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Marketing Research lecture notes

03/04/2015

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What is Marketing Research?  Marketing research is the systematic and objective o Identification, o Collection, o Analysis, o Dissemination, and use of information.

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It is for the purpose of improving decision making related to:  Identification and  Solution of problems and opportunities in marketing.

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Marketing Research : Problem-Identification Research (Market potentials, Market 

share, sales analysis, trends) Problem-Solving Research (segmentation, product, pricing, promotion, distribution)

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The Marketing Research Process  Step 1 : Defining the problem  Step 2 : Developing an approach to the problem  Step 3 : Formulating a research design  Step 4 : Doing Field work or collecting data  Step 5 : Preparing and analyzing data

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Step 6 : Preparing and presenting the report

Its important to distinguish between management decision

problems (MDP) and marketing research problems (MRP)   Define MRP :  what marketing managers used to know and how the information    

is obtained. (Information oriented) Broad statement Specific components Hypothesis Problem definition and approach to the problem

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Difference between MRP & MDP

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Management needs to make a decision about something (a

problem) for example in the . "Should we launch a new product?" "would it be profitable" and "bring in new customers". Research Problem is the information that the market research needs to provide in order to solve the problem. Sometimes known as the objectives. So it might be to find out - the appeal of the product, who does it appeal to? What price would they feel that it is good value for money. The research would feed this information back to management and management could then work out if the potential take up and price would ensure profitability. And thus answer their original management problem, should we launch the product  

Formulating a research design

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Exploratory research design – Secondary data, Primary data Conclusive research design – Descriptive research, Causal research

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Collecting Data       

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Mail surveys Database Internet surveys Personal interviews Phone interviews Observation Sample

Data Analysis Data + Analysis + Insights Insights mean what we have learned from the analysis Recommendations can be findings be put into actions, if so how?, is

more research needed?   Preparing and presenting the report   It is important to have a close collaboration between researcher  

and corporate decision maker. Work out precise and specific objectives of the research It is important to write well

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Ethics Clients ethics :  overt and covert purposes  dishonesty in dealing with suppliers  misuse of research information

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Suppliers ethics :  Violating clients confidentiality  Improper execution of the research

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Respondents ethics and rights :  Privacy and safety  Know the true purpose of the research  Know the research results  Decide which questions to answer

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Because research can be expensive its it important that it becomes

valuable. Therefore before embarking on a research project we need to carefully evaluate costs and benefits.

Planning for Research 

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Defining the problem: Problem faced by managers and turning it into a well-defined, well articulated and solvable problem for marketing.

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MDP -------------- MRP -------- Research questions,

hypothesis  

Characteristics of MDP:  What the decision maker needs to do  Action oriented  Focuses on symptoms  Vague 

Not clear how to solve

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MRP structure:  Overarching (central) statement – broad summary of research  

goal Specific component – provide clear guidance on proceedings When, Where, Who, Why, What research on problem areas

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Scientific and measurable

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Characteristics of the MRP:  What information is needed and how it should be obtained.  Information oriented

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Focuses on underlying causes

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Clearly defined and articulated

Deriving MRP from MDP  Gathering information and understand problem situation.  Synthesizing the information gathered and recognizing the key 

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factors. Trial and error

How to arrive at the MRP  Key recognition  Conceptual – product attitudes and customer needs  Systematic approach – product attribute and customer needs Answering to your MRP it should provide a solution to the MDP to

become a well defined MRP.   Develop an approach to the problem  Research questions  Hypothesis   

Specifications on information

Research questions (RQs) are refined statements of the specific

components of the problem.

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Hypothesis (H): is an unproven statement or proposition about a

factor that is of interest to the researcher. What is research design:  Plan to guide the implementation of a research study.  Details the procedures necessary for obtaining the information needed to structure or solve marketing problems.  

Research Design  Exploratory research design: o Secondary data o Qualitative research:- Focus groups, In-depth interviews 

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& projective techniques Conclusive research design: o Descriptive research – characteristic or functions o Causal research – cause and effect

Types of data:  Secondary  Primary

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(Always start from secondary data)

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Quantitative: variables allocating a number to represent attitudes,

Qualitative data: narrative, describes attitudes, opinions

opinions.

