Cha pter 1

Introduction and Early Phases

of Market Research

© 2007 Prentice Hall 1-1

 Ch apter O utl ine
1) Overview

2) Definition of Marketing Research

3) A Classification of Marketing Research

4) Marketing Research Process

5) The Role of Marketing Research in Marketing

Decision Making

6) Marketing Research and Competitive Intelligence

7) The Decision to Conduct Research

© 2007 Prentice Hall 1-2

 Cha pter Ou tl ine
8) Marketing Research Suppliers and Services
9) Selecting a Research Supplier
10) Careers in Marketing Research
11) The Role of Marketing Research in MIS and DSS
12) The Department Store Project
13) International Marketing Research
14) Ethics in Marketing Research
15) Summary

© 2007 Prentice Hall 1-3

 Rede fini ng Mar keti ng Rese arch

The American Marketing Association (AMA)

redefined Marketing Research as:

The function that links the consumer, the

customer, and public to the marketer
through INFORMATION

© 2007 Prentice Hall 1-4

 Redefi ning M arketi ng Rese ar ch
Used to identify and
define market
opportunities and
problems
Generate, refine, and
evaluate marketing
performance
Monitor marketing
performance

Improve understanding
of marketing as a
process
© 2007 Prentice Hall 1-5
 De fi niti on o f Ma rke ti ng
Rese ar ch
Marketing research is the systematic and objective
 identification

collection

analysis

dissemination
 and use of information
For the purpose of improving decision making related to the
 identification and
 solution of problems and opportunities in marketing.

© 2007 Prentice Hall 1-6

 Ma rket Rese arc h
 Specifies the information necessary to address
these issues
 Manages and implements the data collection
process
 Analyzes the results
 Communicates the findings and their implications
 Helps managers use this information to make
decisions

© 2007 Prentice Hall 1-7

 Cl assi fi catio n of Mar ket ing
Rese ar ch
Problem-Identification Research
 Research undertaken to help identify problems which are

not necessarily apparent on the surface and yet exist or

are likely to arise in the future. Examples: market
potential, market share, image, market characteristics,
sales analysis, forecasting, and trends research.

Problem-Solving Research
 Research undertaken to help solve specific marketing

problems. Examples: segmentation, product, pricing,

promotion, and distribution research.

© 2007 Prentice Hall 1-8

 Resea rc h
Fig. 1.1
Marketing Research

Problem Problem-Solving
Identification Research Research

Market Potential Research Segmentation Research

Market Share Research
Market Characteristics Research Product Research
Sales Analysis Research Pricing Research
Forecasting Research Promotion Research
Business Trends Research
Distribution Research
© 2007 Prentice Hall 1-9
 Pr obl em-S olving Res ea rch
Table 1.1

SEG MENTATI ON RES EARCH

 Determine the basis of segmentation
 Establish market potential and
PROD UCT RES EAR CH
responsiveness for various
segments  Test concept

 Select target markets  Determine optimal product design

 Create lifestyle profiles:  Package tests

demography, media, and
product image characteristics
© 2007 Prentice Hall
 Product modification
 Brand positioning and repositioning
 Test marketing
 Control score tests
1-10
 Pr obl em-S olving Res ea rch
Table 1.1 cont. PR OMOTIO NAL RE SE ARCH
 Optimal promotional budget
0.00% APR
 Sales promotion relationship
 Optimal promotional mix
 Copy decisions
 Media decisions
 Creative advertising testing

PR ICI NG RES EAR CH  Evaluation of advertising effectiveness

 Pricing policies  Claim substantiation

 Importance of price in brand selection

 Product line pricing
 Price elasticity of demand $ALE
 Initiating and responding to price changes
© 2007 Prentice Hall 1-11
 Pr obl em-S olving Res ea rch
Table 1.1 cont.
DISTR IBUT ION RESE ARCH

Determine…
 Types of distribution
 Attitudes of channel members
 Intensity of wholesale & resale coverage
 Channel margins
 Location of retail and wholesale outlets

