Lecture notes in Marketing Research

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An Introduction to Marketing Research Scott M. S mith James Passey Professor of Marketing Founder, Qualtrics Gerald S. Albaum Emeritus Professor of Marketing University of New Mexico Copyright © 2010 by Scott M. Smith and Gerald S. Albaum. This book is made available electronically to users of Qualtrics without charge through the Qualtrics Survey University. All rights reserved. No part of this book may be reproduced except for personal use, or utilized in any form or by any means, electronic or mechanical, including photocopying, recording, or by any information storage and retrieval system, without permission in writing from the authors. Table of Contents Chapter 1 An Introduction to Marketing Research .....................................................1 Chapter 2 Defining the Research Design and Controlling Research Errors ......................................................................21 Chapter 3 Secondary Sources of Information.............................................................37 Chapter 4 Conducting Interviews ..............................................................................59 Chapter 5 Modes of Interviewing Personal-Send-Call ..............................................79 Chapter 6 Qualitative Research and Observation .......................................................97 Chapter 7 Sampling Procedures in Research ............................................................123 Chapter 8 Experimentation ......................................................................................153 Chapter 9 Measuring Respondent Information: Attitudes, Satisfaction, Loyalty and Behavior ........................................191 Chapter 10 General Concepts of Measurement and Scaling .....................................219 Chapter 11 Hypothesis Testing and Univariate Analysis ..........................................259 Chapter 12 Bivariate Data Analysis ..........................................................................287 Chapter 13 Multivariate Statistical Analysis I ..........................................................327 Chapter 14 Multivariate Statistical Analysis II ........................................................363 Chapter 15 Preparing the Research Report ................................................................393 Glossary ........................................................................................................ G-1 Appendix 1 ........................................................................................................ A-1 Preface This book draws its “parentage” from the classic Research for Marketing Decisions by Paul E. Green, Donald S. Tull, and Gerald Albaum. But, it is not a revision of that book. Rather, it might best be viewed as a “child” which is targeted to a different audience—primarily senior-level undergraduate and MBA students who are users of Qualtrics.com. We believe this book is “novel” in at least three major respects. First, with respect to method, the unifying concept of this book is that marketing research is a cost-incurring activity whose output is information of potential value to managers in making decisions. Second, with respect to technique, this book again departs from tradition in terms of an applied approach to the relatively large coverage of more sophisticated, yet relatively easily implemented, research techniques. The entire book focuses on implementation of online marketing research. Question types and examples are implemented using internet survey provider, Qualtrics.com, so that students can design, plan and implement an online survey of their own at no charge. Finally, with respect to analysis, the book is expansive in its coverage, including relative emphasis on modern analytical tools such as multivariate analysis. In terms of number of chapters, 30% of the book is devoted to analysis, but, the discussion is at a level that senior-level undergraduates can understand, and the techniques are explained within the context of computer- based analysis. This book is concerned with providing an introduction to marketing research. This means that all the basic elements of method, techniques, and analysis are covered, including those at a more sophisticated level. But, the book is NOT a book of only essentials. The methodological scope regarding research design, data collection techniques, and measurement is broad. For example, two chapters are devoted to the critical area of measurement and scaling. The book presents its material from primarily a pragmatic and user-oriented (rather than theoretical research technician) perspective. User-orientation is based on the premise that users need to know method in order to evaluate research presented to them. Because the book is available online, it can be used in a modular fashion at no cost to the student. For example, if chapters on experimental design or multivariate statistics are beyond the scope of the instructor’s focus, then they can simply be ignored. Similarly, if the course focuses on survey research, chapters 9 and 10 could be the focal point, supplemented with chapters 1,2,4,5,6,7 plus analysis chapters as appropriate. Note that because of the dynamic nature of electronic publication, chapters may be edited, and additional chapters may be added from time to time. There is a Glossary of Terms and an appendix that includes some widely-used statistical tables for analysis. These tables will be useful for analyzing appropriate cases. Many people helped shape the content and style of this book, but most importantly Professors Paul E. Green and the late Donald S. Tull have had a profound influence on the authors’ thinking about research and their book with one of the present authors provided a platform from which the present book was launched. SCOTT M. SMITH GERALD S. ALBAUM Chapter 1 AN INTRODUCTION TO MARKETING RESEARCH Marketing is a restless, changing, and dynamic business activity. The role of marketing itself has changed dramatically due to various crises—material and energy shortages, inflation, economic recessions, high unemployment, dying industries, dying companies, terrorism and war, and effects due to rapid technological changes in certain industries. Such changes, including the Internet, have forced today’s marketing executive to becoming more market driven in their strategic decision-making, requiring a formalized means of acquiring accurate and timely information about customers, products and the marketplace and the overall environment. The means to help them do this is marketing research. WHAT IS RESEARCH? Research is a systematic and objective investigation of a subject or problem in order to discover relevant information or principles. It can be considered to be either primarily fundamental or applied in nature. Fundamental research, frequently called basic or pure research, seeks to extend the boundaries of knowledge in a given area with no necessary immediate application to existing problems, for example, the development of a research method that would be able to predict what people will be like x years in the future. In contrast, applied research, also