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ADM 2320 Chapter 7 Study online at quizlet.com/_7604m0 1.

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 idea - a key prerequisite to successful decision making - When marketing managers attempt to develop their strategies, marketing research can provide valuable information that will help them make segmentation, positioning, product, place, price, and promotion decision 2.

competitive intelligence (CI)

- Used by firms to collect and synthesize information about their position with respect to their rivals; enables companies to anticipate changes in the marketplace rather than merely react to them. - Firms invest millions of dollars in marketing research every year, and Canada's market research industry is valued at just under a half-billion dollars. - Some of the major players in Canada's multi-million dollar market research and polling industry include the Angus Reid Institute, COMPAS, Harris/Decima, EKOS Research Associates, Ipsos-Reid, Léger Marketing, Pollara Strategic Insights, and the Strategic Counsel. - In addition, there are foreign-owned firms with offices in Canada, such as Nielsen Canada and Forrester Research. 3.

Why do marketers find research valuable? - First, it helps reduce some of the uncertainty under which they currently operate. Successful managers know when research might help their decision making and take appropriate steps to acquire the information they need. - Second, marketing research provides a crucial link between firms and their environments, which enables firms to be customer oriented because they build their strategies by using customer input and continual feedback. - Third, by constantly monitoring their competitors, firms can anticipate and respond quickly to competitive moves. - Fourth, ongoing marketing research can identify emerging opportunities and new and improved ways of satisfying consumer needs and wants from changes in the external environment

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Customer Lifetime Value (CLV)

- The expected financial contribution from a particular customer to the firm's profits over the course of their entire relationship 5.

The marketing research process

A five-step application of the scientific method that includes: 1. Defining the objectives and research needs 2. Designing the research 3. Data collection process 4. Analyzing data and developing insights 5. Action plan and implementation 6.

Step 1: Define the Research Problem

-specify the research objectives -identify the consumer population of interest -place the problem in an environmental context - it is important to establish in advance exactly what problem needs to be solved. - Correctly defining the problem is one of the most important elements of the marketing research process.

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Testing Method

several types of tests measure various elements of human behavior such as abilities, interests, and personality 8.

Research Objectives

the goals you need to accomplish with your research

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Step 2: Design the Research Plan

- After researchers have defined the problem to be addressed, the second step is to design the market research plan. - In this step, researchers identify the type of data needed and determine the type of research necessary to collect it.

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Step 3: Collect Data

- the hypothesis will guide the chosen technique for data collection (direct observation, questionnaire, interview, psychological recordings, psychological test, etc.) - Data collection begins only after the research design process. Based on the design of the project, data can be collected from secondary or primary data sources. 11.

Primary data

Data collected to address the specific research needs/questions currently under investigation. Some primary data collection methods include focus groups, in-depth interviews, and surveys, observe consumer behaviour, experiments

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Secondary Data

Pieces of information that have been collected prior to the start of the focal project e.g. newspaper, internet, magazines, books, journal articles, reports, statistics, Nielsen, company's sales invoices, customers lists, and other reports generated by the company itself 13.

survey

A systematic means of collecting information from people using a questionnaire. 14.

Step 4: Analyzing Data and Developing Insights

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Data

Converting data into information to explain, predict and/or evaluate a particular situation. -Analyzing and interpreting the data should be both thorough and methodical. -To generate meaningful information, researchers analyze and make use of the collected data - In this context, data can be defined as raw numbers or other factual information that, on their own, have limited value to marketers. -However, when the data are interpreted, they become information, which results from organizing, analyzing, and interpreting data and putting them into a form that is useful to marketing decision makers. *step could be viewed as converting raw data to information

raw numbers or other factual information that, on their own, have limited value to marketers

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information

- data that has been organized, analyzed, interpreted, and converted into a useful form for decision makers. - For example, a checkout scanner in a grocery store collects sales data about individual consumer purchases. 17.

Step 5: Determine the Action Plan

- in the final phase in the marketing research process, the analyst prepares the results and presents them to the appropriate decision makers, who undertake appropriate marketing strategies. - A typical marketing research presentation includes an executive summary, the body of the report (which discusses the research objectives, methodology used, and detailed findings), the conclusions, the limitations, and appropriate supplemental tables, figures, and appendixes. - To be effective, written reports must be short, interesting, methodical, precise, lucid, and free of errors. - Furthermore, the reports should use a style appropriate to the audience, be devoid of technical jargon, and include recommendations that managers can actually implement.

