The Consumer Research Process

The Consumer Research Process
CHAPTER TWO The Consumer Research Process

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall
Learning Objectives To Understand the Importance of Consumer Research for Firms and Their Brands, as Well as Consumers. To Understand the Steps in the Consumer Research Process. To Understand the Importance of Establishing Specific Research Objectives as the First Step in the Design of a Consumer Research Project. Here is an outline of the topics for Chapter Two. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Two Slide

Learning Objectives (continued)
To Understand the Purposes and Types of Secondary Consumer Research That Is Available for Making Decisions or Planning Future Consumer Research. To Understand Specific Features and Applications of Different Research Methods to Be Carried Out in Consumer Research Studies. To Understand Where Data Analysis and Reporting of Findings Fit in the Research Process. To Understand How Each Element of the Consumer Research Process Adds to the Overall Outcome of the Research Study. Here is an outline of the topics for Chapter Two. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Two Slide

Outline Overview of consumer research process
Design Secondary research study

The Importance of the Consumer Research Process
Marketers must understand customers to design effective: marketing strategies products promotional messages Consumer research has developed from the more general field of market research. It is a field of study that has been influenced by researchers and practitioners in several other fields, including psychology, sociology, and anthropology. Consumer research is important for marketers as the competitive landscape in almost every industry becomes even more challenging and with growth in global and cross-cultural markets. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Two Slide

How Consumer Research Helps Real Business
Iams, a Procter & Gamble brand that makes pet food, noticed that some consumers were supplementing dry pet food with some form of treat, particularly to get older pets with dental problems to eat it. Iams then conducted quantitative research to determine if this practice was common among consumers. The research indicated that 40% of pet owners use such methods. In response, Iams launched Savory Sauce, a more convenient alternative to table scraps. The product has been so successful that Iams has since extended this line to include eight varieties, including sauces for use with puppies.

The Consumer Research Process Figure 2.2
Here we see an overview of the consumer research process that a typical marketer might follow when conducting research. As you can see, the marketer will first develop objectives to guide their research. Next comes the collection of secondary data which we will learn is data that is available because it had been collected previous to the marketer’s particular research. In the next phase, the marketer branches to both qualitative and quantitative research. In each of these areas, the marketer collects and analyzes data and then presents it in either a written report, a presentation, or both. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Two Slide

The Consumer Research Process
Secondary research Primary research Qualitative Quantitative Information can be classified as either primary or secondary. Secondary information is information that has been collected for another purpose. It is already available to the researcher often for a fee. Primary research can be either qualitative or quantitative. Qualitative research includes focus groups and in-depth interviews. The more numerically-oriented quantitative research includes observational research, experimentation, and survey research. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Two Slide

Developing Research Objectives
Defining purposes and objectives helps ensure an appropriate research design. A written statement of objectives helps to define the type and level of information needed. It is extremely important that research objectives are determined at the beginning of the process. Without this agreed-upon roadmap for the research, money can easily be wasted and research objectives not fulfilled. At this point, it is important to define the purpose of a particular study. A small-scale exploratory study might be executed upfront if more information is needed by the researcher. This might include a few focus group sessions or a limited number of one-on-one interviews. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Two Slide

Example of research objectives
Management Problem: Why are store revenues so low? Possible research objective: Investigate current customer satisfaction Assess target market perceptions of store and competitors Determine target market awareness

Discussion Questions Assume you are planning to open a new pizza restaurant near your campus. What might be three objectives of a research plan for your new business? How could you gather these data? What might be three objectives of a research plan for your new business? To determine the target market, to set pricing strategies, and to design effective marketing messages How could you gather these data? Primary and secondary research. Primary research might include focus groups, surveys, and observation studies of local students and their traffic patterns. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Two Slide

Secondary Data Data that has been collected for reasons other than the specific research project at hand Includes internal and external data Before jumping into primary data collection, a researcher will collect all the relevant secondary data that is available. Some of this data is within the organization and some of it can be collected or purchased from outside organizations. Collecting secondary information is important in guiding primary research decisions. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Two Slide

