Mma6e chapter-04 final

Marketing Management:
An Asian Perspective,
6th Edition
Instructor Supplements
Created by Geoffrey da Silva

Conducting Marketing Research
3
4 © Pearson Education South Asia Pte Ltd 2013. All rights reserved

Learning Issues for Chapter Four
1. What constitutes good marketing research?
2. What are the best metrics for measuring marketing
productivity?
3. How can marketers assess their return on investment of
marketing expenditures?

Importance of Market Information and Research
• Good marketers need insights to help them interpret past
performance as well as plan future activities.
• To make the best possible tactical decisions in the short run
and strategic decisions in the long run, they need timely,
accurate, and actionable information about consumers,
competition, and their brands.
• Discovering a consumer insight and understanding its
marketing implications can often lead to a successful product
launch or spur the growth of a brand.

The Marketing Research System
• Marketing managers often commission formal marketing
studies of specific problems and opportunities.
• Marketing insights provide diagnostic information about
how and why we observe certain effects in the marketplace,
and what that means to marketers.
• Good marketing insights often form the basis of successful
marketing programs.
• Gaining marketing insights is crucial for marketing success.

Definition of Marketing Research
• We define marketing research as the systematic design,
collection, analysis, and reporting of data and findings
relevant to a specific marketing situation facing the company.
• Most large companies have their own marketing research
departments, which often play crucial roles within the
organization.

Small Companies and MR
Small companies can hire the services of a marketing research
firm or conduct research in creative and affordable ways, such
as:
•Engaging students or professors to design and carry out
projects
•Using the Internet
•Checking out rivals
•Tapping into partner expertise

Types of Marketing Research Firms
1. Syndicated-service research firms—These firms gather consumer
and trade information, which they sell for a fee. Example: A.C. Nielsen
Media Research.
2. Custom marketing research firms—These firms are hired to carry
out specific projects. They design the study and report the findings.
3. Specialty-line marketing research firms—These firms provide
specialized research services. The best example is the field-service firm,
which sells field interviewing services to other firms.
© Pearson Education South Asia Pte Ltd 2013. 9 All rights reserved

Marketing Research— Hindustan Unilever
Managers at Hindustan Unilever have direct contact with consumers to find out their perceptions of
their products. This led to a repositioning of Lifebuoy as a family soap.

Example of a Research Brief
Japan Airlines (JAL) is looking for new ways to serve its passengers. It
is reviewing many new ideas, especially to cater to its first-class
passengers on very long flights, many of whom are businesspeople
whose high-priced tickets pay for most of the freight. Among these
ideas are (1) an Internet connection with access to Web pages and
email messaging; (2) 24 channels of satellite cable TV; and (3) a 50-
CD audio system that lets each passenger create a customized playlist
of music and movies to enjoy during the flight. The marketing
research manager was assigned to investigate how first-class
passengers would rate these services and how much extra they would
be willing to pay if a charge was made. He was asked to focus
specifically on the Internet connection.

Example of a Research Brief
One estimate says that airlines might realize revenues of $70 billion
over the next decade from in-flight Internet access, if enough first-class
passengers would be willing to pay $25 for it. JAL could thus
recover its costs in a reasonable time. Making the connection available
would cost the airline $90,000 per plane.

The Marketing Research Process
Effective marketing research involves six steps:

Step 1: Define the Problem, the Decision
Alternatives, and the Research Objectives
Marketing management must be careful not to define the
problem too broadly or too narrowly for the marketing
researcher.
14
An airline looking to add in-flight Internet service would need to conduct careful
consumer research.
© Pearson Education South Asia Pte Ltd 2013. All rights reserved

Nature of Research Objectives and Tasks
• Some research is exploratory—its goal is to shed light on
the real nature of the problem and to suggest possible
solutions or new ideas.
• Some research is descriptive—it seeks to quantify demand.
• Some research is causal—its purpose is to test a cause-and-effect
relationship.

Step 2: Develop the Research Plan
• The second stage of marketing research is where the
researcher will develop the most efficient plan for gathering
the needed information at a given cost.
• To design a research plan, the researcher needs to make
decisions about the data sources, research approaches,
research instruments, sampling plan, and contact methods.

