Chapter One: The Role of Marketing Research
Part One
Chapter 1
The Role of Marketing Research
AT-A-GLANCE
I. What is Marketing Research?
A. Business and marketing research
B. Marketing research defined
II. Applied and Basic Marketing Research
A. Applied marketing research
B. Basic marketing research
C. The scientific method
III. Marketing Research and Strategic Management Orientation
A. Customer orientation
B. Long-run profitability
C. A cross-functional effort
D. Keeping customers and building relationships
E. Marketing research: A means for implementing the marketing concept
F. Marketing research and strategic marketing management
1. Identifying and evaluating market opportunities
2. Analyzing and selecting target markets
IV. Planning and Implementing a Marketing Mix
A. Product research
B. Pricing research
C. Distribution research
D. Promotion research
E. The integrated marketing mix
F. Analyzing marketing performance
V. When Is Marketing Research Needed?
A. Time constraints
B. Availability of data
C. Nature of the decision
D. Benefits versus costs
VI. Marketing Research in the Twenty-First Century
A. Communication Technologies
B. Global marketing research
Chapter One: The Role of Marketing Research
LEARNING OUTCOMES
2. Understand the difference between basic and applied marketing research.
4. Be able to integrate marketing research results into the strategic planning process.
6. Appreciate the way that technology and internationalization are changing marketing research.
CHAPTER VIGNETTE: “Samapple!!”
The technology sector is perhaps one of the fastest moving areas of today’s consumer market. As
technology continues to change and grow, firms must be aware of consumers’ desires in order to
compete effectively. Apple, once America’s favorite technology brand, became complacent,
SURVEY THIS!
This feature allows students to better understand the researcher’s job in determining what
information is needed so that data can be analyzed and become an intelligent source of
information. This first interaction with the “Survey This!” feature is for students to play the role
RESEARCH SNAPSHOT
➢ Care for Some Horns and Halos
In marketing parlance, a halo is an effect that indicates a consumer has a positive perception
of a product, whereas a horn indicates a consumer’s negative perception of a product. These
➢ A Hog Means Family
Harley-Davidson has worked hard to establish long term relationships with its customers by
utilizing marketing research. The firm has been particularly skilled in using social media
data-mining to assess the interests of its American customers.
Chapter One: The Role of Marketing Research
➢ Watching What?
The changing landscape of technology has significantly altered the way Americans consume
television programming. This shift has led Nielsen, once the foremost research firms for
TIPS OF THE TRADE
Throughout the text, a Tips of the Trade section is provided to give hints for using and doing
marketing research. Here is a summary of this chapter’s tips:
➢ Customers and employees are valuable sources for input.
➢ Business problems ultimately boil down to information problems.
➢ Good marketing research is as rigorous as good research in other fields.
OUTLINE
I. WHAT IS MARKETING RESEARCH?
A. Business and Marketing Research
1. Companies need to produce benefits that people want to buy, and successful
companies must understand the bundle of benefits consumers need. Answering
several key questions help provide this understanding:
a. What do we sell? – This includes not only the benefits that are easily seen,
but also the more emotional benefits.
b. How do consumers view our company? – All too often, companies define
2. Answering these questions requires information, and marketing research’s
3. The emphasis of marketing research is to shift decision makers from intuitive
information gathering to systematic and objective investigating.
B. Marketing Research Defined
1. Marketing research is the application of the scientific method in searching for
the truth about marketing phenomena.
2. The process includes:
a. Idea and theory development
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, in whole or in
part, except for use as permitted in a license distributed with a certain product or service or otherwise on a
password-protected website for classroom use.
3. This definition suggests that marketing research:
a. information is not intuitive or haphazardly gathered
5. Marketing research can be used by all types of organizations that engage in some
form of marketing activity.
II. APPLIED AND BASIC MARKETING RESEARCH
A. Applied Marketing Research
B. Basic Marketing Research
1. Basic marketing research is conducted without a specific decision in mind and
it usually does not address the needs of a specific organization.
