Marketing Research Chapter 7

Chapter 7: Marketing Research

• Marketing research is a set of techniques and principles for systematically collecting, recording, analyzing, and interpreting data that supports decision-making in marketing goods, services, or ideas.
• Modern companies leverage "big data."
• Netflix uses usage data to understand what people want to watch.
• Netflix's advanced marketing research helps understand how people watch shows and movies.

Learning Objectives

• LO1: Identify the five steps in the marketing research process.
• LO2: Describe the various secondary data sources.
• LO3: Describe primary data collection techniques and summarize the differences between secondary and primary data.
• LO4: Outline ethical issues firms encounter when conducting marketing research.

The Marketing Research Process

• Step 1: Define the Research Problem and Objectives
  • Determine what information is needed to answer specific research questions.
  • Determine how that information will be obtained.
• Step 2: Design the Research Plan
  • Identify the type of data needed.
  • Determine the type of research necessary to collect the data.
  • Project objectives drive the type of data needed.
• Step 3: Collect Data
  • Secondary data: Data collected prior to the focal project (can be internal or external).
  • Primary data: Data collected to address specific research needs (focus groups, interviews, surveys).
• Step 4: Analyze Data and Develop Insights
  • Convert data into information to explain, predict, and/or evaluate a particular situation.
• Step 5: Present Action Plan
  • Prepare the results (executive summary, report body, conclusions, supplemental tables/appendices).
  • Present the results (short, to the point, audience-appropriate, no technical jargon, recommendations).

Secondary Data

• Can be free or very inexpensive.
• Internal sources: From the company/firm itself (invoices, customer lists, reports).
• Firms use data mining techniques to decipher large amounts of data from internal sources.
• External sources: Census data, trade journals, books, articles, reports, data from specialized research firms.
• Downside: May not be specific or timely enough to solve research needs.
• Big data: Data sets too large and complex to analyze with conventional software. Analyzed with various statistical tools (data mining). Five Vs of Big Data (volume, variety, velocity, veracity, value).
• External Secondary Data Sources: Syndicated data, scanner data, panel data. Examples of databases and sources.

Disadvantages of Secondary Data

• May not be adequate to meet researchers' needs.
• Data originally collected for other purposes may not be completely relevant.
• May not always be adequate to answer the research objective.
• May be dated.

Primary Data Collection Techniques

• Qualitative Research: Exploratory (reliability, validity, sampling). Methods include observation, in-depth interviews, focus groups, social media. Gathering rich, detailed data.
• Quantitative Research: Confirming early insights, using surveys, formal studies, scanner and panel data. Test predictions and hypotheses to measure variables and draw conclusions. Methods include experiments and surveys.

Qualitative Research Methods: Observation, Ethnography, Social Media, and In-Depth Interviews

• Observation: Examination of purchase & consumption behavior. Ethnography studies people in their daily settings.
• Social Media: Social media can provide valuable information for marketing strategy.
• In-Depth Interviews: Trained researchers ask questions, listen, record answers, and clarify.

Qualitative Research Methods - Focus Groups

• A small group discusses an issue in-depth, guided by a trained moderator.
• Unstructured method of inquiry.

Quantitative Research Methods

• Information confirms early insights.
• Uses surveys, formal studies, scanner & panel data.
• Used to test predictions or hypotheses.
• Examples include structured questionnaires and quantitative analyses..

Qualitative Research Methods: Web Surveys

• An important component of all quantitative surveys.
• Simple design, launch, data download and analysis.
• Popular online surveys like SurveyMonkey and Qualtrics.
• High response rates compared to other methods.

Quantitative Research Methods: Experimental Research

• Systematically manipulates one or more variables to determine which variable(s) have a causal effect. Examples include testing new prices or menu items to see the effect on profitability.

Ethical Issues in Marketing Research

• A strong ethical orientation is an integral part of a firm's marketing strategy and decision-making.
• As more firms adopt advanced marketing research technologies, they must ensure they receive permission from consumers.
• Firms need to be careful about how they collect and use customer data. An example is the use of information collected by Roomba or similar devices. Should these devices collect data about the layout of a home and sell it to other companies without the consumer's explicit permission? Consumers should be aware and have the right to say no.