MARKETING RESEARCH AND MARKETING INFORMATION SYSTEMS

Marketing Information Systems (MkIS) Primary vs. secondary data

Advantages and disadvantages of each

Marketing research tools

BUAD 307

MARKETING RESEARCH

Lars Perner, Instructor

Learning Objectives
Appreciate the costs and benefits of research Appreciate the uses of both primary and secondary market research Appreciate the respective advantages and disadvantages of different primary research methods Develop an understanding of research method problems that can lead to misleading or incorrect conclusions. Understand the proper sequence of research activities.
BUAD 307

MARKETING RESEARCH

Lars Perner, Instructor

Marketing Research
An investment to reduce uncertainty Can help guide decisions on
Whether to enter Product characteristics Promotional strategy Positioning

Must weigh costs and benefits of research

Money Time spent

No perfect method tradeoffs between methods

BUAD 307

MARKETING RESEARCH

Lars Perner, Instructor

Marketing Information Systems (MkIS)

Set of procedures and methods for regular collection and analysis of information for marketing decisions
Databases (internal informatione.g., sales volumes) Market research
Primary Secondary
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Lars Perner, Instructor

Data Mining
Processing of vast amounts of data to find relationships between variablese.g.,
Items frequently purchased together strategic adjacencies (items placed together in retail setting) Seasonal patterns in sales Customer segments

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Lars Perner, Instructor

Two Research Methods

Secondary: use of existing research already done
Internal
Information System contente.g., sales/order records

External
Government Consulting firms Newspaper and magazine articles

Primary: creation of specific studies to answer specific questions

BUAD 307

MARKETING RESEARCH

Lars Perner, Instructor

Market Research Sequence

Identify problem or opportunity Plan research design and collect data Collect data

Text, p. 169

Analyze data

Report and present results

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MARKETING RESEARCH

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Primary Research Methods

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Surveys Experimentation Observation Focus groups In-depth interviews Projective techniques Physiological Measures Online research Scanner data Hybrid Methods
MARKETING RESEARCH
Lars Perner, Instructor

Primary Research Methods

Exploratory Methods
Observation (can be more definitive with larger sample sizes and focus on specific behavior) In-depth interviews Focus groups Projective techniques

Precision Methods (Conclusive)

Experiments Surveys Panel Scanner data

BUAD 307

MARKETING RESEARCH

Lars Perner, Instructor

Surveys
Forms
Mail (self-administered, single time) Mail panel (self-administered, multiple surveys administered over time) Telephone (from central location) Mall Intercept Computer/Internet

Planned questions
Open-ended Closed-ended

SURVEY COSTS: USUALLY LOW

Need large sample sizes for precise conclusions

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MARKETING RESEARCH

Lars Perner, Instructor

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Characteristics of Some Problematic Questions

Difficult to answerrespondent may not have knowledge needed
Amounts spent annually on specific product categories may not be known

Sensitive (embarrassing) Two in onee.g., On a scale from 1 to 10, how fast and reliable are Microsoft programs? Leading questionsgiving the feeling of the desired response
Do you agree that soft drinks with sugar are bad for you?

Non-exhaustive question Non-mutually exclusive answers

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Lars Perner, Instructor

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Continuum Questions
Questions rating the degree of a characteristic (e.g., agreement or product usage) tend to be more effective than binary Yes/No questions E.g.,

5 Strongly Agree

4 Agree

3 Neither Agree Nor Disagree

2 Disagree

1 Strongly Disagree

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MARKETING RESEARCH

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Some Areas Suited for Continuum Ratings

Interest Purchase likelihood Satisfaction/ Dissatisfaction Brand loyalty Price sensitivity Knowledge Experience Involvement Decision control Frequency or level of use Awareness Information search Personality traits Variety seeking

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Lars Perner, Instructor

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The Pentagon Declares War on Rush Limbaugh: Misleading Research

Survey found that only 4.8% of listeners to the Armed Forces Radio Network wanted to listen to the biggest hawk there is. How could a survey be made to get these results? Being on the watch for misleading surveys.
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Lars Perner, Instructor

