LEARNING OBJECTIVES
In this chapter, we will address the following questions:
1. What constitutes good marketing research?
2. What are the best metrics for measuring marketing productivity?
3. How can marketers assess their return on investment of marketing expenditures?
CHAPTER SUMMARY
1. Companies can conduct their own marketing research or hire other companies to
2. The marketing research process consists of defining the problem, decision
3. In conducting research, firms must decide whether to collect their own data or
use data that already exist. They must also choose a research approach
4. Two complementary approaches to measuring marketing productivity are: (1)
marketing metrics to assess marketing effects and (2) marketing-mix modeling to
OPENING THOUGHT
Marketing research is primarily a quantitative process in which consumers’ thoughts, actions,
C H A P T E R
4
CONDUCTING
MARKETING RESEARCH
instance, but will shy away from the qualitative side of number crunching. If the analysis is
presented as a “means to an end” then the process should be accepted with greater enthusiasm.
In today’s world of marketing, marketing managers are increasingly being asked to justify
their expenditures. As a result, good marketing managers and good students of marketing
should be very comfortable with the statistical and financial analyses presented in this chapter.
TEACHING STRATEGY AND CLASS ORGANIZATION
PROJECTS
1. At this point in the semester-long marketing plan project, the students’ initial marketing
2. Commission a marketing research study on topic(s) of interest to the students at your
institution. During the course of the semester (15-16 weeks), have the students develop the
3. Sonic PDA Marketing Plan: Sonic has developed a sales forecast for its new PDA for the
next two years. Jane Melody wants to review estimates of industry demand for PDAs. She
also wants to develop an approach for measuring the effectiveness of Sonic’s marketing
efforts. She has asked you to:
• Determine, from available secondary data, estimates of total demand for PDAs for the
next two years. She understands that you will have to do Internet searches and
ASSIGNMENTS
Ask students to contact a local marketing research firm in the area for the purpose of an
interview regarding research techniques, methods, and the difficulties in conducting research.
Pre-approve the set of questions prepared by the students prior to the appointment. Ensure that
In the Marketing Memo, Pros and Cons of Online Research, the author describes four
advantages and two disadvantages for conducting online research. Selecting online research
from the Web, each student is to comment on the “value” of this type of research vis–à-vis the
advantages and disadvantages of the marketing memo. Specifically, do the negatives of online
research, in their example, outweigh the positives? Can, and more importantly, should
marketers develop marketing strategies from just the findings of online research? On the other
hand, is more qualitative or quantitative research needed before strategy is defined?
END–OF–CHAPTER SUPPORT
MARKETING DEBATE—What Is the Best Type of Marketing Research?
Many marketing researchers have their favorite research approaches or techniques, although
different researchers often have different preferences. Some researchers maintain that the only
way to really learn about consumers or brands is through in-depth, qualitative research. Others
contend that the only legitimate and defensible form of marketing research involves
quantitative measures.
The drawbacks of quantitative research, which include selection bias, response bias, and non-
response, will always allow this type of research to be criticized for such shortcomings and
their results discounted. Qualitative research, although having its own sets of disclaimers,
closely describes the actions of consumers—that is what marketing is all about in the first
place—to get someone to purchase something.
With the proper framing of the research assignment and the proper set of specific research
objectives, quantitative research is the most efficient method to gather the necessary
information in the shortest time for the lowest cost.
MARKETING DISCUSSION
When was the last time you participated in a survey? How helpful do you think the
information was you provided? How could the research have been done differently to make it
more effective?
Marketing Excellence: IDEO
1) Why has IDEO been so successful? What is the most difficult challenge they face
in conducting their research and designing their products?
Suggested Answer: IDEO strives to design products that consumers actively want. In
2) In the end, IDEO creates great solutions for other observational methods to conduct
companies that then receive all the credit. Should IDEO try to create more brand
awareness for itself? Why or why not?
Suggested Answers: Students’ answers will vary—some will say “yes” and others will
Marketing Excellence: INTUIT
Questions:
1) Elaborate on Intuit’s use of customer research. Why did it work so well for the
company?
Suggested Answer: Intuit spends a significant amount of time and money on consumer
2) Could anything go wrong for Intuit now that it has beaten out Microsoft? Why or why
not?
Suggested Answer: Of course, Intuit could decide to “sit on its laurels” and reduce or
3) How should Intuit gauge the results of its research among younger consumers with
mobile devices?
Suggested Answer: Intuit has already made dramatic and substantial steps in gauging the
DETAILED CHAPTER OUTLINE
Good marketers need insights to help them interpret past performance as well as plan
future activities. To make the best possible tactical decisions in the short run and strategic
THE MARKETING RESEARCH SYSTEM
Marketing managers often commission formal marketing studies of specific problems and
opportunities.
Marketing insights provide diagnostic information about how and why we observe certain
effects in the marketplace, and what that means to marketers.
Small companies can hire the services of a marketing research firm or conduct research in
creative and affordable ways, such as:
1) Engaging students or professors to design and carry out projects.
2) Using the Internet.
Most companies use a combination of marketing research resources to study their industries,
competitors, audiences, and channel strategies.
B) Marketing research firms fall into three categories:
1) Syndicated-service research firms.
THE MARKETING RESEARCH PROCESS
Effective marketing research involves six steps.
Step 1: Define the Problem, the Decision Alternatives, and the Research Objectives
A) Some research is exploratory—its goal is to shed light on the real nature of the
problem and to suggest possible solutions or new ideas.
