Chapter Three Types of Marketing Research. Chapter Objectives Distinguish between exploratory research and conclusive research and discuss the role each.

Chapter Three

Types of Marketing Research

Chapter Objectives

• Distinguish between exploratory research and conclusive research and discuss the role each plays in research projects

• Illustrate five approaches for conducting exploratory research

• Distinguish between the two types of conclusive research: descriptive research and experimental research

Chapter Objectives (Cont’d)

• Distinguish between conducting a cross-sectional descriptive study and a longitudinal descriptive study

• Understand how to conduct experimental research

• Determine which type of research to conduct

Maytag Innovation through Customer Driven Research

• Maytag– Strategic Initiatives Group used a mix of

qualitative and quantitative studies

– Discovered through exploratory research that baby boomers were driving the market for high-end products

– Based on descriptive research it was determined the new line would carry the Jenn-Air brand

Design for the Luxury Market

• Fitch-Worldwide is a leading design consulting firm was brought in.– Used ethnographic, observational and focus

group techniques to understand luxury consumers

– A result is the Attrezzi Stand Mixer.

– With lots of optional features, it’s “simply too beautiful to put away”

Exploratory Research

• Develop initial hunches or insights• Provide direction for any further research

needed• Purpose

– To shed light on the nature of the situation and to identify any specific objectives or data needs

Conclusive or Confirmatory Research

• To verify insights and to aid decision-makers in selecting a specific course of action

PURPOSE: to aid in the decision-making process from Chapter 1

Decision-making activity

Marketing Research

Organization’s internal and

external environments

Marketing situation calling for decision(s)

Final decision(s)

Conclusive or Confirmatory Research (Cont’d)

Saver’s Nations Bank

• Facts– Growing competition from variety of financial

institutions offers a unique set of financial services– Bank performing well and experiencing rapid growth

since inception• Problem

– Bank wants to ascertain the demographic composition of customers and their perceptions of the bank’s strengths and weaknesses

• Solution: Conduct conclusive research

Trent Eating Association

• Facts– Operates a chain of restaurants in eight

communities– Maintains image of high-class restaurant chain

serving excellent food at premium prices• Problem

– Wondering whether a 15% reduction in prices would hurt or help

• Solution: Conduct conclusive research

Differences Between Exploratory and Conclusive Research

• Research Project Components: Research Purpose– Exploratory Research

• General: To generate insights about a situation

– Conclusive Research• Specific: To verify insights and aid in selecting

a course of action

Differences Between Exploratory and Conclusive Research (Cont’d)

• Research Project Components: Data needs– Exploratory Research

• Vague

– Conclusive Research• Clear

Differences Between Exploratory and Conclusive Research (Cont’d)

• Research Project Components: Data sources– Exploratory Research

• Ill-defined

– Conclusive Research• Well-defined

Differences Between Exploratory and Conclusive Research (Cont’d)

• Research Project Components: Data collection form – Exploratory Research

• Open-ended, rough

– Conclusive Research• Usually structured

Differences Between Exploratory and Conclusive Research (Cont’d)

• Research Project Components: Sample– Exploratory Research

• Relatively small; subjectively selected to maximize generalization of useful insights

– Conclusive Research• Relatively large; objectively selected to permit

generalization of findings

Differences Between Exploratory and Conclusive Research (Cont’d)

• Research Project Components: Data collection– Exploratory Research

• Flexible; no set procedure

– Conclusive Research• Rigid; well-laid-out procedure

Differences Between Exploratory and Conclusive Research (Cont’d)

• Research Project Components: Data analysis– Exploratory Research

• Informal; typically non-quantitative

– Conclusive Research• Formal; typically quantitative

Differences Between Exploratory and Conclusive Research (Cont’d)

• Research Project Components: Inferences/recommendations– Exploratory Research

• More tentative than final

– Conclusive Research• More final than tentative

Types of Data for Exploratory Research

• Key informant• Focus groups• Secondary data• Cast studies• Observational data

Key Informant--Interviews with Knowledgeable People

• Silicon Graphics’ key customers– Industries needing realistic generated images

for film• Boeing • Disney • NASA

• Silicon Graphics decides to explore some new product development

Silicon Graphics Is Using the Key Informant Technique

• Key Customer– Industries needing realistic generated images for film

– Silicon Graphics needs to identify key industry experts within their customer base

• Through interviews they determine industry needs• They develop new visual graphics software

– They then filter this into their product development ideas

P&G

• A leader in the detergent market– Interested in developing a new detergent to

arrest sagging profits in a mature market

• P&G looks to conduct research with managers in appliance industries and key lead users from dry cleaning industries?

