Chapter 08 – Marketing Research: From Customer Insights to Actions
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CHAPTER CONTENTS
PAGE
POWERPOINT RESOURCES TO USE WITH LECTURES ……………………………………. 8-2
LEARNING OBJECTIVES (LO) …………………………………………………………………………….. 8-4
KEY TERMS …………………………………………………………………………………………………………… 8-4
LECTURE NOTES
• Chapter Opener: Hollywood Loves Marketing Research!…………………………………….. 8-5
• The Role of Marketing Research (LO 8-1; LO 8-2) ……………………………………………. 8-6
• Step 1: Define the Problem ………………………………………………………………………………. 8-7
• Step 2: Develop the Research Plan ……………………………………………………………………. 8-8
• Step 3: Collect Relevant Information (LO 8-3; LO 8-4) …………………………………….. 8-10
• Step 4: Develop Findings (LO 8-5) ………………………………………………………………….. 8-30
• Step 5: Take Marketing Actions ………………………………………………………………………. 8-31
• Sales Forecasting Techniques (LO 8-6) ……………………………………………………………. 8-33
APPLYING MARKETING KNOWLEDGE ……………………………………………………………. 8-36
BUILDING YOUR MARKETING PLAN ……………………………………………………………….. 8-43
VIDEO CASE (VC)
• VC-8: Carmex [A]: Leveraging Facebook for Marketing Research ………………………. 8-45
APPENDIX D CASE (D)
• D-8: HOM Furniture: Where Keen Observation Pays …………………………………………. 8-49
IN-CLASS ACTIVITIES (ICA)
• ICA 8-1: Interpreting Census Data …………………………………………………………………… 8-52
• ICA 8-2: Websites for Marketers ……………………………………………………………………… 8-55
• ICA 8-3: Designing a Taste Test Survey for Howlin’ Coyote Chili ………………………. 8-58
• ICA 8-4: Pepsi vs. Coke Taste Test ………………………………………………………………….. 8-61
CONNECT APPLICATION EXERCISES ……………………………………………… 8-68
• Marketing Research Strategies at Frito-Lay Case Analysis
• Marketing Research Approach Click and Drag*
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• Carmex: Leveraging Facebook for Marketing Research Video Case
• iSeeit! Video Case: Market Research Process Video Case
• Sales Forecasting Techniques Click and Drag*
*Note: An alternate version of each Click and Drag exercise is available in Connect for students with
accessibility needs.
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POWERPOINT RESOURCES TO USE WITH LECTURES
PowerPoint
Textbook Figures Slide
Figure 8-1 Five-step marketing research approach leading to marketing actions ………………………. 8-6
Figure 8-2 Types of marketing information ………………………………………………………………………… 8-11
Figure 8-3 Nielsen Television Index Rating Report for network primetime households ……………. 8-19
Figure 8-4A Different types of questions in a sample Wendy’s survey (Q1-Q5) …………………….. 8-25
Figure 8-4A (Q1) Open-ended question ……………………………………………………………………………… 8-26
Figure 8-4A (Q2) Dichotomous question ……………………………………………………………………………. 8-27
Figure 8-4A (Q3) Multiple choice question …………………………………………………………………………. 8-28
Figure 8-4A (Q4) Attitudinal question ………………………………………………………………………………… 8–29
Figure 8-4A (Q5) Semantic differential scale question …………………………………………………………. 8-30
Figure 8-4B Different types of questions in a sample Wendy’s survey (Q6-Q9) …………………….. 8-31
Figure 8-4B (Q6) Likert scale question ………………………………………………………………………………. 8-32
Figure 8-4B (Q7) Media behavior question …………………………………………………………………………. 8-33
Figure 8-4B (Q8) Usage behavior question …………………………………………………………………………. 8-34
Figure 8-4B (Q9) Demographic questions …………………………………………………………………………… 8-35
Figure 8-5 How marketing researchers and managers use information technology to turn
information into action ……………………………………………………………………………………. 8-40
Figure 8-6 Two forms of a cross tabulation relating age of head of household to frequency
of fast-food restaurant patronage ………………………………………………………………………. 8-44
