An Introduction to Research Methods

An Introduction to Research Methods

Marketing research provides information to help implement…

• The Study of Marketing• The Use of the Marketing Concept• Marketing Strategy

Let’s look at each of these in turn


• Marketing: process of all activities necessary for the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives


• Marketing Concept: the business philosophy that holds the key to achieving organizational goals consists of determining the benefits sought by target market members and delivering these benefits more effectively & efficiently than competitors. This is to be done at a “profit.”


• Marketing Strategy: consists of selecting one or more segments of the market as the company’s target market(s) and designing the proper “mix” of the “4Ps”

Key Point: To practice marketing; to implement the marketing concept; to carry out a marketing strategy, managers must make informed decisions.

Many decisions require additional information and marketing research may be needed in order to supply that information.

What is marketing research?

• Marketing research: is the process of designing, gathering, analyzing, and reporting information that may be used to solve a specific marketing problem. (Burns & Bush)

…is the function that links the consumer, customer, and public to the marketer through information—information used to identify and define marketing opportunities and problems; generate, refine, and evaluate marketing actions; monitor marketing performance; and improve the understanding of marketing as a process. (AMA)

What is online research?

• Online research: the use of computer networks, including the Internet, to assist in any phase of the marketing research process including development of the problem, research design, data gathering, analysis, and report writing and distribution

What is online research?

• Web-based research: research that is conducted to evaluate various facets of Web applications; may use traditional methods as well as on-line research methods in conducting research on Web-based applications

• Online survey research: collection of data using computer networks

Marketing Information System

• Marketing Information System (MIS): a structure consisting of people, equipment, and procedures to gather, sort, analyze, evaluate, and distribute needed, timely, and accurate information to marketing decision makers

Components of an MIS

• Internal Reports System … existing organization/company reports and records (sometimes called “accounting information system”)

• Marketing Intelligence System … everyday info about pertinent developments in the environment

Components of an MIS

• Decision Support System (DSS) … collected data that may be accessed and analyzed using tools and techniques that assist managers in decision making (“playing what if?”).

• Marketing Research System…provides information not available from other systems. When specific problem must be solved, marketing research may be needed. This is “project-based” not continuous as with other systems.

The Marketing Research Industry

Marketing Research: A Brief History

• Pre-Marketing Research Era: colonization to the Industrial Revolution

• Early Development Era: Industrial Revolution to 1920• Questionnaire Era: 1920-1940• Quantitative Era: 1940 to 1960• Organizational Acceptance Era: 1960 to 1980• PC Technology Era: 1980 to 1990• Globalization-Online Era: since 1990

Some Figures for Marketing Research Sector

15.890 million USD (2002/WORLD)

ABD -------- 39% ----- 6159 million USD

AB----------- 37%

39% is shared by 10 marketing research companies

51% is spent by the first 25 biggest companies

31% syndicated research

19% qualitative research

The rest is quantitative research

U.S. Rank Organization Headquarters Website ($, in millions)($, in millions)revenue 2004 2003 1 1 VNU Inc. New York www.vnu.com $1,794.4 $3,429.2 47.7%

2 2 IMS Health Inc. Fairfield, Conn. www.imshealth.com 571.0 $1,569.0 63.6

3 4 Westat Inc. Rockville, Md. www.westat.com 397.8 397.8 — 4 5 TNS U.S. New York www.tns-global.com 396.0 1,732.7 77.2

5 3 Information Resources Inc. Chicago www.infores.com 379.6 572.8 33.6

6 6 The Kantar Group Fairfield, Conn. www.kantargroup.com 365.7* 1,136.3* 67.8*

7 7 Arbitron Inc. New York www.arbitron.com 284.7 296.6 4.0

8 8 NOP World US New York www.nopworld.com 213 408.5 47.9

9 9 Ipsos New York www.Ipsos-na.com 193.9 752.8 74.2

10 10 Synovate Chicago www.synovate.com 193.5 499.3 61.3

Top 10 U.S. Marketing Research Firms

Marketing Research Sector in Turkey

Pazarlama ve Kamuoyu Araştırmacıları Derneği (1988)

– Setting ethical and professional standards and measures

– Organising seminars and making publications to up-date members about progresses in marketing research area

