Chapter 1

Introduction and Early Phases of Market Research

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Chapter Outline
1) Overview

2)
3) 4) 5)

Definition of Marketing Research

A Classification of Marketing Research Marketing Research Process The Role of Marketing Research in Marketing Decision Making

6)
7)
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Marketing Research and Competitive Intelligence

The Decision to Conduct Research
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Chapter Outline
8) 9) Marketing Research Suppliers and Services 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

0.00%

APR

Sales promotion relationship

Optimal promotional mix Copy decisions Media decisions Creative advertising testing Evaluation of advertising effectiveness Claim substantiation

PRICING RESEARCH
Pricing policies Product line pricing Price elasticity of demand

Importance of price in brand selection

$ALE
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Initiating and responding to price changes

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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

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

Step 6

: 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 Uncontrollable Environmental Factors Economy Technology Laws & Regulations Social & Cultural Factors Political Factors

Controllable Marketing Variables Product Pricing Promotion Distribution

Assessing Information Needs

Marketing Research

Providing Information

Marketing Decision Making

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

Advise Market Assist Recommend Plan Research Execution

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Organizational Chart for VNU

Fig. 1.4

Executive Board
Corporate Staff

Marketing Information
ACNielsen VNU Advisory Services BASES Claritas Spectra Market Decisions

Media Measurement & Information

Business Information

Directories
Golden Pages Gouden Gids Paginas Amarelas Paglni Auril Promedia Telkom Directory Verizon Puerto Rico

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Nielsen Media Research VNU Business Nielsen/Net Ratings Publications Nielsen Film VNU emedia & Entertainment Information Marketing Nielsen Home VNU Expositions Entertainment VNU Exhibitions Europe Nielsen Music Nielsen Book Nielsen Entertainment Intel IMS PERO/HIC Scarborough SRDS

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Marketing Research Suppliers & Services

Fig. 1.5

INTERNAL

RESEARCH SUPPLIERS

EXTERNAL

FULL SERVICE
Syndicate Services Standardized Services Internet Services Customized Services

LIMITED SERVICE
Field Services Coding and Data Entry Services Branded Products and Services Data Analysis Services
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Analytical Services

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Top 50 U.S. Marketing Research Firms

Table 1.2
U.S. Rank Organization VNU Inc. IMS Health Inc. Westat Inc. TNS U.S. Information Resources Inc. The Kantar Group Arbitron Inc. NOP World US Ipsos Synovate Harris Interactive Inc. Harris Interactive Inc. Wirthin Worldwide Maritz Research Headquarters New York Fairfield, Conn. Rockville, Md. New York Chicago Fairfield, Conn. New York New York New York Chicago Rochester, N.Y. Rochester, N.Y. McLean, Va. Fenton, Mo. Website www.vnu.com www.imshealth.com www.westat.com www.tns-global.com www.infores.com www.kantargroup.com www.arbitron.com www.nopworld.com www.Ipsos-na.com www.synovate.com www.harrisinteractive.com www.harrisinteractive.com www.harrisinteractive.com www.maritzresearch.com ($, in millions) $1,794.4 571.0 397.8 396.0 379.6 365.7* 284.7 213 193.9 193.5 154.8 116.7 38.1 136.6 ($, in millions) $3,429.2 $1,569.0 397.8 1,732.7 572.8 1,136.3* 296.6 408.5 752.8 499.3 208.9 155.4 53.5 185.8 revenue 47.7% 63.6 77.2 33.6 67.8* 4.0 47.9 74.2 61.3 25.9 24.9 28.8 26.2

2004 2003 1 1
2 3 4 5 6 7 8 9 10 11 12 2 4 5 3 6 7 8 9 10 13 20 11

13
14 15 16

12
14 16 15

J.D. Power and Associates

The NPD Group Inc. GfK Group USA Opinion Research Corp.

Westlake Village, Calif.

Port Washington, N.Y. Nuremberg, Germany Princeton, N.J.

www.jdpower.com
www.npd.com www.gfk.com www.opinionresearch.com

133.5
110.5 93.0 91.5

167.6
139.2 834.6 147.5

20.4
20.6 88.9 38.3

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Top 50 U.S. Marketing Research Firms

Table 1.2
U.S. Rank Organization Lieberman Research Worldwide Abt Associates Inc. Market Strategies Inc. Burke Inc. comScore Networks Inc. MORPACE International Inc. Knowledge Networks Inc. OTX Research Headquarters Los Angeles Cambridge, Mass. Livonia, Mich. Cincinnati Reston, Va. Website www.lrwonline.com www.abtassociates.com www.marketstrategies.com www.burke.com www.comscore.com ($, in millions) 67.2 41.5 37.9 37.1 34.9 31.1 29.8 29.8 2004 2003 17 17 18 19 20 21 22 23 23 18 21 22 30 24 25 34 77.7 41.5 39.5 43.4 34.9 34.5 29.8 29.8

(Cont)
revenue 13.5 4.1 14.5 9.9

$, in millions)

Farmington Hills, Mich. www.morpace.com Menlo Park, Calif. Los Angeles www.knowledgenetworks.com www.otxresearch.com

25
26 27 28

23
36 28 32

ICR/Int'l Communications Research Media, Pa.