known as decisional research, attempts to use existing knowledge to aid in the solution of some given problem or set of problems. Marketing research assists in the overall management of the marketing function. A marketing manager must prioritize the more important and pressing problems selected for solution, reach the best possible solution based on the information available, implement the solution, modify the solution when additional information so dictates, and establish policy to act as a ready-made solution for any recurrence of the problem. Marketing research often focuses on understanding the “Customer” (purchasers, consumers, influencers), the “Company” (product design, promotion, pricing, placement, service, sales), and can also be expanded toward the environment to include “Competitors” (and how their market offerings interact in the market environment). Figure 1.1 Marketing Environment (Source: Modified from Perrault and McCarthy, ) 1 Scott M. Smith and Gerald S. Albaum, An Introduction to Marketing Research, © 2010 Within this “Company-Customer-Competition” environment, many types of marketing research can be conducted, much of which is focused on using surveys for Monitoring customers and markets Measuring awareness, attitudes, and image Tracking product usage behavior Diagnosing immediate business problems Supporting strategy development More specific examples are found in the Qualtrics.com Survey University. This provider of professional survey software identifies twenty different kinds of surveys that are of use to marketing researchers. Each focuses on a different aspect of the “Company” and it’s interaction with the “Customer” and “Competition” in the market environment: Exhibit 1.1 Twenty Different Types of Marketing Surveys 1 - Market Description Surveys To determine the size and relative market share of the market. Such studies provide key information about market growth, competitive positioning and tracking share of market. 2 - Market Profiling-Segmentation Surveys To identify who the customers are, who they are not, and why they are or are not your customers. This is often a descriptive market segmentation and market share analysis 3 - Stage in the Purchase Process / Tracking Surveys Where is the customer in the adoption process? This information shows market Awareness – Knowledge – Intention – Trial – Purchase – Repurchase of the product. 4 - Customer Intention - Purchase Analysis Surveys Directed at understanding the current customer. What motivates the customer to move from interest in the product to actual purchase? This is a key to understanding customer conversion, commitment and loyalty. 5 - Customer Attitudes and Expectations Surveys Does the product meet customer expectations? What attitudes have customers formed about the product and/or company. Used to direct advertising and improve customer conversion, commitment and loyalty. 6 - Customer Trust - Loyalty – Retention Analysis Surveys Especially for high priced consumer goods with long decision and purchase processes (time from need recognition to purchase), and depth of consumer attitudes formed about the product and/or company. 7 - New Product Concept Analysis Surveys Concept test studies are appropriate in the initial screening of new product concepts. Likes and dislikes about the concept and evaluation of acceptability and likelihood of purchase are especially useful measures. 8 - New Product Acceptance and Demand Surveys (Conjoint Analysis) Primarily for estimating demand for new products that can be described or have been developed in drawing or concept, but have not yet been developed physically. Develops develop market share estimates of market potential for the alternative potential products. 9 - Habits and Uses Surveys Directed at understanding usage situations, including how, when and where the product is used. Habits and uses studies sometimes include a real or virtual pantry audit. 10 - Product Fulfillment Surveys (Attribute, Features, Promised Benefits) Evaluation of the product’s promised bundle of benefits (both tangible and image). Are expectations created for the product by advertising, packaging and the produce appearance fulfilled by the product? 11 - Product Positioning Surveys (Competitive Market Position) A “Best Practices” study of “How does the market view us relative to the competition?” Competitive positioning analyses often compare the attributes and benefits that make up the product using multidimensional scaling. 2 Scott M. Smith and Gerald S. Albaum, An Introduction to Marketing Research, © 2010 12 - Brand Equity Analysis Surveys What is psychological value that a brand holds in the market place? Brand equity is a composite of brand awareness, brand quality, brand associations and brand loyalty measures. 13 - Advertising Value Identification and Analysis Surveys Advertising value analysis focuses on mapping the hierarchical attributes, benefits and values that are associated with and portrayed by an advertisement. Means-end analysis is often part of this type of study. 14 - Advertising Message Effectiveness Surveys (Media and Message) Message effectiveness testing identifies the impressions, feelings, and effectiveness in moving the respondent to a desired goal (increased awareness, more product information, trial, repeat purchase). 15 - Sales Force Effectiveness Surveys A combination of measures that focus on the sales activities, performance and effectiveness in producing the desired and measurable effect or goal. Often measured as a 360 degree survey completed by the sales person, the client (evaluating the sales call) and the supervisor responsible for evaluating the sales person. 16 - Sales Lead Generation Surveys Sales lead generation surveys for (1) assuring timely use and follow-up of sales leads, (2) qualifying sales leads (thereby saving valuable sales force time) and (3) providing more effective tracking of sales leads. 17 - Customer Service Surveys Akin to customer satisfaction surveys, but focus in detail on the actual customer service that was received, the process involved in receiving that service and the evaluation of the participants in the service process. 18 - Customer Service Representative (CSR) Surveys: Attitudes, Burnout, Turnover and Retention: CSRs hold attitudes that reflect on their job related activities including (1) the allocation of time; (2) solutions to customer needs; (3) how to improve their job; (4) best practices; (5) How well internal departments help customers. CSRs often exhibit frustration, burnout and high turnover and surveys focus on CSR retention, reducing costs and increasing the quality of customer relationships. 