Session No.

Topic Date
6 Conducting marketing research

The Marketing Research Process

To take advantage of all the resources and practices available, good marketers adopt a formal
marketing research process that follows the six steps. The figure 4.1 below highlights six steps of
the process:

Step 2: Develop the Research Plan

In the second stage of marketing research we develop the most efficient plan for gathering the
needed information and discover what that will cost. Suppose American made a prior estimate
that launching ultra-high-speed Wi-Fi service would yield a long-term profit of $50,000. If the
manager believes the marketing research will lead to an improved pricing and promotional plan
and a long-term profit of $90,000, he should be willing to spend up to $40,000 on this research.
If the research will cost more than $40,000, it’s not worth doing. To design a research plan, we
need to make decisions about the data sources, research approaches, research instruments,
sampling plan, and contact methods.

Data Sources: The researcher can gather secondary data, primary data, or both. Secondary data
are data that were collected for another purpose and already exist somewhere. Primary data are
data freshly gathered for a specific purpose or project. 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.

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

Observational Research: Researchers can gather fresh data by observing unobtrusively as

customers shop or consume products. Sometimes they equip consumers with pagers and instruct
them to write down or text what they’re doing whenever prompted, or they hold informal
interview sessions at a café or bar. Photographs and videos can also provide a wealth of detailed
information. Although privacy concerns have been expressed, some retailers are linking security
cameras with software to record shopper behavior in stores. In its 1,000 retail stores, T-Mobile
can track how people move around, how long they stand in front of displays, and which phones
they pick up and for how long.

Ethnographic research 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. Fujitsu Laboratories, Herman Miller, Steelcase, and Xerox
have embraced ethnographic research to design breakthrough products. Technology companies
like IBM, Microsoft, and Hewlett-Packard use anthropologists and ethnologists working
alongside systems engineers and software developers.

Focus Group Research: A focus group is a gathering of 6 to 10 people carefully selected for
demographic, psychographic, or other considerations and convened to discuss various topics at
length for a small payment. A professional moderator asks questions and probes based on the
marketing managers’ agenda; the goal is to uncover consumers’ real motivations and the reasons
they say and do certain things. Sessions are typically recorded, and marketing managers often
observe from behind two-way mirrors. To allow more in-depth discussion, focus groups are
trending smaller in size.

Survey Research: Companies undertake surveys to assess people’s knowledge, beliefs,

preferences, and satisfaction and to measure these magnitudes in the general population. A
company such as American Airlines might prepare its own survey instrument, or it might add
questions to an omnibus survey that carries the questions of several companies at a much lower
cost. It can also pose questions to an ongoing consumer panel run by itself or another company.
It may do a mall intercept study by having researchers approach people in a shopping mall and
ask them questions. Or it might add a survey request at the end of calls to its customer service
department.

Behavioral Research: Customers leave traces of their purchasing behavior in store scanning
data, catalog 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. For example, grocery shopping data show that high-
income people don’t necessarily buy the more expensive brands, contrary to what they might
state in interviews, and many low-income people buy some expensive brands. There is a wealth
of online data to collect from consumers. Clearly, American Airlines can learn many useful
things about its passengers by analyzing ticket purchase records and online behavior.

Step 3: Collect the Information

The data collection phase of marketing research is generally the most expensive and error-prone.
Some respondents will be away from home, offline, or otherwise inaccessible; they must be
contacted again or replaced. Others will refuse to cooperate or will give biased or dishonest
answers. Internationally, one of the biggest obstacles to collecting information is the need to
achieve consistency. Latin American respondents may be uncomfortable with the impersonal
nature of the Internet and need interactive elements in a survey so they feel they’re talking to a
real person. Respondents in Asia, on the other hand, may feel more pressure to conform and may
not be as forthcoming in focus groups as online. Sometimes the solution may be as simple as
ensuring the right language is used.

Step 4: Analyze the Information

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 the Findings

As the last step, the researcher presents the findings. Researchers are increasingly asked to play a
proactive, consulting role in translating data and information into insights and recommendations
for management. “Marketing Insight: Bringing Marketing Research to Life with Personas”
describes an approach that some researchers are using to maximize the impact of their consumer
research findings.

Step 6: Make the Decision

The American Airlines managers who commissioned the research need to weigh the evidence. If
their confidence in the findings is low, they may decide against introducing ultra-high-speed Wi-
Fi service. If they are predisposed to launching it, the findings support their inclination. They
may even decide to study the issue further and do more research. The decision is theirs, but
rigorously done research provides them with insight into the problem.

The hallmarks of a good marketing research

1. Scientific method Effective marketing research uses the principles of the scientific
method: careful observation, formulation of hypotheses, prediction,
and testing.
2. Research creativity In an award-winning research study to reposition cheetos snacks,
researchers dressed up in a brand mascot Chester Cheetah suit and
walked around the streets of San Francisco. The response the
 Character encountered led to the realization that even adults loved
the fun and playfulness of Cheetos. The resulting repositioning led
to a double-digit sales increase despite a tough business
environment.
3. Multiple methods Marketing researchers shy away from overreliance on any one
method. They also recognize the value of using two or three
methods to increase confidence in the results.
4. Interdependence of Marketing researchers recognize that data are interpreted from
models and data underlying models that guide the type of information sought.

5. Value and cost of Marketing researchers shoe concern for estimating the value of
information information against its cost. Costs are typically easy to determine,
but the value of research is harder to quantify. It depends on the
reliability and validity of the findings and management’s
willingness to accept and act on those findings.
6. Healthy scepticism Marketing researchers show a healthy skepticism toward glib
assumptions made by managers about how a market works. They
are alert to the problems caused by “marketing myths.”
7. Ethical marketing Marketing research benefits both the sponsoring company and its
customers. The misuse of marketing research can harm or annoy
consumers, increasing resentment at what consumers regard as an
invasion of their privacy or a disguised sales pitch.

Source:
Kotler, P., & Keller, K. L. (2016). Marketing Management 15th edition.