A Decision-Making Perspective on Marketing Research

"Marketing research is not an immediate or an obvious path to finding solutions to all

managerial
problems."

Marketing is the process of planning and executing the conception, pricing, promotion, and
distribution of ideas, goods, and

services to create exchanges that satisfy individual and organization objectives. The marketing
concept requires that
customer satisfaction rather than profit maximization be the goal of an organization. [Note] In
other words, the
organization should be consumer oriented and should try to understand consumers' requirements
and satisfy them quickly and
efficiently, in ways that are beneficial to both the consumer and the organization. This means
that any research organization
should try to obtain information on consumer needs and gather marketing intelligence to help
satisfy these needs efficiently.

Marketing research is a critical part of such a marketing intelligence system; it helps to

improve management decision
making by providing relevant, accurate, and timely (RAT) information. Every decision poses
unique needs for information,
and relevant strategies can be developed based on the information gathered through marketing
research in action.

Too often, marketing research is considered narrowly as the gathering and analyzing of data for
someone else to use. Firms
can achieve and sustain a competitive advantage through the creative use of market information.
Hence, marketing research
is defined as an information input to decisions, not simply the evaluation of decisions that have
been made. Market research
alone, however, does not guarantee success; the intelligent use of market research is the key to
business achievement.

Acompetitive edge is more the result of how information is used than of who does or does not
have the information. [Note]
Marketing decisions involve issues that range from fundamental shifts in the positioning of a
business or the decision to enter
a new market to narrow tactical questions of how best to stock a grocery shelf. The context for
these decisions is the market
planning process, which proceeds sequentially through four stages; situation analysis, strategy
development, marketing
program development, and implementation. This is a never-ending process, so the evaluation of
past strategic decisions
serves as an input to the situation assessment . . . During each stage, marketing research makes a
major contribution toclarifying and resolving issues and then choosing among decision
alternatives.
Marketing research is not an immediate or an obvious path to finding solutions to all managerial
problems. A manager who is
faced with a particular problem should not instinctively resort to conducting a marketing
research to find a solution to the
problem. A manager should consider several factors before ordering marketing research.
Sometimes it is best not to conduct
marketing research. Hence, the primary decision to be made is whether or not market research is
called for in a particular
situation. Factors that influence this initial decision include the following.
􀁺 Relevance
􀁺 Type and Nature of Information Sought
􀁺 Timing
􀁺 Availability of Resources
􀁺 Cost-Benefit Analysis
Although research is conducted to generate information, managers do not readily use the
information to solve their problems.
The factors that influence a manager's decision to use research information are (1) research
quality, (2) conformity to prior
expectations, (3) clarity of presentation, (4) political acceptability within the firm, and (5)
challenge to the status quo. [Note]
Researchers and managers agree that the technical quality of research is the primary
determination of research use. Also,
managers are less inclined to utilize research that does not conform to prior notions or is not
politically acceptable. [Note]
Some researchers argue that the use of information is a function of the direct and indirect effects
of environmental,
organizational, informational, and individual factors. [Note] However, a researcher should not
alter the findings to match a
manager's prior notions. Further, managers in consumer organizations are less likely to use
research findings than their
counterparts in industrial firms. [Note] This is due to a greater exploratory objective in
information collection, a greater
degree of formalization of organizational structure, and a lesser degree of surprise in the
information collection.
Ethics refers to moral principles or values that generally govern the conduct of an individual or
group. Researchers have
responsibilities to their profession, clients, and respondents, and must adhere to high ethical
standards to ensure that both the
function and the information are not brought into disrepute. The Marketing Research
Association, Inc. (Chicago, Illinois) has
instituted a code of ethics that serves as a guideline for marketing ethical decisions . . . The
Council of American Survey
Research Organization (CASRO) has also established a detailed code of marketing research
ethics to which its members
adhere. [Note] Normally, three parties are involved in a marketing research project: (1) the client
who sponsors the project,
(2) the supplier who designs and executes the research, and (3) the respondent who provides the
information. The issue of
ethics in marketing research involves all three players in a research project.
The increase in international trade and the emergence of global corporations resulting from
increased globalization of
business have had a major impact on all facets of business, including marketing research. The
increase in global competition,
coupled with the formation of regional trading blocs such as the European Community (EC) and
the North American Free
Trade Agreement (NAFTA), have spurred the growth of global corporations and the need for
international marketing
research. The need to collect information relating to international markets, and to monitor trends
in these markets, as well as
to conduct research to determine the appropriate strategies that will be most effective in
international markets, are expanding
rapidly.
The marketing research industry in the United States is increasingly growing into an
international industry, with more than
one-third of its revenues coming from foreign operations. The increase in the importance of
global business has caused an
increase in awareness of the problems related to international research.

International marketing research

marketing research conducted either simultaneously or sequentially to facilitate marketing

decisions in more than one
country. [Note] As such, the basic functions of marketing research and the research process do
not differ from domestic and
multicountry research; however, the international marketing research process is much more
complicated and the international
marketing researcher faces problems that are different from those of a domestic researcher.
The task of marketing research is to find a sizable segment with homogenous tastes. The growing
presence of an international
market in the United States has been influenced by both domestic and foreign markets. In the
domestic arena, ethnic groups
range from Chinese to Turkish, each lending a piece of its culture to the U.S. market. Within
each ethnic group, the product
preference is diverse. These facts present a challenge to marketing research to find a
homogenous group among the "melting
pot" of international products. Complicating matters is the rise in foreign manufacturers selling
their goods in the United
States.
Marketing Research in Practice
"With marketing the new priority, marketing research is the rallying cry."

In practice, a marketing research department's goal can be grouped into three major categories:
programmatic, selective, or
evaluative.
Programmatic research is performed to develop marketing options through market
segmentation, market
opportunity analysis, or consumer attitude and product usage studies.

Selective research is done to test different decision

alternatives such as new product concept testing, advertising copy testing, pretest marketing, and
test marketing.

Evaluative research is carried out to evaluate performance of programs, including tracking

advertising recall, corporate and brand image
studies, and measuring customer satisfaction with the quality of the product and service. As the
number of products and types
of services introduced into the market increase, the need for marketing research explodes and the
future of marketing
research appears to be both promising and challenging.

With marketing the new priority, marketing research is the rallying cry. Companies are trying
frantically to get their hands on
information that identifies and explains the needs of powerful new consumer segments now
being formed . . . Some
companies are pinning their futures on product innovations, others are rejuvenating time-worn
but proven brands, and still
others are doing both.
Not only are the companies that always did marketing research doing a great deal more, the
breadth of research activities also
continues to expand.
􀁺 Senior management is looking for more support for its decisions; therefore, researchers are
doing more acquisition
and competitor studies, segmentation and market structure analyses, and basic strategic position
assessments.
􀁺 Other functions, such as the legal department, now use marketing research evidence routinely.
Corporate Affairs
wants to know shareholders', bankers', analysts', and employees' attitudes toward the company.
The service
department continuously audits service delivery capability and customer satisfaction.
􀁺 Entire industries that used to be protected from the vagaries of competition and changing
customer needs by
regulatory statutes are learning to cope with a deregulated environment. Airlines, banks, and
financial services groups
are looking for ways to overcome product proliferation, advertising clutter, and high marketing
costs brought on by
more sophisticated customers and aggressive competitors.

An information system (IS) is a continuing and interacting structure of people, equipment,

and procedures designed to
gather, sort, analyze, evaluate, and distribute pertinent, timely, and accurate information to
decision makers. While marketing
research is concerned mainly with the actual content of the information and how it is to be
generated, the information system
is concerned with managing the flow of data from many different projects and secondary sources
to the managers who will
use it. This requires databases to organize and store the information and

a decision support system (DSS) to retrieve date,

transform it into usable information, and disseminate it to users.
Managers don't want data. They want, and need, decision-relevant information in accessible and
preferably graphical form
for (1) routine comparisons of current performance against past trends on each of the key
measures of effectiveness,

(2) periodic exception reports to assess which sales territories or accounts have not matched
previous years' purchases, and

(3) special analyses to evaluate the sales impact of particular marketing programs, and to predict
what would happen if changes
were made. In addition, different divisions would like to be linked to enable product managers,
sales planners, market
researchers, financial analysts, and production schedulers to share information.

The purpose of a marketing decision support system (MDSS) is to combine marketing data
from diverse sources into a
single database which line managers can enter interactively to quickly identify problems and
obtain standard, periodic
reports, as well as answers to analytical questions.

A good MDSS should have the following characteristics.

1. Interactive:

The process of interaction with the MDSS should be simple and direct. With just a few
commands the user
should be able to obtain the results immediately. There should be no need for a programmer in
between.
2. Flexible:

A good MDSS should be flexible. It should be able to present the available data in either
discrete or aggregate

form. It should satisfy the information needs of the managers in different hierarchical levels and
functions.

3. Discovery oriented:

The MDSS should not only assist managers in solving the existing problems but should
also help them
to probe for trends and ask new questions. The managers should be able to discover new patterns
and be able to act on them
using MDSS.
4. User friendly: The MDSS should be user friendly. It should be easy for the managers to learn
and use the system. It should
not take hours just to figure out what is going on. Most MDSS packages are menu driven and are
easy to operate.
A typical MDSS is assembled from four components.
􀁺 Database
􀁺 Reports and Displays
􀁺 Analysis Capabilities
􀁺 Models

The Marketing Research Process

"The research process provides a systematic, planned approach to the research project and
ensures that all aspects of the research project are consistent with each other."
How is the market research project conceived, planned, and executed? The answer, in part, is
through a research process,
consisting of stages or steps that guide the project from its conception through the final analysis,
recommendation, and
ultimate action.

The research process provides a systematic, planned approach to the research project and
ensures that all
aspects of the research project are consistent with each other. It is especially important that the
research design and
implementation be consistent with the research purpose and objectives. Otherwise, the results
will not help the client.
Research studies evolve through a series of steps, each representing the answer to a key question.
1. Why should we do research? This establishes the research purpose as seen by the management
team that will be using the
results. This step requires understanding the decisions to be made and the problems or
opportunities to be diagnosed.
2. What research should be done? Here the management purpose is translated into objectives that
tell the researchers exactly
what questions need to be answered by the research study or project.
3. Is it worth doing the research? The decision has to be made here about whether the value of
the information that will likely
be obtained is going to be greater than the cost of collecting it.
4. How should the research be designed to achieve the research objectives? Design issues
include the choice of research
approach—reliance on secondary data versus conducting a survey or experiment—and the
specifics of how to collect the
data.
5. What will we do with the research? Once the data have been collected, how will it be
analyzed, interpreted, and used to
make recommendations for action?
The necessary steps are linked in a sequential process . . . Although the steps usually occur in
this general order, we must
emphasize that "early" decisions are always made by looking ahead to "later" decisions. The
early decisions are constantly
being modified to account for new insights and possibilities presented by later decisions. Also,
the steps do not function in
isolation. Rather, they are embedded in the ongoing planning process of the business, which
culminates in the development
of strategies, programs, and action. This planning process provides the purposes of the research.
In turn, planning is
supported by the information system, which (1) anticipates the type of information required by
decision makers and (2)
organized data that have been collected to ensure their availability when needed.

The development of a research purpose that links the research to decision making, and the
formulation of research objectives
that serve to guide the research are unquestionably the most important steps in the research
process. If they are correct, the
research stands a good chance of being both useful and appropriate. If they are bypassed or
wrong, the research almost surely
will be wasteful and irrelevant.
The basic functions of marketing research and the various stages in the research process do not
differ between domestic and
international research. The international marketing research (IMR) process, however, is much
more complicated than the
domestic research process. IMR is more complicated because of the necessity to ensure
construct, measurement, sampling
and analysis equivalence before any cross-cultural study is conducted. A thorough research of
the proposed international
market is very important before launching a new product or service. Although it is complex, it
can be an extremely beneficial
process. To avoid high-profile mistakes in international marketing research, there are some
considerations to be made:
1. Profile your target customers and clients.
2. Interview target segments to assess how well they match your preconceived ideas.
3. Hire local researchers who know the costs and methods that are workable in local markets.
4. Use a variety of methods to get a well-rounded picture of these proposed markets, the best
approach being a combination
of qualitative and quantitative methods that provides picture references, strengths, beliefs, and
anecdotes.
5. Look at the findings and analyze what must be done differently, abroad or internationally, in
comparison with current
domestic marketing activities. [Note]
Thus, while conducting IMR, one should be aware of the complicated cultural differences in
differing regions of the world.
This complication stems from operating in different and diverse environmental contexts, ranging
from the technologically
advanced and stable United States to mature Western European markets, to the fast-changing
environments in newly
industrialized countries such as Hong Kong and South Korea, to developing economies such as
India and Brazil, to
transforming economies such as the former Soviet Union and Eastern Europe, and to less
developed countries on the African
continent.
Problems may not always be couched in the same terms in different countries or cultural
contexts. This may be due to
differences in socioeconomic conditions, levels of economic development, or differences in any
of the macroenvironmental
factors.
Several academic scholars have identified and have pointed out the major reason for the failure
of businesses and marketing
research projects in a foreign environment. The result has been the self-reference criterion
(SRC) adopted by researchers in
defining the problem in a foreign country. SRC assumes that the environmental variables
(cultural and others) that are
prevalent in the researcher's domestic market are also applicable to the foreign country. This is a
major cause for the failure
of research projects, since defining the problems is the most crucial step in the marketing
research process.
One of the most frequent objectives of international marketing research is foreign market
opportunity analysis. [Note]
When a firm launches international activities, information can be accumulated to provide basic
guidelines. The aim is not to
conduct a painstaking and detailed analysis of the world, but to gather information on questions
that will help management
narrow the possibilities for international marketing activities. Possible questions an international
marketing researcher might
ask to achieve this objective include:
􀁺 Do opportunities exist in foreign markets for the firm's products and services?
􀁺 Which foreign markets warrant detailed investigation?
􀁺 What are the major economic, political, legal, and other environmental facts and trends in each
of the potential
countries?
􀁺 What mode of entry does the company plan to adopt to enter the foreign market?
􀁺 What is the market potential in these countries?
􀁺 Who are the firm's present and potential customers abroad?
􀁺 What is the nature of competition in the foreign markets?-> What kind of marketing strategy
should the firm adopt?

Marketing Research Design and Implementation

"The usefulness of a research project depends on the overall quality of the research design and
on
the data collected and analyzed based on the design."
Pages: 71-89
A research design is the detailed blueprint used to guide a research study toward its objectives.
The process of designing a research study involves many interrelated decisions. The most
significant decision is the choice of
research approach, because it determines how the information will be obtained. Typical
questions at this stage are: Should
we rely on secondary sources such as the Census? Which is more appropriate, an exploratory
approach with group
discussions or a survey? Is a mail, telephone, fax, or personal interview survey better for this
problem?
All research approaches can be classified into one of three general categories of research:
exploratory, descriptive, and
causal. These categories differ significantly in terms of research purpose, research questions, the
precision of the hypotheses
that are formed, and the data collection methods that are used.
Exploratory Research. Exploratory research is used when one is seeking insights into the
general nature of a problem, the
possible decision alternatives, and relevant variables that need to be considered. Typically, there
is little prior knowledge on
which to build. The research methods are highly flexible, unstructured, and qualitative, for the
researcher begins without firm
preconceptions as to what will be found. The absence of structure permits a thorough pursuit of
interesting ideas and clues
about the problem situation.
Descriptive Research. Descriptive research embraces a large proportion of marketing research.
The purpose is to provide an
accurate snapshot of some aspect of the market environment.
Causal Research. When it is necessary to show that one variable causes or determines the
values of other variables, a causal
research approach must be used. Descriptive research is not sufficient, for all it can show is that
two variables are related or
associated. Of course, evidence of a relationship or an association is useful; otherwise, we would
have no basis for even
inferring that causality might be present. To go beyond this inference we must have reasonable
proof that one variable
preceded the other and that there were no other causal factors that could have accounted for the
relationship.
The research designer has a wide variety of methods to consider, either singly or in combination.
They can be grouped first
according to whether they use secondary or primary sources of data. Secondary data are already
available, because they
were collected for some purpose other than solving the present problem. Included here are (1) the
existing company
information system; (2) databanks of other organizations, including government sources such as
the Census Bureau or trade
association studies and reports; and (3) syndicated data sources, such as consumer purchase
panels, where one organization
collects reasonable standardized data for use by client companies . . . Primary data are collected
especially to address a
specific research objective. A variety of methods, ranging from qualitative research to surveys to
experiments, may be
employed . . . Some methods are better suited to one category of research than another.
Once the research approach has been chosen, research tactics and implementation follow: the
specifics of the
measurements, the plan for choosing the sample, and the methods of analyses must be
developed.
The first step is translate the research objective into information requirements and then into
questions that can be answered
by anticipated respondents . . . There are many ways to ask questions to obtain this kind of
attitudinal information.
Once the individual questions have been decided, the measuring instrument has to be developed.
Usually this instrument is a
questionnaire, but it also may be a plan for observing behavior or recording data. The researcher
designing an effective
questionnaire must be concerned with how questions on sensitive topics such as income can be
asked, what the order of the
questions should be, and how misinterpretations can be avoided.
Most marketing research studies are limited to a sample or subgroup of the total population
relevant to the research question,
rather than a census of the entire group. The sampling plan describes how the subgroup is to be
selected. One approach is to
use probability sampling, in which all population members have a known probability of being in
the sample. This choice is

indicated whenever it is important to be able to show how representative the sample is of the
population. Other critical
decisions at this stage are the size of the sample, as this has direct implications for the project
budget, and the means of
minimizing the effect on the results of sample members who cannot be reached or who refuse to
cooperate.
At this stage of the design, most of the cost has yet to be expended, but the research is now
completely specified and a
reliable cost estimate should be available. Thus, a more detailed cost-benefit analysis should be
possible to determine if the
research should be conducted as designed or if it should be conducted at all.
The usefulness of a research project depends on the overall quality of the research design and on
the data collected and
analyzed based on the design. Several potential sources of error can affect the quality of the
research process. The errors can
influence the various stages of the research process and result in inaccurate or useless research
findings.
Two common approaches to budgeting for a marketing research project are estimating the dollar
costs associated with each
research activity or determining the activities to be performed, in hours, and then applying
standard cost estimates to these
hours. The former approach typically is used when a marketing research project is relatively
unusual or expensive. The latter
approach is used for routine marketing research projects or when the researcher has considerable
knowledge of research
activity costs.
Regardless of the basic research design selected (exploratory, descriptive, or causal), researchers
need to be familiar with and
experienced in handling several issues or problems unique to the conduct of marketing research
within and across countries
and cultural groups. Three issues critical to international research design are (1) determining
information requirements, (2)
determining the unit of analysis, and (3) achieving equivalence of construct, measurement,
sample and analysis. [Note]
Apart from these issues, other aspects of the research process, such as identifying sources of
data, availability, and
comparability of data from different countries, problems associated with primary data collection
across countries, and so
forth, add to the complexity of the international research process. Also, these issues add to the
nonrandom error component of
the research process.
Chapter 5: Secondary Sources of Marketing Data
Using Secondary Data Sources for Domestic Marketing Research
"Secondary data can be used by researchers in many ways."
Pages: 102-118
Secondary data are data that were collected by persons or agencies for purposes other than
solving the problem at hand.
They are one of the cheapest and easiest means of access to information. Hence, the first thing a
researcher should do is
search for secondary data available on the topic. The amount of secondary data available is
overwhelming, and researchers
have to locate and utilize the data that are relevant to their research. Most search procedures
follow a distinctive pattern,
which begins with the most available and least costly sources . . . Almost all information systems
initially are based on
routinely collected internal data, and expand through the inclusion of data from published and
standardized sources.
Secondary data can be used by researchers in many ways.
1. Secondary data may actually provide enough information to resolve the problem being
investigated.
2. Secondary data can be a valuable source of new ideas that can be explored later through
primary research.
3. Examining available secondary data is a prerequisite to collecting primary data. It helps to
define the problem and
formulate hypotheses about its solution.
4. Secondary data is of use in the collection of primary data. Examining the methodology and
techniques employed by other
investigators in similar studies may be useful in planning the present one.
5. Secondary data also helps to define the population, select the sample in primary information
collection, and define the
parameters of primary research.

