Chapter 1

Introduction and Early

Phases of Marketing
Research

© 2013 Prentice Hall 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

© 2013 Prentice Hall 1-2

 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

© 2013 Prentice Hall 1-3

 Redefining Marketing Research

The American Marketing Association (AMA)

redefined Marketing Research as:

The motto of every researcher should be

“Find it tell it, like it is”

© 2013 Prentice Hall 1-4

 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
© 2013 Prentice Hall 1-5
 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.

© 2013 Prentice Hall 1-6

 What Market Research Does?
 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

© 2013 Prentice Hall 1-7

 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.

© 2013 Prentice Hall 1-8

 A Classification of Marketing Research
Fig. 1.1
Marketing Research

Problem Problem-Solving
Identification Research Research

Market Potential Research Segmentation Research

Market Share Research
Market Characteristics Research Product Research
Sales Analysis Research Pricing Research
Forecasting Research Promotion Research
Business Trends Research
Distribution Research
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2013 Prentice EXAMINATION 1-9
 Problem-Solving Research
Table 1.1

SEGMENTATION RESEARCH
 Determine the basis of segmentation
 Establish market potential and
PRODUCT RESEARCH
responsiveness for various
 Test concept
segments
 Select target markets
 Determine optimal product design
 Create lifestyle profiles:
 Package tests
demography, media, and  Product modification
product image characteristics
 Brand positioning and repositioning
 Test marketing
 Control score tests
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2013 Prentice EXAMINATION 1-10
 Problem-Solving Research
Table 1.1 cont. PROMOTIONAL RESEARCH
Optimal promotional budget
0.00%

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
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2013 Prentice EXAMINATION 1-11
 Problem-Solving Research
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

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2013 Prentice EXAMINATION 1-12
 Research Process
Research process can be seen as consisting of six
sequential steps which are interdependent and iterative

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

© 2013 Prentice Hall 1-13

 Problem Definition
Researcher must take into account:
 the purpose of the study, the background
information, the information needed, and how it
will be used in decision making.

Problem definition also involves:

 Discussions with decision makers (DMs),
 Interviews with industry experts,
 Analysis of secondary data, and
 Qualitative research like focus groups.

© 2013 Prentice Hall 1-14

 Development of an Approach

This step includes formulating:

 An objective or theoretical framework,
 Analytical models,
 Research questions and hypotheses, and
 Identifying the information needed.

This process is guided by discussions with management,

industry experts, analysis of secondary data, qualitative
research, and pragmatic considerations

© 2013 Prentice Hall 1-15

 Research Design Formulation
A research design is a framework or blueprint for
conducting the MR project which:
 details the procedures for conducting research
 involves the following steps:
– Definition of the information needed
– Secondary data analysis
– Qualitative research
– Methods of collecting quantitative data
– Measurement and scaling procedures
– Questionnaire design
– Sampling process and sample size
– Plan of data analysis
© 2013 Prentice Hall 1-16
 Fieldwork or Data collection

Collecting data from field or from office, through

personal interview, by phone, through mail and
mail panel surveys with pre-recruited households
or electronically
 Proper selection, training, supervision, and
evaluation of the field force help minimize data
collection errors

© 2013 Prentice Hall 1-17

 Data Preparation and Analysis

Data preparation includes editing, coding,

transcription, and verification of data.
 Number or letter codes are assigned to represent
each response to each question
 Data are analyzed to derive relevant information

© 2013 Prentice Hall 1-18

 Report Preparation and Presentation

Entire project is documented in a report which:

 identifies research questions identified,
 describes the approach, research design, data
collection, data collection and analysis procedures,
 presents the results and findings

Findings are presented in a comprehensible

format
Oral presentation can be made

© 2013 Prentice Hall 1-19

 The Role of Marketing Research
 Marketing focuses on identification and satisfaction
of needs
 To determine needs and implement marketing
strategies aimed at satisfying those needs, marketers
need information
 Marketers need more and better information:
» on distant markets due to global business
» on product offerings to respond to affluent and sophisticated
consumers
» on effectiveness of their marketing tools due to acute
competition
» on environment changes (timely information)

