THE IMPORTANCE OF MARKETING RESEARCH

Marketing Research is the act of collecting, interpreting, and reporting information concerning a
clearly defined marketing problem. It helps companies understand and satisfy the needs and wants
of customers.

 In our globalised world and shorter product life cycles today, companies need accurate
information to reduce risk and make good decisions.
 Companies need to act on timely information so as to beat competitors

How Does Marketing Research Determine Marketing Mix?

1. Product: Products must be developed based on real customer needs and wants
2. Price: Pricing requires analysis of the size of the potential market and effects of price
changes on demand.
a. Demand Analysis - research used to estimate how much customer demand there is
for a product and to understand the factors driving the demand
3. Place: Decision regarding distribution must be made using Sales Forecasting
a. Sales Forecasting - research that estimates how much of a product will sell over a
given period of time
i. Help companies determine how much inventory to hold in various points in
the distribution network
4. Promotion: Should be evaluated based on their effectiveness
a. Advertising Effectiveness Studies – Measures how well an advertising campaign
meets marketing objectives
b. Sales Tracking – Following changes in sales during and after promotional programs
to see how marketing efforts affect sales

THE MARKETING RESEARCH PROCESS

Problem Plan Data

Data Analysis Taking Action
Definition Development Collection

Step 1: Problem Definition

1. Clarify the exact nature of the problem

2. Set specific and measurable research objectives

Step 2: Plan Development

1. Identify the specific type of research to be used

o Almost all research starts with the development of a hypothesis
o Hypothesis is an educated guess based on previous knowledge or research about
the cause of the problem under investigation

Type of When Used How Type of Hypothesis

Research Conducted
Explorator Typically when information is limited, Interviews Questions designed
y such as when a firm enters a new and/or to gain broad
market observations understanding
To discover new insights
Descriptive For situations where specifics of a Surveys Multiple and specific
 market are not well defined (i.e Who, and/or focus questions to gain
What, When, Where, How) groups specific
understanding
Causal Used in situations where clarifying Experiments, Questions that
what caused an action to happen often in a assess why
To understand the cause-and-effect store setting something happens
relationships among variables
2. Identify what sampling methods to be used
Sampling is the process of selecting a subset of the population that is representative of the
whole target population
o Probability Sampling ensures that every person in the target population has a
chance of being selected, and the probability of each person being selected is known
o Simple Random Sampling – everyone in the target population has a chance
of being selected
o Stratified Random – By age group
o Cluster Random – By geographic regions
o Nonprobability Sampling (may lead to sampling biasness) does not attempt to
ensure that every member of the target population has a chance of being selected
(contains an element of judgement)
o Judgement Method – Based on interviewer’s judgement on who to
approach to interview
o Quota Sampling – Firms choose participants based on selection criteria such
as demographics
o Snowball Sampling – Firms select participants based on referral of other
participants

Step 3: Data Collection

1. Primary Data Collection

Primary Data Collection is when researchers collect data specifically for the research
problem at hand (Requires more time and money than secondary data, but provides a better
understanding of customers)

o Qualitative Research – in-depth, open-ended examination of a small sample size

o Primarily used for exploratory and descriptive research
o Helps provide researchers a great deal of insight but they don’t allow
researchers to draw generalised conclusions about the larger consumer
population
o Interviews (usually 1 to 1)
 Time consuming
 Researcher asks participants open-ended questions to find out how
the participant feels
 Requires an experienced researcher
o Focus Groups (usually 8 to 12 people at one time)
 Led by an experienced moderator
 Participants interact and discuss about a particular topic or concept
 Hawthorne Effect  People behaving different as they are being
watched
 o Quantitative Research – asking a smaller number of specific and measurable
questions to significantly larger sample size
o Primarily used for descriptive and causal research
o Surveys/Questionnaires
 Pose a sequence of questions to respondents
 Obtain answers to who, what, where, when, how from different
types of questions
 Can be easily administered
o Experiments
 Procedures undertaken to test a hypothesis
 Allows researchers to control the research variables
 Used to find out how the change in an independent variable will
affect a dependent variable
o Mathematical Modelling
 Using equations to model the relationship between variables

