Essentials of Marketing Research Kumar, Aaker, Day Chapter Three The Marketing Research Process

Essentials of Marketing ResearchEssentials of Marketing Research Kumar, Aaker, Day Kumar, Aaker, Day

Chapter ThreeChapter Three

The Marketing Research The Marketing Research ProcessProcess


Why do we have an organized Why do we have an organized MR process?MR process?

• Relevant (does it address the Relevant (does it address the problem at hand?) problem at hand?)

• meaningful (will the results support meaningful (will the results support the decision?) and the decision?) and

• Appropriate (is the research plan Appropriate (is the research plan appropriate to the data collected?)appropriate to the data collected?)


Market Research ProcessMarket Research Process

1.1. Agree on Research PurposeAgree on Research Purpose

2.2. Establish Research ObjectivesEstablish Research Objectives

3.3. Estimate Value of InformationEstimate Value of Information

4.4. Design the ResearchDesign the Research

5.5. Collect the DataCollect the Data

6.6. Prepare and Analyze DataPrepare and Analyze Data

7.7. Report Research ResultsReport Research Results


The Research PurposeThe Research Purpose

•Research purpose is a shared Research purpose is a shared understanding between manager understanding between manager and researcher aboutand researcher about

– Problem or opportunity to be studiedProblem or opportunity to be studied

– Evaluation of decision alternativesEvaluation of decision alternatives

– Research usersResearch users


Case: Promoting a new health Case: Promoting a new health club in townclub in town

• Problem or opportunity be studied?Problem or opportunity be studied?– Consumers largely ignore advertisingConsumers largely ignore advertising– Intense pre-existing competitionIntense pre-existing competition– Competitor’s facilities outdatedCompetitor’s facilities outdated– Increasing populations of the young, Increasing populations of the young,

urban professionalsurban professionals


The Research PurposeThe Research Purpose

•Problem or opportunity analysisProblem or opportunity analysis

– Motivations of researchMotivations of research

– Exploratory research to identify Exploratory research to identify problems or opportunitiesproblems or opportunities

– Goal is to move from exploratory to Goal is to move from exploratory to confirmatory research (decision-confirmatory research (decision-focused)focused)


The Marketing Research The Marketing Research Process: Research PurposeProcess: Research Purpose

•Evaluation of decision alternativesEvaluation of decision alternatives

– If there are no decision alternatives, no If there are no decision alternatives, no research is necessaryresearch is necessary

– How will you evaluate the decision How will you evaluate the decision alternatives?alternatives?

– Time available and importance of Time available and importance of decisiondecision


Case: What decision Case: What decision alternatives may be important alternatives may be important here?here?• Should we advertise in mass media or Should we advertise in mass media or

should we promote through direct mail?should we promote through direct mail?• What should we position ourselves as? What should we position ourselves as?

(prior exploratory research required)(prior exploratory research required)• Should we promote our facilities or our Should we promote our facilities or our

location?location?• Should we promote our facilities or the Should we promote our facilities or the

‘club’ atmosphere?‘club’ atmosphere?


Research PurposeResearch Purpose

•Research usersResearch users

– Who will evaluate the research?Who will evaluate the research?

– External bodies may require high-External bodies may require high-quality research designsquality research designs


Case: Who are the research Case: Who are the research users here?users here?

• The health club managementThe health club management






Research ObjectiveResearch Objective

• A statement, in as precise terminology as A statement, in as precise terminology as possible, of what information is neededpossible, of what information is needed

• Should be framed to ensure information Should be framed to ensure information obtained will satisfy research purposeobtained will satisfy research purpose

• Three Components:Three Components:

Research QuestionResearch Question

Hypothesis DevelopmentHypothesis Development

Research BoundariesResearch Boundaries


The Marketing Research The Marketing Research Process Process (Research Objective)(Research Objective)• Research QuestionResearch Question

– Specifies information the decision maker Specifies information the decision maker needs to achieve the research purposeneeds to achieve the research purpose

• Hypotheses developmentHypotheses development– Alternative answers to the RQ – research to Alternative answers to the RQ – research to

reveal which of these are correctreveal which of these are correct

• Research BoundariesResearch Boundaries– Who / what should be included – what should Who / what should be included – what should

be left out.be left out.


