Chapter 1

Introduction and Early

Phases of Market
Research

© 2007 Prentice Hall 1-1

 Chapter Outline
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

 Chapter Outline
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

 Redefining Marketing
Research

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

 Redefining Marketing
Research
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
 Definition of Marketing
Research
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

 Market Research
 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

 Classification of Marketing
Research
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

 Research
Fig. 1.1
Marketing Research

Problem Problem-Solving
Identification Research Research

Market Potential Research Segmentation

Market Share Research
Market Characteristics
Research
Sales Analysis Research
Forecasting Research
Business Trends Research
© 2007 Prentice Hall
Research
Product Research
Pricing Research
Promotion Research
Distribution Research
1-9
 Problem-Solving Research
Table 1.1

SEGMENTATION RESEARCH
 Determine the basis of
segmentation
 Establish market potential and
PRODUCT RESEARCH
responsiveness for various  Test concept
segments  Determine optimal product
 Select target markets design

 Create lifestyle profiles:  Package tests

demography, media, and  Product modification
product image characteristics
 Brand positioning and
repositioning
 Test marketing
© 2007 Prentice Hall 1-10
 Problem-Solving Research
Table 1.1 cont. PROMOTIONAL RESEARCH
 Optimal promotional budget
0.00% APR  Sales promotion relationship
 Optimal promotional mix
 Copy decisions
 Media decisions
 Creative advertising testing

PRICING RESEARCH  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
 Problem-Solving Research
Table 1.1 cont.
DISTRIBUTION RESEARCH

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

 Marketing Research Process

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

 Marketing Research
Process
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

 The Role of Marketing
Research
Fig. 1.2 Customer Groups
• Consumers
• Employees
• Shareholders
• Suppliers
Uncontrollable
Controllable Environmenta
Marketing l
Factors
Variables
Marketing • Economy
•Product
Research • Technology
•Pricing
• Laws &
•Promotion Regulations
•Distribution • Social &
Assessing Marketing Cultural
Providing Factors
Information Information Decision
Needs Making • Political
Factors

Marketing Managers
• Market Segmentation
•Target Market Selection
• Marketing Programs
• Performance & Control

© 2007 Prentice Hall 1-15

 Power Decisions’
Methodology
Fig. 1.3

Opportunity scan
Option generation
Solve Problem
Refine options
Decision
Client
Needs Fin Seek Pla Act
d n
Achieve Goal

ResearchEvaluate Market Advise

How We Clarify
Plan Assist
Decisions Analysis Interpret Recommend
Help Facilitate Research Execution

© 2007 Prentice Hall 1-16

 Organizational Chart for VNU
Fig. 1.4
Executive Board
Corporate Staff

Marketing Media Measurement Business

Directories
Information & Information Information
ACNielsen Nielsen Media ResearchVNU 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 EuropeTelkom Directory
Market Decisions
Nielsen Music Verizon Puerto Rico
Nielsen Book
Nielsen Entertainment Intel
IMS
PERO/HIC
Scarborough
SRDS
© 2007 Prentice Hall 1-17
 Marketing Research Suppliers &
Services
Fig. 1.5

RESEARCH
INTERNAL EXTERNAL
SUPPLIERS

FULL LIMITED
SERVICE SERVICE
Syndica Intern Field Branded
te et Servic Products
Service Servic es and
s es Coding Services
Standardiz Customize and
ed d Data Analytic Data
Services Services Entry al Analysis
Services Service Services
s
© 2007 Prentice Hall 1-18
 Top 50 U.S. Marketing Research
Firms
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. Marketing Research Firms
(Cont…)
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. Marketing Research Firms
(Cont…)
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

 Selected Marketing
Research
Career Descriptions
Fig. 1.6
Vice President of Marketing Research: 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.
Research Director: Also a senior position. The research director has the
general responsibility for the development and execution of all the
marketing research projects.
Assistant Director of Research: Serves as an administrative assistant to
the director and supervises some of the other marketing research staff
members.
(Senior) Project Manager: Has overall responsibility for design,
implementation, and management of research projects.
Statistician/Data Processing Specialist: Serves as an expert on theory
and application of statistical techniques. Responsibilities include
experimental design, data processing, and analysis.

© 2007 Prentice Hall 1-22

 Selected Marketing Research
Career Descriptions
Fig. 1.6 cont.
Vice President of Marketing Research Director
Research
• Also part of senior
• Part of company’s top management
management team
• Heads the
• Directs company’s entire development and
execution of all
market research operation
research projects
• Sets the goals & objectives of Assistant Director of
the marketing research Research
department • Administrative assistant to
director
• Supervises research staff
Senior Project Manager
members
• Responsible for design, implementation,
& research projects
© 2007 Prentice Hall 1-23
 Selected Marketing Research
Career
Fig. 1.6 cont.
Descriptions
Senior Analyst
• 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
Analyst Statistician/Data
• Handles details in execution of Processing
project • Serves as expert on theory and
• Designs & pretests questionnaires application on statistical
• Conducts preliminary analysis of techniques
data • Oversees experimental design,
data processing, and analysis
Junior Analyst
• Secondary data analysis Fieldwork Director
• Edits and codes questionnaires •Handles selection, training,
• Conducts preliminary analysis of supervision, and evaluation of
data interviewers and field workers

© 2007 Prentice Hall 1-24

 Marketing Research Suppliers &
Services
 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
 Criteria for Selecting a Research
Supplier
 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

 Careers in Marketing
Research
 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 Sample of Marketing Research
Jobs

© 2007 Prentice Hall 1-28

 Preparation for a Career in Marketing
Research

 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

 Systems Vs. Decision Support
Systems
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 by Using “What
Making
if”
by Clarifying Data
Analysis
© 2007 Prentice Hall 1-30
 The Department Store
Project
The following information was solicited:
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
 Marketing Research Associations
Online
Domestic
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)
© 2007 Prentice Hall 1-32
 Marketing Research Associations
Online

International

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