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M.R finals

Marketing Research (University of Technology Sydney)

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Contents
Chapter 8 – Surveys...................................................................................................................................1
Chapter 11 – construct measurement.....................................................................................................5
Chapter 12 – Questionnaires and supplements....................................................................................16
Lecture 7: Coding, Editing and Preparing Data, and Preliminary Data Analysis; Preparing the
Marketing Research Report and its Presentation................................................................................20
Lecture 8: Testing for difference............................................................................................................30
Lecture 9: Testing for association..........................................................................................................37
Lecture 10: Testing for interdependence.................................................................................................46
Lecture 11: Observation and its variants & experiments & test markets................................................51
Lecture 12: Information-driven Technology and the Research Process..................................................63

Chapter 8 – Surveys
Evaluating survey research design

- advantages
o accommodate large sample sizes so results can be
generalised onto target population
o produce precise enough estimates to identify
even small differences
o easy to administer and record answers to
structured questions
o facilitate advanced statistical analysis
o concepts and relationships not directly
measurable can be studied
- Disadvantages
o Questions that accurately measure respondent
attitudes and behaviour can be challenging to
develop
o Richness of detail and in depth data difficult to obtain
o Timeliness of data collection is a challenge
o Low response rates can be a problem

Types of errors in surveys

- Sampling error

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o The difference between the findings based on the sample and the true values of the
defined target population
o Sampling error is caused by the method of sampling used and the size of the sample
o It can be reduced or controlled by increasing the sample size and using appropriate
sampling method
- Non Sampling error
o Survey research errors not related to sampling
o Common characteristics include:
 imperfections in the survey design or execution of the research process
 nonsampling errors are controllable (human mistakes)
 nonsampling errors cannot be directly measured
 one type of error can potentially allow other types of errors to enter the data
collection process
o Most nonsampling errors stem from:
1. respondent errors

2. measurement and design errors

3. faulty problem definition errors


- Occur when decision-makers or researchers or both misinterpret the true nature of the problem
situation
- Manager’s lack of understanding of the real problem

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- Misinterpreting market performance factors as being the problem rather than the symptom
- Researcher’s inaccurate transformation of the problem into research questions

4. project administration errors

Survey method types

- Person-administered surveys
o Trained interviewer asks questions and records answers
 In home – takes palce in respondents home or office
 Executive interview – business executive is interviewed in person
 Mall intercept – shopping patrons stopped and asked for feedback during
shopping
 Purchase intercept – stopped and asked for feedback at point of purchase
- Telephone-administered surveys
o Telephone interviews and computer-assisted telephone interviewing (CATI)
 Telephone interview – interview over phone
 Computer assisted telephone interview – computer used to conduct telephone
interview, respondents opush buttom on their phone to give answers
 Completely automated telephone surveys – survey completely administered by
computer
 Mobile phone survey – can use sms for simple polling and short surveys
- Self-administered surveys
o Respondent reads the survey and records his responses without the presence of an
interviewer
 Mail panel survey – surveys mailed to representative sample
 Dropp off survey – questionnaire left with respondent to do at later time
 Direct mail survey – distribution and return via post
- Online-administered surveys
o Web-based and email surveys, online panels, computer assisted etc
 Fax survey –
 Email survey
 Internet survey

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Survey method selection

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Chapter 11 – construct measurement


Measurement- An integrative process of assessing the information associated with issues of research
interest

Construct - Concept or idea about an object, an attribute or a phenomenon that is worthy of


measurement when solving a decision problem with marketing research.

Construct development - An integrative process in which researchers identify the subjective properties
of a research variable for which data should be collected.

- For each construct being investigated, the researcher must determine its dimensionality traits
(i.e. single versus multidimensional) before developing appropriate scales.

Construct properties:

- concrete features – objective qualities


- Thoughts, feelings, beliefs - subjective qualities

Construct dimensionality:

- Domain observables - The set of identifiable and measurable components associated with an
abstract construct.

Construct validity:

- Subjective yet systematic assessment of how well a construct measurable components


represent that construct
- Content validity (sometimes referred to as face validity) is the subjective, yet systematic,
assessment of how well a construct’s measurable components represent that construct.
- Convergent validity - focuses on how well the construct’s measurement positively correlates
with different measurements of the same construct.

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- Discriminant validity to exist, researchers must be able to establish the fact that the construct
being investigated does not significantly correlate with other constructs that are operationalised
as being different.

Inappropriate scale format:

- the use of untested or inappropriate scale indicators to measure the construct creates a
measurement artefact that could lead to misinterpretations of the true components as well as
the true dimensionality traits making up the investigated construct.

Inapropriate set of respondents:

- convenience sampling

Construct operationalisation:

- Explaining a construct’s meaning in measurement terms by specifying the activities or


operations necessary to measure it.
- Since many constructs, such as customer satisfaction, preferences, emotions, quality images and
brand loyalty, cannot be directly observed or measured, the researcher attempts to measure
them indirectly through operationalisation of their components.
o E.g – measuring satisfaction through asking questions to measure different aspects
related to the construct of satisfaction – e.g convenience of location, operation hours,
communication and customer service.
o You cannot directly measure satisfaction, you cannot look inside the brain and see
satisfaction

Scale development

- Scale development can be defined as the process of assigning a set of descriptors to represent
the range of possible responses to a question about a particular object or construct
- Within this process, the focus is on measuring the existence of various properties or
characteristics of a person’s response.
- Scale points - Designated degrees of intensity assigned to the responses in a given questioning
or observation method.

Scale properties:

-
-
-
-
-
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Scale levels:

- Nominal – provide some type of descriptor, and have no level of intensity –


o Nominal responses are labels, and the numeric value assigned to each represent the
label

- Ordinal - used to depict non-mathematical ideas such as frequency, satisfaction, degree of pain,
happiness etc.
o Ordinal = order (relative position of labels) + description (label)

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o Does not have an origin of scale – true zero


o Distance between attributes are unknown

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- Interval - A scale where order is known as well as the difference between these variables.
o Helps to indicate the distance between two variables
o Contains ordinal properties, except an addition of distance between variables
o Values are established, constant and measureable
o Equal distance between attributes
o Attitude scales can be interval
o Can do subtraction and addition of scores
o Can be likert scales
 But scales cannot contain a neutral response
 Each attribute is a label for a meaningful amount of something
i. E.g – not at all = 2/10 and very high = 8/10

- Ratio - A scale that allows the researcher not only to identify the absolute differences between
each scale point but also to make comparisons between the responses.
o Allows a true natural zero to be a valid response
o Has fixed number responses only
o Can calculate most descriptive statistics with this measure
o E.g - age

Scale formats

Likert scales - An ordinal scale format that asks respondents to indicate the extent to which they agree
or disagree

o Usually 5 scale points from strongly disagree to strongly agree


o Good for in person & online
o Limited – extent to which respondent thinks the statement represents his beliefs

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- with a series of mental belief or behavioural belief statements about a given object.

Semantic differential –

o A bipolar scale format that captures a person’s attitudes or feelings about a given object
o Randomisation of the positive and negative pole descriptors - Bias’s may exist if positive
end is on left always. Randomisation is positive.
o Lack of magnitude expressed in the pole descriptors – Only end 2 poles express extreme
intensity. Researched will have to guess how respondent is interpreting other points.
o Use of non-bipolar descriptors to represent poles – sometimes the poles are not true
opposites
 E.g - take the ‘expert/not an expert’ scale item – not an expert’ do not allow the
respondent to interpret any of the other scale points as being relative
magnitudes of that phrase. Other than that one endpoint described as ’not an
expert’, all the other scale points would have to represent some intensity of
‘expert’, thus creating a skewed scale towards the positive pole.

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 Matching standardised intensity descriptors to pole descriptors – Careful in


selecting specific phrases that it matches intensity of each scale point, and
makes sense in context of each pole

Behaviour intention scales - A scale designed to capture the likelihood that people will demonstrate
some type of predictable behaviour intent towards purchasing an object or a service in a future time
frame.

o To increase the clarity of the scale point descriptors, the researcher can attach a
percentage equivalent expression to each one.

Other scale formats

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Non-comparative scale - A scale format that requires a judgment without reference to another object,
person or concept.

1. a graphic rating scale - graphic rating scale A scale that uses a scale point format which
presents the respondent with some type of graphic continuum as the set of possible
responses to a given question.

2. a performance rating scale - performance rating scale. A scale that uses an evaluative scale
point format which allows the respondent to express some type of post decision or
behaviour evaluative judgment about an object.

3. a staple scale - staple scale A modified version of the semantic differential scale that takes a
single narratively expressed descriptor and centres it within a numeric set of plus and minus
descriptors.

Comparative scales

1. Rank order - A rank-order scale incorporates a scale point format that allows respondents to
compare their own responses by indicating the first preference, second preference, third preference and
so forth, until all the desired responses are placed in either a ‘highest to lowest’ or a ’lowest to highest’
rank order

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Paired-comparison scale - This format creates a


preselected group of traits, product
characteristics or features that are paired
against one another into two groups; respondents are asked to select which in each pair is more
important to them

Constant sums scale - constant sums scale. A scale format that requires the respondent to allocate a
given number of points, usually 100 among several attributes or features based on their importance to
the individual; this format requires a person to evaluate each separate attribute or feature relative to all
the other listed ones.

