Marketing Research
Key Terms: marketing information system, symptom vs. problem, primary data, panel data, secondary data, exploratory research, survey, sample, experiment, focus group, and depth interview.
A marketing information system is ongoing and information is collected whether or not it will be used. Many colleges have a student information system, a type of marketing information system, that routinely gathers information such as number of majors by discipline, number of students taking courses at various hours, number of closed sections by discipline, etc. One college recently did a study to determine the number of students by zip code of residence and by high school. This information was in their information system and they found that a large number of their students came from a small number of zip codes and high schools.
Marketing research is used to identify problems and
opportunities and usually has a specific objective. It is also used to solve a specific
problem or to provide assistance in making a decision.
Steps in Marketing Research:
(1) Define the problem: The first step in marketing research is to define the problem.
It is easier to solve a problem once it is defined. Declining sales are a symptom
and can be caused by such factors as too high a price, too low a price, unattractive
warranty, poor product performance, bad package, inadequate distribution, etc. How can you
solve a problem when you do not know whether to change the price, improve the warranty,
redesign the package, improve distribution, or simply wait for the economy to improve?
Exploratory research is used to help define the problem.
A college is suffering from declining enrollments. That is a symptom. What is
the problem? Is it high tuition, poor quality of instructors, poor course
selection, not enough popular majors, not enough parking, changing demographics
of feeder high schools, or declining reputation? Note that you cannot come
up with a solution unless you do some research. One college found that its
sinking enrollments were due to security issues. Another college
discovered that it had to introduce a business major to make enrollments
increase.
(2) Develop the research plan: What kind of data is needed to come up with
a strategy? How is the data going to be collected?
(3) Find the information that is needed. Sometimes you need primary
data; sometimes secondary data is sufficient.
Secondary data: Data that has already been collected and that you have to find. The advantage of using secondary data is that it can save you a great deal of time. It takes much longer to collect new data (primary data) than to retrieve information that is already out there. Also, it is much cheaper to get secondary data than primary data.
--An organization’s own internal records (sales,
customer complaints, etc.)
--Census information - Check out the US Census Bureau homepage: http://www.census.gov/
--Trade association data
--journals
--Internet
US Business Advisor – Find useful government
information on the Web
http://www.business.gov/
AC Nielsen is the largest marketing research company:
http://www.acnielsen.com/
Primary data: Data that you have to collect yourself. This could take the form of surveys, experiments, observation study, focus groups, or depth interviews. Obviously, this takes quite a bit of time to collect and can be quite expensive.
--Surveys. It is usually too costly to
take a census of the entire population (there are more than 300 million people
in the United States). Generally, we study a sample, i.e., a subset of the
population. Typical sample sizes are between 1,000 and 5,000 people.
If a sample is done correctly, it can be representative of the entire
population. Random samples have the advantage that they are supposed to be
representative. With a simple random sample, every element in the
population has an equal chance of being selected. A convenience sample of say
500 people shopping in a mall may not be representative. With surveys it is
important to get a representative sample (which means a decent rate of response)
and honest/accurate responses. A survey is meaningless if it does not represent
the population you are studying.
Some types of surveys are: mail, telephone, personal interview, mall intercepts,
fax, e-mail, and Web. One serious problem with mail surveys is the low rate of response.
If you send out a mail survey and get a 15% rate of response, it is quite likely
that your results will not be representative. Much marketing research today
is conducted via telephone and Internet (online) surveys. Telephone and online
surveys are quick and not very
expensive. Some of you may have completed an online survey. This is
becoming another relatively inexpensive way to survey people.
--Experimentation. The key elements of an experiment are randomization, manipulation, and control. Subjects are randomly assigned to different conditions in order to test the effect of certain factors. For an experiment to be valid, you need a control group. For instance, the classical studies on shelf space were conducted by trying different amounts of shelf space (e.g., 3 feet vs. 6 feet vs. 9 feet). A product was randomly assigned to the three conditions and in, say, 50 stores the product was allocated 3 feet of shelf space, 6 feet of space in another 50 stores, and 9 feet of space in another 50 stores. The same price is used in all stores and, in fact, you try to keep everything as similar as possible. The manipulated variable is shelf space and you try to keep everything else as constant as possible (controlled variables). Thus, experiments are used to determine cause and effect relationships. Studies show that shelf space is very important for impulse items and not very important for staples.
