Chapter Four

Managing Marketing Information to

Gain Customer Insights

Copyright © 2012 Pearson Education, Inc.  

Chapter 4- slide 1
Publishing as Prentice Hall
Developing Marketing Information
Marketing Research

Marketing research is the systematic design,

collection, analysis, and reporting of data
relevant to a specific marketing situation
facing an organization
Developing Marketing Information
Steps in the Marketing Research Process
 Developing Marketing Information
Marketing Research
Defining the Problem and Research
Exploratory research
Objectives
• The first step for any marketing research activity is to clearly identify
and define the problem you are trying to solve. You start by stating the
Descriptive research
marketing or business problem you need to address and for which you
need additional information to figure out a solution.

• Next, articulate the objectives for the research: What do you want to
Causal research
understand by the time the research project is completed? What
specific information, guidance, or recommendations need to come out
of the research in order to make it a worthwhile investment of the
organization’s time and money?
 Developing Marketing Information
Marketing Research
Developing the Research Plan

• Outlines sources of existing

data
• Spells out the specific
research approaches,
contact methods, sampling
plans, and instruments to
gather data
Developing Marketing Information
Marketing Research
Developing the Research Plan- Data Sources

Secondary data consists of information that

already exists somewhere, having been
collected for another purpose
Primary data consists of information
gathered for the special research plan
Developing Marketing Information
Secondary Data

Advantages Disadvantages

Cost Current

Speed Relevant

Could not get

Accuracy
data otherwise

Impartial
Developing Marketing Information
Marketing Research
Planning Primary Data
Collection
Research
approaches

Contact methods

Sampling plan

Research
instruments
Developing Marketing Information
Market Research
Research Approaches

Observational research involves gathering

primary data by observing relevant people,
actions, and situations
Developing Marketing Information
Market Research
Research Approaches

Survey research is the most widely used

method and is best for descriptive
information—knowledge, attitudes,
preferences, and buying behavior
 Developing Marketing Information
Market Research
Research Approaches

Experimental research is best for gathering

causal information—cause-and-effect
relationships
 Contact Methods

• Information can be collected by mail,

telephone, by personal interview or online.
 Developing Marketing Information
Marketing Research Strengths and
Weakness of Contact Methods
Mail Telephone Personal Online
Flexibility Poor Good Excellent Good
Quantity of data Good Fair Excellent Good
collected
Control of Excellent Fair Poor Fair
interviewer effects
Control of sample Fair Excellent Good Excellent

Speed of data Poor Excellent Good Excellent

collection
Response rate Poor Poor Good Good

Cost Good Fair Poor Excellent

 Marketing Research Strengths and
Weakness of Contact Methods
• • Telephone interviewing is one of the best
Mail questionnaires can be used to collect
large amounts of information at a low cost methods for gathering information quickly,
per respondent. and it provides greater flexibility than mail
questionnaires.
• Respondents may give more honest answers
• Interviewers can explain difficult questions
to more personal questions on a mail
questionnaire than to an unknown and, depending on the answers they receive,
interviewer in person or over the phone. skip some questions or probe on others.
Response rates tend to be higher than the
mail questionnaires.
• Mail surveys usually take longer to complete,
and the response rate—the number of
• However, with telephone interviewing, the
people returning completed questionnaires
—is often very low. cost per respondent is higher than with mail
or online questionnaires.
• Finally, the researcher often has little control
• The method introduces interviewer bias—
over the mail questionnaire sample. Even
with a good mailing list, it is hard to control the way interviewers talk, how they ask
whom at a particular address fills out the questions, and other differences that may
questionnaire affect respondents’ answers.

• Finally, in this age of do-not-call lists and

promotion-harassed consumers, potential
survey respondents are increasingly hanging
up on telephone interviewers rather than
talking with them.
• Personal interviewing takes two forms: individual
interviewing and group interviewing.
• Individual interviewing involves talking with people in
their homes or offices, on the street, or in shopping malls.
Such interviewing is flexible.

