Ch03

Practitioner ViewpointThe marketing/advertising/public opinion research industry has benefitedenormously from online research made possible by ever-increasing techno-logical advances. Powerful computers handling huge blocks of data and atechnology-based infrastructure allow us to capture data at the point of pur-chase via scanning of UPC codes on products. This has opened new ways totrack consumer preference purchases. And with the introduction of pre-ferred customer cards, these data can be linked to specific households,opening the door to more productive analysis of tracking data such as mea-suring customer reaction to deals. Online research is also impacting theindustry’s ability to monitor media. Now the Arbitron PPM (personal peoplemeter) is making possible a huge improvement in the measurement of TV,radio, and cable audience size and behavior. Here miniaturization has madepossible a small computer weighing about 2 ounces that respondents wearand that is able to record any broadcast signals within their hearing range.

One area of online research, online survey research, is significantlyimpacting the research industry today. Made possible by the Internet,online survey research has the advantages of speedy turnaround of projects,much larger samples, and the ability to expose respondents to visual stim-uli. And that is one reason why interviewing via the Internet is widely usedfor concept/product tests now. There has been much trial and error asresearch practitioners strive to utilize the potential of online survey researchand overcome some of the disadvantages. But, no doubt, online surveyresearch is a major innovation that’s here to stay. Technology continues tochange the research industry.

Jack HonomichlPresident, Marketing Aid Center

Chapter

Learning Objectives:

To know the history of marketingresearch

To know how to classifymarketing research firms

To evaluate how the marketingresearch industry has performed

To understand how a researcher’sphilosophy might dictate behavior

To learn which key ethical issuesface the marketing research

industry today

To learn the ethical standards forconducting online survey

research

3The MarketingResearch Industry

44

Marketing Research: Online Research Applications, Fourth Edition, by Alvin C. Burns and Ronald F. Bush.Copyright © 2003, 2000, 1998, 1995 by Pearson Education Inc. Published by Prentice Hall.

Because of permissions issues, some material (e.g., photographs) has been removed from this chapter, though reference to it mayoccur in the text. The omitted content was intentionally deleted and is not needed to meet the University's requirements for thiscourse.

45

Inside Research with Jack J. HonomichlAs we have with our previous editions of this book, we asked Jack Honomichl

to provide us with information and to write the Practitioner Viewpoint for you. Weare delighted to have him do this for us because few people know the marketingresearch industry as well as Mr. Honomichl. Jack Honomichl is the president ofMarketing Aid Center, Inc. in Barrington, Illinois. The Marketing Aid Center pub-lishes the industry newsletter Inside Research, which targets top management inthe research industry. The firm provides consulting, compiles industry statisticssuch as “The Honomichl Top 50” (see Table 3.1), and conducts researchprojects.

Having received a B.S. degree from Northwestern University and a master’sdegree from the University of Chicago, Mr. Honomichl has spent a good part of hislife in the research industry. He has held executive positions with the MarketingInformation Center, a subsidiary of Dun & Bradstreet; Audits & Surveys, Inc.; MRCA;and the Chicago Tribune. He frequently contributes to Advertising Age and theAMA’s Marketing News. His book on the industry entitled Honomichl on MarketingResearch is published by National Textbook Company, Lincolnwood, Illinois. He haspublished nearly 400 articles in the trade and the academic press. As you learnabout the marketing research industry in this chapter, you will gain many insightsfrom the publications of Mr. Honomichl and others.

Jack J. Honomichl is recognized as aleader in the marketing research industry.


NOT AVAILABLE FORELECTRONIC VIEWING

46 Chapter 3 The Marketing Research Industry

The significance of the pre–marketing research era is thatbusiness owners knew their cus-tomers so that there was littleneed for formal marketingresearch.

The significance of the earlydevelopment era is that customerswere separated from businessmanagers, and marketingresearch was needed to under-stand the distant markets.

The purpose of this chapter is to provide you with some information about the mar-keting research industry itself. We begin by giving a brief historical perspective ofmarketing research. Next, we consider the structure of the industry by examiningthe types of firms in the industry and we look at firm size by introducing you to“The Honomichl Top 50,” which shows the top 50 marketing research firms interms of revenue. We next look at evaluations of the industry. How has the researchindustry performed? Finally, we examine the ethical issues facing the industry and,in doing so, we examine closely the additional ethical issues brought on by onlineresearch. When you finish this chapter, you will have finished our three-chapterintroduction to marketing research. Some of you may have become interested inmarketing research as a career. If you want to know more about a career in theindustry, we encourage you to read the Appendix on careers that we have providedfor you at the end of this chapter.

MARKETING RESEARCH: A BRIEF HISTORYPre–Marketing Research EraOur brief history of marketing research examines the development of marketingresearch during different time periods or eras. We could refer to the time periodfrom colonization until the industrial revolution as the pre–marketing research era.The economy was primarily made up of artisans and craftsmen bartering one goodfor another. Towns and villages were small and the businesses that served them werealso small. Everyone knew what each craftsman or artisan made. Paul Revere was asilversmith. He knew the people with whom he bartered and he didn’t need a mar-keting research study to tell him what they wanted. The significance of this timeperiod is that the craftsmen or small business owners knew their customers person-ally. When these conditions exist, even today, there is little need for formal market-ing research studies. This is true for many small business owners. They know theircustomers very well, many by name. Not only do their customers tell them abouttheir likes and dislikes, but customers also keep small business owners informedabout their likes and dislikes of competitors’ offerings as well.1

Early Development EraWe refer to the period between the industrial revolution and about 1920 as the earlydevelopment era. The events of this era led to the need for marketing research. First,the industrial revolution made an everlasting impact on humankind. For the firsttime in the history of the world, we had the ability to mass-produce goods. Second,transportation systems were developed to move large quantities of goods streamingforth from the new factories. The St. Lawrence Seaway was opened, which facilitatedwater transportation along an east–west route and connected the Great Lakes withthe Atlantic. Settlements in the Far West developed and grew, and transportation tothese markets was aided by the completion of the transcontinental railroad in 1869.Third, means of communication also improved with the introduction of the telegraphin 1844 and the wireless radio in 1906 and with increased literacy levels. Both ofthese developments in communications and increases in literacy were important toenable companies with factories located in one part of the country to advertise theirproducts in distant markets. For the first time, companies could mass-produce prod-ucts and advertise and distribute them to distant markets. This meant that businessmanagers were no longer near or acquainted with their customers. So it was thedevelopment of a mass market, separated from the factories of mass production, thatled to the development of marketing research. Managers of these new companies,equipped with the tools of production, needed to understand their faraway markets.


Marketing Research: A Brief History 47

Questionnaires, still an importanttool of marketing research,became prominent in marketingresearch during the time periodfrom about 1920 to 1940.

Many quantitative techniqueswere applied to studying con-sumers and markets for the firsttime during the quantitative era—1940 to 1960.

During the organizational accep-tance era, management began torealize that, in order to survive,marketing research was needed toimplement the marketing concept.

The technological era hasbrought many new products andservices to the research industrythat have impacted the way busi-ness is conducted.

Questionnaire EraWe call the third era, the questionnaire era (1920–1940). Although the question-naire survey is said to have first been used in 1824 by some newspapers, and N. W.Ayres and Company is said to have surveyed grain production in each of the statesin 1879, questionnaire surveys were in limited use until the 1920s. During WorldWar I, the military used questionnaires for personnel screening. This increasedfamiliarity with this research tool led to its use in opinion polls conducted by maga-zine publishers.2 Severe changes in the economy led to increased use of question-naires. When the “boom” during the 1920s gave way to the Great Depression,beginning in 1929, there was increased interest in the use of the questionnaire as asurvey tool.

Quantitative EraThe time period from 1940 to 1960 we call the quantitative era. Census data and, inparticular, the taking of the censuses of business led to an interest in statisticalanalysis. Marketing research was used to set sales quotas and to determine equitablesales territories. It was applied to managerial accounting techniques, such as costanalyses, to determine the costs of distribution. Also, marketing researchers beganto borrow methodological techniques from the social sciences. Sampling theory,hypothesis testing, and the application of statistical techniques to hypotheses involv-ing consumers’ behaviors, intentions, and attitudes became part of the marketingresearch industry’s tool kit.3 The study of “why people buy,” or motivationalresearch, started during this time period. For the first time, the marketing researcherwas aided in his or her task of analysis by a new invention—the computer.4

Organizational Acceptance EraBy 1960 marketing research gained acceptance in business organizations.Consequently, we call the period from 1960 to 1980 the organizational acceptanceera. As the marketing concept was accepted, the marketing research function wasestablished as a formal part of the organization of the firm. The number of firmshaving their own research departments grew rapidly during this time period. Duringthis era, other changes were also taking place. More firms became involved in inter-national marketing activities requiring management to make decisions about con-sumers and competition with which they had little, if any, firsthand experience.Worldwide communications and innovations in product and service technologiescreated a smaller world, but one that was filled with greater diversity and changingenvironments. To keep up, firms embraced the concept of the marketing informa-tion system (MIS), of which marketing research is a key component. Marketingresearch had not only gained acceptance in the organization but also was recognizedas being a key to understanding distant and fast-changing markets. It was neededfor survival.

PC Technology EraWe call the period from 1980 to about 1990 the PC technology era. Althoughresearch firms had access to mainframe computing technology, computer technol-ogy was made available to everyone, all the time, through the invention of the per-sonal computer (PC). The PC served as a catalyst for the development of technolog-ical applications that would make use of the PC. As these applications evolved, theyfound a willing market. Because more powerful applications meant new PCs withgreater computing power, more storage and faster operating speeds were needed.The marketing research industry, like many industries, has benefited from the signif-icant advances in personal computing during this time period. Although computer



Research firms have followedtheir client firms to new marketsall around the world.

Improved technology and greaterneed for efficient communicationshave paved the way for increasedonline research.

An internal supplier means anentity within the firm suppliesmarketing research information.

technology and applications have continued to grow in number and complexity, thefoundation was laid during the decade of the eighties. In addition to word proces-sors and spreadsheets that were developed for the PC during this period, applica-tions such as computer-assisted questionnaire programs, touchscreen data collectionprograms, statistical programs for the PC, and CATI computer telephoning pro-grams were quickly adopted by the marketing research industry.

Globalization–Online EraWe call the time since 1990 the globalization–online era since these two major fac-tors have influenced the marketing research industry. First, marketing research com-panies became much more global during this time period. As business firms grewinto multinational operations there was a need for their U.S. research service to beavailable in other markets of the world as well. The research industry, throughacquisition, merger, and expansion, moved into international markets at anunprecedented pace. In the third edition of this book, published in 2000, JackHonomichl discussed what happened in the research industry during the 1990s. Hesaid some of the world’s largest firms, such as Procter & Gamble, Gillette, Coca-Cola, H. J. Heinz, and Johnson & Johnson, obtain more than half their profits fromoperations outside their home country. Honomichl went on to say that the researchfirms that cater to the information needs of these multinational giants must servethem all over the world, and this explains the force behind the globalization of theresearch industry. As an example, Honomichl says that in just 1997 and 1998, theworld’s largest marketing research firms acquired 55 other firms around the globe.5

In 2000, the top 50 U.S.-based research firms got 37 percent of their revenues fromnon-U.S. operations.6

Our second influence during the time period from 1990 to the present wouldhave to be online research, the focus of this edition of our text. There have beenmany forces that have created the growth in online research. The technology, basedin the PC technology era of the eighties, continued to evolve and create even morepowerful machines and applications software. Globalization meant that not onlywere firms located far from their customers, but also managers were located farfrom one another. The need for communications was never greater. Increasing com-petitive pressures drove the need for operating efficiencies. Consumers’ growingconcerns for privacy caused researchers to grow wary about the future viability oftraditional data collection methods. The opening of the Internet to the public cre-ated the pavement needed for the information highway. All of these forces led firmsin the marketing research industry to practice online research. We believe onlineresearch will continue to evolve, and we believe it will be a significant part of theindustry for years to come.

UNDERSTANDING THE INDUSTRY STRUCTUREIn the marketing research industry we refer to providers of marketing research infor-mation as research suppliers. There are several ways we can classify suppliers. Weuse a classification developed by Naresh Malholtra,7 slightly modified for our pur-poses here. This classification system is shown in Figure 3.1. As shown in this figure,suppliers may be classified as either internal or external.

Internal SuppliersAn internal supplier means an entity within the firm supplies marketing research. It hasbeen estimated that these firms spend roughly 1 percent of sales on marketing research,whether it is supplied internally or externally.8 Kodak, General Mills, General Motors,and DaimlerChrysler have research departments of their own. AT&T has an in-house


Understanding the Industry Structure 49

SyndicatedData Services

StandardizedServices

Full Service Limited Service

Internal External

Research Suppliers

CustomizedServices

OnlineResearchServices

FieldServices

MarketSegment

Specialists

SampleDesign &

DistributionServices

DataAnalysisServices

SpecializedResearchTechniqueServices

Figure 3.1 A Classification of Marketing Research Suppliers

Internal suppliers may (1) havetheir own formal departments, (2)have no formal department but atleast a single individual responsi-ble for marketing research, orthey may (3) assign no oneresponsibility for conducting mar-keting research.

Marketing research departmentsare usually organized accordingto one or a combination of the fol-lowing functions: area of applica-tion, marketing function, or theresearch process.

research department that constantly monitors consumer satisfaction and environmen-tal trends. It also provides research support to AT&T’s advertising agencies. Internalsuppliers exist not only in for-profit firms but also, as we see in Marketing ResearchInsight 3.1, in not-for-profits, such as the American Heart Association, which has itsown marketing research function. It is, thus, an internal supplier.

