Marketing Research and Analytics

Chapter 4
Marketing Research
and Analytics
Pride/Ferrell, Foundations of Marketing, 9th Edition. © 2022 Cengage. All Rights Reserved. May not be
scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Learning Objectives
By the end of this chapter, you should be able to:
4-1 Define marketing research and its importance to decision makers.
4-2 Distinguish between exploratory and conclusive research.
4-3 Name the five basic steps in conducting marketing research, including the two types of data
and four survey methods.
4-4 Describe the tools, such as databases, big data, and marketing analytics, useful to
marketing decision making.
4-5 Identify ethical and international issues in marketing research.
4-1
The Importance of Marketing Research
Pride/Ferrell, Foundations of Marketing, 9th Edition. © 2022 Cengage. All Rights Reserved. May not be scanned,
copied or duplicated, or posted to a publicly accessible website, in whole or in part.
4-1 The Importance of Marketing Research
• Marketing research – The systematic design, collection, interpretation, and reporting of
information to help marketers solve specific marketing problems or take advantage of marketing
opportunities
– It is a process for gathering information that is not currently available to decision makers.
– Its purpose is to inform an organization about:
o Customers’ needs and desires
o Marketing opportunities for products
o Changing attitudes and purchase patterns of customers
• Marketing research can:
– Help a firm better understand market opportunities
– Help a firm ascertain the potential for success for new products
– Help a firm determine the feasibility of a particular marketing strategy
– Help a firm develop marketing mixes to match the needs of customers
– Improve a marketer’s ability to make decisions
4-2
Types of Research
4-2 Types of Research (1 of 4)
• Marketing research can involve two forms of data:

– Qualitative data yields descriptive nonnumerical information.
– Quantitative data yields empirical information that can be communicated through numbers.
• To collect this data, marketers conduct either exploratory research or conclusive

research.
Table 4.1 Differences between Exploratory and
Conclusive Research
Research Project Components Exploratory Research Conclusive Research
Research purpose General: to generate insights about Specific: to verify insights and aid in
a situation selecting a course of action
Data needs Vague Clear
Data sources Ill-defined Well-defined
Data collection form Open-ended, rough Usually structured
Sample Relatively small, subjectively Relatively large, objectively
selected to maximize generalization selected to permit generalization of
of insights findings
Data collection Flexible, no set procedure Rigid, well-laid-out procedure
Data analysis Informal, typically not quantitative Formal, typically quantitative
Inferences/recommendations More tentative than final More final than tentative
Exploratory Research
• Exploratory research – Research conducted to gather more information about a problem or to
make a tentative hypothesis more specific
– The main purpose of exploratory research is to better understand a problem or situation and/or to
help identify additional data needs or decision alternatives.
• Customer advisory boards – Small groups of actual customers who serve as sounding boards
for new-product ideas and offer insights into their feelings and attitudes toward a firm’s products
and other elements of its marketing strategy
• Focus group – A small group of 8 to 12 people who are brought together to participate in an
interview that is often conducted informally, without a structured questionnaire, to observe
interaction when members are exposed to an idea or a concept
– This less-structured format is beneficial to marketers because it can yield more detailed information
to researchers.
Conclusive Research
• Conclusive research – Research designed to verify insights through objective
procedures and to help marketers in making decisions
– It is used when the marketer has one or more alternatives in mind and
needs assistance in the final stages of decision making.
• Two types of conclusive research are:
– Descriptive research
– Experimental research
• Descriptive research – Research conducted to clarify the characteristics of

certain phenomena to solve a particular problem
– Generally, demands prior knowledge
– Assumes that the problem is clearly defined
– May require statistical analysis and predictive tools
• Experimental research – Research that allows marketers to make causal

inferences about relationships between variables
– Requires that an independent variable be manipulated and the resulting changes in a
dependent variable be measured
– Provides strong evidence of cause and effect
4-3
The Marketing Research Process
Figure 4.1 The Five Steps of the
Marketing Research Process
4-3 The Marketing Research Process (1 of 16)
Locating and Defining Problems or Issues

