Ch10.pdf

April 6th, 2022

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Chapter 10

Marketing Research

Learning Objectives

Learning Objective 10.1 Identify the five steps in the marketing research process.

Learning Objective 10.2 Describe the various secondary data sources.

Learning Objective 10.3 Describe the various primary data collection techniques.

Learning Objective 10.4 Summarize the differences between secondary research and primary research.

Learning Objective 10.5 Identify the 5 Vs of big data.

Learning Objective 10.6 Examine the characteristics of marketing analytics.

Learning Objective 10.7 Examine the circumstances in which collecting information on consumers is ethical.

Marketing Research

Exhibit 10.1: The Marketing Research Process

Access the text alternative for slide images.

Step 1: Defining Objectives and Research Needs

What information is needed to answer specific

research questions?

How should that information be obtained?

Step 2: Designing the Research

Determine type

of research

needed to obtain

data.

Identify type of

data needed.

Shutterstock / Gorodenkoff 7

Step 3: Collecting the Data

Secondary Data

• Collected prior to the start of the research project.

• External as well as internal data sources.

Primary Data

• Collected to address specific research needs.

• Examples: focus groups, in-depth interviews, surveys.

• Sample: Choose a group of customers who represent

the customers of interest and generalize their opinions

to the market segment.

Step 4: Analyzing the Data and Developing Insights

Converting data into

information that is

useful in making more

effective marketing

decisions.

Tom Davenport Interview on Business Analytics

Gorodenkoff/Shutterstock 9

What Insights Can You Develop by Analyzing this Data?

EXHIBIT 10.3 Survey Results for McDonald’s and Wendy’s

Access the text alternative for slide images.

McGraw-Hill Global Education Holdings, LLC 10

Step 5: Developing and Implementing an Action Plan

PROGRESS CHECK (1 of 7)

1. What are the steps in the marketing research

process?

2. What is the difference between data and

information?

Secondary Data

A marketing research project often begins with a

review of the relevant secondary data.

Shutterstock / Iakov Filimonov 13

Exhibit 10.4: External Secondary DataSyndicated Data and Some of Their Services (1 of 2)

Name Services Provided

Nielsen

(http://www.nielsen.com)

With its Market Measurement Services, the company

tracks the sales of consumer packaged goods, gathered at

the point of sale in retail stores of all types and sizes.

IRI

(http://www.iriworldwide.com)

InfoScan store tracking provides detailed information about

sales, share, distribution, pricing, and promotion across a

wide variety of retail channels and accounts.

JD. Power and Associates

(http://www.jdpower.com)

Widely known for its automotive ratings, it produces quality

and customer satisfaction research for a variety of

industries.

NDP Group

(www.npd.com)

Based on detailed records consumers keep about their

purchases (i.e., a diary), it provides information about

product movement and consumer behavior in a variety of

industries.

Access the text alternative for slide images.

Exhibit 10.4: External Secondary Data Syndicated Data and Some of Their Services (2 of 2)

Table divided into two columns summarizes continuation of syndicated

data providers and some of their services. The column headers are

marked from left to right as: name and services provided.

Name Services Provided

NOP World

(http://www.nopworld.com)

The mKids US research study tracks mobile

telephone ownership and usage, brand affinities,

and entertainment habits of American youth

between 12 and 19 years of age.

Research and Markets

(http://www.researchandmarkets.

com)

Promotes itself as a one-stop shop for market

research and data from most leading publishers,

consultants, and analysts.

Roper Center for Public Opinion

Research

(http://www.ropercenter.uconn.ed

The General Social Survey is one of the nation’s longest

running surveys of social, cultural, and political indicators.

External Secondary Data Scanner Data

Data from scanner readings

of UPC labels at checkout.

Provided and sold by

leading research firms:

• IRI.

• Nielsen.

Information helps firms

assess what is happening in

the marketplace.

jamie_cross/123RF 16

PROGRESS CHECK (2 of 7)

1. What is the difference between panel and scanner

data?