Step 2: Develop the Research Plan
17
Data Sources
Research
Instruments Sampling Plan
Contact
Methods
Research
Approach

Data Sources
• The researcher can gather secondary data, primary data, or
both.
• Secondary data are data that were collected for another
purpose and already exist somewhere.
• Primary data are data freshly gathered for a specific
purpose or for a specific research project.

Research Approaches
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Observational Research
• Fresh data can be gathered
by observing the relevant
actors and settings.
• Consumers can be
unobtrusively observed as
they shop or as they
consume products.

Observational Research
Fisher-Price set up an observation lab in which it could observe the reactions of little tots to new
toys.

Ethnographic Research
• Is a particular observational research approach that uses
concepts and tools from social sciences to provide deep
understanding of how people live and work.
• The goal is to immerse the researcher into consumers’ lives to
uncover unarticulated desires that might not surface in any
other form of research.

Focus Group Research
• A focus group is a gathering
of 6 to 10 people carefully
selected based on certain
demographic, psychographic,
or other considerations and
brought together to discuss
various topics of interest at
length.
23
Unlike paper-and-pencil surveys, focus-group interviews allow participants
to discuss freely their thoughts and feelings. In Asia, researchers need to
be mindful of cultural nuances such as deference to seniority. In more
conservative Asian countries, men and women attend separate focus
groups.

Focus Group Methods:
• A professional research moderator provides questions and
probes based on the marketing managers’ discussion guide or
agenda.
• Moderators try to discern consumers’ real motivations and
why they say and do certain things.
• The sessions are typically recorded.

Challenges of Focus Group Research in Asia
• In Asia, some cultural sensitivities may require that focus
group sessions be segregated between male and female
participants, or even by age.
• Older participants may find it offensive to be in the same
group as younger participants, while younger participants
may defer in their opinions to those of the older participants.
• See Marketing Memo: Conducting Informative Focus Groups
for practical tips to improve the quality of focus groups.

Survey Research
Companies undertake surveys
to learn about people’s
knowledge, beliefs, preferences,
and satisfaction, and to
measure these magnitudes in
the general population.

Behavioral Data Research
• Customers leave traces of their purchasing behavior in store
scanning data, catalog purchases, and customer databases.
• Much can be learned by analyzing these data.
• Actual purchases reflect consumers’ preferences and often are
more reliable than statements they offer to market
researchers.
• People may report preferences for popular brands, and yet
the data show them actually buying other brands.

Behavioral Data Research: Store Scanners
• Store-scanner data can
provide rich information
about brand preferences,
competitive promotional
effects, and customer
profile.
• More importantly, they
reveal behavioral rather
than attitudinal responses

Experimental Research
• The most scientifically valid research is experimental
research.
• Designed to capture cause-and-effect relationships by
eliminating competing explanations of the observed findings.
• Experiments call for:
i. Selecting matched groups of subjects.
ii. Subjecting them to different treatments.
iii. Controlling extraneous variables.
iv. Checking whether observed response differences are
statistically significant.

Research Instruments
• Marketing researchers have a choice of three main research
instruments in collecting primary data:
–questionnaires,
–qualitative measures, and
–mechanical devices.

Questionnaires
• A questionnaire consists of a set of questions presented to
respondents.
• Because of its flexibility, is by far the most common instrument
used to collect primary data.
• Questionnaires need to be carefully developed, tested, and
debugged before being administered.
i. The researcher carefully chooses the questions, wording, and
sequence.
ii. The form of the question can influence the response.
iii. Marketing researchers use both closed-ended and open-ended
questions.

Questionnaires—
Do’s and Don’t’s

Qualitative Measures
• Some marketers prefer more qualitative methods for gauging
consumer opinions because consumer actions do not always
match their answers to survey questions.
• Qualitative research techniques are relatively unstructured
measurement approaches that permit a range of possible
responses.

Qualitative Measures (continued)
• Qualitative research techniques are a creative means of
ascertaining consumer perceptions that may otherwise be
difficult to uncover.
• Because of the freedom it affords both researchers in their
probes and consumers in their responses, qualitative research
can often be an especially useful first step in exploring
consumers’ brand and product perceptions.

Drawbacks of Qualitative
• Marketers must temper the in-depth insights that emerge
with the fact that the samples are often very small and may
not necessarily generalize to broader populations.
• And different researchers examining the same qualitative
results may draw very different conclusions.