• Focuses on uncovering the nature and boundaries of a situation or question
related to marketing strategy or implementation
– The first sign of a problem is typically a departure from normal function.
• Marketers must define the nature and scope of the situation in order to pin down
the specific boundaries of a problem or an issue through research.
– Researchers and decision makers should remain in the problem or issue definition stage
until they have determined precisely what they want from marketing research and how
they will use it.
Designing the Research Project

• Research design – An overall plan for obtaining the information needed to
address a research problem or issue
• This step requires formulating a hypothesis and determining what type of
research is most appropriate for testing the hypothesis to ensure the results are
reliable and valid.
DEVELOPING A HYPOTHESIS
• Hypothesis – An informed guess or assumption about a certain problem or a
certain set of circumstances
– Is based on all the insight and knowledge available about the problem or circumstances
from previous research studies and other sources
– Accepted or rejected hypotheses act as conclusions for the research effort.
RESEARCH RELIABILITY AND VALIDITY
• Reliability – A condition that exists when a research technique produces almost
identical results in repeated trials
– A reliable technique is not necessarily valid.
• Validity – A condition that exists when a research method measures what it is
supposed to measure
Collecting Data
• The research design must specify what types of data to collect and how they will
be collected.
TYPES OF DATA
• Primary data – Data observed and recorded or collected directly from
respondents
• Secondary data – Data compiled both inside and outside the organization for
some purpose other than the current investigation
SOURCES OF SECONDARY DATA

• Marketers often begin the data-collection phase of the marketing research
process by gathering secondary data.
• They may use available reports and other information from both internal and
external sources to study a marketing problem.
• Internal information may have been gathered using customer relationship
management tools for marketing, management, or financial purposes.
METHODS OF COLLECTING PRIMARY DATA

• Collecting primary data is a lengthier, more expensive, and more complex
process than collecting secondary data.
• To gather primary data, researchers use:
Sampling Survey
Observation
Procedures Methods
Sampling
• Population – All the elements, units, or individuals of interest to researchers for
a specific study
• Sample – A limited number of units chosen to represent the characteristics of a
total population
• Sampling – The process of selecting representative units from a total population
• Probability sampling – A type of sampling in which every element in the

population being studied has a known chance of being selected for study
– Random sampling – A form of probability sampling in which all units in a population have
an equal chance of appearing in the sample, and the various events that can occur have
an equal or known chance of taking place
– Stratified sampling – A type of probability sampling in which the population is divided into
groups with a common attribute and a random sample is chosen within each group
• Nonprobability sampling – A sampling technique in which there is no way to

calculate the likelihood that a specific element of the population being studied
will be chosen
– Quota sampling – A nonprobability sampling technique in which researchers divide the
population into groups and then arbitrarily choose participants from each group
Survey Methods
• Marketing researchers often employ sampling to collect primary data through:
Social
Mail Telephone Personal Online
Networking
Surveys Surveys Interview Surveys Surveys
Surveys
• The survey method chosen depends on the:

– Nature of the problem or issue
– Data needed to test the hypothesis
– Resources, such as funding and personnel, available to the researcher
• Gathering information through surveys is becoming increasingly difficult because