– GAB: Guvenilir Arastirma Belgesi-Bureau Veritas Audit

– Individual members – approx. 400– Member companies - 52

Marketing Research Sector in Turkey

Syndicated Research

• AGB : Daily, weekly and monthly reports – Percentages and other statistics about TV

programme consumption habits of target segments

• Bilişim International Research Org.: Monthly advertising expenditure

research • HTP Research and Consulting Services: Household

panels on consumption – Weekly visits, monthly reports, 12 major cities, 4500

households

• Information Resources Inc/Panel : Retailer audits– Electronic data collection – Retailer information

Industry Structure: Internal Suppliers

• Internal suppliers: an entity within the firm supplies marketing research

• Methods of Organization: • Own formal departments: Organized around:

• Marketing function: ad research, product research, pricing research, channel …

• Research process: data analysis, data collection…• Area of application: brands, customers, etc.

• Single individual or committee

• In some cases no one is specifically assigned such tasks on a full time basis

Industry Structure: External Suppliers

• External suppliers: outside firms hired to fulfill a firm’s marketing research needs

• Methods of Organization: • Function: data analysis, data collection, etc.• Type of research application: ad research, etc.• Geography: domestic, international, etc.• Type of customer: finance, health • Combination of the above

• Classification:• Full-service• Limited service…see next slide

Analyst• Handles details in execution of

project• Designs & pretests questionnaires• Conducts preliminary analysis of

data

Junior Analyst• Secondary data analysis• Edits and codes questionnaires• Conducts preliminary analysis of

data

Fieldwork Director•Handles selection, training, supervision, and evaluation of interviewers and field workers

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

Statistician/Data Processing

• Serves as expert on theory and application on statistical techniques

• Oversees experimental design, data processing, and analysis

Selected Marketing Research Career Descriptions

Improving Industry Performance

• Industry is performing well but could stand some improvements

• Focus on diagnosing problems in the market instead of rushing to test a product/service (The Walkman, developed without MR, was created to solve need for portability. Sony diagnosed a need in the market).

• Need to use IT to speed up MR process

• Research efforts should be integrated..too splintered

• MR needs to be involved in strategic decisions (Should we be in this business v. Is this the best product feature?) Too often, MR is used to test tactics.

Other Suggestions For Industry Improvements

• Certification…Being promoted by AMA

• Auditing…Being used in other areas, i.e. Advertising..audits websites via Audit Bureau of Circulations.

• Education…MR industry has made much progress here. Examples include: AMA’s Notre Dame School of Marketing Research, Burke Institute, Advertising Research Foundation seminars, etc.

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.

Ethics and Marketing Research

• AMA Code of Ethics• Prohibits selling (sugging) or fund raising (frugging)

under the guise of conducting research• Maintaining research integrity by avoiding

misrepresentation and omission of pertinent research data

• Treating others (buyers and suppliers) fairly

Buyers: Being sold unnecessary research, supplier firms sharing buyer’s confidential information.

Suppliers: Being asked for quick answers, not being paid by buyers

• The Public: Should researchers be asked to conduct research on consumption of potentially dangerous products?

– For example, doing research to find ways to increase consumption of high-sugar and/or high-fat content products by kids or ways to increase tobacco use by teens?


• Respondents – example, study finds that refusal rates are climbing often because public is wary of losing privacy.

• Deception should be eliminated.

• Respondents should not be identified if they are promised anonymity/confidentiality

• Invasions of privacy (permission issue); marketing research should not invade a person’s privacy…

• Respondents should have right to choose to participate


Invasion of Privacy– SPAM; sending unwanted email

– Industry currently debating opt-out vs. opt-in (“active consent”) standards (opt-in much stricter)

– Online Survey Research: Abused respondents via SPAM initially.

• Today, industry is a leader in anti-spam legislation. Researchers must have a preexisting relationship with potential online respondents and the respondents must have a reasonable expectation that they will be contacted via email.



• Your ethical views are shaped by your philosophy:

• Deontology: concerned with the rights of the individual

• Simply following the correct moral rules is often not sufficient; instead, we have to have the correct motivations.

• Teleology: analyzes a given behavior in terms of its benefits and costs to society


• Your ethical views are shaped by your philosophy: are these actions “ethical” or not – why?