Types of Secondary Data
Internal Data Data generated in-house May include analysis of customer files Useful for calculating customer lifetime value External Data Data collected by an outside organization Includes federal government, periodicals, newspapers, books, search engines Commercial data is also available from market research firms Secondary data is readily available. As an employee of a company, you may have access to the company’s internal records and databases, which are rich with customer, intermediary, and company data. In addition, as a student, you can access many databases through your school library. Most of this external data comes from online databases which combine articles from books, newspapers, periodicals, as well as trade and academic journals. Some schools supply access to commercial data including Nielsen, Arbitron, SRDS, and MRI/Mediamark. These are four of the many research companies that gather information and then sell the data to companies and institutions. Another excellent source of information is the government. The web link on this slide will bring you to the U.S. Census Bureau. This site is full of statistics and data on the U.S. population and commerce. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Two Slide

Demographic profile Area x U.S Population 151,552 18 years and over
68% 75.4% Median family income 51,793 62,363 Language other than English spoken at home 66.5% 19.6% Average household size 3.85 2.60

Video Discussion: AC Nielson
What technique does AC Nielson use to help profile consumers?

Quality of Secondary Data
Who sponsored the research? Advocacy research, or research conducted to support a position rather than to find the truth about an issue, is blatantly unethical What is the ability of the researchers? Experience is an important consideration for assessing quality Process of data collection Bias-free access to respondents is an important consideration for assessing quality

Pros and Cons of Secondary Data
Advantages of Secondary Data Time savings Cost savings Disadvantages of Secondary Data Problems of fit Problems of accuracy

Outline Primary research Concept of Measurements Qualitative study
Quantitative study: Data collection methods Test market Concept of Measurements Reliability and Validity Measurements Common in Consumer Behavior

Designing Primary Research
Qualitative Research Depth Interviews Focus Groups Projective Techniques Metaphor Analysis Qualitative research is a great way to begin your primary research. It is extremely helpful in identifying attitudes, thoughts, and beliefs about your product. Because these methods generally use small samples, qualitative research techniques are often followed by quantitative processes. The major types of qualitative research are shown in this slide and explained in more detail on the following slides. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Two Slide

Qualitative Collection Method Depth Interview
Also called one-on-one interview Usually 20 minutes to 1 hour Nonstructured Interviewer will often probe to get more feedback (see following slide for probing) Session is usually recorded Depth interviews provide important information for targeting, positioning, and product redesign. They can be as short as 20 minutes or last up to an hour. The interview is often recorded, either with video or audio recordings so that the interviewer can play it back or transcribe the session to have all the details. To get the most from the subject, an interviewer will usually ask probing questions in order to gain more insights from the subject. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Two Slide

Qualitative Collection Method Focus Group
8-10 participants Respondents are recruited through a screener questionnaire Lasts about 2 hours Always taped or videotaped to assist analysis Often held in front of two-way mirrors Online focus groups are growing Whereas one-on-one interviews are conducted directly with the interviewer and a respondent, a focus group uses a small group of subjects for the research. Some researchers favor this approach because the respondents interact with each other and build off of each other’s comments. In addition, many people’s opinions are included in a shorter amount of time than individual interviews. A disadvantage of focus groups is that participants might not always be honest and are less willing to expose private thoughts and personal views due to the presence of other members. Researchers must balance the advantages and disadvantages of this method when deciding if it is right for their research project. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Two Slide

Discussion Guides for Research
Step-by-step outline for depth interviews and focus groups Interviewers will often “improvise” and go beyond the discussion guide Discussion guides are an important part of focus groups and depth interviews. They provide an agenda for the session and help ensure that the researcher’s objectives that were established for the research plan are met. Some interviewers follow the guide exactly, but most will “go with the flow” and let the participants partly drive the direction of the research. This is not to say that the points on the discussion guide are not covered, just that the session has a more natural flow based on the feedback of the participants. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Two Slide