Single-item scale design - A scale format that collects data about only one attribute of an object or a
construct.

- An easy example to remember that illustrates this point is the need to collect age data about the
respondents. The object is ‘a person’ and the single attribute of interest is that person’s ‘age’.

Multiple-item scale design - A scale format that simultaneously collects data on several attributes about
an object or a construct.

Formative composite scale design - A multi-item scale format where each individual scale item
represents a different part of the whole construct, object or phenomenon to be measured.

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o For example, to measure the image of the Mercedes-Benz EClass, the researchers would
have to measure the different attributes that make up that car’s image, such as
performance, resale value, styling, price, safety features, sound system and
craftsmanship. By creating a scale that measures each pertinent attribute, the
researcher can sum the parts into a complete (e.g. formative) whole that measures the
overall image held by respondents towards the E-Class.

Reflective composite scale design - A multi-item scale format where each individual scale item is an
equally valid indicator of the whole construct, object or phenomenon to be measured.
- For example, to measure the image of a Mercedes-Benz E-Class using a reflective composite
scale, the researcher can use a variety of synonyms for image as the individual scale items, such
as look, appearance, aura or persona of the E-Class.

Criteria for scale development

Intelligibility of questions:

- The degree to which the questions on a scale are understood by the respondents.
- The researcher should try to eliminate all guessing on the part of the respondent. Respondents
should be able to understand what types of data are being asked for and how to respond. The
intelligibility factor thus promotes the use of ’respondent instructions’ in scale designs,
especially in self-administered surveys.

Appropriateness of the descriptors:

- The extent to which the scale point elements match the data being sought.

Discriminatory power:

- The scale’s ability to differentiate significantly between the categorical scale responses.
- Moreover, the researcher must decide how many scale points are necessary to make up the
relative magnitudes of a desired response scale.
- Usually between 3-7 points

Scale reliability:

- The extent to which a scale can produce the same measurement results in repeated trials.
- Test-retest technique:
o A technique of measuring scale reliability by administering the same scale to the same
respondents at two different times or to two different samples of respondents under
similar conditions.
- Problems with the test-retest approach:
o First, some of the students who completed the scale the first time might be absent for
the second administration of the scale.

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o Second, students might become sensitive to the scale and therefore alter their
responses in the second measurement.
o Third, environmental or personal factors may change between the two administrations,
thus causing changes in student responses in the second measurement.
- Balancing positive/negative scale point descriptors
o If wanting a balanced/unbiased response – balance positive and negatives

o May want to just know levels of satisfaction -

Inclusion of a neutral response:

o Some respondents wont have enough knowledge or experience with the given topic to
be able to accurately assess their thoughts or feelings.
o An alternative approach to handling situations in which respondents may feel
uncomfortable about expressing their thoughts or feelings about a given object,
because they have no knowledge of or experience with it, would be to incorporate a
’not applicable’ response choice that would not be part of the actual scale

Desired measures of central tendency:

- In deciding what scale level should be developed, the researcher must take into consideration
what kind of data analysis will be conducted after the data are collected.
- The basic sample statistics that are generated through analysing data; these are the mode, the
median and the mean.

Measures of dispersion:

- Relate to how all the data are actually dispersed around a given central tendency value.
- The sample statistics that allow a researcher to report the diversity of the data collected from
scales; they are the frequency distribution, the range and the estimated sample standard
deviation.

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Chapter 12 – Questionnaires and


supplements
Questionnaire design

- Bad design can be costly


- A good set of scales is, by itself, not enough to guarantee that data will automatically be
collected
- Can be descriptive or predictive
o Descriptive design - allows the researcher to collect data that can be turned into facts
about a person or object.
o Predictive questionnaires –
- Good questionnaires allow researchers to gain a true report of the respondent’s attitudes,
preferences, beliefs, feelings, behavioural intentions and actions/reactions in a holistic manner,
not just a fragment. Through carefully worded questions and clear instructions, a researcher has
the ability to control a respondent’s thoughts and ensure objectivity. By understanding good
communication principles, researchers can avoid bad questioning procedures that might result
in either incomprehensible information requests, unanswerable questions or leading questions
that obscure, prohibit or distort the meaning of a person’s responses.

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Questionaire components

- Words
- Questions
o Unstructured questions - Open-ended questions formatted to allow respondents to
reply in their own words.
o Structured questions - Closed-ended questions that require the respondent to choose
from a predetermined set of responses or scale points.
o Bad questions - Any questions that prevent or distort the fundamental communication
between the researcher and the respondents.
 Incomprehensible
 Leading or loaded
 Unanswerable
 Double barrelled – more than 1 issue of a time
- Format
- Hypothesis

Design steps:

1. Confirm research objectives


2. Select appropriate data collection method
o Determine the data requirements
o Determine the data collection method (surveys, interviews etc.)
o Determine type of respondent information required
3. Develop questions and scaling
o Select appropriate scales
4. Determine layout
o Present questions and scales in a logical order.
o Easy, general questions first, then specific questions.
o Allows early relaxation and cooperation – may not even be relevant
o Establish rapport
o Minimise bias’s – If introduce a topic early, may carry that as important into future
responses.
o Demographic and classification questions at the end
5. Obtain initial client approval – Client feedback and approval is essential
6. Pretest, revise and finalise the questionnaire –
o Pretest questionnaire with selected samples in terms of wording, phrasing, instructions and
question sequence
o Check for completion time and difficulties of answering the questions
o Finalise support materials
7. Implement the survey
o Can be self-administered or interviewer completed

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Lynda questionnaire design

Define problem What is the purpose


Who is the target population
What is information going to be used for
What exactly do we want to find out
Plan how it will be administered Phone, personal interview, written, online
questionnaire

Write questionaire Informative title


Introduction
Interesting questions near beginning
Demographics at end
Grouping of topics with headings
Desk check Look at questionnaire as if looking from first time
Pilot survey Make changes
If do lots of changes, do another pilot survey and
desk check

Guidelines for developing questions:

o A question should use vocabulary that the respondent is familiar with.


o A question should focus on a single issue or topic.
o A question should be grammatically simple.
o A question should be interpreted the same way by all respondents. For example, ‘How
many children do you have?’ might mean how many at home or how many including those
not currently living at home or including those from other relationships.
o A question should be brief.

Questionnaire questions SHOULD NOT:

o Be unclear about the frame of reference


o Be worded ambiguously
o E.g frequently – definition may be different to different people
o Have loaded wording on phrasing
o Ask something beyond the respondent’s knowledge
o Lead the respondent to provide a particular response
o Require the respondent to guess
o E.g how much borocolli per grams do you eat a week
o Use words that exaggerate the circumstances
o Be double-barrelled - have two topics

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o Be centred on a specific example to assess a general case


o Require respondent to recall specific details or events when only general issues are likely to
be remembered

Cover letter:

o A separate written communication to a prospective respondent designed to enhance that


person’s willingness to complete and return the survey in a timely manner.
o A separate written communication to a prospective respondent designed to
enhance that person’s willingness to complete and return the survey in a timely
manner.
o Cover letter role – Introduce the respondent to the research project – Inform the
respondent of the importance of the study – Communicate the study’s legitimacy
and deadlines

Supplementary documents:

- Supervisor instructions
o A form that serves as a blueprint for training people on how to execute the
interviewing process in a standardised fashion; it outlines the process by which to
conduct a study that uses personal and telephone interviewers.
- Interviewer instructions
o The vehicle for training the interviewer on how to select prospective respondents,
screen them for eligibility and conduct the actual interview.
o The main importance of interviewer instructions is to ensure that all the
interviewers conduct the interviews in basically the same fashion.
- Screening forms
o A set of preliminary questions that the interviewer uses to determine the eligibility
of a prospective respondent for inclusion in the survey.
o
- Quota sheets

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o A simple tracking form that enhances the interviewer’s ability to collect data from
the right type of respondents; the form helps ensure that representation standards
are met.
o May need quota sample from particular segment
- Rating cards
o Cards used in personal interviews that represent a reproduction of the set of actual
scale points and descriptions used to respond to a specific question/set-up in the
survey. These cards serve as a tool to help the interviewer and respondent speed up
the data collection process.
- Call record sheets
o A recording document that gathers basic summary information about an
interviewer’s performance efficiency (e.g. number of contact attempts, number of
completed interviews, length of time of interview).

