Marketing Research Exam #1 Study Guide/Questions

Step 2:

*Clarify the Problem/Opportunity* Narrow down what's at the heart of that opportunity or problem. - Provide a different perspective on the problem - Fully analyze the "heart of the problem" with the client's help - Challenge assumptions - "Why is this problem important?" - Use Situation Analysis (or SWOT can help guide your research) What's another way to look at this? You might start playing devils advocate

Example of *Strategy-oriented* Decision and Research Problems

*Decision Problem:* - How do we increase store traffic? *Research Problems:* - Investigate effectiveness of different sales promotions. - Determine consumer response to two proposed ad campaigns.

Example of *Discovery-oriented* Decision and Research Problems

*Decision Problem:* - Why are store revenues so low? *Research Problems:* - Investigate current customer satisfaction. - Assess target market perceptions of store and competitors.

Decision problem

*Describe the manager's view of the situation* - basic problem facing the manager which marketing research is intended to answer.

Longitudinal Analysis

*Descriptive* - Repeated measures, over time, of a fixed sample. - We want to see how the information changes over time. Ex: Customer satisfaction, we might ask today, then in a month, then in a year. Are they getting more or less satisfied, or staying the same? - Much more complicated to keep track of people over time. *Two primary types* 1. Continuos panel 2. Discontinuous panel

Cross-Section Study

*Descriptive* Single point in time measures of a sample selected from a population. - Much easier to do, ask people in one moment in time and then you're done.

Step 4:

*Develop Possible Research Problems* Research problem or question (same thing) from the company or clients perspective and turn it into research problems.

Case Analyses

*Exploratory* Intensive study of selected examples of phenomenon

Depth Interviews

*Exploratory* Interviews with people knowledgeable about the general subject being investigated

Literature Search

*Exploratory* Search of popular press, trade, and academic literature or published statistics from research firms or governmental agencies.

Focus Groups

*Exploratory* Small group interviews relying on group discussion

Profiling Customers

*External Secondary* Geodemographers combine census data with their own survey data or data they obtain from administrative records such as motor vehicle registrations or credit transactions. - Who lives where? - Income? - Lifestyle? - Free time? - Entertainment? Ex: PRIZM (website)

Measuring Product Sales and Market Share

*External Secondary* NPD Group tracks a number of food-related trends. - Manufacturers have to buy the customer information.

Measuring Advertising Exposure and Effectiveness

*External Secondary* People meters have enhanced Nielsen's famous television rating service. - Advertising

Marketing Research Companies

*In business to conduct research; some focus on very specific topics or aspects of the research process, whereas others are more general in focus.* Exist solely to do marketing research, that is their only purpose. There are thousands in the US and they can sell data to other companies. Constantly gathering information (Syndicated data (ex: Nielsen)) Custom-designed research (ex: GFK) is for a specific company.

Discontinuous Panel

*Longitudinal* Fixed sample of respondents who are measured repeatedly over time with respect to *different* variables. - Same people, different questions.

Continous Panel

*Longitudinal* Fixed sample of respondents who are measured repeatedly over time with respect to the *same* variables.

Step 1:

*Meet with Client* to obtain: - Management statement of problem/opportunity - Background information - Management objectives for research - Possible managerial actions to result from research *Survey them to obtain any underlying information and gauge what's going on and what's prompted the whole thing, what's going on in the company to want more information.*

Step 6:

*Prepare Research Request Agreement* - Typically you've had several conversations with your client at this point and you all should be on the same page.

Planned Change

*Proactive about the way we handle our marketing mix.* - Increase revenues - Introduce new products - Improved distribution - More effective pricing - Promotions

Quantitative Research

*Research that uses mathematical analysis* - Difference between users - Attitudes, feelings, motivations - Averages, counts, typicality *Causal and Descriptive*

Qualitative Research

*Research whose findings are not subject to quantification or quantitative analysis* - Descriptive - Underlying motivations *Exploratory*

Research Problems

*Restate decision problems in research terms* From the researchers point of view. - Action-oriented - Describes the information to be uncovered. *We have to look at specific variables in research problems, which are something we can actually capture and attach numbers to. (Variables) Customer satisfaction is probably the most common.*

Step 5:

*Select Research Problem(s) to Be Addressed* Figure out which research problems you are actually going to tackle. - Narrow down research problems to most critical ones. - Can't research everything. - Figure out which one is going to MOST LIKELY tackle the problem or opportunity and distinguish which one is going to be the MOST BENEFICIAL to the problem or opportunity at hand.

