Chapter 10 - Marketing Research

• marketing research: a set of techniques and principles for systematically collecting, recording, analyzing, and interpreting data that can aid decision makers involved in marketing goods, services, or ideas

The Marketing Research Process

• Several factors to consider before starting a market research project:

  • will the research be useful?

    • will it provide insights beyond what the managers already know?
    • reduce uncertainty associated with the project?

  • is top management committed to the project and willing to abide by the results of the research?

• Marketing research consists of five steps:

• Another important requirement before embarking on a research project is to plan the entire project in advance

  • avoid unnecessary alterations to research plan as they move along

Step 1: Defining the Objectives and Research Needs

• Research is both expensive and time-consuming. It is important to establish in advance exactly what problem needs to be solved.

Step 2: Designing the Research

• Researchers identify the type of data needed and determine the research necessary to collect them.

Step 3: Collecting the Data

• Data collection begins only after research design process.

• secondary data: pieces of information that have already been collected from other sources and usually are readily available

  • includes both external and internal data sources

• primary data: data collected to address specific research needs

• sample: a group of customers who represent the customers of interest in a search study

Step 4: Analyzing the Data and Developing Insights

• Analyzing and interpreting the data should be thorough and methodical.

• data: raw numbers or facts

  • own their own, have limited value to marketers

• information: organized, analyzed, interpreted data that offer value to marketers

Step 5: Developing and Implementing an Action Plan

• Analyst prepares the results and presents them to appropriate decision makers, who undertake appropriate marketing strategies
• Includes executive summary, body of the report, conclusions, limitations, and appropriate supplementals.

Secondary Data

• Marketing research project often begins with a review of the relevant secondary data.

• Internal

  • Company sale invoices, customer lists, and other reports generated by company itself

Inexpensive External Secondary Data

• Some sources of external secondary data can be access quickly as at a relatively low price (US Census)
• Often not adequate to meet researcher's needs.
• Must also pay attention to how data was collected.

Syndicated External Secondary Data

• syndicated data: data available for a fee from commercial research firms such as Information Resources Inc. (IRI), National Purchase Diary Panel, Nielsen

• scanner data: a type of syndicated external secondary data used in quantitative research that is obtained from scanner readings of UPC codes at check-out counters

• panel data: information collected from a group of customers

  • includes records of what they have purchased (secondary)
  • and survey questions (primary)

Internal Secondary Data

• Rich cache of customer information and purchase history

• Can be difficult to make sense of the millions or even billions of pieces of individual data

• data warehouse: large computer files that store millions or even billions of individual data

• data mining: the use of a variety of statistical analysis tools to uncover previously unknown patterns in data stored in databases or relationships among variables

  • by analyzing the enormous amount of information they possess about customers, companies have developed statistical models that help identify when a customer is dissatisfied with his or her service
  • churn: the number of customers who stop using a product or service, divided by the average number of consumers of that product or service

Big Data

• Field of marketing research has seen enormous changes in the last few years because of:

  • increase in amount of data to which retailers, service providers have access
  • their ability to collect these data from transactions, customer relationship management (CRM), websites, social media
  • the ease of collecting and storing these data
  • the computing ability readily available to manipulate data in real time
  • access to in-house or available software to convert data into valuable decision making insights

• big data: data sets that are too large and complex to analyze with conventional data management and data mining software

Primary Data Collection Techniques

• qualitative research: used to understand the phenomenon of interest through broad, open-ended responses

  • informal research methods, including observation, following social media sites, in-depth interviews, focus groups, and projective techniques

• quantitative research: structured responses that can be statistically tested to confirm insights and hypotheses generated via qualitative research or secondary data

Observation

• observation: an exploratory research method that entails examining purchase and consumption behaviours through person or video camera scrutiny

Social Media

• Social media sites are a booming source of data for marketers

  • Marketers have realized social media can provide valuable information that could air their marketing research

• virtual community: online networks of people who communicate about specific topics

• sentiment mining: data gathered by evaluating customer comments posted through social media sites such as Facebook and Twitter

In-Depth Interviews

• in-depth interview: an explanatory research technique in which trained researchers ask questions, listen to and record the answers, and then pose additional questions to clarify or expand on a particular issue

• Provide insights that help managers better understand the nature of their industry as well as important trends and consumer preferences

• Relatively expensive and time-consuming

  • Depends on characteristics: i.e. doctors vs teenagers

Focus Group Interviews

• focus group interviews: a research technique in which a small group of persons comes together for an intensive discussion about a particular topic, with the conversation guided by a trained moderator using an unstructured method of inquiry
• Growth of online technology now allows focus groups to take place online

Survey Research

• Arguably most popular form of quantitative primary collection method
• survey: a systematic means of collecting information from people that generally uses a questionnaire
• questionnaire: a form that features a set of questions designed to gather information of respondents and thereby accomplish the researcher's objectives; questions can be either structured or unstructured
• unstructured questions: open-ended questions that allow respondents to answer in their own words
• structured questions: close-ended questions for which a discrete set of responses alternatives, or specific answers, is provided for respondents to evaluate

Panel and Scanner-Based Resarch

• The customers' responses indicate whether they think each product should be carried in stores.

Experimental Research

• experimental research (an experiment): a type of quantitative research that systematically manipulates one or more variables to determine which variables have a casual effect on another variable

Advantages and Disadvantage of Primary and Secondary Research