6. Secondary data can also serve as a reference base against which to compare the validity or
accuracy of primary data. It
may also be of value in establishing classifications that are compatible with past studies so that
trends may be more readily
analyzed.
The most significant benefits secondary data offer a researcher are savings in cost and time.
Secondary data research involves
just spending a few days in the library extracting the data and reporting them. This should
involve very little time, effort, and
money compared to primary research. Even if the data are bought from another source, it will
turn out to be cheaper than
collecting primary data, because the cost of data collection is shared by all those using the data.
A company's internal records, accounting and control systems, provide the most basic data on
marketing inputs and the
resulting outcomes. The principal virtues of these data are ready availability, reasonable
accessibility on a continuing basis,
and relevance to the organization's situation.
Data on inputs—marketing effort expended—can range from budgets and schedules of
expenditures to salespeople's call
reports describing the number of calls per day, who was visited, problems and applications
discussed, and the results of the
visit.
Extensive data on outcomes can be obtained from the billing records on shipments maintained in
the accounting system. In
many industries the resulting sales reports are the single most important items of data used by
marketing managers, because
they can be related (via exception reporting methods) to plans and budgets to determine whether
performance is meeting
expectations. Also, they may be compared with costs in order to assess profitability.
Published data are by far the most popular source of marketing information. Not only are the
data readily available, often
they are sufficient to answer the research question.
The major published sources are the various government publications (federal, state, provincial,
and local), periodicals and
journals, and publicly available reports from such private groups as foundations, publishers,
trade associations, unions, and
companies. Of all these sources, the most valuable data for the marketing researcher come from
government census
information and various registration requirements. The latter encompass births, deaths,
marriages, income tax returns,
unemployment records, export declarations, automobile registrations, and so on.
How should someone who is unfamiliar with a market or research topic proceed? In general, two
basic rules are suggested to
guide the search effort: (1) Start with the general and go to the specific, and (2) make use of all
available expertise. [Note]
The four main categories are authorities, general guides and indices, compilations, and
directories.
Users of secondary sources rapidly develop a healthy skepticism. Unfortunately, there are many
reasons why a forecast,
historical statistic, or estimate may be found to be irrelevant or too inaccurate to be useful.
Before such a judgment can be
made, the researcher should have answers to the following questions:
1. Who? This question applies especially to the reputation of the collecting agency for honest and
thorough work and the
character of the sponsoring organization, which may influence the interpretation and reporting of
the data. A related question
is whether either organization has adequate resources to do a proper job. The problems do not
end here, for the original data
source (which provided the count, estimate, or other basis for the reported result) may have its
own motives for biasing what
it reports.
2. Why? Data that are collected to further the interests of a particular group are especially
suspect. Media buyers, for example,
soon learn to be wary of studies of media. It is easy to choose unconsciously those methods,
questions, analysis procedures,
and so forth, that favor the interests of the study sponsor, and it is unlikely that unfavorable
results will be exposed to the
public.
3. How? It is possible to appraise the quality of secondary data without knowledge of the
methodology used to collect them.
Therefore, one should immediately be suspicious of any source that does not describe the
procedures used—including a copy
of the questionnaire (if any), the nature and size of the sample, the response rate, the results of
field validation efforts, and
any other procedural decisions that could influence the results. The crucial question is whether
any of these decisions could
bias the results systematically.
4. What? Even if the available data are of acceptable quality, they may prove difficult to use or
inadequate to the need. One
irritating and prevalent problem is the classifications that are used. Wide variations in
geographic, age, and income groupings

across studies are common.

5. When? There is nothing less interesting than last week's newspaper. Sooner or later, the pace
of change in the world in
general, and in markets in particular, renders all secondary data equally obsolete and
uninteresting except to the historian.
The rate of obsolescence varies with the type of data, but in all cases the researcher should know
when the data were
collected. There may be a substantial lag between the time of collection and the publication of
the results.
6. Consistency? With all the possible pitfalls in secondary data, and the difficulty in identifying
them fully, the best defense is
to find another source that can be used as a basis for comparison. Ideally, the two sources should
use different methodologies
to arrive at the same kind of data. In the likely event that there is some disagreement between the
two sets of data, the process
of reconciliation should first identify the respective biases in order to narrow the differences and
determine which set is the
most credible.

Using Secondary Data Sources for International Marketing Research

"Two major problems are associated with secondary data in international marketing research:
the
accuracy of the data and the comparability of data obtained from different countries."
Pages: 122-124
Secondary data are a key source of information for conducting international marketing research.
This is in part due to their
ready availability, the high cost of collecting primary data versus the relatively low cost of
secondary data, and the usefulness
of secondary data in assessing whether specific problems need to be investigated, and if so, how.
Further, secondary data
sources are particularly valuable in assessing opportunities in countries with which management
has little familiarity, and in
product markets at an early stage of market development.
A wide variety of secondary data sources are available for international marketing research.
These range from sources that
provide general economic, social, and demographic data for almost all countries in the world, to
sources that focus on
specific industries worldwide.
A host of sources of macroeconomic data are to be found, ranging widely in the number of
countries or regions covered.
Many of these are based on or derived from United Nations and World Bank data. The Business
International, Euromonitor,
and Worldcasts divisions of Predicasts also publish annual information on macroeconomic
variables.
The preceding macroeconomic data sources, with the exception of Euromonitor, relate to the
general business environment.
They therefore do not provide much indication as to market potential for specific industries. A
number of sources of industryspecific
data are available. They are United Nations Yearbooks, publications of the U.S. Department of
Commerce, The
Economist, and the Worldcasts.
Numerous other sources specific to individual countries or product markets are also to be found.
The U.S. Department of
Commerce, for example, publishes International Marketing Handbook, which provides profiles
and special information
about doing business in various countries. Information regarding regulations, customs,
distribution channels, transportation,
advertising and marketing research, credit, taxation, guidance for business travelers abroad, and
so forth, are compiled in
their "Overseas Business Reports." Governments or other bodies frequently publish national
yearbooks or statistical data
books. Various private sources also publish regional and country handbooks.
Two major problems are associated with secondary data in international marketing research: the
accuracy of the data and the
comparability of data obtained from different countries.
Different sources often report different values for the same macroeconomic factor, such as gross
national product, per-capita
income, or the number of television sets in use. This casts some doubt on the accuracy of the
data. This may be due to
different definitions followed for each of those statistics in different countries. The accuracy of
data also varies from one
country to another. Data from highly industrialized nations are likely to have a higher level of
accuracy than data from
developing countries, because of the difference in the sophistication of the procedures adopted.
The level of literacy in a
country also plays a role in the accuracy of the macroeconomic data collected in that country.
Business statistics and income data vary from country to country because different countries
have different tax structures and
different levels of taxation. Hence, it may not be useful to compare these statistics across
countries. Population censuses may

not only be inaccurate, they also may vary in frequency and the year in which they were
collected. Although in United States
they are collected once every 10 years, in Bolivia there was a 25-year gap between two censuses.
So most population figures
are based on estimates of growth that may not be accurate and comparable. Measurement units
are not necessarily equivalent
from country to country. For example, in Germany the expense incurred on buying a television
would be classified as
entertainment expense, whereas in the United States it would be classified as furniture expense.
Secondary data are particularly useful in evaluating country or market environments, whether in
making initial market-entry
decisions or in attempting to assess future trends and developments. They thus form an integral
form of the international
marketing research process. More specifically, three major uses of secondary data are in:
1. Selecting countries or markets that merit in-depth investigation
2. Making an initial estimate of demand potential in a given country or a set of countries
3. Monitoring environmental changes
Secondary data can be used systematically to screen market potential, risks, and likely costs of
operating in different
countries throughout the world. Two types of generalized procedures are used. The first
procedure classifies countries on two
dimensions: the degree of demographic and economic mobility, and the country's domestic
stability and cohesion. The
second procedure calculates multiple factor indices for different countries. For example,
Business International publishes
information each year on three indices showing (1) market growth, (2) market intensity, and
(3) market size, for countries
in Western and Eastern Europe, the Middle East, Latin America, Asia, Africa, and Australia.
Customized models, which are
geared to specific company objectives and industry characteristic, can also be developed using
secondary data.
Once the appropriate countries and markets to be investigated in depth have been determined, the
next step is to make an
explicit evaluation of demand in those countries or markets. [Note] This is important when
considering initial market entry,
because of the high costs and uncertainty associated with entering new markets. Management has
to make an initial estimate
of demand potential, and also project future market trends.
Four types of data analyses are unique to demand estimation in an international context. The first
and the most simplistic is
lead-lag analysis. This uses time-series (yearly) data from a country to project sales in other
countries. A second procedure is
the use of surrogate indicators. This is similar to the use of general macroindicators, but develops
the macroindicators relative
to a specific industry or product market. An example of a surrogate indicator is the number of
childbirths in the country as an
indicator of the demand potential for diapers. A third technique, which relies on the use of cross-
sectional data (data from
different countries), is analogous to the use of barometric procedures in domestic sales
forecasting. One assumes that if there
is a direct relationship between the consumption of a product, service, or commodity and an
indicator in one country, the
same relationship will hold in other countries to estimate the demand. The fourth and most
complex forecasting model is the
econometric forecasting model. This model uses cross-sectional and time-series data on factors
underlying sales for a given
product market for a number of countries to estimate certain parameters. Later, these models can
be used to project the
market demand.
A third use of secondary data in an international context is to monitor environmental changes.
Monitoring environmental
changes requires surveillance of a number of key indicators. These should be carefully selected
and tailored to the specific
product or range of products with which management is concerned. Two types of indicators are
required. The first monitors
the general health and growth of a country and its economy and society; the second, those of a
specific industry or product
market. A variety of procedures can be used to analyze the impact of environmental factors on
world trends or industrial
countries, and on product markets, as well as the implications for market growth and appropriate
marketing strategies. These
range from simple trend projections or tracking studies and the use of leading indicators to the
more complex scenario
evaluation studies.

Standardized Sources of Marketing Data

"A number of services have evolved to measure consumer exposure to the various media and
advertisements."
The use of standardized data sources has been revolutionized by so-called single-source data
from scanner systems. This
means that all data on product purchases and causal factors, such as media exposure, promotion
influence, and consumer
characteristics, come from the same households. These data are being made possible through
advances in information
technology whose full impact is only slowly being understood . . . It does not appear that single-
source data will fully
displace other standardized sources, but it will be used in conjunction with them to generate
important new insights.
From store audits and warehouse withdrawal services, we can learn how much product is moving
through the distribution
channel. As this information is one step removed from the actual purchase transaction, we still
don't know who bought, how
frequently they bought, or whether the seeming stability of market shares reflects stable
purchasing patterns or a great deal of
switching back and forth between brands and stores in response to short-term promotional
efforts. To answer these questions,
we need detailed records of purchasing activity by the same people over an extended period of
time. Here are two methods
for collecting this data:
1. In the home audit approach the panel member agrees to permit an auditor to check the
household stocks of certain product
categories at regular intervals. A secondary condition is that the panel member save all used
cartons, wrappers, and so on, so
the auditor can record them.

2. In the mail diary method the panel member records the details of each purchase in certain
categories and returns the
completed diary by mail at regular intervals (biweekly or monthly).
Both types of panels are used extensively in Europe, whereas in the United States and Canada
the mail dairy method is
dominant. When comparisons have been possible, the tow methods have produced equally
accurate market share and trend
data. [Note]
The data from a panel can be analyzed as a series of snapshots—providing information on
aggregate sales activity, brand
shares, and shifts in buyer characteristics and types of retail outlets from one month to the next.
However, just as a motion
picture is more revealing than a snapshot, it is the ability to measure changes in the behavior of
Individuals that is the real
advantage of a panel. Knowledge of the sequence of purchases makes it possible to analyze:
􀁺 Heavy buyers and their associated characteristics
􀁺 Brand-switching rates and the extent of loyal buying (Evidence of stable purchase activity in
the aggregate usually
masks a great deal of individual movement.)
􀁺 Cumulative market penetration and repeat purchase rates for new products (The success of
new products depends
jointly on the proportion who have tried them once and then purchased them a second, third, or
fourth time.)
In comparison with interview methods, although not with audits, the continuous purchase panel
has the advantage of
accuracy. Several studies have found that interview respondents will exaggerate their rate of
purchasing (an effect that is
most pronounced for infrequently purchased products) and dramatically oversimplify brand-
switching behavior. Apparently,
survey respondents tend to equate their most recent brand buying with the "normal" behavior—
whether or not this is
accurate.
The limitations all relate to the vulnerability of panels to various biases. The first problem
encountered is selection bias,
because of the high rates of refusal and the resulting lack of representativeness. It is estimated
that panel recruitment rates
may vary from as low as 10 to 15 percent when the initial contact is made by mail in the United
States, to 50 percent or more
for personal contacts made on behalf of panels in Great Britain.
Panels also are subject to a variety of testing effects. There is a definite tendency for new panel
members to report unusual
levels of purchasing because of the novelty of the reporting responsibility. This effect is so
pronounced that the first month's
results usually are discarded. Surprisingly, there is little evidence to suggest that there is any
long-run conditioning behavior
that would lead to great brand loyalty or price consciousness that would produce systematically
biased data.
Another area in which there is a great deal of commercial information available for marketers
relates to advertising and
media. A number of services have evolved to measure consumer exposure to the various media
and advertisements.
The Nielsen Television Index (NTI) is probably the best known of all the commercial services
available in this category. As a
system for estimating national television audiences, NTI produces a "rating" and corresponding
share estimate.

A rating is

the percent of all households that have at least one television set tuned to a program for at least 6
of every 15 minutes that the
program is telecast. Share is the percent of households that have a television set that is tuned to a
specific program at a
specific time.
Arbitron, a subsidiary of Control Data, maintains both national and regional radio and TV
panels. The panel members are
chosen by randomly generated telephone numbers, to ensure that households with unlisted
numbers are reached. Those
household members who agree to participate when called are sent diaries in which they are asked
to record their radio
listening behavior over a short duration. Most radio markets are rated only once or twice a year;
however, some larger ones
are rated four times a year. The TV diary panel is supplemented with a sample of households that
have agreed to attach an
electronic meter to their television sets. Arbitron produces custom reports for clients. Typically,
these are based on an
interactive computer-based system called Arbitron Information on Demand (AID).
The Starch Readership Service measures the readership of advertisements in magazines and
newspapers.
The Starch surveys employ the recognition method to access a particular ad's effectiveness.
Four degrees of reading are
recorded:
1. Nonreader: A person who does not remember having seen the advertisement in the issue.
2. Noted: A person who remembers seeing the advertisement in the issue.
3. Associated: A person who not only "noted" the advertisement, but who also saw or read some
part of it that clearly
indicated the brand or advertiser.
4. Read Most: A person who read 50 percent or more of the written material in the ad.
Because newspaper and magazine space cost data are also available, a "readers per dollar"
variable can be calculated. The
final summary report from Starch shows each ad's (one-half page or larger) overall readership
percentages, readers per dollar,
and rank when grouped by product category.

