How to Develop a Marketing Research Project

how to plan design a market research project and how to conduct market research for project feasibility and how to develop hypotheses in marketing research | free pdf download
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FHWA-HIF-13-035 A Guide to Developing Marketing Research for Highway InnovationsA Guide to Developing Marketing Research for Highway Innovations Introduction When transportation special- search tools as surveys and fo- information to make better deci- ists decide to build a highway cus groups that accounted for sions. The aim is to arm agency or bridge, much effort goes into the missed step. Clearly, there personnel with ways to conduct planning. There are site stud- was a need for more informa- marketing research in order to ies, outreach to residents of the tion on marketing research and drive decisions. area, environmental impact as- how to go about acquiring it. sessments, feasibility studies, This guide addresses more than and on and on. Planning like- simply how to use marketing re- “We carried on, from that wise needs to be part of any search to deploy technologies; it time, a steady investigation effort to implement any inno- shows how marketing research of what was going on in the vation. In 2007, a Highways for has been used for understand- United States in the matter LIFE (HfL) publication was de- ing public perception of an or- of road building (1897). This veloped to assist in creating a ganization. It can help an agen- planning document. The Guide cy better manage its funding, country is so big that a great to Creating an Effective Market- because good marketing re- deal goes on that we don’t ing Plan outlines how to define search in the form of a customer all know about (1894). What target audiences, craft a clear satisfaction survey can reveal we did in Washington is value proposition, and identify what areas are important to cus- simply to set up a watch, to the appropriate marketing de- tomers and what areas are con- keep an eye on the whole livery channels. In 2009, anoth- sidered nice, but not essential. country, and report what is er helpful tool, a 2-day training A key goal of the Federal High- going on (1894). It simply course titled Leap Not Creep, way Administration (FHWA) HfL furnishes a rallying point was introduced. Both tools have initiative is to mainstream inno- proven useful to implementation for the friends of the reform vation use in satisfying motor- teams. Yet, a gap existed. and a signal tower from ists’ desire for a good driving which its progress can be Teams that went through the experience. Surveys of projects watched and reported day training course often went im- completed under the initiative by day (1894). We are ready mediately into a retreat to create show that using innovation to through that office to furnish their implementation or market- build projects faster, more safe- ing plans. And, whether it was ly, with less disruption of traffic facts and arguments show- because of a short schedule or during construction, and with ing why good roads are a lack of awareness that addi- higher quality can definitely im- necessary, how they can tional input was needed, those prove user satisfaction. be built, and how they are plans were often light on true being built in many parts of The overall purpose of this marketing research and heavy guide is to enable public-sector this great country (1897).” on intuition and gut feeling. In transportation agencies to un- Comments by some cases, such as with Fed- derstand the needs, wants, and General Roy Stone, eral agencies, it was the daunt- head of FHWA’s values of their existing and po- ing task of obtaining approvals predecessor agency, the tential customers and use that U.S. Office of Road Inquiry for undertaking such basic re- Marketing Research Guide 7This guide should be of interest to department of transpor- tation (DOT) managers, marketing professionals, planners, and others interested in the implementation of research strategies that can be applied to highway innovations. This guide provides an overview of marketing research: what it is and why it is relevant to the acceleration of highway inno- vations. It serves as an introduction to the basic concepts and approaches of marketing research and provides key in- formation for marketers or market researchers who have the responsibility for implementing marketing research. It con- tains tips and suggestions for agencies to use the knowl- edge gained through market research to meet their overall service goals. In addition, the guide provides examples of marketing research done for highway-related activities and case studies conducted in Indiana, Georgia, Minnesota, Missouri, Utah, Texas, and Wisconsin, and the value of the research in driving decision-making. This report does not provide detailed guidance on how to design and conduct a research study or a step-by-step set of instructions for meeting industry research standards. Rather, it is an overview, providing resources and research practices that have been found to be most useful to agen- cies and the most relevant to accelerating highway innova- tion use. The Importance of Getting Innovations into Common Use Our highway system is the backbone of our economy, han- dling 70 percent of the total value of all shipped goods. But this national treasure is no longer pristine, nor is it operating at the level it once did. Highways are typically built to last 20 to 25 years, and bridges about twice that. Much of this valu- able infrastructure, begun in the middle of the last century, is crumbling. A headline in the May 9, 2007, issue of The Wall Street Journal summed it up: “U.S. Infrastructure Found to Be in Disrepair.” Even where the structural integrity has remained, the system’s designs may not be up to current safety standards. How do you bring a vast highway system up to modern stan- dards? The transportation agencies of this country are now attempting to do just that, but the techniques being used can sometimes cause as many problems as they alleviate. For example, widening a highway to meet the demands of congestion can mean making congestion worse through work zones, which close off lanes or severely slow traffic flow. In addition, both construction workers and motorists are subjected to increased safety hazards in work zones. 