978-1305769786 Chapter 5 Solution Manual

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DISCUSSION STARTERS

Discussion Starter 1: Sources of Data

ASK: What is held every 10 years in the United States as required by the Constitution and yields crucial

data for marketers?

The answer is the U.S. Census.

ASK: Why is it called the U.S. Census and not the U.S. Sample?

Every person in the U.S. must be counted. It is a full accounting of the population and yields a treasure

trove of information for marketers. For example, you can visit the Census Bureau website and get very

ASK: Is the U.S. Census considered primary data or secondary data?

Discussion Starter 2: Marketing Analytics

ASK: What is the fastest growing area of marketing research?

The answer is marketing analytics. Many of the new analytic firms assist organizations in understanding

what-it-means-for-your-company/

Discussion Starter 3: Purchase Data and Privacy

Credit card companies have been selling aggregate information about consumers’ purchases to marketers

for online advertising purposes:

Discussion Starter 4: Sources of Secondary Information

ASK: What is the difference between primary and secondary data?

The answer is primary data are observed and collected directly from respondents (gathered by

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Prompt for Students:

In this chapter you were introduced to the various techniques used by marketers to collect data from

consumers. In this exercise your group is asked to design a research study to address the following

scenario.

You have been hired by a local diner to survey area residents about what types of food products they

should sell or additional services to offer. The diner currently specializes in hamburgers and comfort

food like mac & cheese and is located close to campus. The owners have considered the following:

adding a deliver service either just campus wide or include the local community, add a salad bar

and/or more health conscious foods, and diversify the types of food offered to include Tex-Mex,

pizza, and/or Italian. The owners are uncertain which items to add to their menu or new services to

offer.

Step 1: Define the problem.

Step 2: Design the research project.

a. Who do you need to collect the data from?

b. What is the best way to collect this data?

c. How would you analyze this data?

Step 3: Design a questionnaire for your client. Justify why you are asking each question.

Class Exercise 4: Pick the Research Design

For this exercise you need to go through the various information challenges facing Papa John’s and

identify the most suitable market research approach they should use to help gather information. You

are supplied a list of possible research approach to choose from. What research approach should be

used if Papa John’s wanted to know...

1. Their market share?

2. The population around a new store they are thinking of opening?

3. The likely success of launching their new “super–chili pizza”?

4. How satisfied their customers are with delivery times and pizza quality?

5. How many customers would also order a salad if it was offered over the phone at the time of

order?

6. Why some people never buy pizzas from them?

7. How friendly is their delivery staff?

8. Whether they should launch a new TV advertising campaign that uses athletes who eat pizza?

9. What impact McDonald’s new healthy food menu is having on their sales?

10. To what extent sales will change, if they increased their prices by 10%?

11. What is their image/positioning in the marketplace?

12. What would be the sales impact if they sponsored TV cooking shows?

Select from:

• Primary data

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• Secondary data

• Focus group with customers

• Focus group with both customers and non-customers

• Experimental research

• Sampling (what type)

• Mail survey

• Telephone survey with customers

• Telephone survey with both customers and non-customers

• Online survey

QUESTIONS:

1. Which research approach (from the list) should be used in each information circumstance?

2. Are there situations where more than one research approach could be suitable? Why do you think

that this would be the case? How would you select the best research approach in that situation?

3. What are the implications of using the wrong form of research design?

ANSWERS TO DEVELOPING YOUR MARKETING PLAN

The information obtained from these questions should assist you in developing various aspects of

1. Define the nature and scope of the questions you must answer with regard to your market.

Identify the types of information you will need about the market to answer those questions.

For example, do you need to know about the buying habits, household income levels, or

attitudes of potential customers?

This question asks students to think seriously about all of the questions they must ask themselves with

2. Determine whether or not this information can be obtained from secondary sources. Visit

the websites provided in Table 5.2 as possible resources for the secondary data.

Students may want to review their understanding of primary versus secondary sources of data before

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license distributed with a certain product or service or otherwise on a password–protected website for classroom use.

this exercise. Will secondary data be helpful, or will primary data be needed? Possibly, students will

want to gather a mix of both.

3. Using Table 5.3, choose the appropriate survey method(s) you would use to collect primary data

for one of your information needs. What sampling method would you use?

The final question asks students to review Table 5.3, which compares different survey methods, and

1. What is marketing research? Why is it important?

Marketing research is the systematic design, collection, interpretation, and reporting of information

2. Describe the five steps in the marketing research process.

3. What is the difference between defining a research problem and developing a hypothesis?

4. Describe the different types of approaches to marketing research and indicate when each

should be used.

