CH 1

Chapter 1
Introduction and Early

Phases of Marketing
Research
Copyright © 2010 Pearson Education, Inc. 1-1

Chapter Outline
1) Overview
2) Definition of Marketing Research
3) A Classification of Marketing Research
4) Marketing Research Process
5) The Role of Marketing Research in

Marketing Decision Making
6) Marketing Research and Competitive

Intelligence
7) The Decision to Conduct Research

Chapter Outline
8) Marketing Research Suppliers and Services

9) Selecting a Research Supplier
10) Careers in Marketing Research
11) The Role of Marketing Research in MIS and DSS
12) The Department Store Project
13) International Marketing Research
14) Ethics in Marketing Research
15) Summary

Redefining Marketing Research
The American Marketing Association (AMA)

redefined Marketing Research as:
The function that links the consumer, the

customer, and public to the marketer
through INFORMATION

Redefining Marketing Research
Used to identify and

define market
opportunities and
problems
Generate, refine, and
evaluate marketing
performance
Monitor marketing
performance
Improve understanding
of marketing as a
process
Definition of Marketing Research
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

Market Research
• Specifies the information necessary to

address these issues
• Manages and implements the data

collection process
• Analyzes the results
• Communicates the findings and their

implications
• Helps managers use this information to

make decisions

Classification of Marketing Research
Problem-Identification Research
• Research undertaken to help identify problems which are
not necessarily apparent on the surface and yet exist or
are likely to arise in the future. Examples: market
potential, market share, image, market characteristics,
sales analysis, forecasting, and trends research.
Problem-Solving Research
• Research undertaken to help solve specific marketing
problems. Examples: segmentation, product, pricing,
promotion, and distribution research.

A Classification of Marketing Research
Fig. 1.1
Marketing Research
Problem Problem-Solving
Identification Research Research
Market Potential Research Segmentation Research

Market Share Research Product Research
Market Characteristics Research
Pricing Research
Sales Analysis Research
Forecasting Research Promotion Research
Business Trends Research Distribution Research
Table 1.1
SEGMENTATION RESEARCH
 Determine the basis of segmentation
 Establish market potential and
responsiveness for various
PRODUCT RESEARCH
segments
 Test concept
 Select target markets
 Determine optimal product design
 Create lifestyle profiles:
demography, media, and  Package tests
product image characteristics  Product modification
 Brand positioning and repositioning
 Test marketing
 Control score tests
Table 1.1 cont. PROMOTIONAL RESEARCH
0.00%
 Optimal promotional budget
APR
 Sales promotion relationship
 Optimal promotional mix
 Copy decisions
 Media decisions
 Creative advertising testing
PRICING RESEARCH  Evaluation of advertising effectiveness
 Pricing policies  Claim substantiation
 Importance of price in brand selection
 Product line pricing
 Price elasticity of demand $ALE
 Initiating and responding to price changes
Table 1.1 cont.

DISTRIBUTION RESEARCH
Determine…
 Types of distribution
 Attitudes of channel members
 Intensity of wholesale & resale coverage
 Channel margins
 Location of retail and wholesale outlets

What does marketing research do ?
Correctly Positioning New Products

Avoiding Product Formulation Errors
Chinese Formula
US Formula

Assessing Translation Errors
P&G Czech republic

Sensitivity to Geographical Differences

Identifying Appropriate Advertising Appeals
Coke ads in Latin America appeal to

greatest shoppers : women

Marketing Research Process
Step 1 : Problem Definition
Step 2 : Development of an Approach to the Problem
Step 3 : Research Design Formulation
Step 4 : Fieldwork or Data Collection
Step 5 : Data Preparation and Analysis
Step 6 : Report Preparation and Presentation

Marketing Research Process
Step 1: Defining the Problem
Step 2: Developing an Approach to the Problem
Step 3: Formulating a Research Design
Step 4: Doing Field Work or Collecting Data
Step 5: Preparing and Analyzing Data
Step 6: Preparing and Presenting the Report