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Task involved in formulating a research design:  Define the information needed.  Design exploratory/descriptive/or causal phases.  Specify the measurements  Construct and pretest questionnaires  

Specify the sampling process Develop a plan of data analysis

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What is a research proposal: a written document that contains the

essence of the research project and serves as contract between researcher and management.  

Structure if a marketing research proposal  Executive summary  Research problem  Research approach  Research design  

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Reporting, costs & timing Appendix

Secondary Data 

Marketing research data:

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Primary data

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Secondary data

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What is secondary data?  Data which has already been collected for purposes other than the problem at hand.

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What is primary data?  Which is originated by a researcher for the specific purpose of addressing the problem at hand.

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Its important on the step of formulating a research design.

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Few secondary data:  Company internal data  Government census  Industry statistics

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Marketing research organizations Books Academic journals

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Blogs

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Secondary data can be found useful under exploratory research for

descriptive research and causal research.   Why use secondary data?  

Readily available Cheap

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Provide useful info, insight Possibility of solving problems without collecting any primary data.

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Main drawbacks of using secondary data:  Prior data manipulation  Data relevancy o Time period o Unit of measure 

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Data accuracy (Credibility)

Comparison between primary and secondary data:

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Collecting purposes  Primary data for the problem at hand  For other problems

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Collection process  PD very involved

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SD rapid and easy

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Collection cost  PD cost high  SD relatively low

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Collection time  PD takes a Long  SD takes a Short

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Types of Secondary Data:  Existing literature  Company internal data  

Government data Syndicated data

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In order for existing literature to help you with research you should

provide historical background and reveal existing information.  

Clarify and define the research problem and research questions.

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Suggest research hypothesis to investigate.

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Types of existing literature:

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Marketing research studies on similar topics

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Books Academic journal articles Newspapers

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Blogs

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Online sources for existing literature:  Electronic searches  Scholarly searches o Peer-reviewed scholarly articles (Google scholar)

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Company internal data:  Sales invoices  Customer data  Product data 

Sales reports

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Advantages of internal data:  Easily available  Inexpensive 

Known quality

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Application of internal data: Database marketing  Database marketing :- Involves the use of computers to capture 

and track customer profiles and purchase details Analytical and Modeling:o Behavioral segmentation o Modeling and prediction of churn

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Government data:  Australian bureau of statistics is the source for many key demographics and economic indicators. o Population o Census Data o Consumer price index

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Advantages of government data:  Generally reliable  Easy access  Purpose and method of data collection is well documented and publically available

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Syndicated services  Companies that collect and sell common pods of data of known commercial value designed to serve a number of clients. o TV program ratings

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Syndicated sources can be classified based on the unit of measurement. o Electronic scanner services

Syndicated service providers:  ACNielsen  Roy Morgan search  TNS   

BIS Shrapnel

Households provide specific information regularly over an extended

period of time, and respondents asked to record specific behaviors.   Sales at electronic checkout counters, aggregate by brand, size and price and brands in spending are collected using volume tracking using scanner data.   Big Data:

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Volume is large its 2.5 Exabyte per day Velocity is real time information processing

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Variety is tracking, user generated, GPS.

Benefits of Big data:  Cold hard facts  Linking different sources of data  Predictions  Real time prediction Big data application – E.g.  Google provided data on how often a particular search term is entered relative to the total search volume.

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Qualitative & Descriptive Research Methods 03/04/2015 

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Qualitative research methods: E.g. Gillett razor for women:  MDP – How to create a new generation of razors for women  Exploratory research – qualitative research (depth interview) What is Qual?  An unstructured, exploratory research methodology based on small samples that provide insights and understanding of the problem setting.

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Classification of Research procedures:  Direct o Focus groups o Depth interviews

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Indirect o Projective techniques  Association   

Completion Construction Expressive

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When to use Qual?  When insight is more important than accurate description.  Complexity of subject matter Qualitative Vs. Quantitative research: Qualitative:  Gain understanding of the underlying situation.  Small number of representatives  Unstructured  

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Quantitative:  Quantify the data and generalize the results  Large number of representatives  Structured  

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Non-statistical Develop an initial understanding

Statistical Recommend a final course of action

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Focus Groups:  Definition – non structured interview of a small group of 

respondents by a trained moderator. Most popular form of qualitative research

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Rationale – probing, unstructured discussion, ability to observe Format – 8 to 10 individuals

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Moderator – Facilitator Duration – 1 to 2 hrs long Tools - Product, product concepts, ad copy and questionnaires.

