Lecture 1

Ch. 1. Introduction/Overview
January 27th, 2022
Agenda for lecture
1. “Big picture” considerations
• What market research is
• The assumption of science: Objectivity
• Why we do research
• Human biases
2. Steps in the research process
What is marketing research? 3 related perspectives
• “A business function, linking the consumer, customer, and public to the
marketer through information” (American Marketing Association definition)
• Key perspective: gathering information, knowledge for its own sake
• The planning, collection, and analysis of data relevant to marketing
decision-making and the communication of insights to management. (textbook
definition)
• Key perspective: using data to make insights, to make educated decisions
• Using the scientific method to discover principles or patterns in the
marketplace, which is done to improve decision-making (applied research) or for
the purposes of basic discovery (basic research) (Dr. Caprariello’s definition)
• Key perspective: using the scientific method for basic or applied reasons
 The starting assumption: Objectivity
Assume that there is a reality that is “out there,” that exists independently of you
or your perception of that reality.
In this case, you are the subject (with a “subjective” perception of the world) and
the world consists of objects (with “objective” truths about their existence,
independently of your perceptions). From this postulate, two principles follow:
1. We as perceivers can never fully know objective reality, only estimate its forms.
• We can be simultaneously correct and incorrect in our conclusions. (blind men & elephant)
2. We must use objective tools to know objective reality. (scientific method)
• We as perceivers are limited by our subjectivity.
 Why do we do research? The three functions
1. Descriptive: gather facts about objective reality
• We want to understand what’s going on “out there,” as objectively as possible.
• One way to do that: take measurements and report.
2. Diagnostic: explain what’s going on beneath the surface
• We want to explain what’s going on “out there.” Why is this happening?
• Similar to a doctor diagnosing the cause of a patient’s symptoms.
• Goal: test theories, identify mechanisms, understand the process
3. Predictive: predict trajectories of things, or of ourselves
• We want to predict and control what’s going on “out there.”
• We can also make educated forecasts, to minimize risk.
• Ex: Your SAT score is X and your HS GPA is Y. Should SBU admit you?
• Ex: You are a prisoner. Here are five facts about you: x, y, z, a, b. Should you be released early?
• Ex: A firm with properties x, y, and z, is in market M, competing against firms A, B, and C. Should
you invest in them?
Why do we need research to do these things?
• The short answer: the scientific method provides one way of knowing
the truth about the world.
• The guarantee of the scientific method is that we uncover an objective reality.
• Is there evidence that our perception of the world is colored by cognitive
limitations?
• Example #1: Survivorship bias
• Example #2: Confirmation bias
• Example #3: Anchoring and adjustment bias
The lesson from the survivorship bias
• Our brains tend to draw conclusions from limited samples of stimuli
that do not necessarily represent reality.
The lesson from the confirmation bias
• Our brains tend to draw conclusions in ways that confirm what we
already know, rather than actively seek to disconfirm.
The lesson from anchoring & adjustment
• Our brains tend to draw biased conclusions, using the influence of
recently activated information.
In sum
• Our senses and experiences help us to understand the world. But our
subjective reality is prone to errors.
• The biases I gave as examples are just a few of many. But they illustrate
important points.
• Survivorship bias: the importance of sampling considerations.
• Confirmation bias: the importance of seeking disconfirmation, and not just confirmation
of what we already believe to be true.
• Anchoring and adjustment: the importance of objective, precise measurement.
• The scientific method allows us to observe the world in a more
objective way. The next steps:
1. define the problem
2. work through the steps of the research process
 Steps in the research process (teasing the semester)
8. We can ignore.

7. We can ignore.
2. Descriptive
research? Or causal?

6. Final third of the course 3. Survey? Observation?

Experiment?

5. Online? In-person? With 4. Probability sample? Or

incentive to participate? nonprobability sample?