The Marketing Research Process:

An Overview
AT-A-GLANCE

I. Decision Making

II. Types of Marketing Research

A. Exploratory research
B. Descriptive research
C. Causal research

III. Stages in the Research Process

A. Problem discovery and definition
• secondary data
• experience survey
• case studies
• pilot studies
B. Planning the research design
• surveys
• experiments
• secondary data studies
• observation techniques
C. Sampling
D. Data gathering
E. Data processing and analysis
• editing
• coding
• analysis
F. Conclusions and report preparation

IV. The Research Program Strategy

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OUTLINE
I. DECISION MAKING

Formally defined, decision making is the process to resolve a problem or to choose from
alternative opportunities. The key to decision making is to recognize the nature of the
problem/opportunity, to identify how much information is available, and to recognize
what information is needed.

II. TYPES OF MARKETING RESEARCH

Marketing research can be classified on the basis of technique (e.g. experiments,

surveys, or observation studies) or purpose. Classifying marketing research on the basis
of its purpose, it can be broken into three categories:

A. Exploratory research is conducted to classify the nature of problems. It is not

intended to provide conclusive evidence from which a particular course of action can
be determined. Exploratory research merely crystallizes the problem and identifies
information needed—subsequent research is usually required.

B. Descriptive research is conducted to discover and determine the characteristics of a

population. It seeks to determine the answers to the questions “who,” “what,”
“when,” “where,” and “how.” It does not tell us “why.” Although it is impossible to
completely eliminate error, this type of research should be conducted as accurately as
possible because, unlike exploratory research, the evidence it provides will be used to
determine a course of action.

C. Causal research attempts to identify cause-and-effect relationships between

variables. It usually follows exploratory and descriptive research and, therefore, the
researchers are quite knowledgeable about the subject. Causal research attempts to
establish that when we do one thing (e.g., increase advertising), another will follow
(e.g., increased sales).

III. STAGES IN THE RESEARCH PROCESS

Systematic inquiry continues throughout all stages of the research, but the research can be
broken into six stages—all of which are functionally interrelated and overlap
chronologically.

Both forward linkage—(when the earlier stages of research will influence the design of
the later stages)—and backward linkage—(when the later stages have an influence on
the earlier stages)—exist in a research process.

A number of alternatives are available to the researcher during each stage of the research
process. There is no best way to research, and the method chosen will depend on the
resources (time, money, manpower, etc.) available and the results one wants.

The six stages in the research process are as follows:

A. Problem discovery and definition: Most research programs are initiated because
managers are uncertain about some aspect of the firm’s marketing program.
Identifying the problem, that is, defining the problem, gives a sense of direction to
the investigation. Marketing research must have clear objectives and definite
designs. Problem definition is possibly the most important, yet most neglected, area
of marketing research. At this stage in the project exploratory research is often used
because it helps refine the problem into a researchable one.

There are four basic techniques: secondary data, pilot studies, case studies, and
experience surveys.

• secondary data or historical data is data previously collected and assembled for
some other project. In contrast, primary data is gathered specifically for the
project at hand. Secondary data can often be found inside the company, at public
libraries and universities, or purchased from a firm specializing in providing
information. Secondary data can usually be gathered faster and at less cost than
primary data, but it can be outdated or may not exactly fit the researcher’s needs.

• pilot studies collect data from the ultimate consumer, or the actual subject of the
research project, to serve as a guide for the larger study. The data collection
methods are informal and findings may lack precision, but may suggest possible
topics for formal investigation.

B. Planning the research design: A research design is a master plan specifying the
methods and procedures for collecting and analyzing the needed information. The
research design should consider the research objectives and should determine the
sources of information, the design technique (e.g. survey or experiment), the
sampling methodology, the time schedule for the research, and the budget for the
research.

There are four basic research designs for causal and descriptive research, and certain
factors such as cost, urgency, availability of data, etc., should determine which design
is used.

• surveys: the most common method of generating primary data. It is a technique in

which information is gathered from a sample of people by use of a questionnaire.
Questionnaires can be administered by mail, phone, or in person.

• experiments: hold the greatest potential for establishing cause-and-effect

relationships because they allow investigation of changes in one variable while
manipulating one or two other variables under controlled conditions.
• secondary data studies: typically involve using past data to project future figures
for a particular event or phenomenon. This technique uses greater quantitative
sophistication than is involved in using secondary data at the exploratory level of
research, but it still has the same advantages and disadvantages attached to it.
• observation techniques: used when the objective of research is merely to record
what can be observed. The advantage of it is that it is nonreactive and the data can
be without a respondent’s direct participation.
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There is no one “best” research design; there are many alternative methods for
solving a problem. Knowing how to select the most appropriate research design
develops with experience.