8The History of Technology Deployment in FHWA From accelerated bridge replacements, to the introduction of roundabouts, to pavement smoothness initiatives, dozens of innovations and technologies currently exist; some are more complex and challenging to deploy than others. If im- plemented, they would result in noticeably faster construc- Innovation in Pennsylvania DOT tion and higher levels of safety. Using innovative methods, PennDOT’s Research and Innovation we would end up with longer life cycles for highways, often Implementations System is a systems at a lower cost than if traditional methods were used. Unfor- approach for advancing winning inno- tunately, the process of moving those new approaches from vation. Examples furthered through state-of-the-art to state-of-the-practice is painfully slow. The the system include: real issue revolves not so much around technologies as it does around accelerating the deployment process. • Safety Circles are high-visibility, fatigue-reducing, yellow, rubber- FHWA has been developing innovations and championing ized round mats that flaggers those of others for many years. As a matter of fact, the de- stand on while they direct work ployment and implementation of technology and innovation zone traffic. is one of FHWA’s key business processes. Over the past decade, technology deployment has become increasingly • A form for channel beams is used critical. In the early 1990s, the FHWA Office of Technology to fabricate concrete and steel Applications (OTA) was formed to lead technology deploy- structural components for bridg- ment. The OTA was dissolved in 1999 when FHWA reorga- es are be replicated locally and nized, and each individual office within the agency (Office result in significant savings, com- of Infrastructure, Office of Safety, Office of Environment and pared with the cost of vendor pur- Planning, etc.) was then charged with deploying its own in- chase. novations. FHWA now has a Resource Center with five loca- tions and Division Offices across the nation, which enhanc- • A salt brine maker is a cus- es rapid deployment and implementation on the Federal, tom-built, automated process- State, and local levels. The FHWA is known to advance ing plant for high-volume and technology and innovation from all possible sources. high-quality brine production for winter operations. It generated in- FHWA also plays a leadership role in shaping and execut- terest for its potential for savings ing a national Research and Technology (R&T) program. through in-house production of In many cases, FHWA acts as convener, bringing the R&T brine. community together to define priorities and future direc- From How to Build a System to Implement tions. By advocating technology and innovation, tracking its Research and Innovation: Lessons Learned benefits, and communicating those benefits to key decision in Pennsylvania, Transportation Research Record 2211 makers, FHWA also exercises leadership. In fact, FHWA’s leadership role in R&T begins with the mis- sion of “enhancing mobility through innovation, leadership, and public service,” and grows from the role that FHWA de- fined for itself, to be “innovators for a better future.” Taking such a leadership role does not exempt FHWA from working collaboratively with its partners. On the contrary, in today’s customer-driven atmosphere, it implies an even greater re- sponsibility to work with partners in defining the direction of and developing the roadmaps needed to achieve results, especially because many times these partners will be im- plementing the technologies and innovations. Marketing Research Guide 9Highways for LIFE Congress authorized the HfL pilot program to facilitate accelerating the deployment process. The “LIFE” in the name is an acronym designed to call to mind the benefits of those new approaches: Long-lasting, Innovative, Fast construction, and Efficient and safe. HfL focuses on providing informa- tion, training, and tools to increase the likelihood of the highway community to quickly apply innovative technologies. The program uses a variety of means to make that happen, including sponsoring the implementation of several individual technologies as examples for how the implementation process might ideally be done, providing funding for construction projects that include innovative approaches, administering training programs on technology deployment for highway professionals, and providing publicity aimed at raising awareness among both the highway community and the driving public. Every Day Counts FHWA Administrator Victor Mendez noted that when he went through Sen- ate confirmation, he was frequently asked why it takes so long to get a new highway built. In response to that concern, FHWA launched the Every Day Counts (EDC) initiative in 2009. It is designed to identify and deploy inno- vation aimed at shortening project delivery, enhancing safety, minimizing congestion (both during and after construction), and improving environmen- tal sustainability. “The list of challenges is really unprecedented. Because of our economy, our transportation system needs to work more efficiently,” stated Mendez. “The public wants greater accountability in how tax dollars are spent. We need to find ways to make our roads safer. And we have an obligation to help preserve our planet for future generations.” Using performance measures, EDC implementation teams are working with State, local, and industry partners to deploy a finite set of innovations. 10Additional Highways for LIFE Resources Leap Not Creep HfL, working with the National Highway Institute, developed a training course designed to provide the necessary tools to get innovations into use. Called, Leap not Creep: Accelerating Innovation Implementation, the course uses both in-class and Web-based training. This course provides transportation employees with the tools to implement innovations quickly and successfully, and to mainstream the innovations into an agency’s standard practice. Specif- ically, the course targets those leading a team or preparing to lead a team, those responsible for deploying an innovation, those selecting innovations that will be implemented within the organiza- tion, and those promoting the use of innovations within an organization. The training discusses the features of successful implementations, provides information on the components of an implementation plan, lists resources for locating innovations and funding for implementation, and discusses strategies for identifying and neutralizing challenges to imple- menting innovations. Taught in a blended format, course participants first attend a 2-hour Web conference that intro- duces the course and sets expectations. One to 2 weeks following the Web conference, partici- pants attend 2 days of classroom training to complete the course. Upon completion of the course, participants are able to: • Identify the benefits of implementing innovations. • Describe the evolution of an innovation from the identification of a need to mainstreaming an innovation into standard practice. • Describe the key factors of successful innovation implementation. • Develop a deployment plan for implementing an innovation. • List three strategies that could be employed by agency decision-makers to support innovation implementation. • Determine resources required to mainstream the innovation into standard practice. • Identify strategies for overcoming barriers to implementing an innovation. • Locate resources to support the deployment of innovations, such as funding resources. For more information about the Leap Not Creep course, go to: http://www.nhi.fhwa.dot.gov/training/course_detail.aspx?num=FHWA-NHI-134073&topicnum=134. Guide to Creating an Effective Marketing Plan In 2006, HfL selected three innovations with national significance as pilots and designated them “vanguard technologies” because of the innovative groundbreaking