Figure 8-6A Absolute frequencies …………………………………………………………………………………….. 8-45
Figure 8-6B Row percentages run horizontally …………………………..………………………………………. 8-46
Figure 8-7 Marketing dashboards present findings to Tony’s marketing manager that leads to
recommendations and actions ……………………………………………………………………………. 8-49
Figure 8-8 Linear trend extrapolation of sales revenues at Xerox, made at the start of 2000 ………. 8-53
Video Case VC-8—Figure 1: Facebook Open-Ended Poll Question ……………………………………….. 8-55
Video Case VC-8—Figure 2: Facebook Fixed Alternative Poll Question ………………………………… 8-56
Video Case VC-8—Figure 3: Potential Results from 3 Possible Facebook Strategies ……………….. 8-57
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POWERPOINT RESOURCES TO USE WITH LECTURES
PowerPoint
Applying Marketing Metrics Slide
Are the Carmex Social Media Programs Working Well?: Conversation Velocity, Share of Voice,
and Sentiment ………………………………………………………………………………………………………………….. 8-37
Marketing Matters, Making Responsible Decisions
Marketing Matters: Online Databases and Internet Resources Useful to Marketers …………………… 8-16
Making Responsible Decisions—Ethics: No More Personal Secrets: The Downside of Data
Mining ……………………………………………………………………………………………………………………………. 8-41
Videos
8-1: Pirates of the Caribbean Movie Trailer ………………………………………………………………………….. 8-4
8-2: Census 2010 Video …………………………..………………………………………………………………………… 8-13
8-3: Trend Hunter Video ……………………………………………………………………………………………………. 8-22
8-4: Carmex [A] Video Case ……………………………………………………………………………………………… 8-54
In-Class Activities (ICA)
ICA 8-1: Interpreting Census Data ……………………………………………………………………………………… 8-63
ICA 8-2: Websites for Marketers …………………………………………………………………………………………. 8-65
ICA 8-3: Designing a Taste Test Survey for Howlin’ Coyote Chili …………………………………………. 8-67
ICA 8-4: Pepsi vs. Coke Taste Test …………………………………………………………………………………….. 8-69
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LEARNING OBJECTIVES (LO)
After reading this chapter students should be able to:
LO 8-1: Identify the reason for conducting marketing research.
LO 8-2: Describe the five-step marketing research approach that leads to marketing actions.
LO 8-3: Explain how marketing uses secondary and primary data.
LO 8-4: Discuss the uses of observations, questionnaires, panels, experiments, and newer data
collection methods.
LO 8-5: Explain how data analytics and data mining lead to marketing actions.
LO 8-6: Describe three approaches to developing a company’s sales forecast.
KEY TERMS
constraints
observational data
cross tabulation
primary data
data
questionnaire data
information technology
sales forecast
marketing research
secondary data
measures of success
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LECTURE NOTES
HOLLYWOOD LOVES MARKETING RESEARCH!
Some movies are blockbusters – Avatar, Titanic, Star Wars: The Force Awakens –
accounting for billions of dollars. Unfortunately, not all movies have such favorable
results.
How can studies try to reduce the risk that a movie will be a box-office flop? Marketing
research!
A. A Film Industry Secret
• Studio executives face risks including bad titles, poor scripts, competing movies,
and more.
a. As a form of marketing research to…
b. Change the title, plot, etc. of a movie after…
c. A sample of the target audience has previewed it.
• Filmmakers want movie titles that:
a. Are concise. c. Capture the essence of the film.
b. Are attention-getting. d. Have no legal restrictions.
• These are the same factors that make a good brand name.
a. Concept testing and script assessment.
• Used to assess early ideas for proposed new films.