Lecture 7: Coding, Editing and


Preparing Data, and Preliminary Data
Analysis; Preparing the Marketing
Research Report and its Presentation
Data validation

- The process of determining, to the extent possible,


whether a survey’s interviews or observations were
conducted correctly and are free of fraud or bias.
- Usually call 10%

Data editing

- Ensure that mistaken omissions by interviewer are filled in – e.g, didn’t tick a box
- Interviewer asking the proper questions
- Proper recording of answers
- Proper screening of respondents – manually check if person fitted into screening rules
- Proper recording and coding of open-ended questions

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If can’t validate with respondents –

- Delete respondents answers


- Still count respondents but use a missing code on that variable

Data coding

- Incorporate coding into questionnaire design where possible


- Assign a coded value to each response
- Use numeric codes – 0-9
- Assign codes to missing data
- Open-ended questions need to be coded for data entry
- Best practices suggest that researchers should incorporate coding into the design of the
questionnaire.
- The researcher needs to assign a numerical value to each questionnaire.
- Open ended questions
o Difficult to code
 List of as many potential responses as possible. The researcher can then
assign values within a range determined by the actual number of separate
responses identified.
 Consolidation of responses
 The third step of the process is to assign a numerical value as a code to each
of the consolidated categories.
o Use code book

Data entry

o Those tasks involved with the direct input of the coded data into some specified software
package that ultimately allows the research analyst to manipulate and transform the data
into useful information.
o Can be entered directly into the computer
o Touch screen, light pen, kiosks, computerised /online surveys
o Entered manually
o Scanned through ocr software
 E.g – multiple choice tests

Error detection

o This is the process of ensuring that the data entered are correct and error free.
o Customised software can prevent errors by making it impossible for data entry personnel to
make certain types of mistakes.
o Data analysis tools can run error check procedures to identify wrong data, incorrect data,
missing data.
o Frequency count, outlier detection, etc
o Computer and internet-based surveys can accommodate vast and complex arrays of data,
greatly increasing the capacity for data collection and substantially reducing confusion and
errors by interviewers and respondents.

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o Still need to do data validation


o Three major benefits are as follows: – encoding data without transcribing from paper –
minimising errors in data entry – speeding up data collection and coding.

Data description

o The final step in preparing the data for further analysis is to describe the data sample in such
a way so as to reveal the general pattern of responses and the general profile of a ‘typical’
respondent.
o Why is it required – Almost all data sets are disaggregated (just rows and columns) – Every
set of data needs some summary information developed that describes the numbers it
contains
o Statistical techniques used – Data tabulation (frequency distribution, cross-tabulations, etc.)
– Measures of central tendency (mean, median, mode)

Data tabulation

o The simple process of counting the number of observations (cases) that are classified into
certain categories.
o One-way tabulation - Categorisation of single variables existing in a study.
 is the categorisation of single variables existing in the study. In most cases, a one-
way tabulation shows the number of respondents who gave each possible answer to
each question on the questionnaire.
 When a research team performs a ‘one-way’ tabulation they focus on a single
variable operating in the research study
 Research analysts use one-way tabulations to:
 determine the degree of non-response to individual questions
 locate simple blunders in data entry
 calculate summary statistics on various questions, for example averages,
standard deviations and percentages
 communicate the results of the research project
 Profile sample respondents
 Distinguishing characteristics between groups
 Establishing percentage of respondents who respond differently to different
situations –
 Frequency table is constructed to illustrate one-way tabulations

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o indications of missing data


 one-way frequency tables indicate the absolute number of missing responses
for each question
o valid percentages
 the establishment of valid percentages is based on removing incomplete surveys
or particular questions
o summary statistics
 One-way frequency tables can illustrate a variety of summary statistics relevant
to the question being analysed

Cross-tabulation - Simultaneously treating two or more variables in the study; categorising the number
of respondents who have answered two or more questions consecutively.
o This simultaneously treats two or more variables in the study
by categorising the number of respondents who
have responded to two or more consecutive
questions
 Helps to analyse relationships among and
between variables
 To quickly compare how different groups of
respondents answer survey questions
 Provide a valid description of both
aggregate and subgroup data
 Merging of frequency distributions of two or more
variables
o As always, the analyst needs to base the selection of variables on the objectives of the
research project.
o Two key elements of cross-tabulation are:
 how to develop the cross-tabulation
 how to interpret the outcome
o It is widely used
o Normally the main form of data analysis in most marketing research projects
 Easily understood and interpreted by managers
o Simple to conduct and appealing to less sophisticated managers

Challenges

- The analyst should take care to construct cross-tabulations that accurately reflect
information relevant to the objectives of the project
- Certain survey approaches can lend themselves to the construction of an endless variety of
cross-tabulation table
- More than three variables can be cross-tabulated but interpretation complex
- Cross-tabulations are not efficient when examine relationships among several variables
- Cross-tabulations can interpret associations not causation

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Measures of central tendency

- Mean
o The arithmetic average of the sample; all values of a distribution of responses are
summed and divided by the number of valid responses.
o Survey data should display some central tendency with most of the
o responses distributed around the mean
o For interval or ratio data, researchers generally use the mean
o It is fairly insensitive to adding or deleting data values. The mean can be subject to
distortion, however, if the data contain extreme values.
- Mode
o The most common value in the set of responses to a question; that is, the response
most often given to a question.
o For nominal data, researchers generally use the mode.
- Median
o The middle value of a rank-ordered distribution; exactly half of the responses are
above and half are below the median value.
o For ordinal data, researchers generally use the median

Measures of dispersion

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- Measures of dispersion describe how close to the mean or other measure of central
tendency the rest of the values in the distribution fall.
o how spread apart the scores of the distribution are or how much the scores vary
from each other

Range

- The distance between the smallest and largest values in a set of responses.

Standard deviation

- The average distance of the distribution values from the mean.


- Researchers refer to the difference between a particular response and the distribution mean
as a deviation.
- Since the mean of a distribution is a measure of central tendency, the distribution should
reveal about as many values above the mean as below it (particularly if the distribution is
symmetrical). Consequently, if researchers subtracted each value in a distribution from the
mean and added them up, the result would be close to zero (the positive and negative
results would cancel each other out).
o The solution to this difficulty is to square the individual deviations before adding
them up (squaring a negative number produces a positive result).

Variance

- Variance between the mean and the observed value is called the deviation from the mean
- Variance is the mean squared deviation of all the values from the mean
- As soon as researchers determine the sum of the squared deviations, they divide it by the
number of respondents minus 1. They subtract the number 1 from the number of
respondents to help produce an unbiased estimate of the standard deviation. The result of
dividing the sum of the squared deviations is the average squared deviation. To get the
result back to the same type of units of measure as the mean, they simply take the square
root of the answer.
- Since the estimated standard deviation is the square root of the average squared deviations,
it represents the average distance of the values in a distribution from the mean. If the
estimated standard deviation is large, the responses in a distribution of numbers do not fall
very close to the mean of the distribution. If the estimated standard deviation is small, you
know that the distribution values are close to the mean.
- Can represent how reliable and strong the central tendency is.

Market research report and its presentation

- Often, quantitative researchers are so concerned about statistics, computer output and
questionnaires that they forget to provide a clear, logical interpretation of their findings.
- Should include;
o Executive summary

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o the research questions


o the research objectives – boundaries, what did and didn’t touch upon
o the data sources and research design – establishing credibility
o the data analysis
o the analysis findings (displayed in tables, graphs or charts and expressed in words)
o a summation and interpretation of the results
o the conclusions based on the results
o the recommendations and suggestions.

Credibility

- The quality of a report that is related to its accuracy and professional organisation.
- A professional report does not tolerate any degree of carelessness in handling data,
reporting statistics or describing outcomes.
- Errors in mathematical calculations, grammatical errors and incorrect terminology are just a
few types of inaccuracies that can also serve to diminish the credibility of the report.

Believability

- The quality of a report that is based on clear and logical thinking, precise expression and
seamless presentation.
- If readers do not understand what they read, they do not believe what they read.

Qualitative research reports

o The literature review and relevant secondary data may be integrated in the analysis of
findings in qualitative data analysis, rather than being presented separately from other
findings
o The objectives and questions in qualitative research tend to be broader more general, and
more open-ended than in quantitative research
o Goal is comparison to previous research findings
o Qualitative researchers rarely present statistics

Quantitative research reports

o The literature review and relevant secondary data analysis is usually presented in the body
of the report (i.e. research background or research issues section)
o Presenting statistics is crucial for quantitative research reports

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Format

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Reporting results

No matter how complicated the statistical analysis, the challenge for researchers is to
summarise and present the analysis in a way that makes it easy to understand for non-
specialists.

o Frequencies
o tables, bar charts or pie charts
o

Common report problems

o Lack of data interpretation

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o Unnecessary use of statistics


o Too much emphasis on packaging/the look of the report.
o Lack of relevance
o Too much emphasis on a few statistics.