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internal secondary data

- Data collected by the individual company for accounting purposes or marketing activity reports - Data from within the business that has been collected for purposes other than the project at hand

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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 - Some retailers try to customize their product and service offerings to match the needs of their customers. - For instance, the U.K. grocer Tesco uses its loyalty card to collect massive amounts of information about its individual customers. - Every time a loyalty card member buys something, the card is scanned, and the store captures key purchase data specific to that member. 20.

Churn

the number of consumers who stop using a product or service, divided by the average number of consumers of that product or service

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External Secondary Data

- Data collected by outside agencies such as the federal government, trade associations, or periodicals - Some sources of external secondary data can be accessed quickly and at relatively low cost. - For example, Statistics Canada data on retail trade provides information about sales of different types of retail establishments either free or inexpensively. - These patterns may be the only accurate sources available to a new small business that wants to determine the size of its potential market

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big data

- Refers to extremely large quantities of data that companies have access to but are unable to handle using conventional data management and data mining software. - Leading firms such as Amazon, Netflix, Google, Nordstrom, Tesco, American Express, and Walmart are already converting their big data into customer insights, and this list keeps growing 23.

Example of secondary data

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Reasons why market research has seen enormous changes in recent years:

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Syndicated data

(1) the increase in the amounts of data to which retailers, service providers, and manufacturers have access; (2) their ability to collect these data from transactions, customer relationship management (CRM) systems, websites, and social media platforms that firms increasingly use to engage with their customers; (3) the ease of collecting and storing these data; (4) the computing ability readily available to manipulate data in real time; (5) access to in-house or available software to convert the data into valuable decision-making insights using analytic dashboards.

Data available for a fee from commercial research firms such as Information Resources Inc. (IRI), National Purchase Diary Panel, and ACNielsen.

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scanner data

- A type of quantitative research that uses data obtained from scanner readings of UPC codes at checkout counters. - Whenever you go into your local grocery store, your purchases are rung up by using scanner systems. - The data from these purchases are likely to be acquired by leading marketing research firms, such as SymphonyIRI Group or Nielsen. - They use this information to help leading consumer packaged-goods firms (e.g., Kellogg's, Pepsi, and Kraft) assess what is happening in the marketplace. - For example, a firm can determine what happened to sales when it reduced its price by 10 percent in a given month. Did sales increase, decrease, or stay the same? 27.

panel data

- A type of quantitative research that involves collecting information from a group of consumers (the panel) over time; data collected may be from a survey or a record of purchases. - Secondary panel data thus might show that when Diet Pepsi is offered at a deep discount, 80 percent of usual Diet Coke consumers switch to Diet Pepsi. Primary panel data could give insights into what they think of each option. 28.

Advantages of Secondary Research

- Saves time in collecting data because they are readily available - Free or inexpensive (except for syndicated data) - reduces data collection costs

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Disadvantages of Secondary Research

- Information may not be precisely relevant to information needs - Information may not be as timely as needed - Sources may not be original; therefore, usefulness is an issue - Methodologies for collecting data may not be relevant or may contain bias in the subject matter 30.

Advantages of Primary Data

- Is specific to the immediate data needs and topic at hand - Offers behavioural insights generally not available from secondary research 31.

Disadvantages of Primary Data

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Qualitative Research

- Information is usually more costly to collect - Data typically takes longer to collect - It often requires more sophisticated training and experience to design and collect unbiased, valid, and reliable data

- Attempts to begin to understand the phenomenon of interest; also provides initial information when the problem lacks any clear definition. - Qualitative research is more informal than quantitative research methods and includes observation, following social media sites, in-depth interviews, focus groups, and projective techniques - Data collection through primary research requires that the researcher make several important decisions, including which methods to use, what types of sampling plans are best in light of the research objective, what types of research instruments (e.g., questionnaire, observation) to use, how the research instrument should be designed (described below), and how best to contact potential respondents (telephone, online, in person, or by mail).

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Qualitative versus quantitative data collection

- Quantitative data is designed to collect cold, hard facts. Numbers. Quantitative data is structured and statistical. It provides support when you need to draw general conclusions from your research. - Qualitative data collects information that seeks to describe a topic more than measure it. Think of impressions, opinions, and views. A qualitative survey is less structured: It seeks to delve deep into the topic at hand to gain information about people's motivations, thinking, and attitudes. 34.

Reliability

- The extent to which the same result is achieved when a study is repeated in identical situations. - For example, on a Saturday in August, you randomly stop shoppers in a mall and ask them to fill out a short questionnaire about why they shop at that particular mall. 35.

