Marketing research

Introduction to marketing research

IBM: In the year 2008 revenues of $103.6

billion, conducts international tracking study twice a year in 14 different languages across 27 different countries in Europe, North and South America and Asia to capture trend data on main frame computing. The result of such a study allows IBM to see how successful it is in penetrating key industries and how IBM equipment is used in large and small businesses.

Recipo: An application service provider, it gives

its clients the ability to view customer feedback the second it is entered on their website, to capture true word and emotion of the consumer. “Live” marketing research.

Portico research: It specializes in observing individuals

recording them on videos and selling these tapes for tens of thousands of dollars to its major clients such as Honda, Delta, Lipton and P&G. For Lipton: to determine people’s attitudes towards tea.

P&G It created a website www.toejam.com to

target teens. Company improved products also based on feedbacks and chats.

Marketing research has become global (IBM) and real time (Recipo), is being conducted in a specialized manner (Portico) and has become much more integrated with marketing (P&G)

Definition:

According to the American Marketing Association: “Marketing research is the function that links the

consumer, customer and public to the marketer through information – information used to identify and define marketing opportunities and problems; generate, refine, and evaluate marketing actions; monitor marketing performance; and improve understanding of marketing as a process.”

“Marketing research is the systematic and objective identification, collection, analysis, dissemination and use of information for the purpose of improving decision making related the identification and solution of problems and opportunities in marketing.”

Classification of Marketing Research:

To identify: Problem identification research

▪ Market Potential research▪ Market Share research▪ Image research▪ Market characteristics Research▪ Sales analysis Research▪ Forecasting Research▪ Business trends Research

To solve: Problem solving Research

▪ Segmentation Research▪ Product Research▪ Pricing research▪ Promotion Research▪ Distribution research

A survey of companies conducting marketing research indicates that 97% of those who responded were conducting market potential, market share and market characteristics research

About 90% also reported that they were using other types of problem identification research. Table 1.1: Problem solving research

However problem identification and problem solving research go hand in hand as shown by Kellogg’s example in the case “Crunchy nut Red adds color to Kellogg’s sales”

Problem identification and problem solving research not only go hand in hand as shown by the Kellogg’s Example, but they also follow a common marketing research process.  

Marketing Research Process: It is a set of six steps that defines the

tasks to be accomplished in conducting a marketing research study. These include problem definition, development of an approach to the problem, research design formation, field work, data preparation and analysis, and report preparation.

STEP 1: Problem definition:

▪ Purpose of study▪ The relevant background information▪ The information needed. How it will be used in decision

making. STEP 2:

Development of an approach to the problem:▪ An objective or theoretical framework▪ Analytical methods▪ Research questions▪ Hypotheses▪ Identify the information needed.

STEP 3 : Research design Formulation:

▪ Research design is a blue print or a framework for conducting the Marketing research Project. It involves following steps:▪ Definition of the information needed▪ Secondary data analysis▪ Qualitative research▪ Methods of collecting quantitative data (survey, observation

and experimentation)▪ Measurement and scaling procedures▪ Questionnaire design▪ Sampling process and sample size▪ Plan of data analysis

STEP 4: Field work or Data Collection

Step 5: Data Preparation and analysis.

▪ Editing▪ Coding▪ Transcription and verification of data

STEP 6: Report preparation and presentation

▪ Addressing the specific research▪ Questions identified▪ Describing the approach▪ The research design▪ Data collection▪ Data analysis procedure adopted▪ Results and major findings

The nature of marketing research: Fig: 1.2: The role of marketing research Case study: Johnson and Johnson

introduced gentle aspirin for babies which failed in the market.

Marketing research suppliers and services: Fig: 1.3: Marketing research suppliers

and services:

The role of MR in MIS and DSS MIS: Marketing information system: A

formalized set of procedures for generating, analyzing, storing and distributing pertinent information to marketing decision makers on an ongoing business.

DSS: Decision support systems: Information systems that enable decision makers to interact directly with both databases and analysis models.

MIS Structured problems Use of reports Rigid structures Information displaying restricted Can improve decision making by clarifying the raw data

DSS Unstructured problems Use of models User friendly interactions Adaptability Can improve decision making by using “what if”

analysis.

International Marketing Research:

Some Facts: US accounts for only 39% of the MR

expenditure worldwide. 40% of MR is conducted in western

Europe. 9% of MR is conducted in Japan Most of European research is done in

Germany, UK, France, Italy and Spain.

Group Discussion: Can ethical Standards be enforced in marketing

research? If So, How? Role playing:

You are a project director working for a major research supplier. You have just received a telephone call from an irate respondent who believes that an interviewer has violated her privacy by calling at an inconvenient time. The respondent expresses several ethical concerns. Ask a fellow student to play the role of this respondent. Address the respondents concerns and pacify her.

CHAPTER 2

Defining the marketing research problem and developing an approach Harley goes Whole Hog:

▪ Comeback in 2000s- so that there was a long waiting list to get a bike

▪ In 2001, HD’s revenue exceeded $3.3 billion.▪ Distributors urged HD to build more motorcycles but the company

was skeptical about investing in new production facilities.▪ The management decision problem was “should HD invest to

produce more motorcycles?” Importance of defining a problem:

Problem definition: A broad statement of the general problem and identification of the specific components of the marketing research problem. All efforts, time , money spent will be wasted if the problem is misunderstood or ill defined.

The process of defining the problem and developing an approach: Fig: 2.1

Tasks Involved: Discussions with decision makers. Interviews with industry experts Secondary data analysis Qualitative research

Environmental context of the problem: Past information and forecasts Resources and constraints Objectives Buyer behavior Legal environment Economic environment Marketing and technological skills.

Management decision problem and marketing research problem Defining marketing research problem: Broad statement - specific components Components of the approach: Objective / theoretical framework Analytical model Research questions Hypotheses:

▪ An unknown statement or proposition about a factor or phenomenon that is of interest to researcher.

Specification of information needed.

Cases: 1.1 Life in fast lane: fast food chains race to be

number one. 1.2 Nike sprints ahead of the competition, yet has a

long way to run. 1.3 Lexus Imparting value to luxury and luxury to

value.  Video Cases:

Burke: Learning and growing through MR (www.burke.com)

Accenture: the accent is in the name (www.accenture.com)

Part 2

Research Design formulation

A research design is formulated after: The problem has been defined The approach developed

Research design

Types of research design: Exploratory Conclusive

▪ Descriptive▪ Causal

At a broad level two main types of research designs are employed in marketing research: Exploratory conclusive

Exploratory research involves sec0ndary data and qualitative research.

Descriptive research makes use of survey and observation methods

The major methodology used in causal designs is experimental

Example

In a study of cause related marketing, exploratory research in the form of secondary data analysis and focus groups was conducted to identify the social causes that American businesses should be concerned about. As a result the following causes were identified as salient : Child care, drug abuse, public education,

hunger, crime, environment, medical research and poverty.

Then conclusive research in the form of a descriptive cross sectional survey was undertaken to quantify how and why causes related marketing influences, consumer’s perception of the company and brands to determine the relative salience of the causes identified in exploratory research.

A random sample of 2,000 Americans was surveyed by telephone. About 61% of the respondents said that when price and quality are equal, they would switch brands or stores to companies that support good causes that help in the local or national level.

The survey also revealed that 68% of the consumers would pay more for a product that is linked to a good cause. Company support of good causes produces a more positive image and greater trust of the company according to 66% of those surveyed.

In keeping with these findings, Starbucks wants to help the environment by providing a new “eco-friendly” coffee cup. The company also has initiatives to help small coffee bean farmers, local community programs and charitable giving. There are even employee incentives and awards for volunteering for these causes.

