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Hult | Pride | Ferrell
Marketing
Foundations 5e
Part 2
Marketing
Research and
Target Market
Analysis
4: Information for Marketing
Research
5: Selecting Target Markets
© 2013 South-Western, a part of Cengage Learning
4-2
Learning Objectives
 To describe the basic steps in conducting
marketing research
 To explore the fundamental methods of
gathering data for marketing research
 To describe the nature and role of tools such
as databases, decision support systems, and
the Internet in marketing decision making
 To identify key ethical and international
considerations in marketing research
© 2013 South-Western, a part of Cengage Learning
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Marketing Research
The systematic design, collection, interpretation
and reporting of information to help marketers
solve specific marketing problems or take
advantage of marketing opportunities
© 2013 South-Western, a part of Cengage Learning
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Benefits of Marketing Research
 Facilitates strategic planning
 Assesses opportunities/threats
 Ascertains potential for success
 Helps determine feasibility of a strategy
 Improves marketer’s ability to make
decisions
© 2013 South-Western, a part of Cengage Learning
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Discussion Question
 How important is marketing research to a firm’s
success?
 Do you think it is worth it to pay an outside
organization to help?
© 2013 South-Western, a part of Cengage Learning
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The Marketing Research Process
© 2013 South-Western, a part of Cengage Learning
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Step 1: Locating and Defining
Problems or Research Issues
 Focus on uncovering the nature and
boundaries of a situation
•
The first sign of a problem is a departure from
normal or expected results
 Define the problem
 Research will often be in-depth
© 2013 South-Western, a part of Cengage Learning
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Defining the Problem
 Marketers must define the nature and scope
of the situation in order to pin down the
problem
 Determine precisely what is the aim of
research
 How will the research be used?
© 2013 South-Western, a part of Cengage Learning
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Step 2: Designing the Research
Project
Research Design
 An overall plan for obtaining the information
needed to address a research problem or issue
Hypothesis
 An informed guess or assumption about a
certain problem or set of circumstances
 Accepted or rejected hypotheses act as
conclusions for the research effort
© 2013 South-Western, a part of Cengage Learning
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Types of Research
Exploratory Research
 Conducted to gather more information about a
problem or to make a tentative hypothesis more
specific
How are consumers’ car buying habits changing?
Conclusive Research
 Designed to verify insights through objective
procedures and to help marketers in making
decisions
What percentage of consumers will consider an
electric car purchase?
© 2013 South-Western, a part of Cengage Learning
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Types of Research continued
Descriptive Research
 Used to clarify the characteristics of certain
phenomena to solve a particular problem
• Demands prior knowledge
• Assumes problem is clearly defined
• May require statistical analysis
 How are consumers gathering information to assist in
car buying?
Experimental Research
 Research that allows marketers to make causal
inferences about relationships
 Provides strong evidence of cause and effect
 Need a dependent variable and independent
variable(s) in order to set-up research project
© 2013 South-Western, a part of Cengage Learning
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Differences Between Exploratory
and Conclusive Research
© 2013 South-Western, a part of Cengage Learning
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Reliability and Validity
Reliability
 A condition existing when a research
technique produces almost identical results
in repeated trials
Validity
 A condition existing when a research method
measures what it is supposed to measure
© 2013 South-Western, a part of Cengage Learning
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Step 3: Collecting Data
Primary Data
 Is observed, recorded, or collected directly
from respondents
 Is collected to address a specific problem that
cannot be answered by secondary data alone
Secondary Data
 Is compiled both inside and outside the
organization
 Is for some purpose other than the current
investigation
© 2013 South-Western, a part of Cengage Learning
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Top 10 Online Pursuits
Source: “Generations Online Charts,” Pew Research Center by Sydney Jones and Susannah Fox, January 28, 2009
© 2013 South-Western, a part of Cengage Learning
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Think About It
 Toluna helps
companies
design and
conduct online
polls
 How can the
Internet help
marketers
conduct
research?
© 2013 South-Western, a part of Cengage Learning
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Discussion Question
 Are their potential target markets who are
easier to reach online? Are some target
markets harder to reach using the Internet?
© 2013 South-Western, a part of Cengage Learning
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External Sources of Secondary Data
© 2013 South-Western, a part of Cengage Learning
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External Sources of Secondary Data
continued
© 2013 South-Western, a part of Cengage Learning
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External Sources of Secondary Data
continued
© 2013 South-Western, a part of Cengage Learning
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Organizations to Know:
U.S. Census Bureau
The decennial census provides a wealth of data
for marketers and others who rely on
demographic information
 Trend analysis
• Number of working parents, number of students
in college, percentage of homeowners, etc.
