Because learning changes everything.

CHAPTER 8
Marketing Research: From Customer
Insights to Actions

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 HOLLYWOOD LOVES MARKETING RESEARCH!

A film industry secret: Research!

• Movie title testing – Toy Story was originally
titled Wind-Up Heroes.
• Concept testing and script assessment.
• Test (or preview) screening.
• Tracking studies.
• Social listening.
Click here to view video.

Black Widow
Movie Trailer

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 THE ROLE OF MARKETING RESEARCH

What is marketing research?

• It’s a process for collecting, analyzing, and taking action.
The challenges in doing good marketing research include discovering
consumer taste, setting the price, and more.
Five-step marketing research approach leads to marketing actions.
• Decision: Conscious choice among alternatives.
• Decision-making: Structured approach.

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 FIGURE 8-1 Five-step marketing research approach leading to
marketing actions.

Access the text alternative for slide images.

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 STEP 1: DEFINE THE PROBLEM
SET THE RESEARCH OBJECTIVES 1

Set the research objectives.

Have a clear research purpose.
Types of marketing research:
1. Exploratory research Lego EV3
Mindstorms
2. Descriptive research
Video
3. Causal research Click here to view video.

Identify possible marketing action.

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 STEP 1: DEFINE THE PROBLEM
SET THE RESEARCH OBJECTIVES 2

Measures of success
• Playtime: Children spend more time playing with new design.
Possible marketing actions:
• Introduce new design.
• Drop old design.

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 STEP 2: DEVELOP THE RESEARCH PLAN

The research plan determines how to collect data.

1. Specify constraints.
2. Identify data needed for marketing actions.
3. Determine how to collect data.
• Concepts: Ideas about products.
• Methods: Approaches to collect data.

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 STEP 3: COLLECT RELEVANT INFORMATION

Collect relevant information for rational, informed marketing decisions.

Data – Facts and figures.
Secondary data – Already exists.
Primary data – Newly collected.

Census Bureau
Video
Click here to view video.

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 FIGURE 8-2 Types of marketing information

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 STEP 3: COLLECT RELEVANT DATA
SECONDARY DATA 1

Internal:
• Marketing input data: Effort expended to make sales.
• Marketing outcome data: Results of marketing efforts.

Internal data (inside the firm)

• Inputs (budgets, financial statements,
sales call reports).
• Outcomes (actual sales and
customer communications).

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 STEP 3: COLLECT RELEVANT DATA
SECONDARY DATA 2

External:
Census Bureau:
• U.S. 2020 Census – the 24th count of population.
• American Community Survey.
• U.S. 2017 Economic Census.
External data (outside the firm)
• U.S. Census reports.
• Trade association studies.
• Business periodicals.
• Internet-based reports.

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 STEP 3: COLLECT RELEVANT DATA
SECONDARY DATA 3

External:
Syndicated panel.
• Nielsen TV ratings.
• J.D. Power surveys.
• IRI InfoScan.
External data (outside the firm)
• U.S. Census reports.
• Trade association studies.
• Business periodicals.
• Internet-based reports.

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 STEP 3: COLLECT RELEVANT DATA
SECONDARY DATA 4

External:
• Trade associations.
• Universities.
• Business periodicals.

External data (outside the firm)

• U.S. Census reports.
• Trade association studies.
• Business periodicals.
• Internet-based reports.

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 STEP 3: COLLECT RELEVANT DATA
SECONDARY DATA 5

Advantages:
• Time savings.
• Inexpensive.
Disadvantages:
• Out of date.
• Definitions/categories not right.
• Not specific enough.

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 STEP 3: COLLECT RELEVANT DATA
PRIMARY DATA—WATCHING PEOPLE 1

Observational data
Mechanical methods:
• Nielsen’s “People Meter” – Attached to TV for measuring channel
and program being watched.
• Nielsen’s TV ratings calculated for each TV program.
• 1 rating point = 1 percent of U.S. HH.
• Networks sell over $67 billion in ads annually.

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 FIGURE 8-3 Nielsen Broadcast Ranking Report for
network TV primetime households
Rank Program Network Rating Views (000)
1 NBC Sunday Night Football NBC 5.3 16,286

2 NCIS CBS 5.0 15,415

3 FBI CBS 4.2 12,890

4 NFL THU Night Football FOX 4.2 12,859

5 Blue Bloods CBS 4.0 12,163

6 Chicago Fire NBC 3.7 11,992

7 Chicago PD NBC 3.7 11,519

Nielsen
8 Young Sheldon CBS 3.7 11,407
Ratings
Click here to view video.

9 Chicago Med NBC 3.7 11,363

10 This Is Us NBC 3.7 11,254

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 STEP 3: COLLECT RELEVANT DATA
PRIMARY DATA—WATCHING PEOPLE 2

Personal methods:
• Watching consumers.
• Mystery shopper.
• Observational research.
• Ethnographic research.
Neuromarketing methods:
Technologies used to study the brain.