C. Sampling: This includes any procedure that uses a small number of items, or that
uses part of the population to make a conclusion regarding the whole population—a
sample is a subset from a larger population. The results of a statistically sound
sample should have the same characteristics as the population. Of course, errors can
be made especially if the target population is not representative of potential
customers, or if the sample size is too small, or not a probability sample, or if the
unit is not randomly selected.

There are two basic types of sample:

• probability sample: in which every member of the population has a known, non-
zero probability of selection.
• non-probability sample: in which the sample is selected on the basis of personal
judgment.

D. Data gathering: Once the research design, including the sampling plan, has been
formalized, the process of collecting information from respondents may begin.
Depending on the design chosen, there are many methods of data collection.

E. Data processing and analysis: -----. Analysis is the application of logic to the
understanding of data that has been gathered; it varies from the simple determination
of patterns to complex statistical analysis.

F. Conclusions and report preparation: This stage involves preparing the information
and making conclusions which will be useful for decision making purposes. The
research report should effectively communicate the research findings. If a research
report is too long or complex for managers to use, then it is totally useless.

DISCUSSION QUESTIONS/ANSWERS
1. For each of the situations below, decide whether the research should be exploratory,
descriptive, or causal.

a. Establishing the functional relationship between advertising and sales.

Causal research. Establishing the functional relationship between advertising and sales is the
project’s goal. It attempts to predict what would happen to sales if a change in advertising
occurred. After the causal variable is manipulated, the researcher observes the effect on sales.

b. Investigate consumer reactions to the idea of new laundry detergent that prevents
shrinkage in hot water.
Exploratory Research. This study will portray the consumers’ initial reaction to this new
product concept. The “how” question is explored. Depending on the nature of the problem
definition, this study could be descriptive.

c. Identify target market demographics for a shopping center.

Descriptive Research. This study portrays the characteristics of the population who will buy
what is identified.

d. Estimate sales potential for concrete vibrators in a northwestern sales territory.

Descriptive Research. This research attempts to describe a market size.

2. A researcher is interested in knowing the answer to a “why” question, but does not know
beforehand what sort of answer will satisfy him. Is answering this question exploratory,
descriptive, or causal research? Explain.

This is a causal study because the researcher wishes to explain why something occurred. To
explain why something occurred one must isolate the cause-and-effect relationship between
variables.

To truly understand why something occurs, cause-and-effect relationships have to be identified.

Therefore the final stage of the research process clearly must be causal. However, as in many
research situations, the researcher may initially have to employ exploratory research to provide
insights into the nature of the problem and then follow with descriptive research before a truly
causal study can be conducted.

3. Why is the problem definition stage of the research process probably the most important
stage?

The text emphasizes that a problem well defined is a problem half solved. Careful attention to
problem definition allows the researcher to set the proper research objectives. If little or no
planning goes into the problem definition and research objectives, the data that is collected may
be of little value.

4. Which research design seems appropriate for the following studies?

a. The manufacturer and marketer of flight simulators and pilot training equipment wishes
to forecast sales volume for the next five years.

Descriptive Research with Secondary Data. Initially the study will identify past sales and the
variables associated with sales of pilot training equipment (e.g., number of licensed pilots,
number of airplanes sold, gross national product, etc.). Once these variables have been identified
the research can then attempt to describe the market size and trends thus aiding the forecast of
potential sales.
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It is very likely that both sales of flight simulators and sales of pilot training equipment are highly
related to general trends in the aviation industry. It is very likely that secondary data from the
Federal Aviation Agency and industry trade associations could be utilized to forecast sales. Of
course, surveys of buying intentions and so on could also be conducted.

d. A major petroleum company is concerned with the increased costs of marketing regular
leaded gasoline and is considering dropping this product.

This situation illustrates the need for a problem definition and how it will influence the choice of
research design. Many students will suggest that the important concern is to identify the impact
of eliminating regular gasoline on consumer attitudes. They will therefore suggest a survey. The
instructor may point out that this is clearly an important aspect of the research. One might
investigate trends from secondary data sources concerning the usage of regular gasoline in the
retail petroleum business and/or how the only true measure of sales change will be through some
type of experiment or quasi-experiment.