Exploratory research is conducted to gather more information about a problem or to make a

tentative hypothesis more specific. Conclusive research is designed to verify insights through an

5. Where are data for marketing research obtained? Give examples of internal and external

data.

Data for marketing research can come from internal or external sources. Internal sources may

include the company’s financial and operational records or customer contacts. Examples of internal

6. What is the difference between probability sampling and nonprobability sampling? In what

situation would random sampling be best? Stratified sampling? Quota sampling?

In probability sampling, every element in the population being studied has a known chance of being

selected for study. In nonprobability sampling, there is no way to calculate the likelihood of

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license distributed with a certain product or service or otherwise on a password–protected website for classroom use.

choosing a specific element of the population being studied. Random sampling works best when it is

easy to number or identify all units in a population and give each unit a known or equal opportunity

of appearing in the sample. Stratified sampling is useful when units such as individuals are not

available on a list but geographic areas such as blocks or census tracts can be used. Then researchers

use a random selection process to pick out units or individuals to be sampled. Quota sampling

differs from the other sampling techniques because it is judgmental. Quota samples are often used in

exploratory research not projected to the total population.

7. Suggest some ways of encouraging respondents to cooperate in mail surveys.

Students’ responses may vary but should indicate an understanding of the growing challenges of

8. If a survey of all homes with listed telephone numbers is conducted, what sampling design

should be used?

9. Describe some marketing problems that could be solved through information gained from

observation.

Personal observation can be used to solve problems such as shoplifting, spoilage, and breakage.

10. What is a marketing information system, and what should it provide?

A marketing information system is a framework for the day-to-day management and structure of

system is measured by the improvements it makes in the marketer’s ability to make decisions.

11. Define a database. What is its purpose, and what does it include?

A database is a collection of information arranged for easy access and retrieval, usually stored in a

12. What is big data? Why is it important to marketing research?

Big data involves massive data files that can be obtained from both structured and unstructured

13. How can marketers use online services and the Internet to obtain information for decision

making?

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and peruse web pages. They also can communicate with other marketers and customers.

14. What role do ethics play in marketing research? Why is it important that marketing

researchers be ethical?

It is essential that professional standards be established by which research may be judged reliable

15. How does marketing research in other countries differ from marketing research in the United

States?

COMMENTS ON THE CASES

VIDEO CASE 5.1: MARKETING RESEARCH REVEALS MARKETING

OPPORTUNITIES IN THE BABY BOOMER GENERATION

Summary

This case illustrates how a variety of marketing research techniques can help marketers meet the

needs of a target market. Baby Boomers are a profitable demographic, and with approximately 20

percent of the U.S. population estimated to be 65 years or older by 2030, marketers are beginning to

research better ways to market to this population. Baby Boomers desire to have a variety of products

available to them, and many of the products traditionally thought to belong to the younger generation

are actually bought the most by older generations, such as cars and technological products. As they

age, Baby Boomers are also creating a market for new products and services.

Questions for Discussion

1. Why are Baby Boomers such a lucrative market?

Baby Boomer spending has been increasing, and they are estimated to have $3.4 trillion in annual

buying power. Baby Boomers desire to have a variety of products available to them, and many of

2. How has the marketing research process been used to understand how Baby Boomers shop

and interact in stores?

Because marketers often target younger generations of consumers, little thought has been given

demographic.

3. How have stores used marketing research findings to tailor their stores and products to

appeal to Baby Boomers?

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Many businesses have used marketing research findings to customize their retail environments

and their products. CVS lowered its shelves, made its store lighting softer, and installed

CASE 5.2: AT THREADLESS, CUSTOMERS DESIGN THE PRODUCT

Summary

This case discusses how Threadless, a rapidly growing T-shirt company, crowdsources its product

design and gets customers involved in its marketing process. By producing and selling only designs

that customers design and approve with their votes, Threadless keeps costs down and profit margins

high. Winners of Threadless’ design competitions receive $2,000 along with a $500 Threadless gift

card and $500 for every time the design is reprinted. Because of its unique business model,

Threadless not only allows aspiring artists and designers to submit and potentially sell their work, but

it also acts as a forum for market research.

Questions for Discussion

1. How has Threadless used crowdsourcing as the foundation of its marketing research?

Threadless customers design and test T-shirt designs, and other customers vote for their favorite

designs. Blogging and critiquing on the website give Threadless’ designers the ability to interact

2. How does Threadless create the equivalent of an online focus group to provide feedback on

designs?

A focus group brings together multiple people to informally discuss a certain topic in a group

3. How has Threadless eliminated the cost of test marketing?

Crowdsourcing ensures that Threadless’ target market provides constant free feedback. By