Research design: Definition

A research design is a framework or blueprint for conducting the marketing research project. It specifies the details of the procedures necessary for obtaining the information needed to structure and / or solve marketing research problems.

Typically a research design involves the following components or tasks: Define the information needed. Define the exploratory , descriptive and/or

causal phases of the research. Specify the measurement and scaling process

and procedures. Construct and pretest a questionnaire

(interview form) or an appropriate form for data collection.

Specify the sampling process and sample. Develop a plan of data analysis.

Research Design : Classification

Research Design

Exploratory Conclusive

Descriptive

Cross Sectional

Single cross

sectional

Multiple Cross

sectional

Longitudinal

Causal

Exploratory Research: One type of research design, which has as it’s primary

objective the provision of insights into, and comprehension of the problem situation confronting the researcher.

The primary aim of the exploratory research is to provide insights, into, and an understanding of, the problem confronting the researcher.

Exploratory research is used in cases when you must define the problem more precisely, identify relevant courses of action, or gain additional insights before an approach can be developed. The information needed is only loosely defined at this stage, and the research process that is adopted is flexible and unstructured. For example: personal interviews with the industry experts. Primary data is qualitative but small and non representative in nature. So findings are tentative and can be an input for further research.

Conclusive Research: Research designed to assist the decision maker in

determining, evaluating and selecting the best course of action to take in a given situation.

Conclusive research is typically more formal and structured then exploratory research.

It is based on large representative samples and the data obtained are subjected to quantitative analysis. The findings from this research are considered to be conclusive in nature in that they are used as input into managerial decision making.

Conclusive research decisions can be either descriptive or causal and descriptive research designs may be either cross sectional or longitudinal.

Research Design

Exploratory Conclusive

Descriptive

Cross Sectional

Single cross

sectional

Multiple Cross

sectional

Longitudinal

Causal

Differences Between Exploratory and Conclusive Research

Exploratory Conclusive

Objective: To Provide insights and understanding.

To test hypothesis and examine relationships.

Characteristics: Information needed is defined only loosely. Research process is flexible and unstructured. Sample is small and non representative. Analysis of primary data is qualitative.

Information needed is clearly defined. Research process is formal and structured. Sample is large and representative. Data analysis is quantitative.

Findings/ results: Tentative. Conclusive.

Outcome: Generally followed by further exploratory or conclusive research.

Findings used as input into decision making.

A comparison of the basic research designs

Exploratory Descriptive Causal

Objective: Discover ideas and insights

Describe market characteristics or functions.

Determine the cause and effect relationships.

Characteristics: Flexible, Versatile, Often the front end of the total design

Marked by the prior formulation of specific hypothesis. Preplanned and structured design.

Manipulation of one or more independent variables. Control of other mediating variables.

Methods: Expert Surveys, Pilot Surveys, Secondary Data, Qualitative Research.

Secondary Data, Surveys, Panels, Observational and other data.

Experiments.

Exploratory Research

Objective is to explore or search through a problem or situation to provide insights and understanding.

Purpose: Formulate a problem or define a problem more

precisely. Identify alternative courses of action. Develop hypothesis. Isolate key variables and relationships for

further examination. Gain insights for developing an approach to the

problem. Establish priorities for further research.

The creativity and ingenuity of the researcher plays a major role in exploratory research. Researchers are alert to new ideas and insights as they proceed. Once a new idea or insight is discovered, they may redirect their exploration in that direction.

Yet the ability of the researcher are not the sole determinations of good exploratory research. Exploratory research can generally benefit from the use of following methods: Survey of experts. Pilot Surveys Secondary data analyzed in a qualitative way. Qualitative research.

Descriptive Research

A type of conclusive research that has as its major objective the description of something-usually market characteristics or functions.

It assumes that the researcher has much prior knowledge about the problem situation.

It is preplanned and structured.A descriptive design requires a clear

specification of the who, what, when, where, why and way of the research.

Purpose: To describe the characteristics of

relevant groups, such as consumers, salespeople, organizations, or market areas.

To estimate the percentage of units in a specified population exhibiting a certain behavior.

To determine the perceptions of product characteristics.

To determine the degree to which marketing variables are associated.

To make specific predictions.

Descriptive research, in contrast to exploratory research is marked by a clear statement of the problem, specific hypotheses, and detailed information needs. Market studies. Market share studies. Sales analysis studies. Image studies. Product usages studies. Distribution studies. Pricing studies. Advertising studies.

Methods of Descriptive Research

Secondary data analyzed in a quantitative as opposed to a qualitative manner.

Surveys.Panels.Observational and other data.

Cross-sectional Designs Involves the collection of information from any

given sample of population elements only once. In single cross-sectional designs, there is

only one sample of respondents and information is obtained from this sample only once.

In multiple cross-sectional designs, there are two or more samples of respondents, and information from each sample is obtained only once. Often, information from different samples is obtained at different times. To predict changes Find trends

Cohort analysis consists of a series of surveys conducted at appropriate time intervals, where the cohort serves as the basic unit of analysis. A cohort is a group of respondents who experience the same event within the same time interval.

Consumption of Various Soft Drinksby Various Age Cohorts

8-1920-2930-3940-4950+

Age 1960 1969 19791950

52.945.233.923.218.1

62.660.746.640.828.8C1

73.276.067.758.650.0C2

81.075.871.467.851.9C3

C8C7C6C5C4

C1: cohort born prior to 1900C2: cohort born 1901-10C3: cohort born 1911-20C4: cohort born 1921-30

C5: cohort born 1931-40C6: cohort born 1940-49C7: cohort born 1950-59C8: cohort born 1960-69

Table 3.3

Percentage consuming on a typical day

Longitudinal Designs A fixed sample (or samples) of population

elements is measured repeatedly on the same variables

A longitudinal design differs from a cross-sectional design in that the sample or samples remain the same over time. In other words, the same people are studied over time and the same variables are measured. How did the American people rate the

performance of George w. Bush immediately after the war in Afghanistan?▪ Cross sectional design

How did the American people change their view of Bush’s performance during the war in Afghanistan?▪ Longitudinal design

Relative Advantages and Disadvantages of Longitudinal and Cross-Sectional Designs

Evaluation Criteria

Cross-Sectional Design Longitudinal Design

Detecting ChangeLarge amount of data collectionAccuracyRepresentative SamplingResponse bias

---++

+++--

Note: A “+” indicates a relative advantage over the other design, whereas a “-” indicates a relative disadvantage.

Table 3.4

“A major advantage of longitudinal design over the cross sectional design is the ability to detect change as a result of repeated measurement of the same variables on the same sample.”

Another advantage of the panels is that relatively large amount of data can be collected, because panel members are usually compensated for their participation, they are willing to participate in lengthy and demanding interviews.

Panel data can be more accurate than cross sectional data.

The main disadvantage of panels is that they may not be representative because: Refusal to cooperate (40% or more) Mortality (20% a year) Payment

Causal Research

A type of conclusive research where the major objective is to obtain evidence regarding cause-and-effect (causal) relationship.

It requires a planned and structured design. A relatively controlled environment is one in

which the other variables that may affect the dependent variable are controlled or checked as much as possible. The effect of manipulation on one or more dependent variables is then measured to infer causability.

In a departmental store, the presence and helpfulness of salespeople (causal variable) will influence the sales of housewares(effect variable). MeadWestvaco Experiment

▪ Does merchandise display affect sales?

Uses of Casual Research

To understand which variables are the cause (independent variables) and which variables are the effect (dependent variables) of a phenomenon.

To determine the nature of the relationship between the causal variables and the effect to be predicted.

METHOD: Experiments

Relationship among Exploratory, Descriptive and Causal Research

When little is known about the problem situation, it is desirable to begin with exploratory research. Exploratory research is appropriate when the problem needs to be defined more precisely, alternative courses of action identified, research questions or hypotheses developed.

