I. Marketing Information and Customer Insights

II. Assessing Marketing Information Needs
IV. Marketing Research

The importance of the Marketing Information System (MIS) and the fact that it starts and ends with customer insight

The Importance of Information in Marketing

A distinguished but arrogant British physicist spoke at the University of Toronto a few years back. On the board he had written a formula something like this

,

At the conclusion of his talk, he asked if there were any questions. A hand went up and a Canadian colleague asked, "Excuse me, Dr. Aerogintz, but I don't understand how you derived the formula on the board." The British physicist snapped, "That's a statement, not a question. Are there any questions?"

As arrogant as this professor's reply seems, it holds a lesson for Marketing Researchers: you must ask the question in the right way if you want to get answers that will give you useful results.

Marketing as Science

Marketing's historic embrace of Logical Empiricism has led us to overemphasize deductive reasoning, quantitative data, and justification as our main methods of scientific enquiry. These methods are important, but to learn to think in new and innovative ways, we also need inductive thinking, qualitative data, and discovery, and our emphasis on corporate profit needs to be tempered with more concern for the effect that marketing has on society  

Deductive AND Inductive Thinking

Deductive Thinking - reasoning from general known premises to specific conclusions which must follow, to figure out how things work, what things are    All rectangles have 4 right angles   A square is a rectangle   Conclusion: A square has 4 right angles For those who have taken  Modes of Reasoning, note the proper syllogistic format: All A are B All C are A Therefore all C are B Marketing Example using the deductive format The shower gel market in Bay City is $2million Original Lemon Source has 15% of that market Conclusion: The company's sales in that city = $300,000.

Inductive Thinking - reasoning from limited specific observations to arrive at general conclusions; to generate new concepts For 12 years every day at noon the clock chimed 12 times In 1 minute it will be noon Conclusion: In 1 minute the clock will chime 12 times  Marketing Example In the past, when we raised the price of our pizza, demand fell. We plan to raise the price of our pizza next month  Conclusion: The demand for our pizza will probably fall      (probably, but not absolutely) The results from inductive thinking are not necessarily as certain as those from deductive, but forces us to think outside the box -- what if the clock did NOT chime 12 times? What can we do beforehand to make sure the demand for our pizza does NOT fall?

Marketing as Art

Marketing is also an art. There is no perfect scientific answer that will tell us what customers will buy and much of marketing involves a lot of creativity, both in the product and in the advertising of it. Part of your job in this course is to find ways to think creatively about products, people, and organizations. Learn the scientific terms and respect the requirements of hard-core research. But remember that often research can consist of sitting and watching. You did this in your Waving Hand Exercise on Peter Drucker and the coffee shop.

Quantitative AND Qualitative Research

We need both numbers and words. We need numerical analysis but we also need discussion of what those numbers mean and what lies beneath the a surface of just numbers. 

Quantitative Data  Here is an example of quantitative and qualitative data from my own area of research, a paper I did with two BAS students, which we presented at a recent conference. We were looking at how issues of sex and violence arise when people view ads. The hypothesis we were testing was:  Hypothesis 3: A significant portion of the words written by all respondents will relate to sexual attraction or power issues   Negative Ad (Banana Republic) Positive Ad (Kool) Both Ads Sex Words 32/208   (15.4%)  126/195 (64.6%)  158/403 (39.2%)   Power Words   135/208  (64.9%)  34/195   (17.4%) 169/403 (41.9%) Both Words 167/208  (80.3%)   160/195 (82.1%)  327/403 (81.1%)  More than 80% of respondents' words were related in some way to sexual attraction or issues of power and control which supports the hypothesis.

Qualitative Data We also asked respondents to write a story about the ads they looked at. Think about the differences between this piece of information and the quantitative data above.  Jessica was her name. She was found at the wrong place at the wrong time. It was Friday March 17, St. Patrick’s Day. Some of her friends had asked her to go out to an Irish dinner dance party to celebrate. It wasn’t a pub and it was a formal event. So she accepted. The dinner was great, featuring some traditional Irish plates. But the dancing was better. She had met a handsome Irish gentleman who swept her off her feet. Jessica was raped by this man by the end of the evening.

Justification AND Discovery

Justification 
A necessary part of academic pursuit, it is the basis of the Scientific Method, and involves setting up a hypothesis and testing it. Click here for a clever and humourous explanation of the Scientific Method. But there is more to scientific inquiry than justification. 

Discovery

David Suzuki who has been known to sit and watch flies on the ceiling because he learns from that exercise how they land, suggests that to really learn we must look around us and watch. As Marketing students, you have one of the largest labs in in any course at York University -- the market. Go to the store and watch, think creatively about why people buy what they buy, and try applying the theories you learn in class to the real world.