Muscular Dystrophy Family Foundation®

• MDFF wants to start a new program to aid people with serious physical handicaps

• They are wondering about what kinds of charitable programs to begin and what strategies to develop in order to seek donations from the public – Who should the MDFF talk to?

• Officers in well-established public service organizations, such as the United Way, the American Red Cross, and the American Cancer Society

Srivats Software Solutions

• Interested in developing high resolution images– Who should they talk to?

• Hollywood animation researchers, NASA researchers, and X-ray specialists

• 8 to 12 individuals• Moderator (a well-trained researcher)• Informal discussion about research topic

Individuals

Moderator

Discussion

Focus Groups

Duties of a Moderator

• Guide discussion• Ensure key aspects of the topic are

discussed• Observe• Record

Using Secondary Data

• Data that is conducted for another purpose• Fast inexpensive was of conducting

exploratory research• Often reveals that no further analysis is

necessary

Kaplan Higher Education

• Currently serving 15 states and looking to expand into other states and more profitable markets

• Relied primarily on secondary data to determine new markets

• This technique provided a fast, cost-efficient method to answer Kaplan’s research question

Case Studies

• In depth examination of a unit of interest• Possible units

– Customer

– Website

– Store

– Salesperson

– Firm

Case Studies (Cont’d)

• Possible Examination Factors– Store

• Morale• Size • Product lines• Layout• Trade area characteristics

Allied Associates Company

• National chain of discount stores with 500 retail outlets across the country

• Profitability during the past few years has remained above industry average– Top management needs to identify key elements

crucial to the company’s success and to capitalize on those elements

– Question: Where and how can one accomplish top management’s objectives?

– CASE STUDY METHOD: Study three best performing stores and three worst performing stores in depth on numerous dimensions

Observation

• Human or mechanical observation of what subjects actually do in a particular situation

• Record information as events occur or compile evidence of past events

• Assesses behavior which can be translated into new products or improvements of current products

Types of Conclusive Research

• Descriptive– Generates data on the composition and

characteristics of a specific group such as customers, sales people, and market areas

• Experimental– Generates data to determine causal

relationships

Voice of the Leaders Survey

• Annual, global survey conducted by The World Economic Forum

• Objective is to understand world leaders’ opinions on a variety of issues affecting today’s business world

• Results found that members believe that the next generation is most likely to live in a prosperous, but unsafe, world

• Also found that the quality of products or services, corporate brand reputation/integrity, and profitability are the three most important measures of corporate success

Exhibit 3.1 Security and Prosperity – World Economic Forum Survey 2004

Exhibit 3.2 Measure of Corporate Success – The Top Three – World Economic Survey, 2004

Descriptive Research--Proportion of High- and Low-Income Customers in Saver’s Nations Bank Clientele

• What does this data indicate to you about the relationship between income and perceptions of location?

Descriptive Research

• Cross-sectional studies– Data collected at a single period in time from a

cross-sectional sample of the unit of interest that is disbanded after the data collection

• Longitudinal studies– Repeated measurements taken over a long

period of time from a panel group or sample of the unit that is maintained for future measurements

Cross-sectional Studies

• Data collected at a single period in time from a cross-sectional sample of the unit of interest that is disbanded after the data collection– Conducted in a single time period

– Uses a cross-sectional sample of the unit

– Once the study is complete the sample is disbanded and not used again

Longitudinal Studies

• Repeated measurements taken over a long period of time from a panel group or sample of the unit that is maintained for future measurements– Measurements taken during many different

time periods – Measurements taken from a panel – A PANEL is a sample of units that is

maintained for multiple measurements taken during multiple time periods

Longitudinal Studies (Cont’d)

• Types of Panels– OMNIBUS PANEL: different subjects are

pulled from the panel for each time period• Drawbacks: data is not as reliable

– TRUE PANEL: the same subjects are used for the panel every time data is collected

• Drawbacks: members sometimes evolve out of the desired study group or are induced by the study to change their practices thus tainting the data

Table 3.4 Results of Longitudinal Brand Use Study

Table 3.5 Changes in Brand Shares: Case 1

• What insights can you gain from this table?

Table 3.6 Changes in Brand Shares: Case 2

• What insights can you gain from this table?

Experimental

• A consumer goods firms wants to determine the impact of advertising on sales.

• How should they measure the impact of advertising on sales?

Multi-group Design

ControlGroup

All variables stay the same

ExperimentalGroup

Change one variable

Units

Measure the differences.

Experimental (Cont’d)

Research Continuum

Most projects fall in here, aspects of both descriptive and experimental.

Purely Descriptive

Purely Experimental

Exhibit 3.5

Selecting the

Appropriate

Research Type