Focus Group Discussion Guide - Figure 2.4
This is an example of a discussion guide for the research done for a food manufacturer and marketer. The participants would be screened and then invited to participate in the focus group. The moderator or leader of the focus group would use this guide to bring them through the session. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Two Slide

Qualitative Collection Method Projective Techniques
Research procedures designed to identify consumers’ subconscious feelings and underlying motivations Consist of a variety of disguised “tests” Projective techniques have their roots in psychoanalytic theory and practice. As a group, they tap into the consumer’s unconscious associations and motivations. There are a variety of these techniques and they are generally administered one-on-one with the respondent in a closed setting. In many situations, the research purpose is disguised and the respondent simply knows they are answering questions for a researcher. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Two Slide

Common Projective Exercises Table 2.1 (excerpt)
Description Word Associations The researcher has a list of words, some of them to be studied and some just as “filler.” The researcher asks the respondent(s) to react, one-at-a time, to each word by stating or (in a focus group setting) writing on a pad the first word that comes to mind, and to explain the link. Sentence Completion The researcher has a series of incomplete sentences that the respondent(s) needs to complete with a word or phrase. Photo/Visual for Storytelling The researcher creates/selects a series of photos of consumers, different brands or products, range of print ads, etc., to serve as stimuli. The respondents are asked to discuss or tell a story based on their response to a photo or some other visual stimulus. Role Playing Is quite similar to storytelling; however, instead of telling a story, the participant(s) will be given a situation and asked to “act out” the role(s), often with regard to a product or brand, or particular selling situation. Here are four of the most common projective exercises. You can see by the description of the techniques that it is often important that the researcher does not tell the subject the nature of the study. Many of these theories are based on the fact that people cannot easily locate and verbalize their true feelings toward a product category or brand. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Two Slide

Example of Word Association
What comes to your mind when you think of “Coca-Cola” Responses frequency Response time

Example of Sentence Completion
Complete the following sentences: People who are concerned about ecology ______. A person who does not use lour lakes for creation is ______

Compare the Differences
People who are concerned about ecology care about the future. A person who does not use our lakes for recreation is being thoughtful about the ecosystem. People who are concerned about ecology are just tree-hugger who want to run up my taxes. A person who does not use our lakes for recreation is a person who doesn’t enjoy water sports.

Qualitative Collection Method Metaphor Analysis
Based on belief that metaphors are the most basic method of thought and communication Zaltman Metaphor Elicitation Technique (ZMET) combines collage research and metaphor analysis to bring to the surface the mental models and the major themes or constructs that drive consumer thinking and behavior. It is believed that much of communication is nonverbal and that people do not think as much in words as they do in images. Given this, they also use metaphors at the root of their thoughts and communication. The Zaltman Metaphor Elicitation Technique is based on this use of metaphors. In these studies, respondents are asked to find pictures that describe their thoughts, feelings, and beliefs about products, companies, and brands. The results are then combined to see if there are common themes or constructs that consumers mention in their results. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Two Slide

Qualitative Collection Method “Looking-In”
Look at information from threads and postings on social media, including blogs and discussion forums Methodology to capture consumers’ experiences, opinions, forecasts, needs, and interests There is an emerging field of consumer research that works to interpret online conversations. The web link on this slide brings you to Converseon, a company that is working in the field. With the growth in social marketing, there are increasing conversations and comments online regarding products and brands. Marketers can use this information to develop new products, introduce new features, and to gain a better understanding of their customers’ needs and wants. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Two Slide

Part Two Design primary research

Designing Primary Research
Quantitative Research Observation Experimentation Survey questionnaires Quantitative research findings are descriptive and empirical. Unlike qualitative research, they can often be generalized to larger populations. Quantitative research helps marketers “predict” future needs, trends, and levels of satisfaction and are heavily used in research. Observation and experimentation can often be done without the subject’s input but a survey always needs direct cooperation from the subject. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Two Slide

