1. 3-1 © 2007 Prentice Hall Chapter Three Research Design

2. 3-2 © 2007 Prentice Hall Chapter Outline 1) Overview 2) Research Design: Definition 3) Research Design: Classification 4) Exploratory Research 5) Descriptive Research i.Cross-Sectional Design ii.Longitudinal Design iii.Advantages and Disadvantages of Longitudinal and Cross-Sectional Designs 6) Causal Research 7) Relationships Among Exploratory, Descriptive, and Causal Research

3. 3-3 © 2007 Prentice Hall Chapter Outline 8) Potential Sources of Error i.Random Sampling Error ii.Non-sampling Error a.Non-response Error b.Response Error 9) Budgeting and Scheduling 10) Marketing Research Proposal 11) International Marketing Research 12) Ethics in Marketing Research 13) Summary

4. 3-4 © 2007 Prentice Hall Research Design: Definition A research design is a framework or blueprint for conducting the marketing research project. It details the procedures necessary for obtaining the information needed to structure or solve marketing research problems.

5. 3-5 © 2007 Prentice Hall Components of a Research Design Define the information needed Design the exploratory, descriptive, and/or causal phases of the research Specify the measurement and scaling procedures Construct and pretest a questionnaire (interviewing form) or an appropriate form for data collection Specify the sampling process and sample size Develop a plan of data analysis

6. 3-6 © 2007 Prentice Hall A Classification of Marketing Research Designs Single Cross- Sectional Design Multiple Cross- Sectional Design Fig. 3.1 Research Design Conclusive Research Design Exploratory Research Design Descriptive Research Causal Research Cross-Sectional Design Longitudinal Design

7. 3-7 © 2007 Prentice Hall Exploratory & Conclusive Research Differences Objective: Character- istics: Findings/ Results: Outcome: To provide insights and understanding. Information needed is defined only loosely. Research process is flexible and unstructured. Sample is small and non- representative. Analysis of primary data is qualitative. Tentative. Generally followed by further exploratory or conclusive research. To test specific hypotheses and/or examine relationships. Information needed is clearly defined. Research process is formal and structured. Sample is large and representative. Data analysis is quantitative. Conclusive. Findings used as input into decision making. ExploratoryConclusive Table 3.1

8. 3-8 © 2007 Prentice Hall A Comparison of Basic Research Designs Objective: Characteristics: Methods: Discovery of ideas and insights Flexible, versatile Often the front end of total research design Expert surveys Pilot surveys Secondary data: qualitative analysis Qualitative research Describe market characteristics or functions Marked by the prior formulation of specific hypotheses Preplanned and structured design Secondary data: quantitative analysis Surveys Panels Observation and other data Determine cause and effect relationships Manipulation of one or more independent variables Control of other mediating variables Experiments ExploratoryDescriptive Causal Table 3.2

9. 3-9 © 2007 Prentice Hall Uses of Exploratory Research Formulate a problem or define a problem more precisely Identify alternative courses of action Develop hypotheses Isolate key variables and relationships for further examination Gain insights for developing an approach to the problem Establish priorities for further research

10. 3-10 © 2007 Prentice Hall Methods of Exploratory Research Survey of experts Pilot surveys Secondary data analyzed in a qualitative way Qualitative research (discussed in Chapter 5)

11. 3-11 © 2007 Prentice Hall Use of Descriptive Research To describe the characteristics of relevant groups, such as consumers, salespeople, organizations, or market areas. To estimate the percentage of units in a specified population exhibiting a certain behavior. To determine the perceptions of product characteristics. To determine the degree to which marketing variables are associated. To make specific predictions.

12. 3-12 © 2007 Prentice Hall Methods of Descriptive Research Secondary data analyzed in a quantitative as opposed to a qualitative manner Surveys Panels Observational and other data

13. 3-13 © 2007 Prentice Hall Cross-sectional Designs Involve the collection of information from any given sample of population elements only once. In single cross-sectional designs, there is only one sample of respondents and information is obtained from this sample only once.