How Do Internal Suppliers Organize the Research Function?Internal suppliers of marketing research can elect several organizing methods toprovide the research function. They may (1) have their own formal departments, (2) have no formal department but place at least a single individual or a committeeresponsible for marketing research, or they may (3) assign no one responsibility forconducting marketing research. Most large organizations have the resources to stafftheir own formal marketing research departments. Firms with higher sales volumes(over $500 million) tend to have their own formal marketing research departmentsand many large advertising agencies have their own formal research departments.9

The key to whether a company has its own research department lies in justifying thelarge fixed costs of supporting the personnel and facilities of the department day inand day out. The major advantage of having your own department is that the staffis fully cognizant of the firm’s operations and the changes in the industry. This maygive them better insights into identifying opportunities and problems suitable formarketing research action.

Marketing research departments are usually organized according to one or acombination of the following functions: area of application, marketing function, orthe research process. By “area of application,” we mean these companies organizethe research function around the “areas” to which the research is being applied. Forexample, some firms serve both ultimate consumers as well as industrial consumers.Therefore, the marketing research department may be organized into two divisions:consumer and industrial. Some firms organize their research department aroundbrands or lines of products or services. Marketing research may be organized



Meet a Marketing Researcher

Internal Suppliers of Marketing Research Include Not-for-Profit as Well as For-Profit Organizations

Allison Groom, American Heart Association

MARKETING RESEARCH

INSIGHT

Ms. Allison Groom is a marketing research consultant withthe American Heart Association’s national center in Dallas,Texas. Her responsibilities encompass a wide spectrum ofmarketing research, including customer satisfaction, publicawareness, employee research, market segmentation, andonline research. She consults internally with management toapply the data to business decisions affecting strategic plan-ning, product development and marketing, and corporateoperations. Before joining the American Heart Association in1988, Ms. Groom was employed at Bozell & Jacobs advertis-ing agency in Dallas. She holds a master’s in advertisingfrom the University of Texas at Austin, and a B.S. in journal-ism from Texas Christian University at Fort Worth.

When we think of organizations that are internal supplierswith their own, in-house marketing research function, we nor-mally think of for-profit firms such as GE, IBM, and Wal-Mart.But decision makers at the not-for-profits must make importantdecisions as well. As you can see from the examples of mar-keting research supplied to us by Allison Groom, the AmericanHeart Association (AHA) conducts marketing research studiesitself (internal supplier) as well as obtaining research informa-tion from marketing research external supplier firms.

Market SegmentationThe AHA maintains profiles of 26 custom market segmentsbased on health knowledge, attitudes and behavior, donating andvolunteering habits, lifestyle and spending habits, demographics,and psychographics. The segments drive product development,marketing, and communications strategies. The segments werecreated based on data from a national consumer mail panel sur-vey that was overlayed with Claritas segmentation profiles.

Market Tracking StudyThe AHA has conducted a biannual tracking study since1996 among the general public to measure changes insocial marketing issues, corporate positioning, and healthknowledge, attitudes, and behavior. A mail survey is sent to5,000 members of a national consumer mail panel and aver-ages a 60 percent response rate. The data allow AHA toadjust strategy based on market changes, as well to updatethe 26 custom market segments.

Customer Usage and Attitude StudyThe AHA recently conducted a usage and attitude studyamong donors and volunteers that represents a comprehen-

sive investigation into giving and volunteering behavior. Atotal of 1,300 nationally representative telephone interviewswere conducted with adults. Telephone surveys were used tomeasure top-of-mind awareness.

Online Survey ResearchThe AHA has recently begun using online surveyresearch when applicable, including surveysamong donors, volunteers, fund-raising event par-ticipants, Web site visitors, and other customers

who are accessible online. Examples of online surveys include:testing fund-raising event prize concepts and T-shirt designs,obtaining usage and satisfaction of emergency cardiovascularcare products, testing names for a Web-based program, evalu-ating an Intranet site, and screening employee participants foran e-training course. The average response rate has beenaround 30 percent, and turnaround time is typically within twoweeks. This methodology has dramatically reduced the AHA’sresearch costs and time lines. Traditional research methodolo-gies, however, are still used heavily by the AHA in order toreach audiences who tend not to be accessible online.

Positioning ResearchThe AHA conducted a series of qualitative and quantitativeresearch to determine its corporate positioning. The researchbegan with a competitive analysis to identify the positioningstrategies used by other major nonprofit health organizations.Focus groups were then held with customers, includingdonors, volunteers, health care professionals, and general con-sumers. The focus groups elicited perceptions and expecta-tions that resulted in the creation of five alternative positioningstatements. The statements were then tested through a quanti-tative mail survey. Four key attributes that were important andbelievable—personal, credible, understandable, and accessi-ble—led to the creation of the AHA’s current positioning state-ment: “The American Heart Association is working for you andyour family by getting the best science on heart disease andstroke and making it simple to understand and easy to obtain.”

Secondary ResearchThe AHA subscribes to several standardized information ser-vices, as third parties have already explored many healthcare and fund-raising issues. It also frequently conducts itsown online searches over the Internet.

3.1



It is rare to find no one responsi-ble for marketing research inlarge organizations; small busi-ness owners who see their cus-tomers daily conduct their own“informal” research constantly.

External suppliers are outsidefirms hired to fulfill a firm’s mar-keting research needs.

The marketing research industryearns nearly $9 billion in annualrevenues.

around functional areas such as advertising research, product research, distributionresearch, and so on. Finally, the research function may be organized around stagesin the research process such as data analysis or data collection.

If internal supplier firms elect not to have a formal marketing research depart-ment, there are many other organizational possibilities. Assignment for marketingresearch may be made across company departments or divisions. That is, althoughthere is no formal research department, responsibility for research rests withinexisting organizational units. One problem with this method is that research activi-ties are not coordinated; a division conducts its own research, and other units of thefirm may be unaware of useful information. One way to remedy this is to have acommittee whose primary function is to coordinate research activities to ensurethat all units of the firm have input into and benefit from any research activityundertaken. In some cases, committees or individuals assigned to marketingresearch may actually conduct some limited research but typically their primaryrole is that of helping other managers recognize the need for research and coordi-nating the purchase of research from external research suppliers. Obviously, theadvantage here is limiting fixed costs incurred by maintaining the full-time staffrequired for an ongoing department. No one may be assigned to marketingresearch in some organizations. This is rare in large companies but not unusual atall in smaller firms. In very small firms, the owner/manager plays many roles, rang-ing from strategic planner to salesperson to security staff. He or she must also beresponsible for marketing research, making certain to have the right informationbefore making decisions. Fortunately, small business owner/managers can more eas-ily gather certain types of information than can CEOs of large, multinational cor-porations. This is because small business owners/managers have daily contact withcustomers and suppliers. In this way, they constantly gather information that helpsthem in their decision making.

External SuppliersExternal suppliers are outside firms hired to fulfill a firm’s marketing research needs.As Allison Groom of the American Heart Association points out in MarketingResearch Insight 3.1, the AHA is not only an internal supplier of marketing researchbut it also purchases research from external suppliers as well. Both large and smallfirms, for-profits and not-for-profits, and government and educational institutionspurchase research information from external suppliers.

Every year Jack Honomichl publishes the “The Honomichl Top 50.” Mr.Honomichl’s study includes revenues from the top 50 firms (ranked on the basis ofrevenues earned in the U.S.) and an additional 130 research firms who are membersof CASRO (Council of American Survey Research Organizations). The HonomichlTop 50 is published each year in the June issue of the AMA’s Marketing News. The2002 study, reporting revenues for the industry for 2001, is shown for you in Table3.1. Revenues were up from 2000 to 2001 by 4 percent after an adjustment forinflation, real growth was 1.28 percent. This was down from real growth rates of 10percent in 1998, 7.9 percent in 1999 and 5.6 percent in 2000 but the decline wasexpected. In fact, many felt the decline in growth would be more than this due to alackluster economy and the horrendous effects of the tragedy of September 11,2001. Mr. Honomichl states that the firms offering syndicated services, with longterm contracts, were affected less by the 9/11 tragedy and firms depending mainlyon ad hoc research project work were affected most. Ad hoc research came to a vir-tual standstill for several weeks following 9/11. Table 3.1 shows that the amount ofresearch revenues earned in the United States during 2001 by the 130 firms was $5.5billion. These same firms earned another $3.3 billion in revenues earned outside theUnited States for a rounded total of $8.9 billion.10


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See how Burke, Inc. is organizedat www.burke.com.

Due to the growth of onlineresearch, several online researchfirms have now joined TheHonomichl Top 50.

Another significant finding of “The Honomichl Top 50” is that due to the rela-tively high growth experienced by online firms for several years now, more of them areappearing in the top 50. The 2002 report shows that Knowledge Networks andcomScore Networks have joined other online research firms previously appearing onthe list. Those online research firms previously appearing are firms such as HarrisInteractive, Greenfield Online, and Jupiter Media Metrix.11 Mr. Honomichl’s report ishighly regarded as the best measure of revenue and change in the marketing researchindustry. You can view “The Honomichl Top 50” table with hyperlinks to the compa-nies at www.marketingpower.org publications (Do a search for Honomichl).

Of course, there are many other research firms in the marketing research indus-try. These research firms range in size from one-person proprietorships to the large,international corporations shown in the “The Honomichl Top 50.” In terms of rev-enue, VNU Inc., owner of ACNielsen, has been the dominant firm with well over abillion dollars in annual revenue. So, as you can see by looking at Table 3.1, theresearch industry is made up of a few large firms, several medium-sized firms, andmany smaller firms (see that the over 100 CASRO firms had revenues totaling asmall percentage of the top 50 firms’ revenues).

You can get an idea of the type, number, and services offered by these firms bylooking at some online directories of marketing research firms. For example, take alook at the New York chapter of the American Marketing Association’s Web siteand look through the Greenbook, a directory of marketing research firms. Go towww.greenbook.org and click on the picture of the Greenbook. Explore this Website and you will get a better understanding of how to classify external supplierfirms. Also visit the different “directory” listings at www.quirks.com.

External Suppliers of Online Survey ResearchInside Research, a confidential newsletter for research industry executives also pub-lished by Jack Honomichl, publishes an index to measure the growth of online sur-vey research. The index is based on 30 U.S. marketing research firms and their 27subsidiaries. These firms reported revenue of $333.5 million in 2001. This repre-sented an increase of 51 percent from 2000. Even though many industries wouldlove to have a 51 percent increase, this was less than expected due to the combina-tion of a weak worldwide economy in 2001 and the economic downturn broughtabout by the terrorists attacks on New York City in September 2001. Significantly,the participating firms forecast revenues to increase by 46 percent in 2002 in spite ofthe weak economy.12 Obviously, online survey research is a fast-growing segment ofonline research and of the entire research industry.

How Do External Suppliers Organize?Like internal supplier firms, external supplier firms organize themselves in differentways. These firms may organize by function (data analysis, data collection, etc.), bytype of research application (customer satisfaction, advertising effectiveness, new-product development, etc.), by geography (domestic versus international), by type ofcustomer (health care, government, telecommunications, etc.), or some combinationof the foregoing functions. Let’s look at a few supplier firms to get an appreciationof how they are organized. Burke, Inc. is organized around four main areas ofresearch application and function: Burke Marketing Research is a full-service mar-keting research division. The Burke Customer Satisfaction Associates offers a stan-dardized service of measuring and managing customer satisfaction. The BurkeTraining & Development Center provides training in marketing research for sup-plier firms, whether internal or external suppliers. The Burke Strategic ConsultingGroup offers intensive consulting to business management. Also, as change occurs,



Full-service supplier firms have theability to conduct the entire mar-keting research project for thebuyer firms. Full-service firms canbe further broken down into syndi-cated data services, standardizedservices, and customized services.

we see research companies changing their organizational structure to accommodatethe change. For example, as online research has grown, Burke, Inc. added a divisionto Burke Marketing Research called Burke Interactive.

Opinion Research Corporation (ORC) is organized by geography, type ofresearch application, and function. ORC’s three divisions are ORC International,which conducts global marketing research; ORC Macro, which specializes inglobal social research such as health issues; and ORC ProTel, which is a provider ofteleservices.13

Strategic Alliances Among External Suppliers Firms in the marketing researchindustry, as in other industries, form strategic alliances. Strategic alliances bringfirms together in a way that allows each firm to take advantage of the other firms’expertise and resources. Therefore, each participating firm gains by being in thealliance. The basis of these alliances may be through acquisition, merger, or contrac-tual agreements. For example, several years ago, Burke, Inc. acquired Trendbox, aresearch firm in Amsterdam, in order to have research capabilities for its Burkeclients who were operating in western Europe. Burke gained immediate representa-tion in western Europe for its clients who were operating there and Trendbox gainedthe advantage of Burke’s very large staff with expertise in many areas. Anotherstrategic alliance has been formed between Digital Marketing Services (DMS) andthe marketing research division of SPSS, SPSS MR. We present this alliance to youbecause not only is it a good example of strategic alliance in the research industrybut it also represents a significant alliance in online survey research. DMS, an AOLcompany, created a large base of internet subscribers who were willing to completeonline surveys. In 2001 DMS entered into a strategic alliance with SPSS’s marketingresearch division, SPSS MR. So, now this alliance offers a competitive array of ser-vices including the talents of these established research firms, a site for onlinerespondents called Opinion Place and data collection and data analytics provided bySPSS MR. This a good example of how reorganizing via a strategic alliance can pro-duce a competitive service.14 DMS and SPSS MR will work closely to expand onlineindustry survey and sample services through OpinionPlace.com, the online indus-try’s largest portal for reliable survey research respondents.15

Classifying External Supplier FirmsAs you may recall from Figure 3.1, we can classify all external supplier firms intotwo categories: full-service or limited-service firms. In the following paragraphs wewill define these two types of firms and give you some examples of each.

