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“Problems” in Marketing Research
MAR 6648: Marketing ResearchJanuary 6, 2010
Overview
• What are the steps we take when conducting marketing research?
• How do figure out what to do with our research?
• How do we decide when to do research?
Marketing Research is…
• The process of monitoring the environment:– Customers, competitors, other influences (legal,
political, global…)• The eyes and ears of a corporation• A tool to help you get close to your customers• A decision aid for marketing strategies and tactics• A tool to reduce uncertainty in outcomes• Costly in terms of time, effort, and money– It should be used when its value > its cost
Customer groups:•Consumers•Employees•Shareholders•Suppliers
Customer groups:•Consumers•Employees•Shareholders•Suppliers
Controllable marketing variables:•Product•Price•Place•Promotion
Controllable marketing variables:•Product•Price•Place•Promotion
Uncontrollableenvironmental factors:•Economy•Technology•Competition•Socio-cultural•Legal/political
Uncontrollableenvironmental factors:•Economy•Technology•Competition•Socio-cultural•Legal/political
Marketing Researchers
Marketing Managers:•Segmentation•Target segments•Marketing programs•Performance and control
Marketing Managers:•Segmentation•Target segments•Marketing programs•Performance and control
Assess information needs
Assess information needs
Provide information
Provide information
Make marketing recommendationsMake marketing
recommendations
The Marketing Research Process
The Marketing Research Process
Research Purpose and Objectives
• They may sound similar, but they’re not the same thing
Research PurposeResearch Purpose
Objective 1
Objective 1
Objective 2
Objective 2
Objective 3
Objective 3 …
So, What’s a “Research Purpose”?
• The Research Purpose is managements’ answer to the question:
• “Why should we do the research?”
Managerial problem
Managerial problem
Managerial opportunityManagerial opportunity
Research PurposeResearch Purpose
Problem-Driven Research
• It’s important to distinguish between problems and their symptoms– Oh no, we’re losing money!
• Symptoms arise due to an underlying cause
SymptomSymptom
Cause A
Cause A
Cause B
Cause B
Cause C
Cause C?
?
?
Establishing Research Objectives
Research PurposeSymptom IdentificationSymptom Identification
Potential Causes of Symptoms
Potential Causes of Symptoms
Known Information
Information needed to find actual
causes
Information Gap
Known Information
Research ObjectivesResearch Objectives
Research Purpose vs. Objectives
• Example: Imagine you’ve been hired to help the manager of an independent dog chew toy company– The company has experienced declining sales– The manager is pretty sure this is related to the
online order experience
Research Purpose vs. Objectives
Opportunity-Driven Research
• With opportunity driven research, the research problem is usually about how to respond to the opportunity
OpportunityOpportunity
Action A
Action A
Action B
Action B
Action C
Action C?
?
?
Establishing Research Objectives
Research PurposeOpportunityOpportunity
Potential ActionsPotential Actions
Known Information
Information needed to determine
best action
Information Gap
Known Information
Research ObjectivesResearch Objectives
Research Purpose vs. Objectives
• Example: Imagine the dog chew toy company would like to expand his business, to buffer himself from declines in his dog toy business – He wants to know whether he can successfully
branch into cat toy sales as well
Research Purpose vs. Objectives
So, a Research Objective…
• Translates management’s purpose into specific questions that need to be answered by the research
• States as precisely as possible what information is needed to fulfill the research purpose – I.e., to close the information gap
The Marketing Research Process
Backward Marketing Research
• 1. Determine how results will be implemented• 2. Determine what final report will contain• 3. Specify analyses needed to fill in the blanks• 4. Determine data needed to carry out analysis• 5. Scan secondary data sources• 6. Design instrument and sample plan for data• 7. Collect data, analyze it, and—finally—see it
used
Marketing Research DesignsMarketing Research Designs
Exploratory Research Designs
Exploratory Research Designs
Conclusive Research Designs
Conclusive Research Designs
DescriptiveDescriptive CausalCausal•To provide insights and understanding•Information needed is loosely defined•Research process is flexible and unstructured•Sample is small and non-representative•Analysis is qualitative•Results tentative•Generally followed by further conclusive research
•To test specific hypotheses and examine relationships•Information needed is clearly defined•Research process is formal and structured•Sample is large and representative•Data analysis is quantitative•Results conclusive•Findings used as input into decision making
Research Design
Exploratory Research
Quantitative Research
Secondary Data
Qualitative Research
Descriptive Research
Causal Research
Yes No
Yes Descriptive Research (Surveys)
Exploratory Research (Focus Groups, In-Depth Interviews)
No
Descriptive Research (Observation, Projection, Counterbiasing)
Causal Research (Experiments)
Phenomenological (Post-Positivism)
Secondary Research (Internal/External)
Which research design is best?Does the researcher know the question?
Does the respondent know the answer? Will she tell you?
The Marketing Research Process
Data Collection and Survey Design
Mail survey
Database
ObservationPersonal Interview
Phone Interview
Test market
Internet survey
SAMPLE?
The Marketing Research Process
Data Analysis
Data Insights
?
Analysis
Note: The framework used for analysis determines, in part, which data we collect!
Interpretation
• Insights:– What have we learned from the analysis?
• Recommendations:– Can the findings be put into actions?– If so, how?– Is more research needed?
The Marketing Research Process
Communication: Client and Researcher
• Most important factor in predicting a good outcome of the research:– Having a close relationship between the
researcher and the corporate decision maker
• Work out precise and specific objectives of the research—jointly with the decision maker
Communication: Client and Researcher
• Typical problems:– Research questions are too broad
• Manager wants to know everything– Internal/political bias
• Incentives for the researcher?
• Think through all possible findings—how can they lead to possible actions?– Construct scenarios– This will likely sharper the original research questions
(or suggest new ones) by eliciting more specific goals for the client
The Marketing Research Process
The Value of Research
• Research can be expensive!• We do not want to do research unless it is
valuable to us• Before embarking on a research project, we
need to carefully evaluate costs and benefits– Is it worth it?– Should we always do research?
First question
• Will research findings change our actions?
The Value of Research
• Case A: Consider the following scenario:– You are considering introducing a new product– If you introduce
• With a 60% change of success ($4 million)• With a 40% change of failure (-$2.5 million)
– If you don’t introduce• $0 for sure
– If you do research you will learn the likely outcome (success or failure)
• What’s the maximum amount of $ you should spend on research?
The Value of Research
• Case B: Consider the following scenario:– You are considering introducing a new product– If you introduce
• With a 60% change of success ($4 million)• With a 40% change of failure ($1 million)
– If you don’t introduce• $0 for sure
– If you do research you will learn the likely outcome (success or failure)
• What’s the maximum amount of $ you should spend on research?
The Value of Research
• Case B: Consider the following scenario:– You are considering introducing a new product– If you introduce
• With a 0% change of success ($4 million)• With a 100% change of failure (-$2.5 million)
– If you don’t introduce• $0 for sure
– If you do research you will learn the likely outcome (success or failure)
• What’s the maximum amount of $ you should spend on research?
Remember…
• Research is valuable only if it causes us to change the optimal decision in a way that increases the expected return from the decision
Summary
• Marketing Research can be used to integrate a lot of information about products, customers, markets, etc.
• There is a general research framework to follow– Start with the end, and work your way back when
planning your research• It is also important to think about whether
you’ll do research