approach they were to take: (1) Prefabricated Bridge Elements and Systems (PBES), (2) Road Safety Audit, and (3) Making Work Zones Work Better. For each of these technologies, a dedicated deployment team was es- tablished, using individuals from throughout the FHWA as partners. The team’s first task was to develop a marketing plan, complete with their first year’s strategies and budget. The approach to developing a marketing plan came from that effort. To access the Guide to Creating an Effective Marketing Plan, go to: http://www.fhwa.dot.gov/hfl/091013/index.cfm. Marketing Research Guide 11Section 1: Overview What Is Marketing? “Marketing is no longer Some people think that marketing is only about the advertising a function—it is an and/or personal selling of goods and services. Advertising and educational process.” personal selling, however, are just two of many activities that fall under the marketing umbrella. American Marketing Association According to the American Marketing Association, marketing is “an organizational function and a set of processes for creating, communicating and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders.” In general, marketing is identifying the particular wants and needs of a target audience, and then going about satisfying those needs. More simply, marketing is finding a need and filling it by identifying your target audience(s), analyzing their needs through research, and then determining strategies and allocating resources to solve their problems with your innovation. In many organizations, marketing is seen as a service function, providing nothing more than support materials such as brochures, videos, and other communication tools. But marketing is much more than that; in reality, marketing focuses first on discovering what is important to the customer and then positioning products or services based on those distinct needs. There Is a Difference between “Market Research” and “Marketing Research” Market research and marketing research are often confused. Market research is simply research into a specific market—it is a very narrow concept. Marketing research is much broader. For example, if Ford Motor Company were to consider moving into another type of business and manufactured mo- torcycles in addition to cars, they would conduct market research on the motorcycle market, looking at how many units are sold, what percent of market share other manufacturers hold, how much cap- ital investment would be required for setting up new assembly plants, and so forth. Market research includes an analysis of such market factors as government regulations, established competitors, and trends in consumer behavior. On the other hand, if Ford Motor Company required qualified data on products, services, or actual motorcycle customers, then it would be more appropriate to conduct marketing research. Market research is frequently a component of marketing research. It is important to note, however, that although there is a clear technical distinction between the two terms, they often are used interchangeably in common conversation.Why Conduct Marketing Research? The Benefits of Marketing Research in Accelerating Innovation Use Marketing research is useful for improving decisions by gaining insight into customers’ needs and per- ceptions. In the National Cooperative Highway Research Program (NCHRP) report, Using Customer Needs to Drive Transportation Decisions (NCHRP Report 487), certain principles concerning informa- tion on customer needs emerged, including: • State and local transportation agencies are using customer needs to drive decision-making. • Agencies can demonstrate links between what customers want and what can be delivered. • Awareness of customer needs brings more positive customer relationships. • Research techniques are increasingly matching those of private-sector marketing organizations. • Working with customers can start at any time. • Agencies rely on both quantitative and qualitative surveys of customer behavior and opinion. • Agencies are innovating in their use of customer segmentation practices. • An agency’s customer initiatives can be very cost-effective. Use of Marketing Research in the Private Sector Marketing research can be tremendously effective in identifying obstacles to the adoption of an innovation, for example, how the right technology BMW Goes Mini solutions could help stakeholders, where the obstacles lie, and what it would take to remove those obstacles. In addition, marketing research can In the early 1990s, in re- help identify opportunities in the industry that create a favorable climate for sponse to shifts in the the adoption of an innovation or new technology. attitudes and values of luxury-car buyers, BMW The private sector has a long history of successes because of marketing initiated a market research effort to ensure its brand’s research. Ford’s consumer testing of the Taurus in the 1980s illustrates position matched an un- how marketing research can pay off. Ford left little to chance, spending derstanding of future cus- over 2 years on marketing studies, including 100,000 miles of driving tests tomer needs. With a focus with drivers of all ages. Today the Taurus is one of America’s best-selling strictly on premium-priced 1 automobiles. cars, customer research was used to classify their Many large companies use marketing research to find out as much pos- prospective customers into sible about their customers to determine what influences their buying de- four segments from which they matched product de- cisions. Philip Kotler, author and economist, wrote in Marketing Manage- velopment—by introduc- 2 ment , “Coke knows that we put 3.2 ice cubes in a glass, see 69 of its ing a car to match three commercials every year, and prefer cans to pop out of vending machines of them: “upper liberals,” at a temperature of 35 degrees. . . . We each spend 20 per year on flow- “Post-moderns,” “upper ers; Arkansas has the lowest consumption of peanut butter in the United conservatives,” and “mod- ern mainstreams.” Armed States; 51 percent of all males put their left pants leg on first, whereas 65 with this customer insight, percent of women start with the right leg; and . . .P&G once conducted a BMW launched the Mini in study to find out whether most of us fold or crumple our toilet paper. . ..” 2001, allowing the compa- As in the private sector, data about customer attitudes and behaviors can ny to enter a new segment often help drive better decisions in the diffusion of highway innovations. of the auto market without reducing the risk of affect- ing perceptions of their ex- 1 Lappin, Figoni, Simmons, Sloan, Primer on Consumer Marketing Research, Page 1 (Volpe Center, 1994). 3 2 U.S. Chamber of Commerce Market Research Toolkit isting brand. 