Research Design Formulation

MKTG 3350:
MARKETING RESEARCH

Yacheng Sun
Leeds School of Business

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 Figure 3.2 Research Design: An Overview

Experiential Learning
Opening Vignette

Research Design Definition

What Would You Do?

Fig 3.3

Types of Basic Research Designs

Be an MR!

Table 3.1
Fig 3.4

Exploratory Research
Be a DM!

Table 3.2

Application to Contemporary Issues

International Technology Ethics

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 Figure 3.2 Research Design: An Overview (Cont.)

Opening Vignette
Experiential Learning

Descriptive Research

What Would You Do?

Table 3.3
Figs 3.5 & 3.6
Cross-Sectional Longitudinal

Causal Research
Be an MR!

Relationship Among Exploratory,

Descriptive, and Causal Research

Fig 3.7
Be a DM!

Tasks Involved in Research Design

Formulation
Fig 3.8

Application to Contemporary Issues

International Technology Ethics
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 Figure 3.2 Research Design: An Overview (continued)

Experiential Learning
Opening Vignette

Informational Value and the Cost of

What Would You Do?

Marketing Research

Budgeting and Scheduling the Project

Be an MR!
Be a DM!

Marketing Research Proposal

Application to Contemporary Issues (Fig. 3.9)

International Technology Ethics
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 Citicorp Banks on Exploratory, Descriptive,
and Causal Research
Marketing Research at Citicorp is typical in that it is used to
measure consumer awareness of products, monitor their
satisfaction and attitudes associated with the product, track
product usage and diagnose problems as they occur. To
accomplish these tasks Citicorp makes extensive use of
exploratory, descriptive, and causal research. Often it is
advantageous to offer special financial packages to specific
groups of customers. In this case, a financial package is
being designed for senior citizens.

The following seven-step process was taken by marketing

research to help in the design.
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 Citicorp Banks on Exploratory, Descriptive,
and Causal Research

1) A taskforce was created to better define the market

parameters to include all the needs of the many Citicorp
branches. A final decision was made to include Americans
55 years of age or older, retired, and in the upper half of
the financial strata of that market.
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 Citicorp Banks on Exploratory, Descriptive,
and Causal Research
2) Exploratory research in the form of secondary data analysis
of the mature or older market was then performed and a study
of competitive products was conducted. Exploratory qualitative
research involving focus groups was also carried out in order to
determine the needs and desires of the market and the level of
satisfaction with the current products.

In the case of senior citizens,

a great deal of diversity was
found in the market. This
was determined to be due to
such factors as affluence,
relative age, and the
absence or presence of a
spouse.
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 Citicorp Banks on Exploratory, Descriptive,
and Causal Research

3) The next stage of research was brainstorming. This

involved the formation of many different financial
packages aimed at the target market. In this case, a
total of 10 ideas were generated. 9
 Citicorp Banks on Exploratory, Descriptive,
and Causal Research
4) The feasibility of the 10 ideas generated in step 3 was then tested.
The ideas were tested on the basis of whether they were possible in
relation to the business. The following list of questions was used as
a series of hurdles that the ideas had to pass to continue on to the
next step.

• Can the idea be explained in a manner that the target

market will easily understand?
• Does the idea fit into the overall strategy of
Citicorp?

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 Citicorp Banks on Exploratory, Descriptive,
and Causal Research
 Is there an available description of a specific target market
for the proposed product?

 Does the research conducted so far indicate a potential

match for target market needs, and is the idea perceived to
have appeal to this market?

 Is there a feasible outline of the tactics and strategies for

implementing the program?

 Have the financial impact and cost of the program been

thoroughly evaluated and determined to be in line with
company practices?

In this study, only one idea generated from the brainstorming session
made it past all the listed hurdles and on to step 5.
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 Citicorp Banks on Exploratory, Descriptive,
and Causal Research
5) A creative work-plan was then generated. This plan was to
emphasize the competitive advantage of the proposed product as
well as better delineate the specific features of the product.

6) The previous exploratory research was now followed up with

descriptive research in the form of mall intercept surveys of people
in the target market range. The survey showed that the list of
special features was too long and it was decided to drop the
features more commonly offered by competitors.

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Citicorp Banks on Exploratory, Descriptive,
and Causal Research
7) Finally, the product was test marketed in six of
the Citicorp branches within the target market.
Test marketing is a form of causal research.
Given successful test marketing results, the
product is introduced nationally.

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Figure 3.3. Steps Leading to the Formulation of a
Research Design

Define the Marketing Research Problem

Develop an Approach to the Problem

Formulate the Research Design

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Research Design: Definition

• A research design is a framework or

blueprint for conducting the marketing
research project. It details the procedures
necessary for obtaining the information
needed to structure or solve marketing
research problems.

