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24309 Marketing ResearchTable of Contents24309 Marketing Research . 1Week 1: Overview of Marketing Research Ch 1 .Error! Bookmark not defined.Week 2: Research Questions and Data Ch 2 & 3 . 2Week 3: Interview and Focus Groups Ch 4 & 5 .Error! Bookmark not defined.Week 4: Observation and its variants and making sense of qualitative data Ch 6 & 7 . Error! Bookmarknot defined.Week 5: Surveys .Error! Bookmark not defined.Week 6: Experiments, test markets and Sampling Causal research design .Error! Bookmark not defined.Week 7: Construct measurement & questionnaires and supplements .Error! Bookmark not defined.Week 8: Coding, editing and presenting data and preliminary data analysisError! Bookmark not defined.Week 9: Data analysis – testing for difference .Error! Bookmark not defined.Week 10: Data analysis – testing for association .Error! Bookmark not defined.Week 11: Data analysis – testing for interdependence .Error! Bookmark not defined.Week 12: Information driven technology and the research process .Error! Bookmark not defined.1
Week 2: Research Questions and DataCh 2 & 3Marketing decisionsThe growing complexity around marketing research and making marketing decisions Organisations increasingly confronted with challenges and opportunities that are the result of changinglegal, political, cultural, technological and competitive issues Growing complexity around marketing research and making marketing decisions due to:o Technological advances and growing internet usage driving developments in marketing research(big data) Internet Rapid technological advances and growing use making the internet a driving forcein many current and future developments in marketing research Traditional researcher philosophies are being challenged as never before e.g growingemphasis on the collection, analysis and interpretation of existing data as a basis ofmarketing business decisions (i.e. through purchase data) enhancing their ability tounderstand shopping behaviour and better meet customer needso Growing emphasis on the collection, analysis and interpretation of existing datao Increased use of gatekeeper technologies: technologies, such as caller ID, that are used to preventintrusive marketing practices (e.g. by telemarketers and scam artists) It essentially acts as a means of protecting privacy against intrusive marketing practices Many internet users either block cookies or erase them in order to keep marketers fromtracking their behaviouro Widespread expansion of firms into global markets opening up new cultural, social andchanging market considerations Forces marketers to not only introduce new data collection tasks but also data interpretationand information management activitieso Marketing research is being repositioned in businesses to play a more important role in strategydevelopment Used increasingly to identify new business opportunities and to develop new product, serviceand delivery ideas Critical component to more efficiently executing customer relationship management (CRM)and in developing competitive intelligenceMarketing research process Development and successful promotion of goods and services involves:o Understanding consumer decisionso Careful planning through a sound marketing research process After identifying a business decision problem and acknowledging the scope for more information marketingresearchers can view all the activities involved in planning and securing that information as part of theresearch processoconsequently, decision makers and researchers need to interact in initiating the first phase of theresearch process (defining the decision problem) Market research planning involves:o Identifying a business decision problemo Determining the scope of marketing research2
Scope of marketing research Determining the scope for marketing research consists of four interrelated tasks:1. Define the decision problem2. Specifying the research question3. Defining the research objective4. Evaluating the likely benefit of the expected informationDefining the decision problemDecision problem: a situation in which management has to decide on a course of action that will help accomplisha specific objective i.e. what should we do now? Which is the best option? Inadequate decision problem is the leading cause of failure of marketing research projectso “The truly serious mistakes are made not as a result of wrong answers but because of asking thewrong questions” – Peter DruckerDefining the decision problem includes 5 interrelated activities:1. Determine the decision makers purpose for the research Determining the purpose of the research begins any thorough problem definition process The decision maker holds the responsibility of assessing and deciding on the need for the services of aresearcher and naming the decision problemo As soon as the researcher comes into the situation they begin the research definition process byasking the decision maker to express reasons to validate the need for researcho Researchers then develop insights into what the decision maker believes the problem to be sheddinglight on the circumstances around the issueo Researcher then asks questions clarity between problem symptoms and actual causes2. Understand the complete problem situation Both the decision maker and the researcher must understand the complete problem situation easy to request,but often difficult to executeo Therefore perform a basic situation analysis of the surrounding circumstances of the problem Situation analysis: a process that focuses on the gathering of information to familiarise the researcher withthe overall complexity of the decision areao Aim: identify the events and factors that have led to the current decision problem situation, anyexpected future consequences as well as enhance communication between the researcher and decisionmaker3. Identify measurable symptoms As soon as the researcher understands the overall problem they must work with the decision maker toseparate the root problems from the observable and measurable symptoms that may have been initiallyperceived as being the decision problemo E.g. managers frequently view declining sales or reduction in market share as problems. However, itsactually the result of more micro issues such as poor advertising execution, lack of sales forcemotivation or poorly designed distribution networks4. Determine the unit of analysis The researcher must be able to specify whether data should be collected about individuals, householders,organisations etc3