Exploratory research is the initial step in the overall research design framework. It should, in most instances, be followed by descriptive or causal research.

Marketing Research at Citicorp is typical in that it is used to measure consumer awareness of products, monitor their satisfaction and attitudes associated with the product, track product usage and diagnose problems as they occur. To accomplish these tasks Citicorp makes extensive use of exploratory, descriptive, and causal research. Often it is advantageous to offer special financial packages to specific groups of customers. In this case, a financial package is being designed for senior citizens.

The following seven-step process was taken by marketing research to help in the design.

Citicorp Banks on Exploratory, Descriptive,and Causal Research

Citicorp Banks on Exploratory, Descriptive,and Causal Research

1) A taskforce was created to better define the market parameters to include all the needs of the many Citicorp branches. A final decision was made to include Americans 55 years of age or older, retired, and in the upper half of the financial strata of that market.

2) Exploratory research in the form of secondary data analysis of the mature or older market was then performed and a study of competitive products was conducted. Exploratory qualitative research involving focus groups was also carried out in order to determine the needs and desires of the market and the level of satisfaction with the current products.

In the case of senior citizens, a great deal of diversity was found in the market. This was determined to be due to such factors as affluence, relative age, and the absence or presence of a spouse.

Citicorp Banks on Exploratory, Descriptive,and Causal Research

3) The next stage of research was brainstorming. This involved the formation of many different financial packages aimed at the target market. In this case, a total of 10 ideas were generated.

Citicorp Banks on Exploratory, Descriptive,and Causal Research

4) The feasibility of the 10 ideas generated in step 3 was then tested. The ideas were tested on the basis of whether they were possible in relation to the business. The following list of questions was used as a series of hurdles that the ideas had to pass to continue on to the next step.

• Can the idea be explained in a manner that the target market will easily understand?• Does the idea fit into the overall strategy of Citicorp?

Citicorp Banks on Exploratory, Descriptive,and Causal Research

Is there an available description of a specific target market for the proposed product?

Does the research conducted so far indicate a potential match for target market needs, and is the idea perceived to have appeal to this market?

Is there a feasible outline of the tactics and strategies for implementing the program?

Have the financial impact and cost of the program been thoroughly evaluated and determined to be in line with company practices?

In this study, only one idea generated from the brainstorming session made it past all the listed hurdles and on to step 5.

Citicorp Banks on Exploratory, Descriptive,and Causal Research

5) A creative work-plan was then generated. This plan was to emphasize the competitive advantage of the proposed product as well as better delineate the specific features of the product.

6) The previous exploratory research was now followed up with descriptive research in the form of mall intercept surveys of people in the target market range. The survey showed that the list of special features was too long and it was decided to drop the features more commonly offered by competitors.

Citicorp Banks on Exploratory, Descriptive,and Causal Research

7) Finally, the product was test marketed in six of the Citicorp branches within the target market. Test marketing is a form of causal research. Given successful test marketing results, the product is introduced nationally.

Citicorp Banks on Exploratory, Descriptive,and Causal Research

Potential Sources of Error inResearch Designs

Surrogate Information ErrorMeasurement ErrorPopulation Definition ErrorSampling Frame ErrorData Analysis Error

Respondent Selection ErrorQuestioning ErrorRecording ErrorCheating Error

Inability ErrorUnwillingness Error

Fig. 3.2Total Error

Non-sampling Error

Random Sampling Error

Non-response Error

Response Error

Interviewer Error

Respondent Error

Researcher Error

Errors in Marketing Research The total error is the variation between the true

mean value in the population of the variable of interest and the observed mean value obtained in the marketing research project.

Random sampling error is the variation between the true mean value for the population and the true mean value for the original sample.

Non-sampling errors can be attributed to sources other than sampling, and they may be random or nonrandom: including errors in problem definition, approach, scales, questionnaire design, interviewing methods, and data preparation and analysis. Non-sampling errors consist of non-response errors and response errors.

Errors in Marketing Research Non-response error arises when some of the

respondents included in the sample do not respond.

Response error arises when respondents give inaccurate answers or their answers are misrecorded or misanalyzed.

Budgeting and scheduling the project

Management tools needed to help ensure that the marketing research project is completed within the available resources-financial, time and manpower etc.

Once a research design, appropriately controlling the total error, has been specified, the budgeting and scheduling decision should be made

CPM- critical path method. Management technique of dividing a research project into

component activities, determining the sequence of these components and the time each activity will require.

PERT- Program evaluation and review techniques. A more sophisticated critical path method that accounts for the

uncertainty in project completion times. GERT- graphical evaluation and review techniques.

A sophisticated critical path method that accounts for both the completion probabilities and the activity costs.

Marketing Research Proposal The official layout of the planned

marketing research activity for management.

It describes the research problem, the approach, the research design, data collection methods, data analysis methods, and reporting methods.

Once the research design has been formulated and budgeting and scheduling of the project accomplished, a written research proposal should be prepared.

The marketing research proposal contains the essence of the project and serves as a contract between the researcher and the management.

Marketing Research Proposal contains:

Executive Summary Background Problem Definition/Objectives of the Research Approach to the Problem Research Design

Kind of information to be obtained Methods of administrating the questionnaire. Scaling techniques. Nature of the questionnaire. Sampling plan and sample size.

Fieldwork/Data Collection Data Analysis Reporting Cost and Time Appendices

Chapter FourExploratory Research Design:Secondary Data

Primary vs. Secondary Data Primary data are originated by a

researcher for the specific purpose of addressing the problem at hand. The collection of primary data involves all six steps of the marketing research process.

Secondary data are data which have already been collected for purposes other than the problem at hand. These data can be located quickly and inexpensively.

Census

Data

A Comparison of Primary & Secondary Data

Primary Data Secondary Data

Collection purpose For the problem at hand For other problemsCollection process Very involved Rapid & easyCollection cost High Relatively lowCollection time Long Short

Table 4.1

Uses of Secondary Data

Identify the problemBetter define the problemDevelop an approach to the problemFormulate an appropriate research

design (for example, by identifying the key variables)

Answer certain research questions and test some hypotheses

Interpret primary data more insightfully

Criteria for Evaluating Secondary Data

Specifications: Methodology Used to Collect the Data

Error: Accuracy of the Data Currency: When the Data Were Collected Objective(s): The Purpose for Which the

Data Were Collected Nature: The Content of the Data Dependability: Overall, How

Dependable Are the Data

Criteria for Evaluating Secondary Data

Criteria Issues Remarks

Specifications & Methodology

Error & Accuracy

Currency

Objective

Nature

Dependability

Data collection method, response rate, quality & analysis of data, sampling technique & size, questionnaire design, fieldwork.Examine errors in approach,research design, sampling, datacollection & analysis, & reporting.

Time lag between collection &publication, frequency of updates.Why were the data collected?

Definition of key variables, units of measurement, categories used, relationships examined.Expertise, credibility, reputation, & trustworthiness of the source.

Data should be reliable, valid, & generalizable to the problem.

Assess accuracy by comparing data from different sources.

Census data are updated by syndicated firms.The objective determines the relevance of data.Reconfigure the data to increase their usefulness.

Data should be obtained from an original source.

Table 4.2

A Classification of Secondary Data

Secondary Data

Ready to Use

Requires Further Processing

PublishedMaterials

Computerized Databases

Syndicated Services

Fig. 4.1

Internal External

Internal Secondary Data

Department Store ProjectSales were analyzed to obtain: Sales by product line Sales by major department (e.g., men's wear,

house wares) Sales by specific stores Sales by geographical region Sales by cash versus credit purchases Sales in specific time periods Sales by size of purchase Sales trends in many of these classifications were

also examined.

