Lecture 01. Introduction to the role of market research

1. Introduction to the role of market research Defining the market research problem Defining the information required to solve the problem Defining the questions to collect the information

Lecture 1
• Introduction to the role of market research
Defining the market research problem
Defining the information required to solve the
problem
Defining the questions to collect the
information
Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall
1-1

2.

Table 1.2
U.S.
Rank
2007
2006
1
Top 50 U.S. Marketing Research Firms
Organization
Headquarters
Website
1
The Nielsen Co.
New York
nielsen.com
$2,173.0
$4,220.0
48.5%
2
2
IMS Health Inc.
Norwalk, Conn.
imshealth.com
801.0
2,192.6
63.5
3
3
Kantar Group*
Fairfield, Conn.
kantargroup.com
526.8
1,551.4
66.0
4
5
Westat Inc.
Rockville, MD
westat.com
467.8
467.8
—
5
4
IRI
Chicago
infores.com
441.0
702.0
37.2
6
6
TNS U.S.
New York
tnsglobal.com
379.8
2,137.2
82.2
7
7
Arbitron Inc.
New York
arbitron.com
338.5
352.1
3.9
8
8
GfK AG USA
Nuremberg, Germany
gfk.com
319.7
1,603.00
80.1
9
9
Ipsos
New York
ipsos-na.com
281.2
1,270.30
77.9
10
10
Synovate
London
synovate.com
250.4
867.0
71.1
11
11
Maritz Research
Fenton, Mo.
maritzresearch.com
187.4
223.3
16.1
12
13
J.D. Power and Associates*
Westlake Village,
Calif.
jdpower.com
184.5
260.5
29.2
13
12
Harris Interactive Inc.
Rochester, N.Y.
harrisinteractive.com
161.0
227.0
29.1
14
14
The NPD Group Inc.
Port Washington, N.Y.
npd.com
160.4
211.1
24.0
15
—
Opinion Research/
Guideline Group
Omaha, Neb.
infousa.com
124.7
206.7
39.7
Princeton, N.J.
opinionresearch.com
97.5
179.5
45.7
15
Opinion Research Corp.
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U.S.
Global
Non-U.S.
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3.

Table 1.2 Top
U.S.
Rank
50 U.S. Marketing Research Firms
Organization
Headquarters
Website
(Cont…)
U.S.
Global
Non-U.S.
2007 2006
38
Guideline Inc.
New York
guideline.com
26.8
26.8
—
16
18
comScore Inc.
Reston, Va.
comscore.com
77.0
87.2
11.7
17
20
Market Strategies Inc.
Livonia, Mich.
marketstrategies.com
75.7
80.4
5.8
20
Market Strategies Inc.
Livonia, Mich.
markestrategies.com
53.4
58.1
8.1
37
Flake-Wilkerson Market
Insights
Little Rock, Ark.
fw-mi.com
22.3
22.3
—
18
17
Lieberman Research Worldwide
Los Angeles
Irwonline.com
71.0
87.4
18.8
19
—
Abt Associates Inc.
Cambridge, Mass.
abtassociates.com
55.1
55.1
—
19
Abt Associates Inc.
Cambridge, Mass.
abtassociates.com
33.0
33.0
—
41
Abt SRBI Inc.
New York
srbi.com
22.1
22.1
—
20
23
OTX
Los Angeles
otxresearch.com
50.8
54.5
6.8
21
21
Burke Inc.
Cincinnati
burke.com
47.0
53.1
11.5
22
22
MVL Group Inc.
Jupiter, Fla.
mvlgroup.com
42.3
42.3
—
23
26
Knowledge Networks Inc.
Menlo Park, Calif.
knowledgenetworks.com
37.3
37.3
—
23
25
National Research Corp.
Lincoln, Neb.
nationalresearch.com
37.3
41.3
9.7
25
24
Directions Research Inc.
Cincinnati
directionsresearch.com
37.2
37.2
—
26
40
Phoenix Marketing International
Rhineback, N.Y.
phoenixmi.com
33.5
34.9
4.0
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4.

