Managing Market Research

Customer insights are fresh marketing information-based understandings of customers and the
marketplace that become the basis for creating customer value, engagement, and relationships. We know
that marketing is providing value to customers and it involves engaging your customers and building
relationships with them. It is crucial to understand what customers give value.

Marketing managers often commission formal marketing studies of specific problems and opportunities.
They may request a market survey, a product-preference test, a sales forecast by region, or an advertising
evaluation. It’s the job of the marketing researcher to produce insight into the customer’s attitudes and
buying behaviour. Marketing insights provide diagnostic information about how and why we observe
certain effects in the marketplace, and what that means to marketers.

Gaining marketing insights is crucial for marketing success. If marketers lack consumer insights, they often
get in trouble.

Use of Customer Insights

 Important but difficult to obtain

 Needs and buying motives not obvious

 Customers usually can’t tell you what and why

 Better information and more effective use of existing information

A marketing information system consists of people, equipment, and procedures to gather, sort, analyze,
evaluate, and distribute needed, timely, and accurate information to marketing decision makers.

Information Needs Probes

• What decisions do you regularly make?

• What information do you need to make these decisions?

• What information do you regularly get?

• What studies do you periodically request?

• What information would you want that you are not getting now?

• What are the four most helpful improvements that could be made in the present marketing
information system?

Marketers obtain information from:

- Internal data: Internal databases are collections of consumer and market information obtained
from data sources within the company network. Sometimes the company is unaware of a particular
problem so it is difficult to be always updated with this kind of data. Big data refers to complex data
sets.
- Marketing intelligence: is the systematic collection and analysis of publicly available information
about consumers, competitors, and developments in the marketing environment.
 - Marketing research: is the systematic design, collection, analysis, and reporting of data relevant to
a specific marketing situation facing an organization. The main topics of marketing research are
consumer motivation and satisfaction and purchase behaviours. Marketing research, however, is
not limited to large companies with big budgets and marketing research departments. Often at
much smaller companies, everyone carries out marketing research, including the customers. Small
companies can also hire the services of a marketing research firm or conduct research.

Types of Market Research Firms

1. Syndicated-service research firms—These firms gather consumer and trade information, which they sell
for a fee. Examples include the Nielsen Company, Euromonitor.

2. Custom marketing research firms—These firms are hired to carry out specific projects. They design the
study and report the findings.

3. Specialty-line marketing research firms—These firms provide specialized research services. The best
example is the field-service firm, which sells field interviewing services to other firms.

To take advantage of all these different resources and practices, good marketers adopt a formal marketing
research process.

The Market Research Process

1. Define the problem , the Decision Alternatives and the Research Objectives

2. Develop the research plan

3. Collect the information

4. Analyse the information

5. Present the findings

6. Make the decision

Step 1 : Define the problem. This step is the most important step. In this step there could be a market
disagreement between the marketing research and the manager. Marketing managers must be careful not
to define the problem too broadly or too narrowly for the marketing researcher.

• Define the problem

• Specify decision: the manager identifies what decisions he will make.

• State research objectives linked to your marketing problem.

Types of Research:

- Exploratory research: sheds light on problem and suggest solutions or new ideas
- Descriptive research: it seeks to quantify demand, ascertain magnitudes
- Casual research: test cause-and-effect relationships , tests hypotheses about cause-and-effect
relationships

Step 2: Develop the research plan: The second stage of marketing research is where we develop the most
efficient plan for gathering the needed information and what that will cost. To design a research plan, we
need to make decisions about the data sources, research approaches, research instruments, sampling plan,
and contact methods.

A. Data sources

B. Research approach

C. Research instruments

D. Sampling plan

E. Contact methods

Research on a new product may call for the following information:

1. Key characteristics of current Red Bull customers,

2. Key characteristics of potential new customers,

3. Retailer reactions,

4. Forecasts of sales and profits for existing and new products

A: Data sources

• Primary Data are data freshly gathered for a specific purpose or for a specific research project.

• Secondary Data are data that were collected for another purpose and already exist somewhere.

Researchers usually start their investigation by examining some of the rich variety of low-cost and readily
available secondary data, to see whether they can partly or wholly solve the problem without collecting
costly primary data. When the needed data don’t exist or are dated, inaccurate, incomplete, or unreliable,
the researcher will need to collect primary data. Most marketing research projects do include some
primary-data collection.

