1. Market Intelligence Julie Edell Britton
Southwestern Conquistador Beer, Secondary Data, Measures, Hypothesis Formulation, Chi-Square
Market Intelligence Julie Edell Britton
Session 2
August 8, 2009

2. Today’s Agenda Announcements Southwestern Conquistador Beer Case
Backward Market Research
Secondary data quality
Measure types
Hypothesis Testing and Chi-Square

3. Announcements National Insurance Case for Sat. 8/22
Download National.sav from platform
SPSS on machines in MBA PC Lab and see installation direction on the platform on how to install on your machine
Do tutorial to familiarize with SPSS
Use handout in course pack to answer questions: 1-6
Stephen will do a tutorial on Friday, 8/21 from 1:00 -2:15 in the MBA PC Lab and be available on 8/21 from 7 – 9 pm in the MBA PC Lab to answer questions
Submit slides by 8:00 am on Sat. 8/22 3

4. SWCB Objectives Feasibility decisions
Problem formulation, information needs
Role of secondary data
Role of research and time budgets
Quality, cost, speed 4

5. SWCB Questions What should Mr. Gomez do? Consumer behavior?
What information do we need to make decision?
Which reports allow that information to be estimated?
What decision do these reports suggest? 5

6. SWCB Conclusions
Feasibility studies need data on: industry demand, market share, investment, costs, margins. Break even analysis common.
Conceptualize data before doing research
Effort at problem formulation stage reduces later costs of doing research
Secondary data is the place to start 6

7. SWCB Conclusions (cont.)
Cost of information is real; research budget typically constrained
Cheap info may not be most economical if it is unreliable
Just because budget has funds does not mean you should conduct extraneous research. 7

8. Today’s Agenda Announcements Southwestern Conquistador Beer Case
Backward Market Research
Secondary data quality
Measure types
Hypothesis Testing and Chi-Square

9. Backward Market Research
Obvious? Psychology of why so hard to do.
Imagine the end of the process:
What will the final report look like? DUMMY TABLES
What decision alternatives might be implemented?
What analyses can support a choice between alternatives?
Where to get the data for analysis?
Do they already exist?
If not, may need to commission a study.
Design the study (“need-” vs. “nice-to-know”)
Analyze data & make recommendation
Put yourself at end at the start. Not “I know I’ll be advocating x so I’ll collect research that lets me do that”. What are your options going to be. Figure out what data you need to be able to make compelling argument for which course of action to take. What analysis do you need? go to your toolbox this is the suite of tools we could use. Break even, net present value, cash flow. (?)
Option is go/no go. Look at tools, say you choose break even. What do you need to compute that? How will you get it? If it exists, then use secondary data. If not, you have to collect primary. Get action standards, dummy tables. Now just have to plug in data.
In discussion of “obvious” highlight that it’s not:
Temporal construal and why it’s so easy to miss what you’ll need for some presentation in 6 months; perhaps why most research fails to do this and people wind up with reports with lots of nice to know and some key omissions of need to know.
Single thing from the course that students later say helped them a lot in their internships and jobs.
We’ll see how obvious is when you do the SW Conquistador case. I’m telling you now that very few of you are going to be happy with the reports you’ve purchased after you purchase them and start to crunch the numbers.
After that, you’ll be convinced that it isn’t so obvious, but it’s also not something you can learn just by someone telling you. You have to practice the skill. After conquistador, we’ll hammer this all term. In WEMBA A, you have to design a survey to get information to help protagonist Dan Nagy figure out how to get more qualified applicants to WEMBA. In B, we’ll give you the survey actually run and ask you what analyses or crosstabs you would run on the data to tell him how to manipulate key levers. In WEMBA C, we’ll give you the dataset itself and you’ll have to figure out what recommendations emerge from the analyses you suggested in the WEMBA B case.
In other words, the key message is that “it’s understandable that you think it’s obvious, but you’re actually wrong.”
Make sure to spend time on:
What will the final report look like? (the need to actually imagine you are delivering the presentation tomorrow, not in 6 months)
What decision alternatives might be implemented? (Think about it hard enough to realize that A, B, and C might be realistic options, but not X, Y, and Z)
What analyses can support a choice between alternatives? (Think about the basic equations in the business case analysis and what information need is needed to fill in the cells for key variables in your business case spreadsheet.)
Where to get the data for analysis?
Do they already exist? (prefer not to spend time and money collecting new data; wish data were available in house or through secondary data)
If not, may need to commission a study.
Design the study (“need to know” vs. “nice to know). In setting up BMR, there will be some discussion of importance of collaboration. Make the point that it’s not just one researcher and one manager, but a set of other managers besides the key contact for the researcher. Big problems emerge if the researcher accepts that the manager contact has actually consulted others who will have to buy in on actions at the end and who will be consuming the findings. The unfortunate thing is that walking the halls to talk with everyone can lead to a broadening and fuzzying-up of the focus of the research… you get what is called “scope creep”, leading to a long questionnaire that people won’t answer and where there’s a big danger of somehow losing the need to know nuggets in the big pile of nice to know stuff.

