Marketing Information & Research

AMA

What Is Marketing Research

Source: Why We Buy. P Underhill.

Marketing Research Varies

• Studies shopping behavior– People tend to walk right on entry

– Women more likely to avoid narrow aisles than men

– Men move faster than women

– Shoppers slow down at reflective surfaces and speed up at blanks

– Don’t notice elaborate signs in the first 30 ft of entrance.

Research contexts differ

Whirlpool Market Research – Marketing researchers

visited consumers homes and observed the following:

– Consumers didn’t wait for dishwasher to fill up machine before running

– The result: A smaller version

Brandweek.comNov. 3, 2003 p. 28Wasserman, Todd

“Sharpening the Focus”

Integrates Multiple Partners

• Greg Josefowica– Borders’ CEO

• Announcement: – Future decisions about

books to distribute based on marketing research vs. publishers’ input.

• To gather consumer data: – Focus groups, exit

interviews and polling, and sales figures

• Questions Borders would like to answer:– Which books are bought on

impulse?– How should books be

configured (by subject, by age, by author)?

– How much space should be devoted to bestsellers?

• Example of research finding:– Use of exit and phone

interviews: • Cooking category• 25% of the books sold are

being given as gifts

2002:

Addresses Multiple Mktg. Mix Aspects

• Starbucks chooses Wisconsin for Chocofino

• Introduces hot drinking chocolate beverage called Chocofino.

– Blend of cocoa powder and cocoa butter, combined with whole milk and then steamed.

– Beverage test phase: March 17 to April 22 2004

• City-wide campaign: Variety of popular Milwaukee venues,

– Local theatres, concerts and museums.

– Chocofino Cab, a Euro-designed, chocolate-brown car delivering complimentary Chocofino beverage coupons around town.

• Have you seen it? 5:24 a.m. March 13, 2004 Starbucks test markets hot chocolate drink in Brew CityBy Molly Snyder Edler

Different Time Periods

• Try new breakfast meal: Egg, rice and Spam.

• Spam musubi ("moo-soo-BEE"): Popular breakfast food– Strip of cooked Spam on block of rice; held in place by a sushi-style

seaweed girdle, is a popular breakfast food and lunchtime or picnic snack.

– Already sold regularly at 7-Elevens in Hawaii.

• 78 McDonald's outlets in Hawaii

• Hormel product made from pork parts is staggeringly popular in Hawaii:– Highest Spam consumption per capita of any state.

• Approximately 8-16 week trial

• Decide if it is selling well enough to add to a menu

June 11, 2002

Varying Levels of Depth

• Geodemographics: – Describe classification of

arbitrary, usually small, geographic areas in terms of characteristics of inhabitants.

• Claritas: market profiling system PRIZM.– Defines every

neighborhood in the U.S. in terms of 62 different clusters.

http://www.clusterbigip1.claritas.com/MyBestSegments/Default.jsp?ID=20

Variety of Data Forms

Experimental• Simulated test market

or full test market

Tracking• Purchase diaries;

usage studies• Scanner data

With So Many Varieties, Tools & Information

At The Marketer’s Disposal

What is Marketing Research?

What is Marketing Research?

• Kotler: – “The systematic design, collection, analysis

and reporting of data and findings relevant to a specific marketing situation facing and organization”

• What it means to us: – The essential link between the market and

the marketing manager – Marketing research brings the voice of the

customer or environment to the marketing manager

Marketing Research & Marketing Information Systems

• In some organizations, marketing research comprises an element of a more formalized process

• Marketing Information System

• Assesses information needs • Develops needed information• Distributes information

But Before We Get Started Into The Process of Mktg. Research

• Let’s take a perspective from 50,000 feet

• What are the key questions we need to ask about marketing research – Before and during the process

• How could we classify the different types of marketing information

• Then let’s move into the more tactical, process-oriented issues of marketing research – What are the steps in the process– What transpires during these steps

What Questions Should We Ask Before &During The Marketing Research Process

Pre-game preparation: Questions we ask before we conduct the research

• Why do we need the information: – TO MAKE A DECISION

• What do we know now? – What does our previous research

suggest? – How does this fit into our strategic

roadmap

• Can the question be answered?

• Can we find and identify the respondents we are interested in?

• Does the data already exist? – Secondary data: Information we’ve

already collected…But collected for another purpose

– Primary data: collected for our purposes

Post-game follow-up: Questions we ask once we have the information

• Why did the people respond/what was their motivation?