19 - Sales Forecasting and Market Tracking Surveys Sales forecasting and market tracking studies can include expert opinion (experts estimate the market), judgmental bootstrapping (expert based rules describing how to use available secondary market information), conjoint analysis (estimation of consumer intentions based on product attributes that are important in the decision), and intentions evaluations (consumer self reported intentions of future purchases) are to be made. 20 - Price Setting Surveys and Elasticity of Demand Analysis Price surveys estimate the elasticity of demand and show optimal price points, including prices too low or too high. Price surveys may estimate the demand for different product or service segments, or different usage situations. Source: Twenty Different Types of Marketing Surveys: http://www.qualtrics.com/wiki/index.php/Market_Surveys. Each of the above surveys focuses on a specific area of research and involves the development of conceptual models directed at predicting or explaining a specific type of behavior that is being measured. This level of specificity is desirable for several reasons. Within the research process, this specificity brings: 1. Clarification. Explication usually results in the clarification of relationships and interactions. The need for more rigorous definitions of key variables often becomes apparent. 2. Objectivity. The process of explicating the modeled behavior often discloses rationalizations and unfounded opinions that had not been recognized as such before. 3. Communication. Discussion helps to identify problems and common points of reference when different people hold alternative implicit models of the same problem situation. 4. Improvement of models. Explicit models can be tested in differing situations to see if the results are reproducible. The degree and range of adaptability can thus be extended. 3 Scott M. Smith and Gerald S. Albaum, An Introduction to Marketing Research, © 2010 5. Guide to research needs. Formulating models explicitly can better pinpoint information gaps and, thus, aid in determining the nature of research needs. While varying information is required for the different types of marketing research projects, the key to conducting a successful research project lies with the researcher and the client. They must come to a common understanding of the nature of the exact research problem, and then agree on the information required to answer this problem. This requires identifying the appropriate questions, respondents, methodology, analysis and reporting. All studies must address these same basic issues (see Exhibit 1.2). EXHIBIT 1.2 Basic Research Issues As technology advances, marketing researchers are continually looking for ways to adapt new technology to the practice of research. Both hardware and software are involved in such adaptations. However, researchers must never forget that research basics cannot be overlooked. Rather, what must be done is to adapt the new techniques and technologies to these basics. All studies must address the following basic issues (Anderson, Berdie, & Liestman, 1984): 1. Ask the right questions. This is the essence of project design, and the heart of proper planning. The research planner must remember that every project is unique, and as such must be tailored to the user’s needs. 2. Ask the right people. Sample design should be such that only those people who are of interest to the research user are contacted, and such that those who are contacted are reasonably representative of the group of interest. 3. Ask questions the right way. It is not enough to be able to ask the right questions; they must be asked in the right way. This is the essence of questionnaire design. The researcher can use all the aids available from the new technologies, but if the wording of the questions is not clear to the respondents, the results will be useless. One basic that is overlooked all too often is pretesting the questionnaire; this is crucial for ensuring that responses are the ones that are needed to address the problem. 4. Obtain answers to questions. The process of data collection is central to all marketing research. Techniques used should be selected for how each bears on nonresponse and response alike. 5. Relate answers to the needs of the research user/client. Data seldom speak for themselves. Proper data analysis is needed if a study is to have any value to the user. Here there is a risk of letting advanced techniques become the master of the researcher rather than the opposite. Common sense is a valuable tool for the researcher when considering alternative analysis approaches for any project. 6. Communicate effectively and in a way that the client understands. Many good projects are ruined in this stage. The information that is reported to the user should be in a form that is understandable to the user so that he or she can tell that it is relevant to the issues at hand. Having considered these general topic-situation issues in conducting research, let’s now turn to the basic process of conducting a research process. 4 Scott M. Smith and Gerald S. Albaum, An Introduction to Marketing Research, © 2010 THE BASIC RESEARCH PROCESS How is marketing research actually conducted? What are the general steps in completing a research project? These questions are answered in the steps of the research process. While the steps are shown as a linear process, some of the steps may be performed simultaneously, such as selecting data collection techniques and sample design. There are other times when “later” decisions influence decisions that are made early in the research planning process. For example, desired analysis techniques often influence the selection of data collection techniques (e.g., measurement) and sample design. Figure 1.2 The Research Process It is important to carefully plan the research process and formally recognize the relationship between the stages. The researcher should write a formal plan for the project, including the background information and statement of objectives, which then becomes the master guide for implementing and controlling the research project. Each step in this research process will now be introduced. STAGE 1: PROBLEM FORMULATION In a very real sense, problem formulation is the heart of the research process. As such, it represents the single most important step to be performed. From the researcher’s point of view, problem formulation means translating the management problem into a research problem. As previously discussed, in order to formulate an appropriate research problem, the researcher must understand the origin and nature of management’s problem and then be able to rephrase it into meaningful terms from an analytical point of view. This involves timely and clear communication between manager and researcher. The end result of problem formulation is a statement of the management problem that is analytically meaningful and that often points the way to alternative solutions. An accurate problem formulation specifies the types of information needed to help solve the management problem. In short, quality thinking about a problem prior to data collection largely determines the quality of data collection, analysis and problem solving. 