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Experimentation
Subjects in different groups treated differently
E.g., for some, target product is given better shelf space E.g., some get coupon

Can help isolate causes Subject is not biased by questionsdoes not know how others are treated
EXPERIMENT COSTS: HIGH
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Lars Perner, Instructor

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My Simulated Store

A shopper in the everyday low price condition

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Ashs Instant Coffee Study

GROCERY SHOPPING LIST Ground beef Potatoes Apples Flour Sugar Laundry detergent Instant coffee 6 cups of yogurt Paper towels Bananas
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GROCERY SHOPPING LIST Ground beef Potatoes Apples Flour Sugar Laundry detergent Ground coffee 6 cups of yogurt Paper towels Bananas
MARKETING RESEARCH

Respondents were asked to describe their impressions of a housewife based only on her shopping list. These shopping lists differ only on one item.

Lars Perner, Instructor

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Definition
Confound: The tendency of some phenomenon to be caused at least in part by some variable other than the one of interest. E.g., does having more toys cause children to be more intelligent?

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Confounds
What is cause, what is effect, and what is coincidence? Correlation is not necessarily cause Lurking factors may be real cause of
Does sitting in front of the room cause higher grades? Do vaccinations cause autism? Does Prozac cause suicide? Do fish-heavy diets cause stomach cancer? Does fraternity/sorority membership cause higher grades?

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Lars Perner, Instructor

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Observation
Looking at consumes in the field e.g.,
Searching for product category area Number of products inspected and time spent on each Apparent scrutiny of labels or other information Involvement of others Behavior under limiting circumstances (e.g., time constraints)
OBSERVATION COSTS: LOW TO HIGH
(DEPENDING ON CODING AND ANALYSIS NEEDED)
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Taste Tests
Not experiments unless
Two or more groups of people are treated differently (e.g., get different food version) or The same person is being treated differently at separate times (e.g., half the participants receive new formulation, then current; half the participants receive in the opposite order)

Triangle Measure
Each respondent is given three items: One current, one new, and one duplicate of either old or new Asked to identify the one that is different and explain why
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Focus Groups
Groups of 8-12 consumers assembled Start out talking generally about context of product Gradually focus in on actual product
MOST APPROPRIATE AS EARLY STAGE METHOD

FOCUS GROUP COSTS: HIGH

(ESPECIALLY FOR THE AMOUNT OF INFORMATION COLLECTED)

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Lars Perner, Instructor

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REMINDER
Focus groups are most useful for identifying issues that should be studied in more detail with more precise methods Due to the small sample size and social influence on individual responses, it is difficult to generalize much from focus groups
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Lars Perner, Instructor

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In-depth interviews
Structured vs. unstructured interviews Generalizing to other consumers Biases
Subtle, inadvertent feedback
IN-DEPTH INTERVIEW COSTS: HIGH
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Projective Techniques
Getting at motivations that may not be consciously known Tell a story about this picture. Measurement of attitudes consumers are unwilling to express
It is easier to admit something embarrassing about someone else

Consumer discusses what other consumer might think, feel, or do

PROJECTIVE METHODS COSTS: USUALLY HIGH IF PERSONAL INTERVIEWS OR EXTENSIVEINTERPRETATION IS NEEDED
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Projective Examples

Please tell me a story of what is going on in this picture.