Validity

- the extent to which a study or research instrument accurately measures what it is supposed to measure - For example, suppose you want to measure consumers' trust in online retailers by using a questionnaire. - Validity seeks to determine whether the questions you asked on the questionnaire actually measure online trust or if they measure some other construct. - It is important to note that a market research study must be both reliable and valid for it to be useful. 36.

sample

- a segment or subset of the population that adequately represents the entire population of interest - For example, if you are interested in studying the loyalty of Canadian teenage boys to brand-name clothing, then your population is all Canadian teenage boys and your sample is the small subset of boys selected for your study. 37.

Questions about selecting a sample

(1) who should be surveyed, (2) how big should the sample be, (3) what types of sampling procedures should be used; for example, simple random sampling (uses a subset of a statistical population with each person having the equal probability to be selected), convenience sampling (subjects are selected on the basis of accessibility and proximity to the researcher), stratified sampling (the population is divided into smaller groups, or strata), or cluster sampling (the population is formed into separate groups, or clusters).

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Quantitative Research

- Provides the information needed to confirm preliminary insights, which managers can use to pursue appropriate courses of action. - For marketing researchers, quantitative research offers a means to confirm implicit hunches through surveys, formal studies such as specific experiments, scanner and panel data, or some combination of these. 39.

Hypothesis

- A statement or proposition predicting a particular relationship among multiple variables that can be tested through research. - The following is an example of a hypothesis: customer satisfaction leads to or is positively related to customer loyalty. 40.

Quantitative Research Methods

uses large surveys, questionnaires, secondary research, looking at large samples. Reports data primarily in numerical form.

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Qualitative Research Methods

in-depth, semi-structured modes of observing or interviewing subjects 42.

Observation

- A qualitative research method that entails examining purchase and consumption behaviours through personal or video camera scrutiny. - For example, researchers might observe customers while they shop or when they go about their daily lives, during which processes they use a variety of products. - Observation can last for a very brief period of time (e.g., two hours watching teenagers shop for clothing in the mall), or it may take days or weeks (e.g., researchers live with families to observe their use of products). 43.

Ethnography

- An observational method that studies people in their daily lives and activities in their homes, work, and communities. - It is often used to determine how consumers might use a product, and yields insights and intimate details that respondents may not be able to articulate or otherwise share. - It is increasingly being used by companies (e.g., Unilever, P&G, Miller Brewing Co.) - Ethnographic studies require highly trained researchers who often use video cameras, audio recording devices, and diaries to keep detailed records of their observations.

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Social Media

- any tool or service that uses the internet to facilitate conversations - Social media sites are a booming source of data for marketers. - Marketers have realized that social media can provide valuable information that could aid their marketing research and strategy endeavours. - In particular, contributors to social media sites rarely are shy about providing their opinions about the firm's own products or its competitors' offerings. - If companies can monitor, gather, and mine these vast social media data, they can learn a lot about their customers' likes, dislikes, and preferences. 45.

Pros of using social media

- large accessible sample= greater objectivity - people of all ages use social media= wider sample, create representation - large amount of information posted on social media sites= easier to find data related to your brand - very current feedback= high relevance - consumers freely offer opinions and insights= no interviewer bias can search for and filter data= more timely

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Cons of using social media

- not a statistically representative sample= could skew findings - feedback may not be well thought out= not useful to research problem - anonymity= could encourage extreme opinions and comments - no depth of information about consumer= cannot distinguish difference among consumers - conversations are observed only= no opportunity to probe for more detail - no consent to study data= potential ethical issues

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In-depth interviews

- A 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. - For instance, in addition to simply watching teenagers shop for apparel, interviewers might stop them one at a time in the mall to ask them a few questions, such as "We noticed that you went into and came out of Aritzia very quickly, and without buying anything. - Why was that?" If the subject responds that no one had bothered to wait on her, the interviewer might ask a follow-up question, such as "Oh? Has that happened to you before?" or "Do you expect sales assistance in that store?" - In-depth interviews can provide a historical context for the phenomenon of interest, particularly when they include industry experts or experienced consumers.

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focus group

- A research technique in which a small group of persons (usually 8 to 12) comes together for an in-depth discussion about a particular topic, with the conversation guided by a trained moderator using an unstructured method of inquiry, on the basis of a predetermined general outline of the topics of interest - Researchers usually make video or audio recordings of the interactions so that they can carefully comb through the interviews later to catch any patterns of verbal or nonverbal responses. - In particular, focus groups gather qualitative data about initial reactions to a new or existing product or service, opinions about different competitive offerings, or reactions to marketing stimuli, like a new ad campaign or poin...