Marketing Research on the Internet

The Internet and Marketing Research Today

"Like any traditional information resource, the Internet has certain advantages and
disadvantages."
The value of the Internet as a marketing research tool is argued by some people today. They
think that quality information is
hard to find and that the Internet is too slow. Although there is some truth to these statements,
they need some qualification.
Like any traditional information resource, the Internet has certain advantages and disadvantages.
Some information can be
searched well on the Internet when other information sources are not available at all. Besides
this, the Internet is
characterized by very dynamic technological developments, which in turn influence the
information search process.
As the population of the Internet and on-line users increases, new research issues have arisen
concerning the demographics
and psychographics of the on-line user and the opportunities for a product or service. On-line
focus groups are conducted
entirely on-line—everything from recruitment and screening (which the recruiter does via e-
mail) to moderation of the
discussion itself. This method allows researchers to reach target segments more effectively.
As the on-line population increases, the demographics broaden, enabling remote global segments
to be reached, something
not possible via traditional methods. One of the limitations to on-line research is that the results
cannot be projected to the
general population because not everyone has access to a computer, modem, and on-line service.
Another difference between on-line and traditional qualitative research is that cyberspace is
populated by trend leaders.
Commonly targeted by marketers, advertisers, and product manufacturers, trend leaders are early
adopters who try out new
ideas, products, services, and technologies before these innovations reach popularity in the mass
market.
Companies are increasingly collecting information from their Web site visitors. Especially for
companies which sell over the
Web, collecting information about potential customers who have Internet access is critical. This
type of data collection can
serve a number of purposes:
􀁺 Counting and describing Web site visitors in order to customize Web site content to suit their
needs
􀁺 Collecting additional information for customer databases, which then may be used by product
development, sales,
marketing, or service departments
􀁺 Receiving questions or suggestions regarding the use of a product
􀁺 Receiving and answering complaints
Finding out information about competitor activities is an important task for businesses. The
Internet is a prime tool for this
task, since it reduces the time spent and may increase substantially the quality of the information
collected. Both product and
financial information are probably suited best for competitive tracking. Especially larger
corporations display this
information most often on their Websites. On the other hand, pricing information might not be
amenable to tracking readily,
since it is not too common for businesses to display product prices (unless they actually sell over
the Internet). Competitive
promotion and distribution information is probably the least suited to tracking via the Internet.
Information about products or
companies can be obtained using search engines on the Web . . . However, search engines have
certain limitations and hence
do not guarantee that all relevant information has been obtained. For this purpose, there are
providers of custom search
services, who search for information for a fee.
The time when one could keep up with the information on the World Wide Web is already
ancient history. With the Web
growing dramatically, it becomes impossible to track even a small and well-defined segment of
the Web. Therefore, the
market researcher has even more difficulty finding the information he or she seeks.
Intranets are internal company networks. While corporations are looking for ways and means of
communicating to
consumers through the World Wide Web, it is apparent that intranets are the building blocks for
successful commercial
activity. These internal networks start off as ways for employees to connect to company
information. Intranets may also
incorporate connections to the company's various suppliers. According to many industry experts,
the advent of total
commercial integration is fairly close—employees, suppliers, and customers will soon operate in
a totally seamless
environment. The advantage for an intranet user is that he or she can connect to the Internet
easily, whereas Internet users
cannot access intranets without appropriate security codes.
The utilization of intranets will aid in the communication and distribution of information inside
large corporations. This is
especially crucial for firms where information and know-how is mission-critical, such as
management consultants or software
developers. Once information is gathered, it is stored in internal databases so that it can be
accessed from any company
location in the world. By researching internal databases in the first place, the danger of
duplicating information search
procedures in separate locations is minimized and therefore the return on information is
maximized.
There are a number of promising technologies on the horizon which all have a common
objective: to increase the bandwidth
of the Internet. The demand for high-speed connections is huge, since more and more large data
files such as multimedia
applications are sent over the Internet.

Information Collection: Qualitative and Observational Methods

Using Qualitative Methods for Information Collection

"The reality in the kitchen or supermarket differs drastically from that in most corporate
offices."

The purpose of qualitative research is to find out what is in a consumer's mind. It is done in order
to access and also get a
rough idea about the person's perspective. It helps the researcher to become oriented to the range
and complexity of consumer
activity and concerns. Qualitative data are collected to know more about things that cannot be
directly observed and
measured. Feelings, thoughts, intentions, and behavior that took place in the past are a few
examples of those things that can
be obtained only through qualitative data collection methods. It is also used to identify likely
methodological problems in the
study, and to clarify certain issues that were not clear in the problem. Sometimes it may not be
possible or desirable to obtain
information from respondents by using fully structured or formal methods. Qualitative data
collection methods are used in
such situations. People may be unwilling to answer some questions when confronted with them
directly. Questions that theyperceive as invasion of privacy, that they think will embarrass them,
or that may have a negative impact on their ego or status
will not be answered . . . Sometimes, accurate answers will not be forthcoming because they are
part of the subconscious
mind and cannot be tapped into directly. They are disguised from the outer world through the
mechanism of ego defenses,
such as rationalization . . . It has been shown that information of this sort can be better obtained
from qualitative methods,
such as focus-group discussions or projective techniques, than through a formal, structured-
survey method of data collection.
The basic assumption behind qualitative methods is that an individual's organization of a
relatively unstructured stimulus
indicates the person's basic perception of the phenomenon and his or her reaction to it. [Note]
The more unstructured and
ambiguous a stimulus is, the more subjects can and will project their emotions, needs, motives,
attitudes, and values. The
structure of a stimulus is the degree of choice available to the subject. A highly structured
stimulus leaves very little choice:
The subject has unambiguous choice among clear alternatives. A stimulus of low structure has a
wide range of alternative
choices. If it is ambiguous, the subjects can "choose" their own interpretations.
Collectively, these methods are less structured and more intensive than standardized
questionnaire-based interviews. There is
a longer, more flexible relationship with this respondent, so the resulting data have more depth
and greater richness of
context—which also means a greater potential for new insights and perspectives. The numbers of
respondents are small and
only partially representative of any target population, making them preludes to, but not
substitutes for, carefully structured,
large-scale field studies. There are three major categories of acceptable uses of qualitative
research methods:
1. Exploratory
􀁺 Defining problems in more detail.
􀁺 Suggesting hypotheses to be tested in subsequent research.
􀁺 Generating new product or service concepts, problem solutions, lists of product features, and
so forth.
􀁺 Getting preliminary reactions to new product concepts.
􀁺 Pretesting structured questionnaires.
2. Orientation
􀁺 Learning the consumer's vantage point and vocabulary.
􀁺 Educating the researcher to an unfamiliar environment: needs, satisfactions, usage situations,
and problems.
3. Clinical
􀁺 Gaining insights into topics that otherwise might be impossible to pursue with structured
research methods.
Individual in-depth interviews are interviews that are conducted face to face with the respondent,
in which the subject matter
of the interview is explored in detail. There are two basic types of in-depth interviews. They are
nondirective and
semistructured, and their differences lie in the amount of guidance the interviewer provides.
In nondirective interviews the respondent is given maximum freedom to respond, within the
bounds of topics of interest to
the interviewer. Success depends on (1) establishing a relaxed and sympathetic relationship; (2)
the ability to probe in order
to clarify and elaborate on interesting responses, without biasing the content of the responses;
and (3) the skill of guiding the
discussion back to the topic outline when digressions are unfruitful, always pursuing reasons
behind the comments and
answers.
A focus-group discussion is the process of obtaining possible ideas or solutions to a marketing
problem from a group of
respondents by discussing it. The emphasis in this method is on the results of group interaction
when focused on a series of
topics a discussion leader introduces. Each participant in a group of five to nine or more persons
is encouraged to express
views on each topic, and to elaborate on or react to the views of the other participants. The
objectives are similar to
unstructured in-depth interviews, but the moderator plays a more passive role than an interviewer
does.
The focus-group discussion offers participants more stimulation than an interview; presumably
this makes new ideas and
meaningful comments more likely. [Note] Among other advantages, it is claimed that
discussions often provoke more
spontaneity and candor than can be expected in an interview. Some proponents feel that the
security of being in a crowd
encourages some participants to speak out.

Focus groups can be classified into three types.

Exploratory focus groups are commonly used at the exploratory phase of

the market research process to aid in defining the problem precisely. They can also be viewed as
pilot testing: Exploratory
groups can be used to generate hypotheses for testing or concepts for future research.
Clinical focus groups involve qualitative research in its most scientific form. The research is
conducted as a scientific
endeavor, based on the premise that a person's true motivations and feelings are subconscious in
nature. The moderator
probes under the level of the consumer's consciousness. Obviously, clinical groups require a
moderator with expertise in
psychology and sociology. Their popularity is less because of the difficulty of validating findings
from clinical groups and
because unskilled operators sometimes attempt to conduct clinical groups.
The reality in the kitchen or supermarket differs drastically from that in most corporate offices.

Experiencing focus groups

allow the researcher to experience the emotional framework in which the product is being used.
Thus an experiencing
approach represents an opportunity to "experience" a "flesh-and-blood" consumer.
Most of the limitations of these qualitative methods stem from the susceptibility of the results in
misuse, rather than their
inherent shortcomings. There is a great temptation among many managers to accept small-
sample exploratory results as
sufficient for their purposes, because they are so compelling in their reality. The dangers of
accepting the unstructured output
of a focus group or a brief series of informal interviews are twofold. First, the results are not
necessarily representative of
what would be found in the population, and hence cannot be projected. Second, there is typically
a great deal of ambiguity in
the results. The flexibility that is the hallmark of these methods gives the moderator or
interviewer great latitude in directing
the questions; similarly, an analyst with a particular point of view may interpret the thoughts and
comments selectively to
support that view. In view of these pitfalls, these methods should be used strictly for insights into
the reality of the consumer
perspective and to suggest hypotheses for further research.

Observation Methods
"There are strong arguments for considering the observation of ongoing behavior as an
integral
part of the research design."
Pages: 203-207
Observational methods are limited to providing information on current behavior. Too often, this
limitation becomes an
excuse for not considering observational methods; because many researchers do not use these
methods, they may not

Casual observation is an important exploratory method. Managers continually monitor such

variables as competitive
prices and advertising activity, the length of lines of customers waiting for service, and the trade
journals on
executives desks, to help to identify problems and opportunities.

Systematic observation can be a useful supplement to other methods. During a personal

interview, the interviewer
has the opportunity to note the type, condition, and size of the residence, the respondent's race,
and the type of
neighborhood with regard to mixed types and qualities of homes and apartments. Seldom is this
data source
adequately exploited in surveys.
􀁺 Observation may be the least expensive and most accurate method of collecting purely
behavioral data such as instore
traffic patterns or traffic passing a certain point on a highway system. Thus, people's adherence
to pedestrian
safety rules before and after a safety campaign can be measured most easily by counting the
number of people who
cross against the light or outside the crosswalks.
􀁺 Sometimes observation is the only research alternative. This is the case with physiological
phenomena or with young
children who cannot articulate their preferences or motives.
Direct observation is frequently used to obtain insights into research behavior and related
issues, such as packaging
effectiveness. One firm used an observer disguised as a shopper, to watch grocery store shoppers
approach a product
category, to measure how long they spend in the display area, and to see whether they have
difficulty finding the product; and
whether the package is read, and if so, whether the information seemed hard to find. This kind of
direct observation can be
highly structured, with a detailed recording form prepared in advance, or very unstructured.
When making an unstructured
observation, the observer may be sent to mingle with customers in the store and look for
activities that suggest service
problems. This is a highly subjective task, because the observer must select a few things to note
and record in varying
amounts of detail. This inevitably will draw subjective inferences from the observed behavior.

Contrived observation can be thought of as behavioral projective tests; that is, the response
of people placed in a contrived
observation situation will reveal some aspects of their underlying beliefs, attitudes, and motives.
Many direct-mail offers of
new products or various kinds of books fall into this category, as do tests of variations in shelf
space, product flavors, and
display locations. The ethics of such offers can be very dubious, as in the example where a
manufacturer decides to produce a
product only after receiving an acceptable number of orders from a direct-mail advertisement.
A variant of this method uses buying teams, disguised as customers, to find out what happens
during the normal interaction
between the customer and the retailer, bank, service department, or complaint department. This
method has provided useful
insights into the discriminatory treatment of minorities by retailers, and the quality of public
performance by employees of
government agencies, banks, and airlines. One is hard pressed to think of other ways of finding
out about the
knowledgeability, helpfulness in meeting customers' needs, and efficiency of the staff. Clouding
this picture are some serious,
unresolved questions of ethics.
Content analysis is an observation technique used to analyze written material into meaningful
units, using carefully applied
rules. [Note] It is defined as the objective, systematic, and quantitative description of the
manifest content of communication.
It includes observation as well as analysis. The unit of analysis may be words, characters,
themes, space and time measures,
or topics. Analytical categories for classifying the units are developed, and the communication is
broken down according to
p

Information from Respondents: Issues in Data Collection

"The choice of data collection method is a critical point in the research process."
Measuring behavior usually involves four related concepts: what the respondents did or did not
do; where the action takes
place; the timing, including past, present, and future; and the frequency or persistence of
behavior. In other words, it often
means assessing what, where, and how often. Surveys can also be conducted to determine
respondents' lifestyles. Groupings
of the population by lifestyle can be used to identify an audience, constituency, target market, or
other collections of interest
to the sponsor. Social contact and interaction are often the focus of survey research or bear
heavily on other issues relevant to
the survey. So the family setting, memberships, social contacts, reference groups, and
communications of respondents
frequently are measured or assessed within the survey research process. Demographic factors
often obtained through surveys
include such variables as age, sex, marital status, education, employment, and income, among
others. Personality reflects
consistent, enduring patterns of behavior, and it is more deeply rooted than lifestyle. Personality
can be measured using rating
methods. Situational tests, projective techniques, and inventory schemes. Motivation and
knowledge are also frequently
measured using surveys.
The problem of getting meaningful results from the interview process stems from the need to
satisfy reasonably the following
conditions:

􀁺 Population has been defined correctly.

􀁺 Sample is representative of the population.
􀁺 Respondents selected to be interviewed are available and willing to cooperate.
􀁺 Respondents understand the questions.
􀁺 Respondents have the knowledge, opinions, attitudes, or facts required.
􀁺 Respondents are willing and able to respond.
􀁺 Interviewer understands and records the responses correctly.
These conditions often are not satisfied because of interviewer error, ambiguous interpretation of
both questions and answers,
and errors in formulating responses.
The choice of data collection method is a critical point in the research process. The decision is
seldom easy, for there are
many factors to be considered and many variations of the four basic survey methods: (1)
personal interview, (2) telephone
interview, (3) mail survey, and (4) fax survey.
Because each research problem will have a different ranking of importance, and no data
collection method is consistently
superior, few generalizations can be made. Much depends on the researcher's skill in adapting the
methods to the
circumstances. Overall, however, the telephone and the mail survey methods are the dominant
methods for conducting
surveys.
The way a researcher plans to draw a sample is related to the best way to collect the data. Certain
kinds of sampling
approaches make it easier or more difficult to use one or another data collection strategy. If one
is sampling from a list, the
information on the list matters. Obviously, if a list lacks either good mailing addresses or good
telephone numbers, trying to
collect data by mail, phone, or fax is complicated. Random-digit dialing has improved the
potential of telephone data
collection strategies by giving every household with a telephone a chance to be selected.
The reading and writing skills of the population and its motivation to cooperate are two salient
considerations in choosing a
mode of data collection. Self-administered approaches to data collection place more of a burden
on the respondent's reading
and writing skills than do interviewer procedures. Respondents who are not very well educated,
whose reading and writing
skills in English are less than facile (but who can speak English), people who do not see well,
and people who are somewhat
ill or tire easily will find an interviewer-administered survey easier than filling our a self-
administered form. Another
problem for mail surveys is getting people to return a completed questionnaire. People who are
particularly interested in the
research problem tend to be most likely to return questionnaires. [Note]
Generally speaking, if one is going to have a self-administered questionnaire, one must reconcile
oneself to closed-end
questions—that is, questions that can be answered by simply checking a box or circling the
proper response from a set
provided by the researcher. Second, and more important, self-administered open answers often
do not produce useful data.
With no interviewer present to probe incomplete answers for clarity and to meet consistent
question objectives, the answers
will not be comparable across respondents, and they will be difficult to code.
Researchers have argued persuasively that one or another of the strategies should have an
advantage when dealing with
sensitive topics. Self-administered procedures are thought to be best, because the respondent
does not have to admit directly
to an interviewer a socially undesirable or negatively valued characteristic or behavior. Others
have argued that telephone
procedures lend an air of impersonality to the interview process that should help people report
negative events or behaviors.
Moreover, random-digit dialing at least provides the option of having a virtually anonymous
survey procedure, because the
interviewer need not know the name or location of the respondent. Still others argue that
personal interviews are the best way
to ask sensitive questions, because interviewers have an opportunity to build rapport and
establish the kind of trust that is
needed for respondents to report potentially sensitive information.
Misrepresentation of the data collection process stems from two principal sources. The first is the
representation of a
marketing activity other than research, as research. The second is the abuse of respondents' rights
during the data collection
process under the rationale of providing better-quality research.
Both the misrepresentation of research and the abuse of respondents' rights during the legitimate
research interviewing
process involve consumer deception. This has two implications. From a business perspective, if
public willingness to
cooperate with the research process is adversely affected, the long-term statistical reliability of
marketing research is
jeopardized. From a social perspective, consumer deception violates basic business ethics. The
responsibility of business to
society rests on a fundamental concern for the advancement of professional business practices.
Marketing research depends
on mutual trust and honesty between the business community and society. Deception undermines
the trust by using people asmere instruments to accomplish unstated purposes.
Attitude Measurement
Attitude Measurement in Marketing Research

"Despite years of experience with these applications, the design of the rating scale is usually an
adhoc
judgment based on the researcher's preferences and past experiences in similar situations."

Attitudes are mental states used by individuals to structure the way they perceive their
environment and guide the way they
respond to it. There is general acceptance that there are three related components that form an
attitude: a cognitive or
knowledge component, a liking or affective component, and an intentions or actions component.
Each component provides a
different insight into a person's attitude.
The cognitive or knowledge component represents a person's information about an object. This
information includes
awareness of the existence of the object, beliefs about the characteristics or attributes of the
object, and judgments about the
relative importance of each of the attributes.
The affective or liking component summarizes a person's overall feelings toward an object,
situation, or person, on a scale
of like-dislike or favorable-unfavorable. When there are several alternatives to choose among,
liking is expressed in terms of
preference for one alternative over another. Preferences can be measured by asking which is
"most preferred" or the "first
choice," which is the "second choice," and so forth. Affective judgments also can be made about
the attributes of an object.
The intention or action component refers to a person's expectations of future behavior toward
an object . . . Intentions
usually are limited to a distinct time period that depends on buying habits and planning horizons.
The great advantage of an
intentions question is that it incorporates information about a respondent's ability or willingness
to pay for the object, or
otherwise take action. One may prefer Aspen over all other ski areas in the Rockies but have no
intention of going next year
because of the cost.
Measurement can be defined as a standardized process of assigning numbers or other symbols
to certain characteristics of
the objects of interest, according to some prespecified rules. Measurement often deals with
numbers, because mathematical
and statistical analyses can be performed only on numbers, and they can be communicated
throughout the world in the same
form without any translation problems. For a measurement process to be a standardized process
of assignment, two
characteristics are necessary. First, there must be one-to-one correspondence between the symbol
and the characteristic in the
object that is being measured. Second, the rules for assignment must be invariant over time and
the objects being measured

Scaling is the process of creating a continuum on which objects are located according to the
amount of the measured
characteristic they possess. An illustration of a scale that is often used in research is the
dichotomous scale for sex. The object
with male (or female) characteristics is assigned a number 1 and the object with the opposite
characteristics is assigned the
number 0. This scale meets the requirements of the measurement process in that the assignment
is one to one and it is
invariate with respect to time and object. Measurement and scaling are basic tools used in the
scientific method and are used
in almost every marketing research situation.
The assignment of numbers is made according to rules that should correspond to the properties
of whatever is being
measured. The rule may be very simple as when a bus route is given a number to distinguish it
from other routes. Here the
only property is identity, and any comparisons of numbers are meaningless. This is a nominal
scale. At the other extreme is
the ratio scale, which has very rigorous properties. In between the extremes are ordinal scales
and interval scales.
Single-item scales are those that have only one item to measure a construct. Under the single-
item scales, the itemizedcategory
scale is the most widely used by marketing researchers. In some situations, comparative scales,
rank-order scales, or
constant-sum scales have advantages.
Attitude rating scales are widely used to test the effectiveness of advertising copy or compare the
performance of new
product concepts and segment markets. Despite years of experience with these applications, the
design of the rating scale is
usually an ad-hoc judgment based on the researcher's preferences and past experiences in similar
situations. The various
decisions that a researcher has to make regarding the form and structure of the scale while
designing a scale are described
briefly below:
1. Number of scale categories. Theoretically, the number of rating-scale categories can vary
from two to infinity. A
continuous rating scale has infinite categories, whereas the number of categories in a
discontinuous scale depends on several
factors, such as the capabilities of the scales, the format of the interview, and the nature of the
object

. For example, if
the survey is done by telephone, the number of categories that a scale can have is very limited,
because the memory of the
respondent is limited.