Making the presentation

o The presentation is as important as the written report.


o Need to effectively communicate the research results.
o Often this is the only part of the project that those commissioning the research will see.
o The content and presentation of the research are closely intertwined.
o Keep the audience in mind.
o Use visuals and graphs and charts. Don’t burden it with heavy text

Presentation guidelines

o Begin with a slide showing the title, the individual presenters, the client and the marketing
research firm
o A sequence of slides showing the research objectives, the research questions, the research
methodology and a description of the sample
o Additional slides to highlight the research findings or the results
o Conclusion slides with recommendations, conclusions and research implications

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Lecture 8: Testing for difference


Hypothesis

o Hypothesis: any stated difference or change exists in reality and is not simply due to random
error in sampling – e.g, just drawn the correct sample that validates the hypothesis
o From educated guess – e.g, young people are more likely to use fintech
o Very difficult to prove a hypothesis 100%, because causation could be due to unseen
variables
o That is why we test to reject the null hypothesis
o Researchers have preconceived notion of how variables relate to each other –
o Marketing research
o Prior studies
o Unless a hypothesis is empirically verified, it remains an unproven statement in a testable
format
o Null hypothesis: anything that is thought to be true, or that has been observed in a
sample, is due to random error
- Rejection of the null hypothesis leads to an acceptance of the hypothesis
- Researchers rarely state the null hypothesis explicitly.
o Examples of marketing-related hypotheses: –
o Heavy and light users of a brand differ psychographic ally
o Ski resort is visited by more than 30% of the advanced skiers in the region
o A hotel has a more upmarket image than its nearby competitors
o Concepts of sampling distribution, standard error of the mean or the proportion, and the
confidence interval are fundamental to construction and interpretation of hypotheses tests

Statistical significance

o Error is always present – because not looking at entire population


o Data analysis is the process of testing hypotheses and establishing statistical significance
o Level of significance
o Will accept different significance levels depending on importance levels of decision
o The amount of risk regarding the accuracy of the test that the researcher is willing to accept;
i.e. it is the probability that the rejection of the null hypothesis is an error.
o Marketing researchers accept a level of significance of 0.10, 0.05 or 0.01, depending on the
research objective. For example, if significance level is 0.05, it means that researchers want
to be 95% certain that the null hypothesis is not true.

2 Types of errors

o Type I error: when sample results lead to the rejection of the null hypothesis, when it is in
fact true – false positive -

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o Can be controlled by tolerable level of significance and increased sample size


o Probability of type I error – Alpha (α)
o Mostly focus on type 1 error – rejecting null hypothesis when it is actually true
- Due to bias
o Type II error: when sample results lead to the null hypothesis not being rejected, when it is
in fact false
o Probability of type II error - β
Difference-testing involving one mean

o Univariate t–test:
o a method to compare whether the mean for a dependent variable in a sample is
different from the population mean (or mean of interest) of that variable
o Will compare mean value to a test value mean – a hypothesised mean value
- Test mean is the level that they are interested in or hope for
- Test the certainty that the discovered mean is not equal to the test value at
95% confidence level
o Test whether the difference is statistically significant]
o Relatively simple test to conduct
o Practical example
o Testing a sample against a certain benchmark to determine if it would hold true and
high enough score for the population
o E.g – determine if retirement age of a population is 65 (which may be the age of
another country, and we want to determine if our countries average is different)
which may have some practical value with how we compare to them, and what we
can do about it or copy from them, as we may also hypothesis that they are doing
something better than us and are looking for evidence of this.
o Interpretation and assessing significance – use these 3 different values
o Absolute value of T is greater than 2 = statistically significant – reject null
o Confidence interval of difference does not include 0
- means dependant variabe and test variable are always significantly different
from 0 difference (or statistically different than the null hypothesis) – reject
null hypothesis that dependant variable is not differnt from test
- if included 0 (null), then could accept the null
o P value - Sid (2tailed) less than 0 - statistically significant – reject null
- If less thank .95% have to accept null hypotheses – insignificant
1. Read null statement and use this to determine if accept or reject the
null
2. If it is insignificant, then it is a null statement, null hypothesis

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2.

Difference-testing involving two or more means

Bivariate t-test:

o A method to compare two means


o Two groups (e.g. males and females) or two sets of data (before and after) and you
wish to compare the mean score on some continuous variable
o Requires ratio or interval data
o Null – there is no difference between 2 variables
o E.g – is there a significant difference in the mean self esteem scores between males and
females
o What you need: two variables
- One categorical, independent variable (males/females)
- One continuous, dependent variable (self esteem scores)
o What will t-test tell you
- Whether there is a statistically significant difference in the mean scores for
the two groups (i.e. whether males and females differ significantly in terms
of their self-esteem levels)
o E.g 2 - Researchers use a bivariate t-test to compare two means in a sample, and whether
the two means differ in the population
o Assumption is that the samples come from populations with normal distributions
and that the variances of the populations are equal
o E.g – compare satisfaction with Westpac with satisfaction with ANZ using same
people but comparing 2 different variables
o The bivariate t-test tries to provide a rational way of determining if the difference
between the two means occurred by chance or whether difference holds for whole
population
o Independent sample t-test
o When you want to compare the mean scores of two different groups of people or
conditions

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o e.g. researcher may want to compare the average number of cups of coffee
consumed per day by male students (the one group) to the average number of cups
of coffee consumed by female students (the other group)
o E.g. 2 – management may think there is a difference in customer age between males
and females

o Paired sample t-test (repeated measures)


o When you want to compare the mean scores for the same group of people on two
different occasions
o e.g. researcher compares the average number of cups of coffee consumed per day
by male students to the average number of soft drinks consumed per day by the
same group of male students
- Can we reject the null hypotheses that average coffees and soft drinks
consumed per day are the same
– Are they significantly different?
o 1 sample, 2 variables.
o Interpreting significance
o Use same as in univariate T-test
- T-value
- Sig (2 tailed)
- Confidence interval
o Can be controlled by increased sample size

Tasks to perform before the test –

o Choose hypotheses to be compared –

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o Choose level of significance for rejecting null hypothesis and accepting the hypothesis
o Typically, p< 0.05 for rejecting the null hypothesis
o Probability or critical value
o The P value or calculated probability is the estimated probability of rejecting the null
hypothesis of a study question when the null hypothesis is true
o Test statistic
o A statistic on which the decision can be based whether to accept or reject a
hypothesis is called test statistic – Examples: z, t and Chi–square

Analysis of variance (ANOVA)

o A method to compare three or more means


o Post hoc tests – only run if it is significant, in order to determine what the
significance is.
o E.g: comparing the consumption of beer bottles per week by three different groups
of MBA, undergraduate and PhD students

One way ANOVA

o If these groups are derived from one independent variable, as in the above case
‘education level’ (albeit broken down into three groups: MBA, undergraduate and
PhD)
- one independent variable which has a number of different levels or
conditions (i.e. groups of students)
– Independent variable must be categorical (nominal variable)
- One dependent variable (i.e, consumption of beer bottles)
– Dependent variable must be metric (either interval or ratio)
o This compares the variance (variability in scores) between the different groups (due to the
independent variable) - with the variability within each of the groups
o Tukey and Duncan output for ANOVA –
o Below shows only 1 subset, which is a subset which does not reject the nul. (no Sig.)
o If had 2 subsets, would indicate different groups, one significant, the other not

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o F test -
o Larger F ratio indicates more variability between the groups than there is within
each group
o A significant F-test indicates that we can reject the null hypothesis, which states that
population means are equal
o Variance between groups > variance within groups = statistical significance
-
o Null hypothesis in ANOVA – all groups are the same.

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o Alternative hypothesis – atleast 2 of the groups of means are different from


eachother
- It does not tell us which of the groups differ
– Need to do Post Hoc test to know which group differs

N way ANOVA

o This is a statistical technique that explores several independent variables


simultaneously
o E.g 1 - Usage rates and geography, heavy users in Victoria may be different to heavy
users in NSW
o E.g 2- Deli Depot management wants to know:
- 1. whether customers who come to the restaurant from greater distances
differ from customers who live nearby in their willingness to recommend
the restaurant to a friend
- 2. whether the gender of the customers influences that difference in
willingness, if any

MANOVA

o Analysts can analyse multiple dependent variables and three or more groups,
simultaneously, using a related procedure called multivariate analysis of variance
(MANOVA).
o Assumptions
- D.V - Two or more dependant variables – Interval or ratio level
– E.g – study time, test scores
- I.V – two or more categorical, independent groups
– E.g – ethnicity, physical activity (low, moderate, high)
o –The objective in MANOVA is identical to that in ANOVA—to examine group
differences in means—except that the analysts consider comparisons for multiple
dependent variables.
- For example, a researcher might want to measure customers’ use of several
types of related products, such as golf balls, golf shoes, golf clubs and golf
clothing (the multiple dependent variables). Since use of one of these types
of products may be related to other factors, such as education levels (the
different groups), MANOVA would be a good choice

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Lecture 9: Testing for association


o how sure can we be that we’d find a relationship in the population
o If a relationship exists between two or more variables, researchers refer to an association
being present.
o Direction of assosciation
o Strength of assosciation
o Type of assosciation
- Linear - A relationship between two variables whereby the strength and
direction of the relationship remains the same over the range of both
variables.
- Curvilinear - A relationship between two variables whereby the strength
and/or direction of their relationship changes over the range of both
variables.