© 2013 Prentice Hall 1-20

 The Role of Marketing Research

The task of marketing research is to

 assess the information needs and
 provide management with relevant, accurate,
reliable, valid, current, and actionable information

Sound decision making should not be based on gut

feeling, intuition or even pure judgment

© 2013 Prentice Hall 1-21

 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 Marketing Factors
Providing
Information Information Decision • Political Factors
Needs Making

Marketing Managers
• Opportunity identification
•Market Segmentation
•Target Market Selection
• Marketing Programs

• Performance & Control

© 2013 Prentice Hall 1-22

 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

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2013 Prentice EXAMINATION 1-23
 Marketing Research and
Competitive Intelligence
CI is the process of enhancing marketplace
competitiveness through a greater understanding
of a firm’s competitors and the competitive
environment
 CI involves the legal collection and analysis of
information regarding the capabilities, vulnerabilities,
and intentions of competitors by using information
databases and other open-sources
 CI is a crucial part of emerging knowledge economy

© 2013 Prentice Hall 1-24

 The Decision to Conduct
Marketing Research
The decision to conduct MR should be guided
by:
 The costs versus the benefits
 The resources available to conduct the research
 The resources available to implement the research
findings
 Management’s attitude toward research
 Availability of the information needs
 Time frames

© 2013 Prentice Hall 1-25

 Organizational Chart for VNU
Fig. 1.4
Executive Board
Corporate Staff

Marketing Media Measurement Business

& Information Directories
Information Information
ACNielsen Nielsen Media Research VNU Business Golden Pages
VNU Advisory Nielsen/Net Ratings Publications Gouden Gids
Services Nielsen Film VNU emedia & Paginas Amarelas
BASES Entertainment Information Marketing Paglni Auril
Claritas Nielsen Home VNU Expositions Promedia
Spectra Entertainment VNU Exhibitions Europe Telkom Directory
Market Decisions Nielsen Music Verizon Puerto Rico
Nielsen Book
Nielsen Entertainment Intel
IMS
PERO/HIC
Scarborough
SRDS
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2013 Prentice EXAMINATION 1-26
 Marketing Research Suppliers & Services
Fig. 1.5

RESEARCH
INTERNAL EXTERNAL
SUPPLIERS

FULL SERVICE LIMITED SERVICE

Field Other
Internet Services
Syndicate Services
Services
Services
Customized
Focus Groups Technical
Services
and and
Qualitative Analytical
Services Services
© 2013 Prentice Hall 1-27
 Selected Marketing Research
Career Descriptions
Fig. 1.6
Vice President of Marketing Research: The senior position in
marketing research. The vice president (VP) is responsible for the
entire marketing research operation of the company and serves on
the top management team. This person sets the objectives and goals
of the marketing research department.
Research Director: Also a senior position. The research director has
the general responsibility for the development and execution of all
the marketing research projects.
Assistant Director of Research: Serves as an administrative assistant
to the director and supervises some of the other marketing research
staff members.
(Senior) Project Manager: Has overall responsibility for design,
implementation, and management of research projects.
Statistician/Data Processing Specialist: Serves as an expert on
theory and application of statistical techniques. Responsibilities
include experimental design, data processing, and analysis.
©NOT FOR Hall
2013 Prentice EXAMINATION 1-28
 Selected Marketing Research Career
Descriptions
Fig. 1.6 cont.
Research Director
Vice President of Marketing
Research • Also part of senior
• Part of company’s top management

management team • Heads the

development and
• Directs company’s entire market execution of all
research operation research projects
• 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

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2013 Prentice EXAMINATION 1-29
 Selected Marketing Research
Career
Fig. 1.6 cont.
Descriptions
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

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2013 Prentice EXAMINATION 1-30
 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.
© 2013 Prentice Hall 1-31
 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.
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2013 Prentice EXAMINATION 1-32
 A Sample of Marketing Research Jobs

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2013 Prentice EXAMINATION 1-33
 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.