• What were people’s motive to respond

– Are certain types of people more likely to respond (non-response bias)

• Are there ethical limitations in how people respond

– Sexual behavior; norms– Bay Watch vs PBS

How Could We Classify Marketing Research Information

Internal Sources

Secondary sources

Market Intelligence

Syndicated sources

Primary sources

Examples Order processing; sales orders, Point of purchase

U.S. Census Data Internet commun. BenchmarkingPublished information; War games; Key customers

A.C. NielsenIRIArbitron

Test markets; surveys

Benefits & Challenges

Readily available; may not be in form

Provides greater breadth; obtained quickly; less targeted; may or may not be usable

Systematic; access to public information; may require formal resources devoted to gathering

More targeted; greater expense

Specialized, private, proprietary

Cost Low expense; sunk cost

Low; often already a sunk cost

Moderate expense Moderate expense

Highest expense

Flexibility Limited Limited Moderate Moderate Greatest

The Marketing Research Process

Four key steps

Keys• It’s a sequential, disciplined process• One step logically leads to the next

The Marketing Research ProcessDefine the problem and research objective

Developing the research plan for collecting information

Implement research plan & collect and analyze data

Interpret and report the findings

Have we adequately defined our problem and the decision we need to make?

How are going to answer this question

Who and how will we collect the data/information

What does the information mean; not what the numbers say.

Have we already asked pre-game questions1. Will this aid in making a

decision?2. What do we know now?3. Can the question be

answered? 4. Can we find the right people?5. Does the data already exist?

Can we use secondary data or primary data

What will our sources for the data be

Sampling plan: Who will we select torepresent the population? 1. Who will be

surveyed2. How many

people will be surveyed

3. How should the sample be chosen

Descriptive statistics alone are meaningless

How do we integrate the knowledge with what we already know.

Have we answered our problem and met our research objective?

Based on our problem, are we (research objective): 1. Exploring2. Describing3. Looking for cause & effect

relationships or associations

Based on the research objective, the method we

will use: • Observation• Survey• Experiment

Choose the research instrument:1. Personal or

mechanical 2. Questionnaire

Can we make our decision?

Marketing Research Step I:Defining the Problem & Research Objectives

• Defining the problem and research objectives– Don’t confuse the symptoms of the problem with its cause

when defining the problem.– How does one write a problem statement?

• Is it measurable • Description of problem• Description of context• Time period• Do we want a description, an exploration or an association

• The problem statement leads to the research objectives? – The research objectives are important?

• What do you/ don’t you understand – Exploratory, descriptive, and causal research each fulfill

different objectives.

Types of Research Objectives

• Exploratory (unaware of specific problem)

• Descriptive (aware of problem)– Describe who, what, when,

where

• Causal (Problem clearly defined)– Cause and effect

• Describe why or how

Example: • Why are sales declining

Example: • Who buys our competitor’s

products? • What features do buyers prefer

in our product?

Example: • Which of the two ad campaigns

increased sales the most?• Will consumers purchase more

of our product in a new package?

Marketing Research Step II:Developing The Research Plan

• Developing the Research Plan– Research objectives

guide the determination of specific information needs.

– Are we trying to explore, describe or find cause and effect

• Research proposals outline the type of data needed and the research plan.

– Does the info. already exist?

• Secondary data:– Information collected for another

purpose which already exists.– May exist internally or externally to

your organization

• Primary data: – Information collected for the specific

purpose at hand• Developed specifically by you for your

needs• Relates directly to your research

question• May be qualitative or quantitative • May be developed through

observation; survey or experiment

Secondary DataInformation collected for another purpose which already exists.

External To The Firm

Internal To The Firm

Secondary Research Examples Secondary Research Examples

Sales informationFinancial statements

Research reports Sales databasesCustomer lettersCustomer lists

Sales/product mix

U.S. CensusSyndicated

(IRI and A.C. Nielsen Trade Assoc.

Govt. AgenciesAcademic Research

InternetMass Media

Business/Trade Mags.

Types of Primary ResearchDeveloped specifically by you for your needs

Primary Research Examples Primary Research Examples Quantitative Qualitative

Ethnography

Phenomenology

Focus groups

In-depth interviews

Case Studies

Experiments: Test markets Simulations

Mechanical and electronic observation

People meters

Surveys and Questionnaires Mail surveys

Personal interview Telephone, fax, e-mail, Web In-house, self-administered

Review: The Flow of Marketing Research

• A research problem leads to a research objective

• The research objective leads to a research approach

• A research approach leads to a specific research instrument

Example of a research problem

If our research objective is

We are most likely to use the following research approaches (primary data)

Examples of Specific research instrument

Why are our sales declining?

Exploratory (unaware of specific problem)

Observation Focus groups

Who buys our competitor’s products?

Descriptive (aware of problem)•Describe who, what, when, where

Survey Questionnaire

Which of the two ad campaigns will increase sales the most?

Causal (Problem clearly defined)•Cause and effect•Describe why or how

Experiment Test Market

What Is An Observation Research Approach?

• Remember, our research objective is exploratory

• Observation: Gather primary data by observing people, actions and situations

• Research approaches:– Discovers behavior but may or may

not uncover motivation– Usually involves:

• People watching people• People watching an activity• Machines watching people

• Mechanical instruments– Traffic counters– Retailer store checkout scanners– Video-taped store traffic– People meters– Website logs, cookies, software– Physiological measurement equipment– Mystery shoppers

• People instruments – Ethnographic research– Focus groups

Focus groupsMystery shopping

What Is An Experimental Research Approach?