© 2007 Prentice Hall 1-12

 Ma rketing Res ea rc h Pr oce ss

Step 1 : Problem Definition

Step 2 : Development of an Approach to the Problem

Step 3 : Research Design Formulation

Step 4 : Fieldwork or Data Collection

Step 5 : Data Preparation and Analysis

Step 6 : Report Preparation and Presentation

© 2007 Prentice Hall 1-13

 Ma rketing Res ea rc h Pr ocess
Step 1: Defining the Problem

Step 2: Developing an Approach to the Problem

Step 3: Formulating a Research Design

Step 4: Doing Field Work or Collecting Data

Step 5: Preparing and Analyzing Data

Step 6: Preparing and Presenting the Report

© 2007 Prentice Hall 1-14

 Th e Rol e of Mark eti ng Rese ar ch
Fig. 1.2 Cus tomer Gro up s
• Co nsumer s
• Emp lo yee s
• Shar eho ld ers
• Sup plier s
Un contro llab le
Co ntro ll ab le Envir on mental
Mar keting Facto rs
Var iab les
Marke ti ng • Economy
• Product
Re sea rch • Technology
• Pricing
• Laws &
• Promotion Regulations
• Distribution • Social & Cultural
As ses si ng Marketing Factors
Pr ovi ding
Inf or mat ion Inf ormatio n Decisi on • Political Factors
Nee ds Making

Mar keting Ma nagers

• Market Seg mentatio n
•Targ et Mar ket Sel ectio n
• Marketi ng P ro gra ms
• Perfo rmance & Contr ol

© 2007 Prentice Hall 1-15

 Po wer De ci sio ns’ Me tho dol ogy
Fig. 1.3

Opportunity scan
Option g ene ratio n
Solv e Problem
Ref ine op tion s
Decis io n
Cl ie nt
Need s Fi nd Seek Pla n Act

Ach iev e Goa l

Research Eval uat e Mark et Ad vi se

Ho w We Cl arif y
Int erpret Re commend Pl an Assi st
Deci si ons Analy si s
He lp Faci litate Research Ex ec ut ion

© 2007 Prentice Hall 1-16

 Orga nizat iona l Chart for VNU
Fig. 1.4
Exe cutive Boar d
Corporate Staff

Marketing Media Measurement Business

Directories
Information & Information Information
ACNielsen Nielsen Media Research VNU Business Golden Pages
VNU Advisory Nielsen/Net Ratings Publications Gouden Gids
Services Nielsen Film VNU emedia & Paginas Amarelas
BASES Entertainment Information Marketing Paglni Auril
Claritas Nielsen Home VNU Expositions Promedia
Spectra Entertainment VNU Exhibitions Europe Telkom Directory
Market Decisions Nielsen Music Verizon Puerto Rico
Nielsen Book
Nielsen Entertainment Intel
IMS
PERO/HIC
Scarborough
SRDS
© 2007 Prentice Hall 1-17
 Ma rketi ng Resear ch Su ppl iers &
Se rvices
Fig. 1.5

RESEAR CH
IN TERNAL SUPP LIERS EXT ERN AL

FU LL SERV ICE LIMIT ED SERVI CE

Field Branded
Syndicate Internet Products
Services
Services Services and Services

Standardized Customized Coding and

Data Entry Data
Services Services
Services Analytical Analysis
Services Services

© 2007 Prentice Hall 1-18

 Top 50 U .S. M ar ke ting Resear ch
Fir ms
Table 1.2
U.S. Rank Organization Headquarters Website ($, in millions) ($, in millions)
revenue
2004 2003
1 1 VNU Inc. New York www.vnu.com $1,794.4 $3,429.2 47.7%

2 2 IMS Health Inc. Fairfield, Conn. www.imshealth.com 571.0 $1,569.0 63.6

3 4 Westat Inc. Rockville, Md. www.westat.com 397.8 397.8 —

4 5 TNS U.S. New York www.tns-global.com 396.0 1,732.7 77.2

5 3 Information Resources Inc. Chicago www.infores.com 379.6 572.8 33.6

6 6 The Kantar Group Fairfield, Conn. www.kantargroup.com 365.7* 1,136.3* 67.8*

7 7 Arbitron Inc. New York www.arbitron.com 284.7 296.6 4.0

8 8 NOP World US New York www.nopworld.com 213 408.5 47.9

9 9 Ipsos New York www.Ipsos-na.com 193.9 752.8 74.2

10 10 Synovate Chicago www.synovate.com 193.5 499.3 61.3

11 — Harris Interactive Inc. Rochester, N.Y. www.harrisinteractive.com 154.8 208.9 25.9