Experiments provide information on actual behaviors whereas surveys are often attitudinal. Experiments are very useful to determine how customers will react to changes in packaging, pricing, and advertising. People cannot answer questions such as will you buy more of Brand X in the red package than the blue package? To answer this you must use an experiment.
--Observation. There are two types of observations: by machine and by people. Occasionally, marketing research involves people observing people. For example, you might use researchers disguised as shoppers and place them in stores in order to determine whether shoppers read the ingredients before purchasing a new product. This, however, is rarely done in marketing. Most research involves observation by machine. For instance, closed-circuit cameras are used to monitor customers and study such things as shopping patterns (studies show that customers like to start with the produce section in a supermarket). Television ratings are obtained by devices connected to a sample of households that own TV sets. Scanners at checkout counters in supermarkets also provide a great deal of information. A supermarket can quickly discover how well different brands are doing every day. They can see what effect changing the location of a brand (or increasing shelf space) has on sales.
--Focus Group Interviews – are very popular in research today. Most focus groups consist of 6 to 12 individuals and a moderator. Many open-ended questions are used; the goal is to get the group to interact. The response of one person may get other people in the group to speak up. Focus groups are sometimes used to find out what problems customers have with products and to help come up with ideas for new products. For instance, a company might conduct a focus group with 10 users of its product to find out how it is being used, problems with it, and what can be done to improve it.
--Depth Interviews – These are detailed, one-on-one interviews and may last for 90 minutes or so. It is somewhat like a psychiatric interview (the one where the psychiatrist has you sit or lie down on a couch and engage in a lengthy, free-flowing conversation). The goal is to get the interviewee to relax and talk. Problems with new products might be discussed. One study I am considering involves asking students whether they considered dropping out of college as freshman, and why.
Focus groups and depth interviews are qualitative research techniques. With qualitative research, you try to get consumers to open up so you can find out how they really feel. You want considerably more than simple yes or no answers. There is much reliance (possibly too much) on the subjective interpretations of the researcher. In fact, it is quite likely that two companies working independently and doing focus groups for a client may come to very different conclusions. Researchers refer to this problem as lack of reliability. Some companies will purposely hire two different marketing research firms to perform qualitative research and then see whether the results are the same or not, i.e., check for reliability.
Panel data: Some research companies use a sample of consumers or stores and take measurements (e.g., sales) on a regular basis (daily, weekly, monthly, etc.). This is known as panel data. Some of you may be members of a consumer panel.
(4) Interpret the Data and Write the Business Research Report. The data must be analyzed properly and recommendations as to the best course of action must be made. Research papers often have the following headings: Introduction, Method, Results, Conclusions (or Discussion).
--------------------------------------------------------------------------------------------------------------------
A great deal of marketing research deals with customer satisfaction. Are customers satisfied? What can be done to increase satisfaction? Research helps a company discover why they are losing customers (customer attrition). What can be done to stop the loss of customers? Can anything be done to get them back?
The Kerin, Hartley, and Rudelius marketing
textbook has an interesting example of how marketing research is used by the
film industry to come up with a good title for a film. Researchers found that
the public did not like the title of a movie Clint Eastwood was directing--
Rope Burns. The title was changed to Million Dollar Baby. A
good movie title helps position the film and may also affect attendance.
Even the ending of a film might be changed after a test screening (film shown to
an audience of several hundred people in the target market for the film). A good
ending is important because an unsatisfying ending may reduce customer
satisfaction and the word of mouth for a film. A film that has a
satisfying ending (not necessarily a happy one) will be talked about for a long
time. What do you think of the ending of the film Titanic?