The Role of Marketing Research
Fig. 1.2 Customer Groups

• Consumers
• Employees
• Shareholders
• Suppliers
Uncontrollable
Controllable Environmental
Marketing Factors
Variables
Marketing • Economy
• Product
Research • Technology
• Pricing
• Laws &
• Promotion Regulations
• Distribution • Social & Cultural
Assessing
Providing
Marketing Factors
Information Decision • Political Factors
Information
Needs Making
Marketing Managers
• Market Segmentation
•Target Market Selection
• Marketing Programs
• Performance & Control
Power Decisions’ Methodology
Fig. 1.3
Opportunity scan
Option generation
Solve Problem
Refine options
Decision
Client
Needs Find Seek Plan Act
Achieve Goal
Research Evaluate Market Advise

How We Clarify
Interpret Recommend Plan Assist
Decisions Analysis Facilitate
Help Research Execution

Figure 1.3 Marketing research suppliers
Research suppliers
Internal External
Full service Limited service
Market
research
Syndicated Customised
Online services reports and
service services
advisory
service
Coding
Softwar Online Online Blog
and Branded Panel
Field Analytica e communi focus and Reportin
data product provider
services l services provider ty groups and buzz g
entry services s
s providers streaming mining
services

Table 1.2 Top 50 U.S. Marketing Research Firms
U.S. Rank Organization Headquarters Website U.S. Global Non-U.S.
2007 2006
1 1 The Nielsen Co. New York nielsen.com $2,173.0 $4,220.0 48.5%
2 2 IMS Health Inc. Norwalk, Conn. imshealth.com 801.0 2,192.6 63.5
3 3 Kantar Group* Fairfield, Conn. kantargroup.com 526.8 1,551.4 66.0
4 5 Westat Inc. Rockville, MD westat.com 467.8 467.8 —
5 4 IRI Chicago infores.com 441.0 702.0 37.2
6 6 TNS U.S. New York tnsglobal.com 379.8 2,137.2 82.2
7 7 Arbitron Inc. New York arbitron.com 338.5 352.1 3.9
8 8 GfK AG USA Nuremberg, Germany gfk.com 319.7 1,603.00 80.1
9 9 Ipsos New York ipsos-na.com 281.2 1,270.30 77.9
10 10 Synovate London synovate.com 250.4 867.0 71.1
11 11 Maritz Research Fenton, Mo. maritzresearch.com 187.4 223.3 16.1
Westlake Village,
12 13 J.D. Power and Associates* Calif. jdpower.com 184.5 260.5 29.2
13 12 Harris Interactive Inc. Rochester, N.Y. harrisinteractive.com 161.0 227.0 29.1
14 14 The NPD Group Inc. Port Washington, N.Y. npd.com 160.4 211.1 24.0
Opinion Research/
15 — Guideline Group Omaha, Neb. infousa.com 124.7 206.7 39.7
15 Opinion Research Corp. Princeton, N.J. opinionresearch.com 97.5 179.5 45.7

Selected Marketing Research Career Descriptions
Fig. 1.5 cont.
Research Director
Vice President of Marketing
Research • Also part of senior
• Part of company’s top management management
team • Heads the development

and execution of all
• Directs company’s entire market
research projects
research operation
• Sets the goals & objectives of the
Assistant Director of Research
marketing research department
• Administrative assistant to director
• Supervises research staff members
Senior Project Manager

• Responsible for design, implementation, & research
projects
Selected Marketing Research Career Descriptions
Fig. 1.5 cont.

Senior Analyst
• Participates in the development of projects
• Carries out execution of assigned projects
• Coordinates the efforts of analyst, junior analyst, & other personnel in the
development of research design and data collection
• Prepares final report
Analyst Statistician/Data Processing

• Handles details in execution of • Serves as expert on theory and
project application on statistical techniques
• Designs & pretests questionnaires • Oversees experimental design, data
• Conducts preliminary analysis of data processing, and analysis
Junior Analyst Fieldwork Director

• Secondary data analysis •Handles selection, training,
• Edits and codes questionnaires supervision, and evaluation of
• Conducts preliminary analysis of data interviewers and field workers
Criteria for Selecting a Research Supplier
 What is the reputation of the supplier?

