MK chapter 10

To develop standards of conduct and create respect for marketing professionals who gather market intelligence, the Society of Competitive Intelligence Professionals has developed a code of ethics. It is as follows:

To continually strive to increase the recognition and respect of the profession. To comply with all applicable laws, domestic and international. To accurately disclose all relevant information, including one's identity and organization, prior to all interviews. To avoid conflicts of interest in fulfilling one's duties. To provide honest and realistic recommendations and conclusions in the execution of one's duties. To promote this code of ethics within one's company, with third-party contractors and within the entire profession. To faithfully adhere to and abide by one's company policies, objectives and guidelines .

ethnography

researchers interview, observe, and often videotape people while they work, live, shop, and play

Also, don't muddy the waters by asking two questions in the same question, something researchers refer to as a double-barreled question

"Do you think parents should spend more time with their children and/or their teachers?" is an example of a double-barreled question.

marketing information that's being gathered.

A certain amount of marketing information is being gathered all the time by companies as they engage in their daily operations. When a sale is made and recorded, this is marketing information that's being gathered. When a sales representative records the shipping preferences of a customer in a firm's customer relationship management (CRM) system, this is also marketing information that's being collected. When a firm gets a customer complaint and records it, this too is information that should be put to use. All this data can be used to generate consumer insight. However, truly understanding customers involves not just collecting quantitative data (numbers) related to them but qualitative data, such as comments about what they think.

Alex J. Caffarini, the president and founder of the marketing research firm Analysights, believes there are a number of other reasons companies mistakenly do marketing research. Caffarini's explanations (shown in parentheses) about why a company's executives sometimes make bad decisions are somewhat humorous. Read through them:

"We've always done this research ." (The research has taken on a life of its own; this particular project has continued for years and nobody questioned whether it was still relevant.) "Everyone's doing this research ." (Their competitors are doing it, and they're afraid they'll lose competitive advantage if they don't; yet no one asks what value the research is creating.) "The findings are nice to know ." (Great—spend a lot of money to create a wealth of useless information. If the information is nice to know, but you can't do anything with it, you're wasting money.) "If our strategy fails, having done the research will show that we made our best educated guess ." (They're covering their butts. If things go wrong, they can blame the findings, or the researcher.) "We need to study the problem thoroughly before we decide on a course of action ." (They're afraid of making a tough decision. Conducting marketing research is a good way to delay the inevitable. In the meantime, the problem gets bigger, or the window of opportunity closes.) "The research will show that our latest ad campaign was effective ." (They're using marketing research to justify past decisions. Rarely should marketing research be done after the fact) (Caffarini).

probability sample

A is one in which each would-be participant has a known and equal chance of being selected. The chance is known because the total number of people in the sampling frame is known. For example, if every other person from the sampling frame were chosen, each person would have a 50 percent chance of being selected.

stage 7: The six basic elements of a research report are as follows.

. 1.Title Page . The title page explains what the report is about, when it was conducted and by whom, and who requested it. 2.Table of Contents . The table of contents outlines the major parts of the report, as well as any graphs and charts, and the page numbers on which they can be found. 3.Executive Summary . The executive summary summarizes all the details in the report in a very quick way. Many people who receive the report—both executives and nonexecutives—won't have time to read the entire report. Instead, they will rely on the executive summary to quickly get an idea of the study's results and what to do about those results. 4.Methodology and Limitations. The methodology section of the report explains the technical details of how the research was designed and conducted. The section explains, for example, how the data was collected and by whom, the size of the sample, how it was chosen, and whom or what it consisted of (e.g., the number of women versus men or children versus adults). It also includes information about the statistical techniques used to analyze the data. Every study has errors—sampling errors, interviewer errors, and so forth. The methodology section should explain these details, so decision makers can consider their overall impact. The is the overall tendency of the study to be off kilter—that is, how far it could have gone wrong in either direction. Remember how newscasters present the presidential polls before an election? They always say, "This candidate is ahead 48 to 44 percent, plus or minus 2 percent." That "plus or minus" is the margin of error. The larger the margin of error is, the less likely the results of the study are accurate. The margin of error needs to be included in the methodology section. 5. Findings . The findings section is a longer, fleshed-out version of the executive summary that goes into more detail about the statistics uncovered by the research that bolster the study's findings. If you have related research or secondary data on hand that back up the findings, it can be included to help show the study did what it was designed to do. 6.Recommendations . The recommendations section should outline the course of action you think should be taken based on the findings of the research and the purpose of the project. For example, if you conducted a global market research study to identify new locations for stores, make a recommendation for the locations (Mersdorf, 2009).

