Conducting Marketing Research

LEARNING OBJECTIVES
In this chapter, we will address the following questions:
1. What constitutes good marketing research?
2. What are the best metrics for measuring marketing productivity?
3. How can marketers assess their return on investment of marketing expenditures?
CHAPTER SUMMARY
1. Companies can conduct their own marketing research or hire other companies to
do it for them. Good marketing research is characterized by the scientific method,
creativity, multiple research methods, accurate model building, cost‐benefit
analysis, healthy skepticism, and an ethical focus.
2. The marketing research process consists of defining the problem, decision
alternatives, and research objectives, developing the research plan, collecting the
information, analyzing the information, presenting the findings to management, and
making the decision.
3. In conducting research, firms must decide whether to collect their own data or
use data that already exist. They must also choose a research approach
(observational, focus group, survey, behavioral data, or experimental) and research
instruments (questionnaire, qualitative measures, or technological devices). In
addition, they must decide on a sampling plan and contact methods (by mail, by
phone, in person, or online).
4. Two complementary approaches to measuring marketing productivity are: (1)
marketing metrics to assess marketing effects and (2) marketing‐mix modeling to
estimate causal relationships and measure how marketing activity affects outcomes.
Marketing dashboards are a structured way to disseminate the insights gleaned
from these two approaches within the organization.
OPENING THOUGHT
Marketing research is primarily a quantitative process in which consumers’ thoughts, actions,
and purchase intentions are collected to form the basis of marketing decisions. As a result,
marketing research involves translating actions, or behavioral intentions to numbers. Most
students will relate to the more “exciting side” of marketing research—focus groups for
C H A P T E R 4 CONDUCTING
MARKETING RESEARCH

instance, but will shy away from the qualitative side of number crunching. If the analysis is
presented as a “means to an end” then the process should be accepted with greater enthusiasm.
In today’s world of marketing, marketing managers are increasingly being asked to justify
their expenditures. As a result, good marketing managers and good students of marketing
should be very comfortable with the statistical and financial analyses presented in this chapter.
To many of the students enrolled in marketing, the topics of statistics, analysis, and financial
modeling will cause their eyes to “roll in their heads” as the thought of calculating numbers
creates stress. The instructor is encouraged to emphasize to the students that good marketers
need good numbers in order to make good decisions.
TEACHING STRATEGY AND CLASS ORGANIZATION
PROJECTS
1. At this point in the semester-long marketing plan project, the students’ initial marketing
research parameters should be completed, demand forecasted, and target market selections
defined.
2. Commission a marketing research study on topic(s) of interest to the students at your
institution. During the course of the semester (15-16 weeks), have the students develop the
questionnaire, collection method, conduct the survey, and tabulate the results. The students
can be divided into groups for this project. Suggested topics can include the school or
university student’s opinions of campus issues such as the athletic program, sale of
alcohol, use of and availability of technology, or students’ perceptions of their current
education experiences.
3. Sonic PDA Marketing Plan: Sonic has developed a sales forecast for its new PDA for the
next two years. Jane Melody wants to review estimates of industry demand for PDAs. She
also wants to develop an approach for measuring the effectiveness of Sonic’s marketing
efforts. She has asked you to:
• Determine, from available secondary data, estimates of total demand for PDAs for the
next two years. She understands that you will have to do Internet searches and
determine industry trade association sources for such data.
• Look at the various ways to evaluate marketing effectiveness and recommend to her
the best way that Sonic can determine the effectiveness of its marketing efforts.
Enter the answers to these questions in a written marketing plan or into the Sales Forecasting
and Controls sections of Marketing Plan Pro.
ASSIGNMENTS
Ask students to contact a local marketing research firm in the area for the purpose of an
interview regarding research techniques, methods, and the difficulties in conducting research.
Pre-approve the set of questions prepared by the students prior to the appointment. Ensure that