• Also used to ensure sequels are consistent with expectations created by
past movies.
[Video 8-1: Star Wars VII Movie Trailer]
b. Test (or preview) screenings.
• Obtain the key reactions of consumers likely to be in the target audience.
• Test screenings include 300 to 400 moviegoers recruited to attend a
“sneak preview” of a film.
• After seeing the movie, the audience fills out a survey to critique the:
– Title, plot, characters, music, and ending.
– Marketing program (posters, trailers, etc.).
c. Tracking studies.
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• Are conducted immediately before an upcoming film’s release to forecast
its opening week’s box-office revenue.
• Prospective moviegoers are asked questions about their awareness of,
interest in, and intention in seeing the upcoming film this weekend.
• Depending on the research results, the movie studio may run last-minute
ads to promote the film.
I. THE ROLE OF MARKETING RESEARCH [LO 8-1]
Marketing research in perspective: (1) what it is, (2) some difficulties in conducting it,
and (3) the five steps marketers use to conduct it.
A. What Is Marketing Research?
• Marketing research is the process of defining a marketing problem and
opportunity, systematically collecting and analyzing information, and
recommending actions.
• Marketers conduct marketing research to reduce the risk of marketing decisions.
B. The Challenges of Doing Good Marketing Research
• Marketing researchers face difficulties in asking consumers questions about new,
unknown, or personal-type products.
a. How can marketing research determine if consumers will buy a product they
have never seen, and never thought about, before?
b. How can marketing research obtain answers that people know but are
reluctant to reveal?
c. How can marketing research help people accurately remember and report their
interests, intentions, and purchases?
• Marketing research must overcome these problems to obtain the information
needed so that marketers can assess what consumers want and will buy.
C. Five-Step Marketing Research Approach [LO 8-2]
• A decision is a conscious choice from among two or more alternatives.
• Decision-making is a more formal, structured approach that marketers use to
consciously choose from a set of alternatives to improve the outcomes of
decisions.
• [Figure 8-1] Marketers use a five-step marketing research approach to collect
information from consumers to improve marketing decisions and actions.
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II. STEP 1: DEFINE THE PROBLEM
• LEGO Group’s definition of “toy” has changed dramatically in the last half century—
from interlocking plastic bricks to construction sets that create figures, vehicles,
buildings, and robots.
a. LEGO introduced MINDSTORMS ® kit, a “toy” that integrates electronics,
computers, and robots with LEGO bricks.
• The kit appeals to a diverse market—from elementary school kids to robotics
experts. Kits can be found in homes, schools, universities, and laboratories.
• LEGO shows how to define the marketing problem and its two key elements:
a. Setting the research objectives.
• Identifying possible marketing actions.
A. Set the Research Objectives
• Research objectives are specific measurable goals the decision maker seeks to
achieve in conducting the marketing research.
• In setting research objectives, the purpose of research must be clear in order to
take marketing actions.
• The three types of marketing research are:
a. Exploratory research provides ideas about a vague problem.
b. Descriptive research tries to find:
• The frequency that something occurs.
• The extent of a relationship between two factors.
c. Causal research. Examples.
• Tries to determine the extent to which the change in one factor changes
another one.
• Experiments and test markets.
B. Identify Possible Marketing Actions
• Effective decision makers develop specific measures of success, which are
criteria or standards used in evaluating proposed solutions to the problem.
• Different research outcomes—based on the measure of success—lead to different
marketing actions.
• A measure of success MUST lead to a clear-cut marketing action.
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• If all the research outcomes lead to the same marketing actions, then marketing
research should NOT be done since it would be useless and a waste of money.
• Marketing researchers know that defining a problem is an incredibly difficult task.
a. If the objectives are too broad, the problem may not be researchable.
b. If too narrow, the value of the research results may be seriously lessened.
• This is why marketing researchers:
a. Spend time in defining a marketing problem precisely.
b. Write a formal proposal that describes the research to be done.
