Chapter 10 Marketing Research PDF

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Professor: Victor Piscitello...

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Marketing Research KEY TERMS 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 Secondary Data: Pieces of information that have already been collected from other sources and usually are readily available Primary Data: Data collected to address specific research needs Sample: A group of customers who represent the customers of interest in a research study Data: Raw numbers or facts Information: Organized, analyzed, interpreted data that offer value to marketers Syndicated Data: Data available for a fee from commercial research firms such as Information Resources Inc. (IRI), National Purchase Diary Panel, and ACNielsen. Scanner Data: A type of syndicated external secondary data used in quantitative research that is obtained from scanner readings of Universal Product Codes (UPCs) at checkout counters Panel Data: Information collected form a group of consumers Data Warehouses: Large computer files that store millions and even billions of pieces of individual data Data Mining: The use of a variety of statistical analysis tools to uncover previously unknown patterns in the data stored in databases or relationships among variables Churn: The number of consumers who stop using a product or service, divided by the average number of consumers of that product or service Big Data: Data sets that are too large and complex to analyze with conventional data management and data mining software Qualitative Research: Informal research methods, including observation, following social media sites, in-depth interviews, focus groups, and projective techniques

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Book Notes

Quantitative Research: Structured responses that can be statistically tested to confirm insights and hypotheses generated via qualitative research or secondary data Observation: An exploratory research method that entails examining purchase and consumption behaviors through personal or video camera scrutiny 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 Overview: An exploratory research technique in which trained researchers ask questions, listed to and record the answers, and then pose additional questions to clarify or expand on a particular issue Focus Group Interviews: A research technique in which a small group of persons (usually 8 to 12) comes together for an intensive discussion about a particular topic, with the conversation guided by a trained moderator using an unstructured method of inquiry Survey: A systematic means of collecting information fro people that generally uses a questionnaire Questionnaire: A form that features a set of questions designed to gather information from respondents and thereby accomplish the researchers’ objectives; questions can be either structured or unstructured Unstructured Questions: Open-ended questions that allow respondents to answer in their own words Structured Questions: Closed-ended questions for which a discrete set of response alternatives, or specific answers, is provided for respondents to evaluate Experimental Research: A type of conclusive and quantitative research that systematically manipulates one or more variables to determine which variables have a causal effect on another variable Biometric Data: Digital scanning of the physiological or behavioral characteristics of individuals as a means of identification QUIZ-YOURSELF QUESTIONS

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Q: Wal-Mart is known for its efficient logistical systems. Every time consumers buy something, that purchase is recorded and sent to company headquarters, where it is used to generate reorders to vendors. In addition, customers’ billions of purchases are analyzed using data mining techniques to uncover ___________________. A: Patterns of consumers’ purchasing behavior Q: Just as marketers create value by meeting needs and wants of consumers, marketing researchers create value if _______________. A: The results will be used in making management decisions THE MARKETKING RESEARCH PROCESS o Why Marketers Find Research Valuable  Helps reduce some uncertainty under which they currently operate  Provides a crucial link between firms and their environments, which enables them to be customer oriented because they build strategies by using customer input and feedback  By constantly monitoring competitors, firms can anticipate and respond quickly to competitive moves o Factors Managers Consider Before a Marketing Research Project  Will the research be useful and provide insights beyond current knowledge?  Is top management committed to the project and willing to abide by the results?  Will the research be valuable/worth it?  Should the project be small or large? o Five Steps of Marketing Research Process  1. Defining the objectives and research needs  Designing the research  Collecting the data  Analyzing the data and developing insights  Developing and implementing an action plan o Step 1: Defining the Objectives and Research Needs  Important to establish in advance exactly what problem needs to be solved  Because research is expensive and time consuming  Researchers assess the value of a project through comparison of benefits vs. costs o Step 2: Designing the Research  Researchers identify the type of data needed and determine the research necessary to collect them  Design might begin with available data but then researchers can start to ask specific questions o Step 3: Collecting the Data  Can be collected from secondary or primary sources

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Secondary Data: Pieces of information that have been collected prior to the start of the focal research project  Include both external and internal data sources  Primary Data: Data collected to address specific research needs  Common collection methods include focus groups, interviews and surveys  Researchers must choose a sample because they cannot observe everybody o Step 4: Analyzing the Data and Developing Insights  Should be thorough and methodical  Researchers analyze and make use of the collected data  Turn data into information o Step 5: Developing and Implementing an Action Plan  Analyst prepares the results and presents them to the appropriate decision makers  Includes an executive summary, the body of the report (which discusses the research objectives, methodology used, and detailed findings), conclusions, limitations, and appropriate supplemental tables, figures and appendixes 

SECONDARY DATA o Secondary Data  May come from free or inexpensive external sources  E.g. census data, information from trade associations, reports in magazines  Readily accessible  May not be specific or timely enough to solve marketers’ research needs/objectives  Can be purchased from specialized firms  Can be accessed through internal sources  E.g. company’s sales invoices, customer lists, other company reports o Inexpensive External Secondary Data  E.g. The U.S. Bureau of the Census (census.gov)  Provides data about businesses by county and zip code  Often not adequate to meet researchers’ needs  May not be completely relevant or timely o Syndicated External Secondary Data  Available for a fee from commercial research firms  E.g. IRI, Nielsen, and the National Purchase Diary Panel  Gathered from scanner data, consumer panels, and other cutting-edge methods  Scanner Data  Used in quantitative research obtained from scanner readings of Universal Product Code (UPC) labels at checkout counters  Focuses on weekly consumption of a particular product at a given unit of analysis  Panel Data  Information collected from a group of consumers, organized into panels, over time