3 Neal E. Boudette, Navigating Curves BMW’s Push to Broaden Line Hits Some Bumps in the Road , The Wall Street Journal January 10, 2005; Page A1. Marketing Research Guide 13Section 2: Getting Started Each marketing research project has its own challenges and ap- proach, but researchers tend to use the same general steps in de- signing any study. Because the steps are closely related, a change made at one stage of the process often requires that revisions be made to other stages. Once the data are collected, however, no further revisions are possible. The researcher should plan the en- tire research project before any data are actually collected. This section reviews three key steps to getting started with a mar- keting research project: (1) determining the research goal or ob- jective, (2) identifying the type of data or information needed to meet the research objective, and (3) compiling a team for conduct- ing the research. Determining the Need for Research One of the most important steps in the marketing research process is determining the need for research or defining the research prob- lem, which typically entails a thorough analysis of the transporta- tion issue or product innovation that is the focus of the research. It is critical to examine the full background on the research topic to inform the design. Answers to the following questions can help set the objectives for and shape the scope of a research project: 1. What is the problem or issue you are facing? Linking Survey Objectives with Outcomes 2. Why is the research necessary? What are the business or operational decisions the data will inform? In 2006, the Michigan Depart- 3. What information do you need to inform the decision or help ment of Transportation con- you understand the issue? ducted a customer survey with the goal of measuring 4. From whom (what audience) do you need to get both driver and community information? What audience(s) does the issue affect? member perceptions of paint- ed rumble strips—specifically 5. How will the data be used or analyzed? which test strips of edge line When the Tennessee DOT completed its first comprehensive cus- pavement were preferred by tomer satisfaction survey in July 2006, the goals were defined to highway users. The survey re- (1) help identify and prioritize the transportation services and im- sults indicated that drivers, as provements that were most important to Tennesseans, and (2) as- did agency planners and con- sess the DOT’s overall performance. The survey was planned and struction engineers, all had designed with these goals in mind, and the survey results were to the same goals in mind, name- be used to help evaluate the effectiveness of the Tennessee DOT’s ly public safety. The specific strategic plan. marking pattern and technical terminology had little meaning Without clearly defined research objectives, time will be spent for - to the general public. mulating a research plan without an end goal, and the result could be data that are not relevant or ultimately, not credible. 14How to Determine What Type of Marketing Examples of Secondary Research Sources Research Data Is Needed • Census Bureau material There are two main types of data sources—primary • Population, housing, economic, county and secondary. Primary research is the collection of business patterns original data to solve a specific problem or provide in- • Statistical Abstracts sight on a policy or program issue. It can be obtained • Topically Integrated Geographic Encoding and through interviews, surveys, or observation. Second- Referencing (TIGER) databases ary research is the review of data or information that al- • US Department of Transportation Data Sources ready has been collected for other purposes. Because • National Household Travel Survey marketing research generally requires substantial in- • Commodity Flow Survey vestment in time and money, it makes sense to deter- mine whether information or data are already available • Census Transportation Planning Products from existing or published sources. These sources • Fatality Analysis Reporting System can be internal to an agency (customer databases, • State DOTs’ publications and Websites historical files, letters from customers, etc.) or external • Dun & Bradstreet (which would involve searches for published informa- • Trade journals, newsletters tion or data, such as newspapers, trade publications, • Transportation Research Board (TRB)/ National associations, industry reports, and the Internet). Cooperative Highway Research Program (NCHRP) Reports Do-It-Yourself Versus Hiring a Consultant Some organizations are fortunate to have internal research departments staffed with specialists in marketing research and can plan, execute, and manage a research project in-house. Others look elsewhere for their research expertise such as other organizations, universities or by hiring a consul- tant for the entire research effort or for help in certain areas. A consultant can be hired as an advisor for part or all of a research project. Hiring a consultant for part of your research is beneficial when there are budget constraints or the organization lacks the internal expertise, as was the case for the Nebraska Department of Roads (NDOR). NDOR used a combination of a multi-functional team drawn from within the organization and a University consultant when conducting a Resident Satisfaction Sur- vey to assess customer satisfaction with overall performance. The NDOR in-house team identified the research needs, developed the survey questions, analyzed the data and compiled the report. The Bu- reau of Sociological Research at the University of Nebraska-Lincoln collected the data and delivered a raw data file to NDOR for analysis. Often, private companies are contracted to design and execute marketing research in its entirety. Aside from not having the in-house research expertise, there are many reasons why you may choose to outsource marketing research: • The project is complex and requires trained marketing research professionals to conduct the research. • Internal department workload would make it difficult for you and/or your department to complete within the necessary timeframe. • Some internal resources are available, but none will be dedicated to getting this work done to your satisfaction. • The project demands accurate, reliable information to support major decisions. • An objective perspective is required to get unbiased answers. • Findings will be reported to external stakeholders, so you need a recognized, external authority. • Research may not have any internal credibility if done in-house. • The organization may not want its identity or that of its product/service known to the subjects. Marketing Research Guide 15Section 3: Preliminary Marketing Results With a research goal and resources in place, and before you embark on developing a research plan, conducting preliminary marketing re- search is a critical step for formulating a complete picture and under- standing of your research topic. This, in turn, informs your research design by: • Providing insights for developing the survey questions. • Offering understanding of the target research population (your target audience) from whom you need to collect input from. • Helping you make decisions about the right research method to reach your target audience. This section details approaches for conducting background research and then offers guidance on how to use the information gathered. Product and Situational