Type of Individual/Household Level DataAvailable from Syndicated Firms

I. Demographic Data

- Identification (name, address, telephone)

- Sex

- Marital status

- Names of family members

- Age (including ages of family members)

- Income

- Occupation

- Number of children present

- Home ownership

- Length of residence

- Number and make of cars owned

Type of Individual/Household Level Data Available from Syndicated Firms

II. Psychographic Lifestyle Data

- Interest in golf

- Interest in snow skiing

- Interest in book reading

- Interest in running

- Interest in bicycling

- Interest in pets

- Interest in fishing

- Interest in electronics

- Interest in cable television

There are also firms such as Dun & Bradstreet and American Business Information which collect demographic data on businesses.

A Classification of Published Secondary Sources

StatisticalData

Guides Directories Indexes Census Data

Other Government Publications

Fig. 4.2

Published Secondary Data

General Business Sources

Government Sources

A Classification of Computerized Databases

Bibliographic Databases

Numeric Databases

Full-Text Databases

Directory Databases

Special-Purpose Databases

Fig. 4.3

Computerized Databases

Online Off-LineInternet

Published External Secondary Sources

Guides An excellent source of standard or recurring information Helpful in identifying other important sources of directories,

trade associations, and trade publications One of the first sources a researcher should consult

Directories Helpful for identifying individuals or organizations that

collect specific data Examples: Consultants and Consulting Organizations

Directory, Encyclopedia of Associations, FINDEX: The Directory of Market Research Reports, Studies and Surveys, and Research Services Directory

Indices Helpful in locating information on a particular topic in

several different publications

Classification of Computerized Databases

Bibliographic databases are composed of citations to articles.

Numeric databases contain numerical and statistical information.

Full-text databases contain the complete text of the source documents comprising the database.

Directory databases provide information on individuals, organizations, and services.

Special-purpose databases provide specialized information.

Syndicated Services

Companies that collect and sell common pools of data of known commercial value designed to serve a number of clients.

Syndicated sources can be classified based on the unit of measurement (households/consumers or institutions).

Household/consumer data may be obtained from surveys, diary panels, or electronic scanner services.

Institutional data may be obtained from retailers, wholesalers, or industrial firms.

A Classification of Syndicated Services

Unit ofMeasurement

Fig. 4.4

Households/Consumers

Institutions

Syndicated Services: ConsumersFig. 4.4 cont.

Psychographic& Lifestyles General

AdvertisingEvaluation

Households / Consumers

Scanner Diary Panels with Cable TV

Surveys Volume Tracking Data

Scanner Diary Panels

Electronic scanner servicesPurchase Media

Panels

Syndicated Services: Institutions

Audits

Direct Inquiries

Clipping Services

Corporate Reports

Fig. 4.4 cont.Institutions

Retailers Wholesalers Industrial firms

Overview of Syndicated ServicesTable 4.3

Type Characteristics Advantages Disadvantages Uses

Surveys Surveys conducted at regular intervals

Most flexible way of obtaining data; information on underlying motives

Interviewer errors; respondent errors

Market segmentation, advertising theme selection and advertising effectiveness

Purchase Panels

Households provide specific information regularly over an extended period of time; respondent asked to record specific behaviors as they occur

Recorded purchase behavior can be linked to the demographic/ psychographic characteristics

Lack of representativeness; response bias; maturation

Forecasting sales, market share and trends; establishing consumer profiles, brand loyalty and switching; evaluating test markets, advertising, and distribution

Media Panels Electronic devices automatically recording behavior, supplemented by a diary

Same as purchase panel

Same as purchase panel

Establishing advertising rates; selecting media program or air time; establishing viewer profiles

Table 4.3 cont.

Overview of Syndicated Services

Type Characteristics Advantages DisadvantagesScanner Volume Tracking Data

Household purchases are recorded through electronic scanners in supermarkets

Data reflect actual purchases; timely data, less expensive

Data may not be representative; errors in recording purchases; difficult to link purchases to elements of marketing mix other than price

Scanner Diary Panels with Cable TV

Scanner panels of households that subscribe to cable TV

Data reflect actual purchases; sample control; ability to link panel data to household characteristics

Data may not be representative; quality of data limited

Table 4.3 cont.

Overview of Syndicated Services

Audit services Verification of product movement by examining physical records or performing inventory analysis

Relatively precise information at the retail and wholesale levels

Coverage may be incomplete; matching of data on competitive activity may be difficult

Measurement of consumer sales and market share, competitive activity, analyzing distribution patterns; tracking of new products

industrial products syndicated services

Data banks on industrial establishments created through direct inquiries of companies, clipping services, and corporate reports

Important source of information on industrial firms, particularly useful in initial phases of the projects

Data are lacking in terms of content, quantity, and quality

Determining market potential by geographic area, defining sales territories, allocating advertising budget

Single-Source Data

Single-source data provide integrated information on

household variables, including media consumption and

purchases, and marketing variables, such as product

sales, price, advertising, promotion, and in-storemarketing effort.

Recruit a test panel of households and meter each home's TV sets.

Survey households periodically on what they read.

Grocery purchases are tracked by UPC scanners. Track retail data, such as sales, advertising, and

promotion.

International Organizations

Government Sources

Nongovernment Sources Governments

Trade Associations

A Classification of International SourcesFig. 4.5

Domestic Organizations in the United States

International Organizations in the United States

Organizations in Foreign Countries

International Secondary Data

Chapter FiveExploratory Research Design:Qualitative Research

A Classification of Marketing Research Data

Survey Data

Observational and Other Data

Experimental Data

Fig. 5.1

Qualitative Data Quantitative Data

Descriptive Causal

Marketing Research Data

Secondary Data Primary Data

Qualitative vs. Quantitative Research

Qualitative Research

To gain a qualitative understanding of the underlying reasons and motivations

Small number of non-representative cases

Unstructured

Non-statistical

Develop an initial understanding

Objective

Sample

Data Collection

Data Analysis

Outcome

Quantitative Research

To quantify the data and generalize the results from the sample to the population of interest

Large number of representative cases

Structured

Statistical

Recommend a final course of action

Table 5.1

A Classification of Qualitative Research Procedures

Association Techniques

Completion Techniques

Construction Techniques

Expressive Techniques

Fig. 5.2

Direct (Non disguised)

Indirect (Disguised)

Focus Groups Depth Interviews

Projective Techniques

Qualitative Research Procedures

Characteristics of Focus Groups

Group Size 8-12

Group Composition Homogeneous, respondents,prescreened

Physical Setting Relaxed, informal atmosphere

Time Duration 1-3 hours

Recording Use of audiocassettes and videotapes

Moderator Observational, interpersonal, and communication skills of the moderator

Table 5.2

Key Qualifications of Focus Group Moderators

1. Kindness with firmness: The moderator must combine a disciplined detachment with understanding empathy so as to generate the necessary interaction.

2. Permissiveness: The moderator must be permissive yet alert to signs that the group’s cordiality or purpose is disintegrating.

3. Involvement: The moderator must encourage and stimulate intense personal involvement.

4. Incomplete understanding: The moderator must encourage respondents to be more specific about generalized comments by exhibiting incomplete understanding.

Key Qualifications of Focus Group Moderators

5. Encouragement: The moderator must encourage unresponsive members to participate.

6. Flexibility: The moderator must be able to improvise and alter the planned outline amid the distractions of the group process.

7. Sensitivity: The moderator must be sensitive enough to guide the group discussion at an intellectual as well as emotional level.

