Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall Basic Marketing Research: Using Microsoft Excel Data Analysis, 3rd edition Alvin C. Burns Louisiana State University Ronald F. Bush University of West Florida Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall

Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall Research Design After thoroughly considering the problem and research objectives, researchers select a research design which is a set of advanced decisions that makes up the master plan specifying the methods and procedures for collecting and analyzing the needed information. Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall

The Significance of Research Design Although every problem and research objective may be unique there are enough similarities that allow us to make some decisions in advance about the best plan to resolve the problem. There are basic marketing research designs that can be successfully matched to given problems and research objectives, and they serve the researcher much like the blueprint serves the builder. Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall

Doss Struse of Momentum Market Intelligence “The benefit of knowledge of research design is that, by knowing which research design is needed to solve a client’s problem, a good researcher can predetermine certain procedures that will likely be needed. This not only leads to efficient research planning but it enables us to advise the client early on as to the advantages & disadvantages of the design we’ve chosen for them.” Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall

Three Types of Research Design There are three types of research design: Exploratory Descriptive Causal Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall

Research Design: A Caution First, it is implied that the order in which the designs are presented-that is exploratory, descriptive, and causal-is the order in which these designs should be carried out. This is incorrect. Second, research is an “iterative” process; by conducting one research project, we learn that we may need additional research, and so on. This may mean that there may be a need to utilize multiple research designs Third, if multiple designs are used in any particular order (if there is an order), it makes sense to first conduct exploratory research, then descriptive research, and finally causal research Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall

Basic Research Objectives and Research Design Research Objective Appropriate Design To gain background information, to define terms, to clarify Exploratory problems and hypotheses, to establish research priorities To describe and measure marketing phenomena at a point Descriptive in time To determine causality, to make “if-then” statements Causal Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall

Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall Exploratory Research Exploratory research is most commonly unstructured, informal research that is undertaken to gain background information about the general nature of the research problem. Exploratory research can be accomplished by simply reading a magazine or even observing a situation Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall

Many insights may be gained from Exploratory Research! Ray Kroc, the milkshake machine salesman who created McDonald’s, observed that restaurants in San Bernardino, California, run by the McDonald brothers were so busy they burned up more milkshake machines than any of his other clients Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall

Uses of Exploratory Research Exploratory research is used in a number of situations: Gain background information Define terms Clarify problems and hypotheses Establish research priorities Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall

Methods of Conducting Exploratory Research Some commonly used methods for conducting exploratory research are: Secondary data analysis Experience surveys Case analysis Other methods of qualitative research Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall

Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall Descriptive Research Descriptive research is undertaken to describe answers to questions of who, what, where, when, and how. When we wish to know who our customers are, what brands they buy and in what quantities, where they buy the brands, when they shop, and how they found out about our products, we turn to descriptive research Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall

Descriptive Research, Continued… Descriptive research is desirable when we wish to project a study’s findings to a larger population. If the study’s sample is representative, the findings may be used to predict some variable of interest such as sales Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall

Classification of Descriptive Research Studies Cross-sectional studies measure units from a sample of the population at only one point in time. Sample surveys are cross-sectional studies whose samples are drawn in such a way as to be representative of a specific population. Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall

Classification of Descriptive Research Studies, Continued... Longitudinal studies: repeatedly measure the same sample units of a population over time. Longitudinal studies often make use of a panel which represents sample units who have agreed to answer questions at periodic intervals. Many large research firms maintain panels of consumers. Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall

Types of Marketing Research Panels Continuous panels: ask panel members the same questions on each panel measurement. Discontinuous panels: vary questions from one panel measurement to the next and are sometimes referred to as omnibus panels Omnibus means: “including or covering many things or classes”. These panels may be used for a variety or purposes, and the information collected by a discontinuous panel varies from one panel measurement to the next. Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall

Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall IPSOS Ad Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall

Marketing Research Panels: Continuous Panels Continuous panels are used quite differently from discontinuous panels in that one may use data from continuous panels to gain insights into changes in consumers’ purchases, attitudes, etc. For example, brand switching studies are used to illustrate how consumers change brands, and market-tracking studies track some variable of interest over time. Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall

Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall Causal Research Causality may be thought of as understanding a phenomenon in terms of conditional statements of the form “If x, then y.” Causal relationships are determined by the use of experiments, which are special types of studies Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall

Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall Experiments An experiment is defined as manipulating an independent variable to see how it affects a dependent variable, while also controlling the effects of additional extraneous variables. Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall

Independent Variables Independent variables are those variables which the researcher has control over and wishes to manipulate. Some independent variables include level of advertising expenditure, type of advertising appeal (humor, prestige), display location, method of compensating salesperson, price, and type of product Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall

Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall Dependent Variables Dependent variables are those variables that we have little or no direct control over, yet we have a strong interest in. Typically dependent variables include sales, market share, customer satisfaction, sales force turnover, net profits, and return on net worth. Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall

Dependent & Independent Variables: An Example… A variable in which you have a strong interest yet cannot directly control….your GPA! What independent variables, over which you can control, have you learned will cause a change in your GPA? Attending class Paying attention..being “engaged” in class Reading your book with interest Devoting adequate study time prior to a test And ???? Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall

Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall Extraneous Variables Extraneous variables are those variables that may have some effect on a dependent variable yet are not independent variables. Extraneous variables must be controlled through proper experimental design. Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall

Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall Experimental Design Experimental design: is a procedure for devising an experimental setting such that a change in a dependent variable may be attributed solely to the change in an independent variable. Experimental designs are procedures that allow experimenters to control for the effects on a dependent variable by an extraneous variable. In this way, the experimenter is assured that any change in the dependent variable was due only to the change in the independent variable. Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall

Symbols of Experimental Design O = measurement of a dependent variable X = manipulation, or change, of an independent variable R = random assignment of subjects to experimental and control groups E = experimental effect Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall

Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall Pretest and Posttest Pretest refers to the measurement of the dependent variable taken prior to changing the independent variable. Posttest refers to a measuring the dependent variable after changing the independent variable. Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall

A “True” Experimental Design A “true” experimental design: is one that truly isolates the effects of the independent variable on the dependent variable while controlling for the effects of any extraneous variables. Designs that do not properly control for the effects of extraneous variables on our dependent variable are known as quasi-experimental designs. Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall

Control of Extraneous Variables A control group is a group whose subjects have not been exposed to the change in the independent variable. An experimental group is a group that has been exposed to a change in the independent variable. Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall

A “True” Experimental Design The before-after with control group design may be achieved by randomly dividing subjects of the experiment into two groups: the control group and the experimental group. Before-After with Control Group: Experimental group (R) :O1X O2 Control group (R) : O3 O4 Where E = (O2– O1) – (O4– O3) Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall

Not “True” Experimental Design Example: An experiment to assess the effects of display position on sales of apples After-Only Design: X O1 Did apple sales increase or decrease? We don’t know the “effect” the change in the independent variable (display position) on the dependent variable (apple$) One-Group, Before-After Design: O1 X O2 We know how much apple$ changed but was the change due SOLEY to the change in display position? Could other (extraneous) variables have accounted for the change? Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall

A “True” Experimental Design Before-After with Control Group: Experimental group:O1 X O2 Control group: O3 O4 Where E = (O2– O1) – (O4– O3) Note: The change from (O2– O1) is due to X AND extraneous variables. When you subtract out the change from (O4– O3) –due only to the extraneous variables….you are left with: CHANGE IN THE DEPENDENT VARIABLE DUE SOLELY TO THE INDEPENDENT VARIABLE!! Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall

Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall Test Marketing Test marketing is the phrase commonly used to indicate an experiment, study, or test that is conducted in a field setting. Two broad classes of uses of test markets To test sales potential for a new product or service To test variations in the marketing mix for a product or service Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall

Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall Types of Test Markets Standard test markets: one in which the firm tests the product or marketing-mix variables through the company’s normal distribution channels Controlled test markets: conducted by outside research firms that guarantee distribution of the product through pre-specified types and numbers of distributors Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall

Types of Test Markets, Continued… Electronic test markets: those in which a panel of consumers has agreed to carry identification cards that each consumer presents when buying goods and services. These tests are conducted only in a small number of cities in which local retailers have agreed to participate. The advantage of the card is that as consumers buy (or do not buy) the test product, demographic information on the consumer is automatically recorded. Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall

Types of Test Markets, Continued… Simulated test markets (STMs): those in which a limited amount of data on consumer response to a new product is fed into a model containing certain assumptions regarding planned marketing programs, which generates likely product sales volume Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall

Selecting Test-Marketing Cities Three criteria for selecting test-market cities: Representativeness—is it representative of the desired geographical area, i.e. the U.S.? Degree of isolation—to avoid “spillover” of promotion into areas not in the test market. Ability to control distribution and promotion—can we gain distributors needed? Can we run “tests” in the newspaper, TV, etc.? Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall

Pros and Cons of Test Marketing Advantages: Test marketing allows for the most accurate method of forecasting future sales It allows firms the opportunity to pretest marketing-mix variables Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall

Pros and Cons of Test Marketing, Continued… Disadvantages: Test markets do not yield infallible results Competitors intentionally try to sabotage test markets They are expensive Test markets bring about exposure of the product to the competition Test markets may create ethical problems Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall

Approaches to Marketing Research Two broad approaches to marketing research: Qualitative research Quantitative research Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall

Quantitative Research Quantitative research is the traditional mainstay of the research industry, and is sometimes referred to as “survey research” Quantitative research is defined as research involving the use of structured questions in which the response options have been predetermined and numerous respondents are involved. Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall

Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall Qualitative Research Qualitative research involves collecting, analyzing, and interpreting data by observing what people do and say. Observations and statements are in a qualitative or non-standardized form. Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall

Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall Your text explains how qualitative research is used to better understand the Latino market segment Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall

Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall Pluralistic Research Pluralistic research is defined as the combination of qualitative and quantitative research methods in order to gain the advantages of both. Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall

Qualitative Research: Observation Observation methods are those in which the researcher relies on his or her powers of observation rather than communicating with a person in order to obtain information. Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall

Qualitative Research: Observation, Continued... Four ways of organizing observations Direct vs Indirect Disguised vs Undisguised Structured vs Unstructured Human vs Mechanical Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall

Direct vs Indirect Observation Direct Observation: observing behavior as it occurs Indirect Observation: the researcher observes the effects of results of the behavior rather than the behavior itself Could be based upon “archives”, secondary data representing historical records or “physical traces”, tangible evidence of some past event Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall

Disguised vs Undisguised Observation Disguised observation: the subject is unaware of being observed Example: “mystery shoppers” used by a retail store chain to record and report on sales clerks’ assistance and courtesy Undisguised observation: respondents are aware of being observed Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall

Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall Focus Groups Focus groups are small groups of people brought together and guided by a moderator through an unstructured, spontaneous discussion for the purpose of gaining information relevant to the research problem. Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall

Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall How Focus Groups Work Two types of Focus Groups: Traditional focus groups Nontraditional focus groups Focus group facility: a set of rooms especially designed for focus groups. The focus group is conducted in a room that seats 10 people (optimum size is 6-12) and a moderator One wall is a large one-way mirror which allows clients in the adjoining room to watch the focus group Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall

Advantages of Focus Groups Generate fresh ideas Allow clients to observe their participants Directed at understanding a wide variety of issues Allow fairly easy access to special respondent groups such as lawyers and doctors Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall

Disadvantages of Focus Groups Do not constitute representative samples Difficult to interpret the results of the focus group Cost per participant is high, though the total spent on focus group research is generally a fraction of what may be spent on quantitative research Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall

The Proper Use of Focus Groups Focus groups should be used when the research objective is to describe rather than predict. How do consumers describe a better package? How would they describe their satisfaction with our service? How could they describe their ideas for an ad campaign? Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall

The Proper Use of Focus Groups, Continued... Focus groups should not be used when the research objective is to predict, as focus groups are based on a small number of respondents that are not representative of the larger population. Focus groups should not be used if research is going to dictate a major, expensive decision for the company. Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall

Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall Depth Interviews Depth Interview: a set of probing questions posed one-on-one to a subject by a trained interviewer so as to gain an idea of what the subject thinks about something or why the subject behaves in a certain way Laddering is a technique used in depth interviews in an attempt to discover how product attributes are associated with desired consumer values The term laddering comes from the notion that the researcher is trying to establish the linkages, or steps, leading from product attributes to values Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall

Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall Protocol Analysis Protocol Analysis involves placing a person in a decision-making situation and asking him or her to verbalize everything he or she considers when making a decision. Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall

Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall Projective Technique Projective Techniques involve situations in which participants are placed in (projected into) simulated activities in the hopes that they will divulge things about themselves that they might not reveal under direct questioning. Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall

Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall Word Association Test A word-association test involves reading words to a respondent, who then answers with the first word that comes to mind. The researcher looks for hidden meanings or associations between responses and the words being tested Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall

Sentence Completion Test With a sentence completion test, respondents are given incomplete sentences and are asked to complete them in their own words. The researcher inspects these sentences to identify themes or concepts that exist. Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall

Cartoon or Balloon Test With a balloon test, a line drawing with an empty “balloon” above the head of one of the actors is provided to subjects who are instructed to write in the balloon what the actor is saying or thinking. The researcher then inspects these thoughts to find out how subjects feel about the situation described in the cartoon. Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall

Role-Playing Activity With role playing, participants are asked to pretend they are a “third person”, such as a friend or neighbor, and to describe how they would act in a certain situation or to a specific statement. By reviewing their comments, the researcher can spot latent reactions, positive or negative, conjured by the situation. Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall

Ethnographic Research Ethnographic research is a detailed descriptive study of a group and its behavior, characteristics, and culture, among others. Ethno means “people” and graphy means “to describe” Ethnographers pay close attention to words, metaphors, symbols, and stories people use to explain their lives and communicate with one another. Marketers have increasingly used ethnographic research to study consumer behavior. Ethnographic research is an area of ethical sensitivity. Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall

Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall Copyright Protected Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall