Marketing Research:

A Global Outlook
Instructors:

J. Andrew Petersen, Ph.D. Pranav Jindal, Ph.D.

Smeal College of Business Kenan-Flagler Business School
Pennsylvania State University University of North Carolina – Chapel Hill
jap57@psu.edu Pranav_Jindal@Kenan-flagler.unc.edu

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What is Marketing Research?

Marketing Environment

Marketing
Research Data Data collection

Information
Decision models

Insights Optimal combination of

experience and Statistics

Decisions

Implementation

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Why Take this Course?

• “The big problem is going to be the ability of humans to use, analyze and make
sense of the data.” – Erik Brynjolfsson, MIT

• 1.5 million managers and analysts with the skills to understand and make decisions
based on the analysis of big data (data-literate managers)

• By 2018 US will face 50-60% gap between demand and supply of deep analytical
talent
McKinsey Global Institute, The New York Times

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Where is the World Moving?

Five Key Trends

– Making information transparent and usable at much higher frequency

– Collect more accurate and detailed performance information

– Ever-narrower segmentation of customers

– Sophisticated analytics can substantially improve decision-making

– Development of the next generation of products and services

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Measuring and Analyzing Consumer Preferences

Revealed Preferences - Observed Stated Preferences - Survey

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Course Philosophy

Analysis Data Information Business

Decisions Tools Collection Need Problem

Type I: Little Value

Type II: Some Value

Type III: Tremendous Value

• Walk you through the process of understanding and measuring consumer

preferences
– Learning by doing - Getting your hands dirty with data
– Understanding linkages between problems, data, tools, and decisions

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What to Expect?

• A fast paced analytical course

– Prepare for class and review after class

• Synergistic topics with increasing degree of complexity as Term progresses

– Strong path dependence in learning
– Very easy to lose track by middle of the Term

• Complicated but thought provoking assignments

– Assign enough time

• Remarkably small grey area

– The purpose of Marketing Research is to reduce subjectivity and increase objectivity

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My Part of the Deal

• Do not hesitate to ask questions and seek help. I will never say no to meeting
requests when I have time available.
– Anytime I am not teaching
– Email is the best way to contact me

• Feedback on submissions
– Specific comments on write ups
– Detailed solution in class
– Transparency in grading

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Required Course Material

• Reference Book:
– Marketing Research: A Global Outlook by V. Kumar (2016)
Sage Publications, New Delhi (ISBN: 978-93-515-0248-7)

• Course Pack (Group Cases)

• Excel 2007 or later

• Software MEXL for data modeling

– Windows XP / Vista / 7 (sorry Mac users)
– Installation instructions and tutorials on LMS

• Course Slides
– Available on LMS (posted before class begins)

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Course Overview and Outline

• 3 Sections

– M/W: 0800 – 1000

– M/W: 1015 – 1215
– T/Th: 1230 – 1430

• Course Objectives

– Learn how to generate, manage, and use information for Marketing Research
– Learn how to use advanced Marketing Research tools for data analysis
– Learn how to apply Marketing Research tools in a global context

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Course Syllabus

• Your grade in this course will be made up from 3 different components

– Attendance and Participation 20%

– Group Assignments 50%

• Case 1: ABB Electrical (Due: Oct. 16th)
• Case 2: Infiniti G20 (Due: Oct. 23rd)
• Case 3: Forte Hotel (Due: Oct. 30th)
• Case 4: Zach‟s Garage (Due: Nov. 6th)

– Final Exam 30%

• Take Home Case (Due: Nov. 13th)

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Group Assignments

• Rules

– You will join a group of no more than 5 students (Please sign up in a group ASAP)
– The students can be enrolled in any of the 3 sections
– All assignments will be due by midnight Oct. 16th, Oct. 23rd, Oct. 30th, Nov. 6th
– These assignments can be submitted through the LMS
– Late submissions will not be accepted
– If you have any questions, please ask one of the TAs or the professors
– Communications with other groups with regard to the case assignments is not allowed

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Schedule at a Glance
# Topic Readings/Description
Session 1 The Nature and Scope of Marketing Research
Data Collection and Measurement Scales MEXL: Software Tutorial
Session 2
Introduction to Choice Models Tool: Logit/Multinomial Logit Analysis
Group Case Assignment: ABB Electrical
Session 3 Customer Segmentation and Targeting Tool: Cluster Analysis

Session 4 Competitive Positioning and Consumer Preferences Tool: Perceptual and Preference Maps