Not a happy one but certainly memorable. I never did like the ending
of Gone With the Wind but have to admit that it works. Nowadays,
many movie studios use test screenings to see whether anything can be improved
(title, music, characters, ending of film, etc.). I suspect that film
directors and writers do not like the idea that a few hundred viewers attending
a test screening (or a "sneak preview" ) will have input on how a film
ends and decide which characters may not make it into the final edit of the
film.
Those of you who are interested in law might be interested in doing some
research on the subject of mock juries and jury research. There are firms
that use mock juries as a type of focus group. The goal is to analyze how juries
will react to different kinds of summaries, witnesses, and/or evidence. A
mock jury can help a lawyer make a more effective presentation before the real
jury.
--------------------------------------------------------------------------------------------------------------------------------
Need help in constructing a questionnaire? This paper may be of value to you
THE
ART OF QUESTIONNAIRE DESIGN: A MODULAR APPROACH
by HH Friedman and LW Friedman
Constructing a useful and effective questionnaire can be a formidable
task, especially for a novice. The
purpose of this paper is to introduce a simple approach that can be used to
instruct individuals in the art of questionnaire construction.
One can be efficiently taught to create comprehensive and reliable
questionnaires using this method. This
approach is based on the idea that there are basically five major types of
questions that comprise many questionnaires.
I. Frequency/Behavioral
The first type of question, which is often placed at the beginning of the
questionnaire, revolves around frequency of performing a certain type of
behavior. These questions
might deal with how long a certain behavior has been performed, how often, how
much, etc. For example:
How long have you
been shopping at this Rite Aid pharmacy?
__ Less than 6 months
__ From 6 months to less than 1 year
__ From 1 year to less than 3 years
__ From 3 years to less than 5 years
__ 5 years or more
During the past six
months, about how often have you visited this Sears store?
__ More than once a
week
__ About once a week
__ A few times a month
__ About once a month
__ Less than once a month
During the past
thirty days, about how many times have you used each of the following drugs?
Marijuana: _________________
Heroin: _________________
Cocaine: _________________
Crack: _________________
LSD: _________________
About how much money
do you usually spend on a pair of jeans?
___Less than $20.00
___$20.00 to $39.99
___$40.00 to $59.99
___$60.00 to $79.99
___More than $80.00
In some situations, the researcher may be forced to ask a frequency of
behavioral type of question using a likelihood scale.
It may be impractical, if not impossible, to use response categories with
specific frequencies in them.
very likely
likely
neither likely nor unlikely
unlikely very
unlikely
Accounting:
____
____
____
____
____
Finance:
____
____
____
____
____
Marketing:
____
____
____
____
____
Management:
____
____
____
____
____
Statistics:
____
____
____
____
____
Computers:
____
____
____
____
____
II. Importance
The second type of question deals with the importance of various factors
in the subject's selection of a product or service.
For example,
How important is each
of the following factors in your choice of a toothpaste?
extremely
slightly
not
important
important important
important
Taste:
____
_____
_____
_____
Price:
____
_____
_____
_____
Cavity prevention:
____
_____
_____
_____
Whitening ability:
____
_____
_____
_____
Tartar control:
____
_____
_____
_____
How
important is each of the following factors in your choice of a supermarket in
which to shop?
extremely
slightly
not
important
important important
important
Price:
____
_____
_____
_____
Cleanliness of the store:
____
_____
_____
_____
Convenient parking:
____
_____
_____
_____
Courteous employees:
____
_____
_____
_____
Fast checkout:
____
_____
_____
_____
Senior citizen discounts:
___
_____
_____
_____
Coupon policies:
____
_____
_____
_____
Quality of the produce:
____
_____
_____
_____
Quality of the meats:
____
_____
_____
_____
How
important is each of the following factors in your choice of a job?
extremely
slightly
not
important
important important
important
Pay:
____
_____
_____
_____
Opportunity for Advancement:
____
_____
_____
_____
Job security:
____
_____
_____
_____
Fringe benefits:
____
_____
_____
_____
Status:
____
_____
_____
_____
Challenging/interesting work:
____
_____
_____
_____
Friendly co-workers:
____
_____
_____
_____
Safe work environment:
____
_____
_____
_____
Effective and fair management:
____
_____
_____
_____
The purpose of this question is to determine which factors are important
to your respondents. Different
groups of customers (or prospective customers) will find different things to be
important. For example, elderly
people might not be so concerned with slower checkouts if this means lower
prices. Or, the opportunity for
advancement may be more important for some jobs and less important for others.