C. The two types of research are not completely independent.
1. Some reserve the term marketing research to refer to basic research and the term
3. This text uses the term marketing research more generally to refer to either type
of research.
D. The Scientific Method
1. All marketing research, whether basic or applied, involves the scientific method.
3. The method involves developing hypotheses and testing them against empirical
4. Its use in basic research leads to inferences and conclusions about phenomena
and leads to the establishment of general laws.
III. MARKETING RESEARCH AND STRATEGIC MANAGEMENT ORIENTATION
A. In all of business strategy, there are only a few business orientations:
2. Production-oriented – the firm prioritizes efficiency and effectiveness of the
Chapter One: The Role of Marketing Research
E. Distribution Research
1. A marketing channel (a.k.a. supply chain) is a network of interdependent
institutions that perform the logistics necessary for consumption to occur.
2. Distribution research:
a. Is typified by studies aimed at selecting retail sites or warehouse locations.
c. May also be used to examine the effect of just-in-time ordering systems or
F. Promotion Research
2. Promotion research investigates the effectiveness of advertising, premiums,
coupons, sampling, discounts, public relations and other sales promotions.
3. Media research helps businesses make decisions about whether television,
newspaper, magazines, or other media alternatives are best suited to convey the
intended message.
G. The Integrated Marketing Mix
1. Integrated marketing communication means that all promotional efforts
should be coordinated to communicate a consistent image.
2. Likewise, the elements of the marketing mix itself must work together.
H. Analyzing Marketing Performance
2. This is especially important for successful total value management, which
3. Performance-monitoring research refers to research that regularly, sometimes
routinely, provides feedback for evaluation and control of marketing activity.
a. Market-share analysis and sales analysis are the most common, but not the
only, forms.
V. WHEN IS MARKETING RESEARCH NEEDED?
A. The determination of the need for marketing research centers on:
1. Time constraints.
3. The nature of the decision.
4. The value of the research information in relation to costs.
B. Time Constraints
1. Systematic research takes time.
C. Availability of Data
1. When managers lack adequate information, research must be considered.
Chapter One: The Role of Marketing Research
D. Nature of the Decision
E. Benefits versus Costs
1. When deciding whether to make a decision without research or to postpone the
decision in order to conduct research, managers should ask three questions:
VI. MARKETING RESEARCH IN THE TWENTY-FIRST CENTURY
A. Marketing research, like all business activity, continues to change, largely due to
changes in:
2. Global marketplace.
B. Communication Technologies
2. The speed with which information can be exchanged has also increased
tremendously.
4. Technology has made for easier data collection and data analysis.
C. Global Marketing Research
1. Companies that conduct business in foreign countries must understand the nature
2. Places greater demands for research tools that allow marketers to culturally
cross-validate research results, meaning that the empirical findings from one
culture also exist and behave similarly in another culture.
QUESTIONS FOR REVIEW AND CRITICAL THINKING/ANSWERS
1. What advantages does research offer to the decision maker over seat-of-the-pants decision
making?
Marketing research attempts to supply accurate information that reduces the uncertainty in
decision making. Very often, decisions are made with little information because of various
reasons, including insufficient time to conduct research or because a manager believes that
Occasionally there are successes, but in the long run, intuition without research leads to losses.
Marketing research helps decision makers shift from intuitive information gathering to systematic
and objective investigating.