2. Secondary Data

Secondary Data is data that has been collected for purposes other than answering the firm’s
particular research question (Much less expensive than primary data, but may not shed light on the
specific nuances of a firm’s particular problem)

o Internal
o Data collected by the company (eg. Sales by product, information from loyalty cards,
previous research reports, etc)
o External
 o Data collected from many sources (eg. Census Bureau, Academic Journals, Business
Publications, etc)

Difference Between Primary and Secondary Data

Step 4: Data Analysis

The purpose of data analysis is to convert data collected in Step 3 into information the firm can use
to answer the question or solve the marketing problem it identified

1. Analysing Qualitative Data

o Qualitative research usually results in a great quantity of textual or media data (as
there is no pre-determined options for respondents)
o Coding is the process of assigning a word, phrase, or number to a selected portion
of data so that it can later be easily sorted and summarised
2. Analysing Quantitative Data
o Uses statistical analysis – the mathematical classification, organisation, presentation,
and interpretation of numerical data
o Descriptive Statistics
o Used to describe characteristics of the research data and study sample
o Most straightforward way to tell a story about data, but will miss out the
specifics/reasoning behind the data
o Inferential Statistics
o Used to make inferences about a large group of people from a smaller
sample
o Can be used to explore:
 Differences between 2 groups of people
 Relationships between variables
o Validity of the data will determine how reliable and useful the analysis is
Step 5: Taking Action

1. Formal Reports and Presentation of Finding to Decision-Makers

o The report should allow the marketing manager to solve the marketing problem or
provide answers to the marketing manager’s questions
o Should include the limitations of the research

MARKETING RESEARCH DATA

Data are facts or measurements of things or events (building blocks of research)

o Qualitative Data  Interview transcripts, video recordings of focus groups, field notes, etc
o Quantitative Data  Collection of filled-up questionnaires, or spreadsheet with thousands of
rows and columns of responses to an online survey, etc

Information is the result of formatting or structuring data to explain a given phenomenon (define
the relationship between 2 or more variables) – result of data analysis

o Qualitative Information  Theory about consumer behaviour or insights about why certain
customers make their choices they do when they shop
o Quantitative Information  Presented in forms of charts/tables

Primary VS Secondary Data

Secondary Data

Secondary Data are data that have been collected for purposes other than answering the firm’s
particular research question

o Internal  Marketing input data, Marketing outcome data

o External  Government, Organisaitons, Universities

Secondary data is less expensive and easier to access than primary data, but the data collected is for
another purpose and may not shed light on the specific problem identified

Primary Data
Primary Data are data that are collected specifically for the research problem at hand

o Interviews, focus groups, observations, video recordings, questionnaires, surveys,

experiments

Primary Data requires more time and money to gather, but will provide a more firm and problem
specific information to the marketer

EXPERIMENTAL RESEARCH IN MARKETING RESEARCH

There are many different variables that will affect an experiment, therefore it is difficult to
determine the cause and effect of just 2 variables.

Independent and Dependent Variables

Experimental research means investigating how a change in an independent variable (the causal
variable in a study controlled by the researcher to influence changes in another variable) might
cause changes in one or more dependent variables (the test or outcome variable in a study that is
influenced by changes in another variable)
Research Considerations

Experimental Conditions are the set of inputs (independent variables) presented to different groups
of participants

Extraneous Variable – anything that could influence the results of an experiment that the researches
are not intentionally studying

Experimental Manipulation – the intentional change that the researcher makes to the independent
variable

Internal Validity – the extent to which changes in the outcome variable were actually caused by
manipulations of the independent variable conditions

o Higher internal validity = more faith in the cause-and-effect relationship

External Validity – the extent to which the results of the experiment can be generalised beyond the
study sample of subjects

o Higher external validity = more likely the cause-and-effect relationship in experiment will be
related to real-life scenarios

Laboratory Experiment  High internal validity, low external validity

Field Experiment  Low internal validity, high external validity

THE IMPORTANCE OF COMPETITORS AND CONSUMERS IN MARKETING RESEARCH

Another important component of marketing research involves gathering data about what
competitors are doing in the marketplace

Competitor Intelligence  gathering data about what strategies direct and indirect competitors are
pursuing in terms of new product development and the marketing mix

o Allow companies to respond in a way that blunts the effects of competitor’s actions
o Can be obtain through competitor’s activities such as trade shows, social media,
conferences, etc
o Can be obtained illegally and unethically as well!