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 Research Design: Some Observations

• The overall research design for a project may

include one or more of these three designs as
part(s) of it.
• Further, if more than one design is to be used,
typically we progress from Exploratory toward
Causal.

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Components of a Research Design
• Define the information needed (Chapter 2)
• Design the exploratory, descriptive, and/or causal
phases of the research (Chapters 3 - 8)
• Specify the measurement and scaling procedures
(Chapters 9 and 10)
• Construct and pretest a questionnaire (interviewing
form) or an appropriate form for data collection
(Chapter 11)
• Specify the sampling process and sample size
(Chapters 12 and 13)
• Develop a plan of data analysis (Chapter 15)

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 Figure 3.4. A Classification of Market Research Designs

Research Design

Exploratory Research
Design Conclusive Research
Design

Descriptive Causal Research

Research

Cross-Sectional Longitudinal
Design Design
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 Table 3.1
Differences Between Exploratory and Conclusive Research
Exploratory Conclusive
Objective: To provide insights To test specific
and understanding. hypotheses and
examine relationships.

Characteristics: Information needed Information needed

is defined only loosely. is clearly defined.

Research process Research process

is flexible and is formal and structured.
unstructured.

Sample is small and Sample is large and

nonrepresentative representative.

Data analysis is Data analysis is

qualitative. quantitative.
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 Table 3.1 (Cont.)
Differences Between Exploratory and Conclusive Research
Exploratory Conclusive
Findings: Tentative. Conclusive.

Outcome: Generally followed by Findings used as input

further exploratory or into decision making.
conclusive research.

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 Table 3.2
A Comparison of Basic Research Designs
Exploratory Descriptive Causal
Objective: Discovery of Describe market Determine
ideas and characteristics cause and effect
insights. or functions. relationships.

Character- Flexible. Marked by the Manipulation of

istics: prior formulation one or more
Versatile. of specific independent
hypotheses. variables.
Often the
front end of Preplanned and Control of other
total research structured mediating
design. design. variables.

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 Table 3.2 (Cont.)
A Comparison of Basic Research Designs
Exploratory Descriptive Causal
Method: Expert surveys. Secondary data Experiments.
(quantitative).
Pilot surveys.
Surveys.
Case
studies. Panels.

Secondary data Observational

(qualitative). and other data.

Qualitative
Research.

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 Uses of Exploratory Research
• Formulate a problem or define a problem more
precisely
• Identify alternative courses of action
• Develop hypotheses
• Isolate key variables and relationships for further
examination
• Gain insights for developing an approach to the
problem
• Establish priorities for further research

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Methods of Exploratory Research

• Survey of experts (discussed in Chapter 2)

• Pilot surveys (discussed in Chapter 2)
• Secondary data analyzed in a qualitative way
(discussed in Chapter 4)
• Qualitative research (discussed in Chapter 5)

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“If you wish to know the road up the
mountain, you must ask the man who
goes back and forth on it.”
-- Zenrinkusi
 Use of Descriptive Research
• To describe the characteristics of relevant
groups, such as consumers, salespeople,
organizations, or market areas
• To estimate the percentage of units in a specified
population exhibiting a certain behavior
• To determine the perceptions of product
characteristics
• To determine the degree to which marketing
variables are associated
• To make specific predictions

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Descriptive Research Example
Weight Watchers average customer
• Woman about 40 years old
• Household income of about $50,000
• At least some college education
• Trying to juggle children and a job

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Are customers
born equal?

• Bestbuy focuses on catering to high profit customers

– sometimes by firing customers that costs it money.
• “Devils” are customers who “buy products, apply for
rebates, return the purchases, then buy them back at
returned-merchandise discounts”.
• Analysis also revealed highly profitable customer
segments, such as upper income men, suburban
women and technology lovers.
• Bestbuy are also motivated to renovate many of its
business practices
Methods of Descriptive Research

• Secondary data analyzed in a quantitative as

opposed to a qualitative manner (discussed
in Chapters 4 and 5)
• Surveys (Chapter 7)
• Panels (Chapters 5 and 7)
• Observational and other data (Chapter 7)

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 Figure 3.5. Major Types of Descriptive Studies

Descriptive
Studies

Consumer Market
Sales
Perception Characteristic
Studies And Behavior Studies
Studies

• Market • Image • Distribution

Potential
• Product • Competitive
• Market Share Usage Analysis

• Sales Analysis • Advertising

• Pricing

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 Cross-sectional and
Longitudinal Designs
• A cross-sectional design involves the collection
of information from any given sample of
population elements only once.

• In a longitudinal design, a fixed sample (or

samples) of population elements is measured
repeatedly on the same variables.

• A longitudinal design differs from a cross-

sectional design in that the sample or samples
remain the same over time.