Full-Service Supplier Firms Full-service supplier firms have the ability to conductthe entire marketing research project for the buyer firms. Full-service firms willoften define the problem, specify the research design, collect and analyze the data,and prepare the final written report. Typically, these are larger firms that have theexpertise as well as the necessary facilities to conduct research studies in theirentirety. Firms such as Market Facts, Inc., Burke, Inc., ACNielsen, Roper StarchWorldwide, Information Resources, Inc., and Walker Information are full-servicefirms. There are certain specializations in the research industry such as syndicateddata services, standardized services, or Internet services. ACNielsen, for example,offers syndicated data services. ACNielsen is a very large, full-service firm. Theseservices are not easily offered and, therefore, they are typically provided by thelarger, full-service firms. Customized services, meaning research that is customdesigned for a particular client problem, may be carried out by a large or small full-service firm.

External suppliers can be classi-fied as either full-service orlimited-service supplier firms.



Syndicated data service firms collect information that is made available to mul-tiple subscribers. The information, or data, is provided in standardized form (infor-mation may not be tailored to meet the needs of any one company) to a large num-ber of companies, known as a syndicate. Therefore, these companies offersyndicated data to all subscribing members of the syndicate. We will discuss syndi-cated data service firms in greater detail in Chapter 7.

Standardized service firms provide syndicated marketing research services, asopposed to syndicated data, to clients. Each client gets different data, but theprocess used to collect the data is standardized so that it may be offered to manyclients at a cost less than that of a custom-designed project. Burke’s CustomerSatisfaction Associates provides the service of measuring customer satisfaction.RoperAWS offers several segmentation services. Other companies offer the serviceof test marketing.

Customized service firms offer a variety of research services that are tailored tomeet the client’s specific needs. Each client’s problem is treated as a unique researchproject. Customized service firms spend considerable time with a client firm to deter-mine the problem and then design a research project specifically to address the partic-ular client’s problem. Such firms include Market Facts, Inc., Elrick & Lavidge, Inc.,Burke Marketing Research, and Taylor Nelson Sofres USA. Market Facts, for instance,provides custom marketing research services through a range of research methodolo-gies including test marketing, focus groups, and consumer and industrial surveys.

Online research services firms specialize in providing services online. Recall inChapter 1 that we defined online research as the use of computer networks, includ-ing the Internet, to assist in any phase of the marketing research process includingdevelopment of the problem, research design, data gathering, analysis, and reportdistribution. Virtually all research firms today use online research in the sense thatthey make use of online technology in at least one or more phases of the researchprocess. These firms would be better categorized in one of the other types of firmsshown in Figure 3.1. However, there are many firms that specialize in online ser-vices. Their “reason for being” is based on the provision of services online.Affinova, for example, exists because it has proprietary, new software that allowsconsumers to design preferred product attributes into new products online.Knowledge Networks came into being because its founders wanted to provideclients with access to probability samples online. Insight Express was formed byNFO, Inc. to allow clients to develop questionnaires and conduct surveys online.Active Group was formed to conduct focus groups online. Certainly, there are over-lapping categories in Figure 3.1. We do not claim that the categories are mutuallyexclusive. In fact, we could argue that some of these, because they specialize in onestep of the research process, could be placed in one of the limited-service suppliercategories that follow.

Limited-Service Supplier Firms Limited-service supplier firms specialize in one or,at most, a few marketing research activities. Firms can specialize in types of market-ing research techniques such as eye-testing and mystery shopping, or specific marketsegments such as senior citizens or certain sports segments such as golf or tennis.The limited-service suppliers can be further classified on the basis of their specializa-tion. These include field services, market segment specialists, sample design and dis-tribution services, data analysis, and specialized research technique service suppli-ers. Many of these limited-service firms specialize in some form of online research.

Field service firms specialize in collecting data. These firms typically operate ina particular territory conducting telephone surveys, focus group interviews, mall-intercept surveys, or door-to-door surveys.

Syndicated data service firms col-lect information that is madeavailable to multiple subscribers.

Standardized service firms pro-vide syndicated services asopposed to syndicated data. Eachclient gets different data, but theprocess used to collect the data isstandardized so that it may beoffered to many clients at a costless than that of a custom-designed project.

Customized service firms offer avariety of research services thatare tailored to meet the client’sspecific needs.

Online services firms specialize inproviding marketing research ser-vices online, such as surveys,concept testing of new products,and focus groups.

Limited-service supplier firmstypically specialize in one or, atmost, a few marketing researchactivities.

Field service firms specialize incollecting data.



Visit Insight Express atwww.insightexpress.com.

Market segment specialists col-lect data for special market seg-ments such as, AfricanAmericans, Hispanics, children,seniors, gays, industrial cus-tomers, or a specific geographicarea within the United States orinternationally.

Sample design and distributionfirms specialize in providing sam-ples to firms that are conductingresearch studies.

Specialized research techniquefirms address very specific needssuch as eye-tracking, packagedesign, or brand name testing.

Because it is expensive and difficult to maintain interviewers all over the coun-try, firms will use the services of field service firms in order to quickly and efficientlygather data. There is specialization even within firms that specialize in field services.Some firms, for example, conduct only in-depth personal interviews; others conductonly mall-intercept surveys. Some firms, such as Irwin Research Associates, areknown as “phone banks” and limit their practice to telephone surveying. Its “sister”company, The Irwin Companies, specializes in focus groups.

Opinion One is a good example of a limited-service firm that uses onlineresearch. It is a field service firm that specializes in providing the ability to displaygraphics, including video, in selected malls around the country. Its system allowsrespondents to view the image and answer questions using touch-screen technology.Respondents’ answers are automatically recorded and sent directly to OpinionOne’s office in Cincinnati, Ohio. Another example of online survey research in alimited-service firm is Insight Express. This company allows a decision maker todesign his or her questionnaire online as well as choose sample characteristics (i.e., aparticular income group, gender, or type of employment). Then Insight Expressgathers respondent data from its online survey respondents and provides data backto the client. All this can be done very quickly and at relatively low expense. TheNew York–based Meyers Research Center specializes in in-store research using con-sumer point-of-sale intercept interviews. Quick Test, Inc. offers clients interviewerswho have been trained specifically for mall-intercept interviews.

Other limited-service firms, called market segment specialists, specialize in collect-ing data for special market segments such as African Americans, Hispanics, children,seniors, gays, industrial customers, or a specific geographic area within the UnitedStates or internationally. Strategy Research Corporation is a Market Facts companythat specializes in Latin American markets. JRH Marketing Services, Inc. specializes inmarketing to ethnic markets, especially to black markets. MedProbe, Inc. specializes inthe research of the medical and pharmaceutical markets. Other firms specialize in chil-dren, mature citizens, pet owners, airlines, beverages, celebrities, college students, reli-gious groups, and many other market segments. By specializing, these limited-servicesuppliers capitalize on their in-depth knowledge of the client’s industry.

Survey Sampling Inc. and Scientific Telephone Samples (STS) are examples oflimited-service firms that specialize in sample design and distribution. It is notuncommon, for example, for a company with an internal marketing researchdepartment to buy its sample from a firm specializing in sampling and then send thesamples and a survey questionnaire to a phone bank for completion of the survey.This way, a firm may quickly and efficiently conduct telephone surveys using aprobability sample plan in markets all over the country. Survey Sampling, Inc. pro-vides Internet samples, B2B samples, global samples, and samples of persons withcharacteristics that are hard to find (low-incidence samples).

Survey Sampling, Inc. (SSI) is one of the oldest and best-known firms specializ-ing in providing samples to marketing research firms. SSI is also an example of acompany using online research. Users can design their sample plan online (see SSI-SNAP) and receive their samples online. Go to www.ssi.com.

There are limited-service marketing research firms that offer data analysisservices. Their contribution to the research process is to provide the technical assis-tance necessary to analyze and interpret data using the more sophisticated dataanalysis techniques such as conjoint analysis. SDR Consulting, SPSS MR, andApplied Decision Analysis LLC are examples of such firms.

Specialized research technique firms provide a service to their clients by expertlyadministering a special technique. Examples of such firms include The PretestingCompany, which specializes in eye movement research. Eye movements are used to



determine effectiveness of ads, direct-mail pieces, and other forms of visual promo-tion. Other firms specialize in mystery shopping, taste tests, fragrance tests, creationof brand names, generating new ideas for products and services, and so on.

We should not leave this section without saying that our categorization ofresearch suppliers does not fit every situation. For example, many full-service firmshave the capabilities of offering what we have called a limited service. Taylor NelsonSofres is a large, full-service firm. It also offers very specialized data analysis ser-vices. Also, there are other entities supplying research information that do not fitneatly into one of our categories. For example, universities and institutes supplyresearch information. Universities sponsor a great deal of research that could beclassified as marketing research. However, you may recall that we stated in Chapter1 that this is basic research as opposed to the applied research. Don’t forget that agood way for you to learn more about the structure of the industry is to go towww.quirks.com and www.greenbook.com and explore how they categorize mar-keting research firms in their online directories.

CAN THE MARKETING RESEARCH INDUSTRY IMPROVE ITS PERFORMANCE?Studies evaluating entire industries are conducted from time to time. Such is the casein the marketing research industry. These reviews indicate that, although the mar-keting research industry is doing a reasonably good job, there is room for improve-ment. Here are some striking examples indicating marketing research needs improv-ing. Sony, Chrysler, and Compaq “ignored the customer” when they introduced theWalkman, minivan, and PC network servers to eager markets. Yet, Coca-Cola’s firstattempt at New Coke and McDonald’s McLean Burgers both failed but, in bothcases, were supported by extensive marketing research.16 Mahajan and Wind sug-gest, however, that marketing research is not fundamentally flawed but that manyexecutives misapply research. They misapply research by not having research pro-fessionals involved in high-level, strategic decision making. Instead, too many exec-utives view marketing research as a commodity to be outsourced to “research bro-kers.” To remedy the situation, Mahajan and Wind, highly regarded in academicsand business consulting, recommend that researchers (1) focus on diagnosing prob-lems, (2) use information technology to increase speed and efficiency, (3) take anintegrative approach, and (4) expand the strategic impact of marketing research.

Marketing Researchers Should Focus on Diagnosing ProblemsMahajan and Wind suggest that marketing researchers should stop using market-ing research only to test solutions, such as testing a specific product or service.Instead, researchers should diagnose the market. As an example, consider that cus-tomers didn’t “ask” for a Sony Walkman or a minivan. Marketing researcherswould not have known about these products by asking customers what theywanted. Without having ever seen these products, it is unlikely that customerswould have been able to articulate the product characteristics. But had marketingresearchers focused on diagnosing the market in terms of unserved markets andunarticulated needs in those markets, they may have produced these products. TheWalkman was successful because it met an unserved market’s need for portableentertainment. The minivan was successful because it met an unserved market’sneed for additional space in family vehicles. Marketing research can improve byproperly diagnosing the market first, then testing alternative solutions to meet theneeds discovered in the market.

There are other entities supplyingresearch information that do not fitneatly into one of our categories.

In evaluations of the researchindustry, the basic conclusion isthat the industry has performedwell, but there is room forimprovement.


Can the Marketing Research Industry Improve Its Performance? 59

Marketing Researchers Should Speed Up Marketing Research by Using ITIt has long been recognized that there is a trade-off between quickly producing mar-keting research information and doing research in a thorough manner. Marketingresearchers want time to conduct projects properly. However, Mahajan and Windpoint out that researchers must remember that time is money. There are real dollarlosses to being late in introducing products and services to the marketplace. Somuch so, in fact, that many companies cut many corners in the research they con-duct or don’t do any marketing research at all. This, of course, often leads to disas-ter and has recently been labeled “death-wish” marketing.17 The suggested prescrip-tion is for marketing researchers to make use of information technology (IT) forspeed and economical efficiency. This is exactly why online research is becomingsuch a significant part of the research industry. Decision Analysts, Inc. allows com-panies to test product concepts quickly using online respondents. Affirnova is a newcompany that allows a company to actually design new products online. HarrisInteractive, Knowledge Networks, Greenfield Online, and many others allow sur-veys to be conducted online. All of these firms use IT to speed up and reduce the costof research.

Marketing Researchers Should Take an Integrative ApproachMarketing researchers have created silos, which separate themselves from otherinformation. For example, by separating research into qualitative and quantitativeresearch, researchers tend to use one or the other when, in fact, more insights maybe gained by integrating the two approaches. The same is true of modeling versusmarketing research. Other silos are created when decision support systems are notlinked with marketing research. Firms should integrate experiments they conductinstead of conducting one-shot projects that investigate a single issue. Mahajan andWind also suggest greater integration of marketing research with existing databasesand other information sources such as customer complaints, other studies of prod-uct/service quality, and external databases. In other words, marketing researcherswould improve their results by taking a close look at all existing information insteadof embarking on isolated research projects to solve a problem.

Marketing Researchers Should Expand Their Strategic ImpactMarketing research has become too comfortable in providing standard reports usingsimple measures. This information, although useful, does not allow marketing researchto contribute to the important central issues of determining overall strategy. Researchbecomes relegated to a lower-level function providing information for lower-level deci-sions. As an example, Mahajan and Wind refer to marketing research periodically pro-viding a report on market shares. Although this information is useful for making tacticaldecisions for each brand, marketing research should be providing information suchdefining the market. Should the company look at a broader market than the one defined?Should global market share be considered? How can the company get more from totalspending in the market? These are broader, more strategic issues that, if addressed prop-erly by marketing research, would add value to the function of marketing research.