Primary Data Collection Techniques

EXHIBIT 10.5 Qualitative versus Quantitative Data Collection

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Observation

Examining purchase and consumption behaviors

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The Brave New World of Shopper-Tracking Technology

In-Depth and Focus Group Interviews

In-Depth interviews

• Trained researchers ask questions

one-on-one with a customer.

• Expensive and time-consuming.

Focus group interviews

• Small group of 8 to 12 people with

a trained moderator.

• Now often take place online.

• Unstructured; qualitative data about

new or existing products or

services.

Although relatively expensive, in-depth interviews

can reveal information that would be difficult to

obtain with other methods.

Wdstock/E+/Getty Images 20

PROGRESS CHECK (3 of 7)

1. What are the types of qualitative research?

Survey Research

The use of surveys or questionnaires.

The most popular type of quantitative primary data

collection method.

A document that features a set of questions

designed to gather information from respondents

that will lead to more effective marketing decisions.

Survey Research Structured vs. Unstructured Questions

EXHIBIT 10.6 Structured versus Unstructured Response

McGraw-Hill Global Education Holdings, LLC 23

Exhibit 10.7: What to Avoid When Designing a Questionnaire (1 of 2)

Issue Good Question Bad Question

Avoid questions the

respondent cannot easily

or accurately answer.

When was the last time

you went to the grocery

store?

How much money did

you spend on groceries

last month?

Avoid sensitive

questions unless they

are absolutely

necessary.

Do you take vitamins? Do you dye your gray

hair?

Avoid double-barreled

questions, which refer to

more than one issue with

only one set of

responses.

1. Do you like to shop for

clothing?

2. Do you like to shop for

food?

Do you like to shop for

clothing and food?

Exhibit 10.7: What to Avoid When Designing a Questionnaire (2 of 2)

Issue Good Question Bad Question

Avoid leading questions,

which steer respondents

to a particular response,

irrespective of their true

beliefs.

Please rate how safe

you believe a BMW is on

a scale of 1 to 10, with 1

being not safe and 10

being very safe.

BMW is the safest car on

the road, right?

Avoid one-sided

questions that present

only one side of the

issue.

To what extent do you

believe fast food

contributes to adult

obesity using a five-point

scale?

1: Does not contribute

5: Main cause

Fast food is responsible

for adult obesity:

Agree/Disagree

Source: Adapted from A. Parasuraman, Dhruv Grewal, and R. Krishnan, Marketing Research, 2nd ed. (Boston: Houghton Mifflin, 2007), Ch. 10. 25

Panel‐ and Scanner‐Based Research

Can be either

secondary or primary

data.

New Balance

encourages people to

join its panel known

as the “New Balance

Tester Community” to

help in the process of

designing new

sneakers.

WAYHOME studio/Shutterstock 26

Experimental Research

Systematically

manipulates one or more

variables to determine

which variables have a

causal effect on other

variables.

Can also be used on

social media.State Bicycle Co. devised experiments to test the efficacy of

several ads to determine which contests and offerings on its

home page would attract visitors who were likely to buy.

Source: State Bicycle Co. 27

Hypothetical Pricing Experiment for McDonald’s

EXHIBIT 10.8 Hypothetical Pricing Experiment for McDonald’s

1 2 3 4 5

Market Unit Price

Market Demand

at Price (in Units)

Total Revenue

(Col. 1 × Col.2)

Total Cost of Units Sold ($300,000

Fixed Cost + $2.00 Variable Cost)

Total Profits

(Col. 3 – Col. 4)

1 $4 200,000 $800,000 $750,000 $100,000

2 5 150,000 750,000 600,000 150,000

3 6 100,000 600,000 500,000 100,000

4 7 50,000 350,000 400,000 (50,000)

Exhibit 10.9: Advantages and Disadvantages of Secondary and Primary Research (1 of 2)

Type Examples Advantages Disadvantages

Secondary

Research

• Census data

• Sales invoices

• Internet information

• Books

• Journal articles

• Syndicated data

• Saves time in

collecting data

because they are

readily available.

• Free or inexpensive

(except for

syndicated data)

• May not be

precisely relevant to

information needs.