5. Should the marketing research program strategy be viewed as a strategic planning activity?

Definitely yes. The expenditures on marketing research could alternatively be spent on

advertising, increases in the number of sales personnel, product line expansion, etc. The program
strategy sets a plan for the usage of marketing research in a given time period. It is appropriate to
strategically coordinate this plan with other marketing mix variable plans.

CASE 3.1 FISHER-PRICE RESCUE HEROES

Objective: The objective of this case is to portray the difference between a research project and a
research program. It illustrates focus groups, concept testing, and survey research. It can be used
to show the steps in the research process. The objective of this case is to present a relatively open-
ended situation so the student may have some experience discussing a research problem and
alternative sources of information.

Summary: Fisher-Price’s action-figure collection, Rescue Heroes, as well as the CBS TV show
with the same name, are popular with boys ages 3 and up. (See www.fisher-
price.com/us/rescueheroes/ ) The Rescue Heroes have a mission to help and rescue with courage,
perseverance, resourcefulness, and non-violent problem solving. The product line consists of
action figures (such as, Jake Justice Police Officer, Wendy Waters Firefighter, and Rocky
Canyon Mountain Ranger), vehicles (for example, Rescue Heroes Quick Response Helicopter),
and command centers. Additional details about the characters may be found online at
www.fisher-price.com/us/rescueheroes/ .

Fisher-Price extensively utilizes marketing research in its new product development process.
Rescue Heroes went from identifying a need to a commercial product line with the help of a
multi-staged research program. Through exploratory research, the company learned that there was
a gap in toys available for preschool and early elementary school boys. Little boys liked the idea
of action figures that their older brothers and friends played with, but those toys were difficult for
them to understand and handle. The findings led Fisher-Price to coin the term KAGO — Kids
Are Getting Older — meaning younger children want more grown-up toys.

Questions

1. Suppose Fisher-Price came up with an idea for a new toy. outline the steps in the research
process that you would recommend that Fisher-Price take.

The stages in a research project are:

Problem discovery and definition, planning the research design, sampling,data gathering, data
processing and analysis, conclusions and report preparation.

Student’s answers will vary. The video focus is on new product development. We will use this
relatively straightforward problem – “what do consumers want and who will buy the product?” -
to answer the question.

Problem discovery and definition: Most research programs are initiated because managers are
uncertain about some aspect of the firm’s marketing program. Identifying the problem, that is,
defining the problem gives a sense of direction to the investigation. Marketing research must
have clear objectives and definite designs. Problem definition is possibly the most important, yet
most neglected, area of marketing research. At this stage in the project, exploratory research is
often used because it helps refine the problem into a researchable one.

Research with moms indicated their toy preferences. The moms liked the idea of imaginative play
with action figures, but they clearly did not want their young children playing with toys that had
violent overtones. As a result of these research findings and creative thinking, Fisher-Price came
up with the idea of action figures within an age appropriate context. After much marketing
research, the company learned that young boys had trouble with the figures toppling over. The
product concept was refined so that the new action figures would have wide feet for stability.

During the marketing research process, Fisher-Price’s researchers conduct focus group interviews
to test new toy concepts. They interview both kids and moms in search of ideas for toys that have
play value -- the tangible features and intangible allure that entice a child to interact with and
have fun with a toy. They tried versions of the action figure line in Fisher-Price’s play laboratory,
a large nursery overflowing with toys. However, it is different from ordinary nurseries because
there is a wall of one-way mirrors and microphones dangle from the ceiling so researchers can
observe how children use the toys.
Planning the research design: A research design is a master plan specifying the methods and
procedures for collecting and analyzing the needed information. The research design should
consider the research objectives and should determine the sources of information, the design
technique (e.g. survey or experiment), the sampling methodology, the time schedule for the
research, and the budget for the research.

There are four basic research designs for causal and descriptive research, and certain factors such
as cost, urgency, availability of data, etc., should determine which design is used.
swadheenjain@yahoo.co.in 9829104202

• surveys: Surveys are the most common method of generating primary data. It is a
technique in which information is gathered from a sample of people by use of a
questionnaire. Questionnaires can be administered by mail, phone, or in person. Each
administration method has its advantages and disadvantages, and all are appropriate in
different situations.

• experiments: Experiments hold the greatest potential for establishing cause-and-effect

relationships because they allow investigation of changes in one variable while
manipulating one or two other variables under controlled conditions. Causal factors can
be isolated because outside factors do not come into play. One example of
experimentation is test marketing. An experiment controls conditions so that one or more
variables can be manipulated in order to test a hypothesis.