the students will be able to collect information from the research company regarding how
information is collected. Once it is collected, what are some of the difficulties faced by the
researcher in presenting this information to the client?
In the Marketing Memo, Questionnaire Dos and Don’ts, the author lists 12 ways to phrase
questions that will maximize unbiased responses. Prepare a set of questions (10-12 questions)
for a hypothetical consumer products company trying to break into the toy business. Make
sure that your questions meet each one of these 12 criteria. Comment on how easy or hard
such question formatting is to accomplish.
In the Marketing Memo, Pros and Cons of Online Research, the author describes four
advantages and two disadvantages for conducting online research. Selecting online research
from the Web, each student is to comment on the “value” of this type of research vis-à-vis the
advantages and disadvantages of the marketing memo. Specifically, do the negatives of online
research, in their example, outweigh the positives? Can, and more importantly, should
marketers develop marketing strategies from just the findings of online research? On the other
hand, is more qualitative or quantitative research needed before strategy is defined?
The story of Tata Ace motors, an Indian company shows the power of conducting marketing
research before producing the product. In small groups for an in-class discussion, have the
students comment on the case in light of the marketing research process examined in the
chapter.
Have students read these sources on the concept of “neuromarketing” and comment on
whether such brain research is ethical or not ethical because such research may lead to more
marketing manipulation: Sources: Daryl Travis, “Tap Buyers’ Emotions for Marketing
Success,” Marketing News, February 1, 2006, pp. 21-22. Deborah L. Vence, “Pick Someone’s
Brain,” Marketing News, May 1, 2006, p. Louise Witt, “Inside Intent,” American
Demographics (March 2004): pp. 34-39; Melanie Wells, “In Search of the Buy Button,”
Forbes, September 1, 2003. See also Carolyn Yoon, Angela H. Gutchess, Fred Feinberg, and
Thad A. Polk, “A Functional Magnetic Resonance Imaging Study of Neural Dissociations
between Brand and Person Judgments,” Journal of Consumer Research, 33 (June 2006), pp.
31-40; Samuel M. McClure, Jian Li, Damon Tomlin, Kim S. Cypert, Latané M. Montague,
and P. Read Montague, “Neural Correlates of Behavioral Preference for Culturally Familiar
Drinks,” Neuron, 44 (October 14, 2004), pp. 379-387.
END-OF-CHAPTER SUPPORT
MARKETING DEBATE—What Is the Best Type of Marketing Research?
Many marketing researchers have their favorite research approaches or techniques, although
different researchers often have different preferences. Some researchers maintain that the only
way to really learn about consumers or brands is through in-depth, qualitative research. Others
contend that the only legitimate and defensible form of marketing research involves
quantitative measures.

Take a position: The best marketing research is quantitative in nature versus the best
marketing research is qualitative in nature.
Suggested Response
Pro: People are complex in their buying habits and purchase decision-making. Consumers, do
not always have the capacity to voice, or understand how they decide to purchase a particular
product or service. As a result, good marketing research should delve into the consumers’
“purchase decision trees” to understand hidden motivations and influences. Good qualitative
research may undercover hidden purchase agendas, hidden uses for the product, or hidden
opportunities for new, yet undeveloped products. Because of the freedom afforded to both
researchers in their probes and consumers in their responses, qualitative research can often be
a useful step in exploring consumers’ brand and product perceptions.
The drawbacks of quantitative research, which include selection bias, response bias, and nonresponse,
will always allow this type of research to be criticized for such shortcomings and
their results discounted. Qualitative research, although having its own sets of disclaimers,
closely describes the actions of consumers—that is what marketing is all about in the first
place—to get someone to purchase something.
Con: Quantitative research is the only accepted method of marketing research that can be
scientifically defended. Quantitative research methods, techniques, and modeling have
advanced substantially in recent years. Along with these advancements in techniques,
quantitative research has improved in its predictability and accuracy due to more sophisticated
mathematical processes. Quantitative research is also the most economically and timely
research available today. With quantitative research, there is secondary data that can quickly
be accessed further reducing time and cost considerations. As the world increases in its “speed
of information” and “speed of living,” quick, accurate information becomes essential for a
marketer to possess.
With the proper framing of the research assignment and the proper set of specific research
objectives, quantitative research is the most efficient method to gather the necessary
information in the shortest time for the lowest cost.
MARKETING DISCUSSION
When was the last time you participated in a survey? How helpful do you think the
information was you provided? How could the research have been done differently to make it
more effective?
Suggested Response
Individual student answers will depend upon the survey chosen, however, the students should
frame their responses in terms of some of the main topics of this chapter.
Marketing Excellence: IDEO
1) Why has IDEO been so successful? What is the most difficult challenge they face
in conducting their research and designing their products?
Suggested Answer: IDEO strives to design products that consumers actively want. In