Analysis Sometimes referred to as an “environmental scan,” a product or situational analysis typically entails a thorough analysis of the transportation issue or product innovation that is the focus of your research. Without a complete picture or the full background on the research, you’ll spend time formulating a research plan without an end goal. Or worse, you may end up with data that doesn’t meet your needs. Options to consider when conducting a situational analysis or environmental scan include: • Internal knowledge and understanding about a program or product innovation from the perspective of colleagues in your agency, program, or team; you may also draw from historical data your program has previously collected. You would also want to include discussions with management, key decision-makers in your agency, and even stakeholders and industry experts to get their perspectives on the research definition. • Mining secondary data collected by other agencies for other purposes, such as traffic counts, vehicle miles traveled, or highway crash and fatality numbers, all of which are drawn from existing databases. • Conducting a literature search or product review using TRIS Online (Transportation Research Information Service), NTIS (National Technical Information Service), an agency library, conference proceedings and published articles, and product reviews. Using this information, the context of the research topic can be defined from the perspective and needs of your program or agency. This way, you can “connect the dots” regarding the research need- ed to resolve issues or problems to make informed decisions. Once you have your research need defined, you can begin to build the overall research framework. 16Determining the Target Audience Define your target audience by determining who to contact to collect the information you need. The target population must be precisely defined, or else the research effort would be ineffective and the results misleading. There is an adage in marketing: start where your audience is. The advice is simple to follow, but only if you know who your audience is. Many transporta- tion agencies consider their audience to be ”the general public.” When you watch an organization’s advertisement on the evening news, it often appears they are talking to the general public. But the entire public is not watching the evening news. Studies show that those with college degrees and adults over the age of 55 watch the news more than anyone else. Therefore, any To combat a signif- organization that is featured on the evening news is most likely to reach col- icant littering prob- lege-educated people and senior adults. “The general public” is too broad lem, the Texas DOT a term, and targeting the general public is most often cost-prohibitive. Even exerted a great deal large corporations do not attempt to target the general public. Instead, it is of effort to determine helpful to think about the public in segments, such as adult drivers, youth of their target audience driving age, urban youth of driving age, urban young women of driving age, for the “Don’t Mess etc. This process of refinement helps you hone in on your target audience. With Texas” commu- If your research objective is to measure how customers perceive road condi- nications campaign. tions on State highways, it makes sense that the research population would The DOT analyzed be State highway users—or drivers—and you could stop there. However, trash collected from if you wanted to differentiate between different types of drivers, you might roadsides and me- further segment your study population by those who drive trucks, State resi- dians, and they dents who drive vehicles, and visitors to the State. You can define customer conducted inter- groups broadly or very specifically, depending on your research objectives: cept surveys and in-depth interviews. • Broadly defined customer groups include active voters, households, Researchers were winter residents, statewide residents, residents aged 18 and older, able to determine and licensed drivers. the primary culprits: males between the • Specifically defined customer groups include commercial drivers, ages of 18 and 34. local government officials, statewide residents who have driven 200 Once the target au- miles on State highways in the past month, and licensed drivers who dience was identi- live within 1 mile from a highway corridor. fied, the DOT’s ad Market Segmentation agency developed the campaign spe- Market segmentation divides a market into distinct groups of people with cifically for this au- similar characteristics. The benefit of market segmentation is to obtain mean- dience, rather than ingful data from each of the customer segments. Considerations include: attempting to ap- peal to the public at • Behavior (licensed drivers, highway usage patterns, attitudes, large. The result was vehicle miles traveled). one of the most suc- • Demography (age, ethnicity, vehicle ownership). cessful and memo- rable governmental • Geography (regions, proximity to a highway or corridor, suburban/ media campaigns in rural). U.S. history. Gathering more conclusive lifestyle and demographic information allows a greater depth of knowledge of the target audience. Marketing Research Guide 17Section 4: Research and Sampling Approaches Primary research is divided into two categories: qualitative and quantitative research. In essence, qualitative research addresses attitudes and behaviors, while quantitative research is based on rea- son or logic. When planning a study or defining its objectives, first determine which approach is best suited—qualitative or quantitative. In some cases, only one will suffice; other times, both are needed. Once determined, the most appropriate methodology needs to be chosen. The most commonly used qualitative and quantitative research and sampling methods are summarized in this section. Qualitative Research Methods Research Methods Qualitative research methods provide insights Qualitative—directional insights; exploratory and understanding of the research problem. The outcome is typically a better understand- • Tests ideas, designs or prototypes, branding ing about the topic itself. • Understand target population opinions/attitudes Examples of qualitative research include fo- about programs/products cus groups, structured or in-depth interviews, which are typically conducted as one-on-one, • Pretest survey instruments in-person or telephone interviews. Because • Explores survey findings the sample is generally small (for instance, 6 to 10 people typically participate in a single Quantitative—confirmator y focus group), qualitative research is rarely, if • Point-in-time measure of attitudes, behaviors, ever, regarded conclusive; therefore, qualita- opinions tive research is not used to make generaliza- tions to the population of interest. • Establishes baselines The cost of this type of research varies de- • Measures shifts over time (trending) pending on the size of the group or number of one-on-one interviews, the location of (or the need for travel to conduct) the interviews, and the number of interviewers. For