Types of secondary data

• Internal Secondary Sources

• External Secondary Sources

• Government Publications

• Periodicals and Books

 • On-Line

• Associations

• Business Information

Gathering Secondary Data

Advantages: lower cost, obtained quickly, cannot collect otherwise

Disadvantages : data may not be relevant, accurate, current, impartial

B: Research Approaches : Marketers collect primary data in five main ways: through observation, focus
groups, surveys, behavioural data, and experiments.

i. Observational research and ethnographic research : Researchers can gather fresh data by observing
the relevant actors and settings unobtrusively as they shop or consume products. Through observation,
you see the actual behaviour of people. Ethnographic research is a particular observational research
approach that uses concepts and tools from anthropology and other social science disciplines to
provide deep cultural understanding of how people live and work. The goal is to immerse the
researcher into consumers’ lives to uncover unarticulated desires that might not surface in any other
form of research.

Netnography : is a specific type of qualitative social media research. It adapts the methods
of ethnography, is understanding social interaction in contemporary digital communications contexts.
You can think of netnography as a particular set of actions for doing research within and about social
media. Netnography is a specific set of research practices related to data collection, analysis, research
ethics, and representation, rooted in participant observation. In netnography, a significant amount of
the data originates in and manifests through the digital traces of naturally occurring public
conversations recorded by contemporary communications networks.

Netnography is more focused on meaning than on precision.

ii. Focus group: A focus group is a gathering of 6 to 10 people carefully selected by researchers based on
certain demographic, psychographic, or other considerations and brought together to discuss various
topics of interest at length. This discussion could be recorded because it provides a lot of rich
informations. Focus-group research is a useful exploratory step, but researchers must avoid
generalizing from focus-group participants to the whole market, because the sample size is too small
and the sample is not drawn randomly. Some marketers feel the research setting is too contrived and
prefer to seek other means of collecting information that they believe are less artificial.

iii. Survey research: Companies undertake surveys to assess people’s knowledge, beliefs, preferences, and
satisfaction and to measure these magnitudes in the general population. One of the most common
tools is the questionnaire

iv. Behavioral research: Customers leave traces of their purchasing behavior in store scanning data,
catalogue purchases, and customer databases. Marketers can learn much by analyzing these data.
Actual purchases reflect consumers’ preferences and often are more reliable than statements they
offer to market researchers. Thanks to technology, today is easy to look at behaviours.
v. Experimental research: The most scientifically valid research is experimental research, designed to
capture cause-and-effect relationships by eliminating competing explanations of the observed findings.
If the experiment is well designed and executed, research and marketing managers can have
confidence in the conclusions.

Quantitative vs Qualitative: Qualitative is speaking with people for in-depth understanding. Quantitative is
an approach that involves statistical analysis and percentages, we are counting. Data are numbers.
Sometimes it is useful to use a mix of qualitative and quantitative.

C: Research Instruments

i. Questionnaires

ii. Qualitative Measures

iii. Mechanical Research Devices

Questionnaires: A questionnaire consists of a set of questions presented to respondents. Because of its

flexibility, it is by far the most common instrument used to collect primary data. Researchers need to
carefully develop, test, and debug questionnaires before administering them on a large scale. Closed-end
questions specify all the possible answers and provide answers that are easier to interpret and tabulate.
Open-end questions allow respondents to answer in their own words and often reveal more about how
people think. Open-end questions are usually skipped because nobody wants to write open answers.

Questionnaires are especially useful in exploratory research, where the researcher is looking for insight
into how people think rather than measuring how many people think a certain way.

Questionnaire Do’s

• Ensure questions are free of bias

• Make questions simple

• Make questions specific

• Avoid jargon

• Avoid sophisticated words

• Avoid ambiguous words

Questionnaire Don’ts

• Avoid negatives

• Avoid hypotheticals

• Avoid words that could be misheard

• Use response bands

• Use mutually exclusive categories

• Allow for “other” in fixed response questions

Questionnaires should include a mix of:

• Dichotomous questions

• Multiple choice

• Likert scale

• Semantic differential

• Importance scale

• Rating scale

• Intention to buy scale

• Open-ended questions

Question Types _ closed-end questions:

- Dichotomous : yes / no
- Multiple choice
- Likert scale: strongly disagree – disagree- neither agree nor disagree- agree- strongly agree
- Semantic differential: large small / experienced inexperienced / modern old-fashioned
- Important scale: extremely important – very important – somewhat important – not very
important not at all important
- Rating scale: excellent – very good – good – fair – poor
- Intention to buy scale : definitely buy – probably buy – not sure – probably not buy – definitely not
buy

Question Types _ open-ended questions:

- Completely unstructured: what is your opinion of American Airlines?

- Word association : what is the first word that comes to your mind when you hear the following?
- Sentence completion: when I choose an airline, the most important consideration in my decision is
…

Qualitative measures: Some marketers prefer more qualitative methods for gauging consumer opinion,
because consumer actions don’t always match their answers to survey questions. Qualitative research
techniques are relatively unstructured measurement approaches that permit a range of possible responses.