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 Figure 3.6. Cross-Sectional vs. Longitudinal Designs

Cross- Sample
Sectional Surveyed
Design at T1

Same
Sample Sample
Longitudinal Surveyed also
Design at T1 Surveyed
at T2

Time T1 T2
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 Table 3.3
Relative Advantages and Disadvantages of Longitudinal and
Cross-Sectional Designs

Evaluation Criteria Cross-Sectional Longitudinal

Design Design
- +
Detecting change

- +
Large amount of data collection

Accuracy - +

+ -
Representative sampling

+ -
Response bias

Note: A + indicates a relative advantage over the other design whereas

a - indicates a relative disadvantage.
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 Cross-sectional Designs
• Involve the collection of information from any given
sample of population elements only once.
• In single cross-sectional designs, there is only one
sample of respondents and information is obtained
from this sample only once.
• In multiple cross-sectional designs, there are two
or more samples of respondents, and information
from each sample is obtained only once. Often,
information from different samples is obtained at
different times.
• Cohort analysis consists of a series of surveys
conducted at appropriate time intervals, where the
cohort serves as the basic unit of analysis. A cohort
is a group of respondents who experience the same
event within the same time interval.
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 Consumption of Various Soft Drinks
by Various Age Cohorts
Percentage consuming on a typical day
Age 1950 1960 1969 1979

8-19 52.9 62.6 73.2 81.0

20-29 45.2 60.7 76.0 75.8 C8
30-39 33.9 46.6 67.7 71.4 C7
40-49 23.2 40.8 58.6 67.8 C6
50+ 18.1 28.8 50.0 51.9 C5
C1 C2 C3 C4

C1: cohort born prior to 1900 C5: cohort born 1931-40

C2: cohort born 1901-10 C6: cohort born 1940-49
C3: cohort born 1911-20 C7: cohort born 1950-59
C4: cohort born 1921-30 C8: cohort born 1960-69
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 Longitudinal Designs
• A fixed sample (or samples) of population
elements is measured repeatedly on the
same variables
• A longitudinal design differs from a cross-
sectional design in that the sample or
samples remain the same over time

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 Cross-Sectional Data May Not
Show Change
Brand Purchased Time Period
Period 1 Period 2
Survey Survey
Brand A 200 200
Brand B 300 300
Brand C 500 500
Total 1000 1000

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 Longitudinal Data May Show
Substantial Change
Brand Brand Purchased in Period 2
Purchased
in Period 1 Brand A Brand B Brand C Total
Brand A 100 50 50 200
Brand B 25 100 175 300
Brand C 75 150 275 500
Total 200 300 500 1000

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 Uses of Casual Research
• To understand which variables are the cause
(independent variables) and which variables are
the effect (dependent variables) of a phenomenon
• To determine the nature of the relationship
between the causal variables and the effect to be
predicted
• METHOD: Experiments

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 Types of Experiments

• Two broad classes:

• Laboratory experiments: those in which the
independent variable is manipulated and
measures of the dependent variable are taken
in a contrived, artificial setting for the purpose
of controlling the many possible extraneous
variables that may affect the dependent
variable
• Field experiments: those in which the
independent variables are manipulated and
measurements of the dependent variable are
made on test units in their natural setting

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 Test Marketing

• Test marketing is the phrase commonly used to

indicate an experiment, study, or test that is
conducted in a field setting.
• Two broad classes:
• To test the sales potential for a new product or
service
• To test variations in the marketing mix for a
product or service

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 Types of Test Markets

• Standard test market: one in which the firm tests

the product and/or marketing mix variables
through the companies normal distribution
channels
• Controlled test markets: ones that are conducted
by outside research firms that guarantee
distribution of the product through prespecified
types and numbers of distributors

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 Criteria for Selecting Test Market Cities

• Representativeness: Do demographics match the

total market?
• Degree of isolation: Phoenix and Tulsa are
isolated markets; Los Angeles is not isolated.
• Ability to control distribution and promotion: Are
there preexisting arrangements to distribute the
new product in selected channels of distribution?
Are local media designed to test variations in
promotional messages?

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 Test Marketing

• Pros:
• Allows most accurate method of forecasting
future sales
• Allows firms the opportunity to pretest
marketing mix variables
• Cons:
• Does not yield infallible results
• Are expensive
• Exposes the new product or service to
competitors
• Takes time to conduct

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 Figure 3.7. Some Alternative Research Designs

Exploratory
Research Conclusive
(a) • Secondary Data Research
Analysis • Descriptive/Caus
• Focus Groups al

Conclusive
(b) Research
• Descriptive/Causa
l

Conclusive Exploratory
Research Research
(c) • Secondary Data
• Descriptive/Caus
al Analysis
• Focus Groups

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Figure 3.8. Tasks Involved In a Research Design

Define the Information Needed

Design the Exploratory, Descriptive,

and/or Causal Phases of the Research

Specify the Measurement and Scaling

Procedures

Construct a Questionnaire

Specify the Sampling Process and the

Sample Size

Develop a Plan of Data Analysis

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