Conducting Marketing Research

1. Conducting Marketing Research Ch. 29 ME

2. Section 29.1 The Marketing Research Process

3. The Marketing Research Process Defining the Problem Obtaining Data Analyzing Data Recommending Solutions Applying the Results

4. Step 1: Defining the Problem • Problem definition – occurs when a business clearly identifies a problem and what is needed to solve it • Research can then create objectives that will help to answer problem(s) • Objectives are used to develop the actual questions that will be included in the research instruments

5. Step 2: Obtaining Data • Data are collected and examined in terms of the problem and problems being studied • Data means facts • Primary Data – are data obtained for the first time and used specifically for the particular problem or issue under study • Secondary Data – have already been collected for some other purpose other than the current study • Cost effective for a company to decide what secondary data is can use before collecting any primary data

6. How Secondary Data are Obtained • Obtained from both internal and external sources • Secondary data are most often collected in the following ways: • Internet: Company’s homepage & Digital dossiers (business clearinghouses) • US and State Government: State Dept. of Commerce, small business development centers, US Gov’t. agencies (census, labor statistics, etc.) & government publications (Statistical Abstract of the United States) • Specialized Research Companies: Mediamark Research, Inc. • Business Publications and Trade Organizations: Wall Street Journaland American Marketing Association

7. Advantages/Disadvantages of Secondary Data Disadvantages Existing data may not be suitable for the problem under study May be sometimes inaccurate Advantages • Obtained easily

8. How Primary Data are Obtained • Obtained through company research projects or specialized research organizations • Primary data are most often collected in the following ways: • Survey Method – is a research technique in which information is gathered from people through the use of surveys or questionnaires • Most frequently used method of collecting primary data • Census – survey of an entire small target population • This situation cannot occur, and time and money are limited • Instead, a sample of the entire target population is used • Sample– is a part of the target population that represents its accurately

9. How Primary Data are Obtained • Technological Methods • Through online surveys and focus group chat session on the Internet • Fax broadcasting • Automated dialers • Digital surveys • Interactive voice response

10. How Primary Data are Obtained • Interviews • Personal interview - involves questioning people face-to-face • Mall Intercept Interview - Conducted in central locations • Focus group – involves eight to twelve people who are brought together to evaluate • Advantage – often easier to get people to respond • Disadvantage – cost • Telephone Interview – quick, efficient, and relatively inexpensive • Mail Survey – is a relatively inexpensive way to reach a potentially large audience • Success rate is only 10% • Internet-based surveys – are quick and eliminate data entry • Allows for real-time data collection, multiple-choice questions, and open-ended, text-based answers

11. How Primary Data are Obtained • The Observation Method • Is a research method technique in which the actions of people are watched and recorded either by cameras or by observers • Properly performed and recorded observations supply better results than those obtained with survey techniques • Mystery shopping – is used to view the interaction between customers and employees • Mystery Shopper – is a researcher who poses as a customer and goes into a business to observe employees and operations • Disadvantages – cannot measure attitudes or motivation; provides what a person does, not why • Advantages – faster; people act normal since they are unaware; cost effective • Point-of-Sale Research – is a powerful form of research that combines natural observation with personal interviews to get people to explain buying behaviors

12. How Primary Data are Obtained • The Experimental Method • Is a research technique in which a researcher observes the results of changing one or more marketing variables while keeping other variables constant under controlled conditions • Is infrequently used for marketing research because of cost of setting up the research situation and the inaccuracy of the responses

13. Step 3: Analyzing Data • Data Analysis – is the process of compiling, analyzing, and interpreting the results of primary and secondary data collection • Data Mining – is a computer process that uses statistical methods to extract new information from large amounts of data

14. Step 4: Recommending Solutions to the Problem • The conclusions drawn from the research are usually presented in an organized and well-written report • Recommendations must be clear and well supported by the research data

15. Step 4: Recommending Solutions to the Problem • A typical report includes the following: • Title page • Acknowledgements of people who assisted in the research effort • Table of contents • List of tables, figures, charts and graphs • Introduction (include the problem under study, its importance, definitions, limitations of the study, and basic assumptions) • Review of the research information (including the results of the any secondary data reviewed for the research effort) • Procedures used (research techniques or techniques used to obtain primary data) • Findings • Recommendations • Summary and conclusions • Appendixes • Bibliography

16. Step 5: Applying the Results Research may be inconclusive, additional research is needed or the research suggest specific courses of action Carefully monitor the results Research effort has been a success if decisions made as a result lead to increased profits through better sales, increased efficiency, or reduced expenses

17. Section 29.2 The Marketing Survey

18. Constructing the Questionnaire • As a major form of quantitative research, questionnaires should provide data that have validity • Validity - when questions asked measure what was intended to be measured • Research questionnaires should also have reliability • Reliability – exists when a research technique produces nearly identical results in repeated trials • To be valid and reliable, a questionnaire must be properly written, formatted, and administered

19. Writing Questions • Open-ended Questions – ask respondents to construct their own responses • Generate a wide-variety of responses that are sometimes difficult to categorize and tabulate • Forced-choice Questions – ask respondents to choose answers from possibilities given on a questionnaires • Are the simplest questions to write and the easiest to tabulate

20. Writing Questions • Yes/No Questions • Should only be used when asking for a response on one issue • Having a question that asks about more than one issue decrease validity and reliability • Most often used as filter questions • Multiple-Choice Questions • Give the respondent several choices • Make the options mutually exclusive and comprehensive enough to include every possible response

21. Writing Questions • Rating Scale Questions • Rate a product or service based upon a scale • Variety of scales may be used • Level of Agreement Questions • Are statements that describe attitudes or opinions • Often easier to use descriptive statements

22. Basic Guidelines for Writing Questions • Each question should be written clearly and as briefly as possible • Use the same ranking or rating scales for all similar questions • Do not ask leading questions • Which suggest an answer • Avoid any bias • Which is a systematic error introduced by encouraging one outcome or answer over the others • Avoid questions that might cause a respondent to guess at the meaning • When finished, pre-test the wording of the questions to correct any mistakes

23. Formatting • Must have excellent visual appearance and design to appeal to respondents • Use dark ink on light paper with easy to read font • Short enough to be answered quickly • Sections headings or numbered sections • Numbers on each questions • Note a continue on next page if more than one page • Content Formatting • Directions must be clear for each section or group • General demographic questions are typically grouped together at the end

24. Administering the Questionnaire • All surveys should have deadlines for completion • A mailed questionnaire should be sent first-class with a high-signed cover letter, and it should be personalized if the person is known • Include pre-paid postage for return • In-Person Surveys • Questionnaires that are not mailed should have brief explanations for purpose • A plan for selection participants in a unbiased way • Incentives • Offer incentives to encourage people to participate