MKT 450 PRIMARY CONSUMER RESEARCH METHODS Lars Perner, Instructor 1 PRIMARY CONSUMER MARKET RESEARCH METHODS Primary research methods techniques –Advantages and disadvantages –Selection of the most appropriate method for specific information needs –Emerging techniques (e.g., sentiment analysis)

MKT 450 PRIMARY CONSUMER RESEARCH METHODS Lars Perner, Instructor 2 Learning Objectives Identify the costs and benefits of research Identify the uses of both primary and secondary market research Identify the respective advantages and disadvantages of different primary research methods for specific information needs Evaluate and identify problems that can lead to misleading or incorrect conclusions. Plan the most effective sequence of research activities.

MKT 450 PRIMARY CONSUMER RESEARCH METHODS Lars Perner, Instructor 3 Data Mining Processing of vast amounts of data to find relationships between variables—e.g., –Items frequently purchased together  “strategic adjacencies” (items placed together in retail setting) –Seasonal patterns in sales –Customer segments

MKT 450 PRIMARY CONSUMER RESEARCH METHODS Lars Perner, Instructor 4 Doing Research from Secondary Data Items bought together (e.g., Amazon.com recommendations) Scanner data Direct mail experimentation (“split catalog” mailings) with varied –Prices –Design (e.g., colors) –Messages (ad copy)

MKT 450 PRIMARY CONSUMER RESEARCH METHODS Lars Perner, Instructor 5 Some Primary Research Methods Surveys Experimentation Observation Participant observation Focus groups In-depth interviews Projective techniques Physiological Measures Online research Scanner data Conjoint analysis Sentiment analysis Hybrid Methods

MKT 450 PRIMARY CONSUMER RESEARCH METHODS Lars Perner, Instructor 6 Primary Research Methods Exploratory Methods –Observation (can be more definitive with larger sample sizes and focus on specific behavior) –In-depth interviews –Focus groups –Projective techniques Precision Methods –Experiments –Surveys –Panel –Scanner data

MKT 450 PRIMARY CONSUMER RESEARCH METHODS Lars Perner, Instructor 7 Choosing a Primary Research Method Does the question involve OPINIONS or BEHAVIOR? Can the respondent answer accurately? (What someone consciously believes may differ from “deeper” opinions; beliefs about hypothetical products may not be well developed.) OPINIONS EXPLORATORY or PRECISION research? YES FOCUS GROUPS INDIVIDUAL INTERVIEWS SURVEYS EXPLORATORYPRECISION BEHAVIOR NO PROJECTIVE METHODS SCANNER DATA (e.g., brand choice, impact of advertising, previous purchases, competing brands, demographics) EXPERIMENTATION (determine causality—e.g., impact of product design, advertising message) PHYSIOLOGICAL (e.g., determine reactions, attention, arousal) OBSERVATION (e.g., how long does the shopper spend? What does he or she look at? Is anyone else involved?) Can the relevant behavior be observed in the customer’s natural environment? NO YES

MKT 450 PRIMARY CONSUMER RESEARCH METHODS Lars Perner, Instructor 8 Some Areas Suited for Continuum Ratings Interest Purchase likelihood Satisfaction/ Dissatisfaction Brand loyalty Price sensitivity Knowledge Experience Involvement Decision control Frequency or level of use Awareness Information search Personality traits Variety seeking

MKT 450 PRIMARY CONSUMER RESEARCH METHODS Lars Perner, Instructor 9 Experimentation Subjects in different groups treated differently –E.g., for some, “target” product is given better shelf space –E.g., some get coupon Can help isolate causes Subject is not biased by questions—does not know how others are treated EXPERIMENT COSTS: HIGH

MKT 450 PRIMARY CONSUMER RESEARCH METHODS Lars Perner, Instructor 10 My Simulated Store… A shopper in the everyday low price condition…

MKT 450 PRIMARY CONSUMER RESEARCH METHODS Lars Perner, Instructor 11 Ash’s Instant Coffee Study GROCERY SHOPPING LIST Ground beef Potatoes Apples Flour Sugar Laundry detergent Instant coffee 6 cups of yogurt Paper towels Bananas GROCERY SHOPPING LIST Ground beef Potatoes Apples Flour Sugar Laundry detergent Ground coffee 6 cups of yogurt Paper towels Bananas Respondents were asked to describe their impressions of a housewife based only on her shopping list. These shopping lists differ only on one item.