Chi Square analysis

o Using two categorical (nominally) scaled variables


- For instance – education and income (where income is expressed nominally,
as low, medium or high)
o Chi-square (X2) analysis permits us to test for significance between the frequency
distributions for two (or more) nominally-scaled variables to determine if there is
any association/dependence between the IV’s.
o Chi-square analysis compares the observed frequencies (counts) of the responses
with the expected frequencies. The expected frequencies are based on our ideas
about the population distribution or our predicted proportions.
- Uses cross tabs to see whether the observed counts differ from what was
expected of the data left up to chance
o Measure covariance
o Chi-square analysis assumes that no association exists between the nominal-scaled
variables being examined.
- Does not test strength
- Refereed to as goodness of fit
o SPSS Output – Pearson correlation

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- Using Pearson Chi Square ( p value) (2 tailed significance level less than
0.05)
- Person value either positive or negative
- Either significant or not

Scatter diagram

o Allows researchers to not only understand the presence of an association, but also the
strength and direction of the association –
o If researchers know that CD purchases are related to age, then they might want to
know the extent to which younger persons purchase more CDs, and ultimately
which types of CDs

o Covariation is the amount of change in one variable that is consistently related to the
change in another variable of interest (how much one variable varies in relation to another
variable varying)
o Scatter diagrams used to visually understand the covariation between variables
o Whether changes in Y are often systematically related to changes in X
o Relationships can be positive or negative
- Negative covariance – When X increases, Y decreses/moves in the opposite
direction
– Negative – e.g, the more expensive ice cream is, the less you’re
going to buy it.
- No relationship – amount of ice-cream is not dependant on your income
level, because people will buy it regardless
- Curvilinear – e.g where price signals quality (wine, hairdresser, car) – as
price goes up, sales goes up, but at a certain price level, sales goes down as
the price gets too high
o Strong or weak – look at variance
- Strong - when all dots are close to line
- Weak – when dots are spread away from the line
o Can be linear or curvilinear
o Use dependant value on y axis (what you are trying to predict), independent
variable on x axis – e.g, is sales of ice cream related to temperature outside and
what is the relationship
- sales of ice-cream (is dependant and what trying to predict), temperature
outside is independent (predictor – thing that using to predict)

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o Used for ratio or interval data


o Not nominal or
ordinal data

Using correlation analysis in SPSS

Pearson correlation co-efficient

o -1<Pearson coefficient<1
o Also includes level of significance
o Tells of the strength of the correlation between variables
o If strong and significant, you can be confident of a linear relationship between variables
o R Value in regression analysis
o This allows a research team to determine the sturdiness of a linear (not curvilinear)
relationship between two variables
o interval and/or ratio- scaled only
o Can only show association; doesn’t allow researcher to make causal statements
o E.g – if know that price and sales are highly correlated – you know there’s a
relationship between the two, but need extra theory to know that its causal
o Pearson coefficient values
o Positive coefficient -
positive linear
relationship
o Negative coefficient –
negative linear
relationship

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- E.g – price of ice cream increases, leads to decrease in sales


o Coefficient of 0 - Curvilinear
- Does not mean there’s no correlation at all, just means no linear correlation
o Numerical size of coefficient – tells strength of relationship
- E.g – stronger and higher coefficient – dots are closer to the line

E.g – Significant association because of Pearson coefficient and significance (2 tailed) score.

Spearman rank order correlation coefficient

o This is a statistical measure of the strength and direction of a linear relationship between
two variables where at least one is ordinal-scaled
o e.g. researchers might be interested in comparing whether a respondent’s ranking
of eight business schools in terms of perceived costs is related to how these schools
are ranked by the same person in terms of perceived prestige

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o E.g above – higher rank in food quality correlates to lower food variety
- Higher food variety correlates to lower food quality

Regression analysis –

o Describes if relationships exist,


o Algebraic formula for a straight line to make predictions about dependant variable when
make a change in independent variable
o Predict effects of X on Y.
o Question – what happens to the dependant variable if we change the independent
variable
o Assumptions –
o Data is interval or ration
o Except for dummy variables
o Detects
o whether a relationship exists
o strength of the relationship
o form of the relationship – positive or negative
o predict values of the dependent variable (DV)
o control for other independent variables (IV) when evaluating contributions of a
specific variable or set of variables
- e.g – sales of icecream may be influenced by price, but also may be
influenced by temperatINure outside
o Dummy Variables
o Need to code categorical data with dummy variables to use in regression
o If coefficient for dummy variable is positive, then the variable coded (1), will have
higher scores of the DV, then the variable coded 0

R-Square - coefficient of determination


o R square
o Square the Pearson co-efficient
o Goodness of fit statistic – how well does the model fits the data. Does it do a good job of
explaining changes in the dependant variable
o When a researcher squares the Pearson product moment correlation coefficient, they arrive
at the coefficient of determination (R-square).
o This number ranges from 0.00 to 1.0 and shows the proportion of variation explained or
accounted for in one variable by another.

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o Dependant variable variation explained by variation in independent variable


o E.g – 0.822= 0.672
- 67% of variation in satisfaction is explained in the variation in likelihood to
recommend

Bivariate regression –

o looks for relationship between one dependant and one independent


o Example – Can variation in sales be explained by variations in advertising
expenditures
o Suppose the manager of the Deli Depot wants to know if having competent
employees in the restaurant will improve the satisfaction of the customers 
o judging the accuracy of a regression equation or model
o Look at the actual value (dependant variable) in the sample
o Compare this with what has been predicted (independent) and see what the
difference is
o Difference between actual and predicted values – e 1

Interpreting output above – 15.12


o R Square – how much of variance is explained by independent
variable
o B (regression coefficients) – 0.315 – positive linear relationship
between competence of employees & satisfaction
o P value - < 0.05 – reject the null that there is no linear
relationship between variables

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o If competence in employees rating increases by 1 unit – satisfaction increases by


0.315 units
o Satisfaction = 2.250 + 0.315 X (competent employee units)
o Come out with predicted value section >>>>
o Post regression analysis of goodness of fit of prediction
o Correlate these values with actual values of dependant value.
o ANALYSE – CORRELATE – BIVARIATE CORRELATION – DEPENDANT +
UNSTANDARDISED PREDICTED VALUE
o Pearson correlation – goodness of fit
- Square pearson correlation = R square
- In bivariate regresion – correlation between true value of dependant
variable and predicted value is the coefficient of determination = R square

Multiple regression

o relationship between one dependant and two or more independent variables


o Use because dependant variable is not affected by just one variable, but by numerous, and
want to take these into account
o E.g – sales of ice-cream – dependant on price, temperature outside, time of day, etc.
o E.g – satisfaction (dependant variable) – food IV (food quality, food variety)
o Each IV has a ‘regression coefficient’
o Provides information about the model as a whole (all variables) and the rela tive
contributions of each of the variables that make up the model
o Straightforward extension of bivariate regression analysis
o Multiple IVs are entered into the equation to calculate separate regression
coefficient that describes their relationship with DV
o These coefficients allow examination of the relative influence of each IV on the DV
- E.g – which IV has the most impact on DV
- Each IV gets its own coefficient that describes its relationship with the DV
o What the impact is of change in one IV on the DV
o Adjusted R squared – accounts for the fact that the more IV’s you use, the higher the actual
R Square will be (because it measures variance in DV explained by IV’s in question)((the
more IV’s, the more whole is the explanation of the DV’s cause of variance))
o Elements of examination for model significance
o The R-square measure
o The model F statistic
o The individual regression coefficients for each IV, their associated t statistics and the
individual beta coefficients

Issues to consider in multiple regression:

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o Each IV could be measured using different scale


o Use a standardised coefficient
- BETA – compare relative impact of different IV’s on satisfaction if they are
measured on different scales
– Highest value – has highest impact/most important variable that
determines the DV
– Food quality – 0.47 – much larger impact than food variety on
satisfaction
– Food variety - -0.04
o Multi Collinearity statistics – if 2 independent variables are very highly correlated, its
difficult to single one out for its impact on the dependant variable and make this
assertion
- If several independent variables are highly correlated (say, for example, the
education level and annual income of a respondent), then clearly income level is not
going to remain the same as the education level of a respondent changes.
- Imagine – if an independent variable increased by 1 unit, we could not
calculate the dependant variable in the regression equation, because the
linear equation is dependant on the variables that have been chosen, and
the second variable would also increase by 1 (or somewhere around that),
thus impacting on the DV output.
-
- VIF – tells if highly correlated
– >10(sometimes >5) – need to be concerned about multi collinearity
– <10 (sometimes <5) – no concern about collinearity – i.e, easy to
single out impact of each
- IF high VIF – remove one of the highly correlated items (highest number)

o Evaluating the results of a regression analysis


o F statistic
- Assess the statistical significance of the overall regression model using the F
statistic and its associated probability
o R square
- Shows the amount of variation in the dependant variable assosciated with
or explained by all of the independent variables considered together
- Larger R square = more behaviour of dependant variable is assosciated with
independent variables
- i.e – 0.78 – Can account for 78% of variation in dependent variable (from its
mean), with the independent variables in question
o Examine the individual regression coefficients and their t statistic to see which are
statistically significant
o Look at the beta coefficients to assess relative influence