When NOT to Conduct Research

- You don't have the resources to conduct the research OR implement any recommendations from the results - Results won't be useful - The opportunity has passed - The decision has already been made - You don't know or management can't agree on what is needed to make a decision - The information already exists - Costs outweigh the benefits *You only want to do research when you're open to multiple decisions.* Research can be extremely expensive, up to millions of dollars.

Primary Data

- Information collected specifically for the investigation at hand. - Very decision-focused and are tailored with a specific business issue in mind. *All new data!*

Why Study Marketing Research?

- Marketing research can be rewarding and fun (and a quickly growing area of marketing employment!) - All of us are consumers of marketing and public opinion research. - Managers need to know the research process, including what to expect marketing research to be able to deliver.

Focus Group *Disadvantages*

- May lead you to draw conclusions too quickly without thinking through issues - Aren't representative of population so results may be biased - Moderator or dominant participants can influence results - Participants may not be honest/open

Costs of Obtaining Information

- Money - Time - Effort

External Secondary Data

- More than Googling - Reference librarians are excellent resources if the researcher has specific details about what is being sought - The U.S. Census Bureau is an outstanding external secondary data source *Remember, just because it is online, doesn't mean it is true or factual.*

Depth Interviews *Advantages*

- No group pressure or influence - Focus is only on one respondent - Increased probing - More flexible regarding: time, location, ?s asked - Can focus more on non-verbal communication - Sensitive, personal, or detailed information

Right to safety

- Physical harm - Psychological harm

Problems of Accuracy

- Primary source (i.e.., originating source) - Purpose of publication - General evidence of quality

Marketing Research Ethics

- Principles, values, and standards of conduct followed by marketing researchers. - The goal of any marketing research project should be to uncover the truth.

The Research Proposal Includes:

- Problem definition and background - Research design and data sources - Sampling plan (how you plan to get those people or to talk to those people) - Data collection forms - Analysis - Time schedule - Personnel requirements - Cost estimate - Appendices (where any extra information is included) *Your sample is just a subgroup of your population, the people you talk to, your focus group*

Who Does Marketing Research?

- Producers of Products and Services > Including: manufacturers, wholesalers, retailers, and service providers. - Advertising Agencies - Marketing Research Companies

Right to privacy

- Respondents have a right to their personal information being protected - Online, respondents must opt-in for contact *OR* Must have a business relationship with the firm

Which of the following currently uses market research?

- Retail companies - Political institutions - Religious organizations - Not-for-profit institutions

Benefits of Information

- Solving the Problem - Changes for Business - Importance of Subsequent Decisions

Secondary Data *Disadvantages*

- They often don't fit the current problem very well. - They are sometimes not accurate. *Problems of Fit* *Problems of Accuracy*

Secondary Data *Advantages*

- Time savings for the researcher. - Money savings for the researcher.

Marketing Research Ethics-Respondent Rights

- To choose - To safety - To be informed - To privacy *These should guide all of your decisions*

Research problems might arise from:

- Unanticipated change in the marketing environment - A firm's planned change of a marketing variable - Customer complaint letters and salespeople's reports.

Causal Research (Notes)

- Used to set different price points to see what demand is, can even be used for place strategies (where in a store we should place our product, what's going to catch people's eyes, higher or lower on our shelves?) - Isn't as heavily used but still very important when determining the fore piece. - Used to understand *cause and effect*.

Right to be informed

- What is involved in the research - How long the research will last - What will be done with the data

Strategy-oriented decision problems are commonly used:

- With planned change - To make a choice between strategic alternatives.

Which of the following is NOT consistent with the definition of marketing research?

The definition states that marketing research is focused on collecting information.

The major emphasis in exploratory research is on:

The discovery of ideas and insights

Which of the following statements about focus groups is FALSE?