MKT 450 PRIMARY CONSUMER RESEARCH METHODS Lars Perner, Instructor 12 The Color Study Subjects were shown a photo of one of eight combinations (2x2x2x2) –Hue (red or blue) –Chroma (intensity) (high, low) –Value (lightness) (high, low) –Advertising copy (relaxing, exciting) Everything else was kept constant

MKT 450 PRIMARY CONSUMER RESEARCH METHODS Lars Perner, Instructor 13 Car Study, Part 2 Respondents reported –How they felt (manipulation check) Excitement –Evaluation of the Suzuki Esteem

MKT 450 PRIMARY CONSUMER RESEARCH METHODS Lars Perner, Instructor 14 Definition Confound: The tendency of some phenomenon to be caused at least in part by some variable other than the one of interest. E.g., does having more toys cause children to be more intelligent?

MKT 450 PRIMARY CONSUMER RESEARCH METHODS Lars Perner, Instructor 15 Confounds What is cause, what is effect, and what is coincidence? Correlation is not necessarily cause “Lurking” factors may be real cause of –Does sitting in front of the room cause higher grades? –Do fish-heavy diets cause stomach cancer? –Does fraternity/sorority membership cause higher grades?

MKT 450 PRIMARY CONSUMER RESEARCH METHODS Lars Perner, Instructor 16 Observation Looking at consumes in the field— e.g., –Searching for product category area –Number of products inspected and time spent on each –Apparent scrutiny of labels or other information –Involvement of others –Behavior under limiting circumstances (e.g., time constraints) OBSERVATION COSTS: LOW TO HIGH (DEPENDING ON CODING AND ANALYSIS NEEDED)

MKT 450 PRIMARY CONSUMER RESEARCH METHODS Lars Perner, Instructor 17 Taste Tests Not experiments unless –Two or more groups of people are treated differently (e.g., get different food version) or –The same person is being treated differently at separate times (e.g., half the participants receive new formulation, then current; half the participants receive in the opposite order) “Triangle” Measure –Each respondent is given three items: One current, one new, and one duplicate of either old or new –Asked to identify the one that is different and explain why

MKT 450 PRIMARY CONSUMER RESEARCH METHODS Lars Perner, Instructor 18 Focus Groups Groups of 8-12 consumers assembled Start out talking generally about context of product Gradually “focus” in on actual product Usually NOT the best approach. Should NOT be chosen as default research method! MOST APPROPRIATE AS EARLY STAGE METHOD FOCUS GROUP COSTS: HIGH (ESPECIALLY FOR THE AMOUNT OF INFORMATION COLLECTED)

MKT 450 PRIMARY CONSUMER RESEARCH METHODS Lars Perner, Instructor 19 REMINDER Focus groups are most useful for identifying issues that should be studied in more detail with more precise methods Due to the small sample size and social influence on individual responses, it is difficult to generalize much from focus groups

MKT 450 PRIMARY CONSUMER RESEARCH METHODS Lars Perner, Instructor 20 In-depth interviews Structured vs. unstructured interviews Generalizing to other consumers Biases –Subtle, inadvertent feedback IN-DEPTH INTERVIEW COSTS: HIGH

MKT 450 PRIMARY CONSUMER RESEARCH METHODS Lars Perner, Instructor 21 Projective Techniques Getting at motivations that may not be consciously known— “Tell a story about this picture.” Measurement of attitudes consumers are unwilling to express –It is easier to admit something embarrassing about someone else Consumer discusses what other consumer might think, feel, or do PROJECTIVE METHODS COSTS: USUALLY HIGH IF PERSONAL INTERVIEWS OR EXTENSIVEINTERPRETATION IS NEEDED

MKT 450 PRIMARY CONSUMER RESEARCH METHODS Lars Perner, Instructor 22 Projective Examples “Please tell me a story of what is going on in this picture.”