Qualitative Research Approaches
• Some other popular qualitative research approaches to get
inside consumers’ minds and find out what they think or feel
about brands and products include:
a. word associations
b. projective techniques
c. visualizations
d. brand personification
e. laddering
• See Marketing Insight: Getting into Consumer’s Heads with
Qualitative Research

Technological Devices
• Technological devices are occasionally used in marketing
research.
i. Galvanometers
ii. Tachistoscope
iii. Audiometers
• Technology has now advanced to such a degree that
marketers can use devices such as skin sensors, brain wave
scanners, and full body scanners to get consumer responses.

Technological Devices (continued)
• Technology has replaced the diaries that participants in media
surveys used to keep. Audiometers attached to television sets
in participating homes now record when the set is on and to
which channel it is tuned.

Use of Technology in Customer Feedback
Changi Airport Singapore targets airline passengers to rate its public restrooms. It installed touch
screens at its restrooms for feedback.

Marketing Insight: Understanding Brain Science
Using neuroscience or “neuromarketing,” a term used to
describe brain research on the effect of marketing stimuli.

Sampling Plan
• After deciding on the research approach and instruments, the
marketing researcher must design a sampling plan. This calls
for three decisions:
a. Sampling unit: Whom should we survey? Define the target
population that will be sampled.
b. Sample size: How many people should be surveyed? Large
samples give more reliable results than small samples.
c. Sampling procedure: How should we choose the
respondents? Probability sampling allows the calculation of
confidence limits for sampling error.

Challenges of Sampling: Using Probability Sampling
in China
• Probability sampling is difficult to achieve in some countries
like China.
• This follows from China’s large size and the time, cost, and
difficulty of accessing respondents in all parts of the country
due to lack of communication, transportation, and other
infrastructural set-ups.
• Regional variations in cultural traditions and the economic
situation present additional problems, particularly as
economic development has been accompanied by increasing
diversity across the country.
• The frequent need to obtain authorization from the relevant
authorities when undertaking surveys.

Contact Methods
45
Mail
Questionnaire
Telephone
Interview
Personal
Interview
Online
Interview
Once the sampling plan has been
determined, the marketing researcher
must decide how the subject should be
contacted: mail, telephone, personal, or
online interview.

Mail Contacts
The mail questionnaire is one way to reach people who would
not give personal interviews or whose responses might be
biased or distorted by the interviewers.
i. Mail questionnaires require simple and clearly worded
questions.
ii. The response rate is usually low and/or slow.

Telephone Contacts
• Telephone interviewing is the best method for gathering information
quickly; the interviewer is also able to clarify questions if
respondents do not understand them.
• The response rate is typically higher than in the case of mailed
questionnaires.
• The main drawback is that the interviews have to be short and not
too personal.
• Telephone interviewing is getting more difficult because of
consumers’ growing antipathy toward telemarketers calling them in
their homes and interrupting their lives.

Personal Contacts
• Personal interviewing is the most versatile method.
• The interviewer can ask more questions and record additional
observations about the respondent, such as dress and body
language.
• At the same time, personal interviewing is the most
expensive method and requires more administrative planning
and supervision than the other three.
• It is also subject to interviewer bias or distortion.

Two Approaches to Personal Interviewing
• Personal interviewing takes two forms.
• In arranged interviews, respondents are contacted for an
appointment, and often a small payment or incentive is
offered.
• Intercept interviews involve stopping people at a shopping
mall or busy street corner and requesting an interview.
• Intercept interviews can have the drawback of being non-probability
samples, and the interviews must not require too
much time.

Online Contacts
• The Internet offers many ways to do research.
• A company can embed a questionnaire on its Web site and
offer an incentive to answer it, or it can place a banner on a
frequently visited site such as Yahoo!
• Online product testing is also growing and providing
information much faster than traditional new-product
marketing research techniques.

A questionnaire can be embedded on a corporate
Web site to get visitors to participate.
InterContinental Hotel Groups—
This hotel chain uses both surveys
and communities to gather data on
customer satisfaction. Online
surveys provide actionable and
speedy results to correct customer
service issues; the online
community provides a sounding
board for more in-depth, longer-term
research objectives.

