Marketing – Chapter 7 – Marketing Research, Decision Support Systems and Sales
Marketing research is the process of collecting and using information for marketing
Development of the Marketing Research Function
The first organized marketing research project was undertaken in 1879 and the second, 32
years later when the first commercial research department was organized at Curtis
Publishing, publishers of The Saturday Evening Post.
Who Conducts Marketing Research?
Marketers usually decide whether to conduct a study internally or through an outside
organization based on cost. Al well as the reliability and accuracy of the information
collected by an outside organization.
Interaction with outside suppliers also helps to ensure that a researcher does not conduct a
study only to validate a favorite viewpoint or preferred option.
Many people who perform marketing research belong to the Marketing Research and
Intelligence Association (MRIA).
MRIA is a Canadian not-for-profit association representing all aspects of the market
intelligence and survey research industry, including social research, competitive
intelligence, data mining, insight and knowledge management.
Syndicated service: Organization that provides standardized data to all customers.
Full-service research supplier: Marketing research organization that contracts with
clients to conduct complete marketing research projects.
Limited-Service Research Supplier: Marketing research firm that specializes in a limited
number of research activities, such as conducting field interviews or performing data
The Marketing Research Process
The chances of making good decisions improve when the right information is provided at
the right time during decision-making.
To achieve this, marketing researchers often follow a 6-step process. In the initial stages,
researchers define the problem, conduct exploratory research and formulate a hypothesis
to be tested. Next, they create a design for the research study and collect needed data.
Finally, researchers interpret and present the research information.
Define the Problem
Researchers must carefully avoid confusing symptoms of a problem with the problem itself.
A symptom merely alerts marketers that a problem exists.
A logical starting point in identifying the problem might be to evaluate the firm’s target
market and marketing mix elements. Conduct Exploratory Research
Exploratory research: Process of discussing a marketing problem with informed sources
both within and outside the firm and examining information from secondary resources.
Marketing researchers often refer to internal data collection as a situation analysis.
The term informal investigation is often used to exploratory interviews with informed
persons outside the researchers firms.
Using Internal Data
Typical sources of internal data are sales records, financial statements and marketing cost
Sales analysis: In-depth evaluation of a firm’s sales.
Sales analysis is one of the least expensive and most important sources of marketing
information available to a firm.
Accounting data can be another good tool for identifying financial issues that influence
Ratio analysis allows researchers to compare performance in current and previous years
against industry benchmarks.
Another source of internal information is marketing cost analysis – evaluation of expenses
for tasks such as selling, warehousing, advertising and delivery to determine the
profitability of particular customers, territories or product lines.
Formulate a Hypothesis
Hypothesis: Tentative explanation for some specific event.
A hypothesis is a statement about the relationship among variables that carries clear
implications for testing this relationship.
Marketing researchers gather two types of data: secondary and primary data.
Secondary data: Previously published information.
Primary data: Information collected for a specific investigation.
Second data offers two important advantages:
1. It is almost always less expensive to gather
2. Researchers usually spend less time to locate and use secondary data.
Secondary data does have limitations though. It can quickly become obsolete. Also,
published data collected for an unrelated purpose may not be completely relevant.
Secondary Data Collection
Secondary data consist of two types: internal and external data.
Internal data includes sales records, product performance reviews, sales force activity
reports and marketing cost reports.
External data come from things like government records, syndicated research services and
industry publications. Sampling Techniques
Before undertaking a study to gather primary data, researchers must first identify which
participants to include in the study.
Sampling: Process of selecting survey respondents or research participants.
Population (universe_: Total group that researchers want to study.
Probability sample: Sample that gives every member of the population a chance of being
Types of probability samples include simple random samples, stratified samples and
In a simple random sample, every member of the relevant universe has an equal
opportunity of selection. I.e. lottery-each numbered ball has equal change of dropping out.
In a stratified sample, randomly selected subsamples of different groups are represented in
the total sample.
In a cluster sample, researchers select a sample of subgroups (or clusters) which they draw
Nonprobability sample: Sample that involved personal judgment somewhere in the
selection process. In other words, researchers decide which particular groups to study.
Types of nonprobability samples are convenience samples and quota samples.
A convenience sample is a nonprobability sample selected from among readily available
respondents, often called an accidental sample.
A quota sample is a nonprobability sample that is divided to maintain the proportion of
certain characteristics among different segments or groups as is seen in the population as a
whole. In other words, each field worker is assigned a quota that specifies the number and
characteristics of the people to contact.