III. STEP 2: DEVELOP THE RESEARCH PLAN
The second step in the marketing research process involves:
• Specifying the constraints on the marketing research activity.
• Identifying the data needed for marketing decisions.
• Determining how to collect the data.
A. Specify Constraints
• The constraints in a decision are the restrictions placed on potential solutions to a
problem.
• Common constraints in marketing problems are limitations on the time and
money available to solve the research problem.
• Examples of constraints set by LEGO:
a. The decision to decide which of the two MINDSTORMS EV3 designs must
be made in five weeks.
b. 10 teams of middle-schoolers will use used to test (play with) which
MINDSTORMS EV3 design to market.
B. Identify Data Needed for Marketing Actions
• Effective marketing research studies focus on collecting data that will lead to
effective marketing actions.
• Often marketing research studies collect a lot of data that are interesting but
irrelevant for marketing decisions that result in marketing actions.
C. Determine How to Collect Data
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Two key elements in deciding how to collect data are (1) concepts and (2) methods.
1. Concepts.
a. Concepts are ideas about products or services.
b. Marketing researchers frequently develop a new-product concept, which is a
picture or verbal description of an offering the firm might offer for sale.
2. Methods.
a. Methods are the approaches that can be used to collect data to solve all or part
of a research problem.
b. A key issue in developing a marketing research plan: Is observing consumers’
behavior better than asking them questions?
• Can we observe behavior without biasing the results?
• Can we ask consumers questions that they can answer?
c. Information on useful methods is available in tradebooks, textbooks, and
handbooks that relate to marketing and marketing research.
d. Some periodicals and journals summarize useful methods that solve marketing
problems. The American Marketing Association publishes the:
• Journal of Marketing.
• Journal of Marketing Research.
e. Special methods vital to marketing research are:
• Sampling.
– Involves selecting representative elements from a population, such as
distributors, customers, or prospects, in order to ask them questions.
– Their answers are then treated as typical of that population.
• Statistical inference. Involves drawing conclusions or generalizing the
results from the data obtained from the sample taken to the larger
population from which the sample was drawn.
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LEARNING REVIEW
8-1. What is marketing research?
8-2. What is the five-step marketing research approach?
8-3. What are constraints, as they apply to developing a research plan?
IV. STEP 3: COLLECT RELEVANT INFORMATION [LO 8-3]
• Collecting enough relevant information to make rational, informed marketing
decisions can entail collecting an enormous amount of information at great expense.
• Data are the facts and figures related to the project.
• [Figure 8-2] Data are divided into:
a. Secondary data are facts and figures that have already been recorded prior to the
project at hand.
b. Primary data are facts and figures that are newly collected for the project.
A. Secondary Data: Internal
• A firm’s internal records are the most easily accessible marketing information.
• Internal secondary data sources can be divided into two related parts:
a. Marketing input data.
• Relate to the effort expended to make sales.
• Are obtained from:
– Sales and advertising budgets and expenditures.
– Salespeople’s call reports (sales calls per day, who was visited, etc.).
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b. Marketing outcome data.
• Relate to the results of the marketing efforts.
• Include:
– Billing records on shipments.
B. Secondary Data: External
• Published data from outside the organization are external secondary data.
• Includes data published by the U.S. Census Bureau:
a. Census 2010 was a count of the U.S. population in 2010.
• Is conducted every 10 years.
consumers.
[Video 8-2: Census]
[ICA 8-1: Interpreting Census Data]
b. Recently, the Census Bureau began collecting data annually from a smaller
number of people through the American Community Survey.
c. The Census Bureau also publishes the Economic Census.
• Is conducted every five years.
• The latest is the 2017 Economic Census.
• These reports are vital to business firms selling products and services to
organizations.
• Contains data on the number and sales of establishments in the U.S. that
produce a product or service on the basis of each firm’s:
– Geography (state, zip code, etc.).