2. Types of poles used in the scale. All rating scales have verbal descriptors or adjectives
that serve as end points or anchors.
The scale can have a single pole or two poles. An example of a two-pole scale is "sweet . . . not
sweet," and an example of a
scale with a single pole is the Stapel scale . . . The advantage of the single-pole scale over the
scale with double poles is ease
of construction, as one need not look for adjectives to achieve bipolarity. The disadvantage is
that we do not know what each
category represents in a single-pole scale.

3. Strength of the anchors.

4. Labeling of the categories.

5. Balance of the scale.

Designing the Questionnaire

Designing a Marketing Research Questionnaire

"The basic guidelines for sequencing a questionnaire to make it interesting and logical to both
interviewer and respondent are straightforward."

A good questionnaire accomplishes the research's objectives. Surveys must be custom-built to

the specification of given
research purposes, and they are much more than a collection of unambiguous questions. A
number of constraints are imposed
on the development of an appropriate questionnaire. For example, the number, form, and
ordering of the specific questions
are partly determined by the data collection method. The respondent's willingness and ability to
answer . . . also influences
the final questionnaire format. The wording and sequence of questions can facilitate recall and
motivate more accurate
responses.
Although each questionnaire must be designed with the specific research objectives in mind,
there is a sequence of logical
steps that every researcher must follow to develop a good questionnaire:

1. Plan what to measure.

2. Formulate questions to obtain the needed information.
3. Decide on the order and wording of questions and on the layout of the questionnaire.
4. Using a small sample, test the questionnaire for omissions and ambiguity.
5. Correct the problems (and pretest again, if necessary).

The most difficult step is specifying exactly what information is to be collected from each
respondent. Poor judgment and
lack of thought at this stage may mean that the results are not relevant to the research purpose or
that they are incomplete.
Both problems are expensive, and may seriously diminish the value of the study.
Before specific questions can be phrased, a decision has to be made as to the degree of freedom
to be given respondents in
answering the question. The alternatives are (1) open-ended with no classification, where the
interviewer tries to record the
response verbatim; (2) open-ended, where the interviewer uses precoded classifications to record
the response; or (3) the
closed, or structured, format, in which a question or supplementary card presents the responses
the respondent may consider

The choice between open- and closed-response questions is not necessarily an either/or
distinction. Open-response questions
can be used in conjunction with closed-response questions to provide additional information.
Using an open-response
question to follow up a closed-response question is called a probe. Probes can efficiently
combine some advantages of both
open and closed questions. They can be used for specific prechosen questions or to obtain
additional information from only a
subset of people who respond to previous questions in a certain way. A common example of the
latter is to ask respondents
who choose "none of the above" a follow-up question to expand on their answer.
There are two general purposes for the use of probes in a questionnaire. The first is to pinpoint
questions that were
particularly difficult for respondents. Adequate pretesting of questions reduces this need to use
probes. The second purpose is
to aid researcher interpretation of respondent answers. Answers to open-response follow-ups can
provide valuable guidance
in the analysis of closed-response questions.
The wording of particular questions can have a large impact on how a respondent interprets
them. Even small changes in
wording can shift respondent answers, but it is difficult to know in advance whether or not a
wording change will have such
an effect. Our knowledge of how to phrase questions that are free from ambiguity and bias is
such that it is easier to discuss
what not to do than it is to give the prescriptions. Hence, the following guidelines are of greatest
value in critically evaluating
and improving an existing question.

1. Is the vocabulary simple, direct, and familiar to all respondents?

2. Do any words have vague or ambiguous meanings?

3. Are any questions "double-barreled"? There are questions in which a respondent can agree
with one part of the question
but not the other, or cannot answer at all without accepting a particular assumption.

4. Are any questions leading or loaded?

5. Are the instructions potentially confusing?

6. Is the question applicable to all respondents?

7. Split-ballot technique. Whenever there is doubt as to the appropriate wording, it is desirable to

test several alternatives.

8. Are the questions of an appropriate length?

The order, or sequence, of questions will be determined initially by the need to gain and maintain
the respondent's

cooperation and make the questionnaire as easy as possible for the interviewer to administer.
Once these considerations are
satisfied, attention must be given to the problem of order bias—the possibility that prior
questions will influence answers to
subsequent questions.
The basic guidelines for sequencing a questionnaire to make it interesting and logical to both
interviewer and respondent are
straightforward.

1. Open the interview with an easy and nonthreatening question.

2. The questionnaire should flow smoothly and logically from one topic to the next.

3. For most topics it is better to proceed from broad, general questions to the more specific.

4. Sensitive or difficult questions dealing with income status, ability, and so forth, should not be
placed at the beginning of
the questionnaire.

The purpose of a pretest is to ensure that the questionnaire meets the researcher's expectations in
terms of the information
that will be obtained. First drafts of questionnaires tend to be too long, often lack important
variables, and are subject to all
the hazards of ambiguous, ill-defined, loaded, or double-barreled questions. The objective of the
questionnaire pretest is to
identify and correct these deficiencies.
The issue of question format is an important one when constructing a questionnaire for cross-
cultural or cross-national
research. [Note] The researcher may lack experience with purchasing behavior or relevant
determinants of response in
another country or cultural context. Use of open-ended questions may thus be desirable in a
number of situations. Since they
do not impose any structure or response categories, open-ended questions avoid the imposition of
cultural bias by the
researcher. Furthermore, they do not require familiarity with all the respondents' possible
responses.
In addition, differences in levels of literacy may affect the appropriateness of using open-ended
questions as opposed to
closed questions. Since open-ended questions require the respondent to answer on his or her own
terms, they also require a
moderate level of sophistication and comprehension of the topic on the part of the respondent;
otherwise, responses will not
be meaningful. Open-ended questions will therefore have to be used with care in cross-cultural
and cross-national research, in
order to ensure that bias does not occur as a result of differences in level of education.
When conducting cross-national research, the wording of questions has to be changed according
to the country in which the
questionnaire is being administered. Certain categories, such as sex and age, are the same in all
countries or cultures, and
hence, equivalent questions can be posed. Somewhat greater difficulties may be encountered
with regard to other categories,
such as income, education, occupation, or the dwelling unit, since these are not always exactly
comparable from one culture
or country to another. In addition to the fact that in some countries men may have several wives,
marital status can present
problems, depending on how the question is put. The growing number of cohabitating couples,
especially those who are
divorced, creates a particular problem in this regard. What is included in the category of income
may vary from country to
country, and incomes vary considerably within countries.
The most significant problems in drawing up questions in multicountry research are likely to
occur in relation to attitudinal,
psychographic, and lifestyle data. Here, as has already been pointed out, it is not always clear
that comparable or equivalent
attitudinal or personality constructs—such as aggressiveness, respect for authority, and honor—
are relevant in all countries
and cultures. Even where similar constructs exist, it is far from clear whether they are most
effectively tapped by the same
question or attitude statement.

Experimentation Experimental Research

"Experimentation is a powerful tool in the search for unambiguous relationships that we hope
may
be used to make valid predictions about the effects of marketing decision, and to develop basic
theories."

Experimental research involves decision making on three major issues:

1. What type of experimental design should be used?
2. Should the experiment be performed in a "laboratory" setting or in the "field"?
3. What are the internal and external threats to the validity of the experiment, and how can we
control for the various threats
to the experiment's internal and external validity?
Experimental designs can be broadly categorized into two groups, classical designs and
statistical designs. The basic
difference between these two types of experimental designs is that classical designs consider the
impact of only one treatment
level of an independent variable at a time. On the other hand, statistical designs allow for
examining the impact of different
treatment levels of an independent variable and also the impact of two or more independent
variables. [Note]
Experimental research can also be broadly divided into two main categories: laboratory
experiments and field experiments.
The first, laboratory experiments, as the name suggests, are experiments in which the
experimental treatment is introduced in
an artificial or laboratory setting. In this type of research study, the variance of all or nearly all of
the possible influential
independent variables not pertinent to the immediate problem of the investigation is kept to a
minimum. This is done by
isolating the research in a physical situation apart from the routine of ordinary living and by
manipulating one or more
independent variables under rigorously specified, operationalized, and controlled conditions.
The second, field experiments, are conducted in the "field." A field experiment is a research
study in a realistic situation in
which one or more independent variables are manipulated by the experimenter under carefully
controlled conditions as the
situation will permit. [Note] . . . A field experiment is the experimental treatment or intervention
introduced in a completely
natural setting. The respondents usually are not aware that an experiment is being conducted;
thus, the respondent tends to be
natural.
To design and analyze an experiment, it is necessary that everyone involved in it have a clear
idea in advance of exactly what
is to be studied, how the data are to be collected, and at least a qualitative understanding of how
these data are to be analyzed.
An outline of the recommended procedure is as follows:

1. Recognition of and statement of the problem.

This may seem to be a rather obvious point, but in practice it is often not
simple to realize that a problem requiring experimentation exists, nor is it simple to develop a
clear and generally accepted
statement of this problem. A clear statement of the problem often contributes substantially to a
better understanding of the
phenomena and the final solution of the problem.

2. Choice of factors and levels.

 The experimenter must choose the factors to be varied in the experiment, the ranges over
which these factors will be varied, and the specific levels at which runs will be made. Thought
must be given to how these
factors are to be controlled at the desired levels and how they are to be measured.

3. Selection of the response variable.

In selecting the response variable, the experimenter should be certain that this variable
really provides useful information about the process under study.

4. Choice of experimental design.

If the first three steps are done correctly, this step is relatively easy. Choice of design
involves the consideration of sample size (number of replicates), the selection of a suitable run
order for the experimental
trials, and the determination of whether or not blocking or other randomization restrictions are
involved.

5. Performing the experiment.

When running the experiment, it is vital to monitor the process carefully to ensure that
everything is being done according to plan. Errors in experimental procedure at this stage will
usually destroy experimental

6. Date analysis.

Statistical methods should be used to analyze the data so that results and conclusions are
objective rather
than judgmental in nature. If the experiment has been designed correctly and if it has been
performed according to the design,
then the statistical methods required are not elaborate.

7. Conclusion and recommendations.

 Once the data have been analyzed, the experimenter must draw practical conclusions
about the results and recommend a course of action. Graphical methods are often useful in this
stage, particularly in

presenting the results to others. Follow-up runs and confirmation testing should also be
performed to validate the conclusions
from the experiment.
Experimentation is a powerful tool in the search for unambiguous relationships that we hope may
be used to make valid
predictions about the effects of marketing decisions, and to develop basic theories. The
laboratory experiment is the preferred
method because of its internal validity; however, because of the acute external validity problems
in the laboratory setting,
managers are reluctant to rely on it. Unfortunately, the field experiment is beset by a number of
problems whose net effect as
been to limit the vast majority of marketing experiments to short-run comparisons across stores,
home placements of product
variations, and so forth. Relatively few large-scale experiments with social programs, marketing
programs, or advertising
campaigns are conducted in any given year.
Cost and time pressures are the first hurdle. Even "simple" in-store tests require additional efforts
to gain cooperation; to
properly place the display, price, or promotion; to measure the uncontrolled variables; and then
to audit the resulting sales
differences. The measurement costs alone are often substantial. When large interventions, such
as comparing alternative
advertising themes in multiple geographic areas, are contemplated, management may be very
wary that the costs will exceed
the benefits. These costs are likely to be considerable if any amount of reinterviewing or special
manipulation of advertising,
product, or other controllable variable is required.
Still another cost is security. A field experiment naturally involves exposing a marketing
program in the marketplace, so it is
difficult to hide from competitors, who are in contact with their own field sales force, store
personnel, research suppliers, and
trade sources.
Implementation problems abound in the conduct of experiments. First, it may not be easy to gain
cooperation within the
organization. Regional managers resist proposals to experiment with varying the size and call
frequency of a sales force.
They do not want to subject their market area to a reduced sales effort. Administrators of social
programs may resist efforts to
assign people randomly to treatments. They want to decide the assignments according to who
can benefit most from the
service and which service is most suitable. A second problem to which experiments involving
market areas are especially
susceptible is contamination, because of an inability to confine the treatment to the designated
experimental area. Buyers
from one geographic area may visit an adjacent area or receive media messages that overflow
from that area. It is seldom
possible to partition geographic market areas so that the sales measurements and treatments
exactly coincide.
A final category of the problems that limit the acceptance and usage of field experiments is
uncertain persistency of results.
For an experimental result to be useful, it must hold long enough to be acted on to advantage.
The two factors most damaging
to an assumption of persistency are high rates of technological, economic, or social change in the
market environment, and
aggressive competitive behavior. During the experiment the competition may elect to monitor
the test independently and
learn as much as possible—or take unusual action, such as a special consumer promotion, to
confound the results. Similarly,
when the test is expanded to a regional or national market, the competitors may either do nothing
or retaliate.

Sampling Fundamentals
Sampling Fundamentals in Marketing Research
"Execution of a research project always introduces some error in the study."

Marketing research often involves the estimation of a characteristic of some population of

interest. For instance, the average
level of usage of a park by community residents might be of interest; or information might be
needed on the attitudes of a
student body toward a proposed intramural facility. In either case, it would be unlikely that all
members of the population
would be surveyed. Contacting the entire population—that is, the entire census list—simply
would not be worthwhile from a
cost-benefit viewpoint. It would be both costly and, in nearly all cases, unnecessary, since a
sample usually is sufficiently
reliable. Further, it often would be less accurate, since nonsampling errors, such as nonresponse,
cheating, and data coding
errors, are more difficult to control. A population can be defined as the set of all objects that
possess some common set of
characteristics with respect to a marketing research problem.
A researcher typically is interested in the characteristics of a population. For example, if the
proportion of people in a city
watching a television show has to be determined, then the information can be obtained by asking
every household in that city.
If all the respondents in a population are asked to provide information, such a survey is called a
census. The proportion of
television viewers generated from a census is known as the parameter. On the other hand, a
subset of all the households may

be chosen and the relevant information could be obtained from that. Information obtained from a
subset of the households is
known as the statistic (from sample). Researchers then attempt to make an inference about the
population parameter with the
knowledge of the relevant sample statistic. A critical assumption in the process of inference is
that the sample chosen is
representative of the population. Estimation procedures and hypotheses tests are the types of
inferences that link sample
statistics and the corresponding population parameters.
A census is appropriate if the population size itself is quite small. For example, a researcher may
be interested in contacting
all the firms in the petroleum industry to obtain information on the use of a particular software. A
census also is conducted if
information is needed from every individual or object in the population. For example, if the
researcher is interested in
determining the number of foreign students enrolled in a university, it is necessary to get
information from all the
departments in the university because of possible variations within each department. Further, if
the cost of making an
incorrect decision is high or if sampling errors are high, then a census may be more appropriate
than a sample.
Sampling may be useful if the population size is large and if both the cost and time associated
with obtaining information
from the population is high. Further, the opportunity to make a quick decision may be lost if a
large population must be
surveyed. Also, with sampling, in a given time period, more time can be spent on each interview
(personal), thereby
increasing the response quality. Additionally, it is easy to manage surveys of smaller samples
and still exercise quality
control in the interview process.
Sampling may be sufficient in many instances. For example, if a company is interested in
obtaining reactions to installing a
check-cashing operation within the premises, a sample of employees may be adequate. If the
population being dealt with is
homogeneous, then sampling is fine. Finally, if taking a census is not possible, then sampling is
the only alternative.
Execution of a research project always introduces some error in the study . . . The total error in a
research study is the
difference between the true value (in the population) of the variable of interest and the observed
value (in the sample). The
total error in the study has two major components: sampling and nonsampling errors. If the
difference in value (error)
between the population parameter and the sample statistic is only because of sampling, then the
error is known as sampling
error. If a population is surveyed and error is observed, this error is known as a nonsampling
error. Nonsampling errors can
be observed in both a census and a sample. [Note] Some of the common sources of nonsampling
errors include measurement
error, data-recording error, data analysis error, and nonresponse error.
Because of their nature, sampling errors can be minimized by increasing the sample size.
However, as sample size increases,
the quality control of the research study may become more difficult. Consequently, nonsampling
errors can increase (e.g., the
number of nonresponses can go up), thereby setting up a classic trade-off between sampling and
nonsampling errors. Since
nonsampling errors can occur from various sources, it is difficult to identify and control them.
Therefore, more attention
should be given to reducing them.

The first step in the sampling process is to define the target population. The target population has
to be defined in such a
manner that it contains information on sampling elements, sampling units, and the area of
coverage. In order to define the
target population, certain simple rules of thumb should be adopted, such as looking to the
research objectives, reproducibility,
and convenience.
The next step is to determine the sampling frame. The sampling frame is usually a convenient list
of population members that
is used to obtain a sample. A number of biases will result if the sampling frame is not
representative of the population.
Hence, care should be taken to choose an appropriate list. There is extensive use of telephone
directories as a basis for
generating lists, but problems such as changed residences, unlisted numbers, and so forth,
introduce biases in the sample.
Next, the mechanism for selecting the sample needs to be determined. There are essentially two
different methodologies for
sample selection. In probability sampling, probability theory is used to determine the appropriate
sample. Simple random
sampling, cluster sampling, stratified sampling, systematic sampling, and multistage designs are
among the various available
choices in probability sampling.
Nonprobability sampling methods, such as judgmental sampling, snowball sampling, and quota
sampling, are appropriate in
the right context, even though they can be biased and lack precise estimates of sampling
variation. Shopping center sampling
is used widely, in part because it is relatively inexpensive. Biases in shopping center samples can
be reduced by adjusting the
samples to reflect shopping center characteristics, the location of the shoppers within the
shopping center, the time period of
the interviewing, and the frequency of shopping.