5 Scott M. Smith and Gerald S. Albaum, An Introduction to Marketing Research, © 2010 Exhibit 1.2 Examples of Management Problems and Related Research Problems Management Problems Research Problems Allocate advertising budget to media Estimate awareness generated by each media type Decide whether to keep office open Evaluate use of services on Saturday and determine on Saturday whether customers will shift usage to weekdays Introduce a new health service Design a concept test and assess acceptance and use Change the marketing program Design a test-marketing situation such that the effect of the new program can be estimated Increase the sales of a product Measure a product’s current image Closely related to problem formulation is the development of a working hypothesis, or an assertion about a state of nature. While hypotheses are crucial for basic research because they tell the researcher what to do, the concept of a hypothesis can also be useful in decisional research to direct the development of the research problem statement. In most cases, the marketing researcher will not explicitly state hypotheses for the research. Kerlinger and Lee (2000, Chapter 2) suggest that research problems and hypotheses meet the following criteria: 1. The problem statement expresses a relationship between two or more variables. 2. The problem is stated clearly and unambiguously in question form. 3. The problem statement implies possibilities of empirical testing. Where properties of good hypotheses include the following: 1. The hypothesis is a statement about the relationship between two or more variables in declarative statement form. 2. The hypothesis carries clear implications for testing the stated relationship (i.e., variables must be measurable or potentially measurable). How to Formulate the Research Problem Problem formulation is much easier when specific components of the research problem are defined: 1. Specify the Research Objectives Objectives guide the researcher in developing good, useful research, and they help the client evaluate the completed project. Objectives range from the very general, such as profit maximization, to the highly specific, such as measuring market interest in a new product. It is rare that the objectives are well explained to the researcher. However, the researcher needs to take the initiative to develop a clear statement of objectives. Each study should have a very limited and manageable set of objectives that focus on the problem being solved. Two or three well targeted objectives is preferable to many that are ill- conceived. Fewer the objectives make it easier to keep track of progress toward the objectives, to ensure that each is properly addressed, and to determine the best methodology. If there are too many objectives separate studies may be appropriate. 6 Scott M. Smith and Gerald S. Albaum, An Introduction to Marketing Research, © 2010 2. The Environment or Context of the Problem Consider the problem of deciding whether to introduce a new consumer product. The marketing researcher must work closely with the client in transforming the client’s problem into a workable research problem. The researcher’s efforts should be oriented toward helping the manager decide whether any investigation is justified based on the potential value of the research findings versus their cost. The researcher must be aware of, and assist in, the identification of objectives, courses of action, and environmental variables, insofar as they affect the design of the research investigation. If the research is undertaken and if the resulting findings are to be utilized (i.e., have an influence on the user’s decision making), the manager and researcher must have a productive and trusting relationship that is based on the researcher’s ability to perform and deliver the research as promised. 3. The Nature of the Problem Every research problem may be evaluated on a scale that ranges from very simple to very complex. The degree of complexity depends on the number of variables that influence the problem. Understanding the nature of the problem helps a researcher ensure that the right problem is being investigated and that a marketing plan can be developed to solve the problem. A thorough preliminary investigation using focus groups of consumers, salespeople, managers, or others close to the problem may produce much needed insight. 4. Alternative Courses of Action A course of action specifies a behavioral sequence that occurs over time, such as the adoption of a new package design, or the introduction of a new product. Such a program of action becomes a commitment, made in the present, to follow some behavioral pattern in the future. It is usually desirable to generate as many alternatives as possible during the problem formulation stage and state them in the form of research hypotheses to be examined. A hypothesis often implies a possible course of action with a prediction of the outcome if that course of action is followed. Once the nature of the problem has been agreed upon, the course of action must be specified. This involves: 1. Determining which variables affect the solution to the problem 2. Determining the degree to which each variable can be controlled 3. Determining the functional relationships between the variables and which variables are critical to the solution of the problem. The following example shows the results of a failure to follow through with these aspects of the problem situation model. 7 Scott M. Smith and Gerald S. Albaum, An Introduction to Marketing Research, © 2010 EXHIBIT 1.3 “New Coke” Versus Original Coke In the mid-1980s the Coca Cola Company made a decision to introduce a new beverage product (Hartley, 1995, pp. 129–145). The company had evidence that taste was the single most important cause of Coke’s decline in the market share in the late 1970s and early 1980s. A new product dubbed “New Coke” was developed that was sweeter than the original-formula Coke. Almost 200,000 blind product taste tests were conducted in the United States, and more than one-half of the participants favored New Coke over both the original formula and Pepsi. The new product was introduced and the original formula was withdrawn from the market. This turned out to be a big mistake Eventually, the company reintroduced the original formula as Coke Classic and tried to market the two products. Ultimately, New Coke was withdrawn from the market. What went wrong? Two things stand out. First, there was a flaw in the market research taste tests that were conducted: They assumed that taste was the deciding factor in consumer purchase behavior. Consumers were not told that only one product would be marketed. Thus, they were not asked whether they would give up the original formula for New Coke. Second, no one realized the symbolic value and emotional involvement people had with the original Coke. The bottom line on this is that relevant variables that would affect the problem solution were not included in the research. CBS New Coke News Clip: http://www.youtube.com/watch?v=-doEpVWFLsE&NR=1&feature=fvwp New Coke Commercial: http://www.youtube.com/watch?v=o4YvmN1hvNA New Coke and Coke Classic Commercial: http://www.youtube.com/watch?v=ky45YGUA3co 5. The Consequences of Alternative Courses of Action A set of consequences always relate to courses of action and even to the occurrence of events not under the control of the manager. One of the manager’s primary jobs is to anticipate and communicate the possible outcomes of various courses of action that may result from following the research. 