Firms like to have groups in which some of the participants are friends.

Mobile Ethnography-Web Communities

Group of consumers who agree to participate over the course of a period of time with the company

Which of the following are examples of secondary data (as contrasted with primary data)?

Housing data (tenure, race of occupants, year built, etc.) as reported in the Journal of Marketing and later used by a researcher working on a project for a construction company.

Predictive Research Example

If we do not adapt to consumer preferences, sales will continue to decline.

AT&T has a marketing research department that regularly collects customer information from numerous sources including: sales invoices, salesperson expense accounts, warranty cards, etc. This is an example of a firm's:

Internal secondary source

Causal Research

Used to establish cause-and-effect relationships between variables

Good DSS provides

What's selling? Who's buying? What are the trends? Patterns? - Standardized up-to-the-minute reports needed for day-to-day operations. - Custom reports that can easily be produced by managers when needed. *DSS increasingly include graphical interfaces and menu-driven procedures for ease of use. - Extremely powerful tools - Hotel searching, business travel or personal (trying to tailor their needs) - all secondary based.

The most fundamental rule in using *secondary data* is to:

always use the primary source or the originating source of secondary data

Advocacy research

is conducted to support a position rather than to find the truth

Sugging

is contacting people under the guise of marketing research when the *real* goal is to sell products or services

Marketing research

is the function that links the consumer to the marketer through information

Market Testing

Involves the use of a controlled experiment done in a limited, but carefully selected, section of the marketplace. Ex: McDonald's used test markets to determine that a market existed for its own higher-end coffee drinks before beginning large-scale distribution.

Research Request Agreement

*Should be executed between the researcher* and the client and should include: *1. Background* - the events that led to the manager's decision *2. Decision Problem* - the underlying question confronting the manager *3. Research Problem(s)* - issue(s) used to address the decision problem *4. Use* - supplying logical reasons for each piece of research *5. Population/Subgroups* - groups from whom information must be gathered (the people you want to know more about, the people your research pertains to) *6. Logistics* - estimates of resource requirements

Eliminate Spurious Associations

*Some other unidentified factor(s) is causing the change in the DV Ex: increased service appears to be increasing satisfaction, but the increase is a result of a lowering of prices. - You have to eliminate other causes, other things that might have made your dependent variable happen. - Multiple independent variables could be affecting our dependent variable.

Step 3:

*State the Manager's Decision Problem* At this point you've narrowed it down enough to figure out what the manager's problem is.

Unplanned Change

*Things we didn't anticipate but we have to react to.* - React to changes in the environment - Respond to market trends - Competitor actions - Customer suggestions/feedback - Discover new uses for old products

Independent Variable

*Variable X* - The thing we change - Marketing mix variables (product, price, promotions, place) - Different products, services, displays, advertisements, locations, promotional materials, etc. *What are they controlling*

Dependent Variable

*Variable Y* - What you observe - Sales, market share, customer behavior, etc. Ex: Consumer behaviors *What is being measured*

Concomitant Variation

*X and Y vary together in a significant way* Ex: When service increases, satisfaction also increases - Means both variables change, they can change in the same way and in opposite ways.

Temporal Sequence

*X comes before Y* (always) Ex: Company would like to see if increasing service level will increase customer satisfaction. A *causal* study would manipulate the level of service to see if customers are more satisfied. - Service is the Independent Variable. - Satisfaction is the Dependent Variable Service is what we would change, to see if we increase or decrease customer satisfaction. - We would have to increase our level of service first, to see a change in customer satisfaction.

The standard test market plays a vital role when

- A firm wishes to test its ability to actually sell to the trade and get distribution for the product. - The capital investment is large. - The firm is entering a new territory.

Focus Groups (Power Point)

- A group of 8-12 people led by a moderator in an in-depth discussion on one particular topic or concept - You want to encourage group dynamics > Response from one person will generate responses from others > Interaction is important!