Exercise: Lab Researching Shoppers Go to the drugstore, grocery store, pizza parlour, beer store... somewhere you regularly shop. Look at the products and watch the shoppers. Report back to the Discussion Group on what you learned. Post your answer in the Moodle Discussion Group.

III. Developing Marketing Information

Exercise: Plan Marketing Information Using your Marketing Plan product as an example, give a specific example of each of the above types of Marketing Information that will show the differences between the types. Post your answer in the Moodle Discussion Group.

Changes in Marketing Research Emphasis over the Last Hundred Years

Sales Driven Turn of the last century: Henry Ford said a customer could have a Ford in any colour he wanted as long as it was black
Customer Driven What colour do you want? In the Marketing Concept years, companies outdid each other trying to figure out through research just exactly what the customer would want most
Market Driven Today in the market-driven economy in relationship marketing, companies try to work together with the customer to decide whether colour is even important and if so which colour ought to be chosen

Exercise Emphasis In a Sales-Driven industry where demand outstrips supply, what kind of market research is a company likely to do? Post your answer in the Moodle Discussion Group.

IV. Marketing Research

1. Defining the Problem and Research Objectives
The single most important step in marketing research
Note this marketing research company's strong emphasis on the need to know your goals

Exercise Defining the Problem Give an example of what could go wrong with your research if you don't know what the problem is. Post your answer in the Moodle Discussion Group.

Exploratory Research - used to gather preliminary information to help define the problem and suggest hypotheses

Causal Research - to test hypotheses about cause-and-effect relationships

Don't confuse Causal which refers to cause and effect, with "Casual" which means "in an informal way"

And be wary of confusing the Direction of Causality:  Every October the weather gets cold because the leaves fall off the trees.

2. Developing the Research Plan for Collecting Information

Translate the research objectives into specific information needs
Do exploratory research to gather preliminary information
Present a written research plan including 

3. Implementing the Research Plan - Collecting and Analyzing the Data

Exercise Databases What kind of databases would be helpful to your company in marketing your new product? Post your answer in the Moodle Discussion Group.

Gathering Primary Data

Exercise - Plan Causal Research Using your Marketing Plan product, give a specific example of a research question involving CAUSAL research, being clear what is the CAUSE. Post your answer in the Moodle Discussion Group.

Contact Methods
Mail
Telephone
Interview
Computer-Assisted

Exercise: Lab Plan Data Gathering Go out and talk to 5 people who use a product like the one for which you are writing your Marketing Plan. Try to get some information on what they think is important in a product like this (it won't be statistically significant with so few respondents). Report back on what you learned, and on what difficulties you experienced in gathering data. Post your answer in the Moodle Discussion Group.

Sampling Plan
Who?
How many?
How to choose?

Some of the problems of data collection are obvious, like the person in your carefully planned sample who isn't at home the seven times you go back to try to find them, or the person who slams the door in your face, but one of the most serious though not so obvious problems in data collection is the respondent who tries too hard to be helpful.  People have been known to lie to market researchers because they want to provide helpful answers. The interviewer asks a woman if she has tried the new brand of tissues now selling in the grocery store called Sneezies. The respondent has seen them but never bought them because she thought they looked cheap, but not wanting to disappoint the market researcher, the respondent replies, "Yes," and when asked to rate how she liked them on a scale of 1 to 5, gives them a 5 for excellent.  The respondent thinks she is being helpful but if too many people do this, the market researcher never gets to the truth about their tissues which, contrary to market research reports are NOT selling well at all!

Research Instruments

When designing a questionnaire, always test it first. The first place to start testing is with yourself. Think through possible answers you might get to the question you have asked and ask yourself how you would interpret a particular result. For example, in Question 7 below, suppose you were doing this research for a taxi company and suppose 80% of your respondents answered "yes" to the question. Could you with certainty advise your taxi company to put more taxis out on the road at night? 

Exercise Questionnaire What things can you find wrong with this Questionnaire? There is at least one thing wrong in every part. If you're having trouble with some of these, remember the best test of any questionnaire - think about what you would do with the answer you might get. Post your answer in the Moodle Discussion Group.

ATTITUDES OF TORONTONIANS TO THE GUARDIAN ANGELS
In-Person Survey done on a street-corner in downtown Toronto
Prepared as an exercise for AK/ADMS2200.03, Marketing Research Unit

4. Interpreting and Reporting the Findings

This is a job that must not be left entirely to the researchers, nor must it be done entirely by those who commissioned the study. The potential for missing relevant interpretations by the one, or bias on the part of the second is too great. The interpretation of the findings should require input from many different areas.  Be sure to include a recommendation for Follow-Up in your findings. 