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More Projective Examples

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Projective Techniques--Examples

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Physiological Measures
Consumer bodily responses are watched at various phases of advertisement or other marketing exposure Tracking of
Eye movements
For areas of focus For attention, involvement

Heart rate Skin conductivity Brain waves

State of mind Attention
PHYSIOLOGICAL METHODS COSTS: HIGH

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Online ResearchAnalysis of Customer Search Queries

Unmet demand search for product not found on site Message comprehension comparison of search terms to media message Consumer vocabulary Feedback analysis
ONLINE SURVEY COSTS: USUALLY LOW
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Online Surveys
Conditional branchingdirect skip to relevant question Quality of response
Time pressures Willingness to write out answers or respond to multiple closed-ended questions Willingness to read and follow instructions is limited

Reliability and browser compatibility issues

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Lars Perner, Instructor

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Conditional Branching Traditional surveys: Have you bought a new car during the last six months? If not, please skip to Question 11. Conditional branching: Respondent will be taken to the appropriate question according to answer Customization of questions
E.g., consumer lists three brands subsequent questions ask about these specific brands by name
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Lars Perner, Instructor

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Other Online Tools

Click Stream Analysis: Analysis of clicking path how does the consumer get to a desired page or product? Shopping cart analysis

COSTS: HIGH START-UP COSTS; LOW VARIABLE COSTS POSSIBLE WITH DEVELOPED ALGORITHMS USUALLY LOW

COSTS: HIGH START-UP COSTS; LOW VARIABLE COSTS POSSIBLE WITH DEVELOPED ALGORITHMS USUALLY LOW

BUAD 307

MARKETING RESEARCH

Lars Perner, Instructor

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Searching for Reports of Personal Experience

Sources
Blogs (blogsearch.google.com) Photos (e.g., Flickr, Webshots, Picasaweb, Google image search) Video (e.g., Youtube)

Some issues
Joy, enjoyment Decisions Anxiety Social setting and influence

Cautions
May be staged or sensationalized May represent what the writer or photographer wants to show May be limited entries on certain mundane tasks such as dishwashing
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Lars Perner, Instructor

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Online Market Research Concerns

Representativeness of
Populationare relevant groups reached in desired proportions? Sampleeven if the desired population is reached, do respondents respond in desired proportions?

Willingness of participants to follow instructions Timing of survey participation requests Panel recruitment Privacy
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Lars Perner, Instructor

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Scanner Data
Panel members in test communities agree to
Swipe a card prior to each purchase Have purchases matched to
Demographic profiles Media/coupon exposure Promotional status of competing brands Past purchases

Problems:
Aggregation over household Aggregation bias--averages of disparate segments obscure! Only available for grocery and some drugstore products
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COSTS: HIGH START-UP COSTS; LOW VARIABLE COSTS POSSIBLE WITH DEVELOPED ALGORITHMS USUALLY LOW
Lars Perner, Instructor

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Scanner Data Research

No. of ads seen by shopper Ads seen for competing brands Split cable Purchase on occasion: Yes, no Time since previous purchase Previous purchases Current price Previous price Current promotional status Previous promotional status Current display status Previous display status Display status of competing brands Promotional status of competing brands Coupon used: Yes, no Coupon available: Yes, no Coupon available for other brands? Yes, no Amount of coupon

RECORDED PURCHASES

TELEVISION EXPOSURE HOUSEHOLD FILE DEMOGRAPHIC INFORMATION

Family size Occupation Family size Income BUAD 307 Home ownership

ANALYSIS
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Lars Perner, Instructor

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Hybrid Studies Some studies do not fall neatly into one category or may consist of a combination
E.g., a series of questionnaires in which respondents are given different information/ presentations becomes an experiment

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MARKETING RESEARCH

Lars Perner, Instructor

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Research Sequencing
More than one research method may be needed Exploratory studiese.g., focus groupsshould be done BEFORE precision approaches such as surveys. Parallel: Studies can be done at the same time if needed
E.g., need to know both attitude toward brand (questionnaire) and brand switching propensity (scanner data) Follow-up: One study is needed to address issues

raised in a previous one

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Lars Perner, Instructor

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Follow-Up Studies Normally, more general methods (e.g., focus groups) should be used first
E.g., identify issues of concern

Subsequent studies can use more precise, less flexible methods

E.g., questionnaire, scanner data, physiological measures, or experiments to follow up on issues raised in early focus group

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REMINDER
If focus groups should be used at all, they should usually be used EARLY in the research process NOT after more precise methods are used.

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Lars Perner, Instructor

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