstract of the United States, and
Survey of Current Business. The second example in the “Overview” section showed how statistics from
the U.S. Department of Labor helped fast-food restaurants switch from a high touch to a high tech
orientation.
Computerized Database

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Computerized databases consist of information that has been made available in computer readable
form for electronic distribution. A classification of computerized database is done as such;

 Online database consists of a central data bank, stored in computers, which is accessed via a
telecommunication network.

 Internet databases can be accessed, & searched on the internet. It is also possible to
download the data from the internet & store it in computers.

 Offline databases make the information available on disks &CD-ROMs. Such databases can
be accessed without the use of any external telecommunication network.

Online, Internet, and offline databases may be further classified as bibliographic, numeric, full-text,
directory, or special-purpose databases.

Bibliographic databases are composed of citations to articles in journals, magazines, newspapers,

marketing research studies, technical reports, government documents, and the like. They often provide
summaries or abstracts of the material cited. Examples of bibliographic databases include ABI/Inform
and the Predicasts Terminal System. Another bibliographic database, Management Contents, provided
by the Dialog Corporation, was used to enhance the literature search in the department store patronage
project.

Numeric databases contain numerical and statistical information, such as survey and time-series data.
Economic and industry data lend themselves to time-series presentations, which are developed when
the same variables are measured over time. Such data are particularly relevant for assessing market
potential, making sales forecasts, or setting sales quotas. The American Statistics Index (ASI) provides
abstracts and indexes of federal government statistical publications. Global Financial Data
(www.globalfinancialdata.com) provides historical data on securities, dividends, and exchange rates. a
telecommunications network. Internet databases can be accessed, searched, and analyzed on the
Internet. It is also possible to download data from the Internet and store it in the computer or an
auxiliary storage device.17 Offline databases make the information available on diskettes and CDROM
disks. Thus, offline databases can be accessed at the user’s location without the use of an external
telecommunications network. For example, the U.S. Bureau of the Census makes computer data files
available on CD-ROM disks. These disks contain detailed information organized by census track or zip
code. In the department store patronage project, this type of information was used in sample selection.

Full-text databases: Databases containing the complete text of secondary source documents comprising
the database.

Directory databases: Directory databases provide information on individuals, organizations, and

services.

Special-purpose databases: Databases that contain information of a specific nature, e.g., data on a
specialized industry.

Syndicated Sources of Secondary Data

 Syndicated services, also referred to as syndicated sources, are companies that collect and sell
common pools of data of known commercial value, designed to serve information needs shared
by a number of clients (see Chapter 1).
 Using syndicated services is frequently less expensive than collecting primary data.
 Figure 4.4 presents a classification of syndicated services. Syndicated services can be classified
based on the unit of measurement (households/ consumers or institutions).
 Household/consumer data may be obtained from surveys, purchase and media panels, or
electronic scanner services. Information obtained through surveys consists of values and
lifestyles, advertising evaluation, or general information related to preferences, purchase,
consumption, and other aspects of behavior. Panels emphasize information on purchases or
media consumption. Electronic scanner services might provide scanner data only, scanner data
linked to panels, or scanner data linked to panels and (cable) TV.
 When institutions are the unit of measurement, the data may be obtained from retailers,
wholesalers, or industrial firms.