The fourth consideration in the process is determining the sample size.

The final consideration is nonresponse bias. Nonresponse bias can be reduced by improving the
research design to reduce
refusals and by using call-backs. Sometimes the best approach is to estimate the amount of bias
and adjust the interpretation
accordingly.
Sampling in international research poses some special problems. The absence of reliable
sampling lists brings in a number of
biases into the study. Moreover, adopting the same sampling method in different countries may
not yield the best results.
Even if one adopts the same sampling procedure across all countries, sampling equivalence will
not necessarily be achieved.

Sample Size and Statistical Theory

"Too often, information tends to be evaluated absolutely (it is intellectually comfortable to be

"certain"). Instead, it should be judged with respect to its use."

A practical question in marketing research often involves determining sample size. A survey
cannot be planned or
implemented without knowing the sample size. Further, the sample size decision is related
directly to research cost, and
therefore must be justified.
The size of a sample can be determined either by using statistical techniques or through some ad
hoc methods. Ad hoc
methods are used when a person knows from experience what sample size to adopt or when there
are some constraints, such
as budgetary constraints, that dictate the sample size.
One approach is to use some rules of thumb . . . The sample should be large enough so that when
it is divided into groups,
each group will have a minimum sample size of 100 or more.
In almost every study, a comparison between groups provides useful information and is often the
motivating reason for the
study. It is therefore necessary to consider the smallest group and to make sure that it is of
sufficient size to provide the
needed reliability.
In addition to considering comparisons between major groups, the analysis might consider
subgroups. For example, there
might be an interest in breaking down the group of frequent park users by age, and comparing
the usage by teenagers, young
adults, middle-aged persons, and senior citizens . . . For such minor breakdowns the minimum
sample size in each subgroup
should be 20 to 50.
The assumption is that less accuracy is needed for the subgroups. Suppose that the smallest
subgroup of frequent park users, the senior citizens, is about 1 percent of the population and it is
desired to have 20 in each
subgroup. Under simple random sampling, a sample size of about 2,000 might be recommended
in this case.
If one of the groups or subgroups of the population is a relatively small percentage of the
population, then it is sensible to use
disproportionate sampling. Suppose that only 10 percent of the population watches educational
television, and the opinions
of this group are to be compared with those of others in the population. If telephone interviewing
is involved, people might
be contacted randomly until 100 people who do not watch educational television are identified.
The interviewing then would
continue, but all respondents would be screened, and only those who watch educational
television would be interviewed. The
result would be a sample of 200, half of whom watch educational television.
Often there is a strict budget constraint. A museum director might be able to spare only $500
for a study, and no more. If
data analysis will require $100 and a respondent interview is $5, then the maximum affordable
sample size is 80. The
question then becomes whether a sample size of 80 is worthwhile, or is the study should be
changed or simply not conducted.
Another approach is to find similar studies and use their sample sizes as a guide. The studies
should be comparable in terms
of the number of groups into which the sample is divided for comparison purposes. They also
should have achieved a
satisfactory level of reliability.
Sample size really depends on four factors. The first is the number of groups and subgroups
within the sample that will be
analyzed. The second is the value of the information in the study in general, and the accuracy
required of the results inparticular. At one extreme, the research need not be conducted if the
study is of little importance. The third factor is the costs
of the sample. A cost-benefit analysis must be considered. A larger sample size can be justified if
sampling costs are low than
if sampling costs are high. The final factor is the variability of the population. If all members of
the population have identical
opinions on an issue, a sample of one is satisfactory. As the variability within the population
increases, the sample size also
will need to be larger.
In stratified sampling the population is divided into subgroups or strata and a sample is taken
from each. Stratified sampling
is worthwhile when one or both of the following are true:
1. The population standard deviation differs by strata.
2. The interview cost differs by strata.
Suppose we wanted to estimate the usage of electricity to heat swimming pools. The population
of swimming pools might be
stratified into commercial pools at hotels and clubs and private home swimming pools. The latter
might have a small
variation, and thus would require a smaller sample. If, however, the home-pool owners were less
costly to interview, that
would allow more of them to be interviewed than if the two groups involved the same interview
cost.
If other sampling designs are employed, the logic used to generate the optimal sample size will
still hold; however, the
formula can get complicated. For example, in an area design, the first step might be to select
communities at random. Then
the procedure could be to select census tracts, then blocks, and finally households.
Sometimes a researcher may want to take a modest sample, look at the results, and then decide if
more information, in the
form of a larger sample, is needed. Such a procedure is termed sequential sampling. For
example, if a new industrial product
is being evaluated, a small probability sample of potential users might be contacted. Suppose it is
found that their average
annual usage lever at a 95 percent confidence level is between 10 and 30 units, and it is known
that for the product to be
economically viable the average has to be 50 units. This is sufficient information for a decision
to drop the product. If,
however, the interval estimate from the original sample is from 45 to 65, the information is
inadequate for making that
decision, and an additional sample might be obtained. The combined samples then would
provide a smaller interval estimate.
If the resulting interval is still inadequate, the sample size could be increased a third time. Of
course, although sequential
sampling does provide the potential of sharply reducing costs, it can result in increased costs and
a delayed decision.
The concept of sequential sampling is useful because it reminds the researcher that the goal of
marketing research is
providing information to help in decision making. The quality of the information must be
evaluated in the decision-making
context. Too often, information tends to be evaluated absolutely (it is intellectually comfortable
to be "certain"). Instead, it
should be judged with respect to its use.

Fundamentals of Data Analysis

"Although data analysis can be a powerful aid to gaining useful knowledge, it cannot rescue a
badly
conceived marketing research study."

An understanding of the principles of data analysis is useful for several reasons. First, it can lead
the researcher to
information and insights that otherwise would not be available. Second, it can help avoid
erroneous judgments and
conclusions. Third, it can provide a background to help interpret and understand analysis
conducted by others. Finally, a
knowledge of the power of data analysis techniques can constructively influence research
objectives and research design.
Although data analysis can be a powerful aid to gaining useful knowledge, it cannot rescue a
badly conceived marketing
research study. If the research purpose is not well conceived, if the research questions are
irrelevant, or if the hypothesis is
nonviable or uninteresting, the research will require an abundance of good fortune to be useful.
Further, data analysis rarely
can compensate for a bad question, an inadequate sampling procedure, or sloppy fieldwork.
Data analysis has the potential to ruin a well-designed study. Inappropriate or misused data
analysis can suggest judgments
and conclusions that are at best unclear and incomplete, and at worst erroneous. Thus, it can lead
to decisions inferior to those

that would have been made without the benefit of the research. One important reason for
studying data analysis, therefore, is
to avoid the pitfalls associated with it.
The raw data obtained from . . . questionnaires must undergo preliminary preparation before they
can be analyzed using
statistical techniques. The quality of the results obtained from the statistical techniques and their
subsequent interpretation
depend to a great degree on how well the data were prepared and converted into a form suitable
for analysis. The major data
preparation techniques include (1) data editing, (2) coding, and (3) statistically adjusting the data
(if required).
Usually the first step in data analysis, after data preparation, is to analyze each question or
measure by itself. This is done by
tabulating the data. Tabulation consists simply of counting the number of cases that fall into the
various categories. Other
than aiding in "data cleaning" aspects, such as identifying the degree of omissions, ambiguities,
and errors in the responses,
the primary use of tabulation is in
(1) determining the empirical distribution (frequency distribution) of the variable in
question and
(2) calculating the descriptive (summary) statistics, particularly the mean or percentages.
Next, the data are subjected to cross-tabulations to assess if any association is present between
two (typically) nominal
variables. If the variables are measured as interval or ratio, they are transformed to nominally
scaled variables for the purpose
of cross-tabulation . . . For analyzing relationships between two or more variables, multivariate
analysis . . . can be
performed.
The appropriate statistical analysis technique for studying the relationships among and between
nominal variables is termed

cross-tabulation. It also is called cross-tabs, cross-classification, and contingency table

analysis. In cross-tabulation, the
sample is divided into subgroups in order to learn how the dependent variable varies from
subgroup to subgroup. Crosstabulation
tables require fewer assumptions to construct, and they serve as the basis of several statistical
techniques such as
chi-square and log-linear analysis. Percentages are computed on each cell basis or by rows or
columns. When the
computations are by rows or columns, cross-tabulation tables usually are referred to as
contingency tables, because the
percentages are basically contingent on the row or column totals.
Cross-tabulation is the analysis of association between two variables that are nominally scaled.
Of course, any interval-scaled
variable can be used to define groups and therefore form a nominally scaled variable . . . Most
marketing research studies go
no further than cross-tabulation, and even those studies that do use more sophisticated analytical
methods still use crosstabulation
as an important component. Hence, along with the data-preparation techniques, understanding,
developing, and
interpreting cross-tabulation are the fundamental needs of data analysis. [Note]
Data analysis is not an end in itself. Its purpose is to produce information that will help to
address the problem at hand.
Several factors influence the selection of the appropriate technique for data analysis. These
include: (1) type of data, (2)
research design, and (3) assumptions underlying the test statistic and related considerations.

]The entire gamut of statistical techniques can be broadly classified as univariate and
multivariate techniques, based on the
nature of the problem.

Univariate techniques are appropriate when there is a single measurement of each of the n
sample
objects, or when there are several measurements of each of the n observations but each variable
is analyzed in isolation. On
the other hand, multivariate techniques are appropriate for analyzing data when there are two
or more measurements of
each observation and the variables are to be analyzed simultaneously.
Univariate techniques can be further classified based on the type of data—whether they are
nonmetric or metric. As
mentioned earlier, nonmetric data are measured on a nominal or ordinal scale, whereas metric
data are measured on an
interval or ratio scale. Nonparametric statistical tests can be used to analyze nonmetric data.
Nonparametric tests do not
require any assumptions regarding the distribution of data.
For both nonmetric and metric data, the next level of classification involves determining whether
a single sample or multiple
samples are involved. Further, the case of multiple samples, the appropriate statistical test
depends on whether the samples
are independent or dependent.

Multivariate statistical techniques can be broadly defined as "a collection of procedures

for analyzing the association
between two or more sets of measurements that were made on each object in one or more
samples of objects." If only two
sets of measurements are involved, the data typically are referred to as bivariate. [Note] The
multivariate techniques can be
classified based on the following logic
.
􀁺 Can the data be partitioned into dependent and independent variable sets? If so, classify
according to the number ofvariables in each set. If not, classify the technique as an
interdependence technique.

􀁺 In the case of interdependence techniques, classification is done based on the principal focus
of the analysis. Is the
focus on the object (person/thing/event) or is it on the variable?
Based on the first factor, the multivariate techniques can be broadly classified as dependence
techniques or

interdependence techniques. Dependence techniques are appropriate when one or

more variables can be identified as
dependent variables and the remaining as independent variables. The appropriate choice of
dependence techniques further
depends on whether there are one or more dependent variables involved in the analysis.
In interdependence techniques, the variables are not classified as dependent or independent;
rather, the whole set of
interdependent relationships is examined. The interdependence techniques can be further
classified as focusing on variables
or objects; that is, as variable interdependence or interobject similarity techniques.

Presenting the Results

Presenting Marketing Research Results

"Each piece of the presentation should fit into the whole, just as individual pieces fit into a
jigsaw
puzzle."

Effective communication between research users and research professionals is extremely

important to the research process.
The formal presentation usually plays a key role in the communication effort. Generally,
presentations are made twice during
the research process. First, there is the research proposal presentation . . . when the client must
decide to accept, change, or
reject it. Second, there is the presentation of the research results, when decisions associated with
the research purpose are
addressed and the advisability of conducting further research often is considered.
Presentations can be written, oral, or both . . . Here are some guidelines that apply to both types
of presentations. In general, a
presenter should:

1. Communicate to a specific audience.

2. Structure the presentation.

3. Create audience interest.

4. Be specific and visual.

5. Address validity and reliability issues.

The first step is to know the audience, its background, and its objectives. Most effective
presentations seem like
conversations, or memos to a particular person as opposed to an amorphous group. The key to
obtaining that feeling is to
identify the audience members as precisely as possible.
Audience identification affects presentation decisions such as selecting the material to be
included and the level of
presentation. Excessive detail or material presented at too low a level can be boring or seem
patronizing. However, the
audience can become irritated or lost when material perceived as relevant is excluded or the
material is presented at too high
a level. In an oral presentation, the presenter can ask audience members whether they already
know some of the material.
Each piece of the presentation should fit into the whole, just as individual pieces fit into a jigsaw
puzzle. The audience should
not be muttering, "What on earth is this person talking about?" or "How does this material fit
in?" or "I'm lost." The solution
is to provide a well-defined structure . . . The structure should include an introduction, a body,
and a summary. Further, each
of the major sections should be structured similarly. The precept is to tell the audience what you
are going to say, say it, and
then tell them what you said. Sometimes you want to withhold the conclusion, to create interest.
In that case the audience
could be told, "The objective here will be to come to a recommendation as to whether this new
product should go into test
market and, if so, with what type of pricing strategy." Further, use nontechnical definitions as
much as possible to present thereport in simple language.
The audience should be motivated to read or listen to the presentation's major parts and to the
individual elements of each
section. Those in the audience should know why the presentation is relevant to them and why
each section was included. A
section that cannot hold interest probably should be excluded or relegated to appendix status.
The research purpose and objectives are good vehicles to provide motivation. The research
purpose should specify decisions
to be made and should relate to the research questions. A presentation that focuses on those
research questions and their
associated hypotheses will naturally be tied to relevant decisions and hold audience interest. In
contrast, a presentation that
attempts to report on all the questions that were included in the survey and in the cross-
tabulations often will be long,
uninteresting, and of little value.
As the analysis proceeds and the presentation is being prepared, the researcher should be on the
lookout for results that are
exceptionally persuasive, relevant, interesting, and unusual. Sometimes the deviant respondent
with the strange answers can
provide the most insight if his or her responses are pursued and not discarded.
Avoid talking or writing in the abstract. If different members of the audience have different or
vague understandings of
important concepts, there is a potential problem. Terms that are ambiguous or not well known
should be defined and
illustrated or else omitted.
The most interesting presentations usually use specific stories, anecdotes, studies, or incidents to
make points. They will be
much more interesting and graphic than a generalization, however accurate and scientific.
Try to identify those design issues that will affect interpretation and raise them in the context of
the interpretation.
The presentation should include some indication of the reliability of the results. At a minimum, it
always should be clear
what sample size was involved. The key results should be supported by more precise information
in the form of interval
estimates or a hypothesis test. The hypothesis test basically indicates, given the sample size,
what probability exists that the
results were merely an accident of sampling. If the probability (or significance level) of the latter
is not low, then the results
probably would not be repeated. Do not imply more precision than is warranted.
It is important to work with the client or at least be available to clarify or interpret the research
results when the findings are
implemented. This continued relationship not only helps researchers to evaluate the project's
usefulness, it gives them a sense
of confidence about the quality of their work. Since most marketing research projects are
obtained through word-of-mouth
referrals, not through advertising, it is important to satisfy the client. It may be useful for the
researcher to sit with the client
and get feedback on various aspects of the research project.

Traditional Applications of Marketing Research: Product, Price, Distribution, and

Promotion
Traditional Applications of Marketing Research: Product, Price, Distribution and
Promotion

"Companies spend more time and resources on advertising research than on sales promotion
research because of the greater risk and uncertainty in advertising research."
Pages: 628-656
New products development is critical to the life of most organizations as they adapt to their
changing environment. Since, by
definition, new products contain unfamiliar aspects for the organization, there will be uncertainty
associated with them. Thus,
it is not surprising that a large proportion of marketing research is for the purpose of reducing the
uncertainty associated with
new products.
New-product research can be divided into four stages . . . The first stage is generating new-
product concepts; the second is
evaluating and developing those concepts; the third is evaluating and developing the actual
products; finally, the product is
tested in a marketing program.
There are two types of concept generation research. The first might be termed need
identification research. The emphasis in
need research is on identifying unfilled needs in the market. The second is termed concept
identification. Here, an effort ismade to determine concepts that might fill an identified need.
Product evaluation and development, or product testing, is very similar to concept testing, in
terms of both the objectives and
the techniques. The aim is still to predict market response to determine whether or not the
product should be carried forward.
Test marketing has two primary functions. The first is to gain information and experience with
the marketing program before
making a total commitment to it. The second is to predict the program's outcome when it is
applied to the total market.
There are really two types of test markets: the sell-in test market and the controlled-distribution
scanner market. Sell-in test
markets are cities in which the product is sold just as it would be in a national launch. In
particular, the product has to gain
distribution space. Controlled-distribution scanner markets are cities for which distribution is
prearranged and the
purchase of a panel of customers are monitored using scanner data.
Research may be used to evaluate alternative price approaches for new products before launch or
for proposed changes in
products already on the market. As in the case of test marketing, the question of "reality" applies,
and it has been found that
the sales response to products at different prices in actual stores produces far more discriminating
results than the sales
response in an artificial store.
Decisions regarding price ranges for new products have to be made early in the development
stage. A product concept cannot
be tested fully, for example, without indicating its price, so when the product is ready to be
introduced, a decision must be
made about its specific price. Decisions on price changes—Should we change the price, and, if
so, in which way and by how
much?—will then need to be made over the product's life cycle.
Either of two general pricing strategies can be followed. The first is a skimming strategy, in
which the objective is to generate
as much profit as possible in the present period. The other is a share-penetration strategy, whose
objective is to capture an
increasingly larger market share by offering a lower price. Pricing research for the two different
approaches differs
substantially in terms of the information sought.
Traditionally, the distribution decisions in marketing strategy involve the number and location of
salespersons, retail outlets,
warehouses, and the size of discounts to be offered. The discount to be offered to the members in
the channel of distribution
usually is determined by what is being offered by existing or similar products, and also whether
the firm wants to follow a
"push" or a "pull" strategy. Marketing research, however, plays an important role in the number
and location in decisions
about numbers and locations.
The decisions for the promotion part of a marketing strategy can be divided into (1) advertising
and (2) sales promotion.
Sales promotion affects the company in the short term, whereas advertising decisions have long
term effects. Companies
spend more time and resources on advertising research than on sales promotion research because
of the greater risk and
uncertainty in advertising research.
Most promotion research companies concentrate on advertising because advertising decisions are
more costly and risky than
sales promotion decisions. Advertising research typically involves generating information for
making decisions in the
awareness, recognition, preference, and purchasing stages. Most often, advertising research
decisions are about advertising
copy. Marketing research helps to determine how effective the advertisement will be.
There are three major types of sales promotion: consumer promotions, retailer promotions, and
trade promotions . . . In
general, the consumer, or end user, is the ultimate target of all sales promotion activities. In
consumer promotion,
manufacturers offer promotions directly to consumers, whereas retail promotions involve
promotions by retailers to
consumers. Trade promotions involve manufacturers offering promotions to retailers or other
trade entities. Trade entities can
also promote to each other. For example, a distributor can offer a steep temporary price cut to
retailers in order to sell excess
inventory. We call these trade promotions, since the recipient of the promotion is a marketing
intermediary.
The most commonly researched sales promotions are coupons, trade allowances, and retailer
promotions. Even among
retailer promotions, only recently have researchers begun to distinguish among price cuts,
displays, and features, and even
now, those are often subsumed under one "promotion" or "deal offer" variable.
Unfortunately, much of the research on sales promotion has concentrated on only a few types or
has considered promotion
only more generically. For example, couponing by far is the most researched form of consumer
promotion. In one sense this
is appropriate, since coupons are clearly the most important consumer promotion for packaged-
goods marketers. [Note]

With scanner data so easily and widely available, most of the information requirements for
decisions on sales promotions can
be readily acquired. Both Nielsen and IRI have installed scanner-based information-collecting
systems (both store and panel)
in the major markets of the country, so researchers will have a wealth of information to rely on.
They also have a number of
ready-to-use expert systems . . . which provide information such as sales and market share in that
store in the week there was
a promotion, so managers can easily find out whether the promotion was effective.