— 13 Harris Interactive Inc. Rochester, N.Y. www.harrisinteractive.com 116.7 155.4 24.9

— 20 Wirthin Worldwide McLean, Va. www.harrisinteractive.com 38.1 53.5 28.8

12 11 Maritz Research Fenton, Mo. www.maritzresearch.com 136.6 185.8 26.2

13 12 J.D. Power and Associates Westlake Village, Calif. www.jdpower.com 133.5 167.6 20.4

14 14 The NPD Group Inc. Port Washington, N.Y. www.npd.com 110.5 139.2 20.6

15 16 GfK Group USA Nuremberg, Germany www.gfk.com 93.0 834.6 88.9

16 15 Opinion Research Corp. Princeton, N.J. www.opinionresearch.com 91.5 147.5 38.3

© 2007 Prentice Hall 1-19

 Top 50 U .S. M ar ke ting Resear ch Fi rms
(Co nt… )
Table 1.2
U.S. Rank Organization Headquarters Website ($, in millions) $, in
millions)
2004 2003 revenue
17 17 Lieberman Research Worldwide Los Angeles www.lrwonline.com 67.2 77.7 13.5

18 18 Abt Associates Inc. Cambridge, Mass. www.abtassociates.com 41.5 41.5 —

19 21 Market Strategies Inc. Livonia, Mich. www.marketstrategies.com 37.9 39.5 4.1

20 22 Burke Inc. Cincinnati www.burke.com 37.1 43.4 14.5

21 30 comScore Networks Inc. Reston, Va. www.comscore.com 34.9 34.9 —

22 24 MORPACE International Inc. Farmington Hills, Mich. www.morpace.com 31.1 34.5 9.9

23 25 Knowledge Networks Inc. Menlo Park, Calif. www.knowledgenetworks.com 29.8 29.8 —

23 34 OTX Research Los Angeles www.otxresearch.com 29.8 29.8 —

25 23 ICR/Int'l Communications Research Media, Pa. www.icrsurvey.com 29.0 29.4 1.4

26 36 Directions Research Inc. Cincinnati www.directionsrsch.com 27.3 27.3 —

27 28 National Research Corp. Lincoln, Neb. www.nationalresearch.com 26.7 29.7 10.1

28 32 Marketing Research Services Inc. Cincinnati www.mrsi.com 25.4 25.4 —

29 29 Lieberman Research Group Great Neck, N.Y. www.liebermanresearch.com 25.1 25.5 1.6

30 33 Peryam & Knoll Research Corp. Chicago www.pk-research.com 22.5 22.7 0.1

31 — National Analysts Inc. Philadelphia www.nationalanalysts.com 22.3 22.3 —

32 — Public Opinion Strategies LLC Alexandria, VA www.pos.org 21.2 21.2 —

© 2007 Prentice Hall 1-20

 Top 50 U.S . Ma rke tin g Re search Fi rms
(Co nt… )
Table 1.2
U.S. Rank Organization Headquarters Website ($, in millions) $, in
2004 2003 revenue
millions)
33 27 Walker Information Inc. Indianapolis www.walkerinfo.com 20.4 23.8 14.3

34 39 The PreTesting Co. Inc. Tenafly, N.J. www.pretesting.com 19.8 20.4 2.9

35 19 C&R Research Services Inc. Chicago www.crresearch.com 19.7 19.7 —

36 35 Flake-Wilkerson Market Insights Little Rock, Ark. www.mktinsights.com 18.8 18.8 —

37 37 Data Development Worldwide New York www.datadw.com 18.3 20.7 11.6

38 41 Schulman, Ronca & Bucuvalas Inc. New York www.srbi.com 17.2 17.2 —

39 45 Cheskin Redwood Shores, Calif. www.cheskin.com 16.5 19.0 13.2

40 38 RDA Group Inc. Bloomfield Hills, Mich. www.rdagroup.com 15.4 17.0 9.4

41 47 Marketing Analysts Inc. Charleston, S.C. www.marketinganalysts.com 15.2 15.6 2.6