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• Syndicated panels.
a. Consist of market research firms that pay households and businesses to…
b. Record all their purchases using a paper or electronic diary.
c. Allow researchers to economically obtain answers to questions:
d. Examples of data obtained from syndicated panels:
• Nielsen Media Research’s TV ratings.
• J. D. Power’s automotive quality and customer satisfaction surveys.
• Other data service firms:
a. Provide information on:
• Household demographics. • Media behavior.
b. Can collect, analyze, interrelate, and present all this information.
c. Include SymphonyIRI Group’s InfoScan.
d. Sales data are:
• Collected using scanners at checkout counters of supermarket, drug,
convenience, and mass merchandise retailers.
• Critical to allocate scarce marketing resources.
• Trade associations, universities, and business periodicals also provide detailed
data to market researchers and planners.
• Other data are available via the Internet using search engines such as Google.
[ICA 8-2: Websites for Marketers]
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MARKETING MATTERS
Technology: Online Databases and Internet Resources Useful to Marketers
Marketers in search of secondary data utilize a variety of online databases and
Internet resources: articles in periodicals, statistical or financial data on markets, products,
and organizations and reports form information companies.
a. Sources of news and articles include:
b. Sources of statistical and financial data include:
C. Advantages and Disadvantages of Secondary Data
• Marketers generally obtain secondary data first and then collect primary data.
• Advantages of secondary data are:
a. Time savings, if the data:
• Have already been collected and published (Census data).
• Exist internally within the firm (sales reports).
b. Low cost, such as free or inexpensive Census reports.
c. Greater level of detail, especially in Census data.
• Disadvantages of secondary data are:
a. May be out of date.
b. The definitions or categories may not be quite right for the project.
c. The data are collected for another purpose and may not be specific enough for
the project.
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LEARNING REVIEW
8-4. What is the difference between secondary and primary data?
8-5. What are some advantages and disadvantages of secondary data?
D. Primary Data: Watching People [LO 8-4]
• The two ways to collect new or primary data for a marketing study are by
(1) watching people and (2) asking them questions.
• Observational data:
a. Are facts and figures obtained by watching how people actually behave.
b. Are collected by mechanical, personal, and neuromarketing methods.
1. Mechanical Methods.
a. [Figure 8-3] Nielsen Media Research national TV ratings are mechanical
observational data collected by a “people meter” that:
• Connects to a box attached to TV sets, DVRs, cable boxes, satellite dishes,
etc. in about 30,000 households across the country.
b. Nielsen introduced “cross–platform campaign ratings” that:
• Combine its existing TV ratings with its new online campaign ratings.
• Include consumer viewing of TV programs:
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c. On the basis of all these observational data, Nielsen then calculates the rating
and share of each TV program:
• With 118 million TV households in the U.S., a single ratings point equals
1 percent, or 1,180,000 TV households.
d. But TV advertisers today have a special problem:
• With about three out of four TV viewers skipping ads with a DVR or
TiVo, or channel surfing during commercials, how many people are
actually seeing the TV ad?
e. The data in Figure 8-3 include viewers who either
• Watched the programs live, or
2. Personal Methods.
Watching consumers in person is another approach to collecting data.
a. Mystery shoppers.
• Pose as a customer and observe behaviors.
• Are paid by firms to check on:
– The quality and pricing of their products.
• Provide clients with unique marketing research information that can be
obtained in no other way.
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b. Two other observational approaches:
• Watching consumers in person.
c. Ethnographic research.
• Is a specialized form of observational research.
• Occurs when trained observers:
d. Personal observation has advantages and disadvantages:
• Is useful and flexible.
3. Neuromarketing Methods.
a. Neuromarketing observes responses to nonconscious stimuli and is a
relatively new field of study that merges technology used to study the brain
with marketing’s interest in understanding consumers.
b. Global brand expert Martin Lindstrom believes that most marketing research
is wasted because consumers’ feelings toward products and brands reside deep
within the subconscious part of their brains.