11. Analysis Dummy Table Ad A Ad B Consumers’ Upbeat Feelings
Consumers’ Learning of Ad Claims
Consumers’ Attitude toward the Ad
Consumers’
Attitude toward the Brand
Ad A
Ad B
Ad Score = .25 UpF +.20 Claims AAd AB
Action Standard - Run the Ad with the Higher Ad Score

12. Research Process Fig 3-1, p.49
Marketing Planning & Info System.
Agree on Research Purpose AmEx
Research Objectives (hypotheses, bounds)
Value of Information (the clairvoyant, p. 59)
Design Research
Collect Data & Analyze
Report Results & Make Recommendations
Key points to make on this slide are
Marketing Planning & Info System.
Note that firms do some research that is not “decision research”, but it’s actually ok. Firms have tracking systems and systems for monitoring their environments – e.g., brand awareness tracking at Intel. They monitor key numbers, and it is when those indicators show some aberrant pattern that they realize that there is a problem to be analyzed in the first place. So having those systems is not contrary to Andreasen.
Agree on Research Purpose (Am Ex)
Am Ex three standard docs show how they use backward market research. I’d explain these as follows. First sheet shows request by manager for a piece of research, and how they demand some specificity in what decision it will influence.
Second sheet is key. It’s playback by the internal market research department of their understanding of the problem. When manager signs off on this, it shows that they are on the same page.
Third sheet, key thing to emphasize is that there are penalties for doing research with no action consequences, or for taking actions that appear to conflict with findings from the research.
Research Objectives (hypotheses, bounds)
Key point here is that having hypotheses is not the same as having blinders to data that don’t fit hypotheses. They are essential to focus the data collection and the analysis, rather than “boiling the ocean.” Bounds are key, because of the aforementioned point that it is easy to start loading up some new study with nice to know suggestions by various managers consulted. The social dynamic makes one want to accede to their requests to add questions, but without toughness in resisting, you get scope creep with the attendant negative consequences. Most questionnaires can be cut by more than half when you learn to ask only need to know questions.
Value of Information (the clairvoyant, p. 59)
Give this brief treatment, not extensive. The Decision Models guys don’t want us to steal one of their core concepts. They now teach in Term 4.
Design Research
Collect Data & Analyze
Report Results & Make Recommendations
I’d make no comment on these last three, unless it was to say that if you are actually doing backward market research, you start with the last bullet… or at least imagining standing up to report results and make recommendations.

13. Key points to make on this slide are Marketing Planning & Info System.
Note that firms do some research that is not “decision research”, but it’s actually ok. Firms have tracking systems and systems for monitoring their environments – e.g., brand awareness tracking at Intel. They monitor key numbers, and it is when those indicators show some aberrant pattern that they realize that there is a problem to be analyzed in the first place. So having those systems is not contrary to Andreasen.
Agree on Research Purpose (Am Ex)
Am Ex three standard docs show how they use backward market research. I’d explain these as follows. First sheet shows request by manager for a piece of research, and how they demand some specificity in what decision it will influence.
Second sheet is key. It’s playback by the internal market research department of their understanding of the problem. When manager signs off on this, it shows that they are on the same page.
Third sheet, key thing to emphasize is that there are penalties for doing research with no action consequences, or for taking actions that appear to conflict with findings from the research.
Research Objectives (hypotheses, bounds)
Key point here is that having hypotheses is not the same as having blinders to data that don’t fit hypotheses. They are essential to focus the data collection and the analysis, rather than “boiling the ocean.” Bounds are key, because of the aforementioned point that it is easy to start loading up some new study with nice to know suggestions by various managers consulted. The social dynamic makes one want to accede to their requests to add questions, but without toughness in resisting, you get scope creep with the attendant negative consequences. Most questionnaires can be cut by more than half when you learn to ask only need to know questions.
Value of Information (the clairvoyant, p. 59)
Give this brief treatment, not extensive. The Decision Models guys don’t want us to steal one of their core concepts. They now teach in Term 4.
Design Research
Collect Data & Analyze
Report Results & Make Recommendations
I’d make no comment on these last three, unless it was to say that if you are actually doing backward market research, you start with the last bullet… or at least imagining standing up to report results and make recommendations.