There have been several other investigations of the research industry over theyears. Some of these reviews have been made by knowledgeable persons’ critiques andothers have asked buyers of marketing research studies whether the value of theresearch performed by the suppliers in the industry is worthwhile. Critical reviews aregood for the industry. John Stuart Mill once said that “custom is the enemy ofprogress.”18 One entire issue of Marketing Research, edited by Chuck Chakrapani,was devoted to a number of articles questioning customary practices in marketingresearch.19 The debate these articles stirred is good for the industry. In summary, the



basic conclusion of these evaluations is that the industry has performed well, but thereis room for improvement. Criticism has focused on the following areas of concern:There is a lack of creativity, the industry is too survey oriented, the industry does notunderstand the real problems that need studying, market researchers show a lack ofconcern for respondents, the industry has a cavalier attitude regarding nonresponseerror, the price of the research is high relative to its value, and that academic marketingresearch should be more closely related to actual marketing management decisions.20

Industry Improvements: Certification, Auditing, and EducationEven though there have been criticisms of the marketing research industry, theindustry has performed well by the toughest of all standards, the test of the market-place. As we noted earlier in this chapter, revenues in the research industry havebeen increasing each year. Clients obviously see value in the marketing research thatis being generated. However, the industry is not complacent. Many suggest that theproblems are created by a very small minority of firms, most of which simply are notqualified to deliver quality marketing research services. There is obviously a concernamong buyers and suppliers with the lack of uniformity in the industry as well. In astudy of buyers’ and suppliers’ perceptions of the research industry, Dawson, Bush,and Stern found that the key issue in the industry is a lack of uniform quality; thereare good suppliers and there are poor suppliers.21

Certification Some have argued that marketing research attracts practitioners whoare not fully qualified to provide adequate service to buyer firms. There are no for-mal requirements, no education level, no degrees, no certificates, no licenses, and notests of any kind required to open up a marketing research business. Certainly, thevast majority of research firms have staffs thoroughly trained in research methodsand have years of excellent performance. However, some say, it is those few firmswith unqualified personnel and management that tarnish the industry’s image.

Professor Bruce Stern has argued that all practitioners should be certified bybeing required to pass a four-part exam on each of the following areas: secondarydata, research methods, data analysis, and the fundamentals of marketing. Asother professions such as accounting, real estate, and financial analysis havelearned, certification programs can raise the overall level of competence within anindustry.22 Alvin Achenbaum23 as well as Patrick Murphy and Gene Laczniak24

have proposed a professional designation of certified public researchers (CPRs),analogous to CPAs or CFAs. Those arguing against certification point out that itwould be difficult, if not impossible, to agree on defining certification standards,particularly for the creative aspect of the research process.25

Few would argue that William D. Neal of SDR Consulting has led the battle tocreate a certification for marketing researchers. We asked Mr. Neal to address thistopic for this book. He provides an extract from a presentation he made to theAdvertising Research Foundation in Marketing Research Insight 3.2. As you willsee, Mr. Neal makes a good argument for certification of marketing researchers. Inconclusion, although many believe certification should take place, there is presentlyno certification program for marketing researchers.

Auditing An alternative to certification is auditing. The concept is to have marketingresearch firms’ work be subject to an outside, independent review for the sake ofdetermining the quality of their work. Several years ago, Steve Bernstein, marketresearch manager for Consolidated Freightways, proposed auditing as a means ofproviding the industry with some professional oversight. Bernstein suggested that theaudit include assessments of, for example, research methods and data integrity. Anaudit would involve procedures such as retabulation from raw data of a random

Many of the problems in theresearch industry are created by avery small minority of firms, mostof which simply are not qualifiedto deliver quality marketingresearch services.

The marketing research industryis discussing certification andauditing programs. It has alsorecently implemented new profes-sional development programs formembers of the industry.


Can the Marketing Research Industry Improve Its Performance? 61

Additional Insights

The Marketing Research Profession Needs Certification26

Insights from William D. Neal, Founder and Senior Executive Officer, SDR Consulting

MARKETING RESEARCH

INSIGHT

The certification of marketing researchers has been hotlydebated in this country for the last 25 years. Several fact-basedarticles have been published on the subject along with severalnotable opinion articles. The two major quantitative studies onthe subject (AMA, 1990; McDaniel and Solano-Mendez,Journal of Advertising Research, 1993) show very consistentresults—over 60 percent of marketing researchers support cer-tification. Younger and less experienced researchers supportcertification to a greater degree than their older colleagues.

Certification is a voluntary process whereby individualsreceive a document recognizing that they have fulfilled therequirements of and have the knowledge base to practice inthe field. Most certification program requirements includepassing an objective knowledge test, demonstrating a basiclevel of experience, abiding to a code of professional prac-tices, and a commitment to engaging in ongoing professionaldevelopment.

There are numerous reasons our profession needs a cer-tification program. There is too much “bad” research beingdelivered to clients—by untrained practitioners, by manage-ment consultants, and by ill-trained M.B.A.’s and marketingmajors. This practice has a major negative impact on userorganizations and it greatly depreciates both the professionand the practice of marketing research.

There are no standards or minimum qualifications forentering the field. Anyone can claim he or she is a researchprofessional without knowing a single thing about correctprocedure. Unfortunately, too many of these “pseudo-researchers” do some really bad research and the wholeprofession gets a black eye for the ridiculous results theydeliver. On the other hand, many user organizations hire orpromote unqualified people into research positions becausethey have no guidelines on proper credentials—be it trainingor experience.

Over 50 percent of the M.B.A. programs in the UnitedStates do not require a single course in marketing research.Yet, many of our clients are M.B.A.’s. Thus, the outcome isthat we often have the uninformed directing the inexperi-enced to do the impossible, with little or no money. And, asusual, the research profession takes the rap for the usuallyuntenable results. Outside of the handful of dedicated mas-ter’s programs in marketing research, training of marketingresearchers is, for the most part, haphazard and unorga-nized. Again, there are no standards or generally acceptedcredentials for the profession.

Much of the business and trade press depreciates thecontributions of marketing research. How has this hap-pened? In many cases we have let the “business” of market-ing research usurp the “science” of marketing research. Welet our clients do focus groups when we know they should bedoing quantitative research. We compromise on samplingand sample sizes, and we too often engage in a myriad ofother compromises to keep the relationship with the client.Over the years, this has weakened our professional imageamong the users of our product. In many other cases, wesimply have ill-trained researchers overstepping their knowl-edge base and capabilities due mostly to a lack of adequatetraining and experience. The result is the same—a weak-ened professional image.

Certification will provide a platform and process foraddressing most of these issues. A comprehensive, well-publicized certification program will finally establish the fieldof marketing research as a recognized profession. It willimprove the practice of marketing research by promoting acore body of knowledge that can be studied and masteredby those wishing to practice in the field. Certification willimprove the practice of marketing research by promoting aset of ethical standards to which those in the field wouldadhere. It would provide a visible signal to employers thatthe researcher possesses the basic knowledge and experi-ence to practice the craft. Certification will help strengthenthe relationship between purchasers and providers of mar-keting research services by providing a common knowledgebase and a common code of professional practice. It willprovide a starting point for those wishing to enter the profes-sion. It will greatly assist professionals, especially youngerprofessionals, in planning their careers. It will improve theimage of marketing research in the eyes of external con-stituencies—consumers, the business press, the courts, gov-ernment, and business managers. Certification will furtherdifferentiate marketing researchers from telemarketers andother direct marketers. It will provide a professional identityfor both those in the profession and those who use the ser-vices of the profession. A comprehensive, well-publicizedcertification program will provide a signal to the entire busi-ness community that not just anyone can do marketingresearch. Good research takes a trained, experiencedprofessional.

Is certification something new and radical? No. Manyother specialized business professions have developed

3.2

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sample of descriptive surveys, validation of a sample of questionnaires, and evenchecking questionnaires for evidence of selling under the guise of marketingresearch.27 (We discuss the latter in the following section on ethics.)

Though proposed several years ago for the marketing research industry, theaudit concept has lain dormant. However, auditing is increasing in other areas andthis may create renewed interest in the concept for marketing research. TheAmerican Marketing Association has recently created a certification forProfessional Certified Marketer (PCM). To achieve the PCM(TM) designation, can-didates must fulfill several criteria such as having a bachelor’s degree, four years ofprofessional experience, or a master’s degree with two years of professional experi-ence. Candidates must also commit to high standards of ethics in the practice ofmarketing and pass a five-hour test of marketing knowledge. The five areas cov-ered on this exam are legal, ethical, and professional marketing issues; the market-ing mix; relationship, information, and resource management; assessment and plan-ning of the strategic marketing process; and marketing evaluation. There are alsostandards for maintaining the certification such as attending professional seminarsand conferences.28 The Audit Bureau of Circulations (ABC), the auditor of maga-zine and other periodical circulation for many years, formed ABCi (ABCInteractive) in 2001 for the purpose of auditing traffic on Web sites.29 SurveySampling, Inc., a marketing research firm specializing in the provision of samples,has asked ABC to audit its samples. Thus, the use of auditing may still be an alter-native for the industry.

Education Although debate continues over the issue of certification and auditing maymake a comeback bid, the key issue is that the industry recognizes it has certain prob-lems, and efforts are being made to remedy them. The industry has been involved invery good continuing education programs. The AMA sponsors programs designed toincrease skills in the industry. One, the AMA School of Marketing Research, is a pro-gram conducted at Notre Dame University designed to benefit the analyst, projectsupervisor, or manager of marketing research. The other is an annual conference onadvanced analytical techniques. Also, the Marketing Research Association started anintroductory program on marketing research. Coordinated at the University ofGeorgia, this program is designed to develop research skills of those being transferredinto marketing research or those who want to enter the profession. The MarketingResearch Association (MRA), Council for the Association of Survey ResearchOrganizations (CASRO’s CASRO University), and the Advertising ResearchFoundation (ARF) have many excellent training classes and programs frequentlyscheduled to meet industry needs. Several universities now offer master’s-level training

successful certification programs, including the InternationalAssociation of Business Communicators, the Public RelationsSociety of America, the International Customer ServiceAssociation, the Business Marketing Association, the Centerfor Direct Marketing, the Association of Incentive Marketing,and the Project Management Institute, to name a few.

All the pieces are in place to develop a comprehensivecertification program in marketing research. We have stan-dards of ethical practice published by MRA, AAPOR, CASRO,and others. We have a superb basic training program that isuniversally available online or through correspondence—the

Marketing Research Institute International’s Principles ofMarketing Research Program. Included with that program isa comprehensive knowledge test covering all of the basics inthe field. We have a wide range of ongoing professional devel-opment programs offered annually by the major professionalassociations, universities, and private firms. All that is neededis for the major associations representing the profession tobring it together, organize it, and administer it.

We are part of a profession that is at least 60 years old.It’s time we started acting like a profession and put a certifi-cation program in place.


Ethics and Marketing Research 63

Ethics may be defined as a field of inquiry into determining whatbehaviors are deemed appropriate.

One’s philosophy usuallydetermines appropriate, ethical behavior.

One philosophy is called deontol-ogy, which focuses on the rightsof the individual. If an individual’srights are violated, then thebehavior is not ethical.

We think these ethical issues areso important that we call yourattention to them throughout thisbook using the ethical issue iconthat you see here.

A number of ethical issues con-front the marketing researchindustry.

in marketing research (see Appendix 3 at the end of this chapter). Certain firms alsoprovide excellent training for the industry. The Burke Institute, a division of Burke,Inc., has provided training programs for many years that are highly regarded in theindustry. The institute teaches classes throughout the year on a number of topicsincluding online research, multivariate techniques, questionnaire design, focusgroup moderating, basic marketing research, and many others. Any review of theindustry would agree that the industry is healthy and is being responsive to its manychallenges.

ETHICS AND MARKETING RESEARCHAs in most areas of business activity, there exist many opportunities for unethical(and ethical) behavior in the marketing research industry.30 A recent study by theEthics Resource Center of Washington, DC, states that the most common ethicalproblem in the total workplace is “lying to employees, customers, vendors or thepublic” (26 percent) followed by “withholding needed information” from thoseparties (25 percent). Only 5 percent of those in the study reported having seen peo-ple giving or taking “bribes, kickbacks, or inappropriate gifts.” Ninety percent ofAmerican workers “expect their organizations to do what is right, not just what isprofitable.” But one in eight of those polled said they “feel pressure to compromisetheir organization’s ethical standards.” And among these respondents, nearly two-thirds said pressure “comes from top management, their supervisors and/or co-workers.”31 Unfortunately, the marketing research industry is not immune to ethicalproblems.32 Also, online survey research has brought about several new areas ofethical concern (you will read about these in our Blue Ribbon Panel’s answersshown later in this chapter). Our purpose here is to introduce you to the areas inwhich unethical behavior has existed in the past and hopefully to give you someframework for thinking about how you will conduct yourself in the future whenconfronted with these situations. We think these ethical issues are so important thatwe call your attention to them throughout this book using the ethical issue icon thatyou see at the beginning of this section.

Ethics may be defined as a field of inquiry into determining what behaviors aredeemed appropriate under certain circumstances as prescribed by codes of behaviorthat are set by society. Society determines what is ethical and what is not ethical. Insome cases, this is formalized by our institutions. Some behavior, for example, is sowrongful that it is deemed illegal by statute. In many ways, behavior that is illegal isunethical, by definition. However, there are many other behaviors that are consid-ered by some to be unethical but are not illegal. When these types of behaviors arenot spelled out by some societal institution (such as the justice system, legislature,Congress, regulatory agencies such as the FTC, etc.), then the determination ofwhether the behaviors are ethical or unethical is open to debate.