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Client report – Moderator subjective assessment & video with

transcript of discussion   Procedures for conducting a focus group:  Design the focus group environment  

Recruit and select focus group participants Select a moderator

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Prepare the discussion guide Conduct the group interview

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Prepare the focus group report

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Pros and Cons on focus groups

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Pros:

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Good for getting in depth information

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One persons experiences or feelings Highlight difference between consumers Allows for spontaneity

Cons:  Results cannot be quantified  Not representative  

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Depth interviews:  Rationale – Aims at gaining insights  Format – One on One  

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Difficulty in getting attendees Minority view points may not be heard

Duration – 30+ minutes Tools – Interview guide, tape interview

Pros:  Can uncover deep insights  Results in a free exchange of information

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When the topic is complex its possible to get at real issues.

Cons:  Skilled interviews are expensive  Data obtained are difficult to analyze and interpret  High costs limits the number of depth interviews

Projective Techniques:  Definition – Indirect techniques that encourages respondents to 

project Rationale – Certain issues are not amendable to direct

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questioning. Format – Projective techniques Tools – Visual props, open ended questionnaires

 Association Technique:  Subject is presented with a list of words, one at a time, and asked to respond with the first word that comes in to mind. Responses are analyzed by calculating responses. Sentence completion:  Respondents are required to complete a number of partial sentences with the first word that comes into their mind. 

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Construction techniques:  Projective technique in which the respondent is required to construct a response in the form of a story.

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Expressive technique:  Respondent is asked why a third party would behave in a certain way or what they think about a product.

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Projective technique Pros & Cons: Pros:  Mask the real purpose of the study  Good in addressing personal, sensitive issues.  Capturing what is going on at subconscious level

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Cons:  Requires highly skilled interviewers  Skilled interpreters are also required to analyze the responses  Serious risk of interpretation bias  

Tend to be expensive Engage in unusual behavior

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Warning about qualitative research:  Cannot take place of conclusive

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Can lead to incorrect decisions

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Most techniques use small samples that may not be representative

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Descriptive research methods  Surveys  Observation Rationale – Enable quantification of opinions, preferences by a

medium.  Format – Scaled questions, open ended questions  Timeframe – On-going Vs. One shot  Tools – Mail, telephone, personal interview, email  

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Classification of Survey methods  Telephone – traditional or computer assisted.  Personal – in-home  Mail – fax, post  Electronic – email, internet Advantages of Survey research  Ease  Reliability

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Simplicity

Disadvantage of Survey research  Respondents may be unable or unwilling to provide the desired 

information Structured data collection involving questionnaires with a fixed

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response choices may result in loss of validity for certain types of data. Properly wording questions is not easy

Observation Research  Respondents may not give “truthful” answers, useful supplements to other techniques. E.g. – Supermarket scanner data, people meter, eye tracking

Pros:

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Measure actual behavior rather than intended or preferred

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behavior There is no reporting bias Certain types of data can be collected only by observation

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Sometimes can be Cheaper and faster

Cons:  Selective perception  In some cases the use of observational methods may be 

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unethical Often time consuming and expensive

Questionnaire Design and Sampling Plan 03/04/2015 

When to use descriptive research?

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Answering specific questions concerning who, what, when,

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where, why and how about the target population. Identify relationships between the marketing variables.

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Survey is the most common method for descriptive research.

Survey is a quantitative research method: Characteristics of a survey:  Formalized questions  Pre-determined response options  Employed to measure and quantify people’s thoughts, feelings 

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and behavior. Administered to a large number of responses.

Variables Vs. Constructs  Variable is an observable, measureable attribute of an object. o E.g. Income, education, gender

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Construct is an unobservable, abstract concept that is measured indirectly by a group of related variables. o E.g. Service quality, customer satisfaction, brand loyalty.

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Why should we care about variables/constructs?

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E.g. Is the country of origin important for customers’ evaluation of cars. Variable “Country of Origin”

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Relevance to hypothesis development is statements are about

variables and relationships.   

Hypothesis are based on prior or expert knowledge. Must be testable with data.

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Questionnaire design:  Definition – is a formalized set of questions for obtaining information from respondents.

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Questionnaire Design Process:  Specify the information needed  Specify the type of interviewing method ...