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Often include records of what the panelists have purchased as well as their responses to survey questions that the client gives to the panel firm to ask the panelists  Focuses on the total weekly consumption by a particular person or household  Provide firms with a comprehensive picture of what consumers are buying or not buying  Key difference between scanner and panel is how the data are aggregated o Internal Secondary Data  Customer information and purchase history  Hard to make sense of the millions or billions of pieces of individual data stored in large computer files called data warehouses  Need to use data mining techniques to extract valuable information  Data Mining uses a variety of statistical analysis tools to uncover previously unknown patterns in the data or relationships among variables  Helps reduce churn levels: the number of participants who discontinue the use of a service, divided by the average number of total participants  Company can focus on what it does best  Can determine Customer Lifetime Value (CLV)  Big Data  The field of marketing research has seen enormous changes because of:  The increase in the amounts of data to which firms have access  Their ability to collect these data from transactions, CRM systems, websites, and social media platforms that firms increasingly use to engage with their customers  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 using analytic dashboards 

PRIMARY DATA COLLECTION TECHNIQUES o Qualitative Research  Used to understand the phenomenon of interest through broad, open-ended responses  Provides initial information that helps the research more clearly formulate research objectives  More informal than quantitative  Includes observations, following social media sites, interviews, and focus groups o Quantitative Research  Structured responses that can be statistically tested  Provides information needed to confirm insights and hypotheses generated via qualitative research or secondary data  Includes formal studies such as specific experiments, scanner and panel data, or some combination of these o Observation

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Entails examining purchase and consumption behavior Through personal or video camera scrutiny or tracking consumer movements electronically as they move through a store  Can examine how people shop, what people use, how people move through a store, what people pick up, how long people stand in front of a particular shelf, etc.  Can help study success of layout and merchandise placement  Best method for determining how consumers might use a product  Useful for designing and marketing it Social Media  A booming source of data for marketers  Companies can monitor, gather and mine social media data  Can learn a lot about customers’ likes, dislikes and preferences  Blogs  Sources for online reviews  Social Media Searches  Data gathered undergoes careful analyses  Sentiment Mining: Firms collect comments about companies and their products on social media sites  Data are analyzed to distill customer attitudes toward and preferences for products and advertising campaigns  Provides insight about what consumers really think In-Depth Interviews  Trained researchers ask questions and list 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  Can communicate how people really feel  Results can be used to develop surveys Focus Group Interviews  A small group of persons (usually 8 to 12) come together for an intensive discussion about a particular topic  Using an unstructured method of inquiry, a trained moderator guides the conversation, according to a predetermined, general outline of topics of interest  Gather qualitative data about:  Initial reactions to a new or existing product or service  Opinions about different competitive offerings  Reactions to marketing stimuli  E.g. a new ad campaign or point-of-purchase display materials Survey Research  A systematic means of collecting information from people using a questionnaire  Questionnaire: A document that features a set of questions designed to gather information from respondents and thereby accomplish the researchers’ objectives  

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Unstructured Questions: Open-ended; answer in your own words Structured Questions: Closed-ended; a discrete set of response alternatives or specific answers is provided for respondents to evaluate  Questions must be carefully designed  Cannot be misleading  Must address only one issue at a time  Must have familiar, comfortable vocabulary  General questions first, specific next, demographic last  Must be professional and easy to follow with instructions where necessary  Most popular  Response rates for surveys  30-35% for online surveys  10-15% for phone  1-2% for mail  Survey response rates are higher in B2B research  And inexpensive  Survey costs will continue to fall as users become more familiar with the online survey process  Results are processed and received quickly  Reports and summaries can be developed in real time and delivered directly to managers in simple, easy-to-digest reports, complete with color, graphics and charts  Phone or mail surveys require laborious data collection, tabulation, summary and distribution before anyone can grasp their results o Panel-Based and Scanner-Based Research  Can be either secondary or primary  As discussed before o Experimental Research  AKA an experiment  A type of research that systematically manipulates o Advantages and Disadvantages or Primary and Secondary Research: PASTE  

THE ETHICS OF USING CUSTOMER INFORMATION o Three Guidelines for Conducting Marketing Research (AMA):  Prohibits selling or fun-raising under the guise of conducting research  Supports maintaining research integrity by avoiding misinterpretation or the omission of pertinent research data  Encourages the fair treatment of clients and suppliers o Protecting Privacy

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Center for Democracy & Technology (CDT) and the Electronic Privacy Information Center (EPIC) are watchdogs over data mining of consumer information  Governments play a part as well  Companies are required to disclose their privacy practices to customers annually Biometric Data: One or more physical traits such as facial characteristics, iris scans, or fingerprints Neuromarketing: The ability to “read consumers’ minds” using wireless EEG scanners that measure the involuntary brain waves that occur when they view a product, advertisement or brand images...