Group Case Assignment: Infiniti G20

Introduction to “Constructs” in Marketing, Questionnaire Design,
Session 5 Tool: Factor Analysis
Data Dimension Reduction
Tool: Conjoint Analysis
Session 6 Understanding Consumer Preferences
Readings: Conjoint Analysis - Technical Note & Which Conjoint Method Should I Use
Group Case Assignment: Forte Hotel
Tool: Bass Model
Session 7 Market Size Estimation, Forecasting Diffusion of New Products
Readings: Bass Model - Technical Note & Ford Hybrid Car Case

Session 8 Measuring Price Sensitivity and Customer Satisfaction Tool: Pricing

Group Case Assignment: Zach‟s Garage

Session 9 Experiments Tool: Experimental Methods
Session 10 Global Marketing Research and Wrap-up
Final Exam Case: TBA

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The Nature and Scope of Marketing Research

The value and

Marketing and The role of costs of
Marketing Marketing Marketing
Research Research Research

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Marketing Concept as a Business Philosophy

Consumer know your customers so well

orientation that your product sells itself

departments may have different The

goals but need to function or
operate in unison marketing accomplishes corporate goals,
Cross-
functional concept e.g., Long-term profitability

Goal orientation
orientation

-- Satisfy the consumer and earn a long-term relationship --

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Why Marketing Research?

Enables firms to implement the philosophical idea of marketing concept

• Links consumer to the marketer through information used to identify and define
marketing opportunities and problems

• Generates, refines, and evaluates marketing actions

e.g., Cinema advertising connects with the youth market

• Monitors marketing performance

e.g., Is the TV ad effective?

• Improves the understanding of marketing as a process

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Marketing Research Defined…

Planning, collection, and analysis of data relevant to marketing decision making and
the communication of the results to management

• Planning - specifying what information is required and designing the method for
collecting such information

• Collection - managing and implementing the collection of data

• Analysis - analyzing the results

• Communication - communicating the findings and their implications to

management

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The Nature and Scope of Marketing Research

The value and

Marketing and The role of costs of
Marketing Marketing Marketing
Research Research Research

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Marketing Mix

Over time, the marketing mix

Product Pricing Promotion Distribution/Place

must be altered because of changes in the

environment in which consumers and businesses
exist, work, compete and make purchasing
decisions

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The Oreo Story*

Oreos were first introduced in 1912 in the U.S., but it wasn't

until 1996 that Kraft introduced Oreos to Chinese consumers.
Nine years later, a makeover began.
Shawn Warren, a 37-year-old Kraft veteran who had spent
many years marketing the company's cookies and crackers
around the world, arrived in Asia in 2005 and noticed that
Oreo's China sales had been flat for the previous five years.

Question: Is there a symptom? What caused this?

*Source: http://online.wsj.com/article/SB120958152962857053.html

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The Oreo Story

…(traditional Oreos were too sweet for Chinese tastes)

So in 2006 Kraft remade the Oreo itself, introducing for the first
time an Oreo that looked almost nothing like the original. The new
Chinese Oreo consisted of four layers of crispy wafer filled with
vanilla and chocolate cream, coated in chocolate. Kraft developed
a proprietary handling process to ensure that the chocolate
product could be shipped across the country, withstanding the
cold climate in the north and the hot, humid weather in the south,
yet still be ready to melt in the mouth.

Question: What about the introduction of Oreos in India?

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Importance of Marketing Research to Management

The emphasis of marketing research is to shift decision makers from risky intuitive
decisions to decisions based on information derived from systematic and objective
investigations because information reduces uncertainty

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Marketing Strategy

… is a plan to guide the long-term use of a firm‟s resources based on its existing and
projected internal capabilities and on projected changes in the external environment.

A good strategic plan is usually based on good marketing research

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Four Stages in Developing and Implementing a Marketing Strategy

• Identifying and evaluating opportunities

• Analyzing market segments and selecting target markets

• Planning and implementing a marketing mix

• Analyzing market performance

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Marketing Strategy Stage Examples of Market Research

1. Estimates of market potential or

• Mattel Toys investigates desires for play experiences
predictions about future environmental
conditions help evaluating • MTV, monitoring demographic trends, learns the
opportunities Hispanic market is growing rapidly

• Cadillac investigates buyers‟ demographic

2. Marketing research is a major source characteristics
of information for determining market • Price: Proctor and Gamble determines price
segments sensitivity for their new Crisco, savory seasons
product line.

3. Marketing research needed to support • Distribution: Selection of retail sites or warehouse

specific decisions about any aspect of locations.
the marketing mix • Product: Oreo conducts taste test.