• Information may

not be timely.

• Sources may not be

original, and

therefore

usefulness is an

issue.

• Methodologies for

collecting data may

not be appropriate.

• Data sources may

be biased.

Exhibit 10.9: Advantages and Disadvantages of Secondary and Primary Research (2 of 2)

Type Examples Advantages Disadvantages

Primary

Research

• Observation

• Focus groups

• In-depth interviews

• Social media

• Surveys

• Experiments

• Specific to the

immediate data

needs and topic at

hand

• Offers behavioral

insights generally

not available from

secondary research

• Costly

• Time-consuming

• Requires more

sophisticated

training and

experience to

design study and

collect data.

PROGRESS CHECK (4 of 7)

1. What are the types of quantitative research?

Big Data

Big data incorporates multiple sources of data.

Changes in marketing research because of:

• Increase in amount of data.

• Ability to collect data from transactions, CRM, social

media, websites.

• Ease of collecting and storing data.

• Computing ability to manipulate data.

• Access to software to convert data into decision-making

insights (Amazon, SAP, Splunk, GoodData, Google

Analytics.

Internal Secondary Data

Exhibit 10.10: The 5 Vs of Big Data

Access the text alternative for slide images.

PROGRESS CHECK (5 of 7)

1. What are the 5 Vs of big data?

Marketing Analytics

Firms can access big data that contain billions of pieces of customer information and purchase histories from many different sources in a variety of types and sizes.

Marketing analytics is used to make sense out of these data.

To make marketing mix decisions, HSN gathers

data across a wide range of points of contact,

including multiple televised channels, catalog and

phone sales, and digital links.

Source: HSN, Inc. 36

Marketing Decisions

Marketing analytics can be used to make marketing decisions that

span all the elements of a firm’s current or planned marketing

strategy, including the following.

• How to Make Marketing Mix Decisions.

• How to Determine Which Segments to Target.

• How to Understand and Manage Those Customer Segment.

• How to Create Micro-Segmentation Strategies at a Local Level.

Tools and Methods (1 of 2)

Descriptive Analytics Tools Help firms organize, tabulate, and

depict their available data, usually

in easy-to-understand reports,

tables, and charts.

Predictive Analytics Tools Rely on historically available data to

forecast the future, such as what is

predicted to happen to a firm’s

product sales in the next month,

next quarter, next year, and so on.

Tools and Methods (2 of 2)

Prescriptive Analytics Tools Analyses that use simulations,

which ask a series of what if–type

questions, and optimization

techniques to find the most effective

or best result, which help firms

better understand what they should

Active Analytics Tools Artificial intelligence algorithms

used to analyze input gathered

from various data bases including

data from the Internet of Things

(IoT).

PROGRESS CHECK (6 of 7)

1. What decisions can be made using marketing

analytics?

2. What are the four broad categories of marketing

analytics tools and methods?

The Ethics of Using Customer Information

AMA Ethical Guidelines for Conducting Marketing Research

1. Prohibits selling or fund-raising under the guise of

conducting research.

2. Supports maintaining research integrity by avoiding

misrepresentation or omission of pertinent research

data.

3. Encourages the fair treatment of clients and

suppliers.

Insights Association Code of

Standards and Ethics

What Would You Do?

Aaron, a marketing

researcher:

• Just finished giving a

successful presentation to

a major client.

• The client has asked for a

list of companies that

participated in the study

and copies of all the

completed surveys.

ra2studio/123RF 43

Threats to Personal Information

Facial recognition software

Neuromarketing

Adapted from: Adam L. Penenberg, “NeuroFocus Uses Neuromarketing to Hack Your Brain,” Fast Company, August 8, 2011,

https://www.fastcompany.com/1769238/neurofocus-uses-neuromarketing-hack-your-brain Findings from neuromarketing studies

by NeuroFocus.Access the text alternative for slide images.

PROGRESS CHECK (7 of 7)

1. Under what circumstances is it ethical to use

consumer information in marketing research?

2. What challenges do technological advances

pose for the ethics of marketing research?

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