Directions Research Inc. National Research Corp. Marketing Research Services Inc. Cincinnati Lincoln, Neb. Cincinnati

www.icrsurvey.com
www.directionsrsch.com www.nationalresearch.com www.mrsi.com

29.0
27.3 26.7 25.4

29.4
27.3 29.7 25.4

1.4
10.1

29
30 31 32

29
33

Lieberman Research Group

Peryam & Knoll Research Corp. National Analysts Inc. Public Opinion Strategies LLC

Great Neck, N.Y.

Chicago Philadelphia Alexandria, VA

www.liebermanresearch.com
www.pk-research.com www.nationalanalysts.com www.pos.org

25.1
22.5 22.3 21.2

25.5
22.7 22.3 21.2

1.6
0.1

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Top 50 U.S. Marketing Research Firms

Table 1.2
U.S. Rank Organization 2004 2003 33 27 Walker Information Inc. 34 35 36 39 19 35 The PreTesting Co. Inc. C&R Research Services Inc. Flake-Wilkerson Market Insights Headquarters Indianapolis Tenafly, N.J. Chicago Little Rock, Ark. Website www.walkerinfo.com www.pretesting.com www.crresearch.com www.mktinsights.com ($, in millions) 20.4 19.8 19.7 18.8

(Cont)
revenue 14.3 2.9

$, in millions) 23.8 20.4 19.7 18.8

37
38 39 40 41 42 43 44 45 46 47

37
41 45 38 47 46 44 42 48 49

Data Development Worldwide

Schulman, Ronca & Bucuvalas Inc. Cheskin RDA Group Inc. Marketing Analysts Inc. Market Probe Inc. Savitz Research Cos. The Marketing Workshop Inc. Ronin Corp. MarketVision Research Inc. RTI-DFD Inc.

New York
New York Redwood Shores, Calif. Bloomfield Hills, Mich. Charleston, S.C. Milwaukee Dallas Norcross, Ga. Princeton, N.J. Cincinnati Stanfordd, Conn.

www.datadw.com
www.srbi.com www.cheskin.com www.rdagroup.com www.marketinganalysts.com www.marketprobe.com www.savitzresearch.com www.mwshop.com www.ronin.com

18.3
17.2 16.5 15.4 15.2 14.1 14.0 13.9 13.5

20.7
17.2 19.0 17.0 15.6 24.6 14.0 13.9 13.9 11.8 11.5

11.6
13.2 9.4 2.6 42.7 2.9

www.marketvisionresearch.com 11.8 www.rti-dfd.com 11.5

48
49 50

50

Q Research Solutions Inc.

Data Recognition Corp. Phoenix Marketing International

Old Bridge, N.J.

Maple Grove, Minn. Rhinebeck, N.Y.

www.qresearchsolutions.com
www.datarecognitioncorp.com www.phoenixmi.com Total

11.2
10.8 10.6 $6,291.0 656.6 $6,947.6

11.2
10.8 10.6 $13,307.7 $737.7 $14,045.4

52.7% 11.0% 50.5%

All other (138 CASRO companies not included in the Top 50) 3 Total (188 companies)

*Estimated by Top 50 1U.S. and worldwide revenue may include nonresearch activities for some companies that are significantly higher. See individual company profiles for details. 2Rate of growth from year to year has been adjusted so as not to includer

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Selected Marketing Research Career Descriptions

Fig. 1.6 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. 1.6 cont. Vice President of Marketing Research
Part of companys top
management team Directs companys entire market research operation Sets the goals & objectives of the marketing research department

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

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. 1.6 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 Coding and data entry services Analytical services Data analysis services Branded marketing research products
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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. 1.7

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

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
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: 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: PMRS: The Market Research Society (UK) (www.marketresearch.org.uk) The Market Research Society of Australia (www.mrsa.com.au) The Professional Marketing Research Society (Canada) (www.pmrs-aprm.com)
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