Chapter 1

Introduction and Early Phases of Marketing Research

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Chapter Outline
1) Overview 2) Definition of Marketing Research 3) A Classification of Marketing Research 4) Marketing Research Process

5) The Role of Marketing Research in Marketing Decision Making

6) Marketing Research and Competitive Intelligence 7) The Decision to Conduct Research
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Chapter Outline
8) Marketing Research Suppliers and Services

9)

Selecting a Research Supplier

10) Careers in Marketing Research 11) The Role of Marketing Research in MIS and DSS 12) The Department Store Project 13) International Marketing Research

14) Ethics in Marketing Research

15) Summary

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Redefining Marketing Research

The American Marketing Association (AMA) redefined Marketing Research as:

The function that links the consumer, the customer, and public to the marketer
through INFORMATION

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Redefining Marketing Research Used to identify and define market opportunities and problems

Generate, refine, and evaluate marketing performance Monitor marketing performance

Improve understanding of marketing as a process
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Definition of Marketing Research

Marketing research is the systematic and objective

identification
collection analysis dissemination and use of information

For the purpose of improving decision making related to the

identification and solution of problems and opportunities in marketing
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Market Research

Specifies the information necessary to address these issues Manages and implements the data collection process Analyzes the results Communicates the findings and their implications Helps managers use this information to make decisions
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Classification of Marketing Research

Problem-Identification Research Research undertaken to help identify problems which are not necessarily apparent on the surface and yet exist or are likely to arise in the future. Examples: market potential, market share, image, market characteristics, sales analysis, forecasting, and trends research. Problem-Solving Research Research undertaken to help solve specific marketing problems. Examples: segmentation, product, pricing, promotion, and distribution research.
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A Classification of Marketing Research

Fig. 1.1

Marketing Research

Problem Identification Research

Market Potential Research Market Share Research Market Characteristics Research Sales Analysis Research Forecasting Research Business Trends Research
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Problem-Solving Research Segmentation Research Product Research Pricing Research Promotion Research Distribution Research
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Problem-Solving Research
Table 1.1 SEGMENTATION RESEARCH Determine the basis of segmentation Establish market potential and responsiveness for various segments Select target markets Create lifestyle profiles: demography, media, and product image characteristics PRODUCT RESEARCH

Test concept
Determine optimal product design Package tests Product modification Brand positioning and repositioning Test marketing Control score tests

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Problem-Solving Research
Table 1.1 cont.

PROMOTIONAL RESEARCH
Optimal promotional budget Sales promotion relationship Optimal promotional mix Copy decisions Media decisions Creative advertising testing

0.00%

APR

PRICING RESEARCH

Evaluation of advertising effectiveness

Claim substantiation

Pricing policies
Product line pricing

Importance of price in brand selection

Price elasticity of demand

Initiating and responding to price changes
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$ALE
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Problem-Solving Research
Table 1.1 cont. DISTRIBUTION RESEARCH

Determine
Types of distribution Attitudes of channel members Intensity of wholesale & resale coverage Channel margins Location of retail and wholesale outlets

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Marketing Research Process

Step 1 Step 2 Step 3 Step 4 Step 5 Step 6

: Problem Definition : Development of an Approach to the Problem : Research Design Formulation : Fieldwork or Data Collection : Data Preparation and Analysis : Report Preparation and Presentation

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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

Step 6: Preparing and Presenting the Report

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The Role of Marketing Research

Fig. 1.2
Customer Groups Consumers Employees Shareholders Suppliers

Controllable Marketing Variables Product Pricing Promotion Distribution

Uncontrollable Environmental Factors

Marketing Research

Economy Technology
Laws & Regulations

Assessing Information Needs

Providing Information

Marketing Decision Making

Social & Cultural Factors Political Factors

Marketing Managers Market Segmentation Target Market Selection Marketing Programs Performance & Control
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Power Decisions Methodology

Fig. 1.3
Opportunity scan

Solve Problem

Option generation
Refine options Decision

Client Needs

Find
Achieve Goal

Seek

Plan

Act

How We Help

Research Evaluate Clarify Decisions Analysis Interpret Facilitate

Recommend

Advise Market Assist Plan Research Execution

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Marketing Research Suppliers & Services

Fig. 1.4

INTERNAL

RESEARCH SUPPLIERS

EXTERNAL

FULL SERVICE
Syndicate Services Standardized Services Internet Services

LIMITED SERVICE
Field Services Focus Groups and Qualitative Services Other Services Technical and Analytical Services
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Customized Services

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Table 1.2
U.S. 2007 1 Rank 2006 1

Top 50 U.S. Marketing Research Firms

Organization Headquarters Website U.S. Global Non-U.S. The Nielsen Co. New York nielsen.com $2,173.0 $4,220.0 48.5%

2
3 4 5 6 7 8 9 10 11

2
3 5 4 6 7 8 9 10 11

IMS Health Inc.

