LEARNING OBJECTIVES
In this chapter, we will address the following questions:
1. What is the scope of marketing research?
2. What steps are involved in conducting good marketing research?
3. What are the best metrics for measuring marketing productivity?
CHAPTER SUMMARY
1. Companies can conduct their own marketing research or hire other companies to
do it for them. Some of ways companies can creatively and affordably conduct research
include: engage students or professors to design and carry out projects; use the Internet;
check out rivals; tap into marketing partner expertise; and tap into employee creativity
and wisdom.
2. Good marketing research is characterized by the scientific method, creativity,
multiple research methods, accurate model building, cost-benefit analysis, healthy
skepticism, and an ethical focus.
3. The marketing research process consists of defining the problem, decision
alternatives, and research objectives; developing the research plan; collecting the
information; analyzing the information; presenting the findings to management; and
making the decision.
4. In conducting research, firms must decide whether to collect their own data or use
data that already exist. They must also choose a research approach (observational, focus
group, survey, behavioral data, or experimental) and research instruments (questionnaire,
qualitative measures, or technological devices). In addition, they must decide on a
sampling plan and contact methods (by mail, by phone, in person, or online).
5. Two complementary approaches to measuring marketing productivity are: (1)
marketing metrics to assess marketing effects and (2) marketing-mix modeling to
estimate causal relationships and measure how marketing activity affects outcomes.
Marketing dashboards are a structured way to disseminate the insights gleaned from these
two approaches within the organization.
6. Assessing the ROI of social media is challenging but requires a range of
short-term and long-term financial and brand-related measures. Although Facebook
“likes” and Twitter tweets provide some sense of the engagement for a brand, a more
complete set of measures is typically needed to get a more accurate picture of social
media or other online activities.
C H A P T E R
4CONDUCTING MARKETING
RESEARCH
OPENING THOUGHT
Marketing research is a process in which consumers’ thoughts, actions, and purchase
intentions are collected to form the basis of marketing decisions. Most students will relate to
marketing research techniques where the insights are gained directly from a process of
transcribing and reviewing responses – focus groups for instance – but will shy away from the
quantitative techniques/number crunching. If the analysis is presented as a “means to an end”
– a way to gain insights that make marketing decision making easier – then the process should
be accepted with greater enthusiasm.
In today’s world of marketing, marketing managers are increasingly being asked to justify
their expenditures. As a result, good marketing managers and good students of marketing
should be very comfortable with the analyses presented in this chapter.
To many of the students enrolled in marketing, the topics of statistics, analysis, and financial
modeling will cause their eyes to “roll in their heads” as the thought of calculating numbers
creates stress. The instructor is encouraged to encourage practice with real-world examples,
which will make the numbers more meaningful, and to emphasize to the students that good
marketers need fluency with these techniques in order to get results that enable better
marketing decisions.
TEACHING STRATEGY AND CLASS ORGANIZATION
PROJECTS
1. At this point in the semester-long marketing plan project, the students’ initial marketing
research parameters should be completed, demand forecasted, and target market selections
defined.
2. Commission a marketing research study on topic(s) of interest to the students at your
institution. During the course of the semester (15-16 weeks), have the students develop the
questionnaire, collection method, conduct the survey, and tabulate the results. The students can
be divided into groups for this project. Suggested topics can include the school or university
student’s opinions of campus issues such as the athletic program, sale of alcohol, use of and
availability of technology, or students’ perceptions of their current education experiences.
3. Sonic PDA Marketing Plan: Sonic has developed a sales forecast for its new PDA for the
next two years. Jane Melody wants to review estimates of industry demand for PDAs. She
also wants to develop an approach for measuring the effectiveness of Sonic’s marketing
efforts. She has asked you to:
Determine, from available secondary data, estimates of total demand for PDAs for the
next two years. She understands that you will have to do Internet searches and determine
industry trade association sources for such data.
Look at the various ways to evaluate marketing effectiveness and recommend to her
the best way that Sonic can determine the effectiveness of its marketing efforts.
Enter the answers to these questions in a written marketing plan or into the Sales Forecasting
and Controls sections of Marketing Plan Pro.
ASSIGNMENTS
Ask students to contact a local marketing research firm in the area for the purpose of an
interview regarding research techniques, methods, and the difficulties in conducting research.