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o Example – Impact of food quality and


food variety on levels of satisfaction
o Adjusted R square- higher
adjusted R square is good –
highest amount of variance
explained by IV’s
o R square – 19.5% in variation of
satisfaction is explained by food
quality and food variety
o SIG – indicates significance
o T value - > 2 = significant
o Unstandardised coeffients
- Food quality – 0.398 – food quality has significant positive impact on
satisfaction
- Food variety - -4.47E^-2 – very tiny impact, and SIG is 0.839 – no significant
impact

Discriminant analysis – not in exam

o A technique for analysing marketing research data when the criterion or DV is


categorical and the predictor or IV are interval.
o Used to classify groups or objects by a set of independent variables
o Used as a statistical tool for determining linear combinations of those independent
variables and using this to predict group membership
 i.e – what combinations within the independent variable is assosciated
with membership to the categories in question
 Z score
 Higher z score, more likely it is that customer belongs to the categorical
data in question
 Lower – vise versa
o Useful for:
 Product research – Discriminant analysis can help to distinguish between heavy,
medium and light users of a product in terms of their consumption habits and
lifestyles.
 Image research – Discriminant analysis can discriminate between customers
who exhibit favourable perceptions of a store or company and those who do
not.
 Advertising research – Discriminant analysis can assist in distinguishing how
market segments differ in media consumption habits.
 Direct marketing – Discriminant analysis can help in distinguishing
characteristics of consumers who

Conjoint analysis – not in exam

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o Used to estimate the value (utility) respondents associate with different product
and/or service features –
o Do so through putting people in different choice situations and combinations and
observing choice behaviour/ratings to determine;
1. Make a lsit of key attributes and levels of company & competitors product in
question
2. Consumers then pick the features they want
3. Software takes note of different preference combinations
4. Statistical analysis estimates preference scores of different combinations
5. Can then specify any amount of features and get a score of utility/adoption
levels based on the test scores.
o Product image analysis
- The relative contribution of each product attribute can be determined for
use in marketing and advertising decisions
o Segmentation analysis
- Groups of potential customers who place different levels of importance on
the product features can be identified for use as high and low potential
market segments
 Benefits
– Ability to provide utility estimates for individual levels of each product attribute – Ability to
estimate non-linear relationships among attribute levels
– Outcome allows to communicate the most preferred combination of features and price to
market to consumers
o Data is collected in realistic ways – consumers can make simple choices and preferences,
don’t have to fill out likert scales etc.
 Limitations
– Researchers choose the appropriate attributes and attribute levels that will realistically
influence consumer preferences or choice
– Consumers may have difficulty making choices or indicating preferences among large
numbers of profiles

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Lecture 10: Testing for interdependence

o Interdependence exists when no single variable or group of variables among those under
consideration can be defined as being dependent or independent. Thus, no one variable can
be predicted or explained by the others under consideration.
o The purpose of interdependence techniques is not to predict a variation in one variable
based on a variation of another variable or variables in a data set, but to summarise the
variables. Fundamentally, the objective of interdependence techniques is to group variables
together so that they can be better understood.
o Therefore, a marketing manager who wants to identify various market segments or clusters
of fast-food customers (e.g. burger, pizza or chicken customers) might utilise these
techniques (to summarise who in the market could be classified as a burger, pizza or chicken
customer).

Factor analysis

o is a statistical technique to condense the information contained in a large number of


variables into a number of information pockets (factors)
o An interdependence technique primarily used for data reduction and summarisation
o they collectively analyse all variables under investigation to identify underlying
factors/groups that exist within the responses
o Reduction into small number of key factors; In customer satisfaction or service
quality studies, key factors could be.
- Reliability construct
– The ability to perform the promised service dependably and
accurately: consistency of performance and dependability, service is
performed right at the first time, the company keeps its promises in
accuracy in billing and keeping records correctly, performing the
services at the designated time
- Responsiveness construct
– The willingness and/or readiness of employees to help customers
and to provide prompt service, timeliness of service: mailing

Factor analysis example:


– customers gave low rates to waiting time, cleanliness, friendly personnel. And another pattern was
high rating on food taste, food temperature, freshness.

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o Based on the patterns of data, researchers can combine these six measures into two
summary measures, or factors, called service quality and food quality
o Researchers do not draw a distinction between dependent and independent variables using
factor analysis; rather, they collectively analyse all variables under investigation to identify
underlying factors.
o Statistical purpose of factor analysis is to determine whether researchers can identify
combinations of variables that will help summarise the data and identify underlying
relationships.

o Factor loading
o Correlation between each of the original variables and the newly developed factors
o Each factor loading is the importance of the variable in measuring the factor
o From -1 to +1
- In the above example
– Waiting time, cleanliness, friendly personnel – Would have a
positive factor loading for service quality –
– Would have a 0 - factor loading for food quality
o High loading means that the variable helps to define the factor or is closely
associated to the factor

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Naming factors

o The researcher examines (intuition and knowledge) the variables that have high loadings on
each factor.
o There often will be a certain consistency among the variables that load high on a given
factor.
o What will you name factors found in previous tables? Service quality, food quality.

Number of factors

o Deciding on how many factors to retain is a very complex process because there can be
more than one possible solution to any factor analysis problem
o Many situations can involve anywhere from one factor to as many factors as there are
variables
o Consider:
o Review the percentage of variation in the original data that each factor explains
o How much does each factor contribute to the understanding of the data
o Look at how many elgenvalues > 1
o

Factor analysis application

o Promotion (e.g. communication)


o Factor analysis can help marketing researchers to better understand media habits
of various customers.
o Price
o Factor analysis can help identify the characteristics of price sensitive and prestige-
sensitive customers.
o Product
o Factor analysis can identify brand attributes that influence consumer choice.
o Place (e.g. distribution)
o Factor analysis can help researchers to better understand channel selection criteria
among distribution channel members.

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o Factor analysis can also be combined with multiple regression analysis for further analyses.

o Can use factor loading scores for factors, instead of using regression analysis that
need to consider all of the variables that are
related
1. Calculate factor scores (composite scores
of each respondent in the derived factors)
2. Save factor scores into data base
3. Use those factor scores as independent
variables in a regression

SPSS APPLICATION

o Rotated component matrix – shows how much


correlation each factor has with variables
o Component 1 – food quality
o Component 2 – high value for momney
o Component 3 – restaurant quality
o Component 4 – service quality

Cluster analysis

o The purpose of cluster analysis is to classify or segment objects (e.g. customers, products,
market areas) into groups so that objects within each group are similar to one another on a
variety of variables.
o Examples
o Using 1 Variable – will be classified according to the response options
o Using 2 variables – will be clustered according to clusters where responses are same
in both variables –
o Example – Depression and anxiety scores – may have a cluster with high depression
high anxiety, cluste with low depression, low anxiety, maybe that’s it, because they
usually come together
o Cluster analysis seeks to classify segments or objects such that there will be as much
likeness within segments and as much difference between segments as possible.
o This method strives to identify natural groupings or segments among many variables
without designating any of the variables as a dependent variable.
o Cluster analysis pinpoints what is homogeneous/similar within groups but
heterogeneous/different between them.
o Similar to factor analysis, researchers most frequently use cluster analysis with metrically
measured variables. Non-metric adaptations are also possible.

Cluster analysis procedures

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o Different to factor analysis – cluster analysis creates groups out of independent variables –
e.g, high spenders, low spenders and medium spenders.
o Factor analysis – groups independent variables into a single underlying classification
o Clustering could be defined as the process of dividing items into unknown number of groups
whose members are alike in some way. A cluster is therefore a collection of items those are
similar among themselves and are dissimilar to the items belonging to other clusters.
o Cluster analysis procedures involves measuring the similarity between objects on the basis
of their ratings on the various characteristics.
o Several cluster analysis procedures are available, each based on a somewhat different set of
complex computer programs.
o Researchers determine the degree of similarity between objects often through a distance
measure.

o New-product research – Clustering brands can help a firm examine its product offerings
relative to competition. Brands in the same cluster often compete more fiercely with each
other than with brands in other clusters.
o Test marketing – Cluster analysis can group test cities into homogeneous clusters for test
marketing purposes.
o Buyer behaviour – Cluster analysis can be employed to identify similar groups of buyers who
have similar choice criteria.
o Market segmentation – Cluster analysis can identify distinct market segments on the basis of
behavioural and descriptive variables.