Kantar Group* Westat Inc. IRI TNS U.S. Arbitron Inc. GfK AG USA Ipsos Synovate Maritz Research

Norwalk, Conn.
Fairfield, Conn. Rockville, MD Chicago New York New York Nuremberg, Germany New York London Fenton, Mo. Westlake Village, Calif. Rochester, N.Y. Port Washington, N.Y. Omaha, Neb. Princeton, N.J.

imshealth.com
kantargroup.com westat.com infores.com tnsglobal.com arbitron.com gfk.com ipsos-na.com synovate.com maritzresearch.com

801.0
526.8 467.8 441.0 379.8 338.5 319.7 281.2 250.4 187.4

2,192.6
1,551.4 467.8 702.0 2,137.2 352.1 1,603.00 1,270.30 867.0 223.3

63.5
66.0 37.2 82.2 3.9 80.1 77.9 71.1 16.1

12
13 14 15

13
12 14 15

J.D. Power and Associates*

Harris Interactive Inc. The NPD Group Inc. Opinion Research/ Guideline Group Opinion Research Corp.

jdpower.com
harrisinteractive.com npd.com infousa.com opinionresearch.com

184.5
161.0 160.4 124.7 97.5

260.5
227.0 211.1 206.7 179.5

29.2
29.1 24.0 39.7 45.7

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Table 1.2 Top

U.S. Rank 2007 2006 38 16 17 18 20 20 37 18 19 17

50 U.S. Marketing Research Firms (Cont)

Headquarters Website U.S. Global Non-U.S. New York Reston, Va. Livonia, Mich. Livonia, Mich. Little Rock, Ark. Los Angeles Cambridge, Mass. guideline.com comscore.com marketstrategies.com markestrategies.com fw-mi.com Irwonline.com abtassociates.com 26.8 77.0 75.7 53.4 22.3 71.0 55.1 26.8 87.2 80.4 58.1 22.3 87.4 55.1 11.7 5.8 8.1 18.8 6.8 11.5 9.7 4.0

Organization

Guideline Inc. comScore Inc. Market Strategies Inc. Market Strategies Inc. Flake-Wilkerson Market Insights Lieberman Research Worldwide Abt Associates Inc.

19 41 20 21 22 23 23 25 26 23 21 22 26 25 24 40

Abt Associates Inc. Abt SRBI Inc. OTX Burke Inc. MVL Group Inc. Knowledge Networks Inc. National Research Corp. Directions Research Inc. Phoenix Marketing International

Cambridge, Mass. New York Los Angeles Cincinnati Jupiter, Fla. Menlo Park, Calif. Lincoln, Neb. Cincinnati Rhineback, N.Y.

abtassociates.com srbi.com otxresearch.com burke.com mvlgroup.com knowledgenetworks.com nationalresearch.com directionsresearch.com phoenixmi.com

33.0 22.1 50.8 47.0 42.3 37.3 37.3 37.2 33.5

33.0 22.1 54.5 53.1 42.3 37.3 41.3 37.2 34.9

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Table 1.2 Top

U.S. Rank 2007 2006 27 34

50 U.S. Marketing Research Firms (Cont)

Headquarters Website U.S. Global Non-U.S. Great Neck, N.Y. liebermanresearch.com 30.1 30.1

Organization

Lieberman Research Group ICR/Int'l Communications Research

28

27

Media, Pa. Farmington Hills, Mich. Los Angeles New York Chicago Calabasas, Calif. Philadelphia Kansas City, Mo. Milwaukee New York Indianapolis Syracuse, N.Y. Winston-Salem, N.C. Cincinnati Alexandra, Va.