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 STEP 3: COLLECT RELEVANT DATA
PRIMARY DATA—ASKING PEOPLE 1

Questionnaire data
Idea generation methods:
• Coming up with ideas.
• Individual interviews.
• In-depth interviews.
• Focus groups.
• Finding “the next big thing”.
• Trend hunting.
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 FIGURE 8-4 Different types of questions in a sample
Wendy’s survey (Q1 – Q4)
1. What things are most important to you when you decide to eat out at a fast food restaurant? Blank

2. Have you eaten at a fast-food restaurant in the past month?

Yes No

3. If you answered yes to question 2, how often do you eat at a fast-food restaurant?
Once a week or more 2 to 3 times a month Once a month or less

4. How important is it to you that a fast-food restaurant satisfies you on the following characteristics?

Characteristic Very important Somewhat important Important Unimportant Somewhat important Very unimportant
Very Important, Taste of food Radio button icon. Somewhat important, Taste of food Radio button icon. Important, Taste of food Radio button icon. Unimportant, Taste of food Radio button icon. Somewhat important, Taste of food Radio button icon. Very unimportant, Taste of food Radio button icon.

Taste of food
Very Important, Cleanliness Radio button icon. Somewhat important, Cleanliness Radio button icon. Important, Cleanliness Radio button icon. Unimportant, Cleanliness Radio button icon. Somewhat important, Cleanliness Radio button icon. Very unimportant, Cleanliness Radio button icon.

Cleanliness
Price
Very Important, Variety of menu Radio button icon. Somewhat important, Variety of menu Radio button icon. Important, Variety of menu Radio button icon. Unimportant, Variety of menu Radio button icon. Somewhat important, Variety of menu Radio button icon. Very unimportant, Variety of menu Radio button icon.

Variety of menu

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 FIGURE 8-4 Different types of questions in a sample
Wendy’s survey (Q5 – Q6)
5. For each of the characteristics listed below check the space on the scale that describes how you feel about Wendy’s. Mark an X on only
one of the five spaces for each characteristic listed.

Characteristic Check the space that describes the degree to which Wendy’s is…

• Taste of food Tasty Blank _____ _____ _____ _____ Not Tasty

• Cleanliness Clean Blank _____ _____ _____ _____ Dirty

• Price Inexpensive Blank _____ _____ _____ _____ Expensive

• Variety of menu Broad Blank _____ _____ _____ _____ Narrow

6. Check the response that describes your agreement or disagreement with each statement listed below.

Statement Strongly Agree Agree Don’t Know Disagree Strongly Disagree

Strongly Agree, Adults like to take families to fast-food restaurants Radio button icon. Agree, Adults like to take families to fast-food restaurants Radio Don’t Know, Adults like to take families to fast-food restaurants Radio button icon. Disagree, Adults like to take families to fast-food restaurants Radio button icon. Strongly Disagree, Adults like to take families to fast-food restaurants Radio button icon.
button icon.

Adults like to take families to fast-food restaurants.

Strongly Agree, Our children have a say in where the family chooses to eat Radio button icon. Agree, Our children have a say in where the family chooses to eat Don’t Know, Our children have a say in where the family chooses to eat Radio button icon. Disagree, Our children have a say in where the family chooses to eat Radio button Strongly Disagree, Our children have a say in where the family chooses to eat Radio button icon.
Radio button icon. icon.

Our children have a say in where the family chooses to eat.

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 FIGURE 8-4 Different types of questions in a sample
Wendy’s survey (Q7 – Q8)
7. How important are each of the following sources of information to you when selecting a fast-food restaurant at which to eat? (Check one
response for each source listed.
Source of Information Very Important Somewhat Important Not at All Important
Very Important, Television Radio button icon. Somewhat Important, Television Radio button icon. Not at All Important, Television Radio button icon.

• Television
Very Important, Newspapers Radio button icon. Somewhat Important, Newspapers Radio button icon. Not at All Important, Newspapers Radio button icon.

• Newspapers
• Radio
Very Important, Billboards Radio button icon. Somewhat Important, Billboards Radio button icon. Not at All Important, Billboards Radio button icon.

• Billboards
• Internet
Very Important, Social networks Radio button icon. Somewhat Important, Social networks Radio button icon. Not at All Important, Social networks Radio button icon.

• Social networks

8. How often do you eat out at each of the following fast-food restaurants? (Check one response for each restaurant listed.)
Restaurant Once a Week or More 2-3 Times a Month Once a Month or Less
Once a Week or More, Burger King Radio button icon. 2-3 Times a Month, Burger King Radio button icon. Once a Month or Less, Burger King Radio button icon.

• Burger King
Once a Week or More, McDonald’s Radio button icon. 2-3 Times a Month, McDonald’s Radio button icon. Once a Month or Less, McDonald’s Radio button icon.

• McDonald’s
Once a Week or More, Wendy’s Radio button icon. 2-3 Times a Month, Wendy’s Radio button icon. Once a Month or Less, Wendy’s Radio button icon.