Unit of analysis will provide direction in later activities (e.g. scale development and drawing appropriatesamples of respondents)5. Determine the relevant variables or constructs The researcher and decision maker jointly determine the specific variables, or constructs: concepts or ideasabout an object, an attribute or phenomenon that are worthy of measurement when solving a decisionproblem with marketing researcher The focus is on identifying the different independent and dependent variables that make up the decisionproblem Examples:o Brand awareness: percentage of respondents having heard of a designated brand; awareness could beunaided or aidedo Intentions to purchase: the number of people who are planning to buy the specified object within adesignated time periodo Importance of factors: and the way their influence a person’s choiceo Demographic characteristics: the age, gender, occupation status, income level etc of individualsSpecify the research question As soon as the decision maker understands and ratifies the decision problem at hand, the researcher mustredefine the decision problem in more specific terms i.e. into a research question or a set of researchquestions This step is the most critical the researcher develops scientific frameworks that are specifically gearedtowards a systematic problem solving approacho Decision problems are broken down into an overarching research question, or a series of specificresearch questionso Research questions are those specific when, where, who, why, what and how statements about theproblem areas that the research will attempt to investigateo Research questions have to be scientific and measurable the researcher will break down a decisionproblem into an overarching research question or a series of more specific questions Therefore, at this point, researcher becomes the more dominant player Example: RACVo The RACV in Victoria has employed you to determine: Which factors are most likely to persuade customers to switch from RACV to AAMI for carinsurance How satisfied current RACV customers are with these factors What are some of the marketing research questions that are relevant?o Research question examples: Which factors do consumers consider important when deciding whether to commit to aparticular car insurance policy? How satisfied are customers with these factors at RACV? How satisfied are customers with these factors at AAMI? Are there any importance-satisfaction gaps at either RACV or AAMI? Are RACV customers willing to switch?Defining the research objectiveResearch objective: precise statements of what the research project will achieve A blueprint of the research project’s activities4
The allow for a specification of information required to assist in management’s decision-makingcapabilitiesAllows the researcher to document concise, measurable and realistic events that either increase ordecrease the magnitude of marketing management’s problemsSome fundamental questions in defining research objectives:o Can complete data be collected at al?o Can the information tell me something I don’t already know?o Will the information provide significant insights?o What benefits will be delivered from this informationEvaluating the of the expected information1. Need for information Can the decision-making problem be resolved without any further research effort? Can the research question(s) be answered immediately (without collecting data)?2. Nature of the decision Both strategic and tactical decisions are critical to a company’s operations and bottom lineprofitability objectives Does the problem situation have strategic or tactical importance?3. Availability of dataDoes adequate information for addressing the defined decision problem already exist?Does new data need to be collected?There will be no need to collect new data if company and external data is available, or can be accessed orpurchased from other companiesAdvances in technology and cross-functional sharing of information provides great amount of operation data(e.g. sales, costs and profitability by products, brands, sales region, customer groups)4. Time constraints Decision makers may need information in real time but, in many cases, systematic research that is required todeliver high-quality information is time consuming Is there enough time to conduct the research?5. Resource requirements i.e. availability of marketing resources including money, skills, staff and facilities Is money budgeted for formalised research?6. Cost vs benefitsMR should be conducted only when the expected value of the information cost of obtaining itCosts of doing MR can be estimated with some certainty, and mostly objective in naturePredetermining the managerial value of the expected information remains subjective in natureGuidelines for approximating the cost-benefit ratioo Focus on the important issues of the projecto Never try to do too much what issues have greatest potential value?o Analyse all methods of collecting data alternative data sources and research designs that allow fordetailed investigation at lower cost?o Subjectively assess the informationKey considerations: going forth with a research endeavour might prove inappropriate if:5
ooooooooIf conducting the research may give competitors the opportunity to formulate competitiveresponsesIf research findings may not be implemented (affordability, big change, staffing etc)If research design does not represent realityIf critical variables of the study cannot be properly defined or measuredIf research is politically motivated e.g. if CEO is biasIf information is already availableIf there are unsufficient time framesIf there are inadequate resourcesMarketing research dataScope of secondary dataSecondary data: data that have been previously collected and assembled for some research project other than thecurrent situation Secondary data is historical in nature and already assembled or publishedo There is an upward trend to use secondary data less expensive, accessible and valido E.g. customer volunteered information (aka customer knowledge) gathered from electroniccustomer councils, customer usability labs, email comments, chat sessions etc to create customerprofiles that can be used to tailor interactions, segment customers and build strong customerrelationships The essential goal of marketing research obtain information that enables management to make the bestpossible decisionso So before the secondary research should be conducted, the researcher and management must:1. Identify and clarify the information needs2. Define the research problem and questions3. Specify the research objectives and confirm the information value4. Determine whether secondary data can be used to answer the research questions Secondary data is available in many different forms:o E.g. existing research, data tables, full text, summary, statistics, broadcast video streams (TV ads ornews reports), online and offline databases The researcher determines:o Whether useful secondary data already existso The relevance of the datao How to obtain the data Sources of secondary data:o Internal secondary data: Collected by a company for business purposes; or6