Procedure for Planning and Conducting Focus Groups

Fig. 5.3

Determine the Objectives and Define the Problem

Specify the Objectives of Qualitative Research

Develop a Moderator’s Outline

Conduct the Focus Group Interviews

Review Tapes and Analyze the Data

Summarize the Findings and Plan Follow-Up Research or Action

State the Objectives/Questions to be Answered by Focus Groups

Write a Screening Questionnaire

Variations in Focus Groups

Two-way focus group. This allows one target group to listen to and learn from a related group. For example, a focus group of physicians viewed a focus group of arthritis patients discussing the treatment they desired.

Dual-moderator group. A focus group conducted by two moderators: One moderator is responsible for the smooth flow of the session, and the other ensures that specific issues are discussed.

Dueling-moderator group. There are two moderators, but they deliberately take opposite positions on the issues to be discussed.

Variations in Focus Groups Respondent-moderator group. The moderator

asks selected participants to play the role of moderator temporarily to improve group dynamics.

Client-participant groups. Client personnel are identified and made part of the discussion group.

Mini groups. These groups consist of a moderator and only 4 or 5 respondents.

Tele-session groups. Focus group sessions by phone using the conference call technique.

Online Focus groups. Focus groups conducted online over the Internet.

Advantages of Focus Groups

1. Synergism2. Snowballing3. Stimulation4. Security5. Spontaneity6. Serendipity7. Specialization8. Scientific

scrutiny9. Structure10. Speed

Disadvantages of Focus Groups

1. Misuse2. Misjudge3. Moderation4. Messy5. Misrepresentation

Depth Interview Techniques: Laddering

In laddering, the line of questioning proceeds from product characteristics

to user characteristics. This technique allows the researcher to tap into the

consumer's network of meanings.

Wide body aircrafts (product characteristic) I can get more work done 

I accomplish more 

I feel good about myself (user characteristic) Advertising theme: You will feel good about yourself when

flyingour airline. “You're The Boss.”

Depth Interview Techniques: Hidden Issue Questioning

In hidden issue questioning, the focus is not on socially shared values but rather on personal “sore spots;” not on general lifestyles but on deeply felt personal concerns.

fantasies, work lives, and social lives  

historic, elite, “masculine-camaraderie,” competitive activities

Advertising theme: communicate aggressiveness, high status, and competitive heritage of the airline.

Depth Interview Techniques: Symbolic Analysis

Symbolic analysis attempts to analyze the symbolic meaning of objects by comparing them with their opposites. The logical opposites of a product that are investigated are: non-usage of the product, attributes of an imaginary “non-product,” and opposite types of products.

“What would it be like if you could no longer use airplanes?”

  “Without planes, I would have to rely on letters and long

distance calls.”  

Airlines sell to the managers face-to-face communication.  

Advertising theme: The airline will do the same thing for a manager as Federal Express does for a package.

Definition of Projective Techniques

An unstructured, indirect form of questioning that encourages respondents to project their underlying motivations, beliefs, attitudes or feelings regarding the issues of concern.

In projective techniques, respondents are asked to interpret the behavior of others.

In interpreting the behavior of others, respondents indirectly project their own motivations, beliefs, attitudes, or feelings into the situation.

Word Association

In word association, respondents are presented with a list of words, one at a time and asked to respond to each with the first word that comes to mind. The words of interest, called test words, are interspersed throughout the list which also contains some neutral, or filler words to disguise the purpose of the study. Responses are analyzed by calculating:

(1)   the frequency with which any word is given as a response; (2)   the amount of time that elapses before a response is given; and (3) the number of respondents who do not respond at all to a test word within a reasonable period of time.

Word AssociationEXAMPLE

STIMULUS MRS. M MRS. C washday everyday ironing fresh and sweet clean

pure air soiled scrub don't; husband does clean

filth this neighborhood dirt bubbles bath soap and water family squabbles children towels dirty wash

Completion TechniquesIn Sentence completion, respondents are given incomplete sentences and asked to complete them. Generally, they are asked to use the first word or phrase that comes to mind.

A person who shops at Sears is ______________________ 

A person who receives a gift certificate good for Sak's Fifth Avenue would be __________________________________

 J. C. Penney is most liked by _________________________

 When I think of shopping in a department store, I ________

A variation of sentence completion is paragraph completion, in which the respondent completes a paragraph beginning with the stimulus phrase.

Completion Techniques

In story completion, respondents are given part of a story – enough to direct attention to a particular topic but not to hint at the ending. They are required to give the conclusion in their own words.

Construction Techniques

With a picture response, the respondents are asked to describe a series of pictures of ordinary as well as unusual events. The respondent's interpretation of the pictures gives indications of that individual's personality.

 In cartoon tests, cartoon characters are shown in a specific situation related to the problem. The respondents are asked to indicate what one cartoon character might say in response to the comments of another character. Cartoon tests are simpler to administer and analyze than picture response techniques.

A Cartoon Test

Let’s see if we can pick up some

house wares at Sears

Figure 5.4

Sears

Expressive Techniques

In expressive techniques, respondents are presented with a verbal or visual situation and asked to relate the feelings and attitudes of other people to the situation.

Role playing Respondents are asked to play the role or assume the behavior of someone else.

Third-person technique The respondent is presented with a verbal or visual situation and the respondent is asked to relate the beliefs and attitudes of a third person rather than directly expressing personal beliefs and attitudes. This third person may be a friend, neighbor, colleague, or a “typical” person.

Advantages of Projective Techniques

They may elicit responses that subjects would be unwilling or unable to give if they knew the purpose of the study.

Helpful when the issues to be addressed are personal, sensitive, or subject to strong social norms.

Helpful when underlying motivations, beliefs, and attitudes are operating at a subconscious level.

Disadvantages of Projective Techniques

Suffer from many of the disadvantages of unstructured direct techniques, but to a greater extent.

Require highly trained interviewers. Skilled interpreters are also required to

analyze the responses. There is a serious risk of interpretation

bias. They tend to be expensive. May require respondents to engage in

unusual behavior.

Guidelines for Using Projective Techniques

Projective techniques should be used because the required information cannot be accurately obtained by direct methods.

Projective techniques should be used for exploratory research to gain initial insights and understanding.

Given their complexity, projective techniques should not be used naively.

Comparison of Focus Groups, Depth Interviews, and Projective Techniques

1. Degree of Structure2. Probing of individual

respondents3. Moderator bias4. Interpretation bias5. Uncovering

subconscious information

6. Discovering innovative information

7. Obtaining sensitive information

8. Involve unusual behavior or questioning

9. Overall usefulness

Relatively highLow

Relatively mediumRelatively lowLow

High

Low

No

Highly useful

Relatively mediumHigh

Relatively high Relatively medium Medium to high

Medium

Medium

To a limited extentUseful

Relatively lowMedium

Low to highRelatively highHigh

Low

High

Yes

Somewhat useful

Focus Groups

Depth Interviews Projective Techniques

Criteria

Table 5.3

Advantages of Online Focus Groups

Geographical constraints are removed and time constraints are lessened.

Unique opportunity to re-contact group participants at a later date.

Can recruit people not interested in traditional focus groups: doctors, lawyers, etc.

Moderators can carry on side conversations with individual respondents.

There is no travel, video taping, or facilities to arrange; so the cost is much lower.

Disadvantages of Online Focus Groups

Only people that have access to the Internet can participate.

Verifying that a respondent is a member of a target group is difficult.

There is lack of general control over the respondent's environment.

Only audio and visual stimuli can be tested. Products can not be touched (e.g., clothing) or smelled (e.g., perfumes).