• Wendy’s

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 FIGURE 8-4 Different types of questions in a sample Wendy’s
survey (Q9)
9. As head of the household, please answer the following questions about you and your household. (Check only one response for each
question.)

a. What is your gender? Male Female

b. What is your marital status? Single Married Other (widowed, divorced, etc.)

c. How many children under age 18 live in your home? 0 1 2 3 or more

d. What is your age? Under 15 25 – 44 45 or older

e. What is your total annual individual or household income? Less than $15,000 $15,000-$49,000 Over $49,000

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 STEP 3: COLLECT RELEVANT DATA
PRIMARY DATA—OTHER SOURCES 1

Primary data from other sources:

• Social media can provide ideas for new
products and services.
• Use social media listening tools.
• Instagram, Facebook, Twitter, others.
• Social media metrics.

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 STEP 3: COLLECT RELEVANT DATA
PRIMARY DATA—OTHER SOURCES 2

Panels:
• A sample of consumers to be measured.
Experiments:
1. Independent variable: The cause (drivers).
2. Dependent variable: The result.
3. Test markets: Used in small geographies to evaluate
marketing actions.

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 STEP 3: COLLECT RELEVANT DATA
PRIMARY DATA—OTHER SOURCES 3

Big data: Describes large amounts of data

collected from a variety of sources.
Information technology
• Transform data into useful information.
• Data visualization.
• Intelligent enterprise.
Data mining: Extracting hidden predictive
information to find patterns and links.

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 MAKING RESPONSIBLE DECISIONS
YOUR DIGITAL LIFE IS TRANSPARENT: THE DOWNSIDE OF DATA MINING

Data mining reveals personal information.

• Collected via tracking devices (Examples: Cookies
and apps).
• Enables personalization and targeting.
• Do some sleuthing on yourself at
[Link].
Click here to view video.

Ghostery
Video
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 STEP 3: COLLECT RELEVANT DATA
ADVANTAGES/DISADVANTAGES OF PRIMARY DATA

Advantages of primary data:

• More flexible.
• More specific to the problem.
Disadvantages of primary data:
• Expensive.
• Time consuming to collect.

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 STEP 3: COLLECT RELEVANT DATA
ADVANTAGES/DISADVANTAGES OF CROSS TABS 1

Developing cross tabulations:

• Cross tabulation (or cross tab).
• Can show raw data to answer questions.
• Can show percentage responses to questions.
Interpreting cross tabulations:
• Look for heavy users.
• Develop marketing actions to reach them.

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 FIGURE 8-6 Two forms of a cross tabulation relating age of head of
household to frequency of fast-food restaurant patronage

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 STEP 3: COLLECT RELEVANT DATA
ADVANTAGES/DISADVANTAGES OF CROSS TABS 2

Advantages:
Simple format
• Direct interpretation of data.
• Easy communication of results.
Flexible: Summarizes data generated.
Disadvantages:
Misleading if too few observations.
Can hide some relationships due to only showing two to three variables.

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 STEP 4: DEVELOP FINDINGS

Analyze the data:

1. How are Tony’s sales doing on a household basis?
2. What factors might be contributing to Tony’s very flat sales
over the past 4 years?
Facts are vital.
Present the findings in an understandable way.

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 FIGURE 8-7 Marketing dashboards that present findings to Tony’s
marketing manager that lead to recommendations and actions.

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 STEP 5: TAKE MARKETING ACTIONS

Research doesn’t stop with findings.

1. Make action recommendations.
2. Implement the action recommendations.
3. Evaluate the results:
• Evaluate the decision itself.
• Evaluate the decision process.

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 SALES FORECASTING TECHNIQUES 1

Sales forecast
Judgments of the decision maker:
• Direct forecast.
• Lost-horse forecast.
Surveys of knowledgeable groups:
• Survey of buyers’ intentions forecast.
• Salesforce survey forecast.

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 SALES FORECASTING TECHNIQUES 2

Statistical Methods
Trend extrapolation:
• Extending a pattern observed in past data into the future.
Linear trend extrapolation:
• When the pattern is described with a straight line.

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 FIGURE 8-8 Linear trend extrapolation of sales revenues at Procter &
Gamble, made at the start of 2010.

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 Marketing Research

Marketing research is the process of defining a marketing problem

and opportunity, systematically collecting and analyzing information,
and recommending actions.

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 Measures of Success

Measures of success are criteria or standards used in evaluating

proposed solutions to the problem.

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 Constraints

Constraints are, in a decision, the restrictions placed on potential

solutions to a problem.

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 Data

Data are the facts and figures related to the project that are divided
into two main parts: secondary data and primary data.

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 Secondary Data

Secondary data are the facts and figures that have already been
recorded prior to the project at hand.

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 Primary Data

Primary data are the facts and figures that are newly collected for the
project.

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 Observational Data

Observational data are the facts and figures obtained by watching,

either mechanically or in person, how people actually behave.

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 Questionnaire Data

Questionnaire data are the facts and figures obtained by asking

people about their attitudes, awareness, intentions, and behaviors.

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 Information Technology

Information technology involves operating computer networks that

can store and process data.

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 Sales Forecast

A sales forecast consists of the total sales of a product that a firm

expects to sell during a specified time period under specified
environmental conditions and its own marketing efforts.

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 Cross Tabulation

A cross tabulation is a method of presenting and analyzing data

involving two or more variables to discover relationships in the data.
Also known as a “cross tab.”

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