Contemporary Applications of Marketing Research: Competitive

Advantage, Brand Equity, Customer
Satisfaction, and Total Quality Management
Contemporary Applications of Marketing Research
"It is important to develop approaches that place a value on a brand."
There has been a shift of focus in marketing, from delivering goods and services to consumers
(satisfying their needs) to
achieving a competitive advantage. Companies are embracing new tools, techniques, and
strategies in order to remain
competitive. This has resulted in a new agenda for marketing research in the nineties.
Assessing competitive advantage can be done in a number of ways. The methods can be broadly
classified as market-based
assessment and process-based assessment. Market-based assessment is direct comparison with
a few target competitors,
whereas process-based assessment is a comparison of the methods employed by the competitors
in achieving their
distinctive advantage.
Brand equity is defined as a set of assets and liabilities linked to a brand that add to or subtract
from the value of a product
or service to a company and/or its customers. [Note] The assets or liabilities that underlie brand
equity must be linked to the
name and/or symbol of the brand. The assets and liabilities on which brand equity is based will
differ from context to context.
However, they can be usefully grouped into five categories:

1. Brand loyalty

2. Name awareness

3. Perceived quality

4. Brand associations in addition to perceived quality

5. Other proprietary brand assets: patents, trademarks, channel relationships, etc.

An appraisal of the brand based on the five dimensions involves addressing and obtaining
answers to the questions that
follow. Marketing research can help to provide answers to these questions.
It is important to develop approaches that place a value on a brand, for several reasons. First,
since brands are bought and
sold, a value must be assessed by both buyers and sellers. Which approach makes the most
sense? Second, investments to
enhance brand equity need to be justified, as there always are competing uses for funds. A
bottom-line justification is that the
investment will enhance the value of the brand. Thus, some "feel" for how a brand should be
valued may help managers
address such decisions. Third, the valuation question provides additional insight into the brand-
equity concept.
At least four general approaches have been proposed to assess the value of brand equity. One is
based on the excess price that
the name can command in the marketplace. The second looks at how much it would cost to
replace the brand with a new one.
The third is based on the stock price. The fourth focuses on a brand's earning power.
In recent years American business has become increasingly committed to the idea of customer
satisfaction and
product/service quality. The measurement of customer satisfaction and its link to
product/service attributes is the vehicle for
developing a market-driven quality approach. [Note]
Customer satisfaction research has been around for a long time, but it has become a fixture at
most large corporations only inrecent years. The growth in the popularity of customer
satisfaction research is, of course, a corollary to the quality movement
in American business. The idea that the customer defines quality should not be new to marketers.
However, its recognition in
the Baldridge criteria has given this idea a credibility that was previously lacking.
Satisfaction research, like advertising tracking research, should be conducted at planned intervals
so as to track satisfaction
over time. Thus, satisfaction research can be put in the context of an interrupted, time-series,
quasi-experimental design. Over
time, management will do various things to improve customer satisfaction, take measurements
following these changes, and
evaluate the results to see if the changes that were implemented had a positive effect on customer
satisfaction.
This approach requires a sequential research design that uses the results from each research
phase to build and enhance the
value of subsequent efforts. During this process, it is imperative to study customers who were
lost, to determine why they
left. This issue must be addressed early in the system design.
A useful step is to provide management with a framework for understanding, analyzing, and
evaluating the status of customer
satisfaction in the firm. A sequential design provides some level of comfort, because it allows for
the luxury of making
critical decisions after you have sufficient data to reduce the risk of error inherent in establishing
a customer satisfaction
system.
With foreign competition steadily eating away the profitability and the market shares of
American companies, more and more
of them are adopting total quality management (TQM) to become more competitive. [Note]
TQM is a process of managing
complex changes in the organization with the aim of improving quality.
The first things on which a TQM company should decide are the guiding principles behind its
data choices. Why these data,
and not those data? As usual, the best rationale usually refers back to the bedrock of customer
satisfaction. There should be a
clear link between the kinds of data collected and maintained and the quality values of the
company. [Note] If short-term
financial measurements drive the company, measures such as market value to book value and
price-to-earnings multiples will
dominate management reports and meetings. If, on the other, quality lies at the center of business
strategy and planning, a
larger share of the measurement and reporting will focus on quality issues. When companies are
truly committed to quality
values, many data issues resolve themselves. [Note]
The power of measurements is clearly visible in applications of quality function deployment
(QFD), a Japanese import
used to make product designs better reflect customer requirements. In QFD, a multifunctional
team measures and analyzes in
great detail both customer attitudes and product attributes. Marketing research plays a crucial
role at this stage of the process.
Then the team creates a visual matrix in order to find ways to modify product attributes
(engineering characteristics) so as to
improve the product on the customer-based measures of product performance. Along the way,
the team must develop a series
of measures of several different types.
Marketing research is an invaluable part of QFD. Customer attributes are obtained through
conjoint analysis or through other
forms of survey research. Customer evaluations of competing products are also obtained through
survey research. Hence, a
thorough knowledge of marketing research is required.

Emerging Applications of Marketing Research: Database

Marketing, E-Commerce, and Relationship
Marketing
Emerging Applications of Marketing Research: Database
Marketing and Relationship
Marketing

"A database provides the means for research to support decisions."

Pages: 689-705
The power of database technology ties these three characteristics together. The database collects
and analyzes customer
information; it is able to target specific benefits to specific customers and it provides the means
for accurately measuring
results. With the advent of customer lists, direct marketing came into prominence.
A database is a customer list to which has been added information about the characteristics and
the transactions of these
customers. Businesses use it to cultivate customers and develop statistical profiles of prospects
most like their present
customers—as they seek new customers. A marketing database can collect and manipulate
information on customers, their individual characteristics and, most
important, their response characteristics. With a database, marketers can use past actions by
customers to predict their future
preferences or profile prospective customers for effective market segmentation. With a database,
marketers can project
additional sales—through cross-selling and repeat purchases. At the same time, by collecting
information and learning more
about current customers' tastes and preferences, marketers can effectively target new customers
with the same characteristics
and even predict the lifetime value of these newly acquired customers. In this way, the
organization cannot just replace
customers lost through attrition but can grow.
A database should attempt to create:

􀁺 A unique identifier such as an ID or match code

􀁺 Name and title of individual and/or organization

􀁺 Mailing address, including ZIP Code

􀁺 Telephone number

􀁺 Source of order, inquiry, or referral

􀁺 Date and purchase details of first transaction

􀁺 Recency/frequency/monetary transaction history by date, dollar amounts (cumulative) of

purchase, and products
(lines) purchased

􀁺 Credit history and rating (scoring)

􀁺 Relevant demographic data for consumer buyers, such as age, gender, marital status, family
data, education, income,
occupation, length of residence at address given, geodemographic cluster information, and
similar data of value

􀁺 Relevant organization data for industrial buyers, such as standard industrial classification
(SIC), size, revenues,
number of employees, length of time in business, perhaps information about the area of the
organization's economic
or social location, and even information about the personality of individual buyers within the
organization [Note]
There are many ways to gather consumer data. You may use such direct means as surveys,
questionnaires, and application
forms, but you may also get information from secondary sources, such as credit-reporting
bureaus and published directories.
When you fill out an application for a rebate or a specially discounted or even free book or other
item, you may wonder why
some of the questions seem to be rather strange as far as the rebate or items are concerned. The
firm is collecting personal
data not normally available in any other medium. (Now you know!)
If you apply for a free subscription to a trade publication you generally must respond to a rather
lengthy set of questions, but
that, too, provides data not usually available otherwise.
You may use conventional advertising media to induce customers and prospective customers to
call and write. One way to do
this is to use a special form of inquiry advertising. And more than a few other companies are
publishing free newsletters for
customers today, encouraging letters from readers as an effective means of generating data for
their databases.
The last time you signed onto the Internet, someone could have watched what you did, what you
said, or what you bought
and then shared the information with a curious marketer who wanted to know. Powerful
computers and high-tech scanners
now enable marketers to monitor closely how, where, and when you spend your money. These
electronic transactions speak
much louder than words because they reflect actual behavior. It no longer matters what
consumers say they do; marketers can
now track what they really do.
Most firms want to have a customer database and a prospect database. The customer database
can categorize customers as
active or inactive customers and inquiries.

􀁺 Active customers: How recently have they purchased? How frequently have the
purchased? How much did they
spend? What are their product or service preferences? Identifying your most active customers
can help you
concentrate your resources on the most profitable segment of your customer list.

􀁺 Inactive customers: How long have prior customers been inactive? How long had they
been active? What was their
buying pattern while active? What offers have they received since? This information can help
you design promotions
that re-activate your inactive customers.

􀁺 Inquiries: From what media source did inquiries come? What was the nature and
seriousness of the inquiry? Do you
have any demographic or psychographic information on inquirers?

Database enhancement can substantially increase the amount and quality of information you hold
on each customer or
prospect.
􀁺 In its simplest form, an enhancement might be the addition of age (from a driver's license
record) or telephone number
(from a directory record). Other possibilities include past transactions; demographic and
psychographic data; credit
experience, if pertinent; people on the move, evidenced by an address change; significant
characteristics of a business;
and a multiple of customer behavior and transaction data.

􀁺 By overlaying multiple databases, you can eliminate duplication between and among the lists
and identify "hotline
names" (those who responded most recently) and "multi-buyers" (those who appear on more than
one response list).

􀁺 Negative screening, such as a credit check, can be used to remove a record from a solicitation
database.
The relationship marketing process incorporates three key elements:

1. Identifying and building a database of current and potential consumers, which records and
cross-references a wide range of
demographic, lifestyle, and purchase information

2. Delivering differential messages to these people through established and new media channels
based on the consumers'
characteristics and preferences

3. Tracking each relationship to monitor the cost of acquiring the consumer and the lifetime
value of his or her purchases
 Market Segmentation Analysis

What is Market Segmentation Analysis?

Market segmentation analysis provides a comprehensive examination of the

contraceptive market, identifies current roles of various sectors with respect to
consumer groups, and helps determine how roles need to change to achieve
contraceptive security. Specifically, market segmentation analysis helps to do the
following:

 Identify consumer groups and the characteristics that define them, such as age,
education, residence, socioeconomic status, parity, work status, and health
insurance coverage;
 Define provider groups (e.g., the public sector, the commercial sector,
nongovernmental organizations (NGOs), and social marketing programs); and
 Understand consumer-provider interaction by addressing the following questions:
- What is the socioeconomic and demographic profile of those who depend on the
public versus the private sector for their family planning (FP) needs? Who
supplies contraceptives to whom? Do the nonpoor benefit from free public sector
services? Does use of the two sectors vary by age (i.e., are youth more likely to
use private sector services)?
- What are the methods used by those who obtain contraceptives from the private
versus public sector? For example, is the public sector the primary provider of re-
supply methods?

Why Is Contraceptive Market Segmentation Analysis Important?

In many countries, contraceptive users—

regardless of their ability to pay—rely heavily on
free or subsidized products made available by the Q5(Highest) Q1(lowest)
public sector. In particular, significant proportions 21% 14%
of better-off clients obtain subsidized
contraceptives from Ministry of Health (MOH) Q2
facilities rather than pay out of pocket in the Figure 1: Socioeconomic 19%
Profileof MOH
commercial or NGO sector. The reliance of able- Family Planning Clients in Nicaragua
Q4
24%
Q3
22%
to-pay consumers on subsidized products poses a severe challenge to achieving
contraceptive security, especially in the face of declining contraceptive donations and
scarce public sector resources. Reducing better-off consumers’ dependence on the
public sector and ensuring that the needs of vulnerable and priority populations are met
in the absence of donor assistance requires targeted public sector services and greater
involvement of the commercial sector in the contraceptive market. A market
segmentation analysis is a necessary first step toward this end—it provides a complete
analysis of the contraceptive market, identifies current roles of different sectors, and
helps determine how those roles need to change to achieve contraceptive security.

Why Is Contraceptive Market Segmentation Important in Advocating for

Contraceptive Security?

A market segmentation analysis yields clear and concrete information and data about
problems and deficiencies in the contraceptive market. It highlights, with user-friendly
graphs and tables, key issues that a country needs to address to move toward
contraceptive security. Such issues and supporting data may include the following:

 Public sector resources benefit those who can afford to pay. Able-to-pay clients
should be redirected to the private sector. For example, as Figure 1 from a recent
market segmentation analysis shows, 45 percent of those who receive
contraceptives from the MOH in Nicaragua belong to the fourth and fifth
socioeconomic quintiles; by contrast, only 30 percent of MOH clients belong to the
two lowest quintiles.

 The public sector needs to target its scarce resources to the most vulnerable groups,
such as populations in remote rural areas and the indigent and poor. In Nicaragua,
for example, only 30 percent of its clients are poor. The MOH should focus its efforts
on increasing the proportion of poor clients that it serves.

 It is essential to mobilize the private sector to serve current and potential users. In
Nicaragua, at least 45 percent of MOH clients are in the top two income quintiles
and should therefore be redirected to the NGO and commercial sectors to free up
MOH resources to serve the poor and needy.
NGO 4%
 Social security institutes need to play a more
significant role in the provision of contraceptives; Figure 2: Sources of Contraceptives for
family planning users with social security Social Security Beneficiaries: Peru
coverage currently rely disproportionately on the Pharmacy
MOH. As Figure 2 from the Peru market 12%
segmentation analysis shows, 45 percent of Private/ Public/MOH
social security beneficiaries receive their Commercial 45%
contraceptives from the MOH. However, as 12%
Social
Security

27%
 contraceptive donations decline, the MOH needs to consider ways to shift the
responsibility for serving eligible clients back to social security health providers.
Using market segmentation data to make the case to both the MOH and social
security institutes can be effective for advocacy purposes.

How is a Contraceptive Market Segmentation Analysis Conducted?

The market for FP services includes contraceptive methods, consumers, and providers.
Contraceptive methods include both modern and traditional methods. Consumers are
defined as women of reproductive age (15 to 44 years), including those using a modern
contraceptive method and those with an unmet need for family planning. Providers are
defined as government and private for-profit (commercial sector) and not-for-profit
(NGO) entities. The way in which the various components of the FP market fit together
is referred to as the FP market structure.

An important element of the analysis calls for establishing households’ ability to pay for
family planning services, which requires creation of a standard of living index (SLI) that
allows households to be ranked from poorest to richest. The SLI is defined in terms of
whether or not a household possesses certain assets and household amenities, such as
electricity, roof material, wall material, refrigerator, television, automobile, radio, and
other amenities. Factor analysis is the quantitative method used to create the SLI.

Household data are then used to divide the population into five SLI quintiles, with the
poorest group consisting of women from households with the fewest assets and the
richest group comprising women from households with the most assets. These groups
provide the basis for (1) tabulating socioeconomic and demographic characteristics
such as age, education, parity, and place of residence across the five SLI quintiles; (2)
comparing method use and provider sources across the SLI quintiles to determine the
extent of differences across groups; and (3) creating market segments based on
socioeconomic characteristics, method use, and provider sources across quintiles by
urban and rural areas.
What Countries Have Conducted Market Segmentation Analyses?

Many countries, including Bangladesh, Bolivia, Egypt, Ethiopia, Honduras, Jordan,

Kenya, Madagascar, Morocco, Nicaragua, Paraguay, Peru, Philippines, Romania,
Turkey, and Ukraine, have conducted market segmentation analyses.

For example, Turkey conducted a market segmentation analysis with support from the
MOH, the U.S. Agency for International Development (USAID), and partners. The
analysis identified current and potential market niches for the private sector. A workshop
on public-private partnerships helped integrate the private sector into a policy dialogue
about the contraceptive financing challenge and encouraged pharmaceutical companies
to view the public sector’s supply needs as a new market. The information from the
market segmentation analysis also helped the MOH advocate successfully with the
Ministry of Finance to increase contraceptive financing such that the MOH budget for
contraceptives saw a substantial increase in 2002.

Kenya recently completed a contraceptive market segmentation analysis

(POLICY/Kenya presentation, 2005). Findings showed that only about 12 percent of
urban and rural clients from the lowest income group use modern contraceptives as
compared with over 40 percent among the wealthiest clients. The majority of the
poorest relied on the public sector for contraceptive services and supplies. The analysis
also identified significant leakage of benefits, with two out of every five among the
wealthiest obtaining their contraceptives from the public sector. The Kenya analysis will
be used in policy dialogue among key partners and stakeholders, including members of
the new government, to build commitment to reform and to implement the country’s
existing waiver and exemption policies for more effective targeting to the neediest
sectors of the population.