Table 1.2 Top
U.S.
Rank
50 U.S. Marketing Research Firms
Organization
Headquarters
Website
U.S.
Global
(Cont…)
Non-U.S.
2007 2006
27
34
Lieberman Research Group
Great Neck, N.Y.
liebermanresearch.com
30.1
30.1
—
28
27
ICR/Int'l Communications
Research
Media, Pa.
icrsurvey.com
28.8
29.7
3.0
29
28
Morpace Inc.
Farmington Hills,
Mich.
morpace.com
28.7
33.2
13.6
30
33
MarketCast
Los Angeles
marketcastonline.com
25.1
25.1
31
36
Data Development Worldwide
New York
datadw.com
25.0
25.3
1.2
32
39
C&R Research Services Inc.
Chicago
crresearch.com
23.6
23.6
—
33
32
Informa Research Services Inc.
Calabasas, Calif.
informars.com
23.5
23.5
—
34
31
National Analysts Worldwide
Philadelphia
nationalanalysts.com
23.3
23.3
—
35
44
Service Management Group
Kansas City, Mo.
servicemanagement.com
22.4
23.0
2.6
36
34
Market Probe Inc.
Milwaukee
marketprobe.com
21.7
41.4
47.6
37
—
Hitwise
New York
hitwise.com
21.6
49.9
56.7
38
42
Walker Information
Indianapolis
walkerinfo.com
21.2
25.5
16.9
39
43
KS&R Inc.
Syracuse, N.Y.
ksrinc.com
17.1
21.0
18.6
40
47
Bellomy Research Inc.
Winston-Salem, N.C.
bellomyresearch.com
16.7
16.7
—
41
46
MarketVision Research Inc.
Cincinnati
marketvisionresearch.com
16.4
16.4
—
42
28
Public Opinion Strategies
Alexandra, Va.
pos.org
15.5
15.5
—
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5.

Table 1.2 Top
U.S.
Rank
50 U.S. Marketing Research Firms
Organization
Headquarters
Website
U.S.
Global
(Cont…)
Non-U.S.
2007 2006
43
—
Compete Inc.
Boston
compete.com
14.9
14.9
—
44
45
Savitz Research Companies
Dallas
savitzresearch.com
14.8
14.8
—
45
48
RDA Group Inc.
Bloomfield Hills,
Mich.
rdagroup.com
13.7
16.8
18.5
46
—
Gongos Research Inc.
Auburn Hills,
Mich.
gongos.com
13.3
13.3
—
47
—
Q Research Solutions Inc.
Old Bridge, N.J.
whoisq.com
13.0
13.2
1.5
48
49
Marketing Analysts Inc.
Charleston, S.C.
marketinganalysts.com
12.8
13.6
5.9
49
50
RTi Market Research & Brand
Strategy
Stamford, Conn.
rtiresearch.com
12.2
12.2
—
50
—
The Link Group
Atlanta
the-link-group.com
11.9
13.3
10.5
$7.828.7
$17,638.0
55.6%
$774.3
$870.1
11.0%
$8,603.0
$18,508.1
53.5%
Total
All other (150 CASRO companies not
included in the Top 50)
Total (200 companies)
*Estimated by Top 50.
U.S. and worldwide revenue may include nonresearch activities for some companies that are significantly higher. Rate of growth from
year to year has been adjusted so as not to include revenue gains or losses from acquisitions or divestitures. Total revenue of 150 survey research companies
that provide financial information on a confidential basis to CASRO.
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6. Marketing Research Suppliers & Services

Marketing Research Suppliers & Services
Fig. 1.4
RESEARCH
SUPPLIERS
INTERNAL
LIMITED SERVICE
FULL SERVICE
Syndicate
Services
Many clients
Field
Services
Internet
Services
Customized
Services
One client
EXTERNAL
Focus Groups
and Qualitative
Services
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Other
Services
Technical
and Analytical
Services
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7. Market Research

• Syndicated Services: collect information of known
commercial value which they then sell to multiple clients
on a subscription basis (e.g. TV ratings)
• Customized Services: offer services specifically for a
client’s needs
• Internet Services: Full Service but specialise in
conducting research over the internet (can be syndicated
or customized services)
• Field services: specialize in providing field workers to
collect data and perform surveys/interviews
• Focus Group Services: specialize in running Focus Groups
(see later)
• Technical and Analytics services: specialize in data
analysis
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8. 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)
RIC
: Research Industry Coalition (www.researchindustry.org)
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9. 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)
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10. Definition of Marketing Research Role

Marketing research is the systematic and objective
identification
collection
analysis
Dissemination (sharing)
and use of information
For the purpose of improving decision making related to the
Identification(1) and solution (2) of problems and
opportunities in marketing
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11. 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
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12. Marketing Research role in context

Customer Groups
• Consumers
• Employees
• Shareholders
• Suppliers
Controllable
Marketing
Variables
• Product
• Pricing
• Promotion
• Distribution
Marketing
Research
(decision context)
Assessing
Information
Needs
Providing
Information
Marketing
Decision
Making
Uncontrollable
Environmental
Factors
• Economy
• Technology
• Laws &
Regulations
• Social & Cultural
Factors
• Political Factors
Marketing Managers
• Market Segmentation
•Target Market Selection
• Marketing Programs
• Performance & Control
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13. Defining the marketing research problem

Fig. 1.1
Marketing Research
(1) Problem
Identification Research
Market Potential Research
Market Share Research
Market Characteristics Research
Sales Analysis Research
Brand Research
Tech Trends Research
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(2) Problem-Solving
Research
e.g.Segmentation
Research
Product Research
Pricing Research
Promotion Research
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14. (1) Problem Identification Research

undertaken to help identify problems which are not
apparent on the surface or might arise in the future
E.g. mobile phone sales increasing 7% YoY. Is this
a problem ? (good if the market is growing 2% but
bad if the market is growing at 50%)
What is my brand image?
How sensitive are my customers to price?
What substitute products are in the market place?
What are the technological advances which might
effect my market (e.g. CD, DVD, iTunes)
Are there cultural issues which might affect my
product acceptance?
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15. (2) Problem-Solving Research

SEGMENTATION RESEARCH (e.g.
new saloon car or 4x4)
Determine the basis of segmentation
Establish market potential and
responsiveness for various
PRODUCT RESEARCH e.g. Touch
segments
Screen phone
Select target markets
Test concept
Create lifestyle profiles:
demography, media, and
product image characteristics
Determine optimal product design
Package tests
Product modification
Brand positioning and repositioning
Test marketing
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16. Problem-Solving Research

Table 1.1 cont.
0.00%
APR
PROMOTIONAL RESEARCH (new
perfume)
Optimal promotional budget
Optimal promotional mix
Media decisions
Creative advertising testing
Evaluation of advertising effectiveness
PRICING RESEARCH (sandwich) Claim substantiation
Pricing policies
Importance of price in brand selection
Product line pricing
Price elasticity of demand
Initiating and responding to price changes
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17. Understanding the problem: use the Problem Audit (for discussion with decision maker)

The problem audit is a comprehensive examination of a marketing problem
with the purpose of understanding its origin and nature.
1.
The events that led to the decision that action is needed,
or the history of the problem (e.g. McDonalds losing market share in
2003 to Burger King, Wendy’s and Subway)
2.
The alternative courses of action available to the DM (For MacDonald’s –
new sandwiches, reduce prices, more restaurants, special offers, more
advertising) which of these alternatives does DM wish to investigate ?
3.
The criteria that will be used to evaluate the alternative courses of
action (e.g more sales, higher market share, more profit)
4.
The potential actions that are likely to be suggested based on the
research findings (e.g. strategic investment – DM needs to support
necessary actions otherwise research might be waste of time)
5.
The information that is needed to answer the DM's questions
(comparison of McDonalds with its competitors regarding product, price,
promotions, advertising, restaurant locations and numbers)
6.
The manner in which the DM will use each item of information in
making the decision (DMs will use not only the information provided by the
research but also their experience and judgement)
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18. Understanding the Problem: Expert Interviews, Secondary data, Qualitative Research

Expert Interviews – carried out with people with expert knowledge of
the company and/or the industry. Can be from within or external.
Unstructured personal interviews – however useful to prepare a list
of topics to cover. Caution – some eager to participate may not
actually have expert knowledge; may be difficult to get help from
experts outside the client.
Secondary data – data which was originally collected for some other
purpose but is relevant e.g. government, previous similar research.
Convenient way to get background information.
Qualitative Research – research undertaken to get a deeper
understanding of the problem. QR is unstructured and exploratory,
based on small samples such as focus group interviews or in-depth
interviews (depth interviews, focus groups)
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19. Management Decision Problem Def. Vs. Marketing Research Problem Def.

Management Decision Problem
(action oriented)
Marketing Research Problem
(information oriented)
Should a new product be
introduced?
To determine consumer preferences
and purchase intentions for the
proposed new product
Should the advertising
campaign be changed?
To determine the effectiveness
of the current advertising
campaign
Should the price of the
brand be increased?
To determine the price elasticity
of demand and the impact on sales
and profits of various levels
of price changes
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20. Problem Definition: e.g. Department Store Project (Sears)

Real Research: Sears department store was losing
market share to its competitors (e.g. Saks Fifth
Avenue, JCPenny, Kmart, Wal-mart)
DM Problem Definition
After a series of interviews with the DM and other key
managers, analysis of secondary data and qualitative
research, the Management Decision Problem was identified as
“What should be done to improve the patronage of Sears”
MR Problem Definition (Broad statement)
“Determine the relative strengths and weaknesses of Sears
vis-à-vis other major competitors with respect to factors that
influence store patronage”
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21. e.g. Department Store Project (Sears)