• secondary data studies: Secondary data studies typically involve using past data to
project future figures for a particular event or phenomenon. This technique uses greater
quantitative sophistication than is involved in using secondary data at the exploratory
level of research, but it still has the same advantages and disadvantages attached to it.

• observation techniques: Observation techniques are used when the objective of

research is merely to record what can be observed. The advantage of it is that it is non-
reactive and the data can be unobtrusively and passively collected without a respondent’s
direct participation. For the inexperienced researcher it can be difficult to administer, and
its biggest disadvantage is that it cannot observe intangible states of mind.

There is no one “best” research design; there are many alternative methods for solving a problem.
Knowing how to select the most appropriate research design develops with experience. The
video game companies often use registration card surveys.

Fisher-Price conducted extensive survey research (called viability testing in the video) and in-
home testing around the country. Boys were shown large drawings (renderings) of the proposed
action figures and they were asked to compare them to competitive products. After the boys
played with the toys at home, survey researchers interviewed the parents about whether they liked
the toys, about the price, and whether they would buy the toys.

Sampling: Sampling includes any procedure that uses a small number of items, or that uses part
of the population to make a conclusion regarding the whole population — a sample is a subset
from a larger population. The results of a statistically sound sample should have the same
characteristics as the population. Of course, errors can be made, especially if the target
population is not representative of potential customers, or if the sample size is too small, or not a
probability sample, or if the unit is not randomly selected.
In our example, the video does not explain how the sample is self-selected.

Data gathering: Once the research design, including the sampling plan, has been formalized, the
process of collecting information from respondents may begin. Depending on the design chosen,
there are many methods of data collection.

Data processing and analysis: Data must be converted, through editing and coding, into a format
that will answer the marketing manager’s questions. Editing involves checking the data forms for
omissions, legibility, and consistency in classification. Before the edited data can be tabulated,
meaningful categories must be established for groups of responses — this process is called coding
and it facilitates computer or hand tabulation. Analysis is the application of logic to the
understanding of data that has been gathered; it varies from the simple determination of patterns
to complex statistical analysis.

Conclusions and report preparation: This stage involves preparing the information and making
conclusions that will be useful for decision-making purposes. The research report should
effectively communicate the research findings. If a research report is too long or complex for
managers to use, then it is totally useless. One of the conclusions from one of the Fisher-Price
projects was that the initial name, Everyday Heroes, should change to Rescue Heroes.

2. What type of outcome might Fisher-Price expect from its exploratory research efforts?

As discussed above, exploratory research with moms showed they liked the idea of imaginative
play with action figures, but they clearly did not want their young children playing with toys that
had violent overtones. After prototypes were constructed, the company learned that young boys
had trouble with the figures toppling over.

3. Describe the program strategy for Rescue Heroes. How did the early research projects
influence subsequent research objectives?

The company used focus group interviews, prototype testing, surveys, and advertising research.
More focus groups could be used to test "finalized" version of ads. Although not mentioned in
this case, test market is often an important project in a program strategy. Sales research after
commercialization in the entire the United States is also an option.

CASE 3.2 HUDSON COFFEE COMPANY

Objective: The objective of this case is to present a relatively open-ended situation so the student
may have some experience discussing a research problem and alternative source of information.

Summary: A coffee manufacturer plans to expand into the canned beverage business. Soft drink
consumption has been rising. Coffee consumption has been declining. The coffee company sees
a product line of iced coffee in five flavors as a natural reaction to a change in the marketing
environment. Colombian Coffee Cooker was the proposed brand name for a new product line of
canned iced coffee drinks. The line was to include a standard coffee flavor, a Swiss chocolate
flavor, a mocha flavor, an espresso flavor, and an amaretto flavor. The marketing of the canned
iced coffee line was planned to be similar to the marketing strategies used by most soft drink
marketers.