Case: New Health Club: Case: New Health Club: Research QuestionsResearch Questions

• Consumers ignore advertising?Consumers ignore advertising?



• Intense pre-existing competitionIntense pre-existing competition



• Outdated competitor’s facilitiesOutdated competitor’s facilities



• Increasing YUPPIESIncreasing YUPPIES


Hypothesis DevelopmentHypothesis Development

ResearchQuestion

ResearchDesign

HypothesisResearchPurpose

Theory

ManagementExperience

Exploratory Research


Role of the HypothesisRole of the Hypothesis

• Introduces more detail than the RQIntroduces more detail than the RQ– RQ: Why are sales in the Northeast lower than RQ: Why are sales in the Northeast lower than

the national average?the national average?– H1: The competitor released a new ad campaignH1: The competitor released a new ad campaign– H2: The weather was abnormally coldH2: The weather was abnormally cold– H3: A distribution snafu prevented products H3: A distribution snafu prevented products

from reaching the retailersfrom reaching the retailers

• Introduces variables to be included in the Introduces variables to be included in the research design (e.g. new ad campaign, research design (e.g. new ad campaign, temperature, distribution problems)temperature, distribution problems)


Case: New Health Club: Case: New Health Club: HypothesesHypotheses

• Consumers ignore advertising?Consumers ignore advertising?



• Intense pre-existing competitionIntense pre-existing competition



• Outdated competitor’s facilitiesOutdated competitor’s facilities



• Increasing YUPPIESIncreasing YUPPIES


The Marketing Research ProcessThe Marketing Research Process (Research Objective) (Research Objective)

Research Purpose

Research Question

Hypothesis

Develop a can design for the new Miller beer

How effective is each of several different design alternatives?

The design that conforms to the advertising message is best.

Increasing Builders Square store traffic

What is the current image of Builders Square?

Builders Square’s image is not as good as its competitor’s image.





3.3. Estimate Value of InformationEstimate Value of Information


The Marketing Research The Marketing Research Process (Estimated Value)Process (Estimated Value)

• Expected Value ConceptExpected Value Concept

– Cost of conducting the research vis-à-vis Cost of conducting the research vis-à-vis the benefits of conducting research and the benefits of conducting research and benefits of benefits of notnot conducting research conducting research

– Probabilities associated with outcomes Probabilities associated with outcomes


Expected Value of Introducing Expected Value of Introducing a producta product

Case 1Case 1 Case 2Case 2

SuccesSuccesss

EV=0.6x4m = EV=0.6x4m = 2.4m2.4m

EV=0.6x4m = EV=0.6x4m = 2.4m2.4m

FailureFailure EV=0.4x1m = EV=0.4x1m = 0.4m0.4m

EV=0.4x(-2.5m) EV=0.4x(-2.5m) = =

-1m-1m

Total EV = 2.8mTotal EV = 2.8m Total EV = 1.4mTotal EV = 1.4m


Expected Value of Introducing Expected Value of Introducing a producta product

• In case 1, we have profits under both In case 1, we have profits under both options, hence we will introduce the options, hence we will introduce the product – research is of little use hereproduct – research is of little use here

• In case 2, we have a loss which can be In case 2, we have a loss which can be avoided if research tells us not to avoided if research tells us not to introduce the productintroduce the product

• What is the maximum you will pay for What is the maximum you will pay for doing the research? doing the research?

• ANS: $1mANS: $1m

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Essentials of Marketing Research Kumar, Aaker, Day Chapter Three The Marketing Research Process