Your Ethical Views Are Shaped by Your Philosophy: Deontology or TeleologyThere are many philosophies that may be applied to explain one’s determination ofappropriate behavior given certain circumstances. In the following discussion weuse the two philosophies of deontology and teleology to explain this behavior.33

Deontology is concerned with the rights of the individual. Is the behavior fair andjust for each individual? If an individual’s rights are violated, then the behavior isnot ethical.34 For example, consider the marketing research firm that has been hiredto study how consumers are attracted to and react to a new form of in-store display.Researchers, hidden from view, record the behavior of unsuspecting shoppers as



The British Market ResearchAssociation has a code of ethics.Visit its Web site atwww.bmra.org.uk. Also, theMarket Research Society of NewZealand has a code of ethics.Visit its Web site atwww.mrsnz.org.nz.

they walk through the supermarket. A deontologist considers this form of researchactivity unethical because it violates the individual shopper’s right to privacy. Thedeontologist would likely agree to the research provided the shoppers wereinformed beforehand that their behavior would be recorded, giving them the optionto participate or not to participate.35

On the other hand, teleology analyzes a given behavior in terms of its benefitsand costs to society. If there are individual costs but group benefits, then there arenet gains and the behavior is judged to be ethical.36 In our example of the shopperbeing observed in the supermarket, the teleologist might conclude that, althoughthere is a violation of the right to privacy among those shoppers observed (the cost),there is a benefit if the company learns how to market goods more efficiently, thusreducing long-term marketing costs. Because this benefit ultimately is shared bymany more individuals than those whose privacy was invaded during the originalstudy, the teleologist would likely declare this research practice to be ethical.

Thus, how you view a behavior as being ethical or unethical depends on yourphilosophy. Are you a deontologist or a teleologist? (See Case 3.1 at the end of thischapter). It’s difficult to answer that question until you are placed in an ethicallysensitive situation. One thing that is for certain is that you will come across ethicallysensitive situations during your career. Will you know it’s an ethically sensitive situ-ation? How will you respond? We hope you will at least know when you are in anethically sensitive situation in marketing research. The rest of this section is devotedto teaching you this sensitivity.37

Ethical Behavior in Marketing Research As noted previously, there are many ways a society may prescribe wanted andunwanted behaviors. In business, if there are practices that are not illegal but arenevertheless thought to be wrong, trade associations or professional organizationswill often prescribe a code of ethical behavior. This has been the case in marketingand, more specifically, in marketing research. The American Marketing Association(www.marketingpower.com), the Council of American Survey ResearchOrganizations (www.casro.org), the Qualitative Research Consultants Association(www.qrca.org), the Marketing Research Association (www.mra-net.org), and theCanadian-based Professional Market Research Society (www.pmrs-aprm.com) allhave a code of ethics. The European-based ESOMAR, the European Society forMarketing Research (www.esomar.nl), has a code of ethics that is adopted by manymarketing research organizations around the world such as the Market ResearchSociety of Australia, Ltd. All over the world, marketing research organizations arestriving to achieve ethical behavior among practitioners of marketing research.

Codes of Ethics As noted previously, the American Marketing Association has a codeof ethics. You can read the code in entirety at its Web site (www.marketingpower.com.).However, the AMA’s “full” code contains some specific codes for marketing research asfollows. In the area of marketing research:38

prohibiting selling (Sugging) or fund raising (Frugging) under the guise of con-ducting research;

maintaining research integrity by avoiding misrepresentation and omission ofpertinent research data;

treating outside clients and suppliers fairly.

Sugging and Frugging The first provision of the AMA code deals with prohibitingselling or fund raising under the guise of conducting research. Sugging refers to

Teleology is a philosophy thatfocuses on the trade-off betweenindividual costs and group bene-fits. If benefits outweigh costs, thebehavior is judged to be ethical.



“selling under the guise of a survey.” Typically, sugging occurs when a “researcher”gains a respondent’s cooperation to participate in a research study and then uses theopportunity to attempt to sell the respondent a good or service. Most consumers arequite willing to provide their attitudes and opinions of products and services inresponse to a legitimate request for this information. Suggers (and Fruggers), how-ever, take advantage of that goodwill by deceiving unsuspecting consumers.Consumers soon learn that their cooperation in answering a few questions has led totheir being subjected to a sales presentation. In sugging and frugging there is nogood-faith effort to conduct a survey for the purpose of collecting and analyzingdata for specific purposes. Rather, the intent of the “fake” survey is to sell or raisemoney. Of course, these practices have led to the demise of the pool of cooperativerespondents. Marketing Research Insight 3.3 fully explains sugging and frugging.The Telemarketing and Consumer Fraud and Abuse Prevention Act of 1994 seeks toput an end to sugging by telemarketers. Under this act, telemarketers will not beallowed to call someone and say they are conducting a survey, and try to sell a prod-uct or service. Although telemarketers are not able to legally practice sugging, theact does not prohibit sugging via the mails.39 Frugging is closely related to suggingand stands for “fund raising under the guise of a survey.” Because frugging does notinvolve the sale of a product or service, it is not covered in the Telemarketing andConsumer Fraud and Abuse Prevention Act of 1994, but it is widely considered tobe unethical. Actually, sugging and frugging are carried out by telemarketers orother direct marketers. Researchers do not practice sugging and frugging. However,we cover this topic because both sugging and frugging are unethical treatments ofpotential respondents in marketing research. Also, we give it special attentionbecause both practices have been significant to the industry for several years.

Research Integrity Sometimes research is not totally objective. Information is with-held, falsified, or altered to protect vested interests.

Marketing research information is often used in making significant decisions.The outcome of the decision may impact future company strategy, budgets, jobs,organization, and so forth. With so much at stake, the opportunity exists for a lackof total objectivity in the research process. The loss of research integrity may takethe form of withholding information, falsifying data, altering research results, ormisinterpreting the research findings in a way that makes them more consistentwith predetermined points of view. As one researcher stated, “I refused to alterresearch results and as a result I was fired for failure to think strategically.”40 Wenow know that this was all too common in the field of auditing. The Enron fiascoof 2002 taught the world that even the highly esteemed field of auditing is subjectto a failure of research integrity. A breakdown occurred when Anderson was theauditing firm and also the managerial consulting firm.41 The impetus for a breachin research integrity may come from either the supplier or buyer. If a research sup-plier knows that a buyer will want marketing research services in the future, thesupplier may alter a study’s results or withhold information, so that the study willsupport the buyer’s wishes. The buyer may not be aware of any departure fromtotal objectivity but is very pleased with the study results and, according to thethinking of the supplier firm, is more likely to use the supplier company again inthe future.

Breaches of research integrity need not be isolated to those managing theresearch project. Interviewers have been known to make up interviews and to takeshortcuts in completing surveys. In fact, there is some evidence that this is more of aproblem than was once thought.42

Maintaining research integrity is regarded as one of the most significant ethicalissues in the research industry. In a study of 460 marketing researchers, Hunt,

Sugging refers to “selling underthe guise of a survey.” It is nowillegal for telemarketers toengage in sugging. Fruggingrefers to “fund raising under theguise of a survey.” Frugging isunethical.



An Ethical Issue

Sugging and FruggingDiane Bowers, President, CASRO

MARKETING RESEARCH

INSIGHT

Diane K. Bowers is the president of the Council of AmericanSurvey Research Organizations (CASRO), with which she hasbeen associated since 1979. She is also a member ofESOMAR’s Professional Standards Committee and sits onthe board of advisors of the Masters in Marketing Researchprograms at the University of Georgia, the University of Texasat Arlington, and the University of Wisconsin at Madison. Inaddition, Diane is a past president of the Council forMarketing and Opinion Research (CMOR), the MarketResearch Council (MRC), and the Research IndustryCoalition (RIC).

Sugging“Sugging” or selling under the guise of research is a short-hand term to describe a misuse of the public trust and anabuse of the survey research process that has been promul-gated by telemarketers as a means to get a “foot in thedoor.”

This practice had become so commonplace that thepublic, the research industry, and, ultimately, the federalgovernment decided to put an end to it. In 1994 a federallaw was enacted that provided the public and theresearch industry with a weapon to combat sugging. TheConsumer Fraud and Abuse Prevention Act included anamendment requiring telemarketers to promptly state atthe beginning of a telephone call that they were selling agood or service.

After the passage of this law the Federal TradeCommission (FTC) promulgated rules for the enforcementof the law, now called the “Telemarketing Sales Rule,”affirming the antisugging component. The FTC specificallyhas emphasized that “. . . the legislative history of theTelemarketing Act noted the problem of deceptive telemar-keters contacting potential victims under the guise of con-ducting a poll, survey, or other type of market research. Toaddress these problems, the Commission believes that inany multiple purpose call where the seller or telemarketerplans, in at least some of those calls, to sell goods or ser-vices, the disclosures required. . . must be made‘promptly,’ during the first part of the call, before the non-sales portion of the call takes place. Only in this mannerwill the Rule assure that a sales call is not being madeunder the guise of a survey research call, or a call forsome other purpose.”

Recently, the FTC has stepped up its enforcement effortsby recommending that a “National Do Not Call” list be cre-ated through which consumers could dictate their desire notto be contacted by telemarketers.

Frugging“Frugging,” or fund raising under the guise of research, isas commonplace and offensive as sugging. In theseinstances political and social organizations, nonprofit enter-prises, charitable, and even educational organizations usethe guise of a survey to solicit contributions, support, alumnigifts, membership, and so on for their institution or cause.Examples of frugging include letters from political cam-paigns or environmental causes that include the words“Survey Enclosed” stamped on the outside of the envelope.The so-called “survey” usually includes only a few leadingquestions, all with an obvious morally correct answer, suchas “Do you favor protecting our children from harm?” At theend of the survey (often in the form of the last question inthe survey) is a request for money, support, or membership.The law has not caught up with these abusive practices,probably because the institutions or causes that commitfrugging are generally worthwhile and commendable.Industry efforts to educate fruggers have been modestlysuccessful, but the practice continues and public com-plaints have increased.

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Sharing of “background knowl-edge” among firms raises ethicalquestions.

Chonko, and Wilcox found that maintenance of research integrity posed the mostsignificant problem for one-third of those sampled.43

Treating Others Fairly Several ethical issues may arise in the practice of marketingresearch that center around how others are treated. Suppliers, buyers, and the pub-lic may be treated unethically.

Sometimes firms buying marketing research are treated unethically. For example,they are sold unnecessary research or supplier firms subcontract the work to otherfirms for less money and, therefore, take profits without doing the research themselves.Buyers also treat supplier firms unethically. Agreements are not honored, paymentsare delayed, and buyers sometimes ask supplier firms to provide them with researchdesigns without ever intending on contracting with an external supplier.

Buyers. In the Hunt, Chonko, and Wilcox study cited previously, the second mostfrequently stated ethical problem facing marketing researchers was fair treatment ofbuyer firms. A little over one-tenth of the respondents claimed this was the mostimportant ethical problem they faced. Unfair treatment of buyers can take manyforms. Passing hidden charges to buyers, overlooking study requirements when sub-contracting work out to other supplier firms, and selling unnecessary research areexamples of unfair treatment of buyer firms. By overlooking study requirements,such as qualifying respondents on specified characteristics or verifying that respon-dents were interviewed, the supplier firm may lower its cost of using the services ofa subcontracting field service firm. A supplier firm may oversell research services tonaive buyers by convincing them to use a more expensive research design, such as acausal design in lieu of a descriptive design, or using more subjects than is necessary.

Sharing confidential and proprietary information raises ethical questions.Virtually all work conducted by marketing research firms is confidential and propri-etary. Researchers build up a storehouse of this information as they conductresearch studies. Most ethical issues involving confidentiality revolve around howthis storehouse of information, or “background knowledge,” is treated. Oneresearcher stated, “Where does ‘background knowledge’ stop and conflict exist (as aresult of work with a previous client)?”44 As an example, let us assume that a mar-keting research firm conducts a number of market surveys for buyer Firm A.Information collected in the survey reveals important customer perceptions of FirmB, one of Firm A’s major competitors. After completing the project for Firm A, theresearch firm recognizes the value of the survey information to Firm B andapproaches the management of Firm B to sell it a survey that is “guaranteed” toidentify important consumer perceptions about its firm. Is this ethical? Such a situa-tion illustrates how “background knowledge” may be used but violates the confi-dentiality trust that must be maintained between research suppliers and buyers.

It is common practice among research supplier firms to check their existing listof buyer-clients to ensure there is no conflict of interest before accepting work froma new buyer. Let’s say a buyer representing an out-patient medical facility in City Arequests research assistance from a supplier firm. Before accepting the work, thesupplier firm determines that it already has client firms that would be consideredcompetitors of the new buyer firm. In most cases, the new buyer would be told thatit would have to seek services elsewhere since there would be a conflict of interest.

Suppliers. Phony RFPs. Buyers also abuse suppliers of marketing research. A majorproblem exists, for example, when a firm having internal research capabilitiesissues a request for proposals (RFPs) from external supplier firms. External firmsthen spend time and money developing research designs to solve the stated prob-lem, estimating costs of the project, and so on. Now, having collected several



Ethical concerns arise when mar-keting researchers are asked toconduct research on advertisingto children or on products theyfeel are dangerous to the publicsuch as certain chemicals, ciga-rettes, alcohol, or sugar.

detailed proposals outlining research designs and costs, the abusing firm decides todo the job internally. There may be cases in which this is justifiable, but certainlyissuing a call for proposals from external firms with no intention of doing the joboutside is unethical behavior. Closely related to this practice is that of issuing pro-posal requests from external firms when another external firm has been awarded thecontract. The proposals are used, once again, as a check on costs and procedures.

Failure to honor time and money agreements. Often buyer firms have obliga-tions such as agreeing to meetings or the provision of materials needed for theresearch project. Supplier firms must have these commitments from buyers in atimely fashion in order to keep to their time schedules. Buyer firms sometimes abusetheir agreements to deliver personnel or these other resources in the time to whichthey have agreed. Also, buyers sometimes do not honor commitments to pay for ser-vices. Unethical buyers may claim they may no longer need the research informationor that the information provided by the research firm is not of value in an attemptto justify their nonpayment. This is a good reason for the research firm to remain inclose communication with the buyer firm throughout the research process. Closecommunication helps to assure that the information provided is the information ofvalue to the buyer. However, some buyers are simply unethical in terms of not pay-ing their bills. Although this happens in many industries, research suppliers do nothave the luxury of repossession although there are, of course, legal recourses.