Exercise Interpreting Findings What can go wrong if the interpretation of data is done entirely by the researchers only? What can go wrong if it is done entirely by the person who commissioned the study? Post your answer in the Moodle Discussion Group.

V. Analyzing and Using Marketing Information

One of the major jobs of the person who analyzes the Marketing Information is to assess how good it is. We do this by examining data reliability and validity. Imagine a Consumer Behaviour study which sought information on university students' consumption of beer. How good are your results?  Chart Quadrant Meaning of Terms Marketing Research Example A Consumer Behaviour study of university students and their consumption of beer Upper Left   Validity is high – you’ve hit the centre of the bull’s-eye Reliability is high – each time you shot, you’re very near the last time you shot  You designed the study well, pre-tested it in numerous Marketing classes, compared your results to what you and experts know about the real world, and you found that university students do indeed purchase more beer after exams than during them. Your study is valid. Several colleagues took your original questionnaire and used it on students in their universities, and found very similar results. Your study is both valid and reliable. Upper Right   Validity is low; your shots are nowhere near the centre of the target Reliability is high – every time you shoot, you're shooting close to the last place you shot  When colleagues tried your questionnaire, they got exactly the same results you did. But, it turns out, none of you did a very good job of designing the questionnaire; you were asking the wrong questions, and you asked them poorly. Most students who answered your survey misunderstood your question and it turned out that your results suggested that students drink the most DURING their actual exam - from 7 to 10 right in the lecture hall.  Lower Left    Validity is high - you’re on the right track, your shots all center around the bull’s-eye Reliability is low; your shots are very far apart You did the questionnaire right, you're quite sure. Your results match what we suspected from general observation and expert knowledge, but none of your colleagues has been able to get the same results, even though they have used your exact same questionnaire, and even though they are using an almost identical sample Lower Right   Validity is low - you are nowhere near the bull's eye Reliability is low - you are shooting inconsistently You got the questions all wrong, and even so, your colleagues trying to replicate your results can't do so, they can't even get close to the same results you got, but they too are way off the mark in terms of what is really happening in the market Note: A lot of Marketing terminology comes from sports and the military. This chart uses both in the analogy to target practice to explain two scientific terms.

Exercise Reliability and Validity In the example above of research results in the Lower Left quadrant, what kind of things might have gone wrong to create this situation? Post your answer in the Moodle Discussion Group.

Customer Relationship Management (CRM) uses sophisticated computer software and programmes to ensure that marketing information about the customer is used correctly.  

Exercise CRM Think about a purchase you made recently; what follow-up from the company did you receive? (for example, every time I have my car fixed, I get an email from them asking if everything went okay).Post your answer in the Moodle Discussion Group.

Distributing and Using Customer Information Technology also helps ensure that marketing information is distributed to all levels of the organization that may find it useful.

Exercise MaW Career in Marketing Research Read the Marketing at Work Case 5-2 in your textbook. What part of her job most appeals to you to do as a career? Post your answer in the Moodle Discussion Group.

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VI. Other Marketing Research Considerations

Marketing Research in Small Businesses and Not-for-Profit Organizations

Not all research has to be done at the level of sophistication of a full Marketing Research study. Many small business owners do successful research simply by observing and talking to their customers, by doing informal small-sample-size surveys. 

Marketing Plan Hint - When trying to decide whether your proposed product for your Marketing Plan Assignment, will interest your target market, do some "small-sample-size" marketing research. Talk to five people who use a product like yours or who whom you think might need the kind of product you are thinking of bringing to market. Ask them how they feel about your idea, and for some ideas of how much they would be willing to pay, what features they would like to see.

International Marketing Research

Years ago, we studied International Marketing as a whole separate chapter. Now, because so very many companes work internationally as a matter of course, its study is integrated into the whole of the text.

Public Policy and Ethics in Marketing Research/Misuse of Findings

Exercise Research Ethics Under what circumstances are you willing to supply information to an online researcher? On what websites would you feel comfortable answering personal questions about your behaviour as a consumer?  Post your answer in the Moodle Discussion Group.

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If you are interested in taking part in a research process yourself, your textbook recommends you can go to these Web sites and try out an on-line poll.

www.pollingreport.com

www.gallup.com

Exercise On-Line Polls Which of the polls or questionnaires was the most interesting to you? Which was easiest to answer? What did you learn from this experience?  Post your answer in the Moodle Discussion Group.