An Introduction to Research Methods

1. An Introduction to Research Methods

2. Marketing research provides information to help implement… • The Study of Marketing • The Use of the Marketing Concept • Marketing Strategy • Let’s look at each of these in turn

3. Marketing research provides information to help implement… • Marketing:process of all activities necessary for the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives

4. Marketing research provides information to help implement… • Marketing Concept:the business philosophy that holds the key to achieving organizational goals consists of determining the benefits sought by target market members and delivering these benefits more effectively & efficiently than competitors. This is to be done at a “profit.”

5. Marketing research provides information to help implement… • Marketing Strategy:consists of selecting one or more segments of the market as the company’s target market(s) and designing the proper “mix” of the “4Ps”

6. Key Point:To practice marketing; to implement the marketing concept; to carry out a marketing strategy, managers must make informed decisions. Many decisions require additional information and marketing research may be needed in order to supply that information.

8. What is online research? • Online research:the use of computer networks, including the Internet, to assist in any phase of the marketing research process including development of the problem, research design, data gathering, analysis, and report writing and distribution

9. What is online research? • Web-based research:research that is conducted to evaluate various facets of Web applications; may use traditional methods as well as on-line research methods in conducting research on Web-based applications • Online survey research: collection of data using computer networks

10. Marketing Information System • Marketing Information System (MIS):a structure consisting of people, equipment, and procedures to gather, sort, analyze, evaluate, and distribute needed, timely, and accurate information to marketing decision makers

11. Internal Reports System … existing organization/company reports and records (sometimes called “accounting information system”) Marketing Intelligence System … everyday info about pertinent developments in the environment Components of an MIS

12. Decision Support System (DSS) … collected data that may be accessed and analyzed using tools and techniques that assist managers in decision making (“playing what if?”). Marketing Research System…provides information not available from other systems. When specific problem must be solved, marketing research may be needed. This is “project-based” not continuous as with other systems. Components of an MIS

13. The Marketing Research Industry

14. Marketing Research: A Brief History • Pre-Marketing Research Era: colonization to the Industrial Revolution • Early Development Era: Industrial Revolution to 1920 • Questionnaire Era: 1920-1940 • Quantitative Era: 1940 to 1960 • Organizational Acceptance Era: 1960 to 1980 • PC Technology Era: 1980 to 1990 • Globalization-Online Era: since 1990

15. Some Figures for Marketing Research Sector • 15.890 million USD (2002/WORLD) • ABD -------- 39% ----- 6159 million USD • AB----------- 37% • 39% is shared by 10 marketing research companies • 51% is spent by the first 25 biggest companies • 31% syndicated research • 19% qualitative research • The rest is quantitative research

16. U.S. Rank Organization Headquarters Website ($, in millions) ($, in millions) revenue 2004 2003 1 1 VNU Inc. New York www.vnu.com $1,794.4 $3,429.2 47.7% 2 2 IMS Health Inc. Fairfield, Conn. www.imshealth.com 571.0 $1,569.0 63.6 3 4 Westat Inc. Rockville, Md. www.westat.com 397.8 397.8 — 4 5 TNS U.S. New York www.tns-global.com 396.0 1,732.7 77.2 5 3 Information Resources Inc. Chicago www.infores.com 379.6 572.8 33.6 6 6 The Kantar Group Fairfield, Conn. www.kantargroup.com 365.7* 1,136.3* 67.8* 7 7 Arbitron Inc. New York www.arbitron.com 284.7 296.6 4.0 8 8 NOP World US New York www.nopworld.com 213 408.5 47.9 9 9 Ipsos New York www.Ipsos-na.com 193.9 752.8 74.2 10 10 Synovate Chicago www.synovate.com 193.5 499.3 61.3 Top 10 U.S. Marketing Research Firms

17. Pazarlama ve Kamuoyu Araştırmacıları Derneği (1988) Setting ethical and professional standards and measures Organising seminars and making publications to up-date members about progresses in marketing research area GAB: Guvenilir Arastirma Belgesi -Bureau Veritas Audit Individual members – approx. 400 Member companies - 52 Marketing Research Sector in Turkey

18. Syndicated Research AGB :Daily, weekly and monthly reports Percentages and other statistics about TV programme consumption habits of target segments Bilişim International Research Org.:Monthly advertising expenditure research HTP Research and Consulting Services:Household panels on consumption Weekly visits, monthly reports, 12 major cities, 4500 households Information Resources Inc/Panel : Retailer audits Electronic data collection – Retailer information Marketing Research Sector in Turkey