The Basic Steps of Conducting a Focus Group

1. Establish the objectives of the focus group. What is its purpose? 2.I dentify the people who will participate in the focus group. What makes them qualified to participate? How many of them will you need and what they will be paid? 3. Obtain contact information for the participants and send out invitations (usually e-mails are most efficient). 4. Develop a list of questions. 5. Choose a facilitator. 6. Choose a location in which to hold the focus group and the method by which it will be recorded. 7. Conduct the focus group. If the focus group is not conducted electronically, include name tags for the participants, pens and notepads, any materials the participants need to see, and refreshments. Record participants' responses. 8. Summarize the notes from the focus group and write a report for management.

Steps in the Marketing Research Process

1. define the research problem 2. determine the research design 3. choose the method to collect primary data 4. design the sample 5. collect the data 6. analyze and interpret the data 7. prepare the research report

customer relationship management (CRM) systems

A system for recording this information is crucial, which explains why so many companies have invested in customer relationship management (CRM) systems. Some companies circulate lists so their employees have a better idea of the market intelligence they might be looking for. Textbook publishers are an example. They let their sales representatives know the types of books they want to publish and encourage their representatives to look for good potential textbook authors among the professors they sell to.

field experiment

An experiment conducted in a natural setting such as a store is referred to as a . Companies sometimes do field experiments either because it is more convenient or because they want to see if buyers will behave the same way in the "real world" as in a laboratory or on a computer

Being able to access clickstream data and other internally generated information quickly can give a company's decision makers a competitive edge.

Being able to access clickstream data and other internally generated information quickly can give a company's decision makers a competitive edge.

industrial espionage

Gathering corporate information illegally or unethically is referred to as . Industrial espionage is not uncommon. Sometimes companies hire professional spies to gather information about their competitors and their trade secrets or even bug their phones. Former and current employees can also reveal a company's trade secret either deliberately or unwittingly. Microsoft recently sued a former employee it believed had divulged trade secrets to its competitors 2 . It's been reported that for years professional spies bugged Air France's first-class seats to listen in on executives' conversations

Analytics software

Increasingly, companies are purchasing analytics software to help them pull and make sense of internally generated information. allows managers who are not computer experts to gather all kinds of different information from a company's databases—information not produced in reports regularly generated by the company. The software incorporates regression models, linear programming, and other statistical methods to help managers answer "what if" types of questions. For example, "If we spend 10 percent more of our advertising on TV ads instead of magazine ads, what effect will it have on sales?" Oracle Corporation's Crystal Ball is one brand of analytical software.

Key Takeaway

Many marketing problems and opportunities can be solved by gathering information from a company's daily operations and analyzing it. Market intelligence involves gathering information on a regular, ongoing basis to stay in touch with what's happening in the marketplace. Marketing research is what a company has to resort to if it can't answer a question by using market intelligence, internal company data, or analytical software. Marketing research is not infallible, however.

scanner-based research

Scanner-based research is information collected by scanners at checkout stands in stores. Each week Nielsen and IRI collect information on the millions of purchases made at stores. The companies then compile the information and sell it to firms in various industries that subscribe to their services. The Nielsen Company has also recently teamed up with Facebook to collect marketing research information

sentiment analysis

Sentiment is a method of examining content in blogs, tweets, and other online media (other than news media) such as Facebook posts to determine what people are thinking at any given time. Some companies use sentiment analysis to determine how the market is reacting to a new product. The Centers for Disease Control (CDC) uses sentiment analysis to track the progress of flu; as people post or tweet how sick they are, the CDC can determine where the flu is increasing or decreasing. analysis