6. Degrees of Uncertainty Most marketing problems are characterized by a situation of uncertainty as to which course of action is best. Years of experience may allow the decision-making manager to assign various “likelihoods of occurrence” to the various possible outcomes of specific courses of action. A carefully formulated problem and statement of research purpose is necessary for competent research. The statement of purpose involves a translation of the decision maker’s problem into a research problem and the derivation of a study design from this problem formulation. The research problem provides relevant information concerning recognized (or newly generated) alternative solutions to aid in this choice. STAGE 2: METHOD OF INQUIRY Market researchers look to the scientific method as the source of their investigative methods. Even though this method is not the only one used, it is the standard against which other investigative methods are measured. The scientific method makes great use of existing knowledge both as a starting point for investigation and as a check on the results of the investigations (i.e., a test of validity). Its most distinctive characteristic is its total lack of subjectivity. The scientific method has evolved objective and rigid procedures for verifying hypotheses or evaluating evidence. It is analytical in its processes and is investigator- independent. Thus, the scientific method is for the most part logical and objective, and frequently makes extensive use of mathematical reasoning and complicated experiments. 8 Scott M. Smith and Gerald S. Albaum, An Introduction to Marketing Research, © 2010 The goal of a scientific methodologist, also called an objectivist, is to run a hypothesis test using publicly stated procedures that are investigator-independent. Formulate a problem Develop a hypothesis Make predictions based on the hypothesis Devise a test of the hypothesis Conduct the test Analyze the results Even though the terminology used is that associated with basic research, the process described is analogous to that of decision making. Although the steps are the same, there are differences in the way in which the steps are performed and in the underlying assumptions about behavior. For example, the essential difference between the objectivist and the subjectivist is the latter’s allowance for use of subjective judgments both when collecting data and when analyzing data (Diesing, 1966). This objectivist-subjectivist distinction has very practical meaning, particularly when considering the use of outside research suppliers. There are commercial research firms that tend to specialize in one or the other method of inquiry. Objectivist-based research is often called quantitative research, whereas subjectivist-based research is often called qualitative research. Exhibit 1.4 The Scientific Method In structure, if not always in application, the scientific method is simple and consists of the following steps: 1. Observation. This is the problem-awareness phase, which involves observing a set of significant factors that relate to the problem situation. 2. Formulation of hypotheses. In this stage, a hypothesis (i.e., a generalization about reality that permit prediction) is formed that postulates a connection between seemingly unrelated facts. In a sense, the hypothesis suggests an explanation of what has been observed. 3. Prediction of the future. After hypotheses are formulated, their logical implications are deduced. This stage uses the hypotheses to predict what will happen. 4. Testing the hypotheses. This is the evidence collection and evaluation stage. From a research project perspective this is the design and implementation of the main study. Conclusions are stated based on the data collected and evaluated. A simple example will show how the scientific method works. Assume a researcher is performing a marketing research project for a manufacturer of men’s shirts: 1. Observation: The researcher notices some competitors’ sales are increasing and that many competitors have shifted to a new plastic wrapping. 2. Formulation of hypotheses: The researcher assumes his client’s products are of similar quality and that the plastic wrapping is the sole cause of increased competitors’ sales. 3. Prediction of the future: The hypothesis predicts that sales will increase if the manufacturer shifts to the new wrapping. 4. Testing the hypotheses: The client produces some shirts in the new packaging and market-tests them. 9 Scott M. Smith and Gerald S. Albaum, An Introduction to Marketing Research, © 2010 STAGE 3: RESEARCH METHOD Whether a particular method of inquiry is appropriate for a research problem depends in large part on the nature of the problem itself and the extent or level of existing knowledge. In addition to selecting a method of inquiry, the research planner must also select a research method. Two broad methodologies can be used to answer any research question–experimental research and non-experimental research. The major advantage of experimental research lies in the ability to control extraneous variables and manipulate one or more variables by the intervention of the investigator. In non-experimental research, there is no intervention beyond that needed for purposes of measurement. STAGE 4: RESEARCH DESIGN Research design is defined as the specific methods and procedures for acquiring the information needed. It is a plan or organizational framework for doing the study and collecting the data. Research designs are unique to a methodology. We discuss research design in depth later in this document and in Chapter 3. STAGE 5: DATA COLLECTION TECHNIQUES Research design begins to take on detailed focus as the researcher selects the particular techniques to be used in solving the problem formulated and in carrying out the method selected. A number of techniques available for collecting data can be used. Some techniques are unique to a method of inquiry. For example, many of the qualitative research techniques, such as projective techniques, are used only in subjectivist-type research. In general, data collection uses either communication or observation. Communication involves asking questions and receiving responses. This process can be done in person, by mail, by telephone, by e-mail, and over the Internet. In most instances this constitutes the broad research technique known as the survey. In contrast to this process, data may be obtained by observing present or past behavior. Regarding past behavior, data collection techniques include looking at secondary data such as company records, reviewing studies published by external sources, and examining physical traces such as erosion and accretion. In order to collect data from communication or observation there must be a means of recording responses or behavior. Thus, the process of measurement and the development of measurement instrument are closely connected to the decision of which data collection technique(s) should be used. The relationship is two-way. That is, the structure and content of the measurement instrument can depend on the data collection technique, and measurement considerations often influence technique selection. STAGE 6: SAMPLE DESIGN Rarely will a marketing research project involve examining the entire population that is relevant to the problem. For the most part, practical considerations (e.g., absolute resources available, cost vs. value, etc.) dictate that one use a sample, or subset of the relevant population. In other instances the use of a sample is derived from consideration of the relevant systematic and variable errors that might arise in a project. 