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									                          Introduction to Marketing Research: Part 2

Slide 1

[Introductory comments again]

Slide 2

So, what types of activities are entailed by marketing research? The next several slides will give
you an indication of what those activities might be.

Slide 3

This slide indicates the range of topics that a marketing researcher might be asked to study.
Here, research is divided into two basic domains: problem identification research and problem
solving research. Clearly, you need to be able to both identify a problem and then once
identified, solve it. Without proper identification, you‟re solving the wrong problem, so clearly
researchers will need to be able to accomplish both tasks. You can see the list under problem
identification: market potential, market share, image research, market characteristics, sales
analysis, forecasting, and business trends. These are all the domains that would help a
marketer to understand what his or her problem might be. Once identified, then under problem
solving you‟re looking at marketing mix issues and segmentation.

Slide 4

This slide lists the types of problem-solving research. Under segmentation are things such as
the basis for segmentation. Under product research are things like concept tests for possible
new products, looking for ways to modify existing products (by changing the packaging of more
mature products or brand repositioning for newer products), and test marketing of both the
traditional and in-store kind. (There‟s more on this later in the semester.) Under pricing research
are things for new products, for modifying prices of existing products, and adjusting for the price
mix of products within a product line. Price elasticity may seem more like an economic issue;
nonetheless, proper pricing would require examining what the market is willing to bear, and
price elasticity gives you a sense for likely changes in demand due to changes in price.
Promotional research is all the things you think about when you think about ad research, copy
decisions, where to place ads, and other promotional research unrelated to advertising. Finally,
distribution research addresses how to distribute your product and what channels or stores
might carry your brand. All these things would be under problem-solving research.

Slide 5

This slide shows another way to think of what was depicted in the previous slide. Instead of
thinking in terms of topic areas, you might think in terms of marketing mix decisions that
managers must make. Basically, it provides similar information but a more accessible way to
think about what value research would have to marketing managers.

Slide 6

These next two slides indicate the kinds of research activities that companies are involved in.
The percentages reported on the right are somewhat dated, but I believe they are still fairly
indicative of the percent of companies that conduct this kind of research, both in total and in-
house. The last column is the in-house column.


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Slide 7 (No audio)

Slide 8

I‟ve found the last slide in this series of several slides especially useful in illustrating the different
kinds of research that are most appropriate at different stages of the product life cycle. For
example, even before a product is launched in that pre-commercialization stage, you can see
that there is a set of research studies that are more typical of that stage. Many of these studies
are qualitative, as opposed to quantitative. Looking at the subsequent four columns—the
introductory, growth, maturity, and decline stage—you can see that the concerns at the
introduction stage entail issues related to launching a product. Concerns at the maturity stage
entail maintaining or growing market share for a product, because at this stage you‟re unlikely to
grow industry sales, so increasing your sales means taking competitors‟ sales. Things like
segmentation and lifestyle research are also possibilities of repositioning your product so that it
becomes more attractive to a different or larger share of the market. All of these are appropriate
in the maturity stage. In the decline stage, you are basically trying to milk the product. It would
be good to know something about people‟s sensitivities to price, the change in demand related
to changes in price or things that you might be able to do to value engineer and reduce the cost
of your product making it more affordable to those people who are buying in that last stage of
the product life cycle.

Slide 9

You can see from this slide that the planning and research necessary for product development
and launch is somewhat different from the types of research necessary for ongoing products.
This expands the pre-commercialization and introduction stages from the previous slide.

Slide 10

As an informed consumer of marketing research, it would be helpful to understand the surrogate
indicators of a good researcher. The next several slides will be spent on this particular topic.

Slide 11

As this cartoon illustrates, the manager—the man pacing with his hands clasped behind his
back—is concerned that the ads he‟s running aren‟t effective; therefore, his market share with
the college segment is inadequate. In fact, this manager may be far too close to the problem to
recognize it. This often happens when managers are so involved and so close to the problem
that they can‟t see the forest from the trees. The researcher‟s job, in this case, is to help
structure the manager‟s problem or to help the manager understand his „true‟ problem.
Recognizing the true problem always will help the manager select among viable alternative
courses of action.

Slide 12

In addition to helping the manager to understand the problem he or she faces, a good
researcher also will conduct the appropriate analysis—the appropriate research needed to
address the manager‟s problem—and provide that manager with the information needed to
make the most informed decision.