Chapter SixDescriptive Research Design: Survey and Observation

A Classification of Survey Methods

Traditional Telephone

Computer-Assisted Telephone Interviewing

Mail Interview

Mail Panel

Fig. 6.1

In-Home Mall Intercept

Computer-Assisted Personal

Interviewing

E-mail Internet

Survey Methods

Telephone Personal Mail Electronic

Some Decisions Related to the Mail Interview Package

Outgoing Envelope Outgoing envelope: size, color, return addressPostage Method of addressingCover LetterSponsorship Type of appeal PostscriptPersonalization SignatureQuestionnaireLength Size Layout FormatContent Reproduction Color Respondent anonymityReturn EnvelopeType of envelope PostageIncentivesMonetary versus non-monetary Prepaid versus promised amount

Table 6.1

Criteria for Evaluating Survey Methods

Flexibility of Data Collection The flexibility of data collection is determined primarily by

the extent to which the respondent can interact with the interviewer and the survey questionnaire.

 Diversity of Questions The diversity of questions that can be asked in a survey

depends upon the degree of interaction the respondent has with the interviewer and the questionnaire, as well as the ability to actually see the questions.

 Use of Physical Stimuli The ability to use physical stimuli such as the product, a

product prototype, commercials, or promotional displays during the interview.

 

Criteria for Evaluating Survey Methods

Sample Control Sample control is the ability of the survey mode to reach

the units specified in the sample effectively and efficiently.

Control of the Data Collection Environment The degree of control a researcher has over the

environment in which the respondent answers the questionnaire.

 Control of Field Force The ability to control the interviewers and supervisors

involved in data collection.  Quantity of Data The ability to collect large amounts of data.  

Criteria for Evaluating Survey Methods

Response Rate Survey response rate is broadly defined as the percentage

of the total attempted interviews that are completed.

Perceived Anonymity Perceived anonymity refers to the respondents' perceptions

that their identities will not be discerned by the interviewer or the researcher.

 Social Desirability/Sensitive Information Social desirability is the tendency of the respondents to

give answers that are socially acceptable, whether or not they are true.

Criteria for Evaluating Survey Methods

Potential for Interviewer Bias The extent of the interviewer's role determines

the potential for bias.

Speed The total time taken for administering the survey

to the entire sample.

Cost The total cost of administering the survey and

collecting the data.

Table 6.2

Criteria Phone/ CATI

In-Home Interviews

Mall-Intercept

InterviewsCAPI

Mail Surveys

Mail Panels E-Mail Internet

Flexibility of data collection

Moderate to high

High High Moderate to high

Low Low Low Moderate to high

Diversity of questions Low High High High Moderate Moderate Moderate Moderate to high

Use of physical stimuli Low Moderate to high

High High Moderate Moderate Low Moderate

Sample control Moderate to high

Potentially high

Moderate Moderate Low Moderate to high

Low Low to moderate

Control of data collection environment

Moderate Moderate to high

High High Low Low Low Low

Control of field force Moderate Low Moderate Moderate High High High High Quantity of data Low High Moderate Moderate Moderate High Moderate Moderate Response rate Moderate High High High Low Moderate Low Very

Low Perceived anonymity of the respondent

Moderate Low Low Low High High Moderate High

Social desirability Moderate High High Moderate to High

Low Low Moderate Low

Obtaining sensitive information

High Low Low Low to moderate

High Moderate to High

Moderate High

Potential for interviewer bias

Moderate High High Low None None None None

Speed High Moderate Moderate to high

Moderate to high

Low Low to moderate

High Very high

Cost Moderate High Moderate to high

Moderate to high

Low Low to moderate

Low Low

A Comparative Evaluation of Survey Methods

Observation MethodsStructured versus Unstructured Observation

  For structured observation, the

researcher specifies in detail what is to be observed and how the measurements are to be recorded, e.g., an auditor performing inventory analysis in a store.

In unstructured observation, the observer monitors all aspects of the phenomenon that seem relevant to the problem at hand, e.g., observing children playing with new toys.

Observation MethodsDisguised versus Undisguised Observation

In disguised observation, the respondents are unaware that they are being observed. Disguise may be accomplished by using one-way mirrors, hidden cameras, or inconspicuous mechanical devices. Observers may be disguised as shoppers or sales clerks.

In undisguised observation, the respondents are aware that they are under observation.

Observation MethodsNatural versus Contrived Observation

Natural observation involves observing behavior as it takes places in the environment. For example, one could observe the behavior of respondents eating fast food in Burger King.

In contrived observation, respondents' behavior is observed in an artificial environment, such as a test kitchen.

A Classification of Observation Methods

Observation Methods

Personal Observation

Mechanical Observation

Trace Analysis

Content Analysis

Audit

Fig. 6.3

Classifying

Observation

Methods

Observation MethodsPersonal Observation

A researcher observes actual behavior as it occurs.

The observer does not attempt to manipulate the phenomenon being observed but merely records what takes place.

For example, a researcher might record traffic counts and observe traffic flows in a department store.

Observation MethodsMechanical Observation

Do not require respondents' direct participation. the AC Nielsen audimeter turnstiles that record the number of people

entering or leaving a building. On-site cameras (still, motion picture, or video) Optical scanners in supermarkets

Do require respondent involvement. eye-tracking monitors pupilometers psychogalvanometers voice pitch analyzers devices measuring response latency

Observation MethodsAudit

The researcher collects data by examining physical records or performing inventory analysis.

Data are collected personally by the researcher.

The data are based upon counts, usually of physical objects.

Observation MethodsContent Analysis

The objective, systematic, and quantitative description of the manifest content of a communication.

The unit of analysis may be words, characters (individuals or objects), themes (propositions), space and time measures (length or duration of the message), or topics (subject of the message).

Analytical categories for classifying the units are developed and the communication is broken down according to prescribed rules.

Observation MethodsTrace Analysis

Data collection is based on physical traces, or evidence, of past

behavior.

The selective erosion of tiles in a museum indexed by the replacement rate was used to determine the relative popularity of exhibits.

The number of different fingerprints on a page was used to gauge the readership of various advertisements in a magazine.

The position of the radio dials in cars brought in for service was used to estimate share of listening audience of various radio stations.

The age and condition of cars in a parking lot were used to assess the affluence of customers.

The magazines people donated to charity were used to determine people's favorite magazines.

Internet visitors leave traces which can be analyzed to examine browsing and usage behavior by using cookies.

A Comparative Evaluation of Observation Methods

Table 6.3

Criteria Personal Mechanical Audit Content Trace Observation Observation Analysis Analysis Analysis

Degree of structure Low Low to high High High MediumDegree of disguise Medium Low to high Low High High Ability to observe High Low to high High Medium Low in natural setting Observation bias High Low Low Medium MediumAnalysis Bias High Low to Low Low Medium

Medium General remarks Most Can be Expensive Limited to Method of

flexible intrusive commu- last resortnications

Relative Advantages of Observation

They permit measurement of actual behavior rather than reports of intended or preferred behavior.

There is no reporting bias, and potential bias caused by the interviewer and the interviewing process is eliminated or reduced.

Certain types of data can be collected only by observation.

If the observed phenomenon occurs frequently or is of short duration, observational methods may be cheaper and faster than survey methods.

Relative Disadvantages of Observation

The reasons for the observed behavior may not be determined since little is known about the underlying motives, beliefs, attitudes, and preferences.

Selective perception (bias in the researcher's perception) can bias the data.

Observational data are often time-consuming and expensive, and it is difficult to observe certain forms of behavior.

In some cases, the use of observational methods may be unethical, as in observing people without their knowledge or consent.

It is best to view observation as a complement to survey methods, rather than as being in competition with them.