4. Marketing research conducted to • Promotion: How may consumers recall “Just One
obtain feedback for evaluation and Calorie, Diet Coke”
control of marketing programs • This year‟s market share as compared to last year‟s.

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Role of Marketing Research

• Descriptive - gathering statements / facts

– Determine demographics of Jeep owners ... learn about consumers‟ satisfaction
towards Jeep

• Diagnostic/explanatory - explaining marketing mix actions or data

– Decide whether a specific demographic segment is targeted with the right
marketing mix ... explain a found trend in satisfaction towards Jeep

• Predictive - predicting the results of a planned marketing decision

– Predict demand for a new diesel engine ... find out whether more fuel efficient
cars improves satisfaction

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The Nature and Scope of Marketing Research

The value and

Marketing and The role of costs of
Marketing Marketing Marketing
Research Research Research

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Value and Costs of Marketing Research

Costs
Value
• Research expenditures
• Decreased uncertainty • Delay of marketing
• Increased likelihood decision
• Possible erroneous
of a correct decision
research results
• Improved marketing • Possible disclosure of
performance resulting information to rivals
in higher profits

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When should we do Market Research?

Yes Yes Yes Yes

Availability Nature of Conduct
Time of Data – the Benefits
Marketing
Constraint – Is data at Decision – vs. Costs
Is time Research
hand Is it
available? inadequate? important?
No No No No

Do Not Conduct Marketing Research

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Marketing Research Process

Step 2:
Marketing Step 1: Choosing a
Research Problem Research
Process Definition Design

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Marketing Research Process

Problem Does it involve hypothesis

or just a statement? Problem definition and statement of objectives
definition
Exploratory, descriptive, causal,
planning, implementing, controlling Creation of the research design
Selection of
basic research Primary/secondary - survey,

design
focus groups, experiments, etc.
Choice of research method

Probability vs. non-

probability, sample size Sampling selection / plan
Collecting the
data Telephone, mail, mall
intercept, Internet, etc. Data collection
Preparing and
Level & scope must
analyzing the be determined early Data analysis
data
Determine format,
Preparing and font, layout, PPTs, etc. Write and present the research report
presenting Were recommendations followed? Is
results more research needed ?
Follow-up

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Marketing Research Process

Step 2:
Marketing Step 1: Choosing a
Research Problem Research
Process Definition Design

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Problem Definition Process
Can the problem
become opportunity? Recognize the problem or opportunity

The Problem Definition Process Steps

Real need understood? Find out why the information is being sought

Examine cultural &

bureaucracy issues Understand the decision making environment

Use the symptoms to help clarify the problem

Translate mgt. problem to marketing research problem

Determine whether the information already exists

Determine whether the question can be answered

State the research objectives

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Understand the Decision Making Environment

Often, additional information is required to fully comprehend

the problem

• Discussions with Decision Makers

• Experience surveys (interview experts)
• Case Analysis
• Focus Groups
• Secondary Data Analysis
• Exploratory Research

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Understand the Decision Making Environment
Experience Surveys (Expert Interviews)

 Ask knowledgeable individuals, both inside and outside the company, about a
particular research problem

 Informal survey – most are willing to provide information

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Understand the Decision Making Environment
Case Analysis

• Intensely investigates one or a few situations similar to the researcher‟s situation

• Investigate in depth

• May require cooperation of the party whose history is being studied

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Understand the Decision Making Environment
Secondary Data Analysis

• Secondary data are data previously collected and assembled for some project other
than the one at hand
– In contrast, primary data are gathered specifically for the project at hand

• Secondary data can often be found

– Inside the company
– At public libraries and universities
– Purchased from a firm specializing in providing information

They can be outdated or may not exactly fit the researcher’s needs.

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Symptoms are not always the same as the Problem

Organization Symptoms Problem Real Problem

Definition
Soft drink Consumers say the Determine consumer Color. The color of
manufacturer drink is too sweet preferences for the drink is a dark
alternative levels of shade of orange,
sugar content giving the consumer
the perception that
the product is too
‘sugary’
Twenty-year-old Membership has been Determine resident’s Demographic
neighborhood declining for years. perception of the changes: Children in
swimming association New water park with swimming pool and this 20-year-old
wave pool and water benefits offered by neighborhood have
slides moved into the new water park. grown up. Older
town a few years ago residents no longer
swim anywhere

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The Iceberg Principle

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From a Management Problem to a Marketing Research Problem

• A statement specifying the

type of managerial action
required to solve the problem.
Management
Decision •A goal statement
Problem defining the specific
information needed to
solve the marketing
Marketing research problem.
Marketing
Research
Research
Problem
Problem
Marketing
Research
Objective
• A statement specifying the type of information needed
by the decision maker to help solve the management
decision problem and how that information can be
obtained efficiently and effectively.