14. 3-14 © 2007 Prentice Hall In multiple cross-sectional designs, there are two or more samples of respondents, and information from each sample is obtained only once. Often, information from different samples is obtained at different times. Cohort analysis consists of a series of surveys conducted at appropriate time intervals, where the cohort serves as the basic unit of analysis. A cohort is a group of respondents who experience the same event within the same time interval. Cross-sectional Designs

15. 3-15 © 2007 Prentice Hall Longitudinal Designs A fixed sample (or samples) of population elements is measured repeatedly on the same variables A longitudinal design differs from a cross- sectional design in that the sample or samples remain the same over time

16. 3-16 © 2007 Prentice Hall Cross-sectional vs. Longitudinal Sample Surveyed at T 1 Same Sample also Surveyed at T 2 T1T1 T2T2 Cross- Sectional Design Longitudinal Design Time Figure 3.6 Cross Sectional vs. Longitudinal DesignsFigure 3.6 Cross Sectional vs. Longitudinal Designs

17. 3-17 © 2007 Prentice Hall Relative Advantages and Disadvantages of Longitudinal and Cross-Sectional Designs Evaluatio n Criteria Cross-Sectional Design Longitudinal Design Detecting Change Large amount of data collection Accuracy Representative Sampling Response bias ---++---++ +++--+++-- Note: A “+” indicates a relative advantage over the other design, whereas a “-” indicates a relative disadvantage.

18. 3-18 © 2007 Prentice Hall Cross-Sectional Data May Not Show Change Brand Purchased Time Period Period 1Period 2Survey Brand A200 200 Brand B300300 Brand C500 500 Total 1000 1000

19. 3-19 © 2007 Prentice Hall Longitudinal Data May Show Substantial Change Brand Purchased in Period 1 Brand Purchased in Period 2 Brand ABrand BBrand C Total Brand A Brand B Brand C Total 100 25 75 200 50 100 150 300 50 175 275 500 200 300 500 1000

20. 3-20 © 2007 Prentice Hall Uses of Casual Research To understand which variables are the cause (independent variables) and which variables are the effect (dependent variables) of a phenomenon To determine the nature of the relationship between the causal variables and the effect to be predicted METHOD: Experiments

21. 3-21 © 2007 Prentice Hall Alternative Research Designs Exploratory Research Secondary Data Analysis Focus Groups Conclusive Research Descriptive/Causal Conclusive Research Descriptive/Causal Exploratory Research Secondary Data Analysis Focus Groups Conclusive Research Descriptive/Causal (a) (b) (c) Figure 3.7 Some Alternative Research Designs Figure 3.7 Some Alternative Research Designs

22. 3-22 © 2007 Prentice Hall Alternative Research Designs Exploratory Research Secondary Data Analysis Focus Groups Conclusive Research Descriptive/Causal Conclusive Research Descriptive/Causal Exploratory Research Secondary Data Analysis Focus Groups Conclusive Research Descriptive/Causal (a) (b) (c) Figure 3.7 Some Alternative Research Designs Figure 3.7 Some Alternative Research Designs

23. 3-23 © 2007 Prentice Hall Potential Sources of Error in Research Designs Surrogate Information Error Measurement Error Population Definition Error Sampling Frame Error Data Analysis Error Respondent Selection Error Questioning Error Recording Error Cheating Error Inability Error Unwillingness Error Total Error Non-sampling Error Random Sampling Error Non-response Error Response Error Interviewer Error Respondent Error Researcher Error

24. 3-24 © 2007 Prentice Hall Errors in Marketing Research The total error is the variation between the true mean value in the population of the variable of interest and the observed mean value obtained in the marketing research project. Random sampling error is the variation between the true mean value for the population and the true mean value for the original sample.

