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Chapter 10
Marketing Research
Copyright 2022 © McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill LLC.
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Learning Objectives
Learning Objective 10.1 Identify the five steps in the marketing research process.
Learning Objective 10.2 Describe the various secondary data sources.
Learning Objective 10.3 Describe the various primary data collection techniques.
Learning Objective 10.4 Summarize the differences between secondary research and primary research.
Learning Objective 10.5 Identify the 5 Vs of big data.
Learning Objective 10.6 Examine the characteristics of marketing analytics.
Learning Objective 10.7 Examine the circumstances in which collecting information on consumers is ethical.
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Marketing Research
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Exhibit 10.1: The Marketing Research Process
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Step 1: Defining Objectives and Research Needs
What information is needed to answer specific
research questions?
How should that information be obtained?
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Step 2: Designing the Research
Determine type
of research
needed to obtain
data.
Identify type of
data needed.
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Step 3: Collecting the Data
Secondary Data
• Collected prior to the start of the research project.
• External as well as internal data sources.
Primary Data
• Collected to address specific research needs.
• Examples: focus groups, in-depth interviews, surveys.
• Sample: Choose a group of customers who represent
the customers of interest and generalize their opinions
to the market segment.
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Step 4: Analyzing the Data and Developing Insights
Converting data into
information that is
useful in making more
effective marketing
decisions.
Tom Davenport Interview on Business Analytics
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What Insights Can You Develop by Analyzing this Data?
EXHIBIT 10.3 Survey Results for McDonald’s and Wendy’s
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Step 5: Developing and Implementing an Action Plan
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PROGRESS CHECK (1 of 7)
1. What are the steps in the marketing research
process?
2. What is the difference between data and
information?
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Secondary Data
A marketing research project often begins with a
review of the relevant secondary data.
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Exhibit 10.4: External Secondary DataSyndicated Data and Some of Their Services (1 of 2)
Name Services Provided
Nielsen
(http://www.nielsen.com)
With its Market Measurement Services, the company
tracks the sales of consumer packaged goods, gathered at
the point of sale in retail stores of all types and sizes.
IRI
(http://www.iriworldwide.com)
InfoScan store tracking provides detailed information about
sales, share, distribution, pricing, and promotion across a
wide variety of retail channels and accounts.
JD. Power and Associates
(http://www.jdpower.com)
Widely known for its automotive ratings, it produces quality
and customer satisfaction research for a variety of
industries.
NDP Group
(www.npd.com)
Based on detailed records consumers keep about their
purchases (i.e., a diary), it provides information about
product movement and consumer behavior in a variety of
industries.
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Exhibit 10.4: External Secondary Data Syndicated Data and Some of Their Services (2 of 2)
Table divided into two columns summarizes continuation of syndicated
data providers and some of their services. The column headers are
marked from left to right as: name and services provided.
Name Services Provided
NOP World
(http://www.nopworld.com)
The mKids US research study tracks mobile
telephone ownership and usage, brand affinities,
and entertainment habits of American youth
between 12 and 19 years of age.
Research and Markets
(http://www.researchandmarkets.
com)
Promotes itself as a one-stop shop for market
research and data from most leading publishers,
consultants, and analysts.
Roper Center for Public Opinion
Research
(http://www.ropercenter.uconn.ed
u)
The General Social Survey is one of the nation’s longest
running surveys of social, cultural, and political indicators.
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External Secondary Data Scanner Data
Data from scanner readings
of UPC labels at checkout.
Provided and sold by
leading research firms:
• IRI.
• Nielsen.
Information helps firms
assess what is happening in
the marketplace.
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PROGRESS CHECK (2 of 7)
1. What is the difference between panel and scanner
data?
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Primary Data Collection Techniques
EXHIBIT 10.5 Qualitative versus Quantitative Data Collection
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Observation
Examining purchase and consumption behaviors
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The Brave New World of Shopper-Tracking Technology
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In-Depth and Focus Group Interviews
In-Depth interviews
• Trained researchers ask questions
one-on-one with a customer.