 Do they complete projects on schedule?
 Are they known for maintaining ethical standards?
 Are they flexible?
 Are their research projects of high quality?
 What kind and how much experience does the supplier
have? Has the firm had experience with projects similar
to this one?
 Do the supplier's personnel have both technical and
non-technical expertise?
 Can they communicate well with the client?
Competitive bids should be compared on the basis of

quality as well as price.

Careers in Marketing Research
• Career opportunities are available with marketing research

firms (e.g., AC Nielsen, Burke)
• Careers in business and non-business firms and agencies
with in-house marketing research departments (e.g., Procter
& Gamble, Coca-Cola, the Federal Trade Commission, United
States Census Bureau)
• Advertising agencies (e.g., BBDO International, Ogilvy &
Mather, J. Walter Thompson)
• Positions: VP of marketing research, research
director/assistant director, project manager, field work
director, statistician/data processing specialist, senior/junior
analyst, and supervisor

Preparation for a Career in Marketing Research
• Take all the marketing courses you can.
• Take courses in statistics and quantitative methods.
• Acquire Internet and computer skills. Knowledge of

programming languages is an added asset.
• Take courses in psychology and consumer behavior.
• Acquire effective written and verbal communication skills.
• Think creatively. Creativity and common sense command a

premium in marketing research.

Using researchers, even if they follow the marketing
research process , does not guarantee that a marketing
decision supported by that research will be successful.
The act of decision making and conducting marketing
research are distinctive activities and there are
examples where the vital link between these activities
has resulted in failure.
If decision-makers have gaps in their knowledge, if
they perceive risk and uncertainty in their decision
making and cannot find support at hand within their
organisation, they can gain support from marketing
research
There are two areas of misconception of the role of
marketing research:
1 Marketing research does not make decisions.
The role of marketing research is not to make
decisions. Rather, research replaces hunches,
impressions or a total lack of knowledge with
pertinent information.
2 Marketing research does not guarantee
success. Research, at best, can improve the
odds of making a correct decision. The real value
of research can be seen over a long period where
increasing the percentage of good decisions should
be manifested in improved bottom-line
performance.
Two reasons may explain why decision-makers
can make poor decisions when sound research
has been conducted:
1 Blind optimism/disbelief in research. Many
patently bad products have been launched
because marketing management did not believe
research findings.
2 Political pressures

Why decision-makers may reject research
findings.
Invalidity of research methods. If the decision-
maker suspects the accuracy or appropriateness
of the methods for the problem faced, lack of
confidence would lead to a rejection of findings.
Faulty communication. This would lead to the
findings being difficult to comprehend
or utilise, or being unconvincing.
Irrelevance. The decision-maker may see the
findings as irrelevant to the perceived marketing
problem

Overview of ethical issues in
marketing research
1 Problem definition
- Using surveys as a guise for selling or fundraising
- Personal agendas of the researcher or client
- Conducting unnecessary research.
2 Developing an approach
- Using findings and models developed for specific
clients or projects for other projects
- Soliciting proposals to gain research expertise
without pay
- Inaccurate reporting.
marketing research (Continued)
3 Research design
- Formulating a research design more suited to the researcher's
rather than the client's needs
- Using secondary data that are not applicable or have been
gathered through questionable means
- Disguising the purpose of the research
- Soliciting unfair concessions from the researcher
- Not maintaining anonymity of participants
- Disrespecting privacy of participants
- Misleading participants
- Disguising observation of participants
- Embarrassing or putting stress on participants
- Using measurement scales of questionable reliability and validity
- Designing overly long/sensitive questionnaires
- Using inappropriate sampling procedures and sample size.

marketing research (Continued)
4 Field work
- Increasing discomfort level of participants
- Following unacceptable field work procedures.
5 Data preparation and analysis

- Identifying and discarding unsatisfactory participants
- Using statistical techniques when the underlying
assumptions are violated
- Interpreting the results and making incorrect
conclusions and recommendations.
6 Report preparation and presentation