The Public. Research on products thought to be dangerous to society. Ethical issuesarise as researchers balance marketing requirements with social issues. This is par-ticularly true in the areas of product development and advertising. For example,marketing researchers have expressed concern over conducting research on advertis-ing to children. Some advertising has had the objective of increasing the total con-sumption of refined sugar among children via advertising scheduled during Saturdaymorning TV programs. Other ethical concerns arise when conducting research onproducts researchers felt were dangerous to the public such as certain chemicals andcigarettes. More recently, television networks are considering changing their policyof not allowing the advertising of alcoholic beverages. Undoubtedly, there will bedebate about the appropriateness of this advertising. It is likely that researchers willbe asked to conduct research on the effectiveness of televised alcoholic beverage ads.Imagine the ethical dilemma a researcher is faced with if asked to develop an effec-tive advertising message to attract teens to drinking bourbon?

Respondents. Respondents are the “lifeblood” of the marketing research industry.Respondent cooperation rates have been going down and the industry is concernedwith the ethical treatment of the existing respondent pool.45

In 1982, CMOR (Council for Marketing and Opinion Research) began monitor-ing survey response cooperation. CMOR surveys a large number of consumers fromtime to time to determine the percentage of the population that has refused to takepart in a survey in the past year. The percentages have risen sharply: 1982 (15 percent),1992 (31 percent), 1999 (40 percent), and in 2002 the percentage was 45 percent.46

Marketing researchers must honor promises made to respondents that therespondent’s identity will remain confidential or anonymous if they expect respon-dents to cooperate in requests for information in the future.

The very nature of marketing research requires an invasion, to some degree, ofindividual privacy. The majority of the U.S. public is concerned about threats to per-sonal privacy.

Deception. Respondents may be deceived during the research process. Kimmel andSmith point out that deception may occur during subject recruitment (they are nottold the true identity/sponsor of the research, etc.), during the research procedure



itself (they are viewed without their knowledge, etc.), and during postresearch situ-ations (there is a violation of the promise of anonymity). Also, these authors suggestthat there are serious consequences to this deception.47

Deception can occur in two basic forms. First is by omission (also called passivedeception) of information to fully inform a respondent. For example, respondentsare asked to participate in a study of “choice of a personal bank.” They are not toldthe study is being conducted by the particular bank sponsoring the research. Second,deception by commission (also called active deception) refers to intentionally givingthe respondent false information. This may be done for many reasons, such as “cre-ating a setting in order to provide a plausible context for an experiment.” For exam-ple, in a study to determine how consumers behave when they are uncertain of theirjudgments, to “create” the “uncertainty” researchers may give them false feedbackabout their judgments on a task.48 Deception of any sort should be held to mini-mum use in research. Still, it may be necessary, in some studies, to deceive respon-dents. In those cases, respondents should be debriefed. Debriefing occurs after astudy and should follow the guidelines of the National Research Act of 1974. Therespondents should be provided with the complete and truthful description of thestudy and its sponsors. The researcher should identify and accurately describe anyand all deceptions that occurred and present a rationale for their use. The latter iscalled “dehoaxing.” If applicable, an attempt should be made to deal with the neg-ative effect (bad feelings, moods, and emotions) that may have been generated bydeception. The attempt to reduce these negative effects is referred to as desensitiz-ing.49 Case 3.1 deals with a situation involving deception of respondents.

Confidentiality and Anonymity. One way of gaining a potential respondent’s trustis by promising confidentiality or anonymity. Confidentiality means that theresearcher knows who the respondent is but does not identify the respondent withany information gathered from that respondent to a client. So the respondent’s iden-tity is confidential information known only by the researcher. A stronger appeal maybe made under conditions of anonymity. The respondent is, and remains, anony-mous or unknown. The researcher is only interested in gathering information fromthe respondent and does not know who the respondent is. The latter often happenswith telephone interviews that have been obtained by randomly dialed telephonenumbers.

Ethical issues arise when the respondents are promised confidentiality andanonymity and the researcher fails to honor this promise. There are pressures toidentify respondents. Clients are often in the business of identifying leads for salespresentations. Suppose research is conducted to identify consumers’ interest in a newservice. In order to gain their cooperation, researchers promise potential respon-dents confidentiality. After the research, the client naïvely asks for the list of namesof all those respondents who expressed some interest in the new service. A researchercomplying with this request is acting unethically. More egregious is the situationwherein the respondents are told they are anonymous yet the researcher knows theiridentity and uses that identity in some way such as making a sales contact.

In some cases, however, respondents want to be identified. Suppose a new prod-uct or service is being evaluated through research and certain respondents are veryinterested in the service. They may desire to be contacted as soon as the product orservice is available. In such cases, respondents should be asked during the researchprocess if they would like to be contacted. If they would, then identifying therespondent to a client would not be considered unethical.

Invasions of Privacy. Marketing research, by its nature, is invasive. Any informationacquired from a respondent has some degree of invasiveness. Ethical issues, some ofthem legal, abound in the area of invading others’ privacy. For many years, marketing



researchers have been concerned about issues such as observing others without theirpermission. Under certain conditions, this should be avoided at all costs. For example,consider a company that decides to conduct research by placing researchers in homesfor the purpose of watching consumers’ behavior and learning about their attitudes,media habits, purchasing preferences, and so forth. This may be perfectly acceptableas long as the family being studied is aware of the researchers’ intention. A few yearsago, however, quite a controversy ensued when a researcher from another country wasplaced in a U.S. family’s home posing as an exchange student! The family was totallyunaware that they were being observed and studied for commercial purposes.Obviously, this was a terrible violation of privacy rights. But what about a companyobserving you in a public place and not placing you in a situation that would be con-sidered unsafe? Watching you shop in a supermarket, for example. This is notregarded as unethical by most researchers. As we shall see in the following paragraphs,online research brings with it serious opportunities for violations of privacy rights.

Spam. When online survey research became a possibility by accessing respondentsvia the Internet, some organizations viewed this as an easy, fast way to gather surveyinformation. They gave little concern to ethical issues when they obtained e-maillists to use to target survey recipients. They began sending out thousands of surveysto unwary persons. The practice of sending unwanted e-mail is called spamming. Anelectronic message has been defined as spam if (1) the recipient’s personal identityand context are irrelevant because the message is equally applicable to many otherpotential recipients; (2) the recipient has not verifiably granted deliberate, explicit,and still revocable permission for it to be sent; and (3) the transmission and recep-tion of the message appear to the recipient to give a disproportionate benefit to thesender.50 Although the practice of sending spam ads and surveys continues today,much of it has been stopped thanks to organizations like Mail Abuse PreventionSystem (MAPS). Visit the MAPS Web site at www.mail.abuse.org.

Marketing Research and Spam SurveysAs we have noted previously, the Internet provides researchers with the ability toaccess millions of potential respondents. However, how they access these potentialrespondents is critical in determining whether unethical practices are being used. Inthe early days of the Internet, before guidelines regarding spam were established,several research firms e-mailed unsuspecting respondents surveys. Still, many maybe doing this. Some know that they are spamming and others are simply unin-formed. In the section that follows, we present information that clarifies when an e-mailed survey is or is not ethical.

Opt-Out vs. Opt-In Standards51 There is an ongoing debate regarding what prac-tices actually constitute invasions of privacy. Slowly, legislation is being adoptedaround the world that helps to define this issue. One common theme in the legislationhas been the individual’s right of consent. One consent standard is the “opt-out” stan-dard. Under this standard, individuals are given the opportunity to not be contactedagain and/or to limit the manner in which information they provide may be used. Onthe other hand, the alternative standard, to “opt-in,” means that individuals mustspecifically and affirmatively consent to a specified activity, such as being given anonline survey via their e-mail. Opt-in is referred to as “active consent” and has beenpreferred by many privacy advocates for the reason that it allows the individual fullcontrol. That is, respondents never receive the survey unless they have opted-in to takeit. Others argue that the ability to opt-out, also known as “passive consent,” providesample control to individuals. To more clearly understand the differences, let’s think ofthe calls you receive from telemarketers. Telemarketing laws exist that allow individu-



als to be put on lists that telemarketers are not to call. This would be an example of theopt-out standard. Some argue that the problem with this standard is that it puts theburden on the individual to protect his or her privacy rights. They must know howinformation about themselves is being used and also know the process for the “opt-out.” For example, your supermarket may be selling information on what you buy.Under the opt-out standard, you, the consumer must know that this is occurring sothat you may pursue an opt-out opportunity. And, once you decide that you do notwant this information about you to be used, you must invest in time and effort to learnhow you can opt-out. A bill, the Consumer Online Privacy and Disclosure Act, requiresWeb sites to post privacy policies on their sites as well as provisions for consumers toopt-out of the disclosure of information about them that is collected at the Web site.

Opt-in is a much tougher standard. In terms of telemarketing, for example, theuse of an opt-in standard would mean you would have to consent to receiving tele-marketing calls prior to telemarketers calling you. So, under the opt-in standard, youwould have to be told by the supermarket that you could participate in its program toobtain information about your purchases. If you refused to opt-in, your privacy wouldbe protected. Under the opt-in standard you would be protected from others obtaininginformation about you without your knowledge and it would save you the time andeffort of learning how to opt-out. If you don’t opt-in, you do not have to opt-out.

Online ResearchLegislative bodies will likely continue the debate as to which standard, opt-in versusopt-out, should be used in privacy laws. The marketing research industry has beenself-regulating itself through codes of standards using the opt-in standard. CASROhas been an industry leader in helping to shape not only ethical standards for theindustry but in also trying to ensure that legislation passed to deal with telemar-keters does not include legitimate marketing researchers. Marketing ResearchInsight 3.4 provides you with information about CASRO.

What Does the CASRO Code of Ethics Say About Online Survey Research and Spamming?We asked Diane K. Bowers, director of CASRO, to provide you with some addi-tional information illustrating what online survey researchers can and cannot dowhen it comes to using the Internet to collect online survey information. We presenther guidance to you in the following paragraphs, which first depict a specific state-ment in the CASRO Code of Ethics followed by further explanation of the applica-tion of the code by Ms. Bowers.

The following statements are taken from the CASRO Code of Ethics,Responsibilities to Respondents; Privacy and the Avoidance of Harassment, Section3. Internet Research:

The unique characteristics of Internet research require specific notice that theprinciple of respondent privacy applies to this new technology and data collec-tion methodology. The general principle of this section of the Code is that sur-vey research organizations will not use unsolicited e-mails to recruit respon-dents for surveys.

Ms. Bowers: “Online research is unique in that it is not permissible for onlineresearchers to randomly e-mail individuals requesting participation in onlineresearch. For other data collection methods (telephone, for example) a ran-domly selected sample is not only permitted but is desirable from a statisticalstandpoint. Current and proposed state laws (1) prohibit the sending of unso-licited e-mails, and/or (2) require adherence to Internet Service Providers’



An Ethical Issue

CASRO Fights for Ethical Standards

MARKETING RESEARCH

INSIGHTThe Council of American Survey Research Organizations(CASRO) was founded in 1975. As the national trade associ-ation of commercial survey research companies, CASROrepresents over 170 companies that account for more than85 percent of the survey revenue in the United States.Members not only join CASRO for its role in the surveyresearch industry, but they also join CASRO because it pro-vides members with additional support and insights in areassuch as business operations, staff development, networking,business development, and management.

PurposeThe main objectives of this organization are to educate, toprotect, and to represent. CASRO continuously communi-cates to the industry and the public about the changes tak-ing place in the research arena. Furthermore, CASRO iscommitted to educate the industry and the public to under-stand the ongoing changes in the research world. CASROrequires all members to adhere to its Code of Standards andEthics for Survey Research in order to protect the public’sright and privacy. In addition, CASRO set standards for con-ducting online research because it recognizes the impor-tance of the Internet as a growing data collection medium.

MissionThe following list highlights CASRO’s mission

Provides the environment and leadership that willpromote the growth and best interests of firms in the survey research industry

Promotes the establishment, maintenance, andimprovement of the professional and ethicalstandards

Communicates the standards, contributions, and achieve-ments of the survey research industry

As the nation’s leading survey research trade organiza-tion, CASRO plays an important role in shaping the surveyresearch industry. First, it sets research standards andguidelines for the industry and the survey researchprocess. Second, it informs members on the currentevents affecting the survey research industry. Third, it isinvolved in the legal and ethical issues that face the surveyresearch industry. In 2001, CASRO adopted the theme“Taking Responsibility for the Future” to communicate itscommitment to industry. Therefore, CASRO is prepared tomeet the changing environment of the survey researchindustry.

Contact InformationCouncil of American Survey Research (CASRO)3 Upper DevonPort Jefferson, New York 11777Phone: (631) 928-6954Fax: (631) 928-6041E-mail: [email protected] site: www.casro.org

Source: www.casro.org

3.4

policies which prohibit “spamming,” and/or (3) prohibit the sending of unso-licited e-mails to people who have requested not to receive further e-mails froma particular company.”

Research organizations are required to verify that individuals contacted forresearch by e-mail have a reasonable expectation that they will receive e-mailcontact for research. Such agreement can be assumed when ALL of the follow-ing conditions exist.

