CH 4: Market Research Essentials

Dr. Jingbo Zhang

 Learning Objectives
Learning Objectives

LO 4-1 Describe the difference between market information

systems and market research systems.
LO 4-2 Identify how critical internal (inside the firm) information
is collected and used in making marketing decisions.
LO 4-3 Explain essential external (outside the firm) information
collection methods.
LO 4-4 Recognize the value of market research and its role in
marketing.
LO 4-5 Define the market research process.
LO 4-6 Illustrate current research technologies and how they
are used in market research.

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• You are a marketing manager – a decision maker.
• What do you need if you need to make a business
decision?
LO 4-1 Describe the difference between market
information systems and market research systems.
 Making Good Marketing
Decisions: The Need to Know
Information is power!

The right information at the right time and in the right format is essential for decision makers.

Creating procedures that collect, analyze and access information is critical.

Marketing research is done by academics but market research is done by marketing managers.

Market research is methodology identification, collection, analysis, and distribution of data related to
discovering and solving problems or opportunities. It enhances good decision making.

A significant problem for most managers today is not having too little information, but having too
much.

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Marketing managers need a system to design and execute
research that generates precise information.

Two fundamental types of market information needed today are:

1. Related to broad areas of interest.
2. Addresses a specific question.

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 The Nature of a Market Information System

A market information system (MIS)

is not a software package but a
continuing process of identifying,
collecting, analyzing, accumulating
and dispensing critical information to
marketing decision makers.

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What information should be collected by the system?
• What information is important and think about the source.

What are the information needs of each decision maker?

• Not everyone need the same information.

How does the system maintain the privacy and confidentiality of

sensitive information?
• Limit access to those who need to know.

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LO 4-2 Identify how critical internal (inside the
firm) information is collected and used in making
marketing decisions.
Internal Sources

Collecting information inside the company:

• Information is used to identify the problem.
• Information is used to proactively address
issues before they become a problem.

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Internal Information Sources

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From the Customer’s Order to
Order Fulfillment

Identify the frequency and size of customer orders.

Determine the actual cost of a customer order.

Rank customers based on established criteria like

profitability.

Calculate the efficiency of the company’s production, and

distribution system.
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Heard on the Street: Sales
Information System

• Formal systems for collecting data (getting the data)

– This includes products discussed with the customer, customer concerns, and
changes in personnel.

• Interpretation of data (analysis).

– managers who add additional insight to the “raw” data from the salesperson

• Distribution of data (getting the analysis to decision makers and back into the
field).

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LO 4-3 Explain essential external (outside the
firm) information collection methods.
External Sources

• Collecting information outside the company.

• Most companies engage in collecting, analyzing, and storing data
from the macro environment on a continuous basis known as
marketing intelligence.

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Exhibit 4.3 External Factors Affect Marketing Decisions
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 External Sources
human
populations, such
as age or income,
used to identify
markets Economic Technology
Demographics
Conditions Transformations

Natural World Political/Legal Competition

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LO 4-4 Recognize the value of market research
and its role in marketing.
Marketing Research Systems

Good marketing research:

• Follows a well defined set of activities and does not
happen by accident.
• Enhances the validity of the information.
• Is impartial and objective.

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LO 4-5 Define the market research process.
Define the Establish Search Collect Analyze Report
Research Research Secondary the the the
Problem Design Sources Data Data Findings

Exhibit 4.6 The Market Research Process

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The Marketing Research Process: Define
the Research Problem

Management research
deliverable: What do managers
want to do with the information?
Define the research problem.
Exactly what information is
needed?

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• Ramzi Haidar/AFP/Getty Images
Activity Question to Be Answered
Type of research What kind of research needs to be done?
Nature of data What kind of data do we need?
Nature of data collection How should we collect the data?
Information content What do we need to know?
Sampling plan Who should be included in the research?

Exhibit 4.7 Research Design Activities

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The Marketing Research Process:
Establish the Research Design

Type of Research

Exploratory Research

Descriptive Research

Causal Research

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Exploratory research
• Clarify the research problem.
• Develop hypotheses for testing in descriptive or causal research.
• Gain additional insight to help in survey development or to identify
other research variables for study.
• Answers the research question.

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 Nature of Data Collection: How Should the Data Be
Collected? Exploratory

Exploratory Research Techniques

Focus group.
• Moderated by a professional.

• 6 -10 people.

• Unstructured, open format.

• Not a representative sample but leads to development of surveys.

In-depth interview
• Unstructured or loosely structured with an individual based on some
characteristic of interest, often demographic.

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Descriptive research: Identifies associations between
variables.
• Identify the characteristics of our target market.

• Assess competitor actions in the marketplace.

• Determine how customers use our products.

• Discover differences across demographic characteristics (age, education,

income) with respect to the use of our products or our competitors.

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 Nature of Data Collection: How Should the Data Be
Collected? Descriptive

Descriptive Research Techniques

Surveys via internet, phone.

Behavioral data is based on what consumers do, not what they say.

Observational data is collected in stores and at home.

• Mechanical observation uses machines like turnstiles, traffic counters,

eye cameras, galvanometers (attached to skin), Amazon Alexa.

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Causal Research: Looks to discover the cause and effect
between variables.
Considerations are:
• Benefit versus cost.
• Time until decision.
• Nature of the decision.
• Availability of data.

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Nature of Data: What Kind of
Data Do We Need?

Primary Data: Collected for this research question using:

Qualitative research is less structured
• Uses methods like surveys and interviews.

• Small sample sizes.

• Not meant for statistical analysis.

Quantitative research uses statistical analysis to assess and quantify

results.

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Nature of Data: What Kind of
Data Do We Need?

Secondary Data: Collected for other purposes.

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 Information Content: What Do We Need to
Know?

A critical part of research design involves determining exactly what

information is needed and how to frame the questions to get that
information.

Consider the structure and wording and possible responses.

• Questions may be open-ended (qualitative) or closed-ended
(quantitative).

Sampling plan: Census, sample, probability sample, nonprobability

sample.

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 Search Secondary Sources

Government sources
• Federal, State, and Local levels.

Market research organizations

• Neilsen Media Research, J.D. Power, MMGY Global.

The Internet

• Consider the source.

• Two kinds of data sources: Market Research firms that
share or sell data and General Knowledge sites like
business publications or academia.
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Marketing Research Process

Collect the Analyze the Report the

data. data. findings.

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LO 4-6 Illustrate current research technologies
and how they are used in market research.
Market Research Technology

Online research tools

• Online (cloud) databases.
• Online focus groups.

• Online sampling.

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Statistical Software

With training and data, managers can

conduct analysis not possible a few
years ago.

Most popular packages are IBM SPSS

and SAS.

Excel spreadsheets

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 Market Research
Challenges in Global
Markets

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 Market Research
Challenges in Global
Markets: Secondary Data

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