CHAPTER 2
THE MARKETING RESEARCH INDUSTRY
LEARNING OBJECTIVES
In this chapter you will learn:
2-1 To learn a brief history of the marketing research industry
2-2 To learn the different types of marketing research firms
2-3 To be aware of the industry structure of marketing research
2-4 To be aware of challenges to the marketing research industry
2-5 To appreciate the areas of ethical sensitivity in the marketing research process and to
be aware of industry initiatives for self-improvement
2-6 To learn about careers in the marketing research industry
CHAPTER OUTLINE
The Marketing Research Industry
Evolution of an Industry
• Earliest studies
o Charles Coolidge Parlin gathered information on customers and markets
to help sell advertising space; considered the “Father of Marketing
Research”
• Why did the industry grow?
o The Industrial Revolution and the desire to sell goods in distant markets
• The 20th century led to a “mature industry”
o A. C. Nielson, Gallup polls, and focus groups became collectively
considered qualitative marketing research
o Computer revolution and increased use of the Internet in the 1990s and
2000s
Who Conducts Marketing Research?
• Client-side marketing research used to understand customers, distributors,
competitors, or the environment in which a firm operates.
• Do–it-yourself research is one of the most important emerging trends in client-
side marketing. This includes online survey platforms, social media monitoring
tools, data analysis and visualization dashboards
• Supply-side marketing research uses outside agencies or suppliers to generate
research for a firm.
The Industry Structure
• Firm size by revenue
• Types of firms and their specialties
o Full-service supplier firms conduct the entire marketing research project
for the buyer; defining the problem, research design, data collection and
analysis
o Limited-service supplier firms specialize in one or a few marketing
research activities
Industry Performance
• Industry revenues and profits
• Qualitative evaluations of the industry
Challenges to the Marketing Research Industry
• New and evolving sources of data and methods
o Electronic surveys result in more primary data
o Passive data is data gathered without overt questioning or other types of
Industry Initiatives
• Industry initiatives
• Best practices
• Maintaining public credibility of research
o The Transparency Initiative was launched in 2014 to encourage disclosure
of research methods in an attempt to prevent sugging, the practice of using
opinion surveys as lead-ins for sales pitches, and frugging, the practice of
raising funds under the guise of research
o Fair dealings with clients and subcontractors include confidentiality, work
carried out according to the agreement, safe guarding of client identity,
use of secondary research, ownership of research, the ability to monitor
studies and following profession codes, laws, and regulations
o Maintaining research integrity including not falsifying data and reported
results accurately and honestly
o Concern for society by ensuring transparency in information, and
upholding the public’s confidence in research
o Certification of qualified research professionals
o Continuing education including conferences, workshops, webinars, and
other forms of education
A Career in Marketing Research
Where You’ve Been and Where You’re Headed
KEY TERMS
Professional Researcher Certification (PRC) Agency
Charles Coolidge Parlin Supplier
Client-side research Supply-side research
Agency MRS
National Do Not Call Registry Do–it-yourself (DIY) research
ESOMAR MRS
TEACHING SUGGESTIONS
1. Instructors may want to bear in mind that the historical development of marketing
research is not as interesting to students as it is to instructors. Most students will
relate only to the present-day. If you have personal experiences or observations to
illustrate some of the changes in marketing research over time, use them, but you
should be aware that, depending how far back in history you give personal examples,
you will be dating yourself. Most students were born after 1990.
2. Ask students if they can detect the three main causes for the changes in marketing
research over its history. One is evolution of markets where we moved from local
markets where buyers and sellers were neighbors to global ones where buyers and
sellers are from completely different cultures. This drives the need for information
about the marketing environment. Another is changes in technology ranging from
questionnaire design to computerization that have been adopted by marketing
research. The third cause is the combination of PC technology (namely the Internet)
and globalization effected by online research. Class discussion and examples of one
or all three of these forces can be fruitful. Select a company that has global marketing
aspirations and have students identify what research questions are relevant as it
moves into different countries and cultures
3. Some topics that you might want to describe to students to open their eyes up to the
impact of technology on marketing research are the following: (1) single source data
where purchases of a family’s (for example) grocery products are captured across
several weeks, (2) focus groups that take place over the Internet using video cameras
and chat software, or (3) handheld computers that administer customer satisfaction
questionnaires to existing customers at (for example) automobile dealership service
centers.
4. Students may not understand the distinctions between the three internal research
suppliers: (a) formal department, (b) single individual, and (c) no one responsible. If
possible, have a representative from each organizational type come to the class and
discuss how marketing research takes place in his/her company. Alternatively,
describe the situations based on your knowledge of representative companies.
5. Most students will think that all marketing research companies are full-service. One
way to help them understand about the limited service companies is to say that they
are practicing niche marketing. They have found niches in the research industry, and
they specialize in performing their functions very well.
6. Save copies of the Marketing News and bring them to class. After reviewing full-
service and limited-service marketing research firms, hand out the newspapers and
have students look at the marketing research company ads. Let selected students
summarize the services of companies they have singled out. Alternatively, select the
ads yourself, make overhead transparencies or PowerPoint slides, and use them in
class when you cover this topic in your class presentation. Another approach, if you
have multimedia classroom capability, is to find the Internet sites for various types of
marketing research firms and to illustrate the products and services of these different
firms during class.