 Target market identification
• Number and size of households in an area,
income distributions, home ownership
 Overall population information
© 2013 South-Western, a part of Cengage Learning
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Methods of Collecting Primary Data
Population
 All the elements, units, or individuals of
interest to researchers for a specific study
Sample
 A limited number of units chosen to
represent the characteristics of the
population
Sampling
 The process of selecting representative units
from a total population
© 2013 South-Western, a part of Cengage Learning
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How Types of Sampling Align
Sampling
Probability
Nonprobability
Random Sampling
Stratified Sampling
Quota
© 2013 South-Western, a part of Cengage Learning
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Probability Sampling
Sampling technique in which every element in
the population being studied has a known
chance of being selected for study
 Random Sampling
• A type of probability sampling in which all units
in a population have an equal chance of appearing
in a sample
 Stratified Sampling
• A type of probability sampling in which the
population is divided into groups according to a
common attribute; a random sample is then
chosen within each group
© 2013 South-Western, a part of Cengage Learning
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Nonprobability Sampling
Sampling technique in which there is no way to
calculate the likelihood that a specific element
of the population being studied will be chosen
 Quota Sampling
• A sampling technique in which researchers divide
the population into groups and then arbitrarily
choose participants from each group
© 2013 South-Western, a part of Cengage Learning
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Think About It
 Forrester Research is a technology and
market research company
 How do firms like Forrester Research
assist marketers by compiling and
analyzing market data?
© 2013 South-Western, a part of Cengage Learning
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Survey Methods
Mail
 Respondents answer questionnaires through the mail
 Sample Mail Survey
Telephone
 Respondents’ answers are recorded by interviewer on the phone
 Sample Phone Survey
Online
 Respondents answer questionnaire via e-mail or website
 Sample Online Survey
 Crowdsourcing calls for taking tasks usually performed by a
marketer or researcher and outsourcing them to a potential
market through an open call for ideas
Personal Interview Surveys
 Participants respond to survey questions face-to-face
© 2013 South-Western, a part of Cengage Learning
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Comparison of the Four Common
Survey Methods
Mail
Surveys
Telephone
Surveys
Online
Surveys
Personal Interview
Surveys
Economy
Potentially lower in
cost per interview than
telephone or personal
surveys if there is an
adequate response
rate.
Avoids interviewers’
travel expenses; less
expensive than in-home
interviews.
The least expensive
method if there is an
adequate response
rate.
The most expensive
survey method;
shopping mall and
focus-group interviews
have lower costs than
in-home interviews.
Flexibility
Inflexible;
questionnaire must be
short and easy for
respondents to
complete.
Flexible because
interviewers can ask
probing questions, but
observations are
impossible.
Less flexible; survey
must be easy for
online users to
receive and return;
short, dichotomous,
or multiple-choice
questions work best.
Most flexible method;
respondents can react
to visual materials;
demographic data are
more accurate; in-depth
probes are possible.
Interviewer
bias
Interviewer bias is
eliminated;
questionnaires can be
returned
anonymously.
Some anonymity; may be
hard to develop trust in
respondents.
Interviewer bias is
eliminated, but e-mail
address on the return
eliminates
anonymity.
Interviewers’ personal
characteristics or
inability to maintain
objectivity may result in
bias.
Sampling
and
respondents’
cooperation
Obtaining a complete
mailing list is difficult;
nonresponse is a
major disadvantage.
Sample limited to
respondents with
telephones; devices that
screen calls, busy
signals, and refusals are a
problem.
Sample limited to
respondents with
computer access; the
available e-mail
address list may not
be a representative
sample for some
purposes.
Not-at-homes are a
problem, which may be
overcome by focusgroup and shopping
mall interviewing.
© 2013 South-Western, a part of Cengage Learning
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Forms of Personal Interviews
In-Home/Door-to-Door
 Takes place at respondents’ homes
Focus-Group
 Observation of group interaction when members are
exposed to an idea or concept
Customer Advisory Boards
 Small groups of customers provide feedback on
ideas, products, marketing strategies
Telephone Depth
 Combines ability to probe with confidentiality
 Computer Assisted Telephone Interviewing (CATI)
Shopping-Mall Intercept
 Interviewing a percentage of people in malls
© 2013 South-Western, a part of Cengage Learning
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Benefits of a Personal Interview
 Establishes Rapport
 More in-depth
•
Probes
•
Follow-up
•
Tests
 Longer in duration
 Yields more information
 Respondents can be carefully selected,
reasons for nonresponse explored
 Gives the interviewer greater flexibility
© 2013 South-Western, a part of Cengage Learning
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Technology and Surveys
On-Site Computer Interview
 A variation of the mall intercept interview
 Respondents complete a self-administered
questionnaire displayed on a computer
monitor
Social Networking Sites
 Can be used to gather useful information in
understanding consumer decisions
 Provide a new way for marketers to conduct
market research
© 2013 South-Western, a part of Cengage Learning
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Discussion Questions
 What are the benefits of using online surveys
over traditional phone or mail surveys?
