Part Three Using Technology and Information to Build Customer Relationships 7 Marketing Research and...

Part ThreePart ThreeUsing Technology and

Information to BuildCustomer Relationships

77 Marketing Research and Information Systems

Copyright © Houghton Mifflin Company. All rights reserved. 7 | 2

Objectives

1. To describe the basic steps in conducting marketing research

2. To explore the fundamental methods of gathering data for marketing research

3. To describe the nature and role of information systems in marketing decision making

4. To understand how such tools as databases, decision support systems, and the Internet facilitate marketing research

5. To identify key ethical and international considerations in marketing research


Chapter Outline

• The Importance of Marketing Research

• The Marketing Research Process

• Using Technology to Improve Marketing Information Gathering and Analysis

• Issues in Marketing Research


The Importance of Marketing Research

• Marketing Research– The systematic design, collection, interpretation,

and reporting of information to help marketers solve specific marketing problems or take advantage of marketing opportunities


U.S. Hot Dog Consumption

Source: National Hot Dog and Sausage Council, as reported in American Demographics, July/August 2004 p. 48.

Hot dogs consumed between Memorial Day and Labor Day 7 billion

Average number of hot dogs eaten per person from Memorial Day to Labor Day

24

Rate of consumption during this time 818 hot dogs/second

Top 5 Major League Ball Parks for Hot Dog Consumption

1. Dodger Stadium 1.6 million

2. Coors Field 1.5 million

3. Wrigley Field 1.5 million

4. Yankee Stadium 1.3 million

5. Minute Maid Park 1.2 million


The Importance of Marketing Research (cont’d)

• Benefits of Marketing Research– Helps firms stay in touch with customers’

changing attitudes and purchase patterns– Assists in better understanding market

opportunities– Determines the feasibility of a particular marketing

strategy– Aids in the development of

marketing mixes to match the needs of customers

– Improves marketer’s ability to make decisions


Net Sights

• Perhaps one of the best-known pollsters and research firms, the Gallup Organization, has been conducting public opinion surveys and since 1935. The company is often called on to survey the public about political issues, business and economic issues, social issues, and lifestyle topics. To view the company’s latest survey results, visit www.gallup.com/.

http://www.gallup.com/


The Five Steps of the Marketing Research Process

FIGURE 7.1


The Marketing Research Process

• Locating and Defining Problems or Research Issues– Focusing on uncovering the nature and

boundaries of a situation or question related to marketing strategy or implementation• Departures from normal or expected marketing

results• Biases in marketing information that distort its

meaning• Evidence of possible or potential market

opportunities


Top 5 Greatest “Brain Gain” and “Brain Drain” Markets

Brain Gaining* Metro Regions

Source: William H. Frey, “Brain Gains, Brain Drains,” American Demographics, June 1, 2004, http://americandemographics.com.

1. New York-Northern New Jersey-Long Island, NY-NJ

(122,000)

2. Chicago-Gary-Kenosha, IL-IN-WI (29,647)

3. Pittsburgh, PA (20,065)

4. Detroit-Ann Arbor-Flint, MI (17,224)

5. Buffalo-Niagara Falls, NY (17,171)

Brain Draining* Metro Regions

1. Atlanta, GA 76,443

2. Phoenix-Mesa, AZ 63,084

3. Dallas-Fort Worth, TX 54,814

4. San Francisco-Oakland-San Jose, CA 48,614

5. Denver-Boulder-Greeley, CO 40,973

*Net domestic migration gains (losses) among college graduates aged 25 and older.


The Marketing Research Process (cont’d)

• Designing the Research Project– Research design

• An overall plan for obtaining the information needed to address a research problem or issue

– Hypothesis• An informed guess or assumption about a

certain problem or set of circumstances• Accepted or rejected hypotheses act as

conclusions for the research effort



• Types of Research– Exploratory research

• Research conducted to gather more information about a problem or to make a tentative hypothesis more specific

– Descriptive research• Research conducted to clarify the

characteristics of certain phenomena to solve a particular problem

– Causal research• Research in which it is assumed that a

particular variable X influences a variable Y



• Research Reliability and Validity– Reliability

• A condition existing when a research technique produces almost identical results in repeated trials

– Validity• A condition existing

when a research method measures what it is supposed to measure



• Collecting Data– Types of data

• Primary data: data observed and recorded or collected directly from respondents

• Secondary data: data complied both inside and outside the organization for some purpose other than the current investigation


SNL DataSource provides a broad array of secondary data in the financial services industry

Reprinted with permission of Greg Amonette, SNL Financial, snl.com


Top 10 Metro Markets with Married and Unmarried Gay and Lesbian Households

Source: Christopher Reynolds, “Still a Hidden Market,” American Demographics, April 1, 2004, http://demographics.com.

1. San Francisco-Oakland-San Jose, CA2. Santa Fe, NM3. Portland, ME4. Miami-Fort Lauderdale, FL5. Bloomington, IN6. Austin-San Marcos, TX7. Madison, WI8. Burlington, VT9. Springfield, MA10. Seattle-Tacoma, WA



• Methods of Collecting Primary Data– Sampling

• Population—all the elements, units, or individuals of interest to researchers for specific study

• Sample—a limited number of units chosen to represent the characteristics of a total population

– Types of sampling– Probability—each element has an known chance for study– Random—each element has an equal chance for study– Stratified—study population divided into like groups– Nonprobability: element’s likelihood of study is unknown– Quota: population is grouped and elements are arbitrarily

chosen



• Basic Survey Methods– Mail survey– Telephone survey– Online survey– Personal interview survey

• In-home (door-to-door) interview• Focus-group interview• Telephone depth interview• Shopping mall intercept interviews• On-site computer interviews



• Questionnaire Construction– Open-ended question

• Question which invites the respondent to answer as their own interests or personal subjectivity dictates

– Dichotomous question• Question which to which the respondent can make only

an either/or or yes/no response

– Multiple-choice question• Question asks the respondent to choose a response

from a fixed set of responses

• Observation Methods• Experimentation


Class Exercise

You are considering opening a new “fluff-and-fold” laundry pick‑up, cleaning, and delivery service for students. You are uncertain whether sufficient demand exists, and you have questions about when students will need your service most and what level of service they will require. You realize that marketing research can help solve your information needs. You must now answer these questions.

