BUAD 307 MARKETING RESEARCH Lars Perner, Instructor 1 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 2 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 3 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 4 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

BUAD 307 MARKETING RESEARCH Lars Perner, Instructor 5 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

BUAD 307 MARKETING RESEARCH Lars Perner, Instructor 6 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 7 Market Research Sequence Identify problem or opportunity Plan research design and collect data Collect data Analyze data Report and present results Text, p. 169

BUAD 307 MARKETING RESEARCH Lars Perner, Instructor 8 Primary Research Methods Surveys Experimentation Observation Focus groups In-depth interviews Projective techniques Physiological Measures Online research Scanner data Hybrid Methods

BUAD 307 MARKETING RESEARCH Lars Perner, Instructor 9 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 10 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 Need large sample sizes for precise conclusions SURVEY COSTS: USUALLY LOW

BUAD 307 MARKETING RESEARCH Lars Perner, Instructor 11 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

BUAD 307 MARKETING RESEARCH Lars Perner, Instructor 12 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., Strongly Neither Strongly Agree Agree Agree Nor Disagree Disagree Disagree

BUAD 307 MARKETING RESEARCH Lars Perner, Instructor 13 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

BUAD 307 MARKETING RESEARCH Lars Perner, Instructor 14 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.

BUAD 307 MARKETING RESEARCH Lars Perner, Instructor 15 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

BUAD 307 MARKETING RESEARCH Lars Perner, Instructor 16 My Simulated Store… A shopper in the everyday low price condition…

BUAD 307 MARKETING RESEARCH Lars Perner, Instructor 17 Ashs Instant Coffee Study GROCERY SHOPPING LIST Ground beef Potatoes Apples Flour Sugar Laundry detergent Instant coffee 6 cups of yogurt Paper towels Bananas GROCERY SHOPPING LIST Ground beef Potatoes Apples Flour Sugar Laundry detergent Ground coffee 6 cups of yogurt Paper towels Bananas Respondents were asked to describe their impressions of a housewife based only on her shopping list. These shopping lists differ only on one item.

BUAD 307 MARKETING RESEARCH Lars Perner, Instructor 18 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?

BUAD 307 MARKETING RESEARCH Lars Perner, Instructor 19 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?

BUAD 307 MARKETING RESEARCH Lars Perner, Instructor 20 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)

BUAD 307 MARKETING RESEARCH Lars Perner, Instructor 21 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

BUAD 307 MARKETING RESEARCH Lars Perner, Instructor 22 Focus Groups Groups of 8-12 consumers assembled Start out talking generally about context of product Gradually focus in on actual product Usually NOT the best approach. Should NOT be chosen as default research method! MOST APPROPRIATE AS EARLY STAGE METHOD FOCUS GROUP COSTS: HIGH (ESPECIALLY FOR THE AMOUNT OF INFORMATION COLLECTED)

BUAD 307 MARKETING RESEARCH Lars Perner, Instructor 23 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

BUAD 307 MARKETING RESEARCH Lars Perner, Instructor 24 In-depth interviews Structured vs. unstructured interviews Generalizing to other consumers Biases –Subtle, inadvertent feedback IN-DEPTH INTERVIEW COSTS: HIGH

BUAD 307 MARKETING RESEARCH Lars Perner, Instructor 25 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

BUAD 307 MARKETING RESEARCH Lars Perner, Instructor 26 Projective Examples Please tell me a story of what is going on in this picture.

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BUAD 307 MARKETING RESEARCH Lars Perner, Instructor 30 More Projective Examples

BUAD 307 MARKETING RESEARCH Lars Perner, Instructor 31 Projective Techniques--Examples

BUAD 307 MARKETING RESEARCH Lars Perner, Instructor 32 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

BUAD 307 MARKETING RESEARCH Lars Perner, Instructor 33 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

BUAD 307 MARKETING RESEARCH Lars Perner, Instructor 34 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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BUAD 307 MARKETING RESEARCH Lars Perner, Instructor 36 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

BUAD 307 MARKETING RESEARCH Lars Perner, Instructor 37 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 38 Searching for Reports of Personal Experience Sources –Blogs (blogsearch.google.com) –Photos (e.g., Flickr, Webshots, Picasaweb, Google image search) –Video (e.g., Youtube) 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 Some issues –Joy, enjoyment –Decisions –Anxiety –Social setting and influence

BUAD 307 MARKETING RESEARCH Lars Perner, Instructor 39 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

BUAD 307 MARKETING RESEARCH Lars Perner, Instructor 40 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 COSTS: HIGH START-UP COSTS; LOW VARIABLE COSTS POSSIBLE WITH DEVELOPED ALGORITHMS USUALLY LOW

BUAD 307 MARKETING RESEARCH Lars Perner, Instructor 41 Scanner Data Research TELEVISION EXPOSURE DEMOGRAPHIC INFORMATION ANALYSIS RECORDED PURCHASES HOUSEHOLD FILE 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 Family size Occupation Family size Income Home ownership No. of ads seen by shopper Ads seen for competing brands Split cable

BUAD 307 MARKETING RESEARCH Lars Perner, Instructor 42 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

BUAD 307 MARKETING RESEARCH Lars Perner, Instructor 43 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

BUAD 307 MARKETING RESEARCH Lars Perner, Instructor 44 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

BUAD 307 MARKETING RESEARCH Lars Perner, Instructor 45 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.