• Expensive and time-consuming.
Focus group interviews
• Small group of 8 to 12 people with
a trained moderator.
• Now often take place online.
• Unstructured; qualitative data about
new or existing products or
services.
Although relatively expensive, in-depth interviews
can reveal information that would be difficult to
obtain with other methods.
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PROGRESS CHECK (3 of 7)
1. What are the types of qualitative research?
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Survey Research
The use of surveys or questionnaires.
The most popular type of quantitative primary data
collection method.
A document that features a set of questions
designed to gather information from respondents
that will lead to more effective marketing decisions.
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Survey Research Structured vs. Unstructured Questions
EXHIBIT 10.6 Structured versus Unstructured Response
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Exhibit 10.7: What to Avoid When Designing a Questionnaire (1 of 2)
Issue Good Question Bad Question
Avoid questions the
respondent cannot easily
or accurately answer.
When was the last time
you went to the grocery
store?
How much money did
you spend on groceries
last month?
Avoid sensitive
questions unless they
are absolutely
necessary.
Do you take vitamins? Do you dye your gray
hair?
Avoid double-barreled
questions, which refer to
more than one issue with
only one set of
responses.
1. Do you like to shop for
clothing?
2. Do you like to shop for
food?
Do you like to shop for
clothing and food?
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Exhibit 10.7: What to Avoid When Designing a Questionnaire (2 of 2)
Issue Good Question Bad Question
Avoid leading questions,
which steer respondents
to a particular response,
irrespective of their true
beliefs.
Please rate how safe
you believe a BMW is on
a scale of 1 to 10, with 1
being not safe and 10
being very safe.
BMW is the safest car on
the road, right?
Avoid one-sided
questions that present
only one side of the
issue.
To what extent do you
believe fast food
contributes to adult
obesity using a five-point
scale?
1: Does not contribute
5: Main cause
Fast food is responsible
for adult obesity:
Agree/Disagree
Source: Adapted from A. Parasuraman, Dhruv Grewal, and R. Krishnan, Marketing Research, 2nd ed. (Boston: Houghton Mifflin, 2007), Ch. 10. 25
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Panel‐ and Scanner‐Based Research
Can be either
secondary or primary
data.
New Balance
encourages people to
join its panel known
as the “New Balance
Tester Community” to
help in the process of
designing new
sneakers.
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Experimental Research
Systematically
manipulates one or more
variables to determine
which variables have a
causal effect on other
variables.
Can also be used on
social media.State Bicycle Co. devised experiments to test the efficacy of
several ads to determine which contests and offerings on its
home page would attract visitors who were likely to buy.
Source: State Bicycle Co. 27
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Hypothetical Pricing Experiment for McDonald’s
EXHIBIT 10.8 Hypothetical Pricing Experiment for McDonald’s
1 2 3 4 5
Market Unit Price
Market Demand
at Price (in Units)
Total Revenue
(Col. 1 × Col.2)
Total Cost of Units Sold ($300,000
Fixed Cost + $2.00 Variable Cost)
Total Profits
(Col. 3 – Col. 4)
1 $4 200,000 $800,000 $750,000 $100,000
2 5 150,000 750,000 600,000 150,000
3 6 100,000 600,000 500,000 100,000
4 7 50,000 350,000 400,000 (50,000)
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Exhibit 10.9: Advantages and Disadvantages of Secondary and Primary Research (1 of 2)
Type Examples Advantages Disadvantages
Secondary
Research
• Census data
• Sales invoices
• Internet information
• Books
• Journal articles
• Syndicated data
• Saves time in
collecting data
because they are
readily available.
• Free or inexpensive
(except for
syndicated data)
• May not be
precisely relevant to
information needs.
• Information may
not be timely.
• Sources may not be
original, and
therefore
usefulness is an
issue.