(1) A substantive pre-existing relationship exists between the individuals con-tacted and the research organization, the client or the list owners contractingthe research (the latter being so identified);

Ms. Bowers: This raises the question of what is a ‘substantive pre-existing rela-tionship?’ At CASRO we believe that such a relationship exists when there has



been a business transaction or customer/consumer communication or corre-spondence in which the individual has voluntarily supplied his/her e-mailaddress for future research, marketing or correspondence contact. The rela-tionship must be evident to the person being e-mailed—in other words, the e-mailed person must have a definable connection with the person contactinghim or her. If that connection is with the research company, the research com-pany must be identified. If the relationship is with a client, the client must beidentified.”

(2) Individuals have a reasonable expectation, based on the pre-existing rela-tionship, that they may be contacted for research;

Ms. Bowers: “We define a reasonable expectation as a sufficient belief on theindividual’s part that he or she may be contacted via e-mail for research pur-poses in connection with or as a follow-up to a preexisting relationship withthe person doing the contacting.”

(3) Individuals are offered the choice to be removed from future e-mail contactin each invitation; and,

Ms. Bowers: “The identified researcher (or client) who has a preexisting rela-tionship with the individual e-mailed for research purposes must give that indi-vidual the chance to opt out of the specific online research study and ALLfuture online research studies in this preexisting relationship.”

(4) The invitation list excludes all individuals who have previously taken theappropriate and timely steps to request the list owner to remove them.

Ms. Bowers: “Researchers or clients must maintain a ‘do-not-e-mail’ list ofthose individuals who have opted out of future online research studies.”

Research organizations are prohibited from using any subterfuge in obtaininge-mail addresses of potential respondents, such as collecting e-mail addressesfrom public domains, using technologies or techniques to collect e-mailaddresses without individuals’ awareness, and collecting e-mail addressesunder the guise of some other activity.

Ms. Bowers:“In traditional sampling, it is acceptable to buy lists, use customerdatabases, buy data in the public domain, and so on. None of this is acceptablein online research unless the sample e-mail addresses are of individuals whohave expressly agreed to be contacted for research purposes. Several statesrequire ISPs to obtain the consent of their subscribers prior to selling or releas-ing subscribers’ names or e-mail addresses.”

Research organizations are prohibited from using false or misleading return e-mail addresses when recruiting respondents over the Internet.

Ms. Bowers: “Researchers must be straightforward and direct in their relation-ship with respondents and may not mislead respondents with disguised e-mailaddresses. Several states have passed laws against transmission of false e-mailsand misrepresentation of point of origin of e-mail.”

When receiving e-mail lists from clients or list owners, research organizationsare required to have the client or list provider verify that individuals listed havea reasonable expectation that they will receive e-mail contact, as defined, . . .above.

Ms. Bowers: “This restates that clients have the same responsibility asresearchers in ensuring that individuals have agreed to be contacted by e-mailfor research based on the four assumptions . . . above.”



Q: What ethical issues has online marketing research created and howwould you evaluate how the industry has handled these issues?

A: Historically, the violations of online etiquette have been committed notout of malice but out of a lack of familiarity with the customs of Web interac-tion. Many firms are simply doing things the way that things have always beendone in the traditional research world. But things like calling people at homewithout permission, sending people unsolicited business offers, selling maga-zine subscriber lists, and so on have no acceptable analogous counterparts inthe online world. Online these would be considered serious invasions of pri-vacy and spam.

Although the industry is actively examining these types of issues andattempting to create meaningful codes of ethics (like IMRO), new players arecontinually entering the field (some through acquisition or corporatetakeover). We see many instances where the first instinct of financially moti-vated newcomers is to spam, spam, spam and let the long-run consequencesbe damned. However, the long run is not that far away. And people who turnrespondents off by bad and unacceptable recruitment and survey behavior willonly serve to hurt their own business, as well as everyone else’s.

A: Online marketing research has solved more ethical issues than it has cre-ated. Online research is unquestionably held to higher standards than off-lineresearch. Online privacy guidelines are far more stringent with regard to con-tact, collection, and use of information.

Online research’s automated interviewing process also has great ethi-cal advantages. Software systems, unlike human interviewers, are lesslikely to lead respondents to the answers they want to fill daily/weekly quo-tas, and so on.

A: The market research industry has been quite successful at contendingwith issues involving the ethical propriety of conducting all forms ofresearch, including online research. Issues that have arisen in recent years,which are not necessarily unique to online research, have involved respon-dent confidentiality, e-mail etiquette, data transmission, data storage, anddata linkage. In general, the major players in the industry exhibited exem-plary practices from the start. Industry associations such as CASRO andESOMAR, as well as online watchdog groups, thereafter have played animportant role in contributing to the development and definition of ethicalpropriety in online research.

A: Greenfield Online strongly believes that companies using the Internetneed to govern the rights of users. From our beginnings, we have takenresponsibility for protecting privacy and know that if we abuse the power theInternet and technology brings in reaching out to consumers, we will loserespondent cooperation and encourage government intervention. GreenfieldOnline is a member of TRUSTe and BBBOnLine. We have helped theresearch community create guidelines for online research with active partici-pation in CASRO (Council of American Research Survey Organization) and asa founding member of IMRO (Internet Marketing Research Organization). Weadhere to the highest consumer privacy standards regarding respondentinformation.

The online research community as a whole has created a number of orga-nizations that help to govern the usage of online research and, unlike mostindustries, has truly banded together to develop standards and combat legis-lation that could negatively impact the online research industry.

Keith PriceVice President

Greenfield Online

George TerhanianVice President ofInternet ResearchHarris Interactive,

Inc.

George HarmonSenior Vice President

Digital MarketingServices

Bill MacElroyPresident

Socratic Technologies


Summary 75

A: The issue of import is that of personal privacy. Online research has apotential for facilitating connecting more personally identifying informationthan traditional measures. This can occur in a variety of ways ranging fromhow consumers are “invited” to participate to keeping track of these con-sumers via cookies to installing software on consumers’ PCs, which enablesrecording all of their online activity.

Associated with this issue is how companies gain informed consent fromconsumers to gather and use their information. It is easy to create a permis-sion or privacy statement that is so long and detailed that consumers mightskip reading it carefully, enabling an unscrupulous firm to hide its intention touse the information obtained very aggressively.

Doss StruseSenior Vice President

Client ServiceKnowledge Networks,

Inc.

What Do Online Research Industry Leaders Have to Say About Ethical Issues Related to Online Research?Now that you have an appreciation of ethical issues in marketing research, wewanted you to see what industry leaders have to say about what they see as ethicalissues in online research and how they handle these issues.

Ethical issues abound in the practice of marketing research. Treating buyers, sup-pliers, the public, and respondents fairly is a basic ethical tenet necessary for thehealth of the research industry. As technology that allows for the tracking of individ-ual behaviors increases, individuals are justifiably more and more concerned with pri-vacy rights. Online research represents yet another possible avenue to invade individ-uals’ cyberspace. However, with organizations such as IMRO, CASRO, and theMRA, marketing researchers are adopting their own standards for the ethical treat-ment of respondents. Yet, the future is cloudy in terms of how legal actions will affectresearch. Already, research firms, realizing that respondents are their “lifeblood,” aremoving in the direction of recruiting their own panels of willing respondents.Recruiting and maintaining a panel requires a considerable investment. Panel equity,the value of readily available access to willing respondents, may become more andmore important in the future. Marketing research firms, recognizing the value theyhave in panels, will make even greater effort to ensure fair and ethical treatment oftheir panel respondents.

SUMMARYThis chapter covered four introductory topics. First, it reviewed the history of theuse of marketing research. In the “pre–marketing research era,” marketing researchwas not needed because businesses had many face-to-face contacts with their cus-tomers. During the “early development era,” the industrial revolution led to market-ing to customers in distant markets, which created the need for marketing researchto understand those distant markets. Questionnaires began to be used in the “ques-tionnaire era” and statistical concepts and computers were applied to marketingresearch in the “quantitative era.” By 1960 marketing research departments becamecommonplace in what we call the “organizational acceptance era.” During the1980s marketing research was shaped by the invention of the PC. We call this decadethe “PC technology era.” Since 1990 two factors have greatly impacted the researchindustry and we call this time period the “globalization–online research era.”

The marketing research industry has a number of unique players, and wedescribed them as internal suppliers and external suppliers of marketing researchinformation. The external suppliers may be further categorized as either full-service



or limited-service firms. Syndicated data services, standardized services, customizedservice firms, and online research service firms are all full-service firms. Limited-service firms include field services, market segment specialists, sample design anddistribution services, data analysis services, and specialized research techniquefirms. Internal suppliers of marketing research have their own formal departments(AT&T, Kodak, GM), have no department but entrust an individual or a committeewith the research function, or assign no one with responsibility for marketingresearch. External supplier firms are outside firms hired to fulfill a firm’s marketingresearch needs. “The Honomichl Top 50” is an annual report that shows the top 50external supplier firms. The research industry is an $8 billion industry and has expe-rienced growth rates around 8 percent per year. Online research firms’ revenueshave been growing in double-digit figures for several years. Online research rev-enues are well over $300 million. External suppliers organize by function, area ofresearch application, geography, by type of customer, or some combination of these.Research firms have recently been forming “strategic alliances,” which allow fortwo or more firms to take advantage of other firms’ skills and resources. DMS, forexample, develops samples taken from AOL subscribers and SPSS MR suppliesexpertise in analytics. The combination of these three organizations can provideexcellent online survey research studies to client firms.

The marketing research industry’s performance is evaluated from time to time.In general, these reviews show that the industry is doing a reasonably good job butthere is room for improvement. Suggestions are made for some of these improve-ments. Some industry leaders have called for a formal certification program formarketing research professionals or even an auditing system to ensure consistencyof performance across the industry. The research industry has started several pro-fessional development programs for its members in recent years. These educationalprograms come from industry professional organizations such as CASRO, MRA,and the AMA. Also, there are private educational programs of excellent qualitysuch as the Burke Institute. Finally, colleges and universities are becoming moreinvolved in providing specialized master’s-level programs in marketing research.The University of Georgia sponsors an online course in marketing research designedto train those entering the field of marketing research with the fundamentals ofmarketing research similar to what you will learn in the course you are taking now.

Ethical issues in marketing research are more important today than ever. Anumber of ethical issues are present in the practice of marketing research.Individuals differ in terms of their sensitivity to the presence of ethical issues. Ethicsis defined as a field of inquiry into determining what behaviors are deemed appro-priate under certain circumstances as prescribed by codes of behavior that are set bysociety. How you respond to ethically sensitive situations depends on your philoso-phy: deontology or teleology. Several organizations in the research industry havecodes of ethical behavior for both buyers and suppliers of research. Sugging is ille-gal. Frugging is very unethical. Ethical issues include research integrity, treating oth-ers (buyers, suppliers, the public, and respondents) fairly. Respondent fairness issuesinclude deception, confidentiality, and invasions of privacy. Spam surveys are aninvasion of privacy. Special standards are provided to online marketing researchersto protect the privacy of online respondents. In the future, we can probably expectmore legislation affecting access to respondents. Research companies, faced with adeclining pool of willing respondents in the general public, will rely more heavily onrecruiting their own panel members. Your authors believe that by recruiting andmaintaining their own panels of respondents, research companies will come to valuetheir “panel equity” and we will see even fairer treatment of respondents in thefuture.


Review Questions/Applications 77

Pre–marketing research era (p. 46)Early development era (p. 46)Questionnaire era (p. 47)Quantitative era (p. 47)Organizational acceptance era (p. 47)PC technology era (p. 47)Globalization–online era (p. 48)Research supplier (p. 48)Internal supplier (p. 48)External suppliers (p. 51)Strategic alliances (p. 55)Full-service supplier firms (p. 55)Syndicated data service firms (p. 56)Standardized service firms (p. 56)Customized service firms (p. 56)Online research services firms (p. 56)Limited-service supplier firms (p. 56)Field service firms (p. 56)Market segment specialists (p. 57)Sample design and distribution (p. 57)Data analysis services (p. 57)

Specialized research technique firms(p. 57)

Certification (p. 60)Auditing (p. 60)Professional Certified Marketer

(PCM) (p. 62)Ethics (p. 63)Deontology (p. 63)Teleology (p. 64)Code of ethical behavior (p. 64)Sugging (p. 64)Frugging (p. 65)Research integrity (p. 65)Passive deception (p. 69)Active deception (p. 69)Confidentiality (p. 69)Anonymity (p. 69)Spam (p. 70)Opt-out (p. 70)Opt-in (p. 71)Panel equity (p. 75)

REVIEW QUESTIONS/APPLICATIONS1. Explain why marketing research was not needed during the “pre–marketing

research era.”2. Explain why marketing research was needed during the “early development era.”3. Explain what has happened in terms of the history of marketing research since

about 1980.4. We categorized firms as internal and external suppliers of marketing research

information. Explain what is meant by each and give an example of each typeof firm.

5. Distinguish among full-service, limited-service, syndicated data services, stan-dardized services, and customized service firms.

6. How would you categorize the following firms?a. a firm specializing in marketing to kids (6–12)b. a firm that specializes in a computerized scent generator for testing reac-

tions to smellsc. a firm that offers a package for running test marketsd. a firm that consists of consultants that can offer research on all functional

areas (i.e., finance, marketing, production, human resources, etc.)e. a firm that collects data on Web site visits and sells this information

7. Provide some examples as to how a not-for-profit organization would usemarketing research.

8. What is the advantage in a firm having its own formal marketing researchdepartment? Explain three different ways such a department may be internallyorganized.

9. On evaluating the marketing research industry, what has been the general con-clusion on how it is doing? What were given as recommendations for improv-ing marketing research?

KEY TERMS



10. Explain the pros and cons of how a certification program, an auditing program,or educational programs may work to improve the marketing research industry.

11. What are the two fundamental philosophies that can be used as a basis formaking ethical decisions? Give an example of how you would use each in yourdaily life. Then give an example of the use of each as it could be applied to anethical issue in the marketing research industry.