Management must know what is important to each group in order to decide
which features to concentrate on.
III.
Performance Rating
The third type of question usually follows the importance question and
deals with the performance rating of various features (attributes) of a product
or service. For example:
Please rate Crest toothpaste on each of the following factors:
very
very
good
good
fair
poor
poor
Taste:
____
____
____
____
____
Price:
____
____
____
____
____
Cavity prevention:
____
____
____
____
____
Whitening ability:
____
____
____
____
____
Tartar control:
____
____
____
____
____
Overall:
____
____
____
____
____
Note that the same factors
used in the importance question can be used in the performance-rating question.
The "overall" category was added in order to obtain an overall
performance rating. The importance
and performance rating questions can be used together in an
importance/performance analysis (Martilla and James, 1977) to determine the
important attributes or features that the organization is not performing well
on. Resources should be allocated to
improving features that are important to customers (or prospective customers)
and which the organization is not doing a good job in satisfying. It would be
foolish to improve features with which the customers are already very satisfied.
Thus, if Crest toothpaste determines that its prospective customers find
taste to be very important and only rate the taste of Crest as "fair,"
it should focus resources on improving the taste of Crest.
Other ways to ask for an overall performance rating include the
following:
Overall,
how would you rate the performance of AOL (America Online)?
__excellent
__very good __good
__fair __poor
__very poor __awful
Overall,
how satisfied are you with the performance of AOL (America Online)?
_____extremely
satisfied
_____satisfied
_____neither satisfied nor dissatisfied
_____dissatisfied
_____extremely dissatisfied
Using
a 9-point scale, where 9 means extremely satisfied and 1 means not at all
satisfied, how satisfied are you with AOL (America Online), overall?
Extremely
satisfied
Not at all satisfied
9 8
7 6
5 4
3 2
1
Sometimes it is a good idea to follow up an overall performance rating
question with an open‑ended question asking for the reason respondents
answered the way they did. This can
be useful in determining areas of dissatisfaction.
____________________________________________________________
Subjects can be asked to indicate their intent to buy or use a product or
service, or whether they would recommend it to a friend.
Would
you recommend a General Electric washing machine to a friend?
__definitely
__probably
__might or might not
__probably not
__definitely not
Please
indicate the chance that you will buy a Dell personal computer if you need a
computer:
__definitely
would buy
__most probably would buy
__probably would buy
__might or might not buy
__probably would not buy
__most probably would not buy
__definitely would not buy
Another type of open-ended
question which can be of great value is one that asks respondents to list
improvements that should be made. For
example:
What
improvements, if any, should be made to better the New York City subway system?
________________________________________________
____________________________________________________________________
What,
if anything, do you dislike about Pepsi Cola?
________________________________________________________________________________________________________________________________________
In
some situations, a researcher might find it more useful to have respondents
describe how the product/service can be improved rather than asking, in effect,
how well am I currently doing (Waddell, 1995).
Consumers may rate a product as "good" but still feel that it
can be improved dramatically. If
this is the case, they might switch to a competitor who offers the improvements
even if the current product performs "good."
The rating of "good" simply means that the product performs
adequately.
Please indicate the amount of improvement, if any, needed to better our restaurant in each of the following:
Amount of Improvement Needed
none
slight
some
much
huge
Taste of
food:
____
____
____
____
____
Prices:
____
____
____
____
____
Speed of service:
____
____
____
____
____
Portion size:
____
____
____
____
____
Friendliness of staff:
____
____
____
____
____
Variety of menu:
____
____
____
____
____
It is often advisable to also determine the performance ratings of
competitor's brands in order to find out where the areas of superiority lie.
These areas may then be highlighted in advertising.