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Lecture 11: Observation and its variants


& experiments & test markets
o The systematic activity of witnessing and recording events or behavioural patterns of people
and other entities without directly communicating with them.
o Many different behaviours can be observed
o Physical actions
o Expressive and verbal behaviours
o Temporal behaviour patterns
o Spatial relations
o Physical objects
o Two elements required for observation
o A behaviour or event that is observable
o A system of recording the behaviour or event
o Observation allows researchers to see WHAT people do, but NOT WHY they do it.
o It cannot be used to obtain information on attitudes, preferences, beliefs, emotions
or similar internal information – Exceptions are usability studies

Conditions for choosing to use observations

o Information condition
o Other data-collection methods might lessen the data’s accuracy and
meaningfulness due to respondents’ faulty recall
- For example, people might not accurately recall the number of times they
zap commercials while watching their favourite TV program
o Type-of-data condition
o Observation used only when a respondent’s feelings are relatively unimportant to
the research objective or believed to be readily inferable from the behaviour
o Not appropriate for ‘why’ question

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o Example: in understanding how certain toys impact children, facial expressions


could be an indicator of a child’s attitudes or preferences towards the toys
o Could be used to explain; Why customers by shampoo, if observe them smelling
shampoo before buying in a store
o Time-frame condition
o The behaviours of events need to happen within a relatively short time span
o Behaviours or events must be repetitive and frequent
o Examples: purchasing food items in a supermarket; waiting in line inside a bank; or
children watching a TV program could lend themselves to observation methods
o Setting
o Activities are limited to those investigators who can readily observe first-hand or
through a device such as a video camera.
o Example: consumers’ interactions with certain products can be observed at the
store or point of purchase. Such interactions are not possible in home settings.

Observation characteristics

o Direct observation
o This is the process of observing actual behaviours or events and recording them as
they occur.
o Direct observation is carried out by a person (rather than via a mechanical device),
who is observing and recording actual activities.
o Direct observation of artefacts of past human behaviour is effectively a trained
investigator interpreting a form of secondary data.
o Indirect observation
o Process of observation of the artefacts that represent behaviours from earlier time
periods.
o Indirect observation techniques can be used to capture and understand individuals’
past behaviours.
o Interpretations and inferences of past data should be viewed cautiously.
o Subjects’ awareness of being observed
o The degree to which subjects consciously know their behaviour is being observed
and recorded
o Disguised observation
- When subjects are completely unaware that they are being observed.
Example: Mystery shopper technique
o Undisguised observation
- Whenever subjects are aware that they are being watched Example: sales
representatives
o The researcher should minimise the presence of an observer to avoid response or
subject bias

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o Structuredness of observation
o Structured observation
- Researchers use a checklist or a standardised recording form to help the
observer restrict his or her attention to prespecified behaviours or events
- The degree to which the researcher knows which activities and movements
of the observed are known.
o Unstructured observation
- No restrictions on the observer regarding what should be recorded.
- Researchers brief the trained observers on the research objectives and
information requirements and then allow them to use their own discretion
(based on interest and relevancy) in determining what behaviours are
actually recorded.
- Observer monitors all aspects of the phenomenon that seem relevant to the
problem at hand, e.g. observing children playing with new toys.
o Medium of observation
o This relates to how the behaviours or events will be observed.
o The researcher can choose between human observers and mechanical devices.
o Human observation
o Data collection by a researcher or trained observer who records human behaviours
or events.
o The observer must have a good understanding of the research objectives and strong
observation and interpretive skills.
o Mechanical observation
o Data collection using a mechanical device to capture human behaviours or events
o Based on the assumption that physiological actions and reactions are predictors of
people’s unobservable cognitive thoughts or affective emotional feelings
o Advances in technology have made mechanical observation devices very useful and
cost-effective and has improved flexibility and accuracy in the data collection
process
o Examples: video camera, traffic counter, optical scanner, eye-tracking monitor,
pupilometer, audio voice pitch analyser, galvanometer, online tracking.
o Mechanical and software based observation
o Voice pitch analysis
o Pupil analysis
o Eye-tracking analysis
o Galvanic skin response analysis
- An electronic instrument that measures a subject’s involuntary changes in
the electronic resistanceof his or her skin.
o Social media monitoring
o Listening platform

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o Sentiment analysis / Opinion mining


-The application of technological tools to identify, extract and quantify
subject information in textual data.
- Mining online conversations
- NLP – Natural language processing
o Website-tracking software
o Clickstream behaviour
o Scanner based panel
Deciding on the observation method

o How complex is the required public setting?


o Is a setting available to observe the behaviours or events?
o To what extent are the behaviours or events repetitious and frequently exhibited?
o What degrees of directness and structure are needed to observe the behaviours or events?
o How aware should the subjects be that their behaviours are being observed?
o Is mechanical/electronic device required for observing the behaviour?

Observation Variants

o Ethnography
o Occurs in the consumer’s natural purchase, usage or consumption setting, and
involves combining observation with interviews to record the dynamics of human
behaviour and the influence of culture
o Study can be conducted over a lengthy time period at home, while shopping, at
leisure, in the car and the workplace
o Film or a video could be made which documents the activities, interviews and
behaviour of the consumer or the participant
o Netnography
o Technique draws on ethnography, but it uses ‘found data’ on the internet that is
produced by virtual communities
o In netnography researchers must:
- gain entry into the culture/community
- gather and analyse data
- ensure trustworthy interpretation
- provide opportunities for feedback from members of the community.

Causal research design

o explain why something happens


o predicting sales, uncovering valuable market information or anticipating the
consequences of a marketing program
o determining customer attitudes

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o investigating cause
o effect relationships then the researcher should consider using a causal research
design, such as experimental procedures or test marketing
o In causal research, the emphasis is on specific hypotheses about the effects of changes of
one variable on another variable.
o A variable is any observable and measurable element (or attribute) of an item or
event.
o Causal research involves experiment.
o The researcher attempts to identify the relationships among different variables by
manipulating one or more independent variables and measures their effect on one
or more dependent variables while controlling the effect of additional extraneous
variables

Key terms

1. Functional relationship – An observable and measurable systematic change in one variable as


another variable changes
2. Randomisation – The procedure whereby many subjects are assigned to different experimental
treatment conditions, resulting in each group averaging out any systematic effect on the
investigated functional relationship between the independent and dependent variables
a. Randomisation is an integral part of conducting experiments
b. Why randomise? Exclude any compounding factors that may influence the result

Experimentation

Ensure conditions surrounding sales remains same – e.g shop at


same store

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They have an effect on behaviour of subject, so should be


controlled where possible

Situational – e.g, noise, lighting


Participant – vary from one person to other, e.g mood,
intelligence, anxiety, nerves.
Experimenter bias – unconsciously tell respondent how to behave
Demand – communicate to participant the intention of the
experiment and can effect their behaviour

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Validity in experimentation

o Internal validity - Internal validity exists when the researcher can rule out rival
explanations for the observed results.
o The extent to which the conclusions drawn from the experiment are true – are there
any other alternative explanations, does it measure what is supposed to measure
- Refers both to how well a study was run (research design, operational
definitions used, how variables were measured, what was/wasn't measured,
etc.), and how confidently one can conclude that the observed effect(s)
were produced solely by the independent variable and not extraneous ones.
– In experimental research, internal validity answers the question,
‘Was it really the treatment that caused the difference between the
subjects in the control and experimental groups?’
- For example, in an experiment on the effects of electricity, if a subject
(person) receives a shock (experimental treatment) and jumps (observed
effect), and the subject jumps only because of the shock and for no other
reason, then internal validity exists.
o External validity – The extent to which a causal relationship found in a study can be
expected to be true for the entire target population.
- A study that readily allows its findings to generalise to the population at
large has high external validity.
- Depends on if have large enough sample
- How natural, how true to the real environment, is the experiment – is it
artificial? If so, external validity is very low.
o Construct validity
- This defines how well a test or experiment measures up to its claims.
- It refers to whether the operational definition of a variable actually reflect
the true theoretical meaning of a concept.
- Process of correctly identifying and understanding both the independent
and dependent variables included in an experimental design.
– Are we really measuring what we want to measure?

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Ensuring construct validity

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T.O.M – want to measure attitudes before seeing an advertisement and then attitudes after –
Depending on when you ask then about their attitudes, it may manipulate what is going on in their
mind.

EoNSTS – e.g – if ask old and young person to take medication, then results will be different –
randomisation or carefully choosing subjects may increase validity

Reliability of experiments

o Experimental design reliability is the degree to which the design and its procedures can be
replicated and achieve similar conclusions about hypothesised relationships.
o Reliable research findings are repeatable.
o Repeatedly same results = reliability
o The conclusions drawn can be generalised beyond the particular conditions in the initial
experiment (i.e. external validity).