fewer people are willing to participate.
Table 4.2 Comparison of the
Four Basic Survey Methods (1 of 2)
Personal Interview
Mail Surveys Telephone Surveys Online Surveys Surveys
Economy Potentially lower in Avoids interviewers’ The least expensive The most expensive
cost per interview than travel expenses. method. Nonresponse survey method.
telephone or personal Limited by large part and privacy limits Shopping mall and
surveys. Low of population with cell access to focus-group interviews
response rate is a phones. respondents. have lower costs than
limitation. in-home interviews.
Flexibility Inflexible. The Flexible because Less flexible. Must be The most flexible
questionnaire must be interviewers can ask easy for online users method. Respondents
short and easy for probing questions, but to receive and return; can react to visual
respondents to observations are short, concise materials. In-depth
complete. impossible. questions work best. probes are possible.
Table 4.2 Comparison of the
Four Basic Survey Methods (2 of 2)
Personal Interview
Mail Surveys Telephone Surveys Online Surveys Surveys
Interviewer Interviewer bias Some anonymity; may Interviewer bias is often Interviewers’ inability
bias is eliminated; be hard to develop eliminated, but privacy to maintain objectivity
questionnaires trust in respondents. issues exist. may result in bias.
can be returned
anonymously.
Sampling and Obtaining a Sample limited to The available email Not-at-homes are a
respondents’ complete mailing respondents with address list may not be problem, which may
cooperation list is difficult. accessible telephones. a representative sample be overcome by focus-
Nonresponse Refusals are a for some purposes. group and shopping
is a major problem. Nonresponse is an mall interviewing.
disadvantage. issue.
• Mail survey – A research method in which respondents answer a questionnaire

sent through the mail
• Telephone survey – A research method in which respondents’ answers to a
questionnaire are recorded by an interviewer on the phone
– Automated telephone surveys (also known as interactive voice response or “robosurveys”)
rely on a recorded voice to ask the questions while a computer program records
respondents’ answers.
– Telephone depth interview – An interview that combines the traditional focus group’s
ability to probe with the confidentiality provided by telephone surveys
• Personal interview survey – A research method in which participants respond

to survey questions face-to-face
– In-home (door-to-door) interview – A personal interview that takes place in the
respondent’s home
– Shopping mall intercept interview – A research method that involves interviewing a
percentage of individuals passing by “intercept” points in a mall
o On-site computer interview – A variation of the shopping mall intercept interview in which
respondents complete a self-administered questionnaire displayed on a computer monitor
Online and Social Media Surveys

• Online survey – A research method in which respondents answer a
questionnaire via e-mail or on a website
• Marketers can also use digital media forums such as chat rooms, blogs,
newsgroups, social networks, and research communities to identify trends in
interests and consumption patterns.
• Crowdsourcing – Combines the words crowd and outsourcing and calls for
taking tasks usually performed by a marketer or researcher and outsourcing
them to a crowd, or potential market, through an open call
– Is a way for marketers to gather input straight from willing consumers and to actively listen
to people’s ideas and evaluations on products
Questionnaire Construction
• Questions must be clear, easy to understand, and directed toward a specific
objective.
• Questions must be designed to elicit information that meets the study’s data
requirements.
• The most important rule in composing questions is to maintain impartiality.
• Questions are usually of three kinds: open-ended, dichotomous, and multiple-
choice.
Observation Methods
• Avoid direct contact with the subject to reduce bias due to the possible
awareness of the observation process.
– If the presence of a human observer is likely to bias the outcome or if human sensory
abilities are inadequate, mechanical observation devices (cameras, recorders, scanners)
may be used to record behavior.
• Observation may include the use of ethnographic techniques, such as watching
customers interact with a product in a real-world environment.
• Observation may be combined with interviews.
• Drawbacks of observation:
– Tends to be descriptive and may not provide insights into causal relationships
– Subject to the observer’s biases or limitations of the mechanical device
Interpreting Research Findings

• Interpretation of research findings is easier if marketers carefully plan their data
analysis methods early in the research process.
• Interpreting analytics and implementing insights—as well as research and data
collection—are among the top marketing challenges.
• Statistical interpretation – Analysis of what is typical and what deviates from
the average
• Data requires careful interpretation by the marketer.
• Managers must understand the research results and relate them to a context
that permits effective decision making.
Reporting Research Findings

