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Chapter 6

Marketing Research and Decision Support

Systems
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McGraw-Hill/Irwin

Copyright 2004 by The McGraw-Hill Companies, Inc. All rights reserved.

After
After studying
studying this
this chapter,
chapter, you
you should
should be
be able
able to:
to:

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Understand the purpose and functions of

marketing research.

Be familiar with the stages of the

marketing research process.

Discuss different types of research

designs, data collection methods, and
sources of secondary and primary
marketing research data.

After
After studying
studying this
this chapter,
chapter, you
you should
should be
be able
able to:
to:

Understand

many of the major issues

involved with survey design and sampling.

Appreciate

the role of marketing research

within decision support systems.

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What is Marketing Research?

Marketing
MarketingResearch:
Research:

Identifies
Identifiesand
anddefines
definesmarketing
marketing
opportunities.
opportunities.

Generates,
Generates,refines,
refines,and
andevaluates
evaluates
marketing actions.
marketing actions.

Monitors
Monitorsmarketing
marketingperformance.
performance.
Improves
Improvesunderstanding
understandingof
of
marketing as a process.
marketing as a process.

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Marketing
Marketing Research:
Research:

Specifies
Specifiesthe
theinformation
informationrequired
requiredto
toaddress
address
these issues .
these issues .

Designs
Designsthe
themethods
methodsfor
forcollecting
collectinginformation.
information.
Manages
Managesand
andimplements
implementsthe
thedata
datacollection
collection
process.
process.

Analyzes
Analyzesthe
theresults.
results.
Communicates
Communicatesthe
thefindings
findingsand
andimplications.
implications.
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Questions Marketing Research Can Help Answer

1.
2.

Planning
Problem Solving

3.

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Produce
Price
Place
Promotion

Control

Marketing Research in the New Millennium

Environmental
Environmental Phenomena
Phenomena will
will affect
affect the
the

marketing
marketing research
research industry
industry in
in the
the next
next decade
decade
and
and beyond.
beyond.

The
The traditional
traditional time
time line
line of
of 44 to
to 66 weeks
weeks for
for the
the

typical
typical research
research project
project will
will not
not be
be acceptable.
acceptable.

Marketing
Marketing research
research isis becoming
becoming aa part
part of
of the
the

marketing
marketing strategy
strategy development
development process.
process.

1-8

Marketing Research in the New Millennium

Interactivity,
Interactivity,e-commerce,
e-commerce, and
and the
the Internet
Internet are
are

affecting
affecting the
the practice
practice of
of marketing
marketing research.
research.

How
How will
will data
data be
be managed?
managed?

Consolidation
Consolidation among
among companies
companies has
has resulted
resulted in
in

market
market dominance
dominance by
by the
the top
top 25
25 firms.
firms.

1-9

The Marketing Research Process

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Problem Definition

Problem Definition:

The first step in any marketing research project and is

critical to its success.

All parties involved must:

Focus on the real research problem, not the symptoms.

Anticipate how the information will be used.
Avoid prescribing a specific study until the problem is
fully understood and defined.

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Research Designs

Exploratory
ExploratoryResearch:
Research:

Typically
Typicallycarried
carriedout
outto
tosatisfy
satisfythe
theresearchers
researchersdesire
desirefor
forbetter
better
understanding, or to develop preliminary background and suggest

understanding, or to develop preliminary background and suggest

issues
issuesfor
foraamore
moredetailed
detailedfollow-up
follow-upstudy.
study.

Descriptive
DescriptiveResearch:
Research:

Casual
CasualResearch:
Research:

Normally
Normallydirected
directedby
byone
oneor
ormore
moreformal
formalresearch
researchquestions
questionsor
or
hypotheses.
hypotheses.
Cross-sectional
Cross-sectionalstudy
study
Longitudinal
Longitudinalresearch
research
Experiments
Experimentsininwhich
whichresearchers
researchersmanipulate
manipulateindependent
independentvariables
variables
and then observe or measure the dependent variable or variables of
and then observe or measure the dependent variable or variables of
interest.
interest.

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Data Types
Primary Data

Secondary Date

SURVEYS
- Mail
- Telephone

INTERNAL DATA
- Company records
- Data from MDSS

INTERVIEWS
- Mall intercepts
- Personal interviews

EXTERNAL DATA
Proprietary
- Custom Research
- Syndicated services
Nonproprietary
- Published reports
- Census data
- Periodicals

FOCUS GROUPS
- Personal
- Mechanical
1-13

Data Collection Methods

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Focus groups
Telephone surveys
Mail surveys
Personal interviews
Mall intercepts
Internet surveys
Projective techniques and
observations

Data Collection Instruments

The
The collection
collection of
of marketing
marketing
research
research information
information involves
involves
construction
construction of
of aa data
data collection
collection
instrument
instrument called
called survey
survey or
or
questionnaire.
questionnaire.

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Types of Survey Research Questions

Scaled
Scaled

Likert
Likertagree-disagree
agree-disagree
Semantic
Semanticdifferential
differential

Multichotomous
Multichotomous (multiple
(multiple choice)
choice)

Categorical
Categorical

Open-ended
Open-ended
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Five Errors in Question Design

1.
2.
3.
4.
5.