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Slide 13

Sadly, many self-proclaimed marketing researchers are ill qualified to conduct marketing
research. Although the American Marketing Association has considered accreditation, the
processes for marketing researchers are not in place. There is no certificate that one can
acquire, like a CPA, that clearly indicates a marketing researcher understands the field and is
sufficiently competent to provide sound research for managers. When you‟re dealing with a
marketing researcher who is inadequately trained, often that researcher will try to fit a technique
that he or she is well versed in to whatever problem that marketing manager faces. I worked
with a „so called‟ marketing researcher in the hospitality industry who was knowledgeable about
only one marketing research technique: conjoint analysis. No matter how many hospitality
clients he met with, the solution to their problem was always, “We need to run a conjoint study
for you.” Clearly, this particular researcher—an advertising person who decided to chase more
profits and visibility for himself—offered marketing research to hospitality firms. Sadly, he was
unqualified to conduct marketing research properly; as a result, his clients did not get the
research results they needed to make the best possible decision.

Slide 14

Good researchers understand their field so well that they can effectively communicate to any
manager—regardless of that manager‟s level of expertise in marketing research and statistics—
the results of the marketing research study and that manager‟s need for additional information
to make a sound decision. A good researcher will not resort to excessive jargon, and never will
utter the phrase „that‟s too complicated for you to know or to figure out‟. A good researcher will
understand that anything worth communicating to a manager can be communicated effectively.

Slide 15

As this cartoon reinforces, good marketing researchers will avoid needless jargon and will
communicate to managers in a way that they can understand.

Slide 16

Other qualities of a good marketing researcher include the following. A good researcher will be
careful and conscientious. Often, consultants will overbook themselves and, as a result, the
rush to satisfy your deadline will produce inadequately conducted research. A good marketing
researcher will not over-schedule him or herself and will be able to provide sound research in a
timely fashion. A good researcher understands that managers‟ expertise about the business
environment often far exceeds the researcher‟s expertise. A good researcher will talk with
managers, regarding the environment, to acquire a sound background and to inform the entire
research process. A good researcher also will understand that research may have overt and
covert purposes, and he or she will avoid research with covert purposes. For example,
managers often solicit research with the idea of acquiring evidence for their already-made
decisions. As I mentioned earlier, it‟s a waste of time and money to conduct research under
such circumstances, and no ethical researcher will do so. Therefore, a good researcher will try
to understand if there are any covert purposes and avoid research for which those purposes
exist.

A good researcher will try to assess three things: the manager‟s decision rule, the decision time
horizon, and the impact to the company on making a wrong decision. The researcher must
know the manager‟s time horizon for a decision—when is the data needed to make a sound
decision—because that information will help the researcher choose the appropriate research


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approach. In addition, the researcher must understand the manager‟s decision rule because the
researcher is trying to provide useful information to the manager for making the best possible
decision. If the researcher provides information that the manager will ignore, then the
researcher is wasting time and the manager is wasting money. Finally, a good researcher will
understand the impact of a wrong decision. In the case of a corporation like IBM, a $10 million
mistake is chump change, but in the case of a small firm in a town like Las Cruces, a $10 million
mistake could cause bankruptcy. Therefore, a researcher may do different kinds of research if
the impact of a wrong decision is a little less pocket money for managers rather than driving a
company into bankruptcy.

Research can be one of three things: (1) It can be fast, in the sense that it can be done quickly.
(2) It can be good, in the sense that the results can accurately reflect reality. (3) It can be cheap,
in the sense that the researcher can choose a less costly design among possible research
designs. Unfortunately, all research projects can be two of those three things only. So, research
can be good and fast, but then it won‟t be inexpensive. It can be good and inexpensive, but then
it would be impossible to do quickly.

Slide 17

As an informed consumer of marketing research, here are some additional things you should
insist upon from your research supplier or marketing research department. You should insist
that the research supplier maintains your confidentiality. If he or she goes on to work for a
competitor, then you must agree in advance that nothing learned as a result of working with you
is shared with that competitor. You want the supplier to be honest and tell you the strengths and
weaknesses of any research results. You want that supplier to meet deadlines, both final and
intermediate. You want that supplier to be flexible, because unexpected things arise during a
research study and a successful study will have to account for those surprises. You want to
ensure that supplier delivers exactly what he or she has agreed to deliver, that what is delivered
is of high quality and responsive to your needs, that appropriate quality controls were used, and
any collected data was collected properly. You want that supplier to be customer oriented and to
try to understand your needs and to address them as best as possible. Finally, you want that
supplier to provide frequent progress reports.

Slide 18

These next two slides summarize the results of surveys about the qualities that managers seek
in researchers. You can see that both slides clearly indicate that communication skills, both
written and oral, are important. Technical competence is fairly far down the list of critical
qualities. This is not to suggest that technical competence is trivial; rather, it‟s got its place as far
as the qualities you should seek in a marketing researcher.

Slide 19 (No audio)

Slide 20

The next two slides indicate the types of conflict that exist between marketing researchers and
managers and the reasons for those types of conflicts.