Key Takeaway

Step 1 in the marketing research process is to define the problem. Businesses take a look at what they believe are symptoms and try to drill down to the potential causes so as to precisely define the problem. The next task for the researcher is to put into writing the research objective, or goal, the research is supposed to accomplish. Step 2 in the process is to design the research. The research design is the "plan of attack." It outlines what data you are going to gather, from whom, how, and when, and how you're going to analyze it once it has been obtained. Step 3 is to design the data-collection forms, which need to be standardized so the information gathered on each is comparable. Surveys are a popular way to gather data because they can be easily administered to large numbers of people fairly quickly. However, to produce the best results, survey questionnaires need to be carefully designed and pretested before they are used. Step 4 is drawing the sample, or a subset of potential buyers who are representative of your entire target market. If the sample is not correctly selected, the research will be flawed. Step 5 is to actually collect the data, whether it's collected by a person face-to-face, over the phone, or with the help of computers or the Internet. The data-collection process is often different in foreign countries. Step 6 is to analyze the data collected for any obvious errors, tabulate the data, and then draw conclusions from it based on the results. The last step in the process, Step 7, is writing the research report and presenting the findings to decision makers.

test market

The place the experiment is conducted or the demographic group of people the experiment is administered to is considered the . Before a large company rolls out a product to the entire marketplace, it will often place the offering in a test market to see how well it will be received. For example, to compete with MillerCoors' sixty-four-calorie beer MGD 64, Anheuser-Busch recently began testing its Select 55 beer in certain cities around the country (McWilliams, 2009).

Review Questions

Why do companies gather market intelligence and conduct marketing research? What activities are part of market intelligence gathering? How do marketing professionals know if they have crossed a line in terms of gathering marketing intelligence? How does the time frame for conducting marketing intelligence differ from the time frame in which marketing research data is gathered?

depth interview

engaging in detailed, one-on-one, question-and-answer sessions with potential buyers—is an exploratory research technique. However, unlike surveys, the people being interviewed aren't asked a series of standard questions. Instead the interviewer is armed with some general topics and asks questions that are open ended, meaning that they allow the interviewee to elaborate. "How did you feel about the product after you purchased it?" is an example of a question that might be asked. A depth interview also allows a researcher to ask logical follow-up questions such as "Can you tell me what you mean when you say you felt uncomfortable using the service?" or "Can you give me some examples?" to help dig further and shed additional light on the research problem. Depth interviews can be conducted in person or over the phone. The interviewer either takes notes or records the interview.

Causal research design

examines cause-and-effect relationships. Using a causal research design allows researchers to answer "what if" types of questions. In other words, if a firm changes X (say, a product's price, design, placement, or advertising), what will happen to Y (say, sales or customer loyalty)? To conduct causal research, the researcher designs an experiment that "controls," or holds constant, all of a product's marketing elements except one (or using advanced techniques of research, a few elements can be studied at the same time). The one variable is changed, and the effect is then measured.

descriptive research design

involves gathering hard numbers, often via surveys, to describe or measure a phenomenon so as to answer the questions of who, what, where, when, and how. "On a scale of 1-5, how satisfied were you with your service?" is a question that illustrates the information a descriptive research design is supposed to capture.

focus group

is a group of potential buyers who are brought together to discuss a marketing research topic with one another. A moderator is used to focus the discussion, the sessions are recorded, and the main points of consensus are later summarized by the market researcher. Textbook publishers often gather groups of professors at educational conferences to participate in focus groups. However, focus groups can also be conducted on the telephone, in online chat rooms, or both, using meeting software like WebEx. The basic steps of conducting a focus group are outlined below

marketing research aggregator

is a marketing research company that doesn't conduct its own research and sell it. Instead, it buys research reports from other marketing research companies and then sells the reports in their entirety or in pieces to other firms. Check out MarketResearch.com's Web site. As you will see there are a huge number of studies in every category imaginable that you can buy for relatively small amounts of money.

marketing information system (MIS)

is a way to manage the vast amount of information firms have on hand—information marketing professionals and managers need to make good decisions. Marketing information systems range from paper-based systems to very sophisticated computer systems. Ideally, however, a marketing information system should include the following components: marketing information system (MIS) • A system for recording internally generated data and reports A system for collecting market intelligence on an ongoing basis Marketing analytics software to help managers with their decision making A system for recording marketing research information