• Before preparing the report, the marketer must take a clear, objective look at the
findings to see how well the gathered facts answer the research question or
support or negate the initial hypotheses.
• The researcher must point out the deficiencies in the research and their causes
in the report.
• The report of research results is usually a formal, written document.
• Researchers need to allocate sufficient time for compiling and writing the report.
• For decision makers who do not have time to study how the results were
obtained, provide a summary and recommendations first.
4-4
Marketing Analytics
4-4 Marketing Analytics (1 of 8)
Marketing Analytics
• Marketing analytics – The use of databases, big data, and measurement
methods enabled by technology to interpret the effectiveness of a firm’s
marketing functions
– Provides frequent, data-driven insights related to all measurable marketing activities
– Can lead to the creation of marketing information systems and decision support systems
that assist businesses in decision making
• Marketing analytics starts with big data and massive files of data available from
multiple sources, which are then structured for access and retrieval in
databases.
– Structured data can be organized by blockchain information systems.
– New technologies have enhanced the process for obtaining important consumer feedback.
Big Data
• Big data – Involves massive structured and unstructured data sources that can
be used by marketers to discover unique insights and make strategic decisions
– Often consists of high-volume data that marketers can use to discover unique insights and
make more knowledgeable marketing decisions
– Volume – Relates to the quantity of data
– Variety – Relates to up to 85 percent of the data being unstructured and needs to be
converted into quantitative analysis
– Velocity – Relates to the speed of data entering the system
– Variability – Relates to data not being consistent or not having a fixed pattern
– Complexity – Relates to difficulty of linking, matching, and transforming data across
systems
• Benefits of big data:

– Can improve return on investment, productivity, and profitability
– Gives firms a competitive advantage
– Reveals specific details about consumers that is difficult to discover in other ways
– Allows marketers to discover trends that predict future buying behaviors
– Can improve the relationship between company and consumer
• Drawbacks of big data:
– Can be challenging for marketers to figure out how to use pieces of data to develop more
targeted marketing strategies
– Takes time and energy when mining for customer insights
– Is subject to bias, projection error, and sampling issues
– Creates privacy issues
• Data silo – A file of fixed data that is in one department isolated from the rest of the organization
– To prevent data silos, management should:
– Determine business needs and target areas where data analytics could help improve on those
needs
– Make sure data relevant to these areas are fully shared
– Ensure all teams and departments involved are on board and in sync
• Though there are numerous benefits of big data for marketing, on the flip side is loss of
consumer privacy.
– Consider how social media giants such as Facebook can monitor conversations about
products and companies and subsequently display target ads in the Facebook feeds
Databases
• Database – A collection of information arranged for easy access and retrieval
– Allows marketers to tap into abundant information useful in making marketing decisions
• Customer relationship management (CRM) employs database marketing techniques to identify
different types of customers and develop specific strategies for interacting with each customer. A
CRM incorporates three elements:
– Identifying and building a database of current and potential customers, including a wide range of
demographic, lifestyle, and purchase information
– Delivering differential messages according to each consumer’s preferences and characteristics
through established and new media channels
– Tracking customer relationships to monitor the costs of retaining individual customers and the lifetime
value of their purchases
• Single-source data – Information provided by a single marketing research firm
Implementing Marketing Analytics

• Used to evaluate return on investment (ROI) on marketing strategies and make adjustments
• Big data and tools such as marketing decision support systems are important to the success of
marketing analytics.
• The highest goal marketers appear to have with marketing analytics is identifying how to develop
better-targeted marketing campaigns.
• Investing in marketing analytics involves four steps:
Define what Implement

