McDaniel & Gates – Marketing Research, 9th Edition Instructor’s Manual
CHAPTER 20
Managing Marketing Research
LEARNING OBJECTIVES
1. To understand what clients want from a marketing research supplier or department
3. To become familiar with market research outsourcing.
5. To see what marketing researcher departments are doing to gain a more strategic role in the
organization.
6. To examine how corporations are measuring the contribution of marketing research to the
organization.
KEY TERMS
Research management
Outsourcing
Captive Outsourcing
Insight
Innovation
Creativity
CHAPTER SCAN
This chapter describes how to effectively manage marketing research. It will examine research
management from the perspective of both the research supplier and the corporate research
department. From the research supplier point of view, this chapter examines communication,
how to manage the process, evaluating client profitability, and developing and managing staff.
McDaniel & Gates – Marketing Research, 9th Edition Instructor’s Manual
CHAPTER OUTLINE
1. Consolidating the Number of Acceptable Suppliers
2. Marketing Research Supplier Management
I. What Do Clients Want?
A. Top-10 List
B. Communication
3. Managing a Marketing Research Department
I. Allocating the Research Department Budget
A. Prioritize Projects
B. Retaining Skilled Staff
II. Selecting the Right Marketing Research Suppliers
A. Steps in Selecting a Research Supplier
III. Moving Marketing Research Into a Decision-Making Role
A. Role of Marketing Research in the Managerial Decision-Making Process
4. Summary
CHAPTER SUMMARY
1. Consolidating the Number of Acceptable Suppliers
2. MARKETING RESEARCH SUPPLIER MANAGEMENT
I. What Do Clients Want?
A. Top Ten List
2. Is honest
4. Is flexible
6. Provides high quality output
8. Has high quality-control standards
10. Keeps the client informed throughout a project.
B. Communications
1. Key to Good Supplier-Client Relations–communication
2. Liaison–every project should have a liaison who serves as a communication link between the
supplier and the client
1) Cost-plus–to actual costs plus an additional markup to cover overhead
C. Managing the Research Process
1. Research Management–overseeing the development of excellent communication systems,
data quality, time schedules, cost controls, client profitability, and staff development
2. Organizing the Supplier Firm–traditionally organized around functions–this allows technical
people to perform backroom tasks such as programming and data analysis and the “people” to
hand project management and client contact
3. Data Quality Management
a. Integrity and Quality of Data–research management is to ensure this factor.
b. Procedures–to ensure the careful proofing of all text, charts, and graphs in written reports.
c. There is typically a lack of clarity in explaining the details around margin of error—most
people do not formerly state the level of confidence associated with a particular margin of error.
4. Time Management
2) Interview length
c. System to Control Schedules–system in place to inform management if project is on schedule
or not
See Practicing Marketing Research: Doing High Quality Work–On Time (p 612)
Seven Tips on Time Management for marketing management project research directors:
2. Think about priorities–concentrate on the most important tasks only, and ignore the others
until they too join the ‘most important’ list.
4. Provide regular updates–set up a form that can be faxed or e-mailed every day explaining how
the project is going.
6. When you discover a problem, let the client know quickly–the sooner they know the quicker
they can adjust schedules and budgets.
7. If you need to bring up a problem don’t be afraid to suggest some solutions as well–suggesting
solutions will help to solve the issue quickly and efficiently.
Questions:
1. Would you like to be a project manager? Why or why not?
2. What do you think are the most important characteristics of a good project manager?
5. Cost Management–procedures for cost control
a. Systems that accurately capture data collection and other costs associated with the project on a
6. Outsourcing
a. One way that research firms are cutting costs is outsourcing.
b. Outsourcing—Having personnel in another country perform some, or all, of the functions
involved in a marketing research project.
c. Captive outsourcing—When a research firm creates a wholly-owned foreign facility for
outsourcing.
See Exhibit 20.1 Outsourcing Issues (p 616)
D. Client Profitability Management
2. Old Adage–20 percent of the clients generate 80 percent of the profits’.
a. Example of Custom Research Incorporated experience with too many clients is provided and
how they handled the situation.
See Exhibit 20.2 CRI’s Client Profitability Analysis (p 617)
See Exhibit 20.3 Screening Questions Used by CRI and the Rationale for Each Question (p
618)
See Practicing Marketing Research: Managing a Marketing Research Firm for
Profitability (p 615)
Owners of most profitable research companies manage them for profit.
The CEO or partners recognize that they are running a business first and foremost. How does this
show?
