Chapter 9 Marketing Research Marketing research is a key prerequisite to successful decision making It consists of a set of techniques and principles for systematically collecting recording analyzing and interpreting data that can aid decision makers involved in marketing goods services or ideas When marketing managers attempt to develop their strategies marketing research can provide valuable information that will help them make segmentation positioning product place price and promotion decisions Firms invest billions of dollars in marketing research every year Why do marketers find this research valuable First it helps reduce some of the uncertainty under which they currently operate Successful managers know when research might help their decision making and then take appropriate steps to acquire the information they need Second marketing research provides a crucial link between firms and their environments which enables them to be customer oriented because they build their strategies by using customer input and continual feedback Third by constantly monitoring their competitors firms can anticipate and respond quickly to competitive moves If you think market research is applicable only to corporate or retailing ventures think again Not for profit organizations and governments also use research to serve their constituencies better The political sector has been slicing and dicing the voting public for decades to determine relevant messages for different demographics Politicians desperately want to understand who makes up the voting public to determine how to reach them Not only do they want to know your political views but they also want to understand your media habits such as what magazines you subscribe to so they can target you more effectively To do so they rely on the five step marketing research process we outline in this chapter We also will discuss some of the ethical implications of using the information that these databases can collect The Marketing Research Process Managers consider several factors before embarking on a marketing research project The marketing research process itself consists of five steps see Exhibit 9 1 Although we present the stages of the marketing research process in a step by step progression of course research does not always or even usually happen that way Researchers go back and forth from one step to another as the need arises Another important requirement before embarking on a research project is to plan the entire project in advance By planning the entire research process prior to starting the project researchers can avoid unnecessary alterations to the research plan as they move through the process Marketing Research Process Step 1 Defining the Objectives And Research Needs Because research is both expensive and time consuming it is important to establish in advance exactly what problem needs to be solved To do so marketers must clearly define the objectives of their marketing research project Researchers assess the value of a project through a careful comparison of the benefits of answering some of their questions and the costs associated with conducting the research Regardless of which specific goals the company has its marketing research efforts and resources will be wasted if its research objectives are poorly defined Poor design arises from three major sources Basing research on irrelevant research questions Focusing on research questions that marketing research cannot answer Addressing research questions to which the answers are already known For companies with track records of anticipating new technologies fashions or gadgets that consumers will demand as well as the core competencies to deliver them in a timely manner lengthy marketing research studies likely will not add significantly to the benefits of their own intuition However timely and focused marketing research could help them refine their ideas and prototypes When researchers have determined what information they need to address a particular problem or issue the next step is to design a research project to meet those objectives Marketing Research Process Step 2 Designing the Research In this step researchers identify the type of data needed and determine the type of research necessary to collect it The project s design might begin with available data such as information that shows that people with children often come into the restaurants at lunchtime and order Happy Meals Identifying the marketing metric needed for the second purpose assessing the extent to which the firm s market position will improve stay the same or deteriorate is not as easy to obtain Their relative market share in relation to that of its competitors over time can also shed light on the future of its market position The firm will want to know which firms have been gaining relative market share and which are losing Marketing Research Process Step 3 Data Collection Process Data collection begins only after the research design process Based on the design of the project data can be collected from secondary or primary data sources Secondary data are pieces of information that have been collected prior to the start of the focal research project Secondary data include both external and internal data sources Primary data in contrast are those data collected to address specific research needs Some common primary data collection methods include focus groups in depth interviews and surveys 1 Secondary Data o A marketing research project often begins with a review of the relevant secondary data o Secondary data might come from free or very inexpensive external sources such as census data information from trade associations and reports published in magazines o Although readily accessible these inexpensive sources may not be specific or timely enough to solve the marketer s research needs and objectives So firms purchase secondary data from specialized research firms o Additionally secondary sources can be taken from internal sources including the company s sales invoices customer lists and other reports generated by the company itself I Inexpensive External Secondary Data v Some sources of external secondary data can be quickly accessed at a relatively low cost v The Census of Retail Trade and County Business Patterns for example provides data about sales of different types of retail establishments If you wanted to open a new location of a business you are already operating these data may help you determine the