Data Sources
The researcher can gather secondary data, primary data, or both.
Secondary data are data that were collected for another purpose and already exist
somewhere.
Research Approaches
Marketers collect primary data in five main ways:
1) Observational Research: Fresh data can be gathered by observing the relevant actors and
settings.
3) Focus Group Research: A focus group is a gathering of 6 to 10 people carefully selected
based on certain demographic, psychographic, or other considerations and brought together to
discuss various topics of interest at length.
4) Survey Research: Companies undertake surveys to learn about people’s knowledge, beliefs,
preferences, and satisfaction, and to measure these magnitudes in the general population.
Marketing Memo: Conducting Informative Focus Groups
Focus groups allow marketers to observe how and why consumers accept or reject concepts or
ideas. Many firms are substituting observational research for focus groups.
5) Experimental Research: The most scientifically valid research is experimental research.
A) Designed to capture cause-and-effect relationships by eliminating competing
explanations of the observed findings.
B) Experiments call for:
1) Selecting matched groups of subjects.
Marketing Memo: Questionnaire Dos and Don’ts
Shows 12 dos and don’ts for designing questionnaires and how difficult these are to create and
administrate.
Research Instruments
Marketing researchers have a choice of three main research instruments in collecting primary
data: questionnaires, qualitative measures, and mechanical devices.
1) Questionnaires
A questionnaire consists of a set of questions presented to respondents.
A) Because of its flexibility, is by far the most common instrument used to collect
primary data.
2) Qualitative Measures
Some marketers prefer more qualitative methods for gauging consumer opinions because
consumer actions do not always match their answers to survey questions.
C) Because of the freedom it affords both researchers in their probes and consumers in
their responses, qualitative research can often be an especially useful first step in
exploring consumers’ brand and product perceptions.
Marketing Insight: Getting into the heads of consumers
There are seven metaphors: balance, transformations, journey, container, connection, resource,
and control.
Marketers don’t necessarily have to choose between qualitative and quantitative measures,
however, and many marketers use both approaches, recognizing that their pros and cons can
offset each other.
Technology has now advanced to such a degree that marketers can use devices such as skin
sensors, brain wave scanners, and full body scanners to get consumer responses.
Technology has replaced the diaries that participants in media surveys used to keep.
Audiometers attached to television sets in participating homes now record when the set is on
and to which channel it is tuned.
Marketing Insight: Understanding brain science
Sampling Plan
After deciding on the research approach and instruments, the marketing researcher must
design a sampling plan. This calls for three decisions:
A) Sampling unit: Whom should we survey? Define the target population that will be
sampled.
Contact Methods
Once the sampling plan has been determined, the marketing researcher must decide how to
contact the subjects: by mail, by telephone, in person or online.
Mail Contacts
The mail questionnaire is one way to reach people who would not give personal
interviews or whose responses might be biased or distorted by the interviewers.
A) Mail questionnaires require simple and clearly worded questions.
Telephone Contacts
Telephone interviewing is a good method for gathering information quickly.
Personal Contacts: Personal interviewing is the most versatile method.
A) The interviewer can ask more questions and record additional observations about the
respondent.
Online Contacts: There is an increase in the use of online methods.
Marketers can also host a real-time consumer panel or virtual focus group or sponsor a chat
room, bulletin board, or blog and introduce questions from time to time.
1) Online research is inexpensive.
Some disadvantages include:
1) Samples can be small and skewed.
Step 3: Collect the Information
The data collection phase of marketing research is generally the most expensive and the most
prone to error.
Step 4: Analyze the Information
The next–to-last step in the process is to extract findings by tabulating the data and developing
summary measures.
Step 5: Present the Findings
The researcher presents findings relevant to the major marketing decisions facing
management.
Step 6: Make the Decision
The managers who commissioned the research need to weigh the evidence.
A) Some organizations are using a marketing decision support system to help marketing
mangers make better decisions.
C) Seven characteristics of Good Marketing Research
1) Scientific method
2) Research creativity
Overcoming Barriers to the Use of Marketing Research
In spite of the rapid growth of marketing research, many companies still fail to use it
sufficiently or correctly, for several reasons:
MEASURING MARKETING PRODUCTIVITY
Marketers are facing increased pressure to provide clear, quantifiable evidence to senior
management as to how their marketing expenditures help the firm to achieve its goals and
financial objectives.
Marketing research can help address this increased need for accountability.
A) Two complementary approaches to measure marketing productivity are:
1) Marketing metrics to assess marketing effects.
Marketing Metrics
Marketing metrics is the set of measures that helps them quantify, compare, and interpret their
marketing performance.
A) Short-term results
• Short-term results often reflect profit-and-loss concerns as shown by sales
turnover, shareholder value, or some combination of the two.
made the right decisions going forward
Marketing–Mix Modeling
Marketing–mix models analyze data from a variety of sources, such as retailer scanner data,
company shipment data, pricing, media, and promotional spending data.
Although marketing–mix modeling helps to isolate effects, it is less effective at assessing how
different marketing elements work in combination and has three shortcomings:
1) Marketing-mix modeling focuses on incremental growth instead of baseline
sales or long-term effects.
Marketing Dashboards
Firms are also employing organizational processes and systems to make sure they maximize
the value of all these different metrics.
Marketing Insight: Marketing dashboards to improve effectiveness and efficiency
States that there are four common measurement “pathways” marketers are pursuing today:
customer metrics, unit metrics, cash-flow metrics, and brand metrics.