42 46 Market Probe Inc. Milwaukee www.marketprobe.com 14.1 24.6 42.7

43 44 Savitz Research Cos. Dallas www.savitzresearch.com 14.0 14.0 —

44 42 The Marketing Workshop Inc. Norcross, Ga. www.mwshop.com 13.9 13.9 —

45 48 Ronin Corp. Princeton, N.J. www.ronin.com 13.5 13.9 2.9

46 49 MarketVision Research Inc. Cincinnati www.marketvisionresearch.com 11.8 11.8 —

47 — RTI-DFD Inc. Stanfordd, Conn. www.rti-dfd.com 11.5 11.5 —

48 — Q Research Solutions Inc. Old Bridge, N.J. www.qresearchsolutions.com 11.2 11.2 —

49 50 Data Recognition Corp. Maple Grove, Minn. www.datarecognitioncorp.com 10.8 10.8 —

50 — Phoenix Marketing International Rhinebeck, N.Y. www.phoenixmi.com 10.6 10.6 —

Total $6,291.0 $13,307.7 52.7%

All other (138 CASRO companies not included in the Top 50)3 656.6 $737.7 11.0%

Total (188 companies) $6,947.6 $14,045.4 50.5%

*Estimated by Top 50 1U.S. and worldwide revenue may include nonresearch activities for some companies that are significantly higher.
See individual company profiles for details. 2Rate of growth from year to year has been adjusted so as not to includer

© 2007 Prentice Hall 1-21

 Se lected Mar ke ting Res earc h
Car eer Desc ript io ns
Fig. 1.6
Vice Pres id en t of Marketi ng Res ea rch : The senior position in
marketing research. The vice president (VP) is responsible for the
entire marketing research operation of the company and serves on
the top management team. This person sets the objectives and goals
of the marketing research department.
Res ea rch Di rector: Also a senior position. The research director has
the general responsibility for the development and execution of all
the marketing research projects.
Ass is tant D ire ctor of Res earch : Serves as an administrative
assistant to the director and supervises some of the other marketing
research staff members.
(Seni or) Projec t Ma nager: Has overall responsibility for design,
implementation, and management of research projects.
Sta ti sti cian/Data Proces sing Speciali st: Serves as an expert on
theory and application of statistical techniques. Responsibilities
include experimental design, data processing, and analysis.
© 2007 Prentice Hall 1-22
 Se lect ed M ar ket ing Res earch Ca re er
Desc ri pt ions
Fig. 1.6 cont.
Vice President of Mark eti ng Res ea rch Di rec to r
Res earch
• Al so pa rt of sen ior
• Part of compa ny’s top ma nagem ent
managem en t tea m
• Hea ds th e
• Dire ct s com pa ny’ s entir e marke t dev el opm en t and
ex ecu ti on of all
res earc h ope ra tion
res ea rch projec ts
• Set s th e goals & objec ti ve s of
As sis tan t D ir ector of Res earch
the mark et in g res ea rc h
• Adm in is tra ti ve assis tant to
depa rt men t
dire ct or
• Superv is es res earch staff
memb ers
Se nio r Project Ma nager
• Res pon sibl e for des ign , imple men tation , &
res earc h projec ts
© 2007 Prentice Hall 1-23
 Se lected Ma rke ti ng Resea rc h
Ca ree r
Fig. 1.6 cont.
D esc ri pti ons
Se nio r A naly st
• Participates in the development of projects
• Carries out execution of assigned projects
• Coordinates the efforts of analyst, junior analyst, & other personnel in the
development of research design and data collection
• Prepares final report

An aly st Sta ti sti cian/Data Proces sing

• Handles details in execution of • Serves as expert on theory and
project application on statistical techniques
• Designs & pretests questionnaires • Oversees experimental design, data
• Conducts preliminary analysis of data processing, and analysis

Juni or An aly st Fiel dwork Di rec tor

• Secondary data analysis •Handles selection, training,
• Edits and codes questionnaires supervision, and evaluation of
• Conducts preliminary analysis of data interviewers and field workers

© 2007 Prentice Hall 1-24

 Ma rket ing Resear ch Su ppl iers &
Se rvic es
 Internal suppliers
 External suppliers
 Full-service suppliers
 Syndicated services