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Double-barreled wording
Loaded wording
Ambiguous wording
Inappropriate vocabulary
Missing alternatives

Sample Design

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Sampling

Probability Sampling

Simple random sampling

Stratified sampling
Cluster sampling

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Nonprobability Sampling

Sampling

Sampling
Sampling Frame
Frame

Sample
Sample Size
Size

Response
Response Rate
Rate

AArecent
recentstudy
studyby
bythe
theCouncil
Councilfor
forMarketing
Marketingand
and

Opinion
OpinionResearch
Research(CMOR)
(CMOR)estimated
estimatedthat
that45
45percent
percent
of
ofconsumers
consumersrefused
refusedto
toparticipate
participatein
inaasurvey
surveyin
in
2001.
2001.

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Fieldwork

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Fieldwork is the process of:

Contacting respondents

Conducting interviews

Completing surveys

Analysis and Interpretation

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Techniques for analyzing

marketing research data:

Straightforward frequency
distributions

Means

Percentages

Complex multivariate statistical tests

Changing Technology
Positive
Positive Factors:
Factors:

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The
Theavailability
availabilityof
ofcomputer-assisted
computer-assistedtelephone
telephone(CAT)
(CAT)
interviewing
interviewinghas
hasenhanced
enhancedsampling,
sampling,data
dataentry,
entry,and
anddata
data
processing.
processing.

Videoconferencing
Videoconferencingenables
enablesclients
clientsto
tomonitor
monitorfocus
focusgroups
groupsand
and
provide
providethe
theopportunity
opportunityto
toinvolve
involvemore
moreparticipants
participantsinin
observation.
observation.

Videoconferencing
Videoconferencingresult
resultininsavings
savingsbecause
becauseclients
clientsdo
donot
nothave
have
to
totravel
travelto
tolocations
locationsto
toview
viewfocus
focusgroup
groupsessions.
sessions.

E-mail
E-mailoffers
offersthe
thepotential
potentialfor
forincreasing
increasingsurvey
surveyefficiency.
efficiency.

Changing Technology
Negative
Negative Factors:
Factors:

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Answering
Answeringmachines
machinesand
andvoice-mail
voice-mailresponses
responsesinhibit
inhibitboth
both
consumer
consumerand
andbusiness-to-business
business-to-businesstelephone
telephoneresearch.
research.

Call
Callwaiting
waitinghampers
hampersthe
theconduct
conductof
oftelephone
telephonesurveys.
surveys.

International Considerations

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1.

Selecting a domestic research

company to do international
research.

2.

Rigidly standardizing methods

across countries.

3.

Interviewing in English around

the world.

4.

Implementing inappropriate
sampling techniques.

International Considerations
55.. Failing
Failingtotocommunicate
communicate

effectively
effectivelywith
withlocal
localresearch
research
companies.
companies.

6.6.Lack
Lackofofconsideration
considerationgiven
giventoto
language.
language.
7.7.Misinterpreting
Misinterpretingdata
dataacross
acrosscountries.
countries.
8.8.Failing
Failingto
tounderstand
understandpreferences
preferencesofof
foreign
foreignresearchers
researchersregarding
regardingthe
the
effective
conduct
of
qualitative
effective conduct of qualitative
research.
research.

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Evaluating Marketing Research

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Ethical Issues in Marketing Research

Excessive interviewing

Lack of consideration

Abuse of respondents
Delivering sales pitches
under the guise of
marketing research
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Ethical Issues in Marketing Research

Incomplete reporting
of results
Misleading reporting
of results

Nonobjective research

Use of data and the

confidentiality of information
collected
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Marketing Decision Support Systems (MDSS)

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MDSS Are Designed to:

Support not supplant management

decision marketing.

Apply to semistructured decisions of

middle and upper management (pricing,
promotion, and location decisions).

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MDSS Are Designed To:

1-32

Provide interaction
between and among
people and systems.

Center on a segment of
related decisions (the
allocation of marketing
effort and resources).

Be user-friendly.

Database Marketing
Database Marketing:

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The collection and use of

individual customer-specific
information to make marketing
more efficient.

Database refers to
customer/prospect information
stored in a computer with
software to process the
information.

Database Marketing

Customer
Customer Relationship
Relationship Management
Management
(CRM):
(CRM):

Relationship
Relationship management
management from
from aa transaction
transaction
orientation
orientation has
has been
been one
one of
of the
the significant
significant
developments
developments in
in the
the practice
practice of
of marketing.
marketing.

One important aspect of data-based marketing

is the ability to evaluate ROI of
marketing expenditures.
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Ethical Issues in Data Base Marketing

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1.1.

Marketers
Marketersmust
mustcontinue
continueto
to
work
workat
atself-regulation
self-regulation
regarding
regardingprivacy
privacyprotection.
protection.

2.2.

Firms
Firmsthat
thatbuild
buildtheir
their
databases
databasesfrom
fromwithin,
within,as
as
opposed
opposedto
tobuying
buyinglists
listsfrom
from
other
othersources,
sources,are
areable
ableto
to
maintain
maintainthe
theprivacy
privacyof
oftheir
their
customers.
customers.

Ethical Issues in Data Base Marketing

1-36

3.3.

Customer
Customerpermission
permissionand
and
notification
notificationshould
shouldbe
be
regularly
regularlysought.
sought.

4.4.

Customers
Customersgenerally
generallywant
want
firms
firmsto
toreduce
reducethe
thevolume
volume
of
ofcatalog
catalogand
andadvertising
advertising
mail
mailwhile
whilesimultaneously
simultaneously
increasing
increasingthe
therelevance
relevanceof
of
that
thatinformation.
information.