7. If your college has a business research division, invite its director to come to class
and describe the various research activities that take place there. Alternatively, such
divisions sometimes have Internet sites with descriptions and examples of their
products, services, and activities that can be viewed in a classroom with multimedia
capabilities.
8. The chapter indicates that formal marketing research departments are typically only
found in large companies, and often they are very small. Ask students what this
implies about a career in marketing research. You might tie this discussion in with
the careers in marketing research appendix. Points to be made are: (1) it will
probably take a master’s degree to break into the management level, (2) you will
probably have to locate in a major metropolitan area, but (3) there will be
opportunities for sharp managers who know something about marketing research in
medium- and small-sized companies because they don’t have marketing research
personnel.
9. Many students are surprised that the research industry has not performed at an
outstanding level. As an opening to this class discussion, you can ask, “What does it
take to start up a marketing research company?” Students will mistakenly say it will
take a degree in marketing research, a master’s degree, or even a Ph.D.! However,
there are no formal requirements, and literally anyone can say he/she is a marketing
researcher. This revelation may shed some light on the performance deficiency or
otherwise point out the need for a certification system.
10. It is important that students come to realize the ethical issues in marketing research
early on, and this is why this topic is introduced in chapter 2. Also, they need to be
made aware that philosophical differences exist. Going over the various ethical issue
areas is worthwhile, but sugging and frugging invariably generate the most class
interest and story-telling.
11. The right to privacy issue is a major worry in the research industry. Ask students
what they believe are their personal privacy rights and how they enforce them when
they are violated. Then turn the tables by telling them that they have taken on a job
as a telephone interviewer where they will be compensated $5 for each completed
interview. What would they do to make money? Sometimes students do an about
face on privacy when they are worried about making enough money to pay their rent.
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How far students seem willing to go to pay the rent in this situation can be a good
springboard to discuss ethical versus practical issues.
12. It is always fun to ask students if they have been “sugged” or “frugged” recently.
Those who have not read the chapter will be immediately obvious, as sugging and
frugging invariably stick in students’ minds. Those who have no clue obviously did
not read the chapter before class.
ACTIVE LEARNING EXERCISE
Learn More about the Firms in the Marketing Research Industry
Go to the American Marketing Association website at: www.marketingpower.com. At
the top of the web page, choose “Resource Library.” At the left margin, click on “AMA
Publications” and then select “Marketing News.” On the right side you should see both
Honomichl reports listed. These will be pdf files that you can navigate to learn more
about research companies.
This exercise is intended to expose students to the deeply to the marketing research
industry by reading descriptions of the top companies. Both documents contain detailed
descriptions of the operations, services, and products of the major marketing research
companies.
There is definitely too much material for a single student, so one strategy is to assign a
company to each student to do a report or short presentation. The students should also
visit the company website for news, new products, white papers, testimonials, success
stories, etc.
ANSWERS TO END-OF-CHAPTER QUESTIONS
1. Who is known as the “Father of Marketing Research” and why?
2. Why did marketing research expand by the 1930s?
3. Focus groups are considered to be what type of research?
4. Define client-side research.
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Client-side research is research that is conducted within an organization. Larger firms
often have formal departments devoted to marketing research. Large firms use this
research to recognize the need to develop innovative approaches to marketing.
5. What are some advantages and disadvantages of DIY research?
6. Define supply-side research. What is another name for supplier firms?
7. What are full-service supplier-firms? What type of services do they provide?
8. Describe limited-service supplier firms.
9. Explain the meaning of the statement that the “marketing research industry thrives
off derived demand.”
10. What began to drastically change the marketing research industry in the 1990s? Why?
11. What are three challenges facing the marketing research industry? Why?
12. Is it ethical for OKCupid to conduct experiments on its users? Explain.
How students feel about the ethics surrounding OKCupid’s practice may vary.
13. What movement spawned an increase in company awareness of methods leading to
improvement? Describe some of these methods.
14. Define sugging and frugging.
15. What commonalities exist in the major marketing research associations’ code of
ethics?
16. What is the PRC, and what is it designed to do?
CASE SOLUTIONS
Case 2.1 Heritage Research Associates
Case Objective
This case provides students the opportunity to apply the MRA Code of Marketing
Research Standards.
Answers to Case Questions
1. Do you think it is ethical to use membership in an association that doesn’t
require any demonstration of expertise to lead customers into thinking the
membership conveys some automatic claim of competency?
2. Consult the MRA Code of Marketing Research Standards. Is the answer to
question 1 covered? Explain.
3. What problems do you see in the future for Tim and John and Heritage
Research Associates? Do you think they are likely to become the “most talked–
about research firm in the world”?
4. Consult the MRA Code of Marketing Research Standards. Are there any
standards that back up your answers to question 3?
The MRA Code of Standards requires:
Members will never falsify or omit data for any reason at any phase of a research
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overriding ethos regardless of the intended use of the research is to produce
accurate statistics that have significance.