MKT 450 PRIMARY CONSUMER RESEARCH METHODS Lars Perner, Instructor 23

MKT 450 PRIMARY CONSUMER RESEARCH METHODS Lars Perner, Instructor 24

MKT 450 PRIMARY CONSUMER RESEARCH METHODS Lars Perner, Instructor 25

MKT 450 PRIMARY CONSUMER RESEARCH METHODS Lars Perner, Instructor 26 More Projective Examples

MKT 450 PRIMARY CONSUMER RESEARCH METHODS Lars Perner, Instructor 27 Projective Techniques--Examples

MKT 450 PRIMARY CONSUMER RESEARCH METHODS Lars Perner, Instructor 28 Physiological Measures Consumer bodily responses are watched at various phases of advertisement or other marketing exposure Tracking of –Eye movements For areas of focus For attention, involvement –Heart rate –Skin conductivity –Brain waves State of mind Attention PHYSIOLOGICAL METHODS COSTS: HIGH

MKT 450 PRIMARY CONSUMER RESEARCH METHODS Lars Perner, Instructor 29 Sentiment Analysis Making sense of online postings in social media –Twitter –Photo sites (e.g., Instagram) –Blogs –Facebook Tracking of massive amounts of data by computer (for large sample size and powerful predictions) Interpretation of postings based on –Specific words used –Context –Indicators of sarcasm, irony Hashtags as brand identifier and emotion/evaluation Heavily proprietary (firms develop methods and keep these secret)

MKT 450 PRIMARY CONSUMER RESEARCH METHODS Lars Perner, Instructor 30 Sentiment Analysis: Some Functions and Tools Association of brands common to posts Identification of probable poster characteristics (e.g., male/female, age) by language use Vocabulary use of different consumer groups Identifying expressions by opinion leaders –As a source of influence on large numbers of other consumers –As “early warning” of opinions that may emerge among consumers in general

MKT 450 PRIMARY CONSUMER RESEARCH METHODS Lars Perner, Instructor 31 Some Complications in Sentiment Analysis Detection of irony, sarcasm, and humor in the specific context Emergence of slang: –New slang terms –Context-specific slang terms –Slang used by limited consumer subgroup Aggregation of responses from different group (e.g., demographic groups, positive/negative to the brand) making for meaningless average responses unless adjusted for group effects Change of meaning by context (e.g., a consumer goes to Starbucks to improve a negative mood; thus, the negative affect should not be attributed to the brand) Interpretation of “pseudo-hashtags” invented to be funny and not to be used across postings (e.g., #tastedkindofbad) Integration of photo or video information into interpretation, especially if text only makes sense in the context of the images

MKT 450 PRIMARY CONSUMER RESEARCH METHODS Lars Perner, Instructor 32 Sentiment Analysis: Cross- Cultural Issues Language structure and meaning (e.g., vague or precise word meaning, sequence of words, ambiguity of implicit objects/subjects) Homonyms (words with same spelling but different meaning) Customs of product category usage (e.g., “candy bar” vs. “chocolate bar”) Slang and word meaning in context Focus on self vs. others

MKT 450 PRIMARY CONSUMER RESEARCH METHODS Lars Perner, Instructor 33 Conjoint Analysis Consumers rate several “profiles” (combinations of features) Statistical analysis is used to “decompose” ratings into preferences

MKT 450 PRIMARY CONSUMER RESEARCH METHODS Lars Perner, Instructor 34 Example Car #1 Gas mileage: 30 mpg Price:$18,200 Safety record:Average PerformanceHigh ReliabilityPoor How would you rate car #1 overall on a scale from 1 (Very poor) to 7 (Excellent?) Car #2 Gas mileage: 20 mpg Price:$15,200 Safety record:Excellent PerformancePoor ReliabilityExcellent How would you rate car #2 overall on a scale from 1 (Very poor) to 7 (Excellent?) Each subject will evaluate several combinations. A statistical technique determines the importance of each feature.