1. Define the problem.2. Design the research project.


Class Exercise (cont’d)

3. After consulting secondary data, you decide to conduct an exploratory study with students in your classes. Develop open‑ended questions to ask students that will provide information regarding your hypotheses.

4. Having gained some insight into the problem, you are now ready to conduct a descriptive study. You decide to conduct a survey to further test your refined hypotheses. However, you have several decisions to make regarding this study.a. What type of sampling approach (random, stratified, area,

quota) will you use and why?b. What survey method (mail, telephone, personal interview) will

you use and why?c. How will you construct the questionnaire? Develop

open‑ended, dichotomous, or multiple‑choice questions that will test your hypotheses. Remember to remain impartial and inoffensive.



• Observation (for Data Collection) Methods– Direct contact with subject is avoided to

reduce possible awareness of observation process.

– Physical conditions, subject actions, and demographics are noted.

– Observations may be combined with same subject interviews.

– Data gathered may be influenced by observer bias.


Class Exercise

What is the most appropriate data collection method for each of these research questions?

1. How do consumers in South Dakota feel about Christmas shopping?

2. How do JC Penney customers feel about Penney’s customer service?

3. What is the opinion of U.S. consumers toward a Chrysler advertisement that questions the quality of Japanese cars?

4. How many people nationwide currently live in apartments?

5. How do Sears’ charge customers view that company’s new pricing policy?



• Experimentation– A research method that attempts to

maintain (control) certain variables while measuring the effects of experimental (uncontrolled) variables• Independent variable: acts on the dependent

variable• Dependent variable: is affected by variations in

the independent variable


Interpreting Research Findings

• Statistical Interpretation– Analysis of survey data to determine what

is typical or what deviates from the average that indicates:• How widely the responses vary• How the responses are distributed• Which hypotheses are supported• Which hypotheses are rejected• Whether construction errors have invalidated

the survey’s results


Interpreting Research Findings (cont’d)

• Reporting Research Findings– Take an objective look at survey findings

• Report deficiencies and reasons for deficiencies

– Prepare a formal, written document• Summary and recommendations

– Short, clear, and simply expressed for executives

• Technical report– Contains more detailed information about research

methods and procedures and important data gathered


Using Technology to Improve Marketing Information Gathering and Analysis

• Marketing Information Systems– Marketing Information System (MIS)

• A framework for the management and structuring of information gathered regularly from sources inside and outside an organization


Using Technology to Improve Marketing Information Gathering and Analysis (cont’d)

• Databases– Database

• A collection of information arranged for easy access and retrieval

– Single-source data• Information provided by

a single marketing research firm



• Marketing Decision Support Systems (MDSS)– Customized computer software that aids

marketing managers in decision making• Capability to create market models based on

changes in marketing variables • Artificial Intelligence (AI) assists

in customer support



• The Internet and Online Information Services– Ease of information dissemination– Ease of information

accessibility (intranets)– Access to customer data

(data mining websites)– Subscription information

services on Web


Issues in Marketing Research

• The Importance of Ethical Marketing Research– Ethical questions affect:

• The reliability of the research• The researcher–marketing

manager relationship• The nature of marketing

managers’ decisions


Debate Issue

• Does marketing research (surveys, telephone interviewing) invade a respondent’s privacy?


Issues in Marketing Research (cont’d)

• International Issues in Marketing Research– Modification of data-gathering methods to

account for regional differences– Use of two-pronged approach to

international marketing research• Detailed search for and analysis of secondary

data• Field research to refine firm’s understanding of

how local environment will shape/restrict data-gathering about customer needs and preferences


JRA provides global marketing research services

Reprinted with permission of JRA, J. Reckner Associates, Inc.


After reviewing this chapter you should:

• Know the basic steps in conducting marketing research.

• Be familiar with the fundamental methods of gathering data for marketing research.

• Be able to describe the nature and role of information systems in marketing decision making.

• Understand how such tools as databases, decision support systems, and the internet facilitate marketing research.

• Be able to identify key ethical and international considerations in marketing research.


Chapter Quiz

1.Marketing information systems and marketing research have changed rapidly because customers and companies around the world have been linked bya. the computer.b. the Internet.c. the Interactive Network.d.electronic online services.e. telecommunications.


Chapter Quiz (cont’d)

2. Dan was given the task of conducting a research project for his firm and proceeds with the following steps. He asks questions to determine the research topic, conducts a telephone survey, writes a report describing the survey results, and gives that report to his boss. Which step of the marketing research process has Dan omitted?a. Collecting datab. Defining and locating problemsc. Interpreting researchd. Designing the research projecte. Reporting research findings



3.A study that is valid and reliablea. is called a marketing research study.b. measures what it is supposed to measure

and produces almost identical results every time.

c. is expensive to implement and complete.d. measures subtle differences in the

population being studied.e. is difficult to produce without expert

researchers.



4. Chelsea, Ltd., a retail clothing store chain, wants to use observation methods to gather information about shopping behavior. Which of the following should Chelsea know about observation methods of data collection?a. Observation uses secondary sources of data.

b. Observation depends on mall interviews.

c. Observation can tell Chelsea what is being done, but not why.

d. Observation focuses on open‑ended questions.

e. Observation works best for telephone surveys.

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