Questions

1. How would you define the research problem?

In this situation the company has not done any marketing research and they are in a position
where they need to know the who, what, where, how, and why of consumer behavior. At the
outset researchers need to know whether there is a need for the product. They need to investigate
trends in the environment. They need to know about the soft drink market and the coffee market.
Specifically it is important to know the consumer’s current behavior and the reasons for that
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behavior. Have consumers been changing to soft drinks because they are shifting away from
“bitter, adult” drinks like coffee. The fact that someone drinks X number of soft drinks consumed
in the morning, at fast-food restaurants, at the beach and at other places away from the home.
Are coffee drinkers also soft drink consumers? Should canned coffee be positioned against soft
drinks or coffee? Will it be consumed only in the morning or all day long? At the outset, it
appears that Colombian Coffee Coolers would be primarily consumed in the home. How
important is home consumption of soft drinks and coffee? Further, they must investigate who
currently makes iced coffee on their own? What are consumers’ attitudes about the trouble of
making iced coffee at home? Is the convenience of taking a can out of the refrigerator more
important than homemade taste? They will wish to know consumers’ reaction to the concept of
iced coffee sold in a can. They need to know if the consumers will like its taste? How sweet
should these drinks be? Further they will also desire to know how consumers react to the taste of
the product comparable to that of home-made iced coffee and how they rate in comparison to
canned colas, orange drinks, lemon-limes and the like. Will heavy users of soft drinks be more
likely prospects than occasional soft drink users? Is the heavy coffee drinker the most likely
prospect? Just who are the heavy users? There are many other questions about preference and
usage that need to be identified. Essentially the research program must begin with some
exploration and description of the marketplace.

Investigating price is another consideration once this initial information is obtained. Different
people buy the same product for different reasons. Hence, there may be a price market segment,
the large family segment, and a convenience of market segment, other considerations, such as
brand loyalties, might be identified after exploratory research has been conducted. There are a
host of problems that might be researched if primary studies indicate a need for the product.

Many students will recommend that some of this information be obtained from soft drink
companies. This is a naïve assumption. Competitors or potential competitors rarely share their
marketing research information with others.

2. What type of information might be acquired using secondary data sources? Primary data?

Past consumption patterns and other trends are likely to be available in secondary data sources.
For example, gourmet coffee sales have more than doubled since 1962 while overall coffee
consumption has declined. Americans three decades ago drank an average of 3.12 cups per day.
Today’s average: 1.87 6-ounce cups per day. However, 10 percent of Americans drink ten or more
cups a day. (The 80/20 rule applies.)

Sales of specialty or gourmet coffee, such as amaretto-flavored coffee or coffee made from arabica
beans, are growing rapidly. Sales of ground specialty and gourmet coffee reached an estimated $1.6
billion in 1998 to command about 30 percent of the total coffee market. The Specialty Coffee
Association of America forecasts there will be more than 10,000 specialty coffee cafés in the United
States at the turn of the century. Starbucks, Barnie’s Coffee and Teas, and other retailers that have
taken advantage of this trend toward fresher, better-quality coffee find statistics from the Specialty
Coffee Association of America, the federal government, and industry analysts to be very useful.

Government statistics concerning beverage consumption may also be of interest to the

researchers. Exhibit 1 shows the government’s coffee and soft drink consumption figures. Coffee
reached its per capita consumption peak in the 1950s. Since then it has been progressively lower.
The soft drink industry publishes a magazine and the trade association has many statistics.
Secondary sources, such as scanner data discussed in the chapter, may show trends in the soft
drink category. Likewise, firms specializing in panel data may indicate usage of certain product
categories. Most of the information concerning consumer behavior and reactions to the
innovation will have to be acquired via primary data sources, most likely through exploratory
research and surveys.

EXHIBIT 1

U. S. Per Capita
Consumption of Coffee and Soft Drinks

Coffee Soft Drinks

1980 26.7 35.1
1985 27.4 35.7
1990 26.9 46.3
1991 26.8 47.9
1992 25.9 48.5
1993 23.4 50.1
1994 21.1 51.3
1995 20.5 51.6
1996 22.5 52.0
1997 23.5 53.0

(Source: Statistical Abstract of the United States, 2000, downloaded August 16, 2001)

3. Outline a program strategy that you would recommend.

The following program strategy assumes that the company will do a number of projects but does
not have financial resources to investigate everything.

Exploratory research utilizing secondary data and focus group interviews.

The research should start out with some form of exploratory research. The focus group interview
seems quite appropriate for this type of situation. Consumers may generally start talking about
their soft drink buying habits and then focus in on the concept of iced coffee. Later in the
research process, if everything appears to warrant further investigation, more quantified concept
test may be taken.

Survey research among beverage consumers to determine habits and usage patterns.

Survey to explore taste reactions to the Colombian Coffee Cooler.

Product usage in-home consumption study.

Of course if the initial research projects do not appear favorable, the later research project should
not be conducted.