MKT 450 PRIMARY CONSUMER RESEARCH METHODS Lars Perner, Instructor 35 Conjoint Analysis: Advantages Reveals ultimate preferences of consumers when competing influences exist Able to predict desirability of combinations not actually explored Can estimate contribution of each factor and assess its cost effectiveness –Will consumers pay $ to reduce the weight of a laptop computer by 2 lbs?

MKT 450 PRIMARY CONSUMER RESEARCH METHODS Lars Perner, Instructor 36 Conjoint Analysis: Disadvantages May be difficult for subjects to rate many combinations May need a large number of subjects for accurate measurement/sufficient precision Must identify relevant attributes and levels in advance Subject must know about product category (attributes must be meaningful)

MKT 450 PRIMARY CONSUMER RESEARCH METHODS Lars Perner, Instructor 37 Scanner Data Panel members in test communities agree to –Swipe a card prior to each purchase –Have purchases matched to Demographic profiles Media/coupon exposure Promotional status of competing brands Past purchases Problems: –Aggregation over household –Aggregation bias--averages of disparate segments obscure! –Only available for grocery and some drugstore products COSTS: HIGH START-UP COSTS; LOW VARIABLE COSTS POSSIBLE WITH DEVELOPED ALGORITHMS USUALLY LOW

MKT 450 PRIMARY CONSUMER RESEARCH METHODS Lars Perner, Instructor 38 Scanner Data Research TELEVISION EXPOSURE DEMOGRAPHIC INFORMATION ANALYSIS RECORDED PURCHASES HOUSEHOLD FILE Purchase on occasion: Yes, no Time since previous purchase Previous purchases Current price Previous price Current promotional status Previous promotional status Current display status Previous display status Display status of competing brands Promotional status of competing brands Coupon used: Yes, no Coupon available: Yes, no Coupon available for other brands? Yes, no Amount of coupon Family size Occupation Family size Income Home ownership No. of ads seen by shopper Ads seen for competing brands “Split cable”

MKT 450 PRIMARY CONSUMER RESEARCH METHODS Lars Perner, Instructor 39 Scope and Uses of Scanner Data Can predict behavior (with some margin of error)—large sample sizes can make this a very powerful method Overall impact based on past purchases and current choices and offerings (e.g., likelihood of switching brand based on a sale; likelihood of home “inventory” being depleted) Identification of choice characteristics (e.g., brand loyalty, price sensitivity) Does not directly identify consumer attitudes or reasons for choice—positive or negative impact can be associated with variables (e.g., brand name, on-sale status) but explicit consumer reasoning is not revealed

MKT 450 PRIMARY CONSUMER RESEARCH METHODS Lars Perner, Instructor 40 Choosing a Primary Research Method Does the question involve OPINIONS or BEHAVIOR? Can the respondent answer accurately? (What someone consciously believes may differ from “deeper” opinions; beliefs about hypothetical products may not be well developed.) OPINIONS EXPLORATORY or PRECISION research? YES FOCUS GROUPS INDIVIDUAL INTERVIEWS SURVEYS EXPLORATORYPRECISION BEHAVIOR NO PROJECTIVE METHODS SCANNER DATA (e.g., brand choice, impact of advertising, previous purchases, competing brands, demographics) EXPERIMENTATION (determine causality—e.g., impact of product design, advertising message) PHYSIOLOGICAL (e.g., determine reactions, attention, arousal) OBSERVATION (e.g., how long does the shopper spend? What does he or she look at? Is anyone else involved?) Can the relevant behavior be observed in the customer’s natural environment? NO YES