Data Collection Methods Observational Research
Helps marketers gain an in-depth understanding of the relationship between people and products by watching them buying and using products Helps researchers gain a better understanding of what the product symbolizes In observational research, the researcher does not interact with the subject but watches their actions and behavior. Observation research can be done in stores, in malls, and in people’s homes. Observation research is very helpful in uncovering problems with a product as well as to gain ideas for product improvements and new products. This type of research is often done to understand how people interact with the product, each other, the design of the stores, and complementary products. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Two Slide

Data Collection Methods Mechanical Observational Research
Uses mechanical or electronic device to record consumer behavior or response Consumers’ increased use of highly convenient technologies will create more records for marketers Audits are a type of mechanical observation which monitor sales Mechanical observation research eliminates the need for a trained observer gathering data on behaviors. These mechanical tools can count and record customer behavior. Examples of mechanical observation methods are electronic traffic counters, videotape technology, and meters. In addition, a customer’s usage of frequent shopper cards at stores will help provide data to the retailers and brand managers. Researchers working in this area must always respect the consumer’s right to privacy. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Two Slide

Data Collection Methods Table 2.2
Mail Telephone Personal Interview Online Cost Low Moderate High Speed Slow Immediate Fast Response rate Self-selected Geographic flexibility Excellent Good Difficult Interviewer bias N/A Problematic Interviewer Supervision Easy These are the four major survey methods. This table summarizes their advantages and disadvantages. As you can see, they differ in their speed, costs, response rate – three very important factors to consider when designing market research. Online surveys are becoming increasingly popular because they are easy to use, inexpensive, and can reach very spread-out respondents. This web link is to surveymonkey.com which is one of the most popular online survey websites. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Two Slide

Increase Mail Response Rate
Include stamped and self-addressed envelop Multiple waves of reminders Use consumer panels

Increase Mail Response Rate
If you were a marketing manager planning a mail survey to find out consumers’ attitude towards your products. Traditionally, mail survey is associated with low response rate of 1%. What suggestion would you give to increase respondent rate?

Example of Test Market New Coke Lesson
A controlled experiment done in a limited but carefully selected sector of the marketplace. McDonald’s used test markets to determine that a market existed for McDonald’s own higher-end coffee drink. Three issues in test market: time, cost and conrol

Best and Worst Test Markets
Rochester, N.Y Wichita, Kansas Eugene-Springfield, Oreg Honolulu, Hawaii San Francisco, Cali New York, N.Y © 2010 South-Western/Cengage Churchill Brown Suter/Basic Marketing Research

Misfires in Market Testing
Frito-Lay test-marketed it Max Potato, corn and tortilla chips containing the Olestra fat substitutes in Grand Junction, Colorado; A TV crew sampled the chips and succumbed to diarrhea, and then broadcast a report about it, creating lots of bad publicity for the chips Campbell Soup spent 18 months developing a blended fruit juice called “Juiceworks”. By the time the product reached the market, three competing brands were already on store shelves. Campbell dropped its product. © 2010 South-Western/Cengage Churchill Brown Suter/Basic Marketing Research

Validity and Reliability
If a study has validity, it collects the appropriate data for the study. A study has reliability if the same questions, asked of a similar sample, produce the same findings. It is important for research to be both valid and reliable. It is only with these two characteristics that you can ensure that the data you have collected is useful for the purpose and can be expanded from the sample to the population. Validity asks the question of whether the data is really applying to the objectives you have set and reliability tells you, the researcher, if the results would be repeated if conducted on a similar group at the same time. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Two Slide

Examples of Validly GMAT Test
Correlation between GMAT score and students’ performance in business school Test spelling ability with: “words” catcher, shortstop, foul, strike, walk, pitcher, outfielder”

