Chapter 4: Marketing Research Essentials

Question 1

T/F: A problem for marketing managers is having access to too much information

Answer 1

TRUE: Companies need info sx that can collect & analyze huge amounts of info & store them for the right time & circumstance

Question 2

What are two types of market information needed to make decisions?

Answer 2

a. Data related to broad areas of interest (e.g. demographic & economic trends)

i. Used in strategic planning

b. Data that addresses a specific question (e.g. what iPhone features would a young, urban professional want?)

Question 3

What is a marketing information system (MIS)?

Answer 3

continuing process of identifying, collecting, analyzing, accumulating, & dispensing critical info to marketing decision makers

○ Info bank where data is collected & stored until it is needed to withdraw
○ Not specific to a problem or question

Question 4

What are 3 factors in creating an MIS?

Answer 4

a. What info should the system collect?

b. What are the information needs of each decision maker?

c. How does the sx maintain privacy & confidentiality of sensitive info?

Question 5

What is market research?

Answer 5

refers to methodological identification, collection, analysis, and distribution of data related to discovering and then solving marketing problems or opportunities and enhancing good decision making

Question 6

What is internal data?

Answer 6

• looks info available inside the company (e.g. relationship between the company, products, & customers)

-Allows for managers to proactively address issues before they become problems

• helps guide strategic decisions

Question 7

T/F: Often, simply checking secondary sources such as legitimate websites will provide sufficient information for the marketing manager to make a decision in a particular situation

Answer 7

TRUE

Question 8

What is the number 1 rule for marketing managers leading research initiatives?

Answer 8

• always know what information you have available inside your own organization first
• seek to maximize existing info

Question 9

What are the purpose of CRM systems?

Answer 9

Tracking a customer’s initial inquiry through to order placement, delivery, payment, and follow-up after the purchase

Question 10

What 4 things does the data collected & analyzed in a CRM sx enable companies to do?

Answer 10

1. Identify the frequency and size of customer orders.
2. Determine the actual cost of a customer order
3. Rank customers based on established criteria (e.g., profitability)
4. Calculate the efficiency of a company’s production & distribution sx

Question 11

What is the best source of internal info?

Answer 11

Sales force - on the front lines of the company-customer interface and have unique access to the customer

usually the first to hear about changes with the customer, such as new personnel or the need for new products

○ learn a great deal about competitors’ tactics and plans

Question 12

What is marketing intelligence?

Answer 12

companies that engage in collecting, analyzing, and storing data from the macro environment on a continuous basis

• The ability to do this well is a competitive advantage

Question 13

What are external sources ?

Answer 13

Info collected outside the company

Question 14

What are demographics?

Answer 14

• Demographics - statistical characteristics of human populations, such as age or income, used to identify markets
• helps define a market (age, income, education)
• helps identify new opportunities (e.g. as baby boomers age, they will need, among other things, retirement communities)

Question 15

What are the two types of economic knowledge>

Answer 15

○Microeconomics - study of individual economic activity (firm, household, or prices)

§ helps marketing managers understand how individuals set priorities and make buying decisions

○ Macroeconomics - refers to the study of economic activity in terms of broad measures of output (gross national product or GNP) and input, as well as the interaction among various sectors of an entire economy

§ gives a “big picture” perspective for an economy and can be helpful in looking for broad economic trends

Question 16

T/F: Marketing managers need to know the role of technology in their business today and also, perhaps even more importantly, its role in the future

Answer 16

TRUE

Question 17

What two key issues drive marketers need to know about the natural world?

Answer 17

• Businesses operate within the constraints of Earth’s available natural resources

A. Individuals, governments, and business all recognize the need to manage the available resources well

B. Pollution - takes a significant toll on the quality of life and economic growth in a community

Question 18

What is the most important external factor to consider?

Answer 18

Competition

• Companies want to know as much as possible about competitors’ products and strategies
• In highly competitive markets, companies are constantly adjusting their strategies to the competition
• Marketing managers rely heavily on external information about competitors to formulate and adjust their own marketing strategies
• As with all the sources of external information, its usefulness is limited by the overall quality, timeliness, and dependability of the data

Question 19

What are 3 elements of good market research?

Answer 19

1. Follows a well-defined set of activities and does not happen by accident.
2. Enhances the validity of the information.
3. It is impartial & objective

Question 20

Step 1: Define the research problem

Answer 20

• One of the biggest challenges
• Often managers are not clear about the problem and need help defining it
• Must first:
  1. Define the Management Research Deliverable - Exactly what does management want to do with this research?

2. Define the research problem

Question 21

Step 2: Establish the research design

Answer 21

a plan of action for attacking the research problem

○ Research designs consist of five activities, each of which is designed to address a specific question about the research process

• decisions made here affect the rest of the project

Question 22

What are the 3 basic types of research?