The Advantage of Jobs-Based Market Research

Getting your customers to tell you what you really need to know gets the
most out of your market research dollars

If, as studies suggest, companies spend $8 billion per year on consumer research, why
do 80 to
85 percent of new product offerings fail?

We think companies can do better. The approach we recommend focuses on

understanding the
“jobs-to-be-done” (or “jobs,” for short) customers are trying to get done in their lives. The
value
of this approach was described by Michael Raynor and Clayton Christensen in their
bestselling
book The Innovator’s Solution. The jobs approach works because it focuses the
research on
customer problems and the circumstances in which customers encounter them, rather
than
focusing on a particular solution a company might be hoping to offer. The jobs approach
also
allows for quite detailed insights to be surfaced that can guide specific product and
business
model design decisions.
Why your customers aren’t telling you what you really need to know
In our experience, most consumers participate enthusiastically in market research.
People are
typically eager to talk about themselves, and focus groups, interviews, and surveys
encourage
them — and in most cases, reward them — to do precisely that. However, traditional
market
research typically assumes that consumers are able to directly provide the needed
answers, and,
despite consumers’ best intentions, this is often not the case.
Many of the reasons for this disconnect between what your customers tell you and what
you
really need to know have been described by the fields of psychology and behavioral
economics
over the past few decades. For example, we now know that an insidious problem with
applying
traditional market research techniques to gain insight on new-to-the-world business
concepts
stems from the phenomenon of “cognitive biases,” subconscious mental filters that
distort
consumers’ answers to research questions in ways that reduce the value of those
answers.
These biases are always a pitfall to navigate in marketing research, but they can be
exacerbated
when the research is focused on gathering information about how consumers will act in
a
completely new set of experiences.
Market researchers have begun to use some of the insights of psychological and
behavioral
psychology to design research in a way that reduces results tainted by cognitive biases.
For
example, most market researchers are aware that the specific choices given to a survey
respondent can influence their answers; you can increase the number of people saying
they are
willing to buy a $100 rice cooker simply by adding a $200 rice cooker to the choices,
even if no
one is interested in the $200 version. (Psychologists might refer to this phenomenon as
the
“compromise effect” — people like to choose the “middle” option out of a set).
However, while some common psychological pitfalls that lead to cognitive biases are
known and
can be controlled with careful design, others are more difficult to fix within the context of
traditional market research techniques. The main problem is that the “product-centric”
emphasis of much market research does not reflect how customers themselves actually
think
about their problems, their lives, and their purchase decisions.
What is needed is a “customer-centric” approach to market research design. The jobs-
to-bedone
approach provides precisely that, enabling researchers to understand in detail
consumer
pain points and thus the broad landscape of possible solutions, rather than a narrow set
of
predefined product ideas. Specific solutions can still be tested, but in conjunction with
jobsbased
understanding, resulting in more reliable insights.

Note that the unique utility of the jobs approach arises from its emphasis on asking the
right
questions to uncover the right information about the market, and not from employing
any
specific market research techniques. In fact, the jobs approach can be implemented
using any of
the traditional market research techniques, including interviews, focus groups, surveys,
and
ethnography.
How jobs-to-be-done overcomes hidden customer biases
The jobs-to-be-done approach frames the problem of understanding the customer as a
quest to
identify and characterize the fundamental problems (the “jobs”) customers are trying to
solve in
their lives, for which they are seeking to “hire” products. This framing reflects the fact
that
customers don’t typically care about purchasing a product as an end in itself. Rather, as
a
problem arises in their lives that they need to solve, they look around for a product best
suited
to solve it.
The jobs customers are trying to solve might be satisfied to varying degrees by products
and
services currently available, or they might be completely unaddressed by any currently
available
product or service. Important yet unsatisfied jobs provide fertile grounds for innovation.
Contrast this method of framing customer insights with the product-centric or needs-
based
approaches used by many companies. Simply testing the appeal of a specific product
can miss
real opportunities if the product being tested does not have the right set of features and
tradeoffs. Consumers might still react negatively to a particular product even if it is
oriented
toward solving highly important, unsatisfied jobs-to-be-done, if the test is framed in a
productcentric
way. This could result in missing a big market opportunity. However, framing the
questions around jobs gets at the root causes of product purchases, and researchers
are thereby
able to decouple the root cause from any specific product.
The jobs approach also elicits more detailed and actionable information than typical
needsbased
approaches. It broadens the aperture of jobs explored beyond just functional ones to
include emotional and social jobs, which are often as or more important than the purely
functional jobs. It surfaces detailed information on the “hiring criteria” customers use
when they
evaluate different options for getting a job done, which provides important guidance on
the
specific features responsive offerings must possess.
The jobs approach also gives primary consideration to the circumstance in which a
customer has
a particular job, i.e. where, when, with whom, and while doing what a customer faces a
particular problem. A customer might have the exact same job in two very different sets
of
circumstances (e.g., “at home” vs. “on-the-go”), and these can provide very different
innovation
opportunities. Finally, it helps companies to evaluate specific product designs to
determine
which best satisfies a consumer’s jobs.
We’ll illustrate the advantages of the jobs-to-be-done approach by showing how it
overcomes
three common examples of cognitive bias in market research: anchoring, emotional
biases, and
demand effects.

Research participants often “anchor” their responses to whatever informational

influences are
at hand. Just as a real anchor keeps a boat in place, cognitive anchors can tether
consumers’
answers to recent information presented, and this can impact research results
substantially.
Most often, this anchoring influence will not be present in a real purchase situation —
and
therein lies the problem.
Anchoring manifests itself in many ways in traditional market research. Questions
intended to
probe product appeal often use the method of calling out and explaining particular
product
features, then asking respondents to rate these features or the product itself. For
example, a
respondent might be told about a shampoo’s new scent, and then asked to rate
shampoo
products containing it. Unfortunately, calling out the scent can cause this feature to be
overweighted
in ratings and decisions made during the latter part of the survey.
Anchoring is particularly problematic when it comes to numbers. Since people often
have a
weak frame of reference for new products, any numbers appearing in a survey can
strongly
influence subsequent numeric responses — even seemingly benign, profiling data such
as the
number of items purchased in the last year.
For example, mentioning that a competitive product costs $5 strongly limits the amount
a
respondent might indicate they’d be willing to pay for a new product. These results both
impede
the predictive value of the survey and limit a company’s ability to envision new business
models
or price points. If Whole Foods, Apple’s iPod, or premium bottled waters had been
shackled to
industry price norms, they would have foregone significant value. And yet, traditional
research
techniques could have led them down this path due to the anchoring problem.
Framing a study around jobs-to-be-done minimizes the impact of anchoring. Asking
about a
consumer’s jobs-to-be-done before asking about specific new product ideas — the jobs
that the
new product is intended to satisfy — enables the researcher to first understand the
nature of
the unsatisfied job in a research context not clouded by price or product anchoring.
Specific
insights can be gleaned as to what that consumer feels the characteristics of a potential
jobsatisfying
solution would be. Product concepts can then be developed out of these insights, and
subsequent concept testing can include more specific, product-testing questions that
are more
prone to anchoring bias. This combined approach — and sequencing — enables a
more
accurate, comprehensive understanding.
Emotional biases
For decades, research on how people make decisions focused almost exclusively on
the role of
reason and thought. More recently, it has been widely acknowledged that emotions play
a
critical role in the decision-making process. Despite this, market research questions
tend to
focus heavily on exploring functional aspects of products and services. While this
information is
important, it is incomplete — the overall puzzle also contains emotional and social
pieces.
Even when market research does probe emotional dimensions, the questions are often
formulated poorly. For example, people are often asked to “associate” or “rate” a
product or
brand according to different emotional descriptors. This usually becomes a very
academic
exercise. After all, how “happy,” “optimistic,” or “proud” does your toilet paper make you
feel?
These associative techniques are also completely irrelevant for new product categories
with

which a consumer has no experience and with which he or she has not yet established
an
emotional connection.
On the other hand, social and emotional jobs are involved in the choice of nearly all
products
and services. Why does someone buy a particular computer? Functional characteristics
like
speed and memory are of course important, but, for example, people might also “hire”
the
Macintosh brand to fulfill an emotional job (e.g., the job of feeling fun and creative) and
a social
job (e.g. the job of conveying a “cool” image-to others). The jobs-to-be-done approach
uncovers
the actual social and emotional factors that lead to purchase decisions, rather than
trying to
force-fit a possibly nonexistent emotional connection to a particular solution.
A related market research challenge stems from the inability of people in the neutral,
unengaged emotional state in which one ordinarily takes a survey to predict how they
might feel
and act in a more relevant emotional state, such as the “enthusiasm state” they are
more likely
to experience when contemplating buying a product, or the “frustration state” of having
an
unsatisfied job-to-be-done.
In such cases, respondents may be unable to respond accurately even if they wanted
to,
because they simply don’t know the “right” answer. The jobs methodology enables
researchers
to “emotionally prime” respondents by having them imagine the circumstances within
which
they would encounter a particular job-to-be-done, thus prompting the actual emotional
state
they would likely be in when making a purchase decision.
Demand effects
Survey respondents often modify their answers due to the influence of the survey-taking
experience itself. As consumers go through a survey or interview process, they pick up
information (or imagine that they pick up information) about the researcher’s agenda,
objectives, and desired answers. The corresponding assumptions they make can
impact how
they respond.
This is somewhat analogous to manifestations of the Heisenberg Uncertainty Principle
in
physics, in which the very act of observing a particle’s state prevents the physicist from
accurately characterizing it. For example, if a survey asks about cars with a particular
focus on
BMW models, the respondent may accurately deduce that this is a survey conducted on
behalf
of BMW, and their answers may be different than if they perceived the survey was by,
say, Kia.
Demand effects come in many varieties. A common one is the respondent’s sense of
what the
research is about and what kinds of answers are “expected.” If the respondent has a
clear
framework for understanding the purpose of the study, they can reply “on auto-pilot,”
without
thinking too deeply about the true answer.
For instance, suppose you are asked “what’s your favorite restaurant?” You may have
an
automatic, standby answer, but it’s likely been a while since you really considered this
deeply
and re-evaluated your answer to see if your preferences have changed as you’ve aged
or tried
new places. Similarly, many market research studies, by focusing on the product, make
it easy
for a person to respond with an “auto-pilot” answer that is not necessarily the most
accurate
one.

Another common demand-effect trigger is the desire of respondents to be helpful, which

may
result in their trying (consciously or not) to provide the answers they perceive the
researcher
wants to hear. The opposite behavior (being purposely obstinate) is also possible,
particularly
when the respondent has experienced some perceived annoyance or insult while going
through
the survey.
Incentives built in to the particular survey platform can also be a problem: a respondent
may
answer in such a way to pass the screener and be able to take the survey, particularly if
their
reward for completion is high. Finally, respondents may answer hastily and without
careful
thought, simply to get the survey over with.
While demand effects occasionally lead to deliberate deception, it is more common for
them to
result in responses inadvertently “nudged” in undesired directions. Thus, simply
demanding that
the person be more “honest” is futile – and may even be counterproductive.
The jobs-to-be-done methodology reduces demand effects, again because of its overall
framing
through the lens of the consumer’s actual life and problems — decoupled from a
particular
product, industry, or company. In jobs-based lines of questioning, people are simply
talking
about the problems, hopes, and pains in their own life, subjects they know intimately
well. Thus,
the jobs approach is able to reduce implied norms and assumptions in behavior related
to
specific products. In this way, the survey is able to determine the consumer’s agenda,
not
reinforce the company’s agenda.
Conclusion
Successful market research elicits accurate answers to questions that are critical to a
company’s
business objectives. But just because you know what you need to know, it doesn’t mean
that
you can find it out by asking consumers directly. It’s not that people aren’t honest —
rather, the
way people actually make decisions involves a complex array of factors, including many
unconscious cognitive biases, as the above examples illustrate.
The jobs-to-be-done methodology offers a powerful means to minimize and even
overcome
these biases, thereby getting more accurate — and more actionable — results.

A Decision-Making Perspective on Marketing Research

"Marketing research is not an immediate or an obvious path to finding solutions to all
managerial
problems."

Marketing is the process of planning and executing the conception, pricing, promotion,
and distribution of ideas, goods, and
services to create exchanges that satisfy individual and organization objectives. The
marketing concept requires that
customer satisfaction rather than profit maximization be the goal of an organization.
[Note] In other words, the
organization should be consumer oriented and should try to understand consumers'
requirements and satisfy them quickly and
efficiently, in ways that are beneficial to both the consumer and the organization. This
means that any research organization
should try to obtain information on consumer needs and gather marketing intelligence to
help satisfy these needs efficiently.
Marketing research is a critical part of such a marketing intelligence system; it helps to
improve management decision
making by providing relevant, accurate, and timely (RAT) information. Every decision
poses unique needs for information,
and relevant strategies can be developed based on the information gathered through
marketing research in action.
Too often, marketing research is considered narrowly as the gathering and analyzing of
data for someone else to use. Firms
can achieve and sustain a competitive advantage through the creative use of market
information. Hence, marketing research
is defined as an information input to decisions, not simply the evaluation of decisions
that have been made. Market research
alone, however, does not guarantee success; the intelligent use of market research is
the key to business achievement. A
competitive edge is more the result of how information is used than of who does or does
not have the information. [Note]
Marketing decisions involve issues that range from fundamental shifts in the positioning
of a business or the decision to enter
a new market to narrow tactical questions of how best to stock a grocery shelf. The
context for these decisions is the market
planning process, which proceeds sequentially through four stages; situation analysis,
strategy development, marketing
program development, and implementation. This is a never-ending process, so the
evaluation of past strategic decisions
serves as an input to the situation assessment . . . During each stage, marketing
research makes a major contribution toclarifying and resolving issues and then
choosing among decision alternatives.
Marketing research is not an immediate or an obvious path to finding solutions to all
managerial problems. A manager who is
faced with a particular problem should not instinctively resort to conducting a marketing
research to find a solution to the
problem. A manager should consider several factors before ordering marketing
research. Sometimes it is best not to conduct
marketing research. Hence, the primary decision to be made is whether or not market
research is called for in a particular
situation. Factors that influence this initial decision include the following.
􀁺 Relevance
􀁺 Type and Nature of Information Sought
􀁺 Timing
􀁺 Availability of Resources
􀁺 Cost-Benefit Analysis
Although research is conducted to generate information, managers do not readily use
the information to solve their problems.
The factors that influence a manager's decision to use research information are (1)
research quality, (2) conformity to prior
expectations, (3) clarity of presentation, (4) political acceptability within the firm, and (5)
challenge to the status quo. [Note]
Researchers and managers agree that the technical quality of research is the primary
determination of research use. Also,
managers are less inclined to utilize research that does not conform to prior notions or
is not politically acceptable. [Note]
Some researchers argue that the use of information is a function of the direct and
indirect effects of environmental,
organizational, informational, and individual factors. [Note] However, a researcher
should not alter the findings to match a
manager's prior notions. Further, managers in consumer organizations are less likely to
use research findings than their
counterparts in industrial firms. [Note] This is due to a greater exploratory objective in
information collection, a greater
degree of formalization of organizational structure, and a lesser degree of surprise in
the information collection.
Ethics refers to moral principles or values that generally govern the conduct of an
individual or group. Researchers have
responsibilities to their profession, clients, and respondents, and must adhere to high
ethical standards to ensure that both the
function and the information are not brought into disrepute. The Marketing Research
Association, Inc. (Chicago, Illinois) has
instituted a code of ethics that serves as a guideline for marketing ethical decisions . . .
The Council of American Survey
Research Organization (CASRO) has also established a detailed code of marketing
research ethics to which its members
adhere. [Note] Normally, three parties are involved in a marketing research project: (1)
the client who sponsors the project,
(2) the supplier who designs and executes the research, and (3) the respondent who
provides the information. The issue of
ethics in marketing research involves all three players in a research project.
The increase in international trade and the emergence of global corporations resulting
from increased globalization of
business have had a major impact on all facets of business, including marketing
research. The increase in global competition,
coupled with the formation of regional trading blocs such as the European Community
(EC) and the North American Free
Trade Agreement (NAFTA), have spurred the growth of global corporations and the
need for international marketing
research. The need to collect information relating to international markets, and to
monitor trends in these markets, as well as
to conduct research to determine the appropriate strategies that will be most effective in
international markets, are expanding
rapidly.
The marketing research industry in the United States is increasingly growing into an
international industry, with more than
one-third of its revenues coming from foreign operations. The increase in the
importance of global business has caused an
increase in awareness of the problems related to international research. International
marketing research can be defined as
marketing research conducted either simultaneously or sequentially to facilitate
marketing decisions in more than one
country. [Note] As such, the basic functions of marketing research and the research
process do not differ from domestic and
multicountry research; however, the international marketing research process is much
more complicated and the international
marketing researcher faces problems that are different from those of a domestic
researcher.
The task of marketing research is to find a sizable segment with homogenous tastes.
The growing presence of an international
market in the United States has been influenced by both domestic and foreign markets.
In the domestic arena, ethnic groups
range from Chinese to Turkish, each lending a piece of its culture to the U.S. market.
Within each ethnic group, the product
preference is diverse. These facts present a challenge to marketing research to find a
homogenous group among the "melting
pot" of international products. Complicating matters is the rise in foreign manufacturers
selling their goods in the United
States.

Marketing Research in Practice

"With marketing the new priority, marketing research is the rallying cry."