Pre-approve the set of questions prepared by the students prior to the appointment. Ensure that
the students will be able to collect information from the research company regarding how
information is collected. Once it is collected, what are some of the difficulties faced by the
researcher in presenting this information to the client?
In the Marketing Memo, Questionnaire Dos and Don’ts, the author lists 12 ways to phrase
questions that will maximize unbiased responses. Prepare a set of questions (10-12 questions)
for a hypothetical consumer products company trying to break into the toy business. Make
sure that your questions meet each one of these 12 criteria. Comment on how easy or hard
such question formatting is to accomplish.
In the Marketing Memo, Pros and Cons of Online Research, the author describes four
advantages and two disadvantages for conducting online research. Selecting online research
from the Web, each student is to comment on the “value” of this type of research vis-à-vis the
advantages and disadvantages of the marketing memo. Specifically, do the negatives of online
research, in their example, outweigh the positives? Can, and more importantly, should
marketers develop marketing strategies from just the findings of online research? On the other
hand, is more qualitative or quantitative research needed before strategy is defined?
The American Airlines case shows the power of conducting marketing research before
offering a service. In small groups for an in-class discussion, have the students comment on
the case in light of the marketing research process examined in the chapter. a
Have students watch this video on the concept of “neuromarketing” and comment on whether
such brain research is ethical or not ethical because such research may lead to more marketing
manipulation:
http://www.businessweek.com/videos/2013-04-26/neuromarketing-explaining-the-brains-buy-
button See also
http://www.businessweek.com/articles/2013-10-10/will-companies-one-day-use-brainwaves-t
o-find-ideal-prices Carolyn Yoon, Angela H. Gutchess, Fred Feinberg, and Thad A. Polk, “A
Functional Magnetic Resonance Imaging Study of Neural Dissociations between Brand and
Person Judgments,” Journal of Consumer Research, 33 (June 2006), pp. 31-40; Samuel M.
McClure, Jian Li, Damon Tomlin, Kim S. Cypert, Latané M. Montague, and P. Read
Montague, “Neural Correlates of Behavioral Preference for Culturally Familiar Drinks,”
Neuron, 44 (October 14, 2004), pp. 379-387.
DETAILED CHAPTER OUTLINE
To make the best possible tactical decisions in the short run and strategic decisions in the long
run, marketers need timely, accurate, and actionable information about consumers,
competition, and their brands. Samsung used insights to develop the campaign for the launch
of the Galaxy S III smart phone.
I. The Scope of Marketing Research
A. Marketing research is the function that links the consumer, customer, and public to
the marketer through information
i. The information is used to identify and define marketing opportunities and
problems; generate, refine and evaluate marketing actions; monitor
marketing performance; and improve understanding of marketing as a
process.
ii. Marketing research specifies the information required to address these
issues, designs the method for collecting information, manages and
implements the data collection process, analyzes the results, and
communicates the findings and their implications.
B. Importance of Marketing Insights
i. Marketing insights provide diagnostic information about how consumers
and markets behave, why we observe certain effects in the marketplace
and what that means to marketers
ii. Marketing insights can form the basis for successful marketing programs,
and gaining insights is crucial for marketing success
C. Who Does Marketing Research?
i. Most large companies have their own marketing research departments,
which often play crucial roles within the organization.