Their variety is limited only by the creativity of the marketing researcher. Some other popular qualitative
research approaches include:

- Word associations : Ask subjects what words come to mind when they hear the brand’s name
- Visualization: Visualization requires people to create a collage from magazine photos or drawings
to depict their perceptions.
- Projective techniques: Give people an incomplete stimulus and ask them to complete it, or give
them an ambiguous stimulus and ask them to make sense of it.
- Laddering: A series of increasingly more specific “why” questions can reveal consumer motivation
and consumers’ deeper, more abstract goals.
Marketers don’t necessarily have to choose between qualitative and quantitative measures, however, and
many marketers use both approaches, recognizing that their pros and cons can offset each other.

Mechanical Research Devices: Technology has now advanced to such a degree that marketers can use
devices such as skin sensors, brain wave scanners, and full body scanners to get consumer responses. There
has been much interest in recent years in various technological devices.

- People meters
- Checkout scanners
- Neuro-marketing

Importance of Eye Gaze: Eye tracking is a type of sensor technology that gives a computer or mobile device
the tools to understand and trace where a person is looking. As a marketer or business owner, the more
you understand your target audience, the more chance you have of creating a fluent and engaging
customer journey across platforms. Eye tracking allows the market researcher to identify which items
capture someone's interest and attention, understand how customers perceive the environment
surrounding an ad or product, and discern what drives their decision to buy or take action .

D: Sampling plan

• Sampling unit: Who is to be surveyed? Marketers must develop a sampling frame so everyone in
the target population has an equal or known chance of being sampled.

• Sample size: How many people should be surveyed? Large samples give more reliable results, but
it’s not necessary to sample the entire target population to achieve reliable results. Samples of less
than 1% of a population can often provide good reliability, with a credible sampling procedure.

• Sampling procedure: How should the respondents be chosen? Probability sampling allows
marketers to calculate confidence limits for sampling error and makes the sample more
representative

Probability sampling (campionamento probabilistico)

Every unit in the population has a known chance of being selected as part of the sample.

• Simple Random Sample

• Stratified Random Sample

• Cluster (area) Sample

Non-probability sampling: it is used when we don’t have the access to the sample population so we select
who we think is important. The sample frame is the list of all the participants.

Non-probability sampling depends on criteria such as the researchers judgement, access to population, cost
and time constraints
 • Convenience Sample

• Judgement Sample

• Quota Sample

E: Contact Methods

• Mail – for sensitive subjects but poor response. The mail questionnaire is one way to reach people
who would not give personal interviews or whose responses might be biased or distorted by the
interviewers. Mail questionnaires require simple and clearly worded questions. Unfortunately, the
response rate is usually low or slow.

• Telephone – gathers info quickly. Telephone interviewing is a good method for gathering
information quickly; the interviewer is also able to clarify questions if respondents do not
understand them. Interviews must be brief and not too personal

• In person – most versatile. Personal interviewing is the most versatile method. The interviewer can
ask more questions and record additional observations about the respondent, such as dress and
body language. At the same time, however, personal interviewing is the most expensive method, is
subject to interviewer bias, and requires more administrative planning and supervision.

• Online – biggest growth area. An approach of increasing importance, the Internet offers many ways
to do research. A company can embed a questionnaire on its Web site and offer an incentive to
answer it, or it can place a banner on a frequently visited site such as Yahoo!, inviting people to
answer some questions and possibly win a prize. Online product testing, in which companies float
trial balloons for new products, is also growing and providing information much faster than
traditional new product marketing research techniques.

Pros and Cons of Online Research

Advantages: inexpensive, fast, accuracy of data, versatility

Disadvantages: small samples, skewed samples, technological problems, inconsistencies

Step 3 : Collect Information

Is the most expensive stage and the most prone to error. Marketers may conduct surveys in homes, over
the phone, via the Internet, or at a central interviewing location like a shopping mall. Four major problems
arise in surveys:

Problems:

• Some respondents will not be at home and will need to be re-contacted or replaced

• Some will refuse to cooperate

• Some will give biased or dishonest answers

• Some interviewers will be biased or dishonest

Step 4 : Analyse Information

The researcher tabulates the data and develops statistics or themes to make sense of the data manually or
by using excel or some other software package.

The next-to-last step in the process is to extract findings by tabulating the data and developing summary
measures. The researchers now compute averages and measures of dispersion for the major variables and
apply some advanced statistical techniques and decision models in the hope of discovering additional
findings. They may test different hypotheses and theories, applying sensitivity analysis to test assumptions
and the strength of the conclusions.

Step 5 : present findings

As the last step, the researcher presents findings relevant to the major marketing decisions facing
management. Researchers increasingly are being asked to play a more proactive, consulting role in
translating data and information into insights and recommendations. They’re also considering ways to
present research findings in as understandable and compelling a fashion as possible.

Step 6: Make the decision

The client/business who commissioned the research needs to either use the research or not. Or do more
research