many cases they have to “dig deep” because they are trying to create consumer-friendly
solutions and the consumers often don’t know what they want or what they need.
In order to achieve these consumer-friendly solutions, IDEO tries to uncover deep
insights through a variety of human-centered research methods.
2) In the end, IDEO creates great solutions for other observational methods to conduct
companies that then receive all the credit. Should IDEO try to create more brand
awareness for itself? Why or why not?
Suggested Answers: Students’ answers will vary—some will say “yes” and others will
say “no.” Both sets of answers should reflect on the nature of the company, its products,
and its core competency. What does the company do very well? Designs solutions for
others. Good students will note that IDEO has created and commands a very well
defined “niche” in the business world and is very successful in that niche and any
movement out of that niche can be difficult and dangerous.
Marketing Excellence: INTUIT
Questions:
1) Elaborate on Intuit’s use of customer research. Why did it work so well for the
company?
Suggested Answer: Intuit spends a significant amount of time and money on consumer
research each year and they state that it is “critical for Intuit to know exactly how
customers use and feel about their products” because of the nature and pace of
technology, the shifting customer and consumer needs, and the competitiveness of the
industry. Intuit uses, site visits, lab studies, and remote studies to keep pace with the
consumer. Without this spend on research, Intuit might not have kept up with these
changes.
2) Could anything go wrong for Intuit now that it has beaten out Microsoft? Why or why
not?
Suggested Answer: Of course, Intuit could decide to “sit on its laurels” and reduce or
remove the research funding and research efforts. Financial pressures to increase stock
prices/premiums/dividends could hasten that decision.
3) How should Intuit gauge the results of its research among younger consumers with
mobile devices?
Suggested Answer: Intuit has already made dramatic and substantial steps in gauging the
younger consumers by classifying each blog post according to velocity, share of voice,
voice quality, and sentiment. These are groundbreaking classifications and understanding
and interpreting this data is the key to gauge the research of the younger consumers.
DETAILED CHAPTER OUTLINE
Good marketers need insights to help them interpret past performance as well as plan
future activities. To make the best possible tactical decisions in the short run and strategic

decisions in the long run, they need timely, accurate, and actionable information about
consumers, competition, and their brands. Discovering a consumer insight and
understanding its marketing implications can often lead to a successful product launch or
spur the growth of a brand.
THE MARKETING RESEARCH SYSTEM
Marketing managers often commission formal marketing studies of specific problems and
opportunities.
Marketing insights provide diagnostic information about how and why we observe certain
effects in the marketplace, and what that means to marketers.
Good marketing insights often form the basis of successful marketing programs.
Gaining marketing insights is crucial for marketing success.
We define marketing research as the systematic design, collection, analysis, and reporting of
data and findings relevant to a specific marketing situation facing the company.
Marketing research, however, is not limited to large companies with big budgets and
marketing research departments.
Small companies can hire the services of a marketing research firm or conduct research in
creative and affordable ways, such as:
1) Engaging students or professors to design and carry out projects.
2) Using the Internet.
3) Checking out rivals.
4) Tapping into marketing partner expertise.
Most companies use a combination of marketing research resources to study their industries,
competitors, audiences, and channel strategies.
B) Marketing research firms fall into three categories:
1) Syndicated-service research firms.
2) Custom marketing research firms.
3) Specialty-line marketing research firms.
THE MARKETING RESEARCH PROCESS
Effective marketing research involves six steps.
Step 1: Define the Problem, the Decision Alternatives, and the Research Objectives
Marketing management must be careful not to define the problem too broadly or too narrowly
for the marketing researcher.

A) Some research is exploratory—its goal is to shed light on the real nature of the
problem and to suggest possible solutions or new ideas.
B) Some research is descriptive— it seeks to quantify demand.
C) Some research is causal—its purpose is to test a cause-and-effect relationship.
Step 2: Develop the Research Plan
The second stage of marketing research is where we develop the most efficient plan for
gathering the needed information and what that will cost.
To design a research plan, we need to make decisions about the data sources,
research approaches, research instruments, sampling plan, and contact methods.
Data Sources
The researcher can gather secondary data, primary data, or both.
Secondary data are data that were collected for another purpose and already exist
somewhere.
Primary data are data freshly gathered for a specific purpose or for a specific research
project.
Research Approaches
Marketers collect primary data in five main ways:
1) Observational Research: Fresh data can be gathered by observing the relevant actors and
settings.
2) Ethnographic Research: is a particular observational research approach that uses concepts
and tools from social sciences to provide deep understanding of how people live and work.
3) Focus Group Research: A focus group is a gathering of 6 to 10 people carefully selected
based on certain demographic, psychographic, or other considerations and brought together to
discuss various topics of interest at length.
A) A professional research moderator provides questions and probes based on the
marketing managers’ discussion guide or agenda.
B) Moderators try to discern consumers’ real motivations and why they say and do
certain things.
C) The sessions are typically recorded.
4) Survey Research: Companies undertake surveys to learn about people’s knowledge, beliefs,
preferences, and satisfaction, and to measure these magnitudes in the general population.
Marketing Memo: Conducting Informative Focus Groups
Focus groups allow marketers to observe how and why consumers accept or reject concepts or
ideas. Many firms are substituting observational research for focus groups.

4) Behavioral Research: Customers leave traces of their purchasing behavior in store scanning
data, catalog purchases, and customer databases. Much can be learned by analyzing these data.
A) Actual purchases reflect consumers’ preferences and often are more reliable than
statements they offer to market researchers.
5) Experimental Research: The most scientifically valid research is experimental research.
A) Designed to capture cause-and-effect relationships by eliminating competing
explanations of the observed findings.
B) Experiments call for:
1) Selecting matched groups of subjects.
2) Subjecting them to different treatments.
3) Controlling extraneous variables.
4) Checking whether observed response differences are statistically significant.
Marketing Memo: Questionnaire Dos and Don’ts
Shows 12 dos and don’ts for designing questionnaires and how difficult these are to create and
administrate.
Research Instruments
Marketing researchers have a choice of three main research instruments in collecting primary
data: questionnaires, qualitative measures, and mechanical devices.
1) Questionnaires
A questionnaire consists of a set of questions presented to respondents.
A) Because of its flexibility, is by far the most common instrument used to collect
primary data.
B) Questionnaires need to be carefully developed, tested, and debugged before being
administered.
1) The researcher carefully chooses the questions, wording, and sequence.
2) The form of the question can influence the response.
3) Marketing researchers use both closed-ended and open-ended questions.
2) Qualitative Measures
Some marketers prefer more qualitative methods for gauging consumer opinions because
consumer actions do not always match their answers to survey questions.
A) Qualitative research techniques are relatively unstructured measurement approaches
that permit a range of possible responses.
B) Qualitative research techniques are a creative means of ascertaining consumer
perceptions that may otherwise be difficult to uncover.

C) Because of the freedom it affords both researchers in their probes and consumers in
their responses, qualitative research can often be an especially useful first step in
exploring consumers’ brand and product perceptions.
D) Qualitative research does have its drawbacks. Marketers must temper the in-depth
insights that emerge with the fact that the samples are often very small and may
not necessarily generalize to broader populations. And different researchers
examining the same qualitative results may draw very different conclusions.
Some other popular qualitative research approaches to get inside consumers’
minds and find out what they think or feel about brands and products include:
a) word associations
b) projective techniques
c) visualizations
d) brand personification
e) laddering
Marketing Insight: Getting into the heads of consumers
There are seven metaphors: balance, transformations, journey, container, connection, resource,
and control.
Marketers don’t necessarily have to choose between qualitative and quantitative measures,
however, and many marketers use both approaches, recognizing that their pros and cons can
offset each other.
Technological Devices
Technological devices are occasionally used in marketing research.
A) Galvanometers
B) Tachistoscope
C) Audiometers
Technology has now advanced to such a degree that marketers can use devices such as skin
sensors, brain wave scanners, and full body scanners to get consumer responses.
Technology has replaced the diaries that participants in media surveys used to keep.
Audiometers attached to television sets in participating homes now record when the set is on
and to which channel it is tuned.
Marketing Insight: Understanding brain science
Using neuroscience or “neuromarketing,” a term used to describe brain research on the effect
of marketing stimuli.
Sampling Plan

After deciding on the research approach and instruments, the marketing researcher must
design a sampling plan. This calls for three decisions:
A) Sampling unit: Whom should we survey? Define the target population that will be
sampled.
B) Sample size: How many people should be surveyed? Large samples give more reliable
results than small samples.
C) Sampling procedure: How should we choose the respondents? Probability sampling
allows the calculation of confidence limits for sampling error.
Contact Methods
Once the sampling plan has been determined, the marketing researcher must decide how to
contact the subjects: by mail, by telephone, in person or online.
Mail Contacts
The mail questionnaire is one way to reach people who would not give personal
interviews or whose responses might be biased or distorted by the interviewers.
A) Mail questionnaires require simple and clearly worded questions.
B) The response rate is usually low and/or slow.
Telephone Contacts
Telephone interviewing is a good method for gathering information quickly.
Personal Contacts: Personal interviewing is the most versatile method.
A) The interviewer can ask more questions and record additional observations about the
respondent.
B) It is the most expensive method.
C) Subject to interviewer bias.
D) Personal interviewing takes two forms:
1) Arranged interviews.
2) Intercept interviews.
Online Contacts: There is an increase in the use of online methods.
Marketers can also host a real-time consumer panel or virtual focus group or sponsor a chat
room, bulletin board, or blog and introduce questions from time to time.
They can ask customers to brainstorm or have followers of the company on Twitter rate an
idea.
Online communities and networks of customers serve as a resource for a wide variety of
companies.
There are a number of pros and cons to online research. Here are some advantages:

1) Online research is inexpensive.
2) Online research is fast.
3) People tend to be honest and thoughtful online.
4) Online research is versatile.
Some disadvantages include:
1) Samples can be small and skewed.
2) Online panels and communities can suffer from excessive turnover.
3) Online market research can suffer from technological problems and
inconsistencies.
Step 3: Collect the Information
The data collection phase of marketing research is generally the most expensive and the most
prone to error.
Marketers can also host a real-time consumer panel or virtual focus group or sponsor a chat
room, bulletin board, or blog and introduce questions from time to time.
They can ask customers to brainstorm or have followers of the company on Twitter rate an
idea.
Internationally, one of the biggest obstacles to collecting information is the need to achieve
consistency.
Step 4: Analyze the Information
The next-to-last step in the process is to extract findings by tabulating the data and developing
summary measures.
Step 5: Present the Findings
The researcher presents findings relevant to the major marketing decisions facing
management.
Step 6: Make the Decision
The managers who commissioned the research need to weigh the evidence.
A) Some organizations are using a marketing decision support system to help marketing
mangers make better decisions.
B) A marketing decision support system (MDSS) is defined as a coordinated collection of
data, systems, tools, and techniques with supporting software and hardware, by which,
an organization gathers, interprets relevant information from business and
environment, and turns it into a basis for marketing action.

C) Seven characteristics of Good Marketing Research
1)Scientific method
2)Research creativity
3)Multiple methods
4)Interdependence of models and data
5)Value and cost of information
6)Healthy skepticism
7)Ethical marketing
Overcoming Barriers to the Use of Marketing Research
In spite of the rapid growth of marketing research, many companies still fail to use it
sufficiently or correctly, for several reasons:
MEASURING MARKETING PRODUCTIVITY
Marketers are facing increased pressure to provide clear, quantifiable evidence to senior
management as to how their marketing expenditures help the firm to achieve its goals and
financial objectives.
An important task of marketing research is to assess the efficiency and effectiveness of
marketing activities.
Marketing research can help address this increased need for accountability.
A) Two complementary approaches to measure marketing productivity are:
1) Marketing metrics to assess marketing effects.
2) Marketing-mix modeling to estimate causal relationships and how marketing
activities affects outcomes.
3) Marketing dashboards are a structured way to disseminate the insights gleaned
from these two approached within an organization.
Marketing Metrics
Marketing metrics is the set of measures that helps them quantify, compare, and interpret their
marketing performance.
A) Short-term results
• Short-term results often reflect profit-and-loss concerns as shown by sales
turnover, shareholder value, or some combination of the two.
B) Change in brand equity
• Brand-equity measures could include customer awareness, attitudes, and
behaviors; market share; relative price premium; number of complaints;
distribution and availability; total number of customers; perceived quality, and
loyalty and retention

Carefully measuring the effects of a marketing activity or program helps ensure managers
made the right decisions going forward
Marketing-Mix Modeling
Marketing-mix models analyze data from a variety of sources, such as retailer scanner data,
company shipment data, pricing, media, and promotional spending data.
Although marketing-mix modeling helps to isolate effects, it is less effective at assessing how
different marketing elements work in combination and has three shortcomings:
1) Marketing-mix modeling focuses on incremental growth instead of baseline
sales or long-term effects.
2) The integration of important metrics such as customer satisfaction, awareness,
and brand equity into marketing-mix modeling is limited.
3) Marketing-mix modeling generally fails to incorporate metrics related to
competitors, the trade, or the sales force (the average business spends far more
on the sales force and trade promotion than on advertising or consumer
promotion).
Marketing Dashboards
Firms are also employing organizational processes and systems to make sure they maximize
the value of all these different metrics.
Management can assemble a summary set of relevant internal and external measures in a
marketing dashboard for synthesis and interpretation.
Some companies are also appointing marketing controllers to review budget items and
expenses, such as:
A) Customer-performance scorecard
B) Stakeholder-performance scorecard
Marketing Insight: Marketing dashboards to improve effectiveness and efficiency
States that there are four common measurement “pathways” marketers are pursuing today:
customer metrics, unit metrics, cash-flow metrics, and brand metrics.