10 Scott M. Smith and Gerald S. Albaum, An Introduction to Marketing Research, © 2010 In designing the sample, the researcher must specify three things: 1. Where the sample is to be selected 2. The process of selection 3. The size of the sample The sample design must be consistent with the relevant population, which is usually specified in the problem-formulation stage of the research process. This allows the data obtained from the sample to be used in making inferences about the larger population. The process of sample selection may be done by probability or non-probability methods. In probability sampling every element in the population has a known nonzero probability (chance) of being selected for inclusion in a study. In contrast, a non-probability sample is one selected on the basis of the judgment of the investigator, convenience, or by some other means not involving the use of probabilities. STAGE 7: DATA COLLECTION Data collection begins after the previous six stages of the research process are complete. Data collection, whether by communication or observation, requires the use of data collection personnel which then raises questions regarding managing these people. Because data collection can be costly, firms often utilize outside limited-service research suppliers, particularly when the extent of in-house research activity does not warrant the cost of having permanent data collection personnel. Also, project design may require specialized data collection, which might best be obtained from an outside supplier. The working relationship between the data collection agency (a so-called field service) and the research supplier or client is a major factor affecting the quality of fieldwork and data collection. A study of marketing research firms found that the major barriers to the communication of information from clients to research suppliers to field service firms were insufficient information supplied by the client, the research supplier as an intermediary between client and field service firm, and lack of client interest in data collection (Segal & Newberry, 1983). The major suggestion for improving communication is for clients to provide more information to both suppliers and field service firms. Another way to overcome communication barriers is for the field service to be consulted on such major issues as scheduling, costs, and purpose of the study. Finally, it was suggested that two-way communication with suppliers be established or strengthened. Although this study was conducted more than 20 years ago, these are enduring problems that exist today. STAGE 8: ANALYSIS AND INTERPRETATION Data that are obtained and presented in the same form as originally collected are seldom useful to anyone. Data must be analyzed. The data must be edited, coded, and tabulated before performing formal analyses such as statistical tests. The types of analyses that can be properly performed depend upon the sampling procedures, measurement instruments, and data collection techniques used. Consequently, it is imperative that the techniques of analysis, associated descriptive or prescriptive recommendation types, and presentation formats be selected prior to data collection. 11 Scott M. Smith and Gerald S. Albaum, An Introduction to Marketing Research, © 2010 STAGE 9: THE RESEARCH REPORT The culmination of the research process is the research report. It includes a clear, accurate, and honest description of everything that has been done and the results, conclusions, and— whenever possible—recommendations for courses of action. Two critical attributes of the report are that it provides all the information readers need using language they understand (completeness) and that it contains selective information chosen by the researcher (conciseness). These attributes are often in conflict with each other. Two approaches can be taken to ensure that this conflict is not a problem. One approach involves preparing two reports: (1) a technical report that emphasizes the methods used and underlying assumptions, and presents the findings in a detailed manner; and (2) a popular report that minimizes technical details and emphasizes simplicity. The second approach is concerned with how the report is communicated. Because people vary a great deal in how they are affected by different forms of communication, the ideal reporting process should try to encompass all major forms. Thus, a written report, by itself, may be inadequate and only an invitation to inaction. There are simply a lot of people who, for various reasons, don’t respond to the printed word. There are still more that, although they may respond, will often misunderstand the meaning of what is written. For these reasons, it is vitally necessary to get management to sit down with the research manager, or with the researcher and the outside research firm, in a face-to-face reporting situation. RESOURCE PLANNING FOR YOUR STUDY When planning for your research, the resources necessary to complete the study should also be identified. Resources include personnel, time and money. Resource plans range from very informal to very formal and may include a list all personnel who will be involved with the project, the exact assignment of each person, the time to be spent, and the pay for each. Additionally you will need to prepare a budget and time schedule for the major activities involved in conducting the study. Microsoft Project or similar software may be helpful in planning and monitoring your research project. Source: http://office.microsoft.com/en-us/templates/TC012330951033.aspx 12 Scott M. Smith and Gerald S. Albaum, An Introduction to Marketing Research, © 2010 THE MAKE OR BUY DECISION A decision facing all companies that want to use marketing research is who should do the research. Alternatives are to have it done in-house, to utilize outside suppliers, or some combination of the two. In short, sourcing marketing research is a “make or buy” decision. For some companies, this decision is automatic—the in-house organization will do all research unless it is beyond their technical expertise. Other companies with in-house capabilities treat the internal units the same as outside suppliers: they must compete with outside suppliers by preparing proposals and making bids for the business. Almost all research users will at some time require the services of outside research suppliers. Outside suppliers range from a full-service marketing research agency such as M/A/R/C Research (http://www.marcresearch.com), Burke (http://www.burke.com), and Maritz Marketing Research, Inc. (http://www.maritz.com), to a specialized survey software company like Qualtrics (http://www.qualtrics.com) that provides sophisticated, yet easy to use online data collection and analysis tools, combined with online training, customer support, respondent panels, and analytical services for the client. Clients can negotiate with full-service companies to perform only limited services, for example, research design and data collection only, if that is all the client wants. Thus, there are many variations in the way outside suppliers are used. When might the use of an outside research supplier be appropriate? There are a number of situations that may call for the use of such firms: 1. The capabilities or technical expertise of in-house researchers are not adequate. 