instance, the costs of conducting focus groups can in- crease if they involve a hard-to-reach popula- tion (which is typically more difficult to recruit), paid moderator, and focus group facility fees. Qualitative research is inexpensive compared to quantitative research, but industry stan- dards require that more than one focus group or interview be conducted. Data Collection for Qualitative Analysis Focus Groups A popular exploratory technique, focus group research usually involves 6 to 12 individuals brought together to discuss a given topic. Fo- 18cus groups are used when in-depth probing or focused discussions are needed to develop new ideas. Focus groups are often used in conjunction with a survey. They are used to gather information about how a product or service is used or perceived in preparation for the development of a survey ques- tionnaire. They can also be used after a survey is administered to explore a survey finding that needs additional exploration or insight. This form of qualitative research is relatively inexpensive, fast, and flexible compared to individual interviews or other, more conclusive, quantitative methods. Features of successful focus groups include: • The preparation, beforehand, of a participant recruitment guide that includes the questions or criteria for screening qualified participants, as well as a moderator’s discussion guide that includes information on the objectives of the study, specific topics to probe, and the general sequence of questions. • The presence of a moderator who can stimulate and direct a Focus Groups on discussion toward areas that will provide meaningful insights Slugging and Body for analysis. Snatching • Group members recruited to be as homogeneous as In the summer of 2012, possible, permitting clearer comparisons among groups FHWA’s Exploratory Re- (useful in market segmentation). search Program conduct- ed a series of nine focus • Group members who have been carefully screened to groups to explore the unique eliminate those with insufficient exposure to the subject at form of ridesharing coined hand. as “casual carpooling” or • One or more groups representing each market segment “slugging.” The 2-hour fo- under study. cus groups, each consisting of 7 to 10 participants, were • Group sessions lasting long enough for the group to build held in Washington, Hous- rapport and explore the discussion topic adequately (usually ton, and San Francisco with 90 minutes to 2 hours). drivers (body snatchers) or passengers (slugs). The in- • Ideally, focus groups are conducted in well-equipped terviews shed light on the facilities (e.g., audiovisual equipment, two-way mirrors that user-run, informal system allow market researchers to observe the discussion without of forming impromptu car- disturbing the participants). pools of two or more com- Focus group sessions are not foolproof; the most common reason muters per vehicles to take for a session to fail is when one person dominates the discussion. It advantage of high-occu- takes a skilled moderator to control such individuals and maintain an pancy vehicle (HOV) lanes atmosphere that encourages free expression and lively and thought- to get to a common employ- ful discussion. ment center. The research revealed a key to success Limitations Strengths is the unstructured nature • Results are exploratory, not • Result in deep insights and wide of the system and the “win- conclusive range of ideas win” benefits the drivers • Results cannot be generalized to the • Group setting is comfortable and passengers receive: population as a whole and participants are likely to be qualifying to use the HOV • Susceptible to client/researcher bias highly engaged lanes (drivers) and travel- • Require a professional and neutral • Allows observation by viewers moderator ing to work without paying and sessions can be recorded • Unstructured data makes analysis for transportation or parking • Can be conducted quickly time consuming (passengers). Marketing Research Guide 19In-Depth Interviews In contrast to group interviews, in-depth (or “depth”) interviews are conducted with an individual or a small number of people within the same customer group or audience. These are often called per- sonal interviews when they are conducted face-to-face; interviews can also be conducted over the telephone. In-depth interviews follow the same pattern as a focus group, where an interviewer writes the answers on a standard coding sheet. Ideally, the interview should consist of the following: • The same questions should be asked of every respondent. The questions must be asked in the same context, and the purpose of the research must be explained to the respondent in the same manner. Strengths • The interviewer must make the effort to ensure that each question is understood in the same way by • Interview length can be tailored to the interviewee’s availability all respondents in order to avoid false data due to misunderstood questions. • Permits face-to-face contact with interviewees • The interviewer must be able to act as a coder, meaning • Explore topics in depth that the answers are written down in a standardized • Flexibility in conducting the form, by the interviewer, not by the respondent. interview to the interviewee’s particular circumstances • The face-to-face interview offers the possibility of dispelling ambiguity because the interview is conducted in person. Limitations • It is extremely important that the interviewer be trained • Expensive and time-consuming in asking the questions in a non-leading way. In • Requires well qualified, highly addition, the interviewer must use non-leading prompts trained interviewers when trying to elicit answers or when trying to find • Flexibility can result in out if the question was correctly understood. Ideally, inconsistencies across interviews interviewers must attempt to maintain an atmosphere of “conversation,” while maintaining a standard format. Quantitative Research Methods Quantitative techniques are applied to generate meaningful metrics that clearly define the magnitude of a response. For example, qualitative research would uncover how people feel about an issue, whereas quantitative research would measure how strongly they feel about it. Quantitative research aims to quantify the information that is collected and therefore typically applies some form of statistical analysis. The outcome is usually a recommended course of action or a hard measure of opinion, attitude, or behavior. Sample sizes are typically significantly larger because the research participants are generally drawn using a probability-based sampling approach (one in which everyone in the sample frame has an equal chance of being invited to participate). Therefore, the re- search data are considered representative of the population of interest. The major difference between quantitative and qualitative research is the statistical validity of the data collected—this, in turn, affects the ability to draw inferences to a population as a whole (i.e., the findings can be generalized to the target population). The industry standard for a statistically valid survey is N=400, which provides a margin of error of plus or minus 5 percent. The number of completed interviews (N) depends on your research needs, how much margin of error you are willing to accept, and your budget. As N grows larger, the margin of error decreases, but the cost of collecting the data likely increases. 