12. Discuss the basic issues you would include in a code of ethics for the market-ing research industry. What practical value do you believe such codes havefor those who are internal suppliers? External suppliers? Respondents? Thepublic?

13. Select any three companies from Table 3.1, “The Honomichl Top 50.” Go toyour library or the Internet and find out where you can get additional infor-mation on these firms. List the sources and the types of information provided.

14. Look up “marketing research” in your Yellow Pages directory. Given theinformation provided in the Yellow Pages, can you classify the research firmsin your area according to the classification system of research firms we used inthis chapter?

15. Comment on each practice in the following list. Is it ethical? Indicate your rea-soning in each case.a. A research company conducts a telephone survey and gathers information

that it uses later to send a salesperson to the home of potential buyers forthe purpose of selling a product. It makes no attempt to sell the productover the telephone.

b. Would your answer to (a) change if you found out that the informationgathered during the telephone survey was used as part of a “legitimate”marketing research report?

c. A door-to-door salesperson finds that, by telling people that he is conduct-ing a survey, they are more likely to listen to his sales pitch.

d. Greenpeace sends out a direct-mail piece described as a survey and asks fordonations as the last question.

e. The cover letter of a mail questionnaire says that it will “only take a fewminutes to fill out.” But pretests have shown that at least 15 minutes areneeded to fill it out.

f. Telephone interviewers are instructed to assure the respondent of confiden-tiality only if the respondent asks about it.

g. A client insists on inspecting completed questionnaires ostensibly to assesstheir validity, but the researcher suspects that the client is really interestedin finding out what specific comments the respondents had about theclient.

h. In the appendix of the final report, the researcher lists the names of allrespondents who took part in the survey and places an asterisk beside thenames of those who indicated a willingness to be contacted by the client’ssales personnel.

i. A “list” of randomly generated telephone numbers is drawn in order toconduct a telephone survey.

j. A “list” of randomly generated e-mail addresses is generated using a“Spambot” (an electronic “robot” that searches the Internet looking forand retaining e-mail addresses) in order to conduct a random onlineresearch project.

k. Students conducting a marketing research project randomly select e-mailaddresses of other students from the student directory in order to conducttheir term project.


Case 3.1 79

l. A department store requests that customers provide them with their e-mail address for “future correspondence” on their monthly bill to thecustomers. They randomly select e-mail addresses from among thosecustomers supplying the e-mail addresses in order to conduct an onlinesurvey.

INTERACTIVE LEARNINGVisit the Web site at www.prenhall.com/burnsbush. For this chapter, work throughthe Self-Study Quizzes, and get instant feedback on whether you need additionalstudying. On the Web site, you can review the chapter outlines and case informa-tion. You may also want to look at the internship and employment opportunities.

CASE 3.1 Creating Thieves in Name of Research!

Several years ago a company developed a device that was said to use subliminal auditory mes-sages that would affect behavior. The company had received a great deal of publicity in thepress by claiming that its “black boxes” would play subliminal messages over a company’ssound system and that these messages could, for example, cause real estate agents to getmore listings and cause shoppers and employees to reduce shoplifting. When retailers learnedthere was a way to reduce their high costs due to shoplifting, the company making the “blackbox” received numerous calls to install the “black box.” Executives viewed this wonderful newproduct as a way of stimulating employees to excel and, for retailers, curbing shoplifting with-out the use of invasive tactics. But some asked “Does this new method, based on subliminalmessages, actually work?”

One of your authors was involved in a marketing research project designed to measure theeffects of subliminal messages on shoplifting behavior. The research design consisted ofresearchers recruiting respondents passing by an office building to take part in a study of the“attitudes and opinions of the public.” Respondents were then told that if they agreed to com-plete the short survey they would be given a very nice gift (a choice of several nice gifts includ-ing a watch, pen set, or expensive glassware). Respondents agreeing to the study were thenescorted into a private “research office,” given a bogus survey measuring attitudes and opin-ions, and shown a large supply of the free gifts nearby. As the respondents began to take thesurvey, the researcher interrupted them to tell the respondents that they had to take a breakand asked if it would be O.K. with the respondent to “Just select one of the free gifts and lockthe door when you leave.” Surrounded by many nice products and without any supervision,this situation was designed to create the maximum likelihood that someone would steal. On arandom basis, half of the respondents were exposed to a subliminal message consisting of thesame message the “black box” company claimed would reduce shoplifting. The other half ofthe respondents were not exposed to any message. If the subliminal message worked, therewould be less stealing when the subliminal message was being played than in the conditionwhen the message was not played.

1. Do you think this study is ethical? Why? Why not?2. If you think the study is ethical, what is your philosophy? If unethical, what is your

philosophy?3. Do you think deception is used in the study? If so, what type of deception?4. Should this study have been conducted? Why? Why not?5. If you felt this study should not have been conducted, under what circumstances

would you agree to a study designed to measure the effects of the subliminal “blackbox” technology?


Maybe you have been thinking about marketing research as a career choice. There are manycareer opportunities in the industry and we have prepared this appendix to give you some infor-mation about those career choices. More importantly, we give you some sources to pursue addi-tional information about a career in the marketing research industry.

WHAT IS THE OUTLOOK FOR THE INDUSTRY?Before you seek employment in any industry you should ask about the total outlook for theindustry. Buggy whip manufacturing is not exactly a growth industry! What are the growth ratesin the industry? What do the experts have to say about the future of the industry?

A good place to find information about the outlook of an industry is the OccupationalOutlook Handbook. You can access it online at www.bls.gov/oco/home.htm. Look under the cat-egory “Professional and related” and then under “Economists and market and surveyresearchers.”

The Occupational Outlook Handbook forecasts jobs in economics and marketing researchto grow faster than average (21 to 35 percent) through 2010. Demand for qualified marketresearch analysts should be healthy because of an increasingly competitive economy.Marketing research provides organizations valuable feedback from purchasers, allowing com-panies to evaluate consumer satisfaction and more effectively plan for the future. As companiesseek to expand their market and consumers become better informed, the need for marketingprofessionals will increase.

Opportunities for market research analysts with graduate degrees should be good in awide range of employment settings, particularly in marketing research firms, as companiesfind it more profitable to contract out for marketing research services rather than supporttheir own marketing department. Other organizations, including financial services organi-zations, health care institutions, advertising firms, manufacturing firms producing con-sumer goods, and insurance companies may offer job opportunities for market researchanalysts.

Opportunities for survey researchers should be strong as the demand for market and opin-ion research increases. Employment opportunities will be especially favorable in commercialmarket and opinion research as an increasingly competitive economy requires businesses tomore effectively and efficiently allocate advertising funds.52

Also, recall that we showed you in this chapter that the research industry has been grow-ing. Industry figures show annual growth rates of 7 to 8 percent in recent years. One of thelargest concerns expressed by members in the industry in a 1999 survey conducted by theAdvertising Research Foundation was a concern that too few qualified researchers would beavailable to handle industry needs. The report suggested increasing college graduate recruitingand working with universities to offer meaningful internships and enrichment of existing mar-keting research courses.53

WHAT ARE THE SALARIES?Another question you should ask is how much the people in this profession earn. Like manyprofessional services, salaries vary widely in the marketing research industry. Nevertheless,we can give you some general guidelines. The Occupational Outlook Handbook separatesmarketing research analysts from survey researchers. The primary difference is that analystsare involved with the total research process and their definition of survey researchers closelymatches what we discuss in this chapter as field data collection firms (limited-service firms).Median annual earnings of market research analysts in 2000 were $51,190. The middle 50percent earned between $37,030 and $71,660. The lowest 10 percent earned less than$27,570, and the highest 10 percent earned more than $96,360. Median annual earnings in

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the industries employing the largest numbers of market research analysts in 2000 were asfollows:

Computer and data processing services $61,320Management and public relations 44,580Research and testing services 43,660

Median annual earnings of survey researchers in 2000 were $26,200. The middle 50 percentearned between $17,330 and $47,820. The lowest 10 percent earned less than $15,050, andthe highest 10 percent earned more than $71,790. Median annual earnings of surveyresearchers in 2000 were $52,470 in computer and data processing services and $18,780 inresearch and testing services.54

Another source stated that entry-level job opportunities are dwindling in the marketingresearch industry because companies want people who can hit the ground running. The start-ing salaries for individuals with undergraduate degrees in business or statistics are around$40,000 per year. With more experience, researchers can earn six-figured salaries. On average,in 1999, researchers earned $87,000, a 5.3 percent increase over 1998. Also, 82 percent ofmarketing researchers earned more than $60,000 in 1999.55

Also, to learn about salaries in marketing research (and other fields) try these sites:

Career Center www.govexec.com/careers (federal pay schedules)Executive Pay Watch www.aflcio.org/paywatchJob Smart. www.jobsmart.org/tools/salary/index.htmSalary.com www.salary.com

WHAT KIND OF JOBS ARE THERE?O.K., so you are still interested! What types of jobs are there in the marketing research industry?

Position titles and the positions themselves vary, depending on whether you work for a full-service firm (account executive/director or project manager), for a limited-service firm (focusgroup moderator or field supervisor), or within a supplier/buyer firm (director of marketingresearch or research analyst). Recognizing that position titles vary by company, you couldexpect entry-level positions to include titles such as marketing research assistant or junior pro-ject director. After a year or more, you might advance to assistant marketing research manageror project director. The job titles are not nearly as important as the responsibilities. As you growin your marketing research career, your assignments will move from problem management toproblem definition and project design.

Almost all the large research firms have a job-openings site on their Web sites. For exam-ple, try acnielsen.com, ACNielsen’s Web page, and go to “Contact” and check out the postedjob listings. This will show you the titles and job descriptions of jobs available at ACNielsen. Ortake a look at National Family Opinion (NFO) Worldwide’s Web site at www.nfow. Go to “Join Us”and then “Career Center.” You will see job descriptions and requirements for the positions avail-able at NFOWorldwide. We recommend you do this at several of the Web sites. Check out thecompanies listed in this chapter in Table 3.1, “The Honomichl Top 50.”

WHAT ARE THE REQUIREMENTS?Do you have what it takes? The traits associated with the most successful and effective market-ing researchers include the following: curiosity, high intelligence, creativity, self-discipline, goodinterpersonal and communication skills, the ability to work under strict time constraints, andfeeling comfortable working with numbers. The field is becoming gender neutral. About half ofall new researchers are women.56 Information Resources, Inc. (IRI) states it prefers a degree inmarketing or a related area. Although an undergraduate degree is required, there has been atrend toward requiring postgraduate degrees in some firms. Most universities do not offer adegree in marketing research. There are some, reported later, that are quite good. Thus, anM.B.A. with a marketing major is one of the more common combinations for people employed

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in marketing research. Other possibilities are degrees in quantitative methods, sociology, or eco-nomics. Undergraduate training in mathematics or the physical sciences is a very suitable (andemployable) background for anyone considering a career in marketing research.

ARE YOU INTERESTED IN A MASTER’S DEGREE IN MARKETING RESEARCH?Graduate degrees are highly recommended in the marketing research industry. Throughout thisbook, we have and will continue to introduce you to real people in the industry. In many cases,we show you their biography that includes their formal training. You will notice that almost all ofthem have graduate degrees. Again, it is not necessary but it is desirable. The following schoolswere obtained from the MRA Web site:

Santa Clara UniversityMBA OfficeKenna Hall 323Santa Clara, CA 95053-0001408-554-4500408-554-4571 faxwww.scu.eduDegree offered: M.B.A. with MR Concentration

University of GeorgiaTerry College of BusinessProgram of Marketing ResearchAthens, GA 30602706-542-3540www.uga.eduDegree offered: Master’s in MR

Southern Illinois University School of BusinessBox 1051Edwardsville, IL62026-0001618-692-3412618-692-3979 faxwww.siue.edu/MMR/Degree offered: Master of Science in MR

Rutgers University92 New StreetNewark, NJ 07102-1895973-648-5651973-648-1592 faxwww.rutgers.comDegree offered: Master’s in Marketing with Concentration in MR

City University of New York—BaruchOffice of Graduate Admissions17 Lexington Ave., Box H-0725New York, NY 10010-5585212-802-2330www.baruch.cuny.eduDegree offered: Master’s in Marketing with Concentration in MR

University of Texas—ArlingtonCollege of Business Administration, Marketing DepartmentUTA Box 19469



Arlington, TX 76019-0469(817) 272-2340817-272-2854 faxwww.uta.eduDegree offered: Master of Science in MR

University of Wisconsin/Nielsen SchoolGradate Program Office2766 Grainger Hall975 University Ave.Madison, WI 53706-1380608-262-1555608-265-4192 faxwww.wisc.eduDegree offered: Master’s in Marketing with MR Concentration

LOOKING FOR A JOBThe first thing you should do is go to your university’s career center. Make certain you takeadvantage of the materials it offers and the knowledge of the staff. Remember, your universitywants you to find a meaningful career but it can only offer you the resources. You must usethose resources. There are some helpful guides available such as:

Career Busters: 22 Things People Do to Mess Up Their Career and How to Avoid ThemHot Jobs: The No-Holds-Barred, Tell-It-Like-It-Is Guide to Getting the Jobs Everybody WantsHow to Land a Better JobSuccessful Job Search Strategies for the Disabled

Look these titles up on your library’s search system. Also, visit the Web pages of theAmerican Marketing Association, Marketing Research Association, and CASRO. They all haveinformation to help you in your career search.

Getting a job is hard work. Getting a good job requires hard work and a lot of preplanning.Network, take advantage of internships, and get familiar with and read publications about theindustry in which you wish to have a career. Join marketing associations, make contacts, andask them how they got their job and to explain their job to you. Good jobs go to well-trained,enthusiastic, and motivated individuals. Get started now!

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