- Incomplete reporting
- Biased reporting
- Inaccurate reporting.
Marketing research associations
online
ESOMAR: European Society for Opinion and
Marketing Research (www.esomar.nl)
MRS: The Market Research Society (UK)
(www.marketresearch.org.uk)
ASC: The Association for Survey Computing
(www. asc.org.uk)
CASRO: The Council of American Survey Research
Organizations (www.casro.org)
MRSA: The Market Research Society of
Australia (www.mrsa.com.au)
PMRS: The Professional Marketing Research
Society (Canada) (www.pmrs-aprm.com)
AAPOR: American Association for Public Opinion Research
Copyright © 2010 Pearson Education, Inc. (www.aapor.org) 1-36
All rights reserved. No part of this publication may be
reproduced, stored in a retrieval system, or transmitted, in
any form or by any means, electronic, mechanical,
photocopying, recording, or otherwise, without the prior
written permission of the publisher. Printed in the United
States of America.
Copyright © 2010 Pearson Education, Inc.

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CH 1

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Chapter 1

Introduction and Early

Copyright © 2010 Pearson Education, Inc. 1-1

2) Definition of Marketing Research

3) A Classification of Marketing Research

4) Marketing Research Process

5) The Role of Marketing Research in

6) Marketing Research and Competitive

7) The Decision to Conduct Research

8) Marketing Research Suppliers and Services

Copyright © 2010 Pearson Education, Inc. 1-3

The American Marketing Association (AMA)

The function that links the consumer, the

Copyright © 2010 Pearson Education, Inc. 1-4

Used to identify and

Marketing research is the systematic and objective

Copyright © 2010 Pearson Education, Inc. 1-6

• Specifies the information necessary to

• Manages and implements the data

• Analyzes the results

• Communicates the findings and their

• Helps managers use this information to

Copyright © 2010 Pearson Education, Inc. 1-7

Copyright © 2010 Pearson Education, Inc. 1-8

Market Potential Research Segmentation Research

Table 1.1 cont. PROMOTIONAL RESEARCH

Table 1.1 cont.

Copyright © 2010 Pearson Education, Inc. 1-12

Correctly Positioning New Products

Copyright © 2010 Pearson Education, Inc. 1-13

Copyright © 2010 Pearson Education, Inc. 1-14

P&G Czech republic

Copyright © 2010 Pearson Education, Inc. 1-15

Copyright © 2010 Pearson Education, Inc. 1-16

Coke ads in Latin America appeal to

Copyright © 2010 Pearson Education, Inc. 1-17

Step 1 : Problem Definition

Step 2 : Development of an Approach to the Problem

Step 3 : Research Design Formulation

Step 4 : Fieldwork or Data Collection

Step 5 : Data Preparation and Analysis

Step 6 : Report Preparation and Presentation

Copyright © 2010 Pearson Education, Inc. 1-18

Step 1: Defining the Problem

Step 2: Developing an Approach to the Problem

Step 3: Formulating a Research Design

Step 4: Doing Field Work or Collecting Data

Step 5: Preparing and Analyzing Data

Step 6: Preparing and Presenting the Report

Copyright © 2010 Pearson Education, Inc. 1-19

Fig. 1.2 Customer Groups

Research Evaluate Market Advise

Copyright © 2010 Pearson Education, Inc. 1-21

Full service Limited service

Copyright © 2010 Pearson Education, Inc. 1-22

1 1 The Nielsen Co. New York nielsen.com $2,173.0 $4,220.0 48.5%

2 2 IMS Health Inc. Norwalk, Conn. imshealth.com 801.0 2,192.6 63.5

3 3 Kantar Group* Fairfield, Conn. kantargroup.com 526.8 1,551.4 66.0

4 5 Westat Inc. Rockville, MD westat.com 467.8 467.8 —

5 4 IRI Chicago infores.com 441.0 702.0 37.2

6 6 TNS U.S. New York tnsglobal.com 379.8 2,137.2 82.2

7 7 Arbitron Inc. New York arbitron.com 338.5 352.1 3.9

8 8 GfK AG USA Nuremberg, Germany gfk.com 319.7 1,603.00 80.1