Develop
to measure Collect the campaign
reporting
and which data and analyze
capabilities
tools to use the results
• The key metric of marketing analytics is performance, assessed through ROI, effectiveness, or
reach.
• Most marketers need to know how to use analytics in marketing decisions.
• Sales, advertising, product development, distribution, and pricing decisions need the support of
marketing analytics.
• Dashboards can convert data analytics to easy-to-use key performance indicators (KPIs).
• Advances in technology related to cloud computing, new programming languages, and
autonomous applications have helped the field grow substantially.
• More than 30 percent of companies have integrated marketing analytics into the daily activities
of the marketing function, and marketing professionals believe that an increasing percentage of
the marketing budget should go toward analytics.
• Research shows that a one-unit increase in marketing analytics deployment results in an
8 percent increase in a company’s return on assets.
Marketing Information and Support Systems

• Marketing decision support system (MDSS) – Customized computer software that aids
marketing managers in decision making
– Offers computational and modeling capabilities
– Has a broad range of advanced marketing analytics
– Often a major component of a company’s marketing information system
– May incorporate artificial intelligence and other advanced computer technologies
• Marketing information system (MIS) – A framework for managing and structuring information
gathered regularly from sources inside and outside the organization
– Provides a continuous flow of information about prices, advertising expenditures, sales, competition,
and distribution expenses
– Can be an important asset for developing effective marketing strategies
4-5
Issues in Marketing Research
4-5 Issues in Marketing Research (1 of 2)
The Importance of Ethical Marketing Research

• It is essential that professional standards be established by which to judge the
reliability of marketing research.
– Such standards are necessary because of the ethical and legal issues that develop in
gathering marketing research data.
• Some organizations have developed codes of conduct and guidelines to

promote ethical marketing research.
• Consumer privacy has also become a significant issue as firms now have the
ability to purchase and collect data on customer demographics, interests, and
more personal matters.
Table 4.3 Guidelines for
Questionnaire Introduction
Guidelines for Questionnaire Introduction
• Allow interviewers to introduce themselves by name.
• State the name of the research company.
• Indicate that this questionnaire is a marketing research project.
• Explain that no sales will be involved.
• Note the general topic of discussion (if this is a problem in a “blind” study, a statement such as
“consumer opinion” is acceptable).
• State the likely duration of the interview.
• Assure the anonymity of the respondent and the confidentiality of all answers.
• State the honorarium, if applicable (for many business-to-business and medical studies, this is
done up-front for both qualitative and quantitative studies).
• Reassure the respondent with a statement such as, “There are no right or wrong answers, so
please give thoughtful and honest answers to each question” (recommended by many clients).
4-5 Issues in Marketing Research (2 of 2)
International Issues in Marketing Research

• Marketers may have to modify data-gathering methods to allow for regional
differences in sociocultural, economic, political, legal, and technological forces.
• Most of the largest marketing research firms derive a significant share of their
revenues from research conducted outside the United States.
• Experts recommend a two-pronged approach to international marketing
research:
– A detailed search for and analysis of secondary data to gain a greater understanding of a
particular marketing environment and to pinpoint issues that must be taken into account in
gathering primary research data
– Field research using the methods described earlier to refine a firm’s understanding of
specific customer needs and preferences

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Chapter 4

• Marketing research can involve two forms of data:

• To collect this data, marketers conduct either exploratory research or conclusive

• Descriptive research – Research conducted to clarify the characteristics of

• Experimental research – Research that allows marketers to make causal

Locating and Defining Problems or Issues

Designing the Research Project

SOURCES OF SECONDARY DATA

METHODS OF COLLECTING PRIMARY DATA

• Probability sampling – A type of sampling in which every element in the

• Nonprobability sampling – A sampling technique in which there is no way to

• The survey method chosen depends on the:

• Gathering information through surveys is becoming increasingly difficult because

• Mail survey – A research method in which respondents answer a questionnaire

• Personal interview survey – A research method in which participants respond

Online and Social Media Surveys

Interpreting Research Findings

Reporting Research Findings

• Benefits of big data:

Implementing Marketing Analytics

Define what Implement

Marketing Information and Support Systems

The Importance of Ethical Marketing Research

• Some organizations have developed codes of conduct and guidelines to

International Issues in Marketing Research

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