 Standardized services

 Customized services

 Internet services

 Limited-service suppliers
 Field services


Coding and data entry services

Analytical services

Data analysis services
 Branded marketing research products

© 2007 Prentice Hall 1-25

 Crite ria for S electin g a Re sear ch
Suppl ie r
 What is the reputation of the supplier?
 Do they complete projects on schedule?
 Are they known for maintaining ethical standards?
 Are they flexible?
 Are their research projects of high quality?
 What kind and how much experience does the
supplier have? Has the firm had experience with
projects similar to this one?
 Do the supplier's personnel have both technical and
non-technical expertise?
 Can they communicate well with the client?

Competitive bids should be compared on the basis of

quality as well as price.
© 2007 Prentice Hall 1-26
 Ca ree rs in Marke ti ng Resea rch
 Career opportunities are available with marketing
research firms (e.g., AC Nielsen, Burke)
 Careers in business and non-business firms and
agencies with in-house marketing research
departments (e.g., Procter & Gamble, Coca-Cola, the
Federal Trade Commission, United States Census
Bureau)
 Advertising agencies (e.g., BBDO International,
Ogilvy & Mather, J. Walter Thompson)
 Positions: VP of marketing research, research
director/assistant director, project manager, field
work director, statistician/data processing specialist,
senior/junior analyst, and supervisor.
© 2007 Prentice Hall 1-27
 A Sa mple o f Ma rket ing Re search
Jo bs

© 2007 Prentice Hall 1-28

 Prepa ra tion for a C ar eer in M ar ke ting Re sear ch

 Take all the marketing courses you can.

 Take courses in statistics and quantitative methods.

 Acquire Internet and computer skills. Knowledge of

programming languages is an added asset.

 Take courses in psychology and consumer behavior.

 Acquire effective written and verbal communication skills.

 Think creatively. Creativity and common sense

command a premium in marketing research.

© 2007 Prentice Hall 1-29

 Ma nage ment I nfo rm atio n S ys tems
Vs . De cisio n Sup port S ys tems
Fig. 1.7

MIS DSS

 Structured Problems
 Unstructured Problems
 Use of Reports
 Use of Models
 Rigid Structure
 User Friendly Interaction
 Information Displaying
 Adaptability
Restricted
 Can Improve Decision
 Can Improve Decision Making
Making by Using “What if”
by Clarifying Data
Analysis

© 2007 Prentice Hall 1-30

 Th e D epar tm ent Store
Pr ojec t
The f oll owi ng informa tion w as soli cit ed:
1. Familiarity with the ten department stores.
2. Frequency with which household members shopped at
each of the ten stores.
3. Relative importance attached to each of the eight factors of
the choice criteria.
4. Evaluation of the ten stores on each of the eight factors of
the choice criteria.
5. Preference ratings for each store.
6. Rankings of the ten stores (from most preferred to least
preferred).
7. Degree of agreement with 21 lifestyle statements.
8. Standard demographic characteristics (age, education, etc.)
9. Name, address, and telephone number.
© 2007 Prentice Hall 1-31
 Ma rk eting R ese arc h A sso ci ation s
Onl ine
Dom es ti c
AAPOR : American Association for Public Opinion Research
(www.aapor.org)
AMA : American Marketing Association (www.ama.org)
ARF : The Advertising Research Foundation
(www.amic.com/arf)
CASRO : The Council of American Survey Research
Organizations (www.casro.org)
MRA : Marketing Research Association (www.mra-net.org)
QRCA : Qualitative Research Consultants Association
(www.qrca.org)
RIC : Research Industry Coalition
(www.researchindustry.org)
© 2007 Prentice Hall 1-32
 Ma rke ti ng Resea rch A ss ociatio ns
Onlin e

In tern at ional

ESOMAR: European Society for Opinion and Marketing

Research (www.esomar.nl)

MRS: The Market Research Society (UK)

(www.marketresearch.org.uk)

MRSA: The Market Research Society of

Australia (www.mrsa.com.au)

PMRS: The Professional Marketing Research Society

(Canada) (www.pmrs-aprm.com)

© 2007 Prentice Hall 1-33