The Research Proposal

- A written statement that describes the marketing problem, the purpose of the study, and a detailed outline of the research methodology. - More detailed than the research request agreement - May respond to a request for proposal (RFP)

Exploratory Research *Disadvantages*

- Can't distinguish small differences - findings are broad - Aren't representative of the population

Exploratory Research *Advantages*

- Cheap - Understand in-depth motivations and feelings of consumers - Can guide quantitative research

Right to choose

- Choose to be in the research - Choose to leave the research

Depth Interviews *Disadvantages*

- Clients generally not as involved - Take more time to interview same # of people - Can be expensive - Lack of group dynamics

Causal Research (Power Point)

- Condition X causes Event Y - Experiments are often used to isolate relationships between independent (Condition X) and dependent (Event Y) variables. - The basic point of an experiment is to change the levels of one or more X variables and examine the resulting impact on Y variables.

Descriptive Research Used to:

- Describe the characteristics of certain groups - Determine the proportion of people who behave in a certain way - Make specific predictions - Determine relationships between variables *Key ?s* Who? What? When? Where? Why? How?

Problems of Fit

- Different units of measurement - Different class definitions - Too general - Age of the data (too old) Ex: Money age groups

Types of Research Design

- Exploratory Research - Descriptive Research - Causal Research

Focus Group *Advantages*

- Group interactions stimulate new ideas - Groups can result in more information in short time than depth interviews - Can observe customers more easily (through one-way mirrors, video) - Quick - Findings are easy to understand

Marketing research (The information is used to:)

- Identify and define marketing problems - Generate, refine, and evaluate marketing actions - Monitor marketing performance - Improve understanding of marketing as a process

Laboratory Experiment

- Includes a situation with exact conditions. > A lab - Control of variables other than X or Y is maximized > Labs are sterile - X variables are manipulated - Aren't very realistic so the results may not be as helpful Ex: Pantene Experiments

Field Experiment

- Includes a situation with fluid conditions > Like a retail store - Control of variables other than X or Y is challenging > Store conditions vary - X variables are manipulated - Happen in the real world

Forms of External Secondary Data

- Industry Organizations (groups of companies) - Government (census, universities) - News Organizations (popular press) - Non-Profit Centers (trends) - Marketing Research Aggregators (pull research from resources & pack it up & sell it (~$200)) - Marketing Research Companies (market data, Nielsen)

Secondary Data

- Information *not* gathered for the immediate study at hand but for some other purpose. - Often give good background information and fill in some gaps in the researcher's understanding. *Already exists!* *Start with this data*

Three Functions of Marketing Research

1. Descriptive 2. Diagnostic 3. Predictive - Gather facts and data, then make sense of it all, then use it to change the way we do business and predict what might happen if we do or don't do anything in our business.

Three Steps of Information

1. Gather Data 2. Useful Information 3. Take Action

Focus Groups Process

1. Select your location and recruit participants 2. Select a moderator 3. Create the discussion guide 4. Conduct the focus group 5. Prepare the focus group report

List three reasons for studying marketing research

1. Some students pursue careers in marketing research 2. Almost everyone is a consumer of marketing research in one way or another and needs to be able to know how to evaluate the likely validity of the research 3. Managers must understand what marketing research can and cannot do, as well as what is involved in the process of conducting research

Three Requirements to Establish Causality

1. Temporal Sequence 2. Concomitant Variation 3. Eliminate Spurious Associations - If you don't have all three of these you end up with descriptive research.

Problem

A process of trying to identify specific areas where additional information is needed about the marketing environment.

Opportunity

A process of trying to identify specific areas where additional information is needed about the marketing environment. *We want to be the company acquiring market share or opportunities before our competitors.* Today's opportunity is tomorrow's problem if a company fails to take advantage of the opportunity but it's competitors do. Explore more areas for growth rather than reacting to what is going on in your environment.

Simulated Test Market

A study in which consumer ratings and other information are fed into a computer model that then makes projections about the likely level of sales for the product in the market. Ex: BASES from Nielsen is an industry leader in simulated test markets. - The least realistic, it happens in a lab and everything is computerized.

Standard Test Market

A test market in which the company sells the product through its normal distribution channels. Ex: Taco Bell ____ marketed its Grilled Stuft Burrito in Fresno, CA - When there's a full scale launch in one or multiple cities in the actual stores and such.

