Marketing Research: Overview Jeremy Kees, Ph.D.

What is Marketing Research? ….. the process of collecting and using information for marketing decision-making Marketing Research is conducted by: Companies large and small Independent Marketing Research Firms

What is Marketing Research? Marketing Research helps us: Assess Market Potential (Target Market Selection) Explore what Product/Service Offerings Customers Want Develop New Products Develop Effective Promotional Strategies Determine price points Measure Existing Customer Satisfaction Monitor the External Environment

Stages in the Research Process (Researchers Perspective) Formulate Problem Stages in the Research Process (Researchers Perspective) Determine Research Design Design Data Collection Method and Forms Design Sample and Collect Data Analyze and Interpret the Data Prepare the Research Report

Popular Research Designs Exploratory Research “Discovery” Descriptive Research “Relationships” Causal Research Experiments

Overview of Research Design Uses Types Formulate problems more precisely Develop Hypotheses Establish priorities for research Eliminate impractical ideas Clarify concepts Literature search Experience survey Analysis of select cases Interviews Ethnographies Focus groups Etc. Exploratory Research Describe segment characteristics Estimate proportion of people who behave in a certain way Make specific predictions Descriptive Research Longitudinal study Panels Sample Survey Provide evidence regarding causal relationships Rule out all other explanations Causal Research Laboratory experiment Field experiment

Relationship Among Research Designs Descriptive Research Exploratory Research Causal Research 8

Qualitative versus Quantitative Research Data Quantitative = numeric data Qualitative = non-numeric data Caveat – all qualitative data can be coded and all quantitative data is based on judgment Common Assumption: Qualitative Data = preliminary Quantitative Data = confirmatory

Qualitative vs. Quantitative Research Qualitative Research To gain a qualitative understanding of the underlying reasons and motivations Small number of non-representative cases Unstructured Non-statistical Develop an initial understanding Objective Sample Data Collection Data Analysis Outcome Quantitative Research To quantify the data and generalize the results from the sample to the population of interest Large number of representative cases Structured Statistical Recommend a final course of action 10

Focus Groups Focus groups: small group discussions led by a trained moderator Objectives: Generate ideas Understand consumer vocabulary Reveal consumer needs, motives, perceptions, and attitudes on products and services Understand findings from quantitative studies 11

Focus Groups Advantages: Generation of fresh ideas Client interaction Versatility Ability to tap special respondents Disadvantages: Representative of the population? Subjective interpretation High cost-per-participant 12

Focus Group Characteristics Group Size 8-12 Group Composition Homogeneous respondents, prescreened Physical Setting Relaxed, informal atmosphere Time Duration 1-3 hours Recording Audiocassettes and/or Video Moderator Observational, interpersonal, and communication skills of the moderator 13

Other Popular Qualitative Techniques In-Depth interview Uses 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 he or she behaves a certain way Ethnographies developing understandings of the everyday activities of people in local settings Observation Insight into actual, not reported, behaviors Mystery Shopping 14

Descriptive Research Describe what is going on or exists Estimate how groups of consumers might behave Examine relationships between two or more variables Predict

Descriptive Research Two Basic Types Longitudinal Cross-Sectional

Causal Research Helps us determine if one or more IVs (treatment, predictors) causes or affects one or more DVs (outcome variables) Most demanding design—strongest conclusion Requires the highest degree of understanding of the problem

Types of Experiments Laboratory Experiment Research investigation in which investigator creates a situation with exact conditions, so as to control some, and manipulate other, variables Experiment Scientific investigation in which an investigator manipulates and controls one or more independent variables and observes the dependent variable for variation concomitant to the manipulation of the independent variables Field Experiment Research study in a realistic situation in which one or more independent variables are manipulated by the experimenter under as carefully controlled conditions as the situation will permit 18 18

Definitions and Concepts Independent variables (IV) are variables or alternatives that are manipulated and whose effects are measured and compared, e.g., price levels. Test units are individuals, organizations, or other entities whose response to the independent variables or treatments is being examined, e.g., consumers or stores. Dependent variables (DV) are the variables which measure the effect of the independent variables on the test units, e.g., sales, profits, and market shares. Extraneous variables are all variables other than the independent variables that affect the response of the test units, e.g., store size, store location, and competitive effort. Covariates

Validity Internal validity refers to whether the manipulation of the independent variables or treatments actually caused the observed effects on the dependent variables. Control of extraneous variables is a necessary condition for establishing internal validity. External validity refers to whether the cause- and-effect relationships found in the experiment can be generalized. To what populations, settings, times, independent variables and dependent variables can the results be projected?

Causal Research (Experimental Design) Internal Validity

Causal Research (Experimental Design) External Validity

Design Data Collection and Forms Secondary Data Exploratory Research Informal and flexible Script Descriptive / Causal Research Rigid and Structured Survey

Design Sample and Collect Data Why is sampling important?? Basic Sampling Methods Probability Non-Probability

Analyze and Interpret Data Exploratory Research Identify themes and patterns Open for more subjective researcher interpretation Descriptive / Causal Research Statistical Analysis Regression, ANOVA, Multidimensional Scaling, Cluster Analysis, etc. More “conclusive”

Prepare Research Report Key Issues Try to be objective as possible and honest with your client Take note of the technical sophistication of your client Be careful when reporting results versus making inferences / recommendations

Critical Issue The MOST important issue to consider throughout the research process is making sure that the research is actionable. Avoid “nice to know” research projects!!!