2. You are not able to hire needed personnel. 3. The outside supplier has the needed facilities for doing the research, such as those needed for focus groups or laboratory experiments. 4. A research firm has a demonstrated expertise in a specific industry. 5. There is no unused capacity in the in-house research organization. 6. Lack of objectivity on the part of in-house personnel 7. The outside research supplier can do the research quicker. 8. Some aspect such as data collection may be cheaper when done by an outside supplier (purchasing supermarket-based scanner data may be less costly than collecting it yourself). 9. There is a need for anonymity or confidentiality that may be provided best by an outside research firm. 10. The results of the research may be used in legal proceedings. If so, the outside research firm may have more credibility in the eyes of the court or regulatory or legislative body. Exhibit 1.5 How to Develop a Successful Research-Consulting Relationship Some rules of thumb for developing a quality relationship with a research client warrant consideration (proposed by Schmalensee, 2001). For the most part these represent adaptation of more standard techniques and methods to fit a B2B situation. These suggestions are organized around the typical flow of a research project: 1. Design research to foster customer relationships. This applies to all stages of a project. The research process should be designed to strengthen relationships with business customers. 2. Lay the groundwork. It is suggested that the researcher allow extra time to talk with the staff, especially those with customer contact. In B2B situations there may be many people who have customer contact, and their views may differ enough that it is beneficial to talk with as many as possible. 13 Scott M. Smith and Gerald S. Albaum, An Introduction to Marketing Research, © 2010 3. Select and draw the samples. There may be a choice of respondents within each business organization, including senior executives, second tier administrators and even customers. In a typical project it is often difficult to decide which type of respondent to contact. One way to overcome this is to interview all major types identified as having relevant information for the problem at hand, although the questions asked each type of respondent will differ. 4. Select the research approach and methodology. Business respondents tend to be busy people, so it is important to be creative in selecting data collection methodologies. For example a combined telephone and Internet may lead to better information that a telephone or mail questionnaires. Understanding how your target respondent can best be contacted can be helpful in selecting the best method for the majority of the sample. 5. Design the questions. Keep the questionnaire as “short and sweet” as possible. This, of course, applies to all research projects. Business respondents will be more likely to respond if the questions are interesting and allow them to respond in their own words in a conversational way. 6. Record and analyze the data. Much of the information collected in B2B research is qualitative, making the analysis crucial. 7. Report the results. A good way to increase credibility and ensure that results lead to action is to personalize results. This includes use of individual respondent anecdotes and other humanizing details. 8. Plan, communicate, and act. A good way to increase response rates and build relationships with customers is to share with them what has been learned and what is planned. Communicating with customers allows a company to involve them in implementing whatever action the research suggests. This, again, is part of relationship building. EXHIBIT 1.6 Basic Research Issues As technology advances, marketing researchers are continually looking for ways to adapt new technology to the practice of research. Both hardware and software are involved in such adaptations. However, researchers must never forget that research basics cannot be overlooked. Rather, what must be done is to adapt the new techniques and technologies to these basics. All studies must address the following basic issues (Anderson, Berdie, & Liestman, 1984): 1. Ask the right questions. This is the essence of project design, and the heart of proper planning. The research planner must remember that every project is unique, and as such must be tailored to the user’s needs. 2. Ask the right people. Sample design should be such that only those people who are of interest to the research user are contacted, and such that those who are contacted are reasonably representative of the group of interest. 3. Ask questions the right way. It is not enough to be able to ask the right questions; they must be asked in the right way. This is the essence of questionnaire design. The researcher can use all the aids available from the new technologies, but if the wording of the questions is not clear to the respondents, the results will be useless. Always pretest the questionnaire to ensure that responses are the ones that are needed to address the problem. 4. Obtain answers to questions. The process of data collection is central to all marketing research. Techniques used should be selected for how each bears on nonresponse and response alike. 5. Relate answers to the needs of the research user/client. Data seldom speak for themselves. Proper data analysis is needed if a study is to have any value to the user. Here there is a risk of letting advanced techniques become the master of the researcher rather than the opposite. Common sense is a valuable tool for the researcher when considering alternative analysis approaches for any project. 6. Communicate effectively. Many good projects are ruined in this stage. The information that is reported to the user should be in a form that is understandable to the user so that he or she can tell that it is relevant to the issues at hand. 14 Scott M. Smith and Gerald S. Albaum, An Introduction to Marketing Research, © 2010 Ethical Considerations in Survey Research There are a number of ethical considerations that arise both in conducting marketing research projects and in marketing related activities in general. Many of these ethical issues are the result of marketing activities that are conducted under the guise of surveys. Exhibit 1.7 summarizes the major practices that are considered unethical, these being deceptive and fraudulent practices, invasion of privacy, and lack of consideration for research subjects and respondents. EXHIBIT 1.7 Ethical Considerations in Treatment of Subjects and Respondents Schneider (1977) enumerated three general areas of ethical concern: deceptive practices, invasion of privacy, and lack of consideration. An additional concern too frequent interviewing of the respondent. Deceptive or fraudulent practices include the following: Unrealized promise