20The costs of quantitative research are highly variable and depend on factors such as the research method, the complexity of sampling, the survey length, and the budget. For example, a 10 or 12 min- ute telephone survey of 400 residents 18 and older will costs about 35,000 to 45,000 to conduct (depending on the complexity of the sampling or survey questions). Data Collection for Quantitative Analysis Pooling Resources Telephone Surveys The Minnesota DOT’s research A variation of the in-depth interview is the telephone survey. The unit provides survey research disadvantage of the telephone survey is that the interviewer los- services for the entire agency. es the respondents’ non-verbal cues, such a body language and Most departments typically do facial expressions, which would be picked up in a face-to-face not have line items for research interview. However, it has very similar advantages to the tradition- in their budgets to fully support al face-to-face interview in terms of social interaction and ability the effort. In these cases, to dispel ambiguity. Telephone surveys are often used when the MnDOT recommends partnering research effort requires a sample of the general population. with other districts or divisions. In recent years, telephone research costs have increased in tan- The primary benefit to pooling dem with declining response rates due to the frustration of receiv- resources for research is that the ing calls from unknown or suspected marketing callers, technol- number of completed interviews ogy such as answering machines and caller ID, and the trend in can be increased, making the prevalence of cell phone ownership among the American public. survey more representative of The survey research industry is addressing these issues with a the customers and strengthening more complex survey design that makes use of dual-mode data the statistical significance of the collection (mail and telephone), cell phone sampling, and ad- results. dress-based sampling, among others. Other contributing factors to the cost of telephone surveys include survey length, sample size and customer segmentation, and analysis. To illustrate the variability of research costs, the following table Strengths summarizes the costs of recent surveys conducted for four State • Reach a majority of households DOTs. (landline and cell phone coverage) Telephone Survey Costs • Fast turnaround State Survey Sample Distinguishing • High response rates Cost DOT Description Size Features • Low non-response (skipped question) rate Statewide Six customer Customer segments; analysis • Interviewers can ask for Florida 5,000 175,000 Satisfaction on statewide and clarification Survey district levels. External Customer Statewide and Maryland 2,300 100,000 Limitations Survey district level analysis • Generally, higher cost Gap analysis of • Respondents may “screen” Business Planning customer opinions telephone calls (caller ID) Maintenance 40,000 to Minnesota 1,000 on perceived Products and 50,000 • Interrupts respondents’ free time acceptable versus Service Survey actual performance. • Not including cell phone sample or those who have no phones Statewide Cus- District level may cause sampling bias Missouri tomer Satisfaction 3,500 75,000 sampling and Survey analysis. Marketing Research Guide 21Mail Surveys The mail survey, which has Limitations Strengths been a common marketing re- • Relatively inexpensive • No probing/clarification search method for decades, • Reach households with address- • Low response rates and missing is often used to get informa- based sample or item non response data tion from people who are dif- • Can be tested using a small ficult to reach in person or • Less control over respondents sample of the overall database who have an unusually high • Slower turnaround • Time convenience for interest in the research topic. respondents • Length can decrease completion Some techniques for increas- • Eliminates interviewer bias rates ing response to mail surveys include an advanced notice to the recipient, a cover letter explaining the purpose of the study and the importance of the recipient’s response, or some sort of incentive, such as a dollar bill, included with the letter. Mail surveys are useful for asking questions that may not be easily answered on the telephone (e.g., those requiring visual prompts or conveying complex information). Sampling Samples are intended to represent a population of consumers; the emphasis should be on selecting appropriate sample members to represent the population. Four tasks must be accomplished before actual physical selection of the sample can occur: 1. Clearly define the target population. The defined population should be r elated to the product being tested or the market being explored. For instance, this might be licensed drivers, vehicle owners, or households near a specific highway corridor or bridge. 2. Determine the sampling “frame.” The sampling frame is simply a list, often representing the universe or every single element in the target population from which the sample is taken. Examples include a drivers license database, a list of residential telephone exchanges, employer lists, city directories, and mailing lists. It is usually easier and more efficient to obtain a list from an outside source than it is to generate it internally, unless the sample size is small, simple, or highly specialized. 3. Determine the sampling method. This requires thoroughly understanding the basic principles of sampling to reduce error. Consider asking for professional help in approving and supervising your sampling procedures. Examples include a random sampling method or a stratified random sample (two or more random samples combined). 4. Draw the sample using the sampling frame and methods defined. 22Rensis Likert and Using the Likert Scale Rensis Likert (1903–1981) was an American educator and organizational psychologist best known for his research on management styles. He developed the Likert scale and the linking pin model. The Likert Scale is an ordered, one-dimension- al scale from which respondents choose one option that best aligns with their view. Typically there are between four and seven options, with five options the most common offering. There is much debate about how many choices should be offered. An odd number of choices allows people to sit on the fence; an even number forces people to make a choice, whether this reflects their true position or not. One of the most important advantages of using a Likert Scale is that it allows one to quantify the entire group’s attitudes or understandings. If, for example, a survey uses a 5-point Likert Scale, all the answers can be totaled and divided by the number of respondents to get the overall average. All options usually have labels, although sometimes only a few are offered and the others are implied. A Likert-style survey commonly presents assertions with which the respondent may agree or disagree to varying degrees. In scoring, numbers are usually assigned to each option (such as 1 to 5). The Likert scale is also called the summative scale, as the result of a questionnaire is often achieved by summing numerical assignments to the responses given. A benefit to this approach is that the questions used are usually easy to understand. A disadvantage of the Likert Scale is that it typically offers only a two-way option, rather than multidimensional ones. If only a few response options are offered, respondents may not feel like any of the options fully capture their desired response. However, a carefully selected set of questions or statements can act together to give a useful and coherent picture. Questions may be selected by a mathematical process as fol- lows: 1. Generate a lot of questions (more than you need). 