E. Primary Data: Asking People
• Most people have filled out some kind of a questionnaire or received a telephone
or an e-mail to get their opinions about a particular product, service, or idea.
• We can divide these questioning techniques into (1) idea generation methods and
(2) idea evaluation methods.
• Questionnaire data are facts and figures obtained by asking people about their
attitudes, awareness, intentions, and behaviors.
1. Idea Generation Methods—Coming Up with Ideas.
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a. Individual interviews.
• Involve a single researcher asking questions of one respondent.
• Has this advantage:
– Able to probe for additional ideas…
b. Depth interviews.
• Are a special kind of individual interview…
• In which researchers ask lengthy, free-flowing questions to…
• Probe for underlying ideas and feelings of respondents.
c. Focus groups.
• Are informal sessions of 6 to 10 past, present, or prospective customers:
– In which a discussion leader, or moderator, asks their opinions about…
• Are often video-recorded and conducted in special rooms with a one-way
mirror so that marketers can hear and watch consumer reactions.
• Can be effective in uncovering ideas that:
– Are often difficult to obtain with individual interviews…
– Due to the peer interaction of the members.
d. “Fuzzy front end” methods.
• Are attempts to identify elusive consumer tastes or trends.
• Are used by consumer product firms to find new product ideas.
• Example: Trend Hunter identifies “emerging shifts in social behavior,”
which are driven by changes in pop culture that can lead to new products.
[Video 8-3: Trend Hunter Video]
2. Idea Evaluation Methods—Testing an Idea.
a. In idea evaluation, the marketing researcher tests ideas to help the marketing
manager recommend marketing actions.
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b. Idea evaluation often involves using these conventional questionnaire formats:
• Personal interview. • Online (e-mail and Internet).
c. These surveys are administered to a large sample of past, present, or
prospective consumers.
d. Researchers have to make important trade-offs to balance cost of a particular
survey method against the expected quality of the data obtained.
• Personal interview surveys.
– Are flexible in:
* Asking probing questions.
• Mail surveys.
– Are easy to conduct.
– Are relatively inexpensive.
– Are usually biased because those most likely to respond have had
especially positive or negative experiences with the product or brand.
• Telephone interviews.
– Allow flexibility.
– Are efficient if computer-assisted telephone interviewing (CATI) is
used.
• Online surveys.
– Consist of both e-mail and Internet surveys.
– Increasingly, many organizations use this method to have consumers
assess their products and services.
– Why? Because most consumers have an Internet connection and an
e-mail address.
– E-mail surveys.
* Marketers embed a survey in an e-mail sent to targeted
respondents.
* When they open the e-mail, consumers can either:
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◊ See the survey directly or…
◊ Click on a link to access it from a website.
* Disadvantages of e-mail surveys. Some consumers:
◊ View e-mail surveys as “junk” or “spam.”
– Internet surveys.
* Most consumers have access to the Internet at home and/or work.
* Marketers can ask consumers to complete a “pop up” survey in a
separate window when they access an organization’s website.
* Marketers use this method to evaluate the design and usability of
their websites.
* Disadvantages of Internet surveys. Some consumers:
◊ Have a “pop–up blocker” that…
– Advantages of both e-mail and online surveys:
* The cost is relatively minimal.
* The turnaround time from data collection to report presentation is
much quicker than the traditional methods.
– Disadvantages of both e-mail and online surveys:
* Consumers participating in online panels can complete the survey
multiple times, creating a significant bias in the results.
e. The foundation of all research using questionnaires is developing precise
questions that get clear, unambiguous answers very efficiently.
f. [Figure 8-4] Question formats as depicted in a Wendy’s survey that assessed
fast-food restaurant preferences among present and prospective consumers:
• Q1: Open-ended question.
– Allows respondents to:
* Express opinions, ideas, or behaviors in their own words, which…
* Captures the “voice” of respondents…