Chapter One: The Role of Marketing Research
It is highly likely that a breakfast cereal manufacturer will use extensive marketing research for
almost all aspects of the marketing program. In a 12-year period, there were 77 new cereal brands
introduced and only 18 of those 77 brands were able to maintain adequate sales. Brands such as
Kream Krunch, Pink Panther Flakes, Fruit Brute, and many others have failed in the marketplace.
product was developed based on consumer research indicating parents were in a quandary about
b. An online auction Internet site such as Quibids
An online auction site will most likely engage in pricing research. This will allow them to
determine the best approach for setting baseline bid prices that will attract the most customers. In
An industrial marketer of nuts, bolts, and other fasteners, like a consumer goods marketer, has a
need to acquire information to reduce uncertainty. The industrial goods marketer will use many of
the same marketing research techniques, but there will usually be a difference in the nature of its
customers and the nature of its information needs. Industrial marketers, like consumer marketers,
need to answer questions such as: What is the size of the market? Who are our current and
d. The Federal Trade Commission
The Federal Trade Commission conducts considerable research on advertising of companies they
are investigating. Their communications research attempts to determine whether or not
advertising is deceptive, misleading, etc. Visit their web site at http://www.ftc.gov.
e. A hospital
A hospital would be interested in investigating consumers’ perceptions and satisfaction with the
hospital services.
f. A company that publishes marketing textbooks
A publisher of these types of books could conduct secondary research (e.g., examine
Chapter One: The Role of Marketing Research
g. Google
Google, with its many products and services, will likely engage in all types of marketing research.
Product research would allow them to develop new devices that match consumer’s desires,
pricing research would allow them to develop pricing strategies for those products and services,
7. An automobile manufacturer is conducting research in an attempt to predict the type of car
design consumers will desire in the year 2022. Is this basic or applied research? Explain.
8. Define online sentiment analysis. How can it be helpful in brand management?
9. What is the definition of an integrated marketing mix? How might this affect the research a
firm conducts?
10. Comment on the following statements:
a. Marketing managers are paid to take chances with decisions. Marketing researchers are
paid to reduce the risk of making those decisions.
This statement illustrates a role that marketing research plays. A marketing researcher’s job is to
provide information to reduce uncertainty, but ultimately, the manager is responsible.
b. A marketing strategy can be no better than the information on which it is formulated.
Managers need timely, accurate, and pertinent information to make decisions to identify and
evaluate opportunities, analyze market segments, plan and implement the marketing mix, and
Chapter One: The Role of Marketing Research
c. The purpose of research is to solve marketing problems.
The purpose of marketing research is to reduce uncertainty and to provide information to allow
marketing managers to make decisions. Although the information provided might help the
11. List the conditions that help a researcher decide when marketing research should or should
not be conducted.
12. How have technology and internationalization affected marketing research?
Marketing research, like all business activity, continues to change. Changes in communication
technologies and the trend toward an ever more global marketplace have played a large role in
many of these changes. Virtually everyone is “connected” today, the speed with which
information can be exchanged has increased tremendously, and changes in computer technology
have made for easier data collection and data analysis. Marketing research has become
13. What types of tools does the marketing researcher use more, given the ever increasing
internationalization of marketing?
The tools used by the marketing researcher are essentially the same. However, the
14. Apple, Facebook, Coca-Cola, Microsoft, Wal-Mart, Pfizer, Google. Given the introduction to
marketing research presented here, rank the companies based on how important you believe
marketing research is to each’s success. What do you think is each firm’s operating orientation?
Chapter One: The Role of Marketing Research
RESEARCH ACTIVITIES
1. Suppose you owned a jewelry store in Denton, Texas. You are considering opening a second
store just like your current store. You are undecided on whether to locate the new store in
another location in Denton, TX or in Birmingham, AL. Why would you decide to have some
marketing research done before making this decision? Should the research be conducted?
What demographic data about Birmingham or Denton might be useful in making the
decision?
2. Find recent examples of news articles from the most recent week involving the use of
marketing research in making decisions about each element of the marketing mix. The Wall
Street Journal is a good source for such stories.
3. Find a list of the ten most popular smartphone apps at the current time. Is there anything in
common among the apps? Do they indicate any trends about consumers in general or a
particular segment of consumers? What is that trend? Which companies may benefit from
such a trend?