• Observation study – choosing product in supermarket

• Observation study – buying shoes in store

• Focus group with client representatives watching; participants not informed

USAAPOR : 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)

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)

Marketing Research Associations Online

The Marketing Research Process

The Marketing Research Process: 11 Steps

• Step One: Establishing the Need for Marketing Research

• Step Two: Defining the Problem• Step Three: Establishing Research Objectives• Step Four: Determining Research Design• Step Five: Identifying Information Types and

Sources• Step Six: Determining Methods of Accessing

Data

The Marketing Research Process: 11 Steps cont…

• Step Seven: Designing Data Collection Forms• Step Eight: Determining Sample Plan and Size• Step Nine: Collecting Data• Step Ten: Analyzing Data• Step Eleven: Preparing and Presenting the Final

Research Report

The Marketing Research ProcessStep One: Establish the Need for Marketing

Research

• Marketing Research is not needed when the:• required information is already available• decisions need to be made now• organization can’t afford the research• costs outweigh the value of the research

The Marketing Research ProcessStep Two: Define the Problem

• The most important step in the marketing research process is defining the problem.

Chain Restaurant Study

One day I received a phone call from a research analyst who introduced himself as one of our alumni.

He was working for a restaurant chain in town and wanted help analyzing the data he had collected while conducting a marketing research study.


When we met, he presented me with a copy of the questionnaire and asked how he should analyze the data. My first question to him was,


When he looked perplexed, I explained that data analysis is not an independent exercise.

Rather, the goal of data analysis is to PROVIDE INFORMATION RELATED TO THE

PROBLEM COMPONENTS.

Chain Restaurant StudyI was surprised to learn that he did not have a clear understanding of the marketing research problem and that a written definition did not exist. So before going any further, I had to definedefine the marketing research problem.Once that was done, I found that

much of the data collected was not relevant to the problem. In this sense, the whole study was a waste of resources. A new study had to be designed and implemented to address the problem defined.

The Problem Definition ProcessFig. 2.1

Discussionwith

Decision Maker(s)

Interviewswith Experts

SecondaryData Analysis

QualitativeResearch

Management Decision Problem

Marketing Research Problem

Tasks Involved

Environmental Context of the Problem

Step I: Problem Definition

Step II: Approach to the Problem

Objective/ TheoreticalFoundations

ResearchQuestions

Hypotheses

Step III: Research Design

Analytical Model: Verbal, Graphical, Mathematical

SpecificationofInformationNeeded

The Marketing Research ProcessStep Three: Establish Research Objectives

• What information is needed in order to solve the problem?

The Marketing Research ProcessStep Four: Determine Research Design

• Exploratory Research: collecting information in an unstructured and informal manner

• Descriptive Research: refers to a set of methods and procedures describing marketing variables

• Causal Research (experiments and other approaches): allows isolation of causes and effects

The Marketing Research ProcessStep Five: Identify Information Types and

Sources

• Secondary Data: information that has been collected for some purpose other than the research at hand

• Primary Data: information that has been gathered specifically for the research objectives at hand

The Marketing Research ProcessStep Six: Determine Methods of Accessing

Data

• Secondary Data: accessing data through sources such as the Internet and library

• Primary Data: collecting data from participants through methods such as telephone, mail, online, and face-to-face (quantitative), and observation studies and focus groups (qualitative)

The Marketing Research ProcessStep Seven: Design Data Collection Forms

• The design of the data collection form that is used to ask or observe and record information in marketing research projects is critical to the success of the project.

• It is easy to write a set of questions but very difficult to construct a questionnaire.

• General types of “instruments” (forms)• Questionnaires• Observation Study forms (protocols)

The Marketing Research ProcessStep Eight: Determine Sample Plan and

Size

• Sample plan: refers to the process used to select units from the population to be included in the sample

• Sample size: refers to determining how many elements (units) of the population should be included in the sample

The Marketing Research ProcessStep Nine: Collect Data

• Sound data collection is very important because, regardless of the data analysis methods used, data analysis cannot “fix” bad data.

Nonsampling errors may occur during data collection. These are related to poor design and/or execution of the data gathering.