Slide 22

Consider the following personal example. Several years ago, I worked on the ad-tracking study
for Ramada. I discovered that despite John Madden‟s (then spokesperson for the Ramada) best
efforts, many people didn‟t understanding the point of Ramada ads with Madden frantically

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waving his arms, jumping up and down, and scribbling X‟s and O‟s on a chalkboard. Basically,
Ramada wasn‟t getting its message across; instead, it was getting John Madden‟s arm flapping
across. The results of that study were very clear about one important thing:

       Ramada‟s major competitor was Holiday Inn, which had a large market share.
       Nonetheless, respondents‟ attitudes about Holiday Inn indicated it was vulnerable.
       Specifically, customers were highly aware of Holiday Inn, had likely stayed at one in the
       past year or two, but were dissatisfied with their experience. So what Ramada should‟ve
       done, rather than having Madden jump up and down proclaiming the virtues of Ramada,
       was to take on Holiday Inn head-to-head in its ads and explain why Ramada was a
       better place to stay.

The manager I conducted that study for, I believe, was replaced. Shortly thereafter, Ramada
was taken over in a merger and I saw little of Ramada‟s ads and heard little about Ramada‟s
marketing strategy for several years. Then, I started seeing ads on television and in
newspapers, and even hearing them on the radio, pitting Ramada against Holiday Inn. I don‟t
know if this ad campaign was inspired by my research or if my results were confirmed by
subsequent research. Regardless, Holiday Inn‟s large market share was seemingly strong but
also showed weakness because many people knew about Holiday Inn but also knew there were
things about it that they didn‟t like. If Ramada‟s ads could address those areas about which
customers were concerned, then Ramada would be able to steal customers from Holiday Inn. In
fact, I suspect that‟s what happened.

Slide 23 (No audio)

Possible Jobs in Marketing Research

Slide 24

This slide suggests the many different entities that are involved in marketing research. One
entity is a local field service; its mandate is to collect the data for a survey designed by someone
like you or me. Alternatively, a local field service may collect data for a larger corporation
conducting a large-scale study. Ad agencies need to conduct research, if for no other reason
than to fine tune their ad copy and convinces their clients about the efficacy of their ads. I,
however, strongly urge you not to use the same agency for both purposes. Clearly, there is a
conflict of interest if the agency doing your advertising also conducts the research to show you
that its ads are effective. Syndicated data companies collect data on a continual basis and
provide standardized reports that help consumer companies to track the progress of their
different products. Calculation houses analyze data often collected by a local field service. A
research consultant would be someone like me, who would be hired by a company to design
and oversee a study. There may be other suppliers who offer their services to larger companies
interested in marketing research. This brief overview indicates the many different entities that
are involved in research. Clearly, there are other entities than those listed here.

Slide 25

The next three slides suggest positions in marketing research that could be filled by someone
with an undergraduate degree in marketing. The first slide indicates positions at the corporate
level inside a marketing research department. The second slide suggests a position for a
marketing research supplier, which is a small marketing research firm, perhaps in a larger city.
The third slide suggests the possibility of working in a research department for an ad agency.
Typically, someone with an undergraduate degree in marketing would begin in sales. Often,


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sales positions require extensive traveling, and many of you may prefer a position that requires
far less traveling. If so, then it‟s possible you‟d prefer a position like the ones described in the
next three slides.

Slide 26 (No audio)

Slide 27 (No audio)

Slide 28

Again, this is a theme that I will repeat; you should never assume that marketing research will
be perfect. It can‟t be. In fact, for any given decision confronting a marketing manager, he or she
may be better off flipping a coin or throwing a dart. However, over the course of a hundred
decisions, if the manager works with marketing researchers to help them understand the basic
business environment and gives them ample time and resources to conduct appropriate studies,
then on average that manager will make better decisions if he or she includes research as part
of the resources to be used to make decisions. Any given study is unlikely to be perfect and it‟s
quite possible that a given study will be very far from perfect. Think of the situation that Coca-
Cola encountered, with all the research it did prior to introducing New Coke.

Slide 29

So, let‟s recap what I covered in this lecture. First, I covered a basic definition of marketing
research, what it‟s in general, and how it differs from and relates to marketing information
systems. Second, I covered the circumstances under which it‟s wise to conduct and wise to
avoid marketing research. Third, I provided a brief overview of basic marketing research
activities, especially those related to research on marketing mix variables. Fourth, I discussed
the indicators of a good researcher. Fifth, I talked briefly about the inherent conflict between
managers and marketing researchers. Finally, I talked about possible jobs, even for students
with undergraduate degrees in marketing, in the marketing research industry.




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