• Remember, our research objective is causal

• Cause and Effect or some type of association

– Provide different treatments (advertisements) to gauge sales

– ***Simulation (mathematical and computer modeling)

Research instruments • Web based experiments

– Customer buying experience on the web

– Site content; Availability of links; Spatial layout; Usability

– Pricing tests

• In-market experiments• Test markets: Measure and

predict sales or profitability of a product

• Test marketing mix variations

What Is A Survey Research Approach?

• Remember, our research objective is descriptive

• Survey– Help understand about people’s

knowledge, attitudes, preferences or buying behavior

• Common forms of survey research: – Questionnaires

• Include different types of questions

– Open-ended question: What are the most important benefits you seek when buying a car?

– Closed-ended question: What is your gender? ____ Male ____ Female

– Cross sectional survey (brand awareness)

How do they collect them?•In-Home Interviews,•Mail Surveys•Mall Intercept Interviews•Telephone Interviews

How Do You Choose Between Instruments?

1. Resource Issues1. How much money do you have2. How much time do you have (trade-off)

2. Information quality and quantity 1. How comfortable are we in making this

decision 2. How much information do we need3. What is the quality of information that we

need

Marketing Research Step III: Implementing

The Research Plan Collecting and Analyzing Data

Who will we measure and draw from• Sample: subgroup of population from whom

information will be collected

• Sampling Plan Decisions:– Sampling unit: Who will be surveyed– Sample size: How many people will be surveyed– Sampling procedure: How should the sample be

chosen • Probability samples• Non-probability samples

Marketing Research Step III: Implementing The Research Plan Collecting and Analyzing Data

We should be cognizant that errors may influence our results • Quantitative data errors

– Sample error: Which respondents replied vs. those who did not

– Measurement error: Did we use the correct surrogates/proxies

– The language of the questions: Did we confuse or bias the respondents’ answers– Leading questions: “When did you stop drinking?”

– Double barreled questions: “What is your opinion of Dick Cheney and the job he is doing as Vice-President?”

– The respondent doesn’t possess the correct knowledge base: “Were our retail associates supportive of one another in the store?”

– Do they facilitate acquiescence of social desirability answers: “Do you watch more PBS Nova or BayWatch?”

• Qualitative data errors– Validity errors: Not checking with respondents

– Lack of qualitative analysis: Coding; validity checks; use of qualitative analysis software

– Not ensuring saturation of results; ensuring certain themes are relevant

Marketing Research Step III: Implementing The Research Plan Collecting and Analyzing Data

• How is the data analyzed

– Qualitative and Quantitative data applications are available for a number of analyses

• Excel is limited • Descriptive statistics, such as averages or trends of

averages provide a limited picture.

– Every statistical model has assumptions, benefits and flaws

– You should outline and understand these assumptions and flaws in your discussions and presentations

• Acceptance by the industry does not equal perfection– Perhaps, only the best instrument we have at this time.

Marketing Research Step IV:Interpreting and Reporting The Findings

• Goal: – Develop interpretations and draw conclusions

– In order to execute this goal: • The information should answer the original research

problem and research objective• The interpretation should be a multi-functional effort• The results should be incorporated into a larger

understanding (pre-existing information)– Converge or diverge– How does this add or challenge to what we know

– The presentation should be devoted to gaining additional meaning, not describing the data

Summary

• Marketing Research: – Essential link between the

market & marketing manager – Brings the voice of the

customer to the marketing manager

• Marketing Research Process: – Sequential, disciplined

process

– We start with a problem and our results should facilitate a decision regarding this problem

– Four main steps that lead/ dove-tail into one another

– Ultimately, our interpretation should incorporate what we found out with our current understanding

On Your OwnDevelop

• What is the research problem– Write a problem statement – Write the research objective(s)– Does existing data exist– What published data could aid in understanding this problem

• Develop the research plan – What sources of data will you use (primary or secondary)

• What specific types of primary or secondary data will you use?

– What research method will you use (observation, survey, or observation)

• Identify a sampling plan and an instrument

Define the problem and research objective

Developing the research plan for collecting information

Implement research plan & collect and analyze data

Interpret and report the findings

Have we adequately defined our problem and the decision we need to make?

How are going to answer this question

Who and how will we collect the data/information

What does the information mean; not what the numbers say.

Have we already asked pre-game questions1. Will this aid in making a

decision?2. What do we know now?3. Can the question be

answered? 4. Can we find the right

people?5. Does the data already exist?

Can we use secondary data or primary data

What will our sources for the data be

Sampling plan: Who will we select torepresent the population? 1. Who will be

surveyed2. How many

people will be surveyed

3. How should the sample be chosen

Descriptive statistics alone are meaningless

How do we integrate the knowledge with what we already know.

Have we answered our problem and met our research objective?

Based on our problem, are we (research objective): 1. Exploring2. Describing3. Looking for cause & effect

relationships or associations

Based on the research objective, the method we will use: • Observation• Survey• Experiment

Choose the research instrument:1. Personal or

mechanical 2. Questionnaire

Can we make our decision?

Summary