1. They hold senior staff accountable for project or account profitability
3. They are willing to make the hard decisions to let people go who can’t deliver acceptable sales
or manage a study on budget
5. They believe in the value of their company’s work
E. Staff Management and Development
2. Suggestions for staff development in a research firm:
a. Create an environment that encourages risk taking, experimentation, and responsibility
b. Foster recognition and accountability
McDaniel & Gates – Marketing Research, 9th Edition Instructor’s Manual
See From The Front Line: 10 Tips for a Winning Proposal (p 619)
1. Follow all instructions provided in the RFP
3. Remember to “sell” your company.
5. Know your audience.
7. Plan ahead!
9. Only propose an alternative solution when you are asked for one.
10. Submit your response on time!
See From the Front Line: Making Difficult Clients Happy (p 609)
Here are 6 tips on handling difficult clients from Tammy Austin, VP of Marketing, DSS
Research
2. Keep detailed notes
4. Take client’s point of view
6. Follow up
3. MANAGING A MARKETING RESEARCH DEPARTMENT
I. Allocating the Research Department Budget
A. Unlike a research supplier, a manager of a corporate marketing research department deals
with issues such as effective spending of the research budget, prioritizing projects for the
McDaniel & Gates – Marketing Research, 9th Edition Instructor’s Manual
C. There’s a preference to spend more time on the strategic issues, such as identifying promising
new markets or developing new products and services.
D. Several research heads try to meet with their clients annually before budgeting season begins
1. Prioritize Projects
a. Using Return on Investment (ROI) for a project prioritization has three advantages.
2. Retaining Skilled Staff
a. A few techniques for retaining key research staff are as follows.
1) Conduct regular performance reviews that give continuing feedback on a job well done—or
offer ways to improve.
3) Give differential pay raises that recognize superior performance.
4) Vary the work.
II. Selecting the Right Marketing Research Supplier
A. Steps in Selecting a Research Supplier
2. Assess the capabilities of alternative suppliers
a. Do the vendors have a particular area of specialization?
b. Are the firms committed to a particular technique and/or data collection method?
3. Consider the size of the firm–it is an important decision criterion–if a small firm they can be
overwhelmed with an enormous project.
5. Research department manager needs to become acquainted with the backgrounds of the
potential vendors
6. Questions should be asked to determine the stability of the company and its qualifications to
complete the project, such as:
a. How long has the vendor been in business?
b. For what other companies has the vendor conducted research projects?
8. The reputations of the firms must be considered in the decision
9. Avoid letting price be the sole determining factor in the selection.
See Practicing Marketing Research Soft Skills of an Ideal Marketing Researcher (p 623)
1. Ideal marketing researchers need good quantitative skills. More importantly in today’s
competitive and dynamic markets, new researchers need other skills and characteristics,
3. In addition to a solid academic background, successful hires must be able to adapt easily and
understand that brevity is prized in the business world.
4. The in-house researcher is not just a messenger between corporate management and an outside
vendor.
Questions:
1. What skills do you think are required to be a great marketing researcher?
2. Where would you rank communication skills on your list?
McDaniel & Gates – Marketing Research, 9th Edition Instructor’s Manual
Questions:
1. Do you think that conducting research in Russia is any different than, say, China? Why?
2. If you were a large American research supplier, would you want to establish are office in
Moscow? Why?
1. The researcher’s challenge is to shed his/her long-held traditional role as a support function,
2. Researchers must move beyond the task of simply crunching numbers and churning out
results; they need to understand the underlying business issues at stake and adjust the
information they gather and how they analyze it. They must reach out to other departments,
building relationships and a better understanding of the issues companywide.
B. Driven by Impact
In some research departments, success is defined by a project that is well executed—a
C. Bring Leadership to Strategic Priorities
Research department managers must understand the major strategic issues facing the company.
D. Develop Rich Consumer and Market Insights
An insight includes discovery together with marketplace impact: “Insight is new knowledge that
has the potential to create significant marketplace impact.”
E. Use Creativity to Innovate
Innovation is the successful implementation of creative ideas within an organization.
Creativity is the ability to generate and recognize potentially useful ideas.
F. Communicate for Impact
McDaniel & Gates – Marketing Research, 9th Edition Instructor’s Manual
The following pointers will help create impact:
• Tell a story with your presentation, and tell it succinctly.
• Leverage visual storytelling, incorporating video where possible.
See Exhibit 20.4 Client-Side Researchers’ Compensation (p 622)
See Exhibit 20.5 The Creative Problem-Solving Process (p 628)
G. Measuring Marketing Research’s Return on Investment
2. Arguments against the use of ROI.
a. ROI is theoretically flawed because it divides the profit return by the expenditure instead of
subtracting it
1. Example of ROI Lite
a. ROI Lite equals the anticipated dollar value of the decision based on the research times the
1. Example of ROI Complete
4. SUMMARY
QUESTIONS FOR REVIEW AND CRITICAL THINKING
1. Should a survey presentation say, “the margin of error is plus or minus 3 percent”? If
not, what problem does it present?