Syndicated Data from Households

Surveys

 Various syndicated services regularly conduct surveys, which involve interviews with a large
number of respondents using a predesigned questionnaire.
 Often these surveys are conducted on samples drawn from panels. Panels were discussed in
Chapter 3 in the context of longitudinal research designs. Panels are samples of respondents
who provide specified information at regular intervals over an extended period of time. These
respondents may be organizations, households, or individuals, although household panels are
most common.
 Comprehensive demographic, lifestyle, and product-ownership data are collected only once as
each respondent is admitted into the panel.
 The panel is used as a respondent pool from which the research organization can draw either
representative or targeted samples based on the relevant background characteristics of the
panel members.
 Response rates to panel surveys, including mail panels, are substantially improved over the
random sampling process because of the commitment panel members make to participate in
surveys
 Psychographic & lifestyle : psychographics refers to the psychological profiles of
individuals. Lifestyle refers to distinctive pattern of living that is described by the activities
people engage in, the interest they have, & the opinions they hold of themselves & the world
around them (AIOs).
 ADVERTISING EVALUATION The purpose of advertising evaluation surveys is to assess the
effectiveness of advertising using print and broadcast media. A well-known survey is the Gallup
and Robinson Magazine Impact Research Service (MIRS) (www.gallup-robinson.com). In the
MIRS, ads are tested using an at-home in-magazine context among widely dispersed samples.
The system offers standardized measures with flexible design options. Test ads may naturally
appear in the magazine or are inserted as tip-ins. It provides strong, validated measures of
recall, persuasion, and ad reaction with responsive scheduling. Such results are particularly
important to heavy advertisers, such as Procter & Gamble, General Motors, Sears, PepsiCo,
Eastman Kodak, and McDonald’s, who are greatly concerned about how well their advertising
dollars are spent.24
 GENERAL SURVEYS Surveys are also conducted for a variety of other purposes, including
examination of purchase and consumption behavior. For example, Harris Interactive’ s
(www.harrisinteractive.com) ShopperInsight is an Internet-based survey of 26,000 primary
household shoppers nationwide asking for their reasons why they have chosen a particular
supermarket, drugstore, or mass merchandiser. Shoppers are asked to rate their shopping
experience based on 30 key factors that influence their choice of retailer, from checkout lines to
store cleanliness, hours, and location. In addition, attributes such as product pricing and
selection are evaluated across 45 individual product categories for every supermarket,
drugstore, and mass merchandiser. These findings can help merchandisers like Wal-Mart gauge
their strengths and weaknesses. For example, the findings from a recent survey reinforced Wal-
Mart’s strategy of providing everyday low prices versus having frequent promotions on special
items. The results showed that Wal-Mart’s prices were 3.8 percent lower than Target, its closest
competitor.
 USES OF SURVEYS Since a wide variety of data can be obtained, survey data have numerous
uses. They can be used for market segmentation, as with psychographics and lifestyles data, and
 for establishing consumer profiles. Surveys are also useful for determining product image,
measurement and positioning, and conducting price perception analysis. Other notable uses
include advertising theme selection and evaluation of advertising effectiveness.
 ADVANTAGES AND DISADVANTAGES OF SURVEYS Surveys are the most flexible means of
obtaining data from respondents. The researcher can focus on only a certain segment of the
population—for example, teenagers, owners of vacation homes, or housewives between the
ages of 30 and 40. Surveys are the primary means of obtaining information about consumers’
motives, attitudes, and preferences. A variety of questions can be asked, and visual aids,
packages, products, or other props can be used during the interviews. Properly analyzed, survey
data can be manipulated in many ways so that the researcher can look at intergroup differences,
examine the effects of independent variables such as age or income, or even predict future
behavior. On the other hand, survey data may be limited in several significant ways. The
researcher has to rely primarily on the respondents’ self-reports. There is a gap between what
people say and what they actually do. Errors may occur because respondents remember
incorrectly or give socially desirable responses. Furthermore, samples may be biased, questions
poorly phrased, interviewers not properly instructed or supervised, and results misinterpreted.