IV. Agree/Disagree
Statements
The fourth type of question is especially useful when the researcher is
trying to determine respondents' opinions, beliefs and attitudes and it is
difficult to use hedonic rating scales with adjectives as response categories.
It may be simpler to construct statements and ask respondents how
strongly they agree or disagree with each of the statements.
For example:
Please
indicate how strongly you agree or disagree with each of the following
statements:
1.
People who exercise regularly live longer.
____
strongly agree
____ agree
____ neither agree nor
disagree
____ disagree
____ strongly disagree
2.
Exercise is more important than dieting in losing weight.
____
strongly agree
____ agree
____ neither agree nor
disagree
____ disagree
____ strongly disagree
3.
The best exercise for losing weight is bicycling.
____
strongly agree
____ agree
____ neither agree nor
disagree
____ disagree
____ strongly disagree
4.
The most boring exercise is jogging.
____
strongly agree
____ agree
____ neither agree nor
disagree
____ disagree
____ strongly disagree
The agree/disagree questions can be laid out with the response
categories as column headings just as with the importance and performance rating
questions presented earlier.
The Likert scale (or summated ratings scale), a popular attitude scale
used in research, requires subjects to indicate how strongly they agree or
disagree with a series of statements relating to a particular behavior or object
(Tull and Hawkins, 1993, pp. 393-394). A
total attitude score can be computed for each subject after numerical values of
1 to 5 are assigned to the response categories. Reverse scoring is necessary for
unfavorable statements; strongly agreeing with a favorable statement (e.g.,
"New York City is the best city in the world") would receive
the same score as strongly disagreeing with an unfavorable statement (e.g.,
"I would never live in New York City").
V. Demographics
The fifth type of question is usually placed at the end of the
questionnaire and deals with the demographics of the respondents.
These questions can be used to determine the profile of the respondents
(who should be representative of customers, prospective customers, the
population of an area, etc.). Demographics
are also needed to compare different groups on importance or performance
ratings, for example, to determine whether men and women rate one's product the
same.
The
following information is necessary for classification purposes only:
1.
Your sex: ___Male
___Female
2.
Your age:
__Under 25
__25 to 34 __35
to 44
__45 to 54
__55 to 64 __65
or older
3.
Your education:
__less than high school graduate
__high school graduate
__some college
__college graduate
__some postgraduate college work
__graduate school degree
4.
Total household Income (before taxes) for the past 12 months:
__Under $15,000 __$15,000-
24,999
__$25,000 - 34,999
__$35,000
- 49,999
__$50,000 - 79,999
__$80,000 or more
5.
Your ethnicity: __Caucasian
(white) __African‑American
(black) ___Hispanic
___Asian __Other
(please specify):_______________
6.
Current marital status: ___Married/living
together __single/never
married
___widowed/divorced/separated
There are many other demographic questions that can be added, including
occupation, size of household,
county or state of residence, etc.
As noted in previous chapters, one of the most important measures in marketing is customer/client satisfaction. Measuring customer satisfaction in a reliable and valid way is important. Attitude scales to measure customer satisfaction have been developed. If you wish to learn more about measuring customer satisfaction, check out the following: http://www.esmalloffice.com/SBR_template.cfm?docNumber=PL12_1200.htm#sampsurvey
Quirk’s Marketing Research Review is a "one-stop
source for marketing research information":
http://www.quirks.com/
Market Research Links from KnowThis.com:
http://www.knowthis.com/research/marketingresearch.htm
"How to Learn About an Industry or a Specific
Company"
http://www.virtualpet.com/industry/howto/search.htm
Green Book – Worldwide Directory of Marketing
Research Companies and The Focus Group Directory:
http://www.greenbook.org/
MarketResearch.com database of market research
publications
http://www.marketresearch.com/
Decision Analyst, Inc. -- Leading marketing research firm
(articles, free software, etc.)
http://www.decisionanalyst.com/
@Researchinfo.com – The Online Market Research
Community
http://www.researchinfo.com/
(c) 2010 H.H. Friedman