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Chapter 04
Market Research Essentials
4-1
LEARNING OBJECTIVES
LO 4-2 Identify how critical internal (inside the firm) information is collected and used in
making marketing decisions.
LO 4-4 Recognize the value of market research and its role in marketing.
LO 4-6 Illustrate current research technologies and how they are used in market research.
CHAPTER OUTLINE
I. MAKING GOOD MARKETING DECISIONS – THE
NEED TO KNOW
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II. MARKET INFORMATION SYSTEM
A. The nature of a Market Information System
B. Internal Sources - Collecting Information inside the
Company
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i. From the Customer’s Order to Order
Fulfillment
a. Identify the frequency and size of customer
orders.
b. Determine the actual cost of a customer
order.
c. Rank customers based on established
criteria like profitability.
d. Calculate the efficiency of the company’s
production and distribution system.
ii. Heard on the Street – Sales Information
System
a. Formal systems for collecting data (and
getting the data).
b. Interpretation of data (analysis).
c. Distribution of data (getting the analysis to
decision makers and back in the field).
C. External Sources - Collecting Information outside the
Company
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i. Demographics
a. Populations of Interest
b. Ethnic Groups
c. Geographic Changes
ii. Economic Conditions
iii. Technology Transformations
iv. Natural World
v. Political/Legal Environment
vi. Competition
III. MARKET RESEARCH SYSTEMS
A. The Importance of Market Research to Managers
B. The Market Research Process
i. Define the Research Problem
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ii. Establish the Research Design
a. Type of Research – What Kind of
Research Needs to be Done?
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b. Nature of Data – What Kind of Data do
We Need?
c. Nature of Data Collection – How Should
the Data be Collected?
d. Information Content – What do We Need
to Know?
e. Sampling Plan: Who Should be Included in
the Research?
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iii. Search Secondary Sources
a. Government Sources
b. Market Research Organizations
c. The Internet
d. Advantages and Disadvantages of
Secondary Data Sources
iv. Collect the Data
v. Analyze the Data
vi. Report the Findings
C. Market Research Technology
i. Online Research Tools
a. Online (Cloud) Databases
b. Online Focus Groups
c. Online Sampling
ii. Statistical Software
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D. Market Research Challenges in Global Markets
i. Secondary Data
a. Data Accessibility
b. Data Dependability
c. Data Comparability
ii. Primary Data
a. Unwillingness to Respond
b. Unreliable Sampling Procedures
c. Inaccurate Language Translation and
Insufficient Comprehension
IV. SUMMARY
KEY TERMS
market information system (MIS) A continuing process of identifying, collecting, analyzing,
accumulating and dispensing critical information to marketing decision makers.
marketing intelligence The collecting, analyzing, and storing of data from the macro
environment on a continuous basis.
demographics The statistical characteristics of human populations, such as age or income, used
to identify markets.
microeconomics The study of individual economic activity.
macroeconomics The study of economic activity in terms of broad measures of output and input
as well as the interaction among various sectors of an entire economy.
market research The methodical identification, collection, analysis, and distribution of data
related to discovering then solving marketing problems or opportunities and enhancing good
decision making.
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management research deliverable The definition of what management wants to do with
marketing research.
qualitative research Less structured research not meant to be used for statistical analysis that
can employ methods such as surveys and interviews to collect data.
quantitative research Research used to develop a measured understanding using statistical
analysis to assess and quantify the results.
focus group A qualitative research method that consists of a meeting (either in person or
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closed-ended questions Question format that encourages respondents to provide specific
responses.
APPLICATION QUESTIONS
1. Imagine you are the Vice President of Sales for a large security company and you have been
asked to put together a sales information system that collects, analyzes, interprets, and
distributes information from the sales force. How would you do it? What information would
you ask salespeople to collect?
2. As a market manager at Lenovo, what key information from outside the company would be
important to help in the design of a new laptop for small and medium-sized businesses
The following are examples:
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3. The marketing manager for Disney Cruise Line wants to know what demographic trends will
affect the cruise line business over the next five years. What kind of research is needed to
address this question? Conduct some secondary research and try to you identify two or three
important demographic trends that might affect the Cruise line business?
4. The market research director for John Deere has just received a call from the marketing
manager in the company’s lawn tractor division. The manager wants to know how the new
advertising campaign is being received by current customers. Design a research study for
this research. Be sure to include a problem definition and research design.
Research problem - How is the new advertising campaign being received by current
customers?
Research Design:
5. The alumni director at your institution wants to know how to serve the alumni better. Design
a survey of no more than 10 questions that the alumni director can use to ask alumni about
their interest in getting more involved with their school.
The following are examples of a few questions:
MANAGEMENT DECISION CASE
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BMW’s Road to Higher Customer Satisfaction: Just Tell Me What You Think!
Marketing research is often looked at by students (and by some professional managers) as a dull,
Questions for Consideration
1. Assuming BMW wanted to learn more about what customers value in their luxury driving
experience and then make decisions from that research, what kind(s) of market research
would you recommend that may improve their understanding?
As discussed in this chapter, there are several ways to categorize methods of market research
and a discussion of these using BMW’s case as an example may help students better
conceptualize the categories. Following are three categories discussed in the chapter and
discussion points for each related to the BMW case. As we’ll discuss across all three
questions, BMW applied a mix of descriptive and exploratory research, with primary and
secondary data, using qualitative and quantitate questions.
a. Descriptive, Exploratory, and Causal Research Categories.
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c. Quantitative vs. Qualitative.
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2. BMW is facing the classic quality-quantity-cost tradeoff; the higher information quality they
seek (represented by more questions), the fewer responses they get or the higher their
research costs. Since BMW’s executives each have 25-to-30 years’ experience in the
automotive market, what would be the advantages and disadvantages of trusting their own
experience vs. spending more on market research?
When fielding a market research study, there are always tradeoffs that marketers must deal
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3. Often when problems develop like BMW is experiencing in their research data gathering, a
new (often technological) solution is developed to address the problem. What might be some
innovative ways to approach gaining both statistical significance (through higher response
rate) and deeper context (through open-ended qualitative data)?
As the case title–Just Tell Me What You Think–suggests, if we stepped outside of the general
Chapter 04
Market Research Essentials
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4-17
done on small samples due to the extensive effort of analyzing and interpreting
the qualitative data. However, in BMW’s case they were able to gather qualitative
data from a much larger sample and make their survey shorter (boosting response
rates) in the process.
b. In the context of their problem, the open-ended format gave BMW the opportunity
to discover needs they had been unaware of. The open format also allowed
customers to express their thoughts in a more free-flowing manner. However, it
also meant that BMW had a large amount of unstructured data to be analyzed.
BMW solved the problem by using a recent form of unstructured text analysis that
programmatically parses sets of unstructured data seeking relevancy terms and
phrases and identifying positive or negative sentiment to the phrases. Done with a
representative sample of the target population, such a method helped BMW
discover how to deliver real value.
SUGGESTED VIDEO
Dole: Analyzing the Marketing Environment (4:25 minutes)
Description: Dole is constantly analyzing the environment to make sure their marketing message
is on target.
1. What are the long-term consequences for Dole’s decision not to focus primarily on taste?
1
http://historygarage.com/essential-evolution-handy-cup-holder/
2
Sheehan, K. B. (2001). E‐mail survey response rates: A review. Journal of Computer‐Mediated Communication,
6(2), 0-0.