25. 3-25 © 2007 Prentice Hall Non-sampling errors can be attributed to sources other than sampling, and they may be random or nonrandom: including errors in problem definition, approach, scales, questionnaire design, interviewing methods, and data preparation and analysis. Non-sampling errors consist of non-response errors and response errors. Errors in Marketing Research

26. 3-26 © 2007 Prentice Hall Errors in Marketing Research Non-response error arises when some of the respondents included in the sample do not respond. Response error arises when respondents give inaccurate answers or their answers are misrecorded or misanalyzed.

27. 3-27 © 2007 Prentice Hall Marketing Research at Citicorp is typical in that it is used to measure consumer awareness of products, monitor their satisfaction and attitudes associated with the product, track product usage and diagnose problems as they occur. To accomplish these tasks Citicorp makes extensive use of exploratory, descriptive, and causal research. Often it is advantageous to offer special financial packages to specific groups of customers. In this case, a financial package is being designed for senior citizens. The following seven-step process was taken by marketing research to help in the design. Citicorp Banks on Exploratory, Descriptive, and Causal Research

28. 3-28 © 2007 Prentice Hall Citicorp Banks on Exploratory, Descriptive, and Causal Research 1) A taskforce was created to better define the market parameters to include all the needs of the many Citicorp branches. A final decision was made to include Americans 55 years of age or older, retired, and in the upper half of the financial strata of that market.

29. 3-29 © 2007 Prentice Hall 2) Exploratory research in the form of secondary data analysis of the mature or older market was then performed and a study of competitive products was conducted. Exploratory qualitative research involving focus groups was also carried out in order to determine the needs and desires of the market and the level of satisfaction with the current products. In the case of senior citizens, a great deal of diversity was found in the market. This was determined to be due to such factors as affluence, relative age, and the absence or presence of a spouse. Citicorp Banks on Exploratory, Descriptive, and Causal Research

30. 3-30 © 2007 Prentice Hall 3) The next stage of research was brainstorming. This involved the formation of many different financial packages aimed at the target market. In this case, a total of 10 ideas were generated. Citicorp Banks on Exploratory, Descriptive, and Causal Research

31. 3-31 © 2007 Prentice Hall 4) The feasibility of the 10 ideas generated in step 3 was then tested. The ideas were tested on the basis of whether they were possible in relation to the business. The following list of questions was used as a series of hurdles that the ideas had to pass to continue on to the next step. Can the idea be explained in a manner that the target market will easily understand? Does the idea fit into the overall strategy of Citicorp? Citicorp Banks on Exploratory, Descriptive, and Causal Research

32. 3-32 © 2007 Prentice Hall  Is there an available description of a specific target market for the proposed product?  Does the research conducted so far indicate a potential match for target market needs, and is the idea perceived to have appeal to this market?  Is there a feasible outline of the tactics and strategies for implementing the program?  Have the financial impact and cost of the program been thoroughly evaluated and determined to be in line with company practices? In this study, only one idea generated from the brainstorming session made it past all the listed hurdles and on to step 5. Citicorp Banks on Exploratory, Descriptive, and Causal Research

33. 3-33 © 2007 Prentice Hall 5) A creative work-plan was then generated. This plan was to emphasize the competitive advantage of the proposed product as well as better delineate the specific features of the product. 6) The previous exploratory research was now followed up with descriptive research in the form of mall intercept surveys of people in the target market range. The survey showed that the list of special features was too long and it was decided to drop the features more commonly offered by competitors. Citicorp Banks on Exploratory, Descriptive, and Causal Research

34. 3-34 © 2007 Prentice Hall 7) Finally, the product was test marketed in six of the Citicorp branches within the target market. Test marketing is a form of causal research. Given successful test marketing results, the product is introduced nationally. Citicorp Banks on Exploratory, Descriptive, and Causal Research

35. 3-35 © 2007 Prentice Hall MR Design and MR Proposal ???? Next Class