icrsurvey.com

28.8

29.7

3.0

29 30 31 32 33 34 35 36 37 38 39 40 41 42

28 33 36 39 32 31 44 34 42 43 47 46 28

Morpace Inc. MarketCast Data Development Worldwide C&R Research Services Inc. Informa Research Services Inc. National Analysts Worldwide Service Management Group Market Probe Inc. Hitwise Walker Information KS&R Inc. Bellomy Research Inc. MarketVision Research Inc. Public Opinion Strategies

morpace.com marketcastonline.com datadw.com crresearch.com informars.com nationalanalysts.com servicemanagement.com marketprobe.com hitwise.com walkerinfo.com ksrinc.com bellomyresearch.com marketvisionresearch.com pos.org

28.7 25.1 25.0 23.6 23.5 23.3 22.4 21.7 21.6 21.2 17.1 16.7 16.4 15.5

33.2 25.1 25.3 23.6 23.5 23.3 23.0 41.4 49.9 25.5 21.0 16.7 16.4 15.5

13.6

1.2 2.6 47.6 56.7 16.9 18.6

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Table 1.2 Top

U.S. Rank Organization 2007 2006 43 44 45 46 47 48 49 45 48 49 50 Compete Inc.

50 U.S. Marketing Research Firms (Cont)

Headquarters Website U.S. Global Non-U.S. Boston Dallas Bloomfield Hills, Mich. Auburn Hills, Mich. Old Bridge, N.J. Charleston, S.C. Stamford, Conn. compete.com savitzresearch.com rdagroup.com gongos.com whoisq.com marketinganalysts.com rtiresearch.com 14.9 14.8 13.7 13.3 13.0 12.8 12.2 14.9 14.8 16.8 13.3 13.2 13.6 12.2 18.5 1.5 5.9

Savitz Research Companies RDA Group Inc. Gongos Research Inc. Q Research Solutions Inc. Marketing Analysts Inc. RTi Market Research & Brand Strategy

50

The Link Group

Atlanta

the-link-group.com

11.9

13.3

10.5

Total All other (150 CASRO companies not included in the Top 50)

$7.828.7

$17,638.0

55.6%

$774.3

$870.1

11.0%

Total (200 companies)

$8,603.0

$18,508.1

53.5%

*Estimated by Top 50.

U.S. and worldwide revenue may include nonresearch activities for some companies that are significantly higher. Rate of growth from year to year has been adjusted so as not to include revenue gains or losses from acquisitions or divestitures. Total revenue of 150 survey research companies that provide financial information on a confidential basis to CASRO.

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Selected Marketing Research Career Descriptions

Fig. 1.5
Vice President of Marketing Research: The senior position in marketing research. The vice president (VP) is responsible for the entire marketing research operation of the company and serves on the top management team. This person sets the objectives and goals of the marketing research department. Research Director: Also a senior position. The research director has the general responsibility for the development and execution of all the marketing research projects. Assistant Director of Research: Serves as an administrative assistant to the director and supervises some of the other marketing research staff members. (Senior) Project Manager: Has overall responsibility for design, implementation, and management of research projects. Statistician/Data Processing Specialist: Serves as an expert on theory and application of statistical techniques. Responsibilities include experimental design, data processing, and analysis.
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Selected Marketing Research Career Descriptions

Fig. 1.5 cont.
Vice President of Marketing Research
Part of companys top management team Directs companys entire market

Research Director
Also part of senior management Heads the development and execution of all research projects

research operation
Sets the goals & objectives of the marketing research department

Assistant Director of Research

Administrative assistant to director Supervises research staff members

Senior Project Manager

Responsible for design, implementation, & research projects
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Selected Marketing Research Career Descriptions

Fig. 1.5 cont. Senior Analyst
Participates in the development of projects Carries out execution of assigned projects Coordinates the efforts of analyst, junior analyst, & other personnel in the development of research design and data collection Prepares final report

Analyst

Handles details in execution of project Designs & pretests questionnaires Conducts preliminary analysis of data

Statistician/Data Processing

Serves as expert on theory and application on statistical techniques Oversees experimental design, data processing, and analysis

Junior Analyst

Secondary data analysis Edits and codes questionnaires Conducts preliminary analysis of data
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Fieldwork Director

Handles selection, training, supervision, and evaluation of interviewers and field workers
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Marketing Research Suppliers & Services

Internal suppliers External suppliers Full-service suppliers Syndicated services Standardized services Customized services Internet services Limited-service suppliers Field services Focus groups and qualitative services Technical and analytical services Other services
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Criteria for Selecting a Research Supplier

What is the reputation of the supplier? Do they complete projects on schedule? Are they known for maintaining ethical standards? Are they flexible? Are their research projects of high quality? What kind and how much experience does the supplier have? Has the firm had experience with projects similar to this one? Do the supplier's personnel have both technical and non-technical expertise? Can they communicate well with the client? Competitive bids should be compared on the basis of quality as well as price.
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Careers in Marketing Research

Career opportunities are available with marketing research firms (e.g., AC Nielsen, Burke)

Careers in business and non-business firms and agencies with in-house marketing research departments (e.g., Procter & Gamble, Coca-Cola, the Federal Trade Commission, United States Census Bureau)
Advertising agencies (e.g., BBDO International, Ogilvy & Mather, J. Walter Thompson) Positions: VP of marketing research, research director/assistant director, project manager, field work director, statistician/data processing specialist, senior/junior analyst, and supervisor

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A Sample of Marketing Research Jobs

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Preparation for a Career in Marketing Research

Take all the marketing courses you can.

Take courses in statistics and quantitative methods.

Acquire Internet and computer skills. Knowledge of programming languages is an added asset.

Take courses in psychology and consumer behavior.

Acquire effective written and verbal communication skills. Think creatively. Creativity and common sense command a premium in marketing research.

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Management Information Systems Vs. Decision Support Systems

Fig. 1.6

MIS
Structured Problems Use of Reports Rigid Structure Information Displaying Restricted Can Improve Decision Making by Clarifying Data
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DSS

Unstructured Problems
Use of Models User Friendly Interaction

Adaptability
Can Improve Decision Making by Using What if

Analysis
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The Department Store Project

The following information was solicited:

1. Familiarity with the ten department stores
2. Frequency with which household members shopped at each of the ten stores 3. Relative importance attached to each of the eight factors of the choice criteria 4. Evaluation of the ten stores on each of the eight factors of the choice criteria 5. Preference ratings for each store 6. Rankings of the ten stores (from most preferred to least preferred) 7. Degree of agreement with 21 lifestyle statements 8. Standard demographic characteristics (age, education, etc.) 9. Name, address, and telephone number
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Marketing Research Associations Online

Domestic
AAPOR : American Association for Public Opinion Research (www.aapor.org) AMA ARF : American Marketing Association (www.ama.org) : The Advertising Research Foundation (www.amic.com/arf)

CASRO : The Council of American Survey Research Organizations (www.casro.org) MRA QRCA RIC : Marketing Research Association (www.mra-net.org) : Qualitative Research Consultants Association (www.qrca.org) : Research Industry Coalition (www.researchindustry.org)
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Marketing Research Associations Online

International ESOMAR: European Society for Opinion and Marketing Research (www.esomar.nl) MRS: MRSA: The Market Research Society (UK) (www.marketresearch.org.uk) The Market Research Society of Australia (www.mrsa.com.au)

PMRS:

The Professional Marketing Research Society (Canada) (www.pmrs-aprm.com)

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Overview of Ethical Issues in Marketing Research Table 1.3 I II Problem definition Using surveys as a guise for selling or fundraising Personal agendas of the researcher or client Conducting unnecessary research Developing an approach Using findings and models developed for specific clients or projects for other projects Soliciting proposals to gain research expertise without pay Inaccurate reporting
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Overview of Ethical Issues in Marketing Research (Cont.)

Table 1.3 cont.

III
-

Research Design
Formulating a research design more suited to the researcher's rather than the client's needs Using secondary data that are not applicable or have been gathered through questionable means Disguising the purpose of the research Soliciting unfair concessions from the researcher Not maintaining anonymity of respondents Disrespecting privacy of respondents Misleading respondents Disguising observation of respondents Embarrassing or putting stress on respondents Using measurement scales of questionable reliability & validity Designing overly long/sensitive questionnaires Using inappropriate sampling procedures and sample size
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Overview of Ethical Issues in Marketing Research

Table 1.3 cont.

IV
-

Field Work
Increasing discomfort level of respondents Following unacceptable field work procedures

V
-

Data Preparation and Analysis

Identifying and discarding unsatisfactory respondents Using statistical techniques when the underlying assumptions are violated Interpreting the results and making incorrect conclusions and recommendations

VI
-

Report Preparation and Presentation

Incomplete reporting Biased reporting Inaccurate reporting

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