MARKETING RESEARCH VS MARKETING ANALYTICS

1. Marketing research and marketing analytics work hand in hand, but they are not the same
thing
2. Marketing research is an iterative process that gathers data to answer a clearly defined
research question. Marketing analytics focuses on the data collected by marketing
researchers and how that data can be used
3. Marketing analytics helps firms identify purchasing patterns; data mining is one method that
firms use to explore and interpret these data
4. Marketing analytics helps firm identify and interpret the relationship among multiple sets of
data with statistical modelling
MARKETING RESEARCH ETHICS

QUESTIONNAIRE DESIGN

Pitfalls of Questionnaire Wording

Sequence and Layout Decisions

LECTURE 4 READINGS

Reading 1: Marketing Analyst VS Data Scientist: What’s The Main Difference?

https://consultyasser.com/marketing-analysts-vs-data-scientists-what-difference/

Marketing analytics have a huge potential for connecting the dots between data and marketing
activities inside all times of orgnaisations

Marketing analytics is not only limited to sales data but also connected with customer support,
business automation and financial department.

The main two roles in marketing data

Marketing requires 2 roles of data – Marketing Analyst and Data Scientist

 Marketing Analyst  To dominate the marketing analytics

 Data Scientist Operate the company data aggregation

The key difference between Marketing Analyst and Data Scientist

Marketing Analyst should be a native marketing-speaker with professional skills in driving insights to
answer the marketer’s needs

Data Scientist is a native data-speaker with skills in deriving Business Intelliegence and analytics
insights from structured and unstructured data sources
 Main differences between Marketing Analyst and Data Scientist

1. Marketing Analyst should have a solid experience with marketing metrics, while it is not
required in data scientist role
2. Data Scientist is expected to formulate the critical questions that will help the business and
then use the data to solve it, while Marketing Analyst is given questions by the marketing
team and pursue a solution with that guidance
3. Marketing Analyst not required to be advanced in programming while Data Scientist should
be professional in writing queries. Both roles work with IT teams to source the right data.
4. Data Scientist role requires a strong data visualisation skill and the ability to convert data
into a business story. A Marketing Analyst is more focused on analysing the marketing
metrics.
5. Data Scientist usually work in a multidirectional and free form in order to extract better
insights, whiles Marketing Analyst usually has a specific direction to work on.

*Marketing Metrics = Measurable values used by marketing teams to demonstrate the effectiveness
of campaigns across all marketing channels

Defining the Marketing Analyst Role

Marketing analysts should be very solid in understanding the function of marketing and its
objectives.

Objectives of Marketing Analyst

 Measure the effectiveness of marketing activities and the online ROI, of various marketing channels
used to position a product or service. Given the increasing variety and complexity of marketing
channels reaching this objective is a serious challenge.
 Bring the data analytics into the heart of all marketing campaigns and tools while setting up the
most effective metrics to measure and trends to manage.
 Turn insights and data patterns into clear indicators and tactics for growth hacking, budget
allocation, and performance management.
 Maintain a reliable and effective connection between the marketing specialists needs and data
scientist reports.

Who is the best Marketing Analyst?

 A native marketer who knows how to play professionally with marketing technology tools and
marketing metrics.
 A scientifically minded person with an appreciation for design. He needs to know the effect of
messaging and design on the consumer experience.
 Analysts by the heart who dominate the dashboards and he have charts ready even for his grocery
shopping habits and his girlfriend mood swing.
 He knows that insights are more important than figures. He loves the data in front of him but he is
more in love with knowing the consumer.
 He is the honest guy who never takes any sides. Neither marketing performance team nor data
team.