ii. Smaller companies use everyone to carry out marketing research,
including customers, and they hire research firms or use affordable
methods like:
1. Engaging students or professors to design and carry out projects
2. Using the Internet
3. Checking out rivals
4. Tapping into marketing partner expertise
5. Tapping into employee creativity and wisdom
iii. Marketing research firms fall into three categories:
1. Syndicated-service research firms
2. Custom marketing research firms
3. Specialty-line marketing research firms
D. Overcoming Barriers to the Use of Marketing Research
i. Many companies still fail to use marketing research sufficiently or
correctly
ii. An example of a marketing research failure was research that predicted the
failure of Star Wars
II. The Marketing Research Process
A. Step 1: Define the Problem, the Decision Alternatives, and the Research
Objectives
i. Do not define the problem too broadly or too narrowly
ii. Some research is exploratory – the goal is to identify the problem and to
suggest possible solutions
iii. Some research is descriptive – it seeks to quantify demand
iv. Some research is causal – it tests a cause-and-effect relationship
B. Step 2: Develop the Research Plan
i. Develop the most efficient plan for gathering needed information
ii. Discover what it will cost to execute the plan
iii. Consider data sources
1. Secondary data – collected for another purpose; already exists
2. Primary data – freshly gathered for a specific purpose or project
iv. Consider research approaches
1. Observational research
2. Ethnographic research
3. Focus group research
4. Survey research
5. Behavioral research
v. Choose research instruments
1. Questionnaires
a. Closed-end questions specify all possible answers
i. Dichotomous
ii. Multiple choice
iii. Likert
iv. Semantic differential
v. Importance scale
vi. Rating scale
vii. Intention-to-buy scale
b. Open-end questions allow respondents to answer in their
own words
i. Completely unstructured
ii. Word association
iii. Sentence completion
iv. Story completion
v. Picture
vi. Thematic Apperception Test
2. Qualitative measures
a. ZMET
b. Projective techniques
c. Visualization
d. Brand personification
e. Laddering
3. Technological devices
a. Galvanometers
b. Tachistoscopes
c. Eye tracking
d. Skin sensors
e. Brain wave scanners
f. Full-body scanners
g. EEG
h. fMRI
i. Audiometers
j. GPS
vi. Choose a sampling plan
1. Sampling unit: whom should we survey?
2. Sample size: How many people should we survey?
3. Sampling procedure: How should we choose the respondents?
vii. Choose a contact method
1. Mail contacts
2. Telephone contacts
3. Personal contacts
4. Online contacts
5. Online research pros:
a. Inexpensive
b. Expansive
c. Fast
d. Honest and thoughtful responses
e. Versatile
6. Online research cons:
a. Samples can be small and skewed
b. Online panels and communities can suffer from excessive
turnover
c. Online market research can suffer technological problems
and inconsistencies
C. Step 3: Collect the Information
i. Most expensive and error-prone phase
ii. Need to achieve consistency is one of the biggest obstacles
D. Step 4: Analyze the Information
i. Extract findings by tabulating the data and developing summary measures
ii. Test hypotheses and theories, applying sensitivity analysis to test
assumptions/strength of conclusions
E. Step 5: Present the Findings
F. Step 6: Make the Decision
G. Good marketing research
i. Uses the principles of the scientific method
ii. Is creative
iii. Does not rely on one method; uses two or three to increase confidence in
the results
iv. Recognizes that data are interpreted from underlying models that guide
information sought
v. Balances cost and value of information
vi. Avoids glib assumptions/has a healthy skepticism
vii. Is Ethical
H. A marketing decision support system (MDSS) is a coordinated collection of data,
systems, tools, and techniques, with supporting software and hardware, by which
an organization gathers and interprets relevant information from business and
environment and turns it into a basis for marketing action
III. Measuring Marketing Productivity
A. Marketing metrics assess marketing effects
i. Help marketers quantify, compare and interpret performance
ii. Marketers choose one or more measures based on the issues they face
iii. Examples:
1. Web site analytics
2. Social media presence
3. Permission marketing statistics
4. Short-term financial benefits
5. Short-term overall digital benefits
6. Long-term brand lift
7. Long-term risk avoidance
8. Sales turnover
9. Shareholder value
10. Customer awareness, attitudes and behaviors
11. Market share
12. Relative price premium
13. Number of complaints
14. Distribution and availability
15. Total number of customers
16. Perceived quality
17. Loyalty and retention
B. Marketing-mix modeling estimates causal relationships and measure how
marketing activity affects outcomes
i. Data analyzed from sources like retailer scanner data, company shipment
data, pricing, media and promotion spending data
ii. Understand/isolate effects of marketing activities and allocate or reallocate
expenditures
iii. Cons:
1. Less effective at assessing how different marketing elements work
together
2. Focuses on incremental growth instead of baseline sales or
long-term effects
3. Integration of metrics like customer satisfaction, awareness and
brand equity is limited
4. Generally fails to incorporate metrics related to competitors, trade,
or sales force
C. Marketing dashboards are a structured way to disseminate insights gleaned from
marketing metrics and marketing-mix modeling
i. Summarize relevant internal and external measures for synthesis and
interpretation
ii. Only as good as the information on which they are based
iii. Customer-performance scorecard – customer-based measures
iv. Stakeholder-performance scorecard – satisfaction of various constituencies
v. Measurement pathways
1. Customer metrics pathway
2. Unit metrics pathway
3. Cash-flow metrics pathway
4. Brand metrics pathway