oMarketing activity reports on customer knowledge Customer knowledge info is provided by customers outside the marketing function Eg. Customers may provide date of this type to engineers, logical support personnelor IT for issues relating to product improvementExternal secondary data: Data collected by outside agencies such as the government, trade associations, reports,industry whitepapers, magazines, audits, consumer panels and marketing research firms Data contained in online databases or available through computer facilitating agencies orvendors Government documents: ABS reports and census data, CIA factbook The major challenge associated with external data sources lies in finding and securing theappropriate source for extracting the dataThe role of secondary data in marketing research Traditional viewo Used to be ‘non-original’o Main functions of secondary data research were to provide historical background for a currentprimary research endeavour and to create trend analysiso It was the filler, attachment or appendix of primary research Modern viewo Increased emphasis on business and competitive intelligence, target marketing, marketingsegmentation, strategic performance analysis, customer relationship management programs andavailability of information from offline and online databases secondary data becoming moreimportanto Used to examine a wide variety of marketing and business problems because of the speed and costeffectiveness of obtaining the dataSecondary data and customer relationship management (CRM) CRM programs help companies learn about customers’ needs and behaviours in order to developstronger relationships with customerso Combines technology and human insights to better understand customer behaviour and the value ofcustomers to the organisation For CRM to be effective, an organisation must first determine its information needs and what it intends to dowith the information. For example:o Financial institutions keep track of customers life cycle stages in order to determine the right time tomarket appropriate financial products like mortgages etco Pizza hut maintains detailed customer information and past purchase behaviour to help in cross sellingfood products companies using CRM programs carefully examine the different ways customer information comes intothe business, where and how the data is stored, and how data is currently being usedo e.g. Myer may interact with customers through email campaigns, websites, stores, call centreso CRM then links these different sources of secondary data and data flow between operational units(e.g. sales, inventory) and analytical software systems sort through the data for customer patternso Trained marketing specialists then go through the data and look for trends or patternsSecondary data research tasks Secondary data often is the starting point in defining the research that needs to be conductedo Provide historical background reveals existing information7
o Analyse existing ‘growing’ and ‘stored’ dataSecondary information is becoming more widely available and technology is enabling greater refinementand categorisation for electronic searchesLiterature reviews: reasons for:o Clarify and define the research problem and research questionso Suggest research hypotheses to investigateo Identification of scales and constructs required for the studyo Identification of well-established and successful research methodologies to study the problem athandElectronic search sourcesPlanning for external secondary datao The problem is not finding out whether information exists; it is finding out where the informationresideso Most secondary information is not categorised in any particular form.o The GO-CART approach Establish goals Develop objectives Define specific information characteristics Outline specific research activities Establish reliability Document using tabulation mechanismsLimitations of secondary data Prior data manipulation: render data unfit for present purpose Data relevance:o The time period of the collectiono The categories of definitions8
o The unit of measuresData accuracy (trustworthiness)o Consistency across sourceso Source credibility, appropriateness of methodology and source biasInternal secondary data Internal secondary data collection plays a significant support role for:o Sales presentationso Decision-making functionso Cases where documentation for necessary primary research activities is required Can be used to analyse:o Product performanceo Customer satisfactiono Distribution effectivenesso Target market strategies Can be useful for planning:o New product introductionso Product deletionso Promotional strategieso Competitive intelligenceo Customer service tacticsTutorial 2:1. Discuss the role of marketing research to determine Macpac’s brand position Anchored in the rugged New Zealand environment and world-renowned adventurous spirito Reputation for innovative design, as well as manufacturing and employment practices that producehigh performance, quality quality outdoors gearo No marketing research to determine brand position which is the New Zealand environment2. What research objectives might Macpac have established to create innovative products? Information needed for market research:o Competitors ultimately to find gap in the market innovationo How often customers use the business’s products3. What is the role of marketing research at different stages of product design and development?a. Determine market wants and needs Results in a lot of data being receivedb. Create prototype Test the prototype ensuring its safe, works etc Get people to try to product the people should be ‘expert’ users, or people that use the productcan receive feedbackthen youTextbook questions:1. What secondary data sources might Costco Australia use to help determine its future warehouselocations9
ABS and census demographics of the areaAverage income per householdo Look at this over time because incomes increase and decreaseGoogle maps to determine where competitors are, where there is a gap, where it is most populated etc2. Do you think Costco’s management has made the right decision to expand its operations in Australia bylocating in Sydney and Canberra? Conduct a feasibility study using available secondary data sources Population is more dense in Sydney and Canberrao High population in Sydneyo Canberra has high incomeso Logistical proximity between Sydney and Canberra3. Explore the feasibility of Costco.com. Do you think having an online storefront will cannibalise itsphysical operations in Australia Logical issues Whether competitors are doing it successfully Percentage of consumption having it online10
Example: RACV o The RACV in Victoria has employed you to determine: Which factors are most likely to persuade customers to switch from RACV to AAMI for car insurance How satisfied current RACV customers are with these factors What are some of the marketing research questions that are relevant? o Research question examples:
