978-1259637155 Chapter 4

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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

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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.