of anonymity Use of disguised questionnaires and interviews Faked sponsor identification Implication of required response Lying about research procedure Faked testing in experimental research Promise of undelivered compensation Sales solicitation disguised as research Invasions of privacy includes the following examples: Observation without informed consent Questions concerning people other than the subject Projective techniques Personal classification data Full disclosure and use of “optional” participation Lack of consideration for subjects or respondents is exhibited in all of the following practices: Overuse of public (i.e., unreasonable demands on the time and energy of respondents) Research in subject areas with a depressing effect on respondents Subjects of no immediate interest to respondents Poor interviewers Contacts at inconvenient times No mention of procedural aspects Failure to debrief Failure to present subject with option to discard results upon completion Subjects’ rights are an important consideration in the ethical treatment of research participants. Respondents have rights that should not be ignored or violated. Research should not be deceptive or coerced. The researcher is often in a position of authority and as such should assure that the participant does not feel forced to comply, has the ability to choose and make informed choices, is safe from stress, psychological and physical harm, providing information detrimental to their self-interest, and have the right to be informed of the purpose of the research. 15 Scott M. Smith and Gerald S. Albaum, An Introduction to Marketing Research, © 2010 Furthermore, promises of anonymity must be kept. Exhibit 1.8 identifies the ethical issues involved in subjects’ rights. The American Marketing Association has provided a statement identifying principles of ethical practice of marketing research (Exhibit 1.9). These broad guidelines provide standards for the protection of the marketer and respondent alike and even extend to researchers and to marketers who are not engaged in research activities. Exhibit 1.8 Ethical Questions Regarding Subjects’ Rights Subjects’ Rights Possible Results of Violation of Rights A. The right to choose a. Awareness of right a. Feelings of forced compliance, biased data b. Adequate information for an informed choice b. May violate the client’s desire for anonymity, may c. Opportunity to make a choice enable subjects to enact subject role c. Subjects may avoid environments where this right is violated B. The right to be safe a. Protection of anonymity a. Biased data, refusal to participate in future b. Subjects’ right to be free from stress research b. Biased data, refusal to participate in future research C. The right to be informed a. Debriefing a. Unrelieved stress, feelings of being used, refusal to participate in future research b. Dissemination of data b. Subjects may feel that they gain nothing from and are exploited by participating in research and consequently may distort their response and decline to participate in future research c. Right to not be deceived c. Biased data, refusal to participate in future research SOURCE: “Ethics in Marketing Research: Their Practical Relevance,” by Tybout, A.M. & Zaltman, G., in Journal of Marketing, 11, p. 359. November, 1974. Published by the American Marketing Association 16 Scott M. Smith and Gerald S. Albaum, An Introduction to Marketing Research, © 2010 Exhibit 1.9 Ethics in Marketing Research The American Marketing Association on Ethics in Marketing Research The American Marketing Association has established principles of ethical practice of marketing research for the guidance of its members. Marketing management must acknowledge its obligation to protect the public from misrepresentation and exploitation under the guise of research. Similarly, the research practitioner has an obligation to the discipline and to those who provide support for it—an obligation to adhere to basic and commonly accepted standards of scientific investigation as they apply to the domain of marketing research. FOR RESEARCH USERS, PRACTITIONERS, AND INTERVIEWERS 1. No individual or organization will undertake any activity which is directly or indirectly represented to be marketing research, but which has as its real purpose the attempted sales of merchandise or services to some or all of the respondents interviewed in the course of the research. 2. If respondents have been led to believe, directly or indirectly, that they are participating in a marketing research survey and that their anonymity will be protected, their names shall not be made known to any one outside the research organization or research department, or used for other than research purposes. FOR RESEARCH PRACTITIONERS 1. There will be no intentional or deliberate misrepresentation of research methods or results. An adequate description of methods employed will be made available upon request to the sponsor of the research. Evidence that fieldwork has been completed according to specifications will, upon request, be made available to buyers of the research. 2. The identity of the survey sponsor and/or the ultimate client for whom a survey is being done will be held in confidence at all times, unless this identity is to be revealed as part of the research design. Research information shall be held in confidence by the research organization or department and not used for personal gain or made available to any outside party unless the client specifically authorizes such release. 3. A research organization shall not undertake marketing studies for competitive clients when such studies would jeopardize the confidential nature of client-agency relationships. FOR USERS OF MARKETING RESEARCH 1. A user of research shall not knowingly disseminate conclusions from a given research project or service that are inconsistent with or not warranted by the data. 2. To the extent that there is involved in a research project a unique design involving techniques, approaches, or concepts not commonly available to research practitioners, the prospective user of research shall not solicit such a design from one practitioner and deliver it to another for execution without the approval of the design originator. FOR FIELD INTERVIEWERS 1. Research assignments and materials received, as well as information obtained form respondents, shall be held in confidence by the interviewer and revealed to no one except the research organization conducting the marketing study. 2. No information gained through a marketing research activity shall be used, directly or indirectly, for the personal gain or advantage of the interviewer. 3. Interviews shall be conducted in strict accordance with specifications and instructions received. 4. An interviewer shall not carry out two or more interviewing assignments simultaneously, unless authorized by all contractors or employers concerned. Members of the American Marketing Association will be expected to conduct themselves in accordance with the provisions of this code in all of their marketing research activities. 17 Scott M. Smith and Gerald S. Albaum, An Introduction to Marketing Research, © 2010

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