 Do you think there might be drawbacks?
What would those drawbacks be?
© 2013 South-Western, a part of Cengage Learning
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Questionnaire Construction
Question Types
Open-Ended Question
 What is your general opinion about coffee shops?
(please describe) __________________________
Dichotomous Question
 Have you ever purchased a coffee product?
 Yes
 No
Multiple-Choice Question

What income group are you in?
 $0-$19,000
 $20,000-$59,999
 $60,000-$99,000
 more than $100,000
© 2013 South-Western, a part of Cengage Learning
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Observation Methods
 Avoid direct contact with subject to reduce
possible awareness of observation process
 Note physical conditions, subject’s actions
and demographics
 Observations may be combined with samesubject interviews
 Data gathered may be influenced by
observer bias
© 2013 South-Western, a part of Cengage Learning
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Step 4: Interpreting Research
Findings
 The first step in drawing conclusions from
most research is displaying the data in table
format
 The data must be analyzed next
• Statistical interpretation focuses on what is
typical and what deviates from the average
 Data require careful interpretation
 Managers must understand the research
results and relate them to a context that
permits effective decision making
© 2013 South-Western, a part of Cengage Learning
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Step 5: Reporting Research Findings
 Prepare a formal, written document
 Determine level of detail
 Clear and objective presentation
 Consider the intended audience
 Point out deficiencies in the data
 Summary/recommendations first
© 2013 South-Western, a part of Cengage Learning
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Discussion Question
 Are any of the five steps of the marketing
research process optional? Or are they all
necessary?
Remember, the five steps are:
1. Locating and defining issues or problems
2. Designing the research project
3. Collecting data
4. Interpreting research findings
5. Reporting research findings
© 2013 South-Western, a part of Cengage Learning
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Using Technology to Improve Marketing
Information Gathering and Analysis
 Increasingly accessible
 Customer relationship management
enhanced
 Permits internal research and quick
information gathering
 Access array of valuable information sources
© 2013 South-Western, a part of Cengage Learning
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Types of Technology Used
Marketing Information Systems (MIS)
 A framework for managing and structuring
information gathered from internal and
external sources
Databases
 Single-source data provided by single
marketing research firm
Marketing Decision Support Systems
(MDSS)
 Customized computer software that aids
marketing managers in decision making
© 2013 South-Western, a part of Cengage Learning
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Firms to Know: uSamp
 uSamp is a technology company specializing
in online sampling tools
 Technology helps firms conduct marketing
research quicker, easier and more accurately
than before
•
Helps firms utilize the Internet more effectively
© 2013 South-Western, a part of Cengage Learning
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The Importance of Ethical
Marketing Research
 Must have professional standards by which
research can be judged
 Ethical and legal issues can develop as
research is carried out
 Some organizations have developed codes of
conduct and guidelines for ethical research
for organizations
•
Marketing Research Association Code of
Marketing Research Standards
© 2013 South-Western, a part of Cengage Learning
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International Issues in
Marketing Research
 Marketers must modify data-gathering
methods to account for differences in
sociocultural, economic, political, legal and
technological forces
 Use two-pronged approach to international
marketing research
• A detailed search for and analysis of secondary
data to gain greater understanding of a particular
marketing environment and its issues before
gathering primary data
• Conduct field research using the methods
described in the chapter
© 2013 South-Western, a part of Cengage Learning
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Top U.S. Marketing
Research Firms
SOURCE: “TOP 50 U.S. MARKET RESEARCH ORGANIZATIONS,” MARKETING NEWS, JUNE 30, 2009, P. 19.
© 2013 South-Western, a part of Cengage Learning
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Important Terms
Marketing research
Quota sampling
Research design
Mail survey
Hypothesis
Telephone survey
Exploratory research
Online survey
Conclusive research
Crowdsourcing
Descriptive research
Personal interview survey
Experimental research
In-home (door-to-door)
interview
Reliability
Focus-group interview
Validity
Customer advisory boards
© 2013 South-Western, a part of Cengage Learning
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Important Terms continued
Primary data
Telephone depth interview
Secondary data
Shopping mall intercept
interview
Population
On-site computer interview
Sample
Statistical interpretation
Sampling
Marketing information system
(MIS)
Probability sampling
Database
Random sampling
Single-source data
Stratified sampling
Marketing decision support
system (MDSS)
Nonprobability sampling
© 2013 South-Western, a part of Cengage Learning
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