Qualitative research

is any form of research that includes gathering data that is not quantitative, and often involves exploring questions such as why as much as what or how much. Different forms, such as depth interviews and focus group interviews, are common in marketing research.

nonprobability sample

is any type of sample that's not drawn in a systematic way. So the chances of each would-be participant being selected can't be known

clickstream data

is data generated about the number of people who visit a Web site and its various pages, how long they dwell there, and what they buy or don't buy. Companies use clickstream data in all kinds of ways. They use it to monitor the overall traffic of visitors that a site gets, to see which areas of the site people aren't visiting and explore why, and to automatically offer visitors products and promotions by virtue of their browsing patterns. Software can be used to automatically tally the vast amounts of clickstream data gathered from Web sites and generate reports for managers based on that information. Netflix recently awarded a $1 million prize to a group of scientists to plow through Web data generated by millions of Netflix users so as to improve Netflix's predictions of what users would like to rent (Baker, 2009). (That's an interesting way to conduct marketing research, don't you think?)

Secondary data

is data that has already been collected by someone else, or data you have already collected for another purpose. Collecting primary data is more time consuming, work intensive, and expensive than collecting secondary data. Consequently, you should always try to collect secondary data first to solve your research problem, if you can. Your company's internal records are a source of secondary data. Your local library is a good place to gather free secondary data.It has searchable databases as well as handbooks, dictionaries, and books, some of which you can access online

Primary data

is information you collect yourself, using hands-on tools such as interviews or surveys, specifically for the research project you're conducting.

convenience sample

is one type of nonprobability sample. It is a sample a researcher draws because it's readily available and convenient to do so. Surveying people on the street as they pass by is an example of a convenience sample. The question is, are these people representative of the target market?

Syndicated research

is primary data that marketing research firms collect on a regular basis and sell to other companies. J.D. Power & Associates is a provider of syndicated research.

exploratory research design

is useful when you are initially investigating a problem but you haven't defined it well enough to do an in-depth study of it. Perhaps via your regular market intelligence, you have spotted what appears to be a new opportunity in the marketplace. You would then do exploratory research to investigate it further and "get your feet wet," as the saying goes. Exploratory research is less structured than other types of research, and secondary data is often utilized. exploratory research design

research design

is your "plan of attack." It outlines what data you are going to gather and from whom, how and when you will collect the data, and how you will analyze it once it's been obtained. Let's look at the data you're going to gather first.

data mining

knows how to access different databases and write computer programs to extract the right information from the right places at BNSF, a process known as . Combining data into one location is called , and makes Pool's analysis easier. He then captures the information and displays it in , screens on the computer that make the data easily understood so that managers can detect marketing trends. While a dashboard may display a piece of information, such as the number of carloads sold in West Virginia, the manager can click on the number and get more detail.

case study

looks at how another company solved the problem that's being researched. Sometimes multiple cases, or companies, are used in a study. Case studies nonetheless have a mixed reputation. Some researchers believe it's hard to generalize, or apply, the results of a case study to other companies. Nonetheless, collecting information about companies that encountered the same problems your firm is facing can give you a certain amount of insight about what direction you should take. In fact, one way to begin a research project is to carefully study a successful product or service.

intranet

looks like the Web and operates like it, but only an organization's employees have access to the information. So, for example, instead of a brand manager asking someone in accounting to run a report on the sales of a particular product, the brand manager could look on her firm's intranet for the information.

Physiological measurements

measure people's involuntary physical responses to marketing stimuli, such as an advertisement. Elsewhere, we explained that researchers have gone so far as to scan the brains of consumers to see what they really think about products versus what they say about them. Eye tracking is another cutting-edge type of physiological measurement. It involves recording the movements of a person's eyes when they look at some sort of stimulus, such as a banner ad or a Web page. The Walt Disney Company has a research facility in Austin, Texas, that it uses to take physical measurements of viewers when they see Disney programs and advertisements. The facility measures three types of responses: people's heart rates, skin changes, and eye movements (eye tracking)