Su r vey Met h ods Cla ssified by m ode of

Adm in ist r a t ion

Purchase and Media Panels

 Often, survey data can be complemented with data obtained from purchase and media panels.
 While panels are also maintained for conducting surveys, the distinguishing feature of purchase
and media panels is that the respondents record specific behaviors as they occur.
 Previously, behavior was recorded in a diary, and the diary was returned to the research
organization every one to four weeks. Paper diaries have been gradually replaced by electronic
 diaries. Now, most of the panels are online and the behavior is recorded electronically, either
entered online by the respondents or recorded automatically by electronic devices.
 Panel members are compensated for their participation with gifts, coupons, information, or
cash. The content of information recorded is different for purchase panels and media panels.
 PURCHASE PANELS In purchase panels, respondents record their purchases of a variety of
different products, as in the NPD Panel.
 Media panels A data-gathering technique that is comprised of samples of respondents whose
television viewing behavior is automatically recorded by electronic devices, supplementing the
purchase information recorded online or in a diary
 USES OF PURCHASE AND MEDIA PANELS Purchase panels provide information useful for
forecasting sales, estimating market shares, assessing brand loyalty and brand-switching
behavior, establishing profiles of specific user groups, measuring promotional effectiveness, and
conducting controlled store tests. Media panels yield information helpful for establishing
advertising rates by radio and TV networks, selecting appropriate programming, and profiling
viewer or listener subgroups. Advertisers, media planners, and buyers find panel information to
be particularly useful.
 ADVANTAGES AND DISADVANTAGES OF PURCHASE AND MEDIA PANELS As compared to
sample surveys, purchase and media panels offer certain distinct advantages. Panels can provide
longitudinal data (data can be obtained from the same respondents repeatedly). People who are
willing to serve on panels may provide more and higher-quality data than sample respondents.
In purchase panels, information is recorded at the time of purchase, eliminating recall errors.
Information recorded by electronic devices is accurate because it eliminates human errors. The
disadvantages of purchase and media panels include lack of representativeness, maturation, and
response biases. Most panels are not representative of the U.S. population. They
underrepresent certain groups such as minorities and those with low education levels. This
problem is further compounded by refusal to respond and attrition of panel members. Over
time maturation sets in, and the panel members must be replaced (see Chapter 7). Response
biases may occur, since simply being on the panel may alter behavior. Since purchase or media
data are entered by hand, recording errors are also possible (see Chapter 3).