By itself it is not appropriate. With the margin of error, there needs to be a stated level of
confidence. Additionally, it needs to clear that margin of error is associated with random
2. Describe four different ways a manager can help ensure high data quality.
The manager first of all must guard carefully to be sure that good marketing research
methodologies are practiced. He or she can follow the procedures to reduce error discussed in the
3. What policies need to be put in place to assure that research projects are handled in a
timely manner? What steps should be taken if a project falls behind schedule?
The research firm must have guidelines that instruct the field service managers, the project
managers, and other team members what information must be communicated about the project’s
time schedule and when it must be communicated. For example, if the research firm has policies
4. How can a research supplier develop its employees?
Create a positive environment, one that encourages (calculated) risk-taking, experimentation, and
responsibility. Foster recognition and responsibility. Provide job autonomy within a certain
5. Should every firm conduct a client profitability study? Why?
Not necessarily. The issue is whether doing a particular activity pays its way. Work should be
accomplished at a profit unless management has decided to the contrary (say a pro bono study).
6. Is outsourcing beneficial to the marketing research industry? Why or why not?
7. Explain the relationship between insights, creativity, and innovation.
McDaniel & Gates – Marketing Research, 9th Edition Instructor’s Manual
8. How should one allocate a corporate marketing research budget? Is this the only way?
Several research heads try to meet with their clients annually before budgeting season begins, to
9. What is an acceptable method of prioritizing research projects in a research
department?
10. What should marketing research do in order to play a more strategic role in the
organization?
Marketing researchers need to move beyond the role of answering questions to one of generating
information that is valuable to promoting the business enterprise. Part of this involves a better
11. Assume that a company is trying to determine whether to enter a new market. The
estimated first year’s revenue is $2.2 million. Because management knows a little about the
market, they are 20 percent confident that they can make the right decision without
research. With research, they will be 80 percent confident. The estimated likelihood of
moving into the market without research is 40 percent. This would rise to 80 percent after
the research. The cost of the research is $400,000. What is the ROI after the first year?
12. What steps and actions should a research supplier take to try to become a strategic
partner with a research client?
Marketing research departments can take several specific actions to increase their internal
WORKING THE NET
1. Go to www.worldopinion.com or www.Quirks.com Find an article on managing marketing
research firms. Summarize for the class.
Responses will vary.
2. Go to Google, or another search engine, and look up “marketing research outsourcing.”
Present your findings to the class.
REAL-LIFE RESEARCH
Case 20.1 – Walther Research Deals with Managing Project Managers (p 633)
Key Points
Much of the problem, but certainly not all, seems to be his project managers and a lack of project
McDaniel & Gates – Marketing Research, 9th Edition Instructor’s Manual
Questions:
1. Larry is considering reorganizing. What should he do?
2. What are the advantages of keeping a functional organizational structure? What are the
disadvantages?
3. What might he gain from a team structure? Are there any risks in moving to this form of
organization?
4. What should Larry do about directing and controlling his project managers?
Case 20.2 – Maxwell Research Considers Outsourcing to Cross-Tab in India (p 634)
Key Points:
• Maxwell Research, a full-service research firm located in Austin, Texas, specializes in
custom research serving primarily the hospitality, travel, and consumer package goods
McDaniel & Gates – Marketing Research, 9th Edition Instructor’s Manual
• While sales have increased a minimum of 20 percent annually since 2000, net profits have
not and instead have fallen in each of the last three years.
• Mike knew that his labor-intensive, customer-oriented approach was part of the problem.
Why Cross-Tab Orientation?
• Cross-Tab is a full-service market research agency that also provides outsourcing
services for market research and data analytics processes to global marketing and
market research organizations.
Cross-Tab Experience
• Have experience across all areas of research, including: Online surveys, CATI, and
PAPI; small ad-hoc projects as well as large multicountry projects; qualitative and
Cross-Tab People
• Team is equipped with the knowledge, resources and domain expertise to effectively
execute each client’s business mandates.
Questions:
1. What do you think about Mike’s labor-intensive focus on customer service? What are
the advantages and disadvantages?
2. What are the advantages and disadvantages for Maxwell Research to engage in
outsourcing?
The key advantage is cost to serve. However, there are several issues. Since Cross-Tabs is
3. What are some key issues Maxwell needs to resolve before it signs an outsourcing
agreement?
Mike first needs to be sure of his clients’ needs and whether they can be met by the outsourcing
4. Will outsourcing solve Maxwell’s ROI problem? What might happen to sales revenue?
Outsourcing could save Mike money and increase ROI; however this assumes that his clients
don’t leave Mike because he has outsourced their work rather than handling it personally. Mike