Four major elements are involved in undertaking marketing research. The first element is a preliminary investigation. This initial study permits the researcher to determine the purpose and scope of his research as well as to identify tentative questions.
Creating a research design to test the questions is the most important and most complicated aspect of marketing research. It commences with the selection of the approach to be taken. The three most commonly used are the experimental, the observational, and the survey approaches. Any given project may use one or more of the three.
It is also necessary to determine the types of data that will be needed to solve the marketing problem and to locate sources where this information can be obtained. Data sources are generally classified as either primary or secondary. Secondary data are made up of previously collected information and are obtained from historical records, publications, government documents, and the like. Primary data are gathered for the first time. The survey method is probably the most frequently used method for collecting primary data. Data are by gathered by mail, by telephone, by personal interviewing, and online.
Another critical aspect of most marketing research projects is the selection of the sample. A probability sample involves the selection of respondents in such a way that every unit in the pool has the same chance of being selected. One method of drawing a probability sample is by the use of a table of random digits. A nonprobability sample is drawn on a judgmental basis; the respondents are selected because they are considered to be representative of the group from which they are drawn.
The final aspect of the research design is the anticipation of the results and the decision as to how the data will be summarized and reported. It is becoming more and more common in large marketing research projects to make use of a computer for the processing and tabulation of the research results. Some problems usually arise, however, and careful supervision and control of the data-collection activities are important. It is particularly critical to guard against various kinds of survey bias that can creep into a project.
Marketing research The scientific and controlled gathering of nonroutine marketing information undertaken to help management solve marketing problems.
Informal assessment An unstructured search of the marketing environment.
Research design Plan proposed for testing the research questions as well as collecting and processing information.
Experimental approach Variable interest must be manipulated and everyone participating in the experiment must have a known and equal chance of being selected.
Historical/case method Reliance is placed on past experiences in seeking solutions to current marketing problems.
Survey approach Marketing information is collected either from observation or by questionnaire or interview.
Secondary source data Information that has been previously published and can come from within or outside the business.
Primary information Information gathered to address a particular problem.
Data processing Procedures for sorting, assembling, and reporting data.
➢ Marketing research is sometimes referred to as a "problem-solving tool". Explain what is meant by this statement.
➢ It is often argued that only such fields as physics, chemistry, and mathematics are really "scientific" and that marketing research, as common with all behavioral research, cannot be scientific. How would you respond to someone who stated this opinion?
➢ Do you think that a distinction can be made between "pure" and "applied" research in marketing?
➢ Select a local or campus enterprise with which you are familiar. Identify a marketing problem that it faces. (You may need to interview the manager of the establishment.) Translate this marketing problem into its informational elements. Conduct a small-scale informal investigation: (a) What tentative hypotheses can you develop? (b) What types of research design do you believe would be necessary to test these hypotheses?
➢ A small manufacturer of highly specialized medical laboratory equipment and a manufacturer of a proprietary (nonprescription) cold remedy need information to assist in planning new product introductions. What would be the advantages and drawbacks of using primary versus secondary marketing information for each firm?
➢ You are the advertising manager of a company that manufactures professional baseball equipment. Your firm employs 50 field salespeople who make periodic calls on sporting goods dealers, large schools and colleges, and professional athletic organizations. You also place full-page advertisements in a trade publication for the sporting goods industry, Scholastic Coach. The president of your company has questioned the use of this publication and has asked you to find out how effective it is in increasing awareness about your products and in stimulating sales. How would you go about this task?
➢ In 1970, Ford Motor Company introduced its subcompact automobile, the Pinto. Suppose you had been a marketing research analyst working for another car manufacturer. What kinds of primary and secondary marketing research would you have conducted to evaluate the success of this new product introduction?
Design a short questionnaire (no more than 10 questions) intended to reveal whether or not another student is a good prospect for a new laptop computer. Assume the purpose of this questionnaire is to obtain information that could be used to help increase sales of laptops to college students. Would you use the same questions on a mail questionnaire as in a personal interview? If not, what questions would you use if you were going to mail the questionnaires?
Research saves the day at case
In today's combative marketplace, making any significant progress against skillful and large rivals is nothing short of a colossal achievement. Case Corporation, a manufacturer of construction and farm equipment, can make such a claim, but only after spending two years digging itself out of decline—operating losses for 1991 and 1992 reached USD 900,000—and are finally showing growth. Case's net income increased more than 300 per cent in 1994 to USD 165 million, with a 14 per cent sales increase, and 1995 revenues reached USD 4.2 billion.
Significant headway toward recovery began in 1994 when new CEO, Jean-Pierre Rosso, launched a new era at Case. His matter-of-fact pronouncement: "We need to be asking what the farmer and contractor need", triggered the company's turnaround and kindled a new respect from its customers.
Basic as it may seem, for most of the 1980s, “asking" was not a part of Case's product-driven orientation. Result: under performing products such a low-horsepower tractors entered the marketplace, fueled by low prices and sales incentives.
Worse yet, when market demand eventually plummeted, dealers found themselves stuck with a glut of unsold Case equipment. To further aggravate the situation, relationships with dealers were increasingly greeted with suspicion.
In the face of those dire conditions, Rosso issued his market-driven directive that pressed Case managers to determine the wants and needs of its customers. One incident showcases the process they used to obtain reliable customer feedback: A contractor was flown in to Case's Burlington, Iowa test site and put to work for three days testing a piece of Case equipment and comparing its performance with that of comparable Caterpillar and Deere machines. Each day managers grilled the customer about features, benefits, and problems.
In another approach, Case sent teams of engineers and marketing personnel to talk to key customers and users of competitors' equipment. Applying what they learned from the feedback, engineers developed prototype machines and shipped them to hundreds of participating users for evaluation. The engineers then incorporated actual field data into final prototypes.
The bottom line: all this market-driven "asking” is a far cry from the Case's reputation during the 1980s of being one of the most mismanaged companies in the field.
➢ Although things seem to be going well for Case, can you identify any potential mistakes they made in doing their research?
➢ How could they gather secondary data on this product category?
1 Ralph H. Sprague, Jr. and Hugh J. Watson, Decision Support Systems:Putting Theory Into Practice, Englewood Cliffs, N.J.: Prentice-Hall,1986, p. 1
2 Claire Selitz, Lawrence S. Wrightsman, and Stuart W. Cook, Research Methods in Social Relations, New York: Holt, Reinhart and Winston, 1976, pp. 11 4-115.
3 Ian P. Murphy, "Research with Bottom Line in Mind Only," Marketing News, March 3, 1997, p. 10.
4 Pamela L. Alreck and Robert D. Settle, The Survey Research Hand book, Richard D. Irwin, Inc., 1995.
5 Seymour Sudman, Applied Sampling, New York: Academic Press, 1976