Some Methods of Online Contacts
• Marketers can also host a real-time consumer panel or virtual
focus group or sponsor a chat room, bulletin board, or blog
and introduce questions from time to time.
• They can ask customers to brainstorm or have followers of
the company rate an idea on Twitter.
• Online communities and networks of customers serve as a
resource for a wide variety of companies.

Advantages of Online Research
1. Online research is inexpensive.
2. Online research is fast.
3. People tend to be honest and thoughtful
online.
4. Online research is versatile.

Disadvantages of Online Research
1. Samples can be small and skewed.
2. Online panels and communities can suffer from excessive
turnover.
3. Online market research can suffer from technological
problems and inconsistencies.

Step 3: Collect the Information
• The data collection phase of marketing research is generally
the most expensive and the most prone to error.
• Marketers can also host a real-time consumer panel or virtual
focus group or sponsor a chat room, bulletin board, or blog
and introduce questions from time to time.
• They can ask customers to brainstorm or have followers of
the company on Twitter rate an idea.
• Internationally, one of the biggest obstacles to collecting
information is the need to achieve consistency.

Step 4 : Analyze the Information
• The next-to-last step in the process is to extract findings from
the collected data.
• The researcher tabulates the data and develops frequency
distributions.
• Averages and measures of dispersion are computed for the
major variables.

Step 4 : Analyze the Information
The researcher will also apply some advanced statistical
techniques and decision models in the hope of discovering
additional findings.

Step 5: Present the Findings
The researcher presents findings relevant to the major
marketing decisions facing management.

Step 6: Make the Decision
• The managers who commissioned the research need to weigh
the evidence.
• Good research should provide clear insights into the research
problem.
• See Table 4.2: The Seven Characteristics of Good
Marketing Research

Characteristics of Good Marketing Research

Marketing Decision Support System
• Some organizations are using a marketing decision support
system to help marketing mangers make better decisions.
• A marketing decision support system (MDSS) is defined
as a coordinated collection of data, systems, tools, and
techniques with supporting software and hardware, by which,
an organization gathers, interprets relevant information from
business and environment, and turns it into a basis for
marketing action.

Overcoming Barriers to the Use of Marketing
Research
• In spite of the rapid growth of marketing research, many
companies still fail to use it sufficiently or correctly.
• They may not understand what marketing research is capable
of and not provide the researcher the right problem and
information from which to work.
• They may also have unrealistic expectations about what
researchers can offer. Failure to use marketing research
properly has led to numerous errors in marketing decisions.

Marketing Research in Asia—
Key Challenges
The conduct of marketing research in Asia presents its own
unique set of challenges.
1. Much data on Asian markets — particularly less
economically developed countries — is non-existent,
unreliable, or very costly to collect.
2. There are also problems with secondary data in the
region either in terms of reliable or currency.

Key Challenges
3. There are also few comparable databases available.
4. The collection of primary data is also saddled with
problems. Survey research suffers from a lack of
sampling lists, few or unqualified interviewers, poor
language translation of questions, respondent
refusals to be interviewed, metric equivalence, or less
than truthful responses.

Problems with Questionnaires
• Asians are more prone to yea-saying.
• Hence, having an odd-numbered
scale may lead to more mid-point
responses when customers
do not want to give an
unfavourable response.
• Companies may consider using
even-numbered scale in their
Asian questionnaire.

Key Challenges
5. Additionally, researchers should bear in mind the
connotations Asians associate with certain product
features. For example, when asking Asians for their
reactions toward price, many Asians tend to equate
high price with high quality.
6. Researchers must also be aware of the cultural
variations in Asian countries. For example, it may be
decided that the wife be interviewed. However, in
some Muslim countries, men have several wives. Who
is to be interviewed?

Key Challenges
7. In many countries, the researcher cannot send a mailed
questionnaire because of low population literacy or poor
postal service; and telephone interviews are not feasible
where telephone ownership or service is poor. This means
that researchers must rely primarily on personal
interviewing, focus group interviewing, and observational
research.
8. Asian countries also vary in their research capabilities.
Hong Kong, Japan, the Philippines, and Singapore have
fairly advanced research industries; while those in China
and Indonesia are more limited, although improving.

Summing Up— Challenges Faced by Companies
Conducting Research in Asia
• Thus, companies going abroad face a problem: they need
reliable data because they know little about other countries’
cultures, distribution, and economics; yet the data often are
poor for making key decisions.
• Researchers should also be attuned to the high rate of change
in the Asian region. Information may thus be out-dated very
quickly.
• Marketing research is most useful insofar as it can forecast
patterns of behavior.

Possible Solutions
1. It may be unwise to develop one marketing research study for all
of Asia. Rather, a sequence of piloting, adaptation, and rollout may
be preferable.
2. External validation among data sources is also advised.
3. Standardized question structure, back-translation, and logic checks
of questions may also be useful research strategies. It has also
been recommended that samples be based on future demographic
profiles to account for Asia’s high rate of change.
4. Finally, as more companies enter Asia, the marketing research
capabilities and infrastructure in the region will improve.

Translation of Questionnaires
Because of Asia’s varied languages, some questionnaires come
in multiple languages to minimize misunderstanding of what
was surveyed.

Measuring Marketing Productivity
• Marketers are facing increased pressure to provide clear,
quantifiable evidence to senior management as to how their
marketing expenditures help the firm to achieve its goals and
financial objectives.
• An important task of marketing research is to assess the
efficiency and effectiveness of marketing activities.

Measuring Marketing Productivity
• Marketing research can help address this increased need for
accountability.
• Two complementary approaches to measure marketing
productivity are:
a. Marketing metrics to assess marketing effects.
b. Marketing-mix modeling to estimate causal relationships and
how marketing activities affects outcomes.
• Marketing dashboards are a structured way to disseminate
the insights gleaned from these two approached within an
organization.

Marketing Metrics
• Marketing metrics is the set of measures that help firms to
quantify, compare, and interpret their marketing
performance.
• Marketing metrics can be used by brand managers to design
marketing programs and by senior management to decide on
financial allocations.

Five Key Questions in Measuring Marketing
Performance
1. Do you routinely research consumer behavior (retention,
acquisition, usage, etc.) and why consumers behave that way
(awareness, satisfaction, perceived quality, etc.)?
2. Are the results of this research routinely reported to the board in a
format integrated with financial marketing metrics?
3. In those reports, are the results compared with the levels
previously forecasted in the business plans?
4. Are they also compared with the levels achieved by your key
competitor using the same indicators?
5. Is short-term performance adjusted according to the change in
your marketing-based asset(s)?

Table 4.3: Sample Marketing Metrics

Marketing Mix Modeling
• Marketing-mix models analyze data from a variety of sources,
such as retailer scanner data, company shipment data,
pricing, media, and promotional spending data.
• Although marketing-mix modeling helps to isolate effects, it is
less effective at assessing how different marketing elements
work in combination.

Three Main Shortcomings for Marketing Mix
Modeling
1. Marketing-mix modeling focuses on incremental growth
instead of baseline sales or long-term effects.
2. The integration of important metrics such as customer
satisfaction, awareness, and brand equity into marketing-mix
modeling is limited.
3. Marketing-mix modeling generally fails to incorporate metrics
related to competitors, the trade, or the sales force (the
average business spends far more on the sales force and
trade promotion than on advertising or consumer
promotion).

Marketing Dashboards
• Firms are also employing organizational processes and systems to
make sure they maximize the value of all these different metrics.
•
• Management can assemble a summary set of relevant internal and
external measures in a marketing dashboard for synthesis and
interpretation.
• Some companies are also appointing marketing controllers to
review budget items and expenses.
• Increasingly, these controllers are using business intelligence
software to create digital versions of marketing dashboards that
aggregate data from disparate internal and external sources.

Marketing Dashboards—Two Key Scorecards
• A customer-performance scorecard records how well the
company is doing year after year on such customer-based
measures as those shown in Table 4.4. Management should set
norms for each measure and take action when results get out of
bounds.
• A stakeholder-performance scorecard tracks the satisfaction of
various constituencies who have a critical interest in and impact on
the company’s performance: employees, suppliers, banks,
distributors, retailers, and stockholders. Again, management should
take action when one or more groups register increased or above-norm
levels of dissatisfaction.

Table 4.4: Sample Customer Performance Scorecard
Measures

Marketing Effectiveness and Efficiency

Example of a Marketing Dashboard

Mma6e chapter-04 final

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