Controlled Test Market

An entire program conducted by an outside service in a market in which it can guarantee distribution. Ex: Behaviorscan from SymphonyIRI Group is a leading supplier of controlled test market services. - When the manufacturer works with an outside service to put the product on a few shelves and test away. - It's a little more limited and it mainly exists due to the hesitation of retailers to push brand new products.

Decision Support Systems (DSS)

Anything you give a company is kept by them in a database. - Finding trends in data (about customers and marketing mix) Database (Data System) + Analytical Models (Model System) + User Interface (Dialog System) = Information

Using different ads in different geographic areas and investigating which ad generated the highest sales is an example of _____ research design.

Causal

Which of the following does not constitute an advantage of secondary sources of information?

Complete fit with the problem.

Diagnostic Research Example

Consumer tastes have changed.

External Data

Data that originate *outside* the organization for which the research is being done. - You have to find it! Ex: MRI data, databases, trade journals (you don't own) Ex: Published reports

Internal Data

Data that originate *within* the organization for which the research is being done. Ex: Decision Support System, CRM (loyalty programs) - You already have it! Ex: Old focus groups, interviews, old surveys. *Most studies should BEGIN with a search for internal data*

A discovery-oriented decision problem is best defined as a:

Decision problem that typically seeks to answer "what" or "why" questions.

The outcome variable that is influenced by the manipulation of another variable(s) is called the _____ variable.

Dependent

Descriptive Research

Describing a population with respect to important variables - Can take multiple forms

Exploratory Research

Discover ideas and insights

The case analysis technique is an example of which type of research design?

Exploratory

Descriptive Research...before attempting to ask any ?s

Know what you are going to do with the subsequent answers via dummy tables. - A common pitfall is that you collect all your data and can't actually answer your research question. Fill out your dummy tables so you don't run in to that problem.

Discuss why researchers should care about marketing research ethics

Marketing research ethics are the principles, values, and standards of conduct followed by marketing researchers. The goal of any marketing research project should be to uncover the truth about the topic of interest, not to produce a result that the researcher or managers want to see. Researchers must behave ethically because their jobs depend upon the trust and goodwill of research participants.

Keep in the back of your mind while researching:

More pages = More effort - What is the purpose of the website?

Ad Agencies

Often conduct research, primarily to test advertising and measure its effectiveness.

Producers of Products and Services

Often have marketing research departments and gather information relevant to the particular products and services they produce and the industry in which they operate.

Discovery-focus

On generating broad, useful information. *What* is going on? *Why* is it going on? Want to work towards strategy-oriented

Strategy-focus

On selecting a specific course of action. How can we make this happen? Will it have the desired impact? - More clarification and specific, strategic questions. - More specific things you can actually tackle with research. *Researchers should conduct this if possible.*

An experimental design is:

One in which the investigator has direct control over at least one independent variable.

Secondary data rarely fit perfectly the researcher's particular problem. The most important reason for the lack of fit is (are):

Out-of-date statistics, differences in units of measurement, differences in class boundaries.

The distinction between primary and secondary data is defined by the:

Purpose of the investigation

Descriptive Research Example

Sales have declined 2% year-to-year.

Which of the following might NOT be considered a benefit of using secondary data?

Secondary data fit the problem under investigation better.

The Problem Formulation Process

Step 1: Meet with Client Step 2: Clarify the Problem/Opportunity Step 3: State the Manager's Decision Problem Step 4: Develop Possible Research Problems Step 5: Select Research Problem(s) to Be Addressed Step 6: Prepare Research Request Agreement

Respondents

The people you are doing the research on.

Data

The raw facts, recorded measures of certain phenomena. - External environment - Internal environment

Datamining

The use of analytic techniques to explore the data held within a dataset in order to isolate useful information. - Netflix data indicates that customers like the movies the service recommends better than the movies they choose on their own. - Finding out what's going on with our products, pricing counterintuitive. - End internal secondary data.

The most important advantage(s) of secondary data is (are) that:

There could be possible cost and time savings.

What is the basic purpose of marketing research?

To furnish information that aids decision-making.

Information

Transformed and organized facts in a form suitable for mangers to base decisions.