19. Industry Structure: Internal Suppliers • Internal suppliers: an entity within the firm supplies marketing research • Methods of Organization: • Own formal departments: Organized around: • Marketing function: ad research, product research, pricing research, channel … • Research process: data analysis, data collection… • Area of application: brands, customers, etc. • Single individual or committee • In some cases no one is specifically assigned such tasks on a full time basis

20. Industry Structure: External Suppliers • External suppliers: outside firms hired to fulfill a firm’s marketing research needs • Methods of Organization: • Function: data analysis, data collection, etc. • Type of research application: ad research, etc. • Geography: domestic, international, etc. • Type of customer: finance, health • Combination of the above • Classification: • Full-service • Limited service…see next slide

22. Senior Analyst • Participates in the development of projects • Carries out execution of assigned projects • Coordinates the efforts of analyst, junior analyst, & other personnel in the development of research design and data collection • Prepares finalreport • Analyst • Handles details in execution of project • Designs & pretests questionnaires • Conducts preliminary analysis of data • Statistician/Data Processing • Serves as expert on theory and application on statistical techniques • Oversees experimental design, data processing, and analysis • Junior Analyst • Secondary data analysis • Edits and codes questionnaires • Conducts preliminary analysis of data • Fieldwork Director • Handles selection, training, supervision, and evaluation of interviewers and field workers Selected Marketing Research Career Descriptions

23. Industry is performing well but could stand some improvements Focus on diagnosing problems in the market instead of rushing to test a product/service (The Walkman, developed without MR, was created to solve need for portability. Sony diagnosed a need in the market). Need to use IT to speed up MR process Research efforts should be integrated..too splintered MR needs to be involved in strategic decisions (Should we be in this business v. Is this the best product feature?) Too often, MR is used to test tactics. Improving Industry Performance

24. Other Suggestions For Industry Improvements • Certification…Being promoted by AMA • Auditing…Being used in other areas, i.e. Advertising..audits websites via Audit Bureau of Circulations. • Education…MR industry has made much progress here.Examples include: AMA’s Notre Dame School of Marketing Research, Burke Institute, Advertising Research Foundation seminars, etc.

25. What is the reputation of the supplier? Do they complete projects on schedule? Are they known for maintaining ethical standards? Are they flexible? Are their research projects of high quality? What kind and how much experience does the supplier have? Has the firm had experience with projects similar to this one? Do the supplier's personnel have both technical and non-technical expertise? Can they communicate well with the client? Competitive bids should be compared on the basis of quality as well as price. Criteria for Selecting a Research Supplier

26. Ethics and Marketing Research • AMA Code of Ethics • Prohibits selling (sugging) or fund raising (frugging) under the guise of conducting research • Maintaining research integrity by avoiding misrepresentation and omission of pertinent research data • Treating others (buyers and suppliers) fairly • Buyers: Being sold unnecessary research, supplier firms sharing buyer’s confidential information. • Suppliers: Being asked for quick answers, not being paid by buyers

27. The Public: Should researchers be asked to conduct research on consumption of potentially dangerous products? For example, doing research to find ways to increase consumption of high-sugar and/or high-fat content products by kids or ways to increase tobacco use by teens? Ethics and Marketing Research

28. Respondents – example, study finds that refusal rates are climbing often because public is wary of losing privacy. Deception should be eliminated. Respondents should not be identified if they are promised anonymity/confidentiality Invasions of privacy (permission issue); marketing research should not invade a person’s privacy… Respondents should have right to choose to participate Ethics and Marketing Research

29. Invasion of Privacy SPAM; sending unwanted email Industry currently debating opt-out vs. opt-in (“active consent”) standards (opt-in much stricter) Online Survey Research: Abused respondents via SPAM initially. Today, industry is a leader in anti-spam legislation. Researchers must have a preexisting relationship with potential online respondents and the respondents must have a reasonable expectation that they will be contacted via email. Ethics and Marketing Research

30. Ethics and Marketing Research • Your ethical views are shaped by your philosophy: • Deontology: concerned with the rights of the individual • Simply following the correct moral rules is often not sufficient; instead, we have to have the correct motivations. • Teleology: analyzes a given behavior in terms of its benefits and costs to society

31. Ethics and Marketing Research • Your ethical views are shaped by your philosophy: are these actions “ethical” or not – why? • Observation study – choosing product in supermarket • Observation study – buying shoes in store • Focus group with client representatives watching; participants not informed