14. Research Process Fig 3-1, p.49
Marketing Planning & Info System.
Agree on Research Purpose AmEx
Research Objectives (hypotheses, bounds)
Value of Information (the clairvoyant, p. 59)
Design Research
Collect Data & Analyze
Report Results & Make Recommendations
Key points to make on this slide are
Marketing Planning & Info System.
Note that firms do some research that is not “decision research”, but it’s actually ok. Firms have tracking systems and systems for monitoring their environments – e.g., brand awareness tracking at Intel. They monitor key numbers, and it is when those indicators show some aberrant pattern that they realize that there is a problem to be analyzed in the first place. So having those systems is not contrary to Andreasen.
Agree on Research Purpose (Am Ex)
Am Ex three standard docs show how they use backward market research. I’d explain these as follows. First sheet shows request by manager for a piece of research, and how they demand some specificity in what decision it will influence.
Second sheet is key. It’s playback by the internal market research department of their understanding of the problem. When manager signs off on this, it shows that they are on the same page.
Third sheet, key thing to emphasize is that there are penalties for doing research with no action consequences, or for taking actions that appear to conflict with findings from the research.
Research Objectives (hypotheses, bounds)
Key point here is that having hypotheses is not the same as having blinders to data that don’t fit hypotheses. They are essential to focus the data collection and the analysis, rather than “boiling the ocean.” Bounds are key, because of the aforementioned point that it is easy to start loading up some new study with nice to know suggestions by various managers consulted. The social dynamic makes one want to accede to their requests to add questions, but without toughness in resisting, you get scope creep with the attendant negative consequences. Most questionnaires can be cut by more than half when you learn to ask only need to know questions.
Value of Information (the clairvoyant, p. 59)
Give this brief treatment, not extensive. The Decision Models guys don’t want us to steal one of their core concepts. They now teach in Term 4.
Design Research
Collect Data & Analyze
Report Results & Make Recommendations
I’d make no comment on these last three, unless it was to say that if you are actually doing backward market research, you start with the last bullet… or at least imagining standing up to report results and make recommendations.

15. American Express Marketing Research Brief (To Be filled out by End User)
Marketing Background - Describe the current information or environment – what are the issues that precipitated the need for the research? What business units will be impacted?
Business Decisions - What decisions will be made and what actions will be taken as a result of the research? (If appropriate, specify alternatives being considered). What other data or business considerations will impact the decision?
Information Objectives - What are the key questions (critical information) that must be answered in order to make the decision?
Relevant Populations - Who do we need to talk to and why?
Timing - When must the research be completed to make the marketing decision?
Budget – How much money has been budgeted for this research? To what budget line will it be charged?
Requested by ________________ Manager
Requested by ________________ Director
Requested by ________________ Vice President
Am Ex three standard docs show how they use backward market research. I’d explain these as follows. First sheet shows request by manager for a piece of research, and how they demand some specificity in what decision it will influence.

16. American Express Marketing Research Brief (To Be filled out by Marketing Research)
Job # __ Project Title _________ Budget Line ___ Business Unit___
Marketing Background
Business Decisions To Be Made
Research Objectives
Research Design
Action Standards
Existing Sources of Information Consulted (e.g. syndicated and/or previous research)
Research Firm
Timing
Cost
Market Research Department Travel Cost
Approval ________________ Vice President
Approval ________________ if between $100,000 and $500,000 - Sr. VP
Approval ________________ if over $500,000 - Exec. Committee Member
Second sheet is key. It’s playback by the internal market research department of their understanding of the problem. When manager signs off on this, it shows that they are on the same page.

17. American Express Marketing Research Actionability Audit (To Be filled out by End User)
Project Name
End User Name
What Decisions or Actions were taken or are planned as a result of this research? If none, explain why.
Were any Actions Taken or are any actions being considered that are in conflict with the research learning? If so, why?
In retrospect, is there anything that could have been done differently to improve the actionability of the research investment? If so, what?
Relevant Populations - Who do we need to talk to and why?
Third sheet, key thing to emphasize is that there are penalties for doing research with no action consequences, or for taking actions that appear to conflict with findings from the research.

18. Research Process Fig 3-1, p.49
Marketing Planning & Info System.
Agree on Research Purpose AmEx
Research Objectives (hypotheses, bounds)
Value of Information (the clairvoyant, p. 59)
Design Research
Collect Data & Analyze
Report Results & Make Recommendations
Key points to make on this slide are
Research Objectives (hypotheses, bounds)
Key point here is that having hypotheses is not the same as having blinders to data that don’t fit hypotheses. They are essential to focus the data collection and the analysis, rather than “boiling the ocean.” Bounds are key, because of the aforementioned point that it is easy to start loading up some new study with nice to know suggestions by various managers consulted. The social dynamic makes one want to accede to their requests to add questions, but without toughness in resisting, you get scope creep with the attendant negative consequences. Most questionnaires can be cut by more than half when you learn to ask only need to know questions.
Value of Information (the clairvoyant, p. 59)
Give this brief treatment, not extensive. The Decision Models guys don’t want us to steal one of their core concepts. They now teach in Term 4.
Design Research
Collect Data & Analyze
Report Results & Make Recommendations
I’d make no comment on these last three, unless it was to say that if you are actually doing backward market research, you start with the last bullet… or at least imagining standing up to report results and make recommendations.

19. Overview of Research Design
Exploratory
Generate ideas on alternatives & criteria to evaluate the alternatives
Descriptive
1-way: frequencies, proportions, means, medians
2-way: correlations, crosstabs
Causal
Assess cause-effect relationships
Not all research leads to go/no go decision. Sometimes you’re so early in the process, you’re just trying to figure out what the right questions are. This is exploratory, and it’s not based on go/no go decision. Main point to make here is that Andreasen backward market research applies only to Descriptive and Causal studies.
Workhorse of descriptive research is the survey. Can do all sorts of analyses on it.
Causality: run experiment.