Answer 22

1. Exploratory
   □ Clarifying the research problem.
   □ Developing hypotheses for testing in descriptive or causal research.
   □ Gaining additional insight to help in survey development or to identify other research variables for study.
   □ Answering the research question.
2. Descriptive - describe/explain a phenomenon
   □ Identifying the characteristics of our target market.
   □ Assessing competitors’ actions in the marketplace.
   □ Determining how customers use our product.
   □ Discovering differences across demographic characteristics
3. Causal - cause & effect
   § What effect will a price increase have on sales? Causal research can determine the change in the number of sales for different price levels

Question 23

How do we determine what data/research to use?

Answer 23

1. benefits vs costs
2. time
3. nature of decision
4. availability of data

Question 24

What is primary data?

Answer 24

data collected specifically for this research question

○ Collected using one of two approaches:

§ Qualitative research - less structured and can employ methods such as surveys and interviews to collect the data
-qualitative research employs small samples and is not meant to be used for statistical analyses

§ Quantitative research - used to develop a more measured understanding using statistical analysis to assess and quantify the results

Question 25

what is secondary data?

Answer 25

data collected for some other purpose than the problem currently being considered Most common tool is focu groups

Question 26

What is a focus group>

Answer 26

- a meeting (either in person or increasingly online) of 6 to 10 people that is moderated by a professional who carefully moves the conversation through a defined agenda in an unstructured, open format ○ Generally, the participants are selected on the basis of some criteria ○ The value of focus groups lies in the richness of the discussion - a good moderator can draw out a lot of information from the participants - not representative sample

Question 27

What is an in-depth interview?

Answer 27

an unstructured (or loosely structured) interview with an individual who has been chosen based on some characteristic of interest, often a demographic attribute

Question 28

What techniques are employed in descriptive research?

Answer 28

1. surveys - structured questionnaires given to a sample group of individuals representing the population of interest 2. Behavioural data - include information about when, what, and how often customers purchase products and services as well as other customer "touch points" (for example, when they contact the organization with a complaint or question) 3. Observational data - behavioural patterns among the population of interest - can be mechanical - device tracks activity or physical

Question 29

Step 5: Information content

Answer 29

Involves determining exactly what information is needed and how to frame the questions to get that information

Question 30

Open vs closed questions

Answer 30

○ Open-ended questions - encourage respondents to be expressive and offer the opportunity to provide more detailed, qualitative responses § often used in exploratory research ○ Closed-ended questions - more precise and provide specific responses - allow for more quantitative analysis and are most often used in descriptive research

Question 31

Step 6: sampling

Answer 31

census - comprehensive record of each individual in the population of interest sample - subgroup of the population selected for participation in the research

Question 32

Two types of sampling

Answer 32

Probability - uses a specific set of procedures to identify individuals from the population to be included in the research Non-probability - he probability of everyone in the population being included in the sample is not identified

Question 33

What are market research organizations?

Answer 33

○ Organizations publish data that can be useful to marketers in particular industries willing to share or sell market data

Question 34

What are the advantages & disadvantages of secondary data sources?

Answer 34

Advantages - accessible & cheap Disadvantages: 1. Doesn't exactly match the research problem 2. Not current/up to date 3. Skeptical in validity

Question 35

What is data collection

Answer 35

involves access and distribution of the survey to the respondent, then recording the respondent's responses and making the data available for analysis * Often the most costly element in the market research process * The greatest potential for error exists as data are collected

Question 36

What are the 3 categories of online research tools?

Answer 36

1. Online (cloud) databases - data stored on a server that is accessed remotely over the internet or some other telecommunications network 2. Online focus groups - more convenient; easier to conduct - restricted sample - those w/ access to phone/tech - lack of environmental control - lack of verification 3. Online sampling - online questionnaires & surveys

Question 37

What are the challenges global marketers face when collecting primary data?

Answer 37

1. Unwillingness to respond - Cultural, gender, and individual differences create wide disparities in the willingness to provide personal information 2. Unreliable Sampling Procedure - unreliable or inadequate demographic information to conduct primary research 3. Inaccurate Language Translation & Insufficient Comprehension - getting people in global markets to actually complete a survey presents three challenges

Question 38

What are the challenges global marketers face when collecting secondary data?

Answer 38

1. Data accessibility - in the United States, businesspeople are accustomed to easily accessing information that simply does not exist in much of the world 2. Data Dependability - Government agencies, particularly in developing countries, will distort data to present a more favourable analysis § The data are often reported incorrectly because people do not want the government to know the true figures, usually because of higher tax concerns 3. Data comparability - risks 3 problems i. Developing countries often lack historical data, making it much harder to assess long-term economic or business trends ii. The available data are outdated so they are ineffective for making decisions in the current economic environment iii. Terms used in reporting information are not consistent