• Sampling errors may occur based purely on chance

The Marketing Research ProcessStep Ten: Analyze Data

• Data analysis: involves entering data into computer files, inspecting data for errors (data cleaning), running tabulations (frequencies), and conducting various statistical tests

The Marketing Research ProcessStep Eleven: Prepare and Present the Final

Research Report

• Findings are presented, often by research objective, in a clear and concise way.

• The need for a good report cannot be overstated. It is the report, and/or its presentation, that properly communicates the results to the client.

The Marketing Research Report

• Executive summary• Background• Problem definition• Research objectives• Research design• Fieldwork/data

collection

• Data analyses• Recommendations• Cost and timetable• Research

organisation and researchers

• Appendices• Agreement

Example Study

Department Store Project


• RQ: Do the customers of Sears exhibit store loyalty?

• H1: Customers who are store-loyal are less knowledgeable about the shopping environment.

• H2: Store-loyal customers are more risk-averse than are non-loyal customers.

Department Store ProjectSpecification of Information Needed

Component 1

• The researcher identified the following factors as part of the choice criteria: quality of merchandise, variety and assortment of merchandise, returns and adjustment policy, service of store personnel, prices, convenience of location, layout of store, credit and billing policies. The respondents should be asked to rate the importance of each factor as it influences their store selection.

Component 2

• The researcher identified nine department stores as competitors to Sears based on discussions with management. The respondents should be asked to evaluate Sears and its nine competitors on the eight choice criteria factors.

Component 3

• Sixteen different product categories were selected, including women's dresses, women's sportswear, lingerie and body fashion, junior merchandise, men's apparel, cosmetics, jewelry, shoes, sheets and towels, furniture and bedding, and draperies. The respondents should be asked whether they shop at each of the ten stores for each of the 16 product categories.

Component 4

• No additional information needs to be obtained from the respondents.


Component 5• Information should be obtained on the standard

demographic characteristics and the psychographic characteristics of store loyalty, credit use, appearance consciousness, and combining shopping with eating.

Component 6• No additional information needs to be obtained from

the respondents.


At United, Food Is Uniting the Airline with Travelers

United Airlines, as other major airlines, had to deal with passenger loyalty (management decision problem: how to attract more and more loyal passengers). The broad marketing research problem was to identify the factors that influence loyalty of airline travelers.

The basic answer is to improve service. Exploratory research, theoretical framework, and empirical evidence revealed that the consumers’ choice of an airline is influenced by: safety, price of the ticket, frequent-flyer program, convenience of scheduling, and brand name.


A graphical model stipulated that consumers evaluate competing airlines based on factors of the choice criteria to select a preferred airline. The problem was that major airlines were quite similar on these factors. Indeed, "airlines offer the same schedules, the same service, and the same fares.” Consequently, United Airlines had to find a way to differentiate itself. Food turned out to be the solution.


Secondary data, like the J. D Power & Associates' survey on "current and future trends in the airline food industry," indicated that "food service is a major contributor to customers’ loyalty." This survey also emphasized the importance of food brands.


The airline's Marketrak survey told United Airlines that "customers wanted more varied and up-to-date food.”

The following research questions and hypotheses may be posed.

RQ1 How important is food for airline customers?

H1: Food is an important factor for airline travelers.

H2: Travelers value branded food.

H3: Travelers prefer larger food portions, but with consistent quality.

H4: Travelers prefer exotic food.


Characteristics that influence the research design included the identification of competing airlines (Delta, American, etc.), factors of the choice criteria (already identified), measurement of airline travel, and loyalty.


This kind of research helped United Airlines define their marketing research problem and develop the approach. Focus groups and surveys were conducted to check customers' perceptions of food in United Airlines' aircraft. The results provided support for all the hypotheses (H1 to H4). United Airlines then made a few changes: new "culinary menus," larger portions of food, new coffee, and branded products (e.g., Godiva chocolates). This resulted in better service, increasing customer satisfaction and fostering loyalty.


International Marketing ResearchExamining the impact of the Self-

Reference Criterion (SRC)1. Define the marketing research problem in

terms of domestic environmental and cultural factors.

2. Define the marketing research problem in terms of foreign environmental and cultural factors. Make no judgments.

3. Isolate the self-reference criterion (SRC) influence on the problem and examine it carefully to see how it complicates the problem.

4. Redefine the problem without the SRC influence and address it for the foreign market situation.

Documents

An Introduction to Research Methods