• Methodologies for
collecting data may
not be appropriate.
• Data sources may
be biased.
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Exhibit 10.9: Advantages and Disadvantages of Secondary and Primary Research (2 of 2)
Type Examples Advantages Disadvantages
Primary
Research
• Observation
• Focus groups
• In-depth interviews
• Social media
• Surveys
• Experiments
• Specific to the
immediate data
needs and topic at
hand
• Offers behavioral
insights generally
not available from
secondary research
• Costly
• Time-consuming
• Requires more
sophisticated
training and
experience to
design study and
collect data.
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PROGRESS CHECK (4 of 7)
1. What are the types of quantitative research?
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Big Data
Big data incorporates multiple sources of data.
Changes in marketing research because of:
• Increase in amount of data.
• Ability to collect data from transactions, CRM, social
media, websites.
• Ease of collecting and storing data.
• Computing ability to manipulate data.
• Access to software to convert data into decision-making
insights (Amazon, SAP, Splunk, GoodData, Google
Analytics.
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Internal Secondary Data
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Exhibit 10.10: The 5 Vs of Big Data
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PROGRESS CHECK (5 of 7)
1. What are the 5 Vs of big data?
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Marketing Analytics
Firms can access big data that contain billions of pieces of customer information and purchase histories from many different sources in a variety of types and sizes.
Marketing analytics is used to make sense out of these data.
To make marketing mix decisions, HSN gathers
data across a wide range of points of contact,
including multiple televised channels, catalog and
phone sales, and digital links.
Source: HSN, Inc. 36
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Marketing Decisions
Marketing analytics can be used to make marketing decisions that
span all the elements of a firm’s current or planned marketing
strategy, including the following.
• How to Make Marketing Mix Decisions.
• How to Determine Which Segments to Target.
• How to Understand and Manage Those Customer Segment.
• How to Create Micro-Segmentation Strategies at a Local Level.
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Tools and Methods (1 of 2)
Descriptive Analytics Tools Help firms organize, tabulate, and
depict their available data, usually
in easy-to-understand reports,
tables, and charts.
Predictive Analytics Tools Rely on historically available data to
forecast the future, such as what is
predicted to happen to a firm’s
product sales in the next month,
next quarter, next year, and so on.
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Tools and Methods (2 of 2)
Prescriptive Analytics Tools Analyses that use simulations,
which ask a series of what if–type
questions, and optimization
techniques to find the most effective
or best result, which help firms
better understand what they should
do
Active Analytics Tools Artificial intelligence algorithms
used to analyze input gathered
from various data bases including
data from the Internet of Things
(IoT).
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PROGRESS CHECK (6 of 7)
1. What decisions can be made using marketing
analytics?
2. What are the four broad categories of marketing
analytics tools and methods?
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The Ethics of Using Customer Information
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AMA Ethical Guidelines for Conducting Marketing Research
1. Prohibits selling or fund-raising under the guise of
conducting research.
2. Supports maintaining research integrity by avoiding
misrepresentation or omission of pertinent research
data.
3. Encourages the fair treatment of clients and
suppliers.
Insights Association Code of
Standards and Ethics
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What Would You Do?
Aaron, a marketing
researcher:
• Just finished giving a
successful presentation to
a major client.
• The client has asked for a
list of companies that
participated in the study
and copies of all the
completed surveys.
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Threats to Personal Information
Facial recognition software
Neuromarketing
Adapted from: Adam L. Penenberg, “NeuroFocus Uses Neuromarketing to Hack Your Brain,” Fast Company, August 8, 2011,
https://www.fastcompany.com/1769238/neurofocus-uses-neuromarketing-hack-your-brain Findings from neuromarketing studies
by NeuroFocus.Access the text alternative for slide images.
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PROGRESS CHECK (7 of 7)
1. Under what circumstances is it ethical to use
consumer information in marketing research?
2. What challenges do technological advances
pose for the ethics of marketing research?
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