• Trained interviewers can guide interviews, explain difficult

questions, and explore issues as the situation requires.
They can show subjects actual products, advertisements,
or packages and observe reactions and behavior. However,
individual personal interviews may cost three to four
times as much as telephone interviews.
 Developing Marketing Information
Marketing Research
Contact Methods
Focus Groups
– Six to 10 people
– Trained moderator
– Challenges
• Expensive
• Difficult to generalize from small
group
• Consumers not always open and
honest
Developing Marketing Information
Marketing Research
Online Contact Methods

Internet Online
surveys panels

Online
Online
focus
experiments
groups
Developing Marketing Information
Marketing Research
Online Contact Methods

Advantages
• Low cost
• Speed
• Higher response rates
• Good for hard to reach
groups
 Developing Marketing Information
Marketing Research
Sampling Plan

Sample is a segment of the population

selected for marketing research to
represent the population as a whole
– Who is to be studied?
– How many people should be studied?
– How should the people be chosen?
 Marketing Research
Sampling Plan

• Probability sampling means that every

member of the target population has a
known chance of being included in the
sample.
• In non-probability sampling, the sample is
selected based on non-random criteria,
and not every member of the population
has a chance of being included.
 Developing Marketing Information
Marketing Research
Sampling Plan – Types of Samples
Probability Sample
Simple random sample Every member of the population has a known and equal
chance of selection
Stratified random The population is divided into mutually exclusive groups
sample and random samples are drawn from each group
Cluster (area) sample The population is divided into mutually exclusive groups
and the researcher draws a sample
Nonprobability Sample
Convenience sample The research selects the easiest population members
Judgment sample The researcher uses their judgment to select population
members
Quota sample The researcher finds and interviews a prescribed number
of people in each of several categories
Developing Marketing Information
Marketing Research
Research Instruments

Questionnaires
• Most common
• Administered in person, by phone,
or online
• Flexible
• Research must be careful with
wording and ordering of questions
 Developing Marketing Information
Marketing Research
Research Instruments—Questionnaires

• Closed-end questions include all possible

answers, and subjects make choices among
them
– Provide answers that are easier to interpret and
tabulate
• Open-end questions allow respondents to
answer in their own words
– Useful in exploratory research
 Questionnaire Do’s and Don’ts
• Ensure questions are free • Avoid negatives
of bias • Avoid hypothetical
• Make questions simple • Avoid words that could be
• Make questions specific misheard
• Avoid complicated words • Allow for “other” in fixed
• Avoid ambiguous words response questions
Question Types - Dichotomous

In arranging this trip, did you contact

any travel agent?
 Yes  No
Question Types – Multiple Choice
With whom are you traveling on this trip?
 No one
 Spouse
 Spouse and children
 Children only
 Business associates/friends/relatives
 An organized tour group
 Question Types – Likert Scale

Indicate your level of agreement with the

following statement: Small airlines
generally give better service than large
ones.
 Strongly disagree
 Disagree
 Neither agree nor disagree
 Agree
 Strongly agree
 Question Types –
Completely Unstructured
What is your opinion of electric cars?
 Quantitative research deals with numbers
and statistics, while qualitative research deals
with words and meanings. Quantitative
methods allow you to systematically measure
variables and test hypotheses.

Qualitative methods allow you to explore

concepts and experiences in more detail.
 Qualitative Research
Qualitative market research is often
aimed at increasing understanding of
consumers’ thoughts and feelings
toward brands.

Projective techniques are methods

that can be used by skilled
researchers to tap into participants’
deep motivations and attitudes.
Developing Marketing Information
Marketing Research
Research Instruments

Checkout
scanners

People Neuro-
meters marketing

Mechanical
devices
• Checkout scanners to record shoppers’
purchases.
• Other mechanical devices measure
subjects’ physical responses to marketing
offering. Eye cameras to study viewers’ eye
movement while watching ads-at what
point their eyes focus first
Developing Marketing Information
Marketing Research
Implementing the Research Plan
& Interpreting the findings

Collecting the information

Processing the information
Analyzing the information
Interpret findings
Draw conclusions
Report to management
 Marketing Research
Implementing the Research Plan
& Interpreting the findings

• The researcher next puts the marketing

research plan into action. This involves
collecting, processing, and analyzing the
information. Data collection can be carried
out by the company’s marketing research
staff or outside firms. Researchers should
watch closely to make sure that the plan is
implemented correctly.
 Marketing Research
Implementing the Research Plan
& Interpreting the findings
• Researchers must also process and analyze
the collected data to isolate important
information and insight. They need to check
data for accuracy and completeness and
code it for analysis. The researchers then
tabulate the results and compute statistical
measures.
 Advantages of Marketing Research
• It helps businesses strengthen their position.
Use market research to gain a better perspective and understanding of your
market or target audience and ensure that your firm stays ahead of the
competition.
• It minimizes any investment risk
Spending what is often only a small proportion of your investment on
researching and testing the market, product, concept or idea makes sound
business sense.
• It identifies potential threats and opportunities
• It helps to discover yours and your competitor’s strengths and weaknesses
• It helps in spotting emerging trends
• It focuses on customer needs and demands