In practice, a marketing research department's goal can be grouped into three major
categories: programmatic, selective, or
evaluative. [Note] Programmatic research is performed to develop marketing options
through market segmentation, market
opportunity analysis, or consumer attitude and product usage studies. Selective
research is done to test different decision
alternatives such as new product concept testing, advertising copy testing, pretest
marketing, and test marketing. Evaluative
research is carried out to evaluate performance of programs, including tracking
advertising recall, corporate and brand image
studies, and measuring customer satisfaction with the quality of the product and service.
As the number of products and types
of services introduced into the market increase, the need for marketing research
explodes and the future of marketing
research appears to be both promising and challenging. [Note]
With marketing the new priority, marketing research is the rallying cry. Companies are
trying frantically to get their hands on
information that identifies and explains the needs of powerful new consumer segments
now being formed . . . Some
companies are pinning their futures on product innovations, others are rejuvenating
time-worn but proven brands, and still
others are doing both. [Note]
Not only are the companies that always did marketing research doing a great deal
more, the breadth of research activities also
continues to expand.
􀁺 Senior management is looking for more support for its decisions; therefore,
researchers are doing more acquisition
and competitor studies, segmentation and market structure analyses, and basic
strategic position assessments.
􀁺 Other functions, such as the legal department, now use marketing research evidence
routinely. Corporate Affairs
wants to know shareholders', bankers', analysts', and employees' attitudes toward the
company. The service
department continuously audits service delivery capability and customer satisfaction.
􀁺 Entire industries that used to be protected from the vagaries of competition and
changing customer needs by
regulatory statutes are learning to cope with a deregulated environment. Airlines, banks,
and financial services groups
are looking for ways to overcome product proliferation, advertising clutter, and high
marketing costs brought on by
more sophisticated customers and aggressive competitors.
An information system (IS) is a continuing and interacting structure of people,
equipment, and procedures designed to
gather, sort, analyze, evaluate, and distribute pertinent, timely, and accurate information
to decision makers. While marketing
research is concerned mainly with the actual content of the information and how it is to
be generated, the information system
is concerned with managing the flow of data from many different projects and secondary
sources to the managers who will
use it. This requires databases to organize and store the information and a decision
support system (DSS) to retrieve date,
transform it into usable information, and disseminate it to users.
Managers don't want data. They want, and need, decision-relevant information in
accessible and preferably graphical form
for (1) routine comparisons of current performance against past trends on each of the
key measures of effectiveness, (2)
periodic exception reports to assess which sales territories or accounts have not
matched previous years' purchases, and (3)
special analyses to evaluate the sales impact of particular marketing programs, and to
predict what would happen if changes
were made. In addition, different divisions would like to be linked to enable product
managers, sales planners, market
researchers, financial analysts, and production schedulers to share information.
The purpose of a marketing decision support system (MDSS) is to combine
marketing data from diverse sources into a
single database which line managers can enter interactively to quickly identify problems
and obtain standard, periodic
reports, as well as answers to analytical questions.
A good MDSS should have the following characteristics.
1. Interactive: The process of interaction with the MDSS should be simple and direct.
With just a few commands the user
should be able to obtain the results immediately. There should be no need for a
programmer in between.
2. Flexible: A good MDSS should be flexible. It should be able to present the available
data in either discrete or aggregateform. It should satisfy the information needs of the
managers in different hierarchical levels and functions.
3. Discovery oriented: The MDSS should not only assist managers in solving the
existing problems but should also help them
to probe for trends and ask new questions. The managers should be able to discover
new patterns and be able to act on them
using MDSS.
4. User friendly: The MDSS should be user friendly. It should be easy for the managers
to learn and use the system. It should
not take hours just to figure out what is going on. Most MDSS packages are menu
driven and are easy to operate.
A typical MDSS is assembled from four components.
􀁺 Database
􀁺 Reports and Displays
􀁺 Analysis Capabilities
􀁺 Models

Marketing Research Design and Implementation

"The usefulness of a research project depends on the overall quality of the research
design and on
the data collected and analyzed based on the design."

A research design is the detailed blueprint used to guide a research study toward its
objectives.
The process of designing a research study involves many interrelated decisions. The
most significant decision is the choice of
research approach, because it determines how the information will be obtained.
Typical questions at this stage are: Should
we rely on secondary sources such as the Census? Which is more appropriate, an
exploratory approach with group
discussions or a survey? Is a mail, telephone, fax, or personal interview survey better
for this problem?
All research approaches can be classified into one of three general categories of
research: exploratory, descriptive, and
causal. These categories differ significantly in terms of research purpose, research
questions, the precision of the hypotheses
that are formed, and the data collection methods that are used.
Exploratory Research. Exploratory research is used when one is seeking insights into
the general nature of a problem, the
possible decision alternatives, and relevant variables that need to be considered.
Typically, there is little prior knowledge on
which to build. The research methods are highly flexible, unstructured, and qualitative,
for the researcher begins without firm
preconceptions as to what will be found. The absence of structure permits a thorough
pursuit of interesting ideas and clues
about the problem situation.
Descriptive Research. Descriptive research embraces a large proportion of marketing
research. The purpose is to provide an
accurate snapshot of some aspect of the market environment.
Causal Research. When it is necessary to show that one variable causes or
determines the values of other variables, a causal
research approach must be used. Descriptive research is not sufficient, for all it can
show is that two variables are related or
associated. Of course, evidence of a relationship or an association is useful; otherwise,
we would have no basis for even
inferring that causality might be present. To go beyond this inference we must have
reasonable proof that one variable
preceded the other and that there were no other causal factors that could have
accounted for the relationship.
The research designer has a wide variety of methods to consider, either singly or in
combination. They can be grouped first
according to whether they use secondary or primary sources of data. Secondary data
are already available, because they
were collected for some purpose other than solving the present problem. Included here
are (1) the existing company
information system; (2) databanks of other organizations, including government sources
such as the Census Bureau or trade
association studies and reports; and (3) syndicated data sources, such as consumer
purchase panels, where one organization
collects reasonable standardized data for use by client companies . . . Primary data are
collected especially to address a
specific research objective. A variety of methods, ranging from qualitative research to
surveys to experiments, may be
employed . . . Some methods are better suited to one category of research than
another.
Once the research approach has been chosen, research tactics and implementation
follow: the specifics of the
measurements, the plan for choosing the sample, and the methods of analyses must be
developed.
The first step is translate the research objective into information requirements and then
into questions that can be answered
by anticipated respondents . . . There are many ways to ask questions to obtain this
kind of attitudinal information.
Once the individual questions have been decided, the measuring instrument has to be
developed. Usually this instrument is a
questionnaire, but it also may be a plan for observing behavior or recording data. The
researcher designing an effective
questionnaire must be concerned with how questions on sensitive topics such as
income can be asked, what the order of the
questions should be, and how misinterpretations can be avoided.
Most marketing research studies are limited to a sample or subgroup of the total
population relevant to the research question,
rather than a census of the entire group. The sampling plan describes how the
subgroup is to be selected. One approach is to
use probability sampling, in which all population members have a known probability of
being in the sample. This choice isindicated whenever it is important to be able to show
how representative the sample is of the population. Other critical
decisions at this stage are the size of the sample, as this has direct implications for the
project budget, and the means of
minimizing the effect on the results of sample members who cannot be reached or who
refuse to cooperate.
At this stage of the design, most of the cost has yet to be expended, but the research is
now completely specified and a
reliable cost estimate should be available. Thus, a more detailed cost-benefit analysis
should be possible to determine if the
research should be conducted as designed or if it should be conducted at all.
The usefulness of a research project depends on the overall quality of the research
design and on the data collected and
analyzed based on the design. Several potential sources of error can affect the quality
of the research process. The errors can
influence the various stages of the research process and result in inaccurate or useless
research findings.
Two common approaches to budgeting for a marketing research project are estimating
the dollar costs associated with each
research activity or determining the activities to be performed, in hours, and then
applying standard cost estimates to these
hours. The former approach typically is used when a marketing research project is
relatively unusual or expensive. The latter
approach is used for routine marketing research projects or when the researcher has
considerable knowledge of research
activity costs.
Regardless of the basic research design selected (exploratory, descriptive, or causal),
researchers need to be familiar with and
experienced in handling several issues or problems unique to the conduct of marketing
research within and across countries
and cultural groups. Three issues critical to international research design are (1)
determining information requirements, (2)
determining the unit of analysis, and (3) achieving equivalence of construct,
measurement, sample and analysis. [Note]
Apart from these issues, other aspects of the research process, such as identifying
sources of data, availability, and
comparability of data from different countries, problems associated with primary data
collection across countries, and so
forth, add to the complexity of the international research process. Also, these issues
add to the nonrandom error component of
the research process

Standardized Sources of Marketing Data

"A number of services have evolved to measure consumer exposure to the various
media and
advertisements."

The use of standardized data sources has been revolutionized by so-called single-
source data from scanner systems. This
means that all data on product purchases and causal factors, such as media exposure,
promotion influence, and consumer
characteristics, come from the same households. These data are being made possible
through advances in information
technology whose full impact is only slowly being understood . . . It does not appear that
single-source data will fully
displace other standardized sources, but it will be used in conjunction with them to
generate important new insights.
From store audits and warehouse withdrawal services, we can learn how much product
is moving through the distribution
channel. As this information is one step removed from the actual purchase transaction,
we still don't know who bought, how
frequently they bought, or whether the seeming stability of market shares reflects stable
purchasing patterns or a great deal of
switching back and forth between brands and stores in response to short-term
promotional efforts. To answer these questions,
we need detailed records of purchasing activity by the same people over an extended
period of time. Here are two methods
for collecting this data:
1. In the home audit approach the panel member agrees to permit an auditor to check
the household stocks of certain product
categories at regular intervals. A secondary condition is that the panel member save all
used cartons, wrappers, and so on, so
the auditor can record them.
2. In the mail diary method the panel member records the details of each purchase in
certain categories and returns the
completed diary by mail at regular intervals (biweekly or monthly).
Both types of panels are used extensively in Europe, whereas in the United States and
Canada the mail dairy method is
dominant. When comparisons have been possible, the tow methods have produced
equally accurate market share and trend
data. [Note]
The data from a panel can be analyzed as a series of snapshots—providing information
on aggregate sales activity, brand
shares, and shifts in buyer characteristics and types of retail outlets from one month to
the next. However, just as a motion
picture is more revealing than a snapshot, it is the ability to measure changes in the
behavior of Individuals that is the real
advantage of a panel. Knowledge of the sequence of purchases makes it possible to
analyze:
􀁺 Heavy buyers and their associated characteristics
􀁺 Brand-switching rates and the extent of loyal buying (Evidence of stable purchase
activity in the aggregate usually
masks a great deal of individual movement.)
􀁺 Cumulative market penetration and repeat purchase rates for new products (The
success of new products depends
jointly on the proportion who have tried them once and then purchased them a second,
third, or fourth time.)
In comparison with interview methods, although not with audits, the continuous
purchase panel has the advantage of
accuracy. Several studies have found that interview respondents will exaggerate their
rate of purchasing (an effect that is
most pronounced for infrequently purchased products) and dramatically oversimplify
brand-switching behavior. Apparently,
survey respondents tend to equate their most recent brand buying with the "normal"
behavior—whether or not this is
accurate.
The limitations all relate to the vulnerability of panels to various biases. The first
problem encountered is selection bias,
because of the high rates of refusal and the resulting lack of representativeness. It is
estimated that panel recruitment rates
may vary from as low as 10 to 15 percent when the initial contact is made by mail in the
United States, to 50 percent or more
for personal contacts made on behalf of panels in Great Britain.
Panels also are subject to a variety of testing effects. There is a definite tendency for
new panel members to report unusual
levels of purchasing because of the novelty of the reporting responsibility. This effect is
so pronounced that the first month's
results usually are discarded. Surprisingly, there is little evidence to suggest that there
is any long-run conditioning behavior
that would lead to great brand loyalty or price consciousness that would produce
systematically biased data.
Another area in which there is a great deal of commercial information available for
marketers relates to advertising and
media. A number of services have evolved to measure consumer exposure to the
various media and advertisements.
The Nielsen Television Index (NTI) is probably the best known of all the commercial
services available in this category. As a
system for estimating national television audiences, NTI produces a "rating" and
corresponding share estimate. A rating isprogram is telecast. Share is the percent of
households that have a television set that is tuned to a specific program at a
specific time.
Arbitron, a subsidiary of Control Data, maintains both national and regional radio and
TV panels. The panel members are
chosen by randomly generated telephone numbers, to ensure that households with
unlisted numbers are reached. Those
household members who agree to participate when called are sent diaries in which they
are asked to record their radio
listening behavior over a short duration. Most radio markets are rated only once or twice
a year; however, some larger ones
are rated four times a year. The TV diary panel is supplemented with a sample of
households that have agreed to attach an
electronic meter to their television sets. Arbitron produces custom reports for clients.
Typically, these are based on an
interactive computer-based system called Arbitron Information on Demand (AID).

The Starch Readership Service measures the readership of advertisements in

magazines and newspapers. [Note]
The Starch surveys employ the recognition method to access a particular ad's
effectiveness. Four degrees of reading are
recorded:
1. Nonreader: A person who does not remember having seen the advertisement in the
issue.
2. Noted: A person who remembers seeing the advertisement in the issue.
3. Associated: A person who not only "noted" the advertisement, but who also saw or
read some part of it that clearly
indicated the brand or advertiser.
4. Read Most: A person who read 50 percent or more of the written material in the ad.
Because newspaper and magazine space cost data are also available, a "readers per
dollar" variable can be calculated. The
final summary report from Starch shows each ad's (one-half page or larger) overall
readership percentages, readers per dollar,
and rank when grouped by product category.
The Internet and Marketing Research Today
"Like any traditional information resource, the Internet has certain advantages and
disadvantages."

The value of the Internet as a marketing research tool is argued by some people today.
They think that quality information is
hard to find and that the Internet is too slow. Although there is some truth to these
statements, they need some qualification.
Like any traditional information resource, the Internet has certain advantages and
disadvantages. Some information can be
searched well on the Internet when other information sources are not available at all.
Besides this, the Internet is
characterized by very dynamic technological developments, which in turn influence the
information search process.
As the population of the Internet and on-line users increases, new research issues have
arisen concerning the demographics
and psychographics of the on-line user and the opportunities for a product or service.
On-line focus groups are conducted
entirely on-line—everything from recruitment and screening (which the recruiter does
via e-mail) to moderation of the
discussion itself. This method allows researchers to reach target segments more
effectively.
As the on-line population increases, the demographics broaden, enabling remote global
segments to be reached, something
not possible via traditional methods. One of the limitations to on-line research is that the
results cannot be projected to the
general population because not everyone has access to a computer, modem, and on-
line service.
Another difference between on-line and traditional qualitative research is that
cyberspace is populated by trend leaders.
Commonly targeted by marketers, advertisers, and product manufacturers, trend
leaders are early adopters who try out new
ideas, products, services, and technologies before these innovations reach popularity in
the mass market.

Companies are increasingly collecting information from their Web site visitors.
Especially for companies which sell over the
Web, collecting information about potential customers who have Internet access is
critical. This type of data collection can
serve a number of purposes:
􀁺 Counting and describing Web site visitors in order to customize Web site content to
suit their needs
􀁺 Collecting additional information for customer databases, which then may be used by
product development, sales,
marketing, or service departments
􀁺 Receiving questions or suggestions regarding the use of a product
􀁺 Receiving and answering complaints
Finding out information about competitor activities is an important task for businesses.
The Internet is a prime tool for this
task, since it reduces the time spent and may increase substantially the quality of the
information collected. Both product and
financial information are probably suited best for competitive tracking. Especially larger
corporations display this
information most often on their Websites. On the other hand, pricing information might
not be amenable to tracking readily,
since it is not too common for businesses to display product prices (unless they actually
sell over the Internet). Competitive
promotion and distribution information is probably the least suited to tracking via the
Internet. Information about products or
companies can be obtained using search engines on the Web . . . However, search
engines have certain limitations and hence
do not guarantee that all relevant information has been obtained. For this purpose, there
are providers of custom search
services, who search for information for a fee.
The time when one could keep up with the information on the World Wide Web is
already ancient history. With the Web
growing dramatically, it becomes impossible to track even a small and well-defined
segment of the Web. Therefore, the
market researcher has even more difficulty finding the information he or she seeks.
Intranets are internal company networks. While corporations are looking for ways and
means of communicating to
consumers through the World Wide Web, it is apparent that intranets are the building
blocks for successful commercial
activity. These internal networks start off as ways for employees to connect to company
information. Intranets may also
incorporate connections to the company's various suppliers. According to many industry
experts, the advent of total
commercial integration is fairly close—employees, suppliers, and customers will soon
operate in a totally seamless
environment. The advantage for an intranet user is that he or she can connect to the
Internet easily, whereas Internet users
cannot access intranets without appropriate security codes.
The utilization of intranets will aid in the communication and distribution of information
inside large corporations. This is
especially crucial for firms where information and know-how is mission-critical, such as
management consultants or software
developers. Once information is gathered, it is stored in internal databases so that it can
be accessed from any company
location in the world. By researching internal databases in the first place, the danger of
duplicating information search
procedures in separate locations is minimized and therefore the return on information is
maximized.
There are a number of promising technologies on the horizon which all have a common
objective: to increase the bandwidth
of the Internet. The demand for high-speed connections is huge, since more and more
large data files such as multimedia
applications are sent over the Internet

Attitude Measurement in Marketing Research

"Despite years of experience with these applications, the design of the rating scale is
usually an adhoc
judgment based on the researcher's preferences and past experiences in similar
situations."
Pages: 273-283
Attitudes are mental states used by individuals to structure the way they perceive their
environment and guide the way they
respond to it. There is general acceptance that there are three related components that
form an attitude: a cognitive or
knowledge component, a liking or affective component, and an intentions or actions
component. Each component provides a
different insight into a person's attitude.
The cognitive or knowledge component represents a person's information about an
object. This information includes
awareness of the existence of the object, beliefs about the characteristics or attributes
of the object, and judgments about the
relative importance of each of the attributes.
The affective or liking component summarizes a person's overall feelings toward an
object, situation, or person, on a scale
of like-dislike or favorable-unfavorable. When there are several alternatives to choose
among, liking is expressed in terms of
preference for one alternative over another. Preferences can be measured by asking
which is "most preferred" or the "first
choice," which is the "second choice," and so forth. Affective judgments also can be
made about the attributes of an object.
The intention or action component refers to a person's expectations of future
behavior toward an object . . . Intentions
usually are limited to a distinct time period that depends on buying habits and planning
horizons. The great advantage of an
intentions question is that it incorporates information about a respondent's ability or
willingness to pay for the object, or
otherwise take action. One may prefer Aspen over all other ski areas in the Rockies but
have no intention of going next year
because of the cost.
Measurement can be defined as a standardized process of assigning numbers or other
symbols to certain characteristics of
the objects of interest, according to some prespecified rules. Measurement often deals
with numbers, because mathematical
and statistical analyses can be performed only on numbers, and they can be
communicated throughout the world in the same
form without any translation problems. For a measurement process to be a
standardized process of assignment, two
characteristics are necessary. First, there must be one-to-one correspondence between
the symbol and the characteristic in the
object that is being measured. Second, the rules for assignment must be invariant over
time and the objects being measured.