Technical Skills for Marketing Analyst

 Strong analytical, conceptual and reasoning skills

 Professional skills in Web Analytics, Marketing clouds, AdTech, and Automation
 Experience with Statistical Software, Business Intelligence Platforms, and Data Visualization
 Intermediate experience with programming language and database querying
 Experience with market research, segment analysis, consumer behavior and marketing channels

Defining the Data Scientist Role in Marketing Department

Business Savvy is the main asset desired in a marketing data scientist

Who is the Best Data Scientist?

 Tech-savvy with different programming languages and statistics capabilities.

 A scientist who applies statistical tools, economic tools, and different disciplines is another facet.
 A coder who aggregate and clean data in the most efficient possible ways with ability to invent new
algorithms to solve problems and build new tools to automate work or provide real-time reporting
system
 He is an expert in interpreting the visual display of complex data sets and tells a story.
 He is sophisticated with analytics programs, machine learning, and statistical methods and quick
with preparing data for use in predictive and prescriptive modeling
 Without asking he is always busy with conducting undirected research, exploring and examining
data from a variety of angles to determine hidden weaknesses, trends and/or opportunities
 He speaks the language of IT and able to communicate requirements and predictions to IT
departments through effective data visualizations and reports

Technical Skills

 Expert in Math (linear algebra, calculus, and probability), Statistics (hypothesis testing and summary
statistics), Data visualization (Tableau, Power BI, SAP Analytic Cloud) and reporting techniques
 Professional with Software engineering skills, Data mining, Data cleaning and munging
 Professional skills in programming (R, SQL databases, Python or C/C++)
 Professional with BigQuery, DynamoDB and cloud computing tools
 Experience with ML tools and techniques (k-nearest neighbors, random forests, ensemble methods)

Collaboration Between Marketing Analyst and Data Scientist

aAmarketing analyst is solid at creating relations between data and marketing needs while data
scientist is the true advocate in bringing the data and advanced statistics and bring the most reliable,
clean, fastest results to the table

Be Careful With Data

If you make a mistake with the underlying data, that could be a big problem while you analyze.

Reading 2: A Day in the Life of a Marketing Analytics Professional

https://towardsdatascience.com/a-day-in-the-life-of-a-marketing-analytics-professional-
83dd45f2e702

CLASS PARTICIPATION VIDEO (OKCupid)

OkCupid’s Matching Algorithm  Help the company decide if 2 people should go on a date based on
the data collected from the users

Algorithm  Systematic step by step way to solve a problem, breaking human attraction into
components where a computer can work with

In order to make use of the algorithm, the company needs data.

- They ask the users simple and complex questions to find out more about them
- They match users answers to see if they are compatible
 Eg. Both users love horror movies
 Eg. One user like to be centre of attraction, while other user don’t like to be
centre of attraction

Not all questions are given equal weightage

- For all the common questions, the algorithm makes use of 3 different questions to
determine weightage
 Your own answer
 How you like someone else to answer
 How important is the question to you (Assign numeric values to this
question)
 Irrelevant = 0, Little Important = 1, Somewhat Important = 10. Very
Important = 50, Mandatory = 250
- This helps form the users data and try to match them with other user’s data

Now that you know how OKCupid programs the algorithm, what do you think OKCupid needed to
know to develop that algorithm?

OkCupid needs to find out more about their users. Information such as demographics, and where
the general area the person is stay, etc. More importantly, the company must understand what
individual users’ value in a relationship. By having this information, the company is then able to
make use of the algorithm that it has designed to match people based on what they value in a
relationship. Without the raw data provided by the users, the algorithm cannot match people.
Ask for their permission and consent.

1) Data analytics is an important function in marketing as it provides insights to marketers, who can
then go on and design better marketing strategies. However, there is a growing concern on how the
data collected is used and companies should address this issue. 2) Survey questions should be
specific and not confusing so that respondents can give their proper responses.