© 2013 Prentice Hall 1-34

 The Role of Marketing Research in
MIS and DSS
 MIS is a set of formalized procedures for
generating, analyzing, storing, and distributing
pertinent information to marketing decision
makers on an ongoing basis
 DSS is a set of computerized information systems
for generating, analyzing, storing, and distributing
pertinent information to marketing decision
makers on an ongoing basis

© 2013 Prentice Hall 1-35

 The Role of Marketing Research in
MIS and DSS
 MR is a part of MIS or DSS
– MIS collects information from MR and other sources like
internal records, marketing intelligence.
 MR provides information on an ad hoc basis and
less information than does MIS
 DSS enable decision makers to interact directly
with databases and analysis models
– DSS are integrated systems including hardware, database,
softwarebase, communication network

© 2013 Prentice Hall 1-36

 Management Information Systems
Vs. Decision Support Systems
Fig. 1.7

MIS DSS

1. Structured Problems 1. Unstructured Problems

2. Use of Reports 2. Use of Models

3. Rigid Structure 3. User Friendly Interaction

4. Information Displaying 4. Adaptability

Restricted
5. Can Improve Decision
5. Can Improve Decision Making Making by Using “What if”
by Clarifying Data Analysis

© 2013 Prentice Hall 1-37

 The Department Store Project
The following information was solicited:
1. Familiarity with the ten department stores.
2. Frequency with which household members shopped at each
of the ten stores.
3. Relative importance attached to each of the eight factors of
the choice criteria.
4. Evaluation of the ten stores on each of the eight factors of
the choice criteria.
5. Preference ratings for each store.
6. Rankings of the ten stores (from most preferred to least
preferred).
7. Degree of agreement with 21 lifestyle statements.
8. Standard demographic characteristics (age, education, etc.)
9. Name, address, and telephone number.
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2013 Prentice EXAMINATION 1-38
 Marketing Research Associations Online
Domestic
AAPOR : American Association for Public Opinion Research
(www.aapor.org)
AMA : American Marketing Association (www.ama.org)
ARF : The Advertising Research Foundation
(www.amic.com/arf)
CASRO : The Council of American Survey Research
Organizations (www.casro.org)
MRA : Marketing Research Association (www.mra-net.org)
QRCA : Qualitative Research Consultants Association
(www.qrca.org)
RIC : Research Industry Coalition
(www.researchindustry.org)
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2013 Prentice EXAMINATION 1-39
 Marketing Research Associations Online

International

ESOMAR: European Society for Opinion and Marketing

Research (www.esomar.nl)

MRS: The Market Research Society (UK)

(www.marketresearch.org.uk)

MRSA: The Market Research Society of

Australia (www.mrsa.com.au)

PMRS: The Professional Marketing Research Society

(Canada) (www.pmrs-aprm.com)

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2013 Prentice EXAMINATION 1-40
 Overview of Ethical Issues in Marketing Research

Table 1.3
I Problem definition
- Using surveys as a guise for selling or fundraising
- Personal agendas of the researcher or client
- Conducting unnecessary research

II 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

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2013 Prentice EXAMINATION 1-41
 Overview of Ethical Issues in Marketing Research (Cont.)
Table 1.3 cont.

III 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 respondents
- Disrespecting privacy of respondents
- Misleading respondents
- Disguising observation of respondents
- Embarrassing or putting stress on respondents
- Using measurement scales of questionable reliability & validity
- Designing overly long/sensitive questionnaires
- Using inappropriate sampling procedures and sample size
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2013 Prentice EXAMINATION 1-42
 Overview of Ethical Issues in Marketing Research

Table 1.3 cont.

IV Field Work
- Increasing discomfort level of respondents
- Following unacceptable field work procedures

V Data Preparation and Analysis

- Identifying and discarding unsatisfactory respondents
- Using statistical techniques when the underlying
assumptions are violated
- Interpreting the results and making incorrect
conclusions and recommendations

VI Report Preparation and Presentation

- Incomplete reporting
- Biased reporting
- Inaccurate reporting
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2013 Prentice EXAMINATION 1-43
© 2013 Prentice Hall 1-44
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