32. Marketing Research Associations Online US AAPOR:American Association for Public Opinion Research (www.aapor.org) AMA : American Marketing Association (www.ama.org) ARF : The Advertising Research Foundation (www.amic.com/arf) CASRO : The Council of American Survey Research Organizations (www.casro.org) MRA : Marketing Research Association (www.mra-net.org) QRCA : Qualitative Research Consultants Association (www.qrca.org) RIC : Research Industry Coalition (www.researchindustry.org)

33. International ESOMAR: European Society for Opinion and Marketing Research (www.esomar.nl) MRS: The Market Research Society (UK) (www.marketresearch.org.uk) MRSA: The Market Research Society of Australia (www.mrsa.com.au) PMRS: The Professional Marketing Research Society (Canada) (www.pmrs-aprm.com) Marketing Research Associations Online

34. The Marketing Research Process

35. The Marketing Research Process: 11 Steps • Step One: Establishing the Need for Marketing Research • Step Two: Defining the Problem • Step Three: Establishing Research Objectives • Step Four: Determining Research Design • Step Five: Identifying Information Types and Sources • Step Six: Determining Methods of Accessing Data

36. The Marketing Research Process: 11 Steps cont… • Step Seven: Designing Data Collection Forms • Step Eight: Determining Sample Plan and Size • Step Nine: Collecting Data • Step Ten: Analyzing Data • Step Eleven: Preparing and Presenting the Final Research Report

37. The Marketing Research Process Step One: Establish the Need for Marketing Research • Marketing Research is not needed when the: • required information is already available • decisions need to be made now • organization can’t afford the research • costs outweigh the value of the research

38. The Marketing Research Process Step Two: Define the Problem • The most important step in the marketing research process is defining the problem.

39. One day I received a phone call from a research analyst who introduced himself as one of our alumni. He was working for a restaurant chain in town and wanted help analyzing the data he had collected while conducting a marketing research study. Chain Restaurant Study

40. When we met, he presented me with a copy of the questionnaire and asked how he should analyze the data. My first question to him was, What is the problem being addressed? Chain Restaurant Study

41. When he looked perplexed, I explained thatdata analysisis not an independent exercise. Rather, the goal of data analysis is toPROVIDE INFORMATION RELATED TO THE PROBLEM COMPONENTS. Chain Restaurant Study

42. I was surprised to learn that he did not have a clear understanding of themarketing research problemand that a written definition did not exist. So before going any further, I had to define the marketing research problem. Once that was done, I found that much of the data collected was not relevant to the problem. In this sense, the whole study was a waste of resources. A new study had to be designed and implemented to address the problem defined. Chain Restaurant Study

43. Tasks Involved Fig. 2.1 Discussion Interviews Secondary Qualitative with with Data Research Decision Maker(s) Experts Analysis Environmental Context of the Problem Step I: Problem Definition Management Decision Problem Marketing Research Problem Step II: Approach to the Problem Specification of Information Needed Analytical Model: Verbal, Graphical, Mathematical Objective/ Research Hypotheses Theoretical Questions Foundations Step III: Research Design The Problem Definition Process

44. The Marketing Research Process Step Three: Establish Research Objectives • What information is needed in order to solve the problem?

45. The Marketing Research Process Step Four: Determine Research Design • Exploratory Research: collecting information in an unstructured and informal manner • Descriptive Research: refers to a set of methods and procedures describing marketing variables • Causal Research (experiments and other approaches): allows isolation of causes and effects

46. The Marketing Research Process Step Five: Identify Information Types and Sources • Secondary Data: information that has been collected for some purpose other than the research at hand • Primary Data: information that has been gathered specifically for the research objectives at hand

47. The Marketing Research Process Step Six: Determine Methods of Accessing Data • Secondary Data: accessing data through sources such as the Internet and library • Primary Data: collecting data from participants through methods such as telephone, mail, online, and face-to-face (quantitative), and observation studies and focus groups (qualitative)

48. The Marketing Research Process Step Seven: Design Data Collection Forms • The design of the data collection form that is used to ask or observe and record information in marketing research projects is critical to the success of the project. • It is easy to write a set of questions but very difficult to construct a questionnaire. • General types of “instruments” (forms) • Questionnaires • Observation Study forms (protocols)

49. The Marketing Research Process Step Eight: Determine Sample Plan and Size • Sample plan: refers to the process used to select units from the population to be included in the sample • Sample size: refers to determining how many elements (units) of the population should be included in the sample

50. The Marketing Research Process Step Nine: Collect Data • Sound data collection is very important because, regardless of the data analysis methods used, data analysis cannot “fix” bad data. • Nonsampling errors may occur during data collection. These are related to poor design and/or execution of the data gathering. • Sampling errors may occur based purely on chance