2. Get a group of colleagues or judges to score the questionnaire. 3. Sum the scores for all items. 4. Calculate the inter-correlations between all pairs of items. 5. Reject questions that have a low correlation with the sum of the scores. One problem to asking questions in this way is that people can become influenced by the way they have answered previous questions. For example, if a respondent has agreed to several questions in a row, they may continue to agree. They may also deliberately break the pattern, disagreeing with a statement with which they might otherwise have agreed. This patterning can be broken up by asking reversal questions, where the sense of the question is reversed. Sometimes the “do not” is empha- sized, to ensure people notice it, although this can cause bias. “No amount of care in interviewing and analysis can remove the bias inherent in a bad sample.” Celinda C. Lake, Public Opinion Polling Marketing Research Guide 23Section 5: New Approaches to Marketing Research In tandem with the explosive growth of Internet use in the United States (see figure below), new ap- proaches to marketing research using Web-based methods have been introduced in the past decade. Because the building blocks of qualitative and quantitative marketing research remain the same, in- novative organizations and businesses are pushing the envelope by integrating the insights gleaned from traditional and emerging research techniques. This section first presents the benefits and limita - tions of using these new approaches and then addresses each individually. Benefits and Limitations of the New Approaches Web-based approaches have rapidly emerged as a research venue because they generally provide broader, faster access to target research populations. In addition to these clear benefits, Web-based surveys can be administered with lower overall costs than traditional marketing research approaches. Still, when considering whether to use a Web-based marketing research approach, there are limita- tions to consider. The most prominent limitations are the gaps that exist between those with and with- out access to Internet at home. According to research conducted by the Pew Foundation’s Internet and American Life Project, four of five, or nearly 80 percent, of American adults use the Internet. Still, there are gaps with regard to the representativeness of users in Internet adoption. Over the past decade, the gap between whites and minorities has mostly narrowed. But according to Pew, Internet access is lower among senior citizens, adults with less than a high school education, and those living in households earning less than 30,000 per year. Additionally, adults living with a disability in the United States (27 percent) are significantly less likely than adults without a disability to go online (54 per cent versus 81 percent). Internet adoption, 1995-2011 % of American adults (age 18+) who use the internet, over time. As of August 2011, 78% of adults use the internet. 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Source: Pew Internet & American Life Project Surveys, March 2000-August 2011. 24 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011The move towards mobile technology, including cell and smart phones, tablets, iPads, and even e-readers, is beginning to lessen the “digital divide.” Nonetheless, when considering Web-based marketing research methods, users must keep these limitations in mind. If the objective is to collect data that are fully representative of the research target population, a Web-based approach may not be the best option. The exception to this would be if the Web-based approach recruited participants using a probability-based sample to ensure that participants were randomly selected to participate in the research. Online Focus Groups Limitations Strengths One of the latest innovations to the focus group format is • Initial investments in technology • Cost-effective, especially if the move to the Internet. Using recruitment is by email • Limited group interactions and dynamics chat and Web conferencing • No travel required technology, the Web-based • No observation of non-verbal • Turnaround time is fast expressions format has made it possible • More can participate at once • Need a strong moderator for people around the world • No hands-on involvement such skilled in verbally controlling to gather online, eliminating as being able to touch, smell or discussions travel costs and other logisti- come into contact with objects • Online recruitment may skew cal problems associated with • May be more open and free to representation of population traditional face-to-face focus talk due to anonymity targets groups. When online, participants tend to speak more freely because they are sitting at home and feel anon- ymous. Online focus groups allow qualitative research to be completed more quickly and at a lower cost. On the other hand, moderators cannot see the body language or facial expressions of online participants. Instead of the two-way mirrors often used to monitor traditional focus groups, online platforms allow clients to watch the online discussion from a “back room.” Clients can “talk” among themselves, communicate with the moderator during the session, or add new discussion questions. Many Web conferencing programs have been developed in the last few years. The programs often bundle tools already common to Internet communication to create an interactive meeting environ- ment. Tools include chat and instant messaging technology, Webcams that send streaming video, and screen sharing that allows participants to view information from the moderator’s desktop. These tools allow organizations to bring focus groups together at a lower cost and in a faster timeframe. Using Web conferencing programs, sessions can also be recorded for additional analysis or to share with colleagues. Organizations will always need feedback from their targeted customers, and the focus group will con- tinue to be a valuable tool. Web-conferencing advances make it easier to host focus groups, and other technological advances are sure to follow. Marketing Research Guide 25

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