Electronic Scanner Services

 Although information provided by surveys and purchase and media panels is useful, electronic
scanner services are becoming increasingly popular. Scanner data reflect some of the latest
technological developments in the marketing research industry.
 Scanner data are collected by passing merchandise over a laser scanner, which optically reads
the bar-coded description (the universal product code or UPC) printed on the merchandise. This
code is then linked to the current price held in the computer memory and used to prepare a
sales slip. Information printed on the sales slip includes descriptions as well as prices of all items
purchased.
 Checkout scanners, which are now used in many retail stores, are revolutionizing packaged-
goods marketing research. Three types of scanner data are available: volume tracking data,
scanner panels, and scanner panels with cable TV.
 Volume tracking data provide information on purchases by brand, size, price, and flavor or
formulation, based on sales data collected from the checkout scanner tapes. This information is
collected nationally from a sample of supermarkets with electronic scanners.
 In scanner panels, each household member is given an ID card that can be read by the
electronic scanner at the cash register. The scanner panel member simply presents the ID card
at the checkout counter each time she or he shops. In this way, consumer identity is linked to
products purchased as well as the time and day of the shopping trip, and the firm can build a
shopping record for that individual. Alternatively, some firms provide handheld scanners to
panel members. These members scan their purchases once they are home.
 An even more advanced use of scanning, scanner panels with cable TV, combines scanner
panels with new technologies growing out of the cable TV industry. Households on these panels
subscribe to one of the cable TV systems in their market. By means of a cable TV “split,” the
researcher targets different commercials into the homes of the panel members. For example,
half the households may see test commercial A during the 6:00 P.M. newscast while the other
half see test commercial B. These panels allow researchers to conduct fairly controlled
experiments in a relatively natural environment. IRI’s BehaviorScan system contains such a
panel.
 USES OF SCANNER DATA Scanner data are useful for a variety of purposes. National volume
tracking data can be used for tracking sales, prices, distribution, modeling, and analyzing early
warning signals. Scanner panels with cable TV can be used for testing new products,
repositioning products, analyzing promotional mix, and making advertising decisions, including
budget, copy and media, and pricing. These panels provide marketing researchers with a unique
controlled environment for the manipulation of marketing variables.
 ADVANTAGES AND DISADVANTAGES OF SCANNER DATA Scanner data have an obvious
advantage over surveys and purchase panels, since they reflect purchasing behavior that is not
subject to interviewing, recording, memory, or expert biases. The record of purchases obtained
by scanners is complete and unbiased by price sensitivity, since the panelist is not required to be
overly conscious of price levels and changes. Another advantage is that in-store variables like
pricing, promotions, and displays are part of the data set. The data are also likely to be current
and can be obtained quickly. Finally, scanner panels with cable TV provide a highly controlled
testing environment. In scanner panels, each household member is given an ID card that can be
read by the electronic scanner at the cash register. The scanner panel member simply presents
the ID card at the checkout counter each time she or he shops. In this way, consumer identity is
linked to products purchased as well as the time and day of the shopping trip, and the firm can
build a shopping record for that individual. Alternatively, some firms provide handheld scanners
to panel members. These members scan their purchases once they are home. The Nielsen
Consumer Panel, called Homescan, is used to record the purchases of approximately 300,000
households throughout the world. The consumer scans the bar codes on purchases with a
handheld scanner, which records the price, promotions, and quantity of each item. The
 information in the handheld scanner is then transmitted to Nielsen through telephone lines.
Nielsen uses the information from the scanner and additional information gathered from the
consumer to determine such things as consumer demographics, quantity and frequency of
purchases, percentage of households purchasing, shopping trips and expenditures, price paid,
and usage information. Manufacturers and retailers use this information to better understand
the purchasing habits of consumers. The Boston Market example given in the “Overview”
section provided an illustration. According to Nielsen’s consumer panel data, 55 percent of
respondents purchased a meal for at-home consumption several times a month.32 An even
more advanced use of scanning, scanner panels with cable TV, combines scanner panels with
new technologies growing out of the cable TV industry. Households on these panels subscribe to
one of the cable TV systems in their market. By means of a cable TV “split,” the researcher
targets different commercials into the homes of the panel members. For example, half the
households may see test commercial A during the 6:00 P.M. newscast while the other half see
test commercial B. These panels allow researchers to conduct fairly controlled experiments in a
relatively natural environment. IRI’s BehaviorScan system contains such a panel. A major
weakness of scanner data is lack of representativeness. National volume tracking data may not
be projectable onto the total population, because only large supermarkets have scanners. Also,
certain types of outlets, such as food warehouses and mass merchandisers, are excluded.
Likewise, scanners have limited geographical dispersion and coverage. The quality of scanner
data may be limited by several factors. All products may not be scanned. For example, a clerk
may use the register to ring up a heavy item to avoid lifting it. If an item does not scan on the
first try, the clerk may key in the price and ignore the bar code. Sometimes a consumer
purchases many flavors of the same item, but the clerk scans only one package and then rings in
the number of purchases. Thus, the transaction is inaccurately recorded. With respect to
scanner panels, the system provides information on TV sets in use rather than actual viewing
behavior. Although scanner data provide behavioral and sales information, they do not provide
information on underlying attitudes, preferences, and reasons for specific choices.

Syndicated Data From Institutions

 Retailers & wholesalers audits: an audit is a formal examination & verification of product
movement traditionally carried out by auditors who make in-person visits to retail &
wholesale outlets & examine physical records or analyze inventory.

 Audit data focus on the products & services sold through outlets.

 Scanner data generated has greatly reduced the need to perform traditional audits.

 Wholesale audit services monitor warehouse withdrawals.

 Industry services: provides syndicated data about industrial firms, businesses, & other
institutions.

 Financial, operating & employment data are also collected.

  These data are collected by making direct inquiries, from clipping services that monitor
newspapers, the trade press or broadcast, & corporate reports.

 The range & sources of syndicated data available form industrial firms are more limited
than those available form consumer goods firms.

Primary Data: Qualitative Versus Quantitative Research

As was explained in Chapter 4, primary data are originated by the researcher for the specific purpose of
addressing the problem at hand. Primary data may be qualitative or quantitative in nature, as shown in
Figure 5.1. The distinction between qualitative and quantitative research

A Cla ssifica t ion of Ma r ket in g Resea r ch Da t a

Ma r ket in g Resea r ch Da t a

Seconda r y Da t a P r ima r y Da t a

Qua lit a t ive Da t a Qu a nt it a t ive Da t a

Descr ipt ive Cau sal

Su r vey Obser va t ion a l a n d Exper iment a l

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