Nature and Scope of Marketing Research

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Nature and Scopeof Marketing Research

• 3 - The Marketing Research Process

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• Five Key Questions
• Why should we do research? (Purpose)
• What research should be done? (Objective)
• Is it worth doing the research? (Value of info)
• How should the research be designed? (Design and
  data collection)
• What will we do with the research? (Data analysis
  and report)

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Research purpose
1- Problem or opportunity identification /
analysis - What is the problem or opportunity
? - What is the scope ? - What are the possible
reasons ? Kroger Co. is opening 5 new Signature
stores (upscale supermarkets) in Houston. 1,000
questionnaires were sent to targeted area
residents asking what features they would like to
see included in these new stores. Based on the
surveys, Kroger added several variations to what
already existed in established stores (A larger
selection of wines, a sit-down coffee bar, a
large all-natural food section, U-Scan Express
aisles).
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Research purpose
2 - Decision alternatives - What alternative
actions ? - What timing ? - What importance
does decision have ? Kroger Co. wants to upgrade
its stores (upscale supermarkets). It can
modernize the existing concept or add new
features / services. What criteria should be
considered ? Which alternative should be pursued ?
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Research purpose
3 - Users of research output - Who are they ? -
What will they use research output for ? - Will
they need frequent updates ? - What level of
detail is needed ? Every 6 months, Kroger Co.
conducts surveys of consumer behavior in and
attitude toward its stores number of customers
per day of week, time spent in store, purchases
made, etc.. Should these be maintained ? Should
they be adapted ?
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Research objective
Question What is the research question to be
answered ? What specific information is needed
? Hypothesis What is anticipated ? What reasons
are thought to be true ? Test if the hypothesis
is true. Boundaries What scope should the
research have ?
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• Research question
• Asks what specific information is required
• to achieve the research purpose
• Sample questions to determine if a specific
  advertisement should be run
• Will the advertisement be noticed ?
• Will it be interpreted accurately ?
• Will it favorably influence attitudes ?
• Will it be remembered ?
• Will it have an impact on the companys image ?

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• Hypothesis Development
• A possible answer to a research question.
• Generating a hypothesis
• Draw on previous research efforts
• Draw on managers experience with related
  problems, coupled with knowledge and the use of
  judgment

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• Value of information
• Value depends on
• Importance of managers decision
• Uncertainty that surrounds it
• Influence of research information on decision
• Direct and opportunity cost of getting the
  information

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Nature and Scopeof Marketing Research

• 4 - Research Design and Implementation
• (Issues in international research are not covered)

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• Research Design
• The detailed blueprint to guide the
  implementation of a research study toward the
  realization of its objectives
• Categories of research
• Exploratory
• Descriptive
• Causal

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• Exploratory Research
• Used when seeking insights into the general
  nature of a problem, the possible decision
  alternatives, and the relevant variables that
  need to be considered
• Discover what people think about a new shampoo
• Discover what eating habits people have during
  the day
• Discover what people think of an advertisement
• Discover what people look for in a leisure trip
• Etc.

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• Descriptive Research
• Provides an accurate snapshot of some aspect of
  the market environment, such as
• The proportion of the adult population that
  supports the Cancer Society
• Consumer evaluation of the attributes of our
  product versus competing products.
• The socioeconomic and demographic characteristics
  of the readership of a magazine
• The proportion of stores that are carrying,
  displaying, or merchandising our products
• Etc.

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• Causal Research
• Used when it is necessary to show that one
  variable causes or determines the values of other
  variables
• Measuring the impact of a change in price on the
  level of sales
• Measuring the impact of an increase in
  advertising on the level of awareness
• Measuring the impact of product demonstration on
  intention to buy
• Etc.

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Detective Funnel

• The DF combines all three approaches
• Exploratory techniques generate many possible
  reasons for a problem, circumscribes a territory
  to be further investigated
• Descriptive and Causal approaches narrow the
  possible causes, first by providing more specific
  input about an aspect of the subject under
  consideration, second by establishing a cause
  effect link between two variables.

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Data collection methods

• Relation between data collection and research
  category
• Exploratory Descriptive
  Causal
• Secondary Sources
• Information System a b
• Outside databases a b
• Syndicated Services a b
  b
• Primary Sources
• Qualitative Research a b
• Surveys b a b
• Experiments b a
• a very appropriate, b somewhat appropriate

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Research Implementation

• After choosing the research approach, develop
• The specifics of measurements
• What instrument should be used ?
• Plan for choosing the sample
• What kind of sample, what sample size ?
• Methods of analysis
• What kind of analysis will provide most
  informative results ?
• Analysis of value versus cost and time involved
• Run a more detailed cost / benefit analysis.

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Error in Research Design

• Two Components of Errors
• Sampling error
• Non-sampling error
• Sampling Error
• Difference between a measure obtained from a
  sample of population and the true measure that
  can be obtained only from the entire population
• Nonsampling Error
• All other errors associated with a research
  project

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Sources of Nonsampling Error

• Design Error
• Selection Error
• Population Specification Error
• Sampling Frame Error
• Surrogate Information Error
• Measurement Error
• Experimental Error
• Data Analysis Error

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Sources of Nonsampling Error

• Administering Error
• - Occurs during the administration of a survey
  instrument to the respondents
• Questioning Error
• Recording Error
• Interference Error

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Sources of Nonsampling Error

• Response Error
• Occurs when respondent provides inaccurate
  answers to survey questions
• Non-response Error
• Occurs if
• Some members of sample are not contacted
• Some members provide incomplete or no response to
  survey instrument

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Budgeting the Research Project

• Two approaches to budgeting
• Estimate the dollar costs associated with each
  research activity
• Used for unusual or expensive projects
• Determine the activities to be performed in hours
  and apply standard cost estimates to these hours
• Used for routine projects or when researcher has
  knowledge of costs

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Research Proposal

• Describes a plan for conducting and controlling a
  research project
• Basis for a written contract between manager and
  researcher
• Basis for reviewing important decisions
• Used to choose among competing suppliers and
  influence decision to fund study

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Basic Contents of a Research Proposal

• Executive Summary
• Purpose and Scope
• Objectives
• Research Approach
• Time and Cost Estimates
• Appendices