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Experimental designs

o One shot study


o Easiest design
o E.g – show add for brand, then ask for attitude towards brand
o Problem – not able to say that attitude towards brand was caused by advertisement
– don’t know baseline attitude level, don’t know how other brands are evaluated
- Doesn’t explain why or how things happen
o One group pre test post test
o Measure attitude before exposed to advertisement and after
o Problems – measuring attitude before hand may change perception of
advertisement itself and the attitudes that follow
o SGC – like in medical studies

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Test Marketing

o An application of a controlled experiment done in a limited but carefully selected test


markets
o Has high level of external validity – but low internal validity

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o Marketing mix variables (IV) are varied in test marketing, and the sales (DV) are
monitored
o Conducted in a regular sales setting
o Objectives
o To determine market acceptance of the product
o Evaluating alternative levels of marketing mix variables
o Predicting new product/service acceptance levels
o Advertising and image effectiveness
o Risks
o Competitors may lower prices to combat your own price change
o Other unobservable factors that may impact sales but have nothing to do with 4 P’s
Types of test markets

o Traditional/standard test markets


- firm conducts a full marketing campaign in a small number of cities (which
represent the entire population/country of distribution) and uses store
audits, consumer and distributor surveys, and other measures to gauge
product performance. Results are used to forecast national sales and profits,
discover product problems, and fine-tune the marketing program
- Advantages
– Conducted in actual distributions channels
– Can determine both customer acceptance and trade support
- Disadvantages
– Cost, time and exposure to competition.
– Competitors can see new product before the nati0onal introduction.
Competitors have time to prepare counter attack and interfere with
test market
o Controlled test markets
o Tests that are performed by an outside research firm that guarantees distribution of
the test product through pre-specified outlets in selected cities Advantages
Disadvantages
o Advantages
- Distribution is guaranteed
- Costs are lower than standard/traditional test markers
o Disadvantages
- Limited number of markets.
- Lack of control
- Advertising effect difficult to evaluate
- Competitive monitoring is difficult
o Simulated test markets

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o A type of laboratory experiment that aims to imitate real life, where respondents
are selected, interviewed and then observed making or discussing their purchases.
o Simulated test markets can lead to mathematical models used to forecast factors
such as awareness, trial, sales volumes, impact on other products.
o Advantages
- Internal validity
- Cost and time savings
- Can predict trial, repurchase and purchase cycle accurately – can ask
respondents questions
- Minimised exposure to competition
o Disadvantages
- External validity
- Isolation from real world
- Broad-based customer reaction is difficult to measure
o Virtual test markets
o Tests that are completely computerised, allowing the test subjects to observe and
interact with the product as though they were actually in the test store’s
environment
o Simulated stores appears in a computer screen
o Advantages
- ‘Stores’ closely resemble reality.
- Can be changed quickly – design of store, packaging, etc.
- No exposure to competition
o Field experiments
o Experimental designs that manipulate the independent variables in order to
measure the dependent variable in a natural test setting.

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Lecture 12: Information-driven


Technology and the Research Process
Benefits of new technology

o Help identify research questions and objectives


o E.g – clickstream monitoring
o Data source
o Couple of years ago, not much information except for store sales. Now, with loyalty
cards, they can know who you are, what you are purchasing.
o Sampling
o Can now survey people online and not in physical presence
o Scale measurement and questionnaire design
o E.g – can send people to different survey questions if they answer in a certain way
o Data collection and analysis
o Website crawlers
o Data mine big data sets
o Dissemination of results
o Can reach big audience through technology – e.g twitter
o accessing and examining data and reports from vendors, sellers, customers, competitors
o software-based statistical analysis
o more advanced analysis – e.g, cluster analysis
o analysing and conducting performance review of sales, marketing, CRM and operational
approaches
o use of dashboards and decision-support systems for problem identification and decision
making

Use of portals

o Regular portals
o A portal is a website that offers a broad array of resources and services.
o Portals also can ‘drill down’ into lower level data to identify both negative and
positive business trends – e.g. Yahoo!, Excite, Mygarden.net.au or Bicycles.net.au
o Enterprise Information Portal (EIP)

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o An internet site owned and operated by an organisation to support its total business
operation (i.e. Dashboard)
o Used for enterprise-wide data integration, tracking flow of information and
detecting problems in business operations
o Users can graphically view information – e.g. Google Dashboard
Benefits of dashboards

o Visual presentation of marketing and customer performance data


o Improved problem definition and identification of negative and positive trends
o More detailed reports on markets, products and segments
o Better informed decisions on marketing research plans

Technology and research designs

o Advances in technology are dramatically changing the methods used to obtain and interpret
the data
o Take transactional data and combine with other information
o Technology impacts definition and categorisation of customer data:
o Transactional customer data: the information contained in a strategic business unit
- e.g. cash withdrawals from an ATM, reservation, purchases from an online
store, clickstream
o Analytical customer data: data used in performing analyses as the basis for
managerial decision making
- e.g. market and industry trends, competitor information and
macroenvironmental changes
- Secondary data
o The success of any marketing program depends on leveraging high-quality timely data
o Transition from traditional behavioural intention measures to real-time transaction
measures

Web traffic analysis

o Web traffic analysis


o Measures the traffic generated by a company’s website
o Records customer visits, purchases, revenue, service calls generated, traffic
reduction
o Click-stream analysis
o Reflects the exact pattern of a customer’s navigation through a particular website
and reveals a number of basic data points on how customers interact with the
website
o the number of pages viewed by a visitor
o the pattern of websites visited

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o length of stay on the website


o dates and times of visits
o number of filled or abandoned registrations
o demographics of registered visitors
o number of customers with shopping carts
Data enhancement: Biometrics & Smart cards

o Biometrics – The automatic identification of a person based on his/her physiological or


behavioural characteristics
o A pattern recognition system
o Face recognition
o e.g. Australian government visa applications
o Smart cards – Any pocket-sized card with embedded integrated circuits
o Can provide a macro view of actions at point of purchase
o e.g. retail store, theme park, automated check-in
Technology and data collection

o Technology has brought greater speed and productivity


o Online survey, focus group, subject recruitments, data collection and analysis
o Benefits include:
- greater control of the survey
- more complete data and smaller bias
- more sophisticated analytic techniques
o Internet technologies have had a major impact on the survey method
- Generating and creating the online survey
- Efficient distribution and collection
- Analysing the data
- Preparing research reports
- Developing online surveys in multilingual formats
- Modifies surveys for different methods of delivery (web, mobile)
- Merging of information from external databases
o New options available for survey deployment
- Mobile phones and PDAs
- Quick and easy to complete
- No restriction on when and where to survey
- Examples include:
– Zommerang’s mobile phone survey
– Opinionmeter Australia
– Nielsen’s NewroFocus service

Technology and data analysis

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o Data warehouse
o Logical aggregation of information stored in a single data location
o Most customer data is recorded and stored in a data warehouse
o Contains and collects secondary data, competitive information, sales data,
environmental information and primary data on customers
o e.g. customer data for all Apple products produced and marketed
o Data mart
o Contains all the types of data included in a data warehouse but in a format relating
to only one product of a company
o e.g. customer data for a single Apple product
o Customer information stored in data warehouses or data marts is multidimensional
o The benefit of multidimensional data is that it enables researchers to develop
customer profiles and buying behaviours across products or brands
o Examples
- Customer attributes: age, gender, education, purchase frequency
- Product attributes: style, features and quality levels
- Brand attributes: colour, price, package size and taste
- Store attributes: discount, department store, convenience store, location,
inventory levels

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Data mining

o Generating customer profiles or buyer behaviour characteristics is accomplished through


data mining
o Data mining is the process of analysing data to extract patterns and relationships not easily
visible from simply looking at the data
o Data mining tools operate to simultaneously analyse significant relationships among several
customer dimensions within vast data warehouses.
o Find patterns and relationships in large volumes of data
o Infer rules from them that predict future behaviour and guide decision-making
o Advanced statistical tools such as Multidimensional analysis, Neural networks and
Decision trees are used for data mining
- Find predictors/IV’s that impact sales
- Find patterns in data

Technology and social networks

o Social networking has revolutionised the way people communicate


o Many businesses are using social networks for advertising and customer relationship
management
o Tourism Australia has a Facebook page to promote Australia as tourist destination
o Video/voice chat, email, messaging, etc.
o Intelligence gathering
o Conducting focus group interviews
o Market feedback
Focus group interviews

o Online focus groups


o Individuals increasingly make friends and share comments and information through
social networks such as MySpace, Facebook, LinkedIn, Tweeter, etc.
o New tools: Nqual Rich Focus Research Platform
- Web-based online focus group technique that operates in real time
- Resembles web conferencing, but without telephone conversations
- All conversations are completed using instant messaging or chat and can be
completed through a research-literate dialogue
- Raw data is collected and transcripted immediately and ready for analysis

Blogs

o Marketing researchers use blogs as a way of capturing customer data and opinions and
analysing it for their own use
o Blogs – provide commentary or news on a particular subject
o serve as personal online diaries

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o typically combines text, images and links to other blogs, web pages and other
media related to its topic.
o enable readers to leave comments
o micro-blogging (blogs with very short information posts)
Analysing text in blogs

o Sentiment analysis – uncover emotions in text


o Can be used to understand why customers do what they do by analysing their blogs,
texts online
o Can be used to understand investors and share price predictions about how people
are feeling about a company
o Word αs
o Example: Buzz Metrics by AC Nielsen – Buzz Metrics is a tracking tool that manages
consumer driven discussions from online content, discussion boards, blogs, forums,
review sites and Usenet newsgroups.
o The software measures consumer-generated media and online word of mouth, and enables
companies to track consumer ‘buzz’ including opinions, preferences and trends for a variety
of products and services.
o The software tracks and reports customer information across a variety of industries
including, consumer electronics, automotive, health, nutrition and entertainment.

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