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From a Management Problem to a Marketing Research Problem
Restatement

Management Decision Problem (MDP) Marketing Research Problem (MRP)

• Asks what the decision maker • Asks what information is needed

needs to do
• Information oriented
• Action oriented
• Focuses on the underlying causes
• Focuses on symptoms

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How do you get a good marketing research problem?

• Recognize the symptom

• Analyze the situation once symptom is recognized
• Conduct preliminary research to
– Increase understanding of a concept
– Clarify exact nature of problem to be solved
– Identify important variables to be studied
• What information is being sought and why
• How will the information be used; the research constraints, e.g., time, costs,
etc.

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MDP and related MRP examples
Management Decision Problem (MDP) Marketing Research Problem (MRP)

• Should advertising campaign X be • To determine the effectiveness of

introduced to turn around slow advertising campaign X
sales?

• Should we export the Jeep • To assess market potential for the

Cherokee to the Netherlands? Jeep Cherokee in the Netherlands

• To determine the price elasticity of

• Should the price of the brand be demand and the impact on sales and
increased? profits of various levels of price
changes

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Marketing Research Process

Step 2:
Marketing Step 1: Choosing a
Research Problem Research
Process Definition Design

44
Marketing Research Process

Problem Does it involve hypothesis

or just a statement? Problem definition and statement of objectives
definition
Exploratory, descriptive, causal,
planning, implementing, controlling Creation of the research design
Selection of
basic research Primary/secondary - survey,

design
focus groups, experiments, etc.
Choice of research method

Probability vs. non-

probability, sample size Sampling selection / plan
Collecting the
data Telephone, mail, mall
intercept, Internet, etc. Data collection
Preparing and
Level & scope must
analyzing the be determined early Data analysis
data
Determine format,
Preparing and font, layout, PPTs, etc. Write and present the research report
presenting Were recommendations followed? Is
results more research needed ?
Follow-up

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Selection of Basic Research Design

Research design - master plan that specifies methods and procedures for collecting data

Three major research designs:

• Exploratory research - If little is known about the problem

• Descriptive research - If the problem is „somewhat‟ clear

• Causal research - If the problem is very clear

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Study Guide – Basic Research Designs
Exploratory
Discovery of ideas and insights
Objective
Unaware of the problem
Information needed defined loosely
Research process flexible and
unstructured
Sample is small and non-
Characteristics representative
Does not provide conclusive evidence questions are typically answered
Subsequent research expected
Why do sales decline?
Question
Descriptive Causal
Describe market characteristics or Determine cause and effect
functions relationships
Some understanding of the nature of Problem clearly defined
the problem
Information needed is clearly defined
Information needed is well defined
Manipulation of one or more
Research process formal and structured independent variables
Sample is large and representative Controlled environment
Who, what, why, when, where, how Sample is large and representative
Conclusive nature
Conclusive nature (assists in decision
making)
How do consumers perceive our ads? How does advertisement relate to
sales?
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Descriptive & Causal Research Methods

Observation Research:
Typically descriptive research that monitors
respondents’ actions without direct
interaction; e.g., scanner data

Survey Research: Experiments:

Used in descriptive or causal
research in which interviewer
interacts with respondents to
obtain facts, opinions, etc.
Cross sectional vs. Longitudinal
Research to measure causality, in
which the researcher changes one
or more independent variables and
observes the effect of the changes
on the dependent variable.

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Two Key Approaches to Data Collection

Probability Sampling
A subset of the population that can be assumed to be a representative cross section of
the population because every element in the population has a known non-zero chance
of being selected

Non-probability Sampling
A subset of the population in which the chances of selection for the various elements
in the population are not precisely known

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Data versus Information

Data - The raw facts - recorded measures of certain phenomena

Information - Facts in a form suitable for managers to base decisions on

Example - A large discount store with national and international

distribution regularly collects and saves purchase data from customers

For each and every purchase you know what the consumers purchased,
how they paid for their purchase (i.e. cash, credit, check, …) and in some
cases you can identify the individual/household consumer (e.g. unique
credit card number).
Information or Data?

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Getting Ready for the Next Session

• Topics:

– Data Collection and Measurement Scales

– Introduction to Choice Models

• Assignments:

– Install MEXL on your computer (Instructions available on LMS)

– Read the tutorial on Logit/Multinomial Logit Analysis (Available in MEXL)

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