Measurements in Consumer Behavior

Attitude Scales Likert scales Asked to agree or disagree with a statement Easy to prepare & interpret Simple for consumers Semantic differential scales Includes bipolar adjectives Relatively easy to construct and administer Behavior intention scales Measures likelihood consumers will act a certain way Easy to construct and administer Rank-order scales Items ranked in order of preference in terms of some criteria Attitude scales are used to help researchers understand evaluations of certain product and brand attributes. The four scales in this slide are the most commonly used attitude scales. In general, these scales are easy to administer and provide excellent information for the researcher. You have probably taken many surveys that were full of attitude scales. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Two Slide

Likert Scale Respondents indicate their degree of agreement or disagreement with each of a number of statements. Five to nine categories work well

Example of Likert Scale
Strongly Disagree Agree Neither Agree nor The celebrity endorser is trustworthy. The celebrity endorser is unattractive. The celebrity endorser is an expert on the product. The celebrity endorser is not knowledgeable about the product. (c) 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Churchill Brown Suter/Basic Marketing Research

Semantic-differential Scale
Anchored by a set of bipolar adjectives or phrases Particularly useful in corporate, brand and product-image studies.

Example of an Itemized Rating Scale: Semantic-Differential Scale
CELEBRITY ENDORSER Knowledgeable Not : Not Expert Expert Attractive Unattractive Trustworthy (c) 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Churchill Brown Suter/Basic Marketing Research

Behavioral Intention Scale
Measures the likelihood that consumers will act in a certain way in the future Example: How likely are you going to continue using Bank X’s online banking for the next six months? (7 as most likely, and 1 as least likely)

Rank Order Scale Subjects are asked to rank items such as products in order of preference. We rank the following beverage brand in terms of your preference Coca Cola Pepsi Cola Sprite Dr. pepper

Customer Satisfaction Measurement
Customer Satisfaction Surveys Analysis of Expectations versus Experience Mystery Shoppers Customer Complaint Analysis It is important for every company to measure the level of customer satisfaction. Analysis can be quantitative as in the case of customer satisfaction surveys. With these surveys, it is important to measure the difference between what the customer expected from the company and their perception of what they received. Qualitative analysis might include mystery shoppers who pose as customers in order to interact with service personnel. The mystery shopper files a report on how effectively the employees work with customers. Companies should have a system where they can analyze their customer complaint data so that they can make changes for improvement. A good complaint analysis system should encourage customers to complain and provide suggestions for improvements in service and products. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Two Slide

Sampling and Data Collection
Samples are a subset of the population used to estimate characteristics of the entire population. A sampling plan addresses: Whom to survey How many to survey How to select them Researcher must choose probability or nonprobabililty sample. It is almost always impossible to get information from every member of the population. This is why marketers need to use a sample of the population. To determine the sample a researcher will use, it is important to put together a sampling plan which includes the details on whom to survey, how many to survey, and how the survey respondents will be chosen. Once this is decided, the marketer can choose a probability or nonprobability sample. The basic difference between these two types of samples is that in a probability sample, every member of the population has a chance of being selected as opposed to a probability sample, where the researcher uses their judgment to select the respondents for the sample. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 54 Chapter Two Slide

Data Analysis and Reporting Findings
Open-ended questions are coded and quantified. All responses are tabulated and analyzed. Final report includes executive summary, body, tables, and graphs. The responses from qualitative research are analyzed in addition to the results of the quantitative research. For survey data, the open-ended responses are coded so that they can be entered into a spreadsheet or analysis software. Once all the data is entered, it is tabulated and then analyzed. The final step of the research process is to put together a report. In addition to the executive summary, body, tables, and graphs, the research report might include strategic recommendations based on the research findings. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Two Slide

The Consumer Research Process Figure 2.2
Here we see an overview of the consumer research process that a typical marketer might follow when conducting research. As you can see, the marketer will first develop objectives to guide their research. Next comes the collection of secondary data which we will learn is data that is available because it had been collected previous to the marketer’s particular research. In the next phase, the marketer branches to both qualitative and quantitative research. In each of these areas, the marketer collects and analyzes data and then presents it in either a written report, a presentation, or both. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Two Slide

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Seven Slide

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