MR Problem Definition (specific components
of the problem definition)
In the department store project, the marketing research
problem is to determine the relative strengths and
weaknesses of Sears, vis-à-vis other major competitors, with
respect to factors that influence store patronage. Specifically,
research should provide information on the following
questions.
1. What criteria do households use when selecting department
stores?
2. How do households evaluate Sears and competing stores in
terms of the choice criteria identified in question 1?
3. Which stores are patronized when shopping for specific
product categories?
4. What is the market share of Sears and its competitors for
specific product categories?
5. What is the demographic and psychological profile of the
customers of Sears? Does it differ from the profile of customers
of competing stores?
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22. Development of Research Questions and Hypotheses

• Research questions (RQs) are
refined statements of the specific
components of the problem. Each
component may need to be broken down
into several RQs.
• A hypothesis (H) is an unproven
statement or proposition about a factor
or phenomenon that is of interest to the
researcher. Often, a hypothesis is a
possible answer to the research question.
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23. e.g. Department Store Project (Sears): research questions

Relating to the 5th component of the Research
Problem for Sears – the psychological characteristics
of Sears customers:
• RQ1: Do the customers of Sears exhibit store
loyalty?
• RQ2: Are they heavy users of credit?
• RQ3: Are they more conscious of personal
appearance than customers of competing stores?
• RQ4: Do they combine shopping with eating out?
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24. e.g. Department Store Project (Sears) research hypotheses

• RQ: Do the customers of Sears exhibit store
loyalty?
• H1: Customers of Sears are loyal.
• H2: Customers who are store-loyal are less
knowledgeable about the shopping
environment
• H3: Store-loyal customers are more riskaverse than are non-loyal customers.
(Hypothesis guide as to what information to be
collected and analyzed)
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25. e.g. Department Store Project (Sears)

Specification of Information Needed
Component 1
• The researcher identified the following factors as part of the
choice criteria: quality of merchandise, variety and assortment
of merchandise, returns and adjustment policy, service of store
personnel, prices, convenience of location, layout of store,
credit and billing policies. The respondents should be asked to
rate the importance of each factor as it influences their store
selection.
Component 2
• The researcher identified nine department stores as competitors
to Sears based on discussions with management. The
respondents should be asked to evaluate Sears and its nine
competitors on the eight choice criteria factors.
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26. e.g. Department Store Project (Sears)

Component 3
• 16 different product categories were selected, including
women's dresses, women's sportswear, lingerie and body
fashion, junior merchandise, men's apparel, cosmetics,
jewelry, shoes, sheets and towels, furniture and bedding, and
draperies. The respondents should be asked whether they
shop at each of the 10 stores for each of the 16 product
categories.
Component 4
• No additional information needs to be obtained from the
respondents.
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27. e.g. Department Store Project (Sears)

Component 5
• Information should be obtained on the standard
demographic characteristics and the psychographic
characteristics of store loyalty, credit use,
appearance consciousness, and combining
shopping with eating.
• We will look at the Sears questionnaire and the
survey data gathered in more detail later in the
course
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28. Another example: At United, Food Is Uniting the Airline with Travelers

United Airlines, as other major airlines, had to deal with
passenger loyalty (management decision problem: how
to attract more and more loyal passengers). The broad
marketing research problem was to identify the factors
that influence loyalty of airline travelers.
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29. At United, Food Is Uniting the Airline with Travelers

The basic answer is to improve service. Exploratory
research, theoretical framework, and empirical evidence
revealed that the consumers’ choice of an airline is
influenced by: safety, price of the ticket, frequent-flyer
program, convenience of scheduling, and brand name.
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30.

At United, Food Is Uniting the Airline with
Travelers
Secondary data, like the J. D Power & Associates'
survey on "current and future trends in the airline
food industry," indicated that "food service is a major
contributor to customers’ loyalty." This survey also
emphasized the importance of food brands.
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31.

At United, Food Is Uniting the Airline
with Travelers
The airline's Marketrak survey told United Airlines that
"customers wanted more varied and up-to-date food.”
The following research questions and hypotheses may be
posed.
RQ1
How important is food for airline customers?
H1:
Food is an important factor for airline travelers.
H2:
Travelers value branded food.
H3:
Travelers prefer larger food portions, but with
consistent quality.
H4:
Travelers prefer exotic food.
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32.

At United, Food Is Uniting the Airline
with Travelers
This kind of research helped United Airlines define their marketing
research problem and develop the approach. Focus groups and
surveys were conducted to check customers' perceptions of food in
United Airlines' aircraft. The results provided support for all the
hypotheses (H1 to H4). United Airlines then made a few changes:
new "culinary menus," larger portions of food, new coffee, and
branded products (e.g., Godiva chocolates). This resulted in better
service, increasing customer satisfaction and fostering loyalty.
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