A Comparative Evaluation of Survey Methods for International Marketing Research

Criteria Telephone Personal Mail ElectronicHigh sample control + + - -Difficulty in locating + - + + respondents at homeInaccessibility of homes + - + +Unavailability of a large + - + +pool of trained interviewersLarge population in rural areas - + - -Unavailability of maps + - + +Unavailability of current - + - +telephone directoryUnavailability of mailing lists + + - +Low penetration of telephones - + + -Lack of an efficient postal system + + - +Low level of literacy - + - -Face-to-face communication culture - + - -Poor access to computers & Internet ? + ? -Note: A (+) denotes an advantage, and a (–) denotes a disadvantage.

Table 6.4

Chapter SevenCausal Research Design:Experimentation

Concept of CausalityA statement such as "X causes Y " will have the

followingmeaning to an ordinary person and to a scientist.

____________________________________________________Ordinary Meaning Scientific Meaning

____________________________________________________X is the only cause of Y. X is only one of a

number of possible causes of Y.

X must always lead to Y The occurrence of X makes the

(X is a deterministic occurrence of Y more probable

cause of Y). (X is a probabilistic cause of Y).

 It is possible to prove We can never prove that X

is athat X is a cause of Y. cause of Y. At best, we can

infer that X is a cause of Y.____________________________________________________

Conditions for Causality

Concomitant variation is the extent to which a cause, X, and an effect, Y, occur together or vary together in the way predicted by the hypothesis under consideration.

The time order of occurrence condition states that the causing event must occur either before or simultaneously with the effect; it cannot occur afterwards.

The absence of other possible causal factors means that the factor or variable being investigated should be the only possible causal explanation.

Evidence of Concomitant Variation betweenPurchase of Fashion Clothing and Education

High

High Low

363 (73%) 137 (27%)

322 (64%) 178 (36%)

Purchase of Fashion Clothing, Y

Table 7.1

500 (100%)

500 (100%)LowEd

uca

tion,

X

Purchase of Fashion Clothing ByIncome and Education

Low Income

Purchase

High Low

High

LowEd

uc

atio

n 200 (100%)

300 (100%)

300

200

122 (61%)

171 (57%)

78 (39%)

129 (43%)

High Income

Purchase

High

High

Low

Low

241 (80%)

151 (76%)

59 (20%)

49 (24%)

Ed

uc

atio

n

Definitions and Concepts

Independent variables are variables or alternatives that are manipulated and whose effects are measured and compared, e.g., price levels.

Test units are individuals, organizations, or other entities whose response to the independent variables or treatments is being examined, e.g., consumers or stores.

Dependent variables are the variables which measure the effect of the independent variables on the test units, e.g., sales, profits, and market shares.

Extraneous variables are all variables other than the independent variables that affect the response of the test units, e.g., store size, store location, and competitive effort.

Experimental Design

An experimental design is a set of procedures specifying

the test units and how these units are to be divided into homogeneous subsamples,

what independent variables or treatments are to be manipulated,

what dependent variables are to be measured, and

how the extraneous variables are to be controlled.

Validity in Experimentation Internal validity refers to whether the

manipulation of the independent variables or treatments actually caused the observed effects on the dependent variables. Control of extraneous variables is a necessary condition for establishing internal validity.

External validity refers to whether the cause-and-effect relationships found in the experiment can be generalized. To what populations, settings, times, independent variables and dependent variables can the results be projected?

Extraneous Variables

History refers to specific events that are external to the experiment but occur at the same time as the experiment.

Maturation (MA) refers to changes in the test units themselves that occur with the passage of time.

Testing effects are caused by the process of experimentation. Typically, these are the effects on the experiment of taking a measure on the dependent variable before and after the presentation of the treatment.

The main testing effect (MT) occurs when a prior observation affects a latter observation.

Extraneous Variables

In the interactive testing effect (IT), a prior measurement affects the test unit's response to the independent variable.

Instrumentation (I) refers to changes in the measuring instrument, in the observers or in the scores themselves.

Statistical regression effects (SR) occur when test units with extreme scores move closer to the average score during the course of the experiment.

Selection bias (SB) refers to the improper assignment of test units to treatment conditions.

Mortality (MO) refers to the loss of test units while the experiment is in progress.

Controlling Extraneous Variables Randomization refers to the random

assignment of test units to experimental groups by using random numbers. Treatment conditions are also randomly assigned to experimental groups.

Matching involves comparing test units on a set of key background variables before assigning them to the treatment conditions.

Statistical control involves measuring the extraneous variables and adjusting for their effects through statistical analysis.

Design control involves the use of experiments designed to control specific extraneous variables.

Limitations of Experimentation Experiments can be time consuming,

particularly if the researcher is interested in measuring the long-term effects.

Experiments are often expensive. The requirements of experimental group, control group, and multiple measurements significantly add to the cost of research.

Experiments can be difficult to administer. It may be impossible to control for the effects of the extraneous variables, particularly in a field environment.

Competitors may deliberately contaminate the results of a field experiment.

Chapter EightMeasurement and Scaling: Fundamentals and Comparative Scaling

Measurement and Scaling

Measurement means assigning numbers or other symbols to characteristics of objects according to certain prespecified rules. One-to-one correspondence between the

numbers and the characteristics being measured.

The rules for assigning numbers should be standardized and applied uniformly.

Rules must not change over objects or time. 

Measurement and Scaling

Scaling involves creating a continuum upon which measured objects are located.

Consider an attitude scale from 1 to 100. Each respondent is assigned a number from 1 to 100, with 1 = Extremely Unfavorable, and 100 = Extremely Favorable. Measurement is the actual assignment of a number from 1 to 100 to each respondent. Scaling is the process of placing the respondents on a continuum with respect to their attitude toward department stores.

7 38

Primary Scales of MeasurementScale

Nominal Numbers Assigned to Runners

Ordinal Rank Orderof Winners

Interval PerformanceRating on a

0 to 10 Scale

Ratio Time to Finish, in

Seconds

Figure 8.1

Thirdplace

Secondplace

Firstplace

Finish

Finish

8.2 9.1 9.6

15.2 14.1 13.4

Primary Scales of MeasurementNominal Scale

The numbers serve only as labels or tags for identifying and classifying objects.

When used for identification, there is a strict one-to-one correspondence between the numbers and the objects.

The numbers do not reflect the amount of the characteristic possessed by the objects.

The only permissible operation on the numbers in a nominal scale is counting.

Only a limited number of statistics, all of which are based on frequency counts, are permissible, e.g., percentages, and mode.

Illustration of Primary Scales of Measurement

Table 8.2

Nominal Ordinal RatioScale Scale Scale

Preference $ spent last No. Store Rankings 3 months

1. Lord & Taylor2. Macy’s3. Kmart4. Rich’s5. J.C. Penney 6. Neiman Marcus 7. Target 8. Saks Fifth Avenue 9. Sears 10.Wal-Mart

IntervalScale Preference Ratings1-7 11-17

7 79 5 15 02 25 7 17 2008 82 4 14 03 30 6 16 1001 10 7 17 2505 53 5 15 359 95 4 14 06 61 5 15 1004 45 6 16 010 115 2 12 10

Primary Scales of MeasurementOrdinal Scale

A ranking scale in which numbers are assigned to objects to indicate the relative extent to which the objects possess some characteristic.

Can determine whether an object has more or less of a characteristic than some other object, but not how much more or less.

Any series of numbers can be assigned that preserves the ordered relationships between the objects.

In addition to the counting operation allowable for nominal scale data, ordinal scales permit the use of statistics based on centiles, e.g., percentile, quartile, median.

Primary Scales of MeasurementInterval Scale

Numerically equal distances on the scale represent equal values in the characteristic being measured.

It permits comparison of the differences between objects.

The location of the zero point is not fixed. Both the zero point and the units of measurement are arbitrary.

Any positive linear transformation of the form y = a + bx will preserve the properties of the scale.

It is meaningful to take ratios of scale values. Statistical techniques that may be used include

all of those that can be applied to nominal and ordinal data, and in addition the arithmetic mean, standard deviation, and other statistics commonly used in marketing research.

Primary Scales of MeasurementRatio Scale

Possesses all the properties of the nominal, ordinal, and interval scales.

It has an absolute zero point. It is meaningful to compute ratios of scale values.

Only proportionate transformations of the form y

= bx, where b is a positive constant, are allowed.

All statistical techniques can be applied to ratio data.

Primary Scales of MeasurementTable 8.1

Scale Basic Characteristics

Common Examples

Marketing Examples

Nominal Numbers identify & classify objects

Social Security nos., numbering of football players

Brand nos., store types

Percentages, mode

Chi-square, binomial test

Ordinal Nos. indicate the relative positions of objects but not the magnitude of differences between them

Quality rankings, rankings of teams in a tournament

Preference rankings, market position, social class

Percentile, median

Rank-order correlation, Friedman ANOVA

Ratio Zero point is fixed, ratios of scale values can be compared

Length, weight Age, sales, income, costs

Geometric mean, harmonic mean

Coefficient of variation

Permissible Statistics Descriptive Inferential

Interval Differences between objects

Temperature (Fahrenheit)

Attitudes, opinions, index

Range, mean, standard

Product-moment

A Classification of Scaling Techniques

Likert Semantic Differential

Stapel

Scaling Techniques

NoncomparativeScales

Comparative Scales

Paired Comparison

Rank Order

Constant Sum

Q-Sort and Other Procedures

Continuous Rating Scales

Itemized Rating Scales

A Comparison of Scaling Techniques

Comparative scales involve the direct comparison of stimulus objects. Comparative scale data must be interpreted in relative terms and have only ordinal or rank order properties.

  In noncomparative scales, each object is

scaled independently of the others in the stimulus set. The resulting data are generally assumed to be interval or ratio scaled.

Relative Advantages of Comparative Scales

Small differences between stimulus objects can be detected.

Same known reference points for all respondents.

Easily understood and can be applied. Involve fewer theoretical assumptions. Tend to reduce halo or carryover effects from one

judgment to another.

Relative Disadvantages of Comparative Scales

Ordinal nature of the data Inability to generalize beyond the stimulus

objects scaled.

Comparative Scaling TechniquesPaired Comparison Scaling

A respondent is presented with two objects and asked to select one according to some criterion.

The data obtained are ordinal in nature. Paired comparison scaling is the most widely

used comparative scaling technique. With n brands, [n(n - 1) /2] paired comparisons

are required Under the assumption of transitivity, it is possible

to convert paired comparison data to a rank order.

Obtaining Shampoo Preferences Using Paired Comparisons

Figure 8.3

Instructions: We are going to present you with ten pairs of shampoo brands. For each pair, please indicate which one of the two brands of shampoo you would prefer for personal use.

Recording Form:

Jhirmack Finesse Vidal Sassoon

Head & Shoulders

Pert

Jhirmack 0 0 1 0 Finesse 1a 0 1 0 Vidal Sassoon 1 1 1 1 Head & Shoulders 0 0 0 0 Pert 1 1 0 1 Number of Times Preferredb

3 2 0 4 1

aA 1 in a particular box means that the brand in that column was preferred over the brand in the corresponding row. A 0 means that the row brand was preferred over the column brand. bThe number of times a brand was preferred is obtained by summing the 1s in each column.

Paired Comparison Selling

The most common method of taste testing is paired comparison. The consumer is asked to sample two different products and select the one with the most appealing taste. The test is done in private and a minimum of 1,000 responses is considered an adequate sample. A blind taste test for a soft drink, where imagery, self-perception and brand reputation are very important factors in the consumer’s purchasing decision, may not be a good indicator of performance in the marketplace. The introduction of New Coke illustrates this point. New Coke was heavily favored in blind paired comparison taste tests, but its introduction was less than successful, because image plays a major role in the purchase of Coke.

A paired comparison taste test

Comparative Scaling TechniquesRank Order Scaling

Respondents are presented with several objects simultaneously and asked to order or rank them according to some criterion.

It is possible that the respondent may dislike the brand ranked 1 in an absolute sense.

Furthermore, rank order scaling also results in ordinal data.

Only (n - 1) scaling decisions need be made in rank order scaling.

Preference for Toothpaste Brands Using Rank Order Scaling

Figure 8.4

Instructions: Rank the various brands of toothpaste in order of preference. Begin by picking out the one brand that you like most and assign it a number 1. Then find the second most preferred brand and assign it a number 2. Continue this procedure until you have ranked all the brands of toothpaste in order of preference. The least preferred brand should be assigned a rank of 10.

No two brands should receive the same rank number.

The criterion of preference is entirely up to you. There is no right or wrong answer. Just try to be consistent.

Brand Rank Order

1. Crest _________

2. Colgate _________

3. Aim _________

4. Gleem _________

5. Macleans _________

6. Ultra Brite _________

7. Close Up _________

8. Pepsodent _________

9. Plus White _________

10. Stripe _________

Preference for Toothpaste Brands Using Rank Order Scaling

Figure 8.4 cont.

Form

Comparative Scaling TechniquesConstant Sum Scaling

Respondents allocate a constant sum of units, such as 100 points to attributes of a product to reflect their importance.

If an attribute is unimportant, the respondent assigns it zero points.

If an attribute is twice as important as some other attribute, it receives twice as many points.

The sum of all the points is 100. Hence, the name of the scale.

Importance of Bathing Soap AttributesUsing a Constant Sum Scale

Figure 8.5

Instructions

On the next slide, there are eight attributes of bathing soaps. Please allocate 100 points among the attributes so that your allocation reflects the relative importance you attach to each attribute. The more points an attribute receives, the more important the attribute is. If an attribute is not at all important, assign it zero points. If an attribute is twice as important as some other attribute, it should receive twice as many points.

Figure 8.5 cont.

Form Average Responses of Three Segments Attribute Segment I Segment II Segment III1. Mildness2. Lather 3. Shrinkage 4. Price 5. Fragrance 6. Packaging 7. Moisturizing 8. Cleaning Power

Sum

8 2 4 2 4 17 3 9 7

53 17 9 9 0 19 7 5 9 5 3 20

13 60 15 100 100 100

Importance of Bathing Soap AttributesUsing a Constant Sum Scale

Chapter NineMeasurement and Scaling:Noncomparative ScalingTechniques

Noncomparative Scaling Techniques

Respondents evaluate only one object at a time, and for this reason noncomparative scales are often referred to as monadic scales.

Noncomparative techniques consist of continuous and itemized rating scales.

Continuous Rating ScaleRespondents rate the objects by placing a mark at the

appropriate position on a line that runs from one extreme of the criterion variable to

the other.The form of the continuous scale may vary considerably. How would you rate Sears as a department store?Version 1Probably the worst - - - - - - -I - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Probably the

best Version 2Probably the worst - - - - - - -I - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -- - Probably the

best0 10 20 30 40 50 60 70 80 90

100 Version 3

Very bad Neither good Very good nor bad

Probably the worst - - - - - - -I - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - -Probably the best

0 10 20 30 40 50 60 70 80 90100

A relatively new research tool, the perception analyzer, provides continuous measurement of “gut reaction.” A group of up to 400 respondents is presented with TV or radio spots or advertising copy. The measuring device consists of a dial that contains a 100-point range. Each participant is given a dial and instructed to continuously record his or her reaction to the material being tested.

As the respondents turn the dials, the information is fed to a computer, which tabulates second-by-second response profiles. As the results are recorded by the computer, they are superimposed on a video screen, enabling the researcher to view the respondents' scores immediately. The responses are also stored in a permