Ch. 3 The Marketing Research Process PDF

The Marketing Research Process 11 Steps in the Marketing Research Process Step 1: Establish the need for marketing research Step 2: Define the problem Step 3: Establish research objectives Step 4: Determine research design Step 5: Identify information types and sources Step 6: Determine methods of a...

The Marketing Research Process 11 Steps in the Marketing Research Process Step 1: Establish the need for marketing research Step 2: Define the problem Step 3: Establish research objectives Step 4: Determine research design Step 5: Identify information types and sources Step 6: Determine methods of accessing data Step 7: Design data collection forms Step 8: Determine the sample plan and size Step 9: Collect data Step 10: Analyze data Step 11: Communicate the insights. Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights Reserved The Marketing Research Process: Caveats to a Step-By-Step Process The “Step-by-Step Process” – Not always presented as an 11-step process – Not all studies use all 11 steps – Few studies follow the steps in order Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights Reserved Step 1: Establish the Need for Marketing Research Is there a real need for marketing research? - Not all decisions require marketing research - We often have information Research takes time and costs money Cost of information may outweigh value of information The need for marketing research arises when managers must make decisions and they have inadequate information. Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights Reserved Step 1: Establish the Need for Marketing Research When is marketing research Not needed? The information is already available - For routine decisions, most managers have the experience to act without any additional information. - Do we already have the information? - Other components of the marketing intelligence system (MIS) may be able to supply the data. - Can the needed information be obtained from the internal reports system or from the decision support system (DSS)? Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights Reserved Step 1: Establish the Need for Marketing Research When is marketing research Not needed? The timing is wrong - Circumstances may dictate there is simply not enough time to conduct marketing research. - Competitive firms need to react quickly. - Is the product at the end of its life cycle? Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights Reserved Step 1: Establish the Need for Marketing Research When is marketing research Not needed? Costs outweigh the value - Marketing research should be seen as an investment. - Although costs are readily estimated, it is much more difficult to estimate the value research is likely to add. - All methods of measuring the value of research should explicitly link the research results to business impacts. - Ex: a research study should not just conclude that alternative A produces more consumer satisfaction. Rather, the increase in consumer satisfaction should be linked to an impact such as greater customer retention or higher market share. Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights Reserved Step 1: Establish the Need for Marketing Research When is marketing research Not needed? Costs outweigh the value - All methods of measuring the value of research should demonstrate that something happened as a result of the research that would not have happened otherwise, and quantify the financial value of that difference. Or the metrics should demonstrate that risk was mitigated and quantify the financial value of that risk reduction. Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights Reserved Step 2: Define the Problem The need to make a decision requires decision alternatives. If there are no alternatives, no decision is necessary. Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights Reserved Step 3: Establish Objectives Research objectives state what the researchers must do. Research objectives, when achieved, provide the information necessary to solve the problem identified in step 2. Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights Reserved Step 4: Determine Research Design Exploratory Research: collecting information in an unstructured and informal manner. - It is undertaken to learn more about the research problem, learn terms and definitions, or identify research priorities. - Often exploratory research is conducted early on to help clients determine the research objectives. Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights Reserved Step 4: Determine Research Design Descriptive research: research that describes the phenomena of interest. - Many surveys are undertaken to describe things: level of awareness of advertising, intentions to buy a new product, satisfaction level with service Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights Reserved Step 4: Determine Research Design Causal studies: attempt to uncover what factor or factors cause some event. - Causal studies are achieved from a class of studies we call experiments. - Ex: Which web page is more likely to induce a user to put a product in their shopping basket? Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights Reserved Step 5: Identify Information Types and Sources Primary information: information collected specifically for the problem at hand Secondary information: information already collected - Secondary information should always be sought first, since it is much cheaper and faster to collect than primary information and is sometimes superior to information that an individual firm is able to collect on its own. - It is available in published sources in the library or online, and is either free or available for a small fee. - Syndicated data: research companies collect information and make it available to all those willing to pay a subscription. Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights Reserved Step 6: Determine Methods of Accessing Data Secondary data is relatively easy to access Primary data is more complex Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights Reserved Step 7: Design Data Collection Forms The questionnaire must be worded objectively, clearly, and without bias in order to communicate with respondents. If a focus group is used, a focus group guide must be developed. If we observe respondents, the form is called an observation form. Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights Reserved Step 8: Determine Sample Plan and Size A sample is drawn from an entire group or population. The sample plan describes how each sample element, or unit, is to be drawn from the total population. Gives you representativeness! - Population selections should be defined by the research objectives Sample size refers to determining how many elements of the population should be included in the sample. - The size of the sample determines how accurately your sample results reflect values in the population. Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights Reserved Step 9: Collect Data Errors in collecting data may be attributed to fieldworkers or to respondents, and they may be intentional or unintentional. Researchers should know the sources of these errors and implement controls to minimize them. - Ex: fieldworkers, the people who are collecting the data, may cheat and make up data they report as having come from a respondent. Researchers aim to minimize this possibility by undertaking a control referred to as validation. - Validation means that 10% (the industry standard) of all respondents in a marketing research study are randomly selected, re-contacted, and asked if they indeed took part in the study. Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights Reserved Step 10: Analyze Data Data analysis involves entering data into computer files, inspecting data for errors, and running tabulations and various statistical tests. The objective of data analysis is to use statistical tools to present data in a form that fulfills the research objectives. If the research objective is to determine if there are differences in intention to purchase a new product between four levels of income groups, data analysis would be used to determine if there are any differences in intention to purchase among the income groups in the sample, and to determine if these differences actually exist in the population. Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights Reserved Step 11: Communicate the Insights Communicating the results, the last step, is one of the most important phases of marketing research. Its importance cannot be overstated because it is the report, or its presentation, that properly communicates the results to the client. Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights Reserved Defining the Problem Problems are situations calling for managers to make choices among decision alternatives. Defining the problem is the most important step in the marketing research process. - If the problem is defined incorrectly, the rest of the steps in the research process will be fundamentally flawed. Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights Reserved Recognize the Problem Failure to Meet an Objective A problem occurs when there is a gap between what was supposed to happen and what did happen Marketing managers often formally identify key performance indicators (KPIs), or measures that provide scores of how well a company is performing relative to its objectives. Examples of KPIs: Decrease in Sales Decrease in Brand Awareness Website yielding fewer conversions Returns, complaints, bad reviews Recognize the Problem Identification of an Opportunity An opportunity occurs when there is a gap between what did happen and what could have happened. This situation represents a failure to realize a “favorable circumstance or chance for progress or advancement.” A marketing opportunity is defined as a potentially favorable circumstance in which a company can perform successfully. Some firms have departments and formal procedures to ensure that opportunities are found and evaluated. These firms tend to rely on innovations to renew their life cycles and keep them competitive. Understanding the background of a problem Conduct a situational analysis A situation analysis is a form of exploratory research undertaken to gather background information and data that may be helpful in properly defining the problem decision. Ex: A situation analysis may reveal that the symptom of declining sales is more likely due to a problem with losing distributors than with ad copy. A situation analysis may begin with the researcher learning about the industry, the competitors, key products or services, markets, market segments, social media activity, etc The researcher should start with the industry to determine if any symptoms, to be identified later, are associated with the entire industry or only with the client firm. The researcher should then move to the company itself: its history, performance, products/services, unique competencies, marketing plans, target markets, and major competitors. Understanding the background of a problem Conduct a situational analysis Methods: Reviewing internal and external data Experience surveys: discussions with knowledgeable persons inside and outside the firm Case analyses: examples of former, similar situations Focus groups: small groups discussing topics such as the company’s products or services Understanding the background of a problem Clarify the Symptoms When diagnosing a problem, symptoms are sometimes confused with problems. The role of a symptom is to alert management to a problem—that is, there is a gap between what should be happening and what is happening. Ex: “losing money” Symptoms function as a signal to alert managers to recognize problems. Can the symptoms be verified by other factors that are identified in the situation analysis? Are the symptoms one of a kind? Are they likely to appear again? Understanding the background of a problem Determine the Probable Cause of the Symptom(s) There is always some cause for change. The situation analysis should have identified these possible causes. After listing all possible causes under each one of the previously identified broad categories, the researcher and manager should narrow down the possible causes to a small set of probable causes, defined as the most likely factors giving rise to the symptom(s). Determine the Decision Alternatives Decision alternatives are all the marketing actions that the manager thinks may resolve the problem. Ex: price changes, product modification or improvement, new promotional campaigns, adjustments in channels of distribution. During this phase, the researcher’s marketing education and knowledge come fully into play. The manager and researcher brainstorm possible decision alternatives that may serve as solutions. Develop the Problem Statement The problem statement is a concise description of the problem or opportunity that management is facing that requires research to make a decision. The following are examples of problem statements: An apartment manager wants to increase the proportion of occupancies per year at his apartment complex. A snack manufacturer seeks to increase sales by offering biodegradable packaging. An app developer hopes to increase the number of downloads of her app. A retailer wants to understand the consequences of an increase in sales to baby boomers and a decrease in sales to millennials during the past 12 months. The Research Objective Research objectives are specific and tell the researcher exactly what information must be collected to solve the problem by facilitating selection of an alternative. They are goal-oriented statements or questions that specify what information is needed.. Research objectives should be clear, specific, and actionable. - Ex: give the limitations of time, money, and technology, the research objectives should be obtainable through marketing research. The number of research objectives can be highly variable depending on the problem statement, but a rule of thumb is to have three to six research objectives per research project. Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights Reserved The Research Objective Specify from whom information is to be gathered Specify what information is needed Specify the unit of measurement used to gather information Word questions used to gather information using the respondents’ frame of reference Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights Reserved Formulating Research Objectives as Statements or Questions Problem Statement: The American Red Cross wishes to increase the number of American university students who donate blood each year. Formulating Research Objectives as Statements Formulating Research Objectives as Questions To determine what college students see as the benefits of donating blood What do college students see as the benefits of donating blood? To determine what college students see as the obstacles to donating blood What do college students see as the obstacles to donating blood? To identify the incentives that would encourage students to donate blood What incentives would encourage students to donate blood? To distinguish the types of promotions that are most likely to attract college students What types of promotions are most likely to attract college students? To identify how the information defined from the previous statements varies according to the characteristics of college students, including gender, class standing, type of university attended, domestic versus international student, and geographical region. How does the information defined from the previous questions vary according to the characteristics of college students, including gender, class standing, type of university attended, domestic versus international student, and geographical region? Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights Reserved Action Standards An action standard is a predesignation of some quantity of a measured attribute or characteristic that must be achieved for a research objective for a predetermined action to take place. Action standards entail making important decisions prior to collecting data, and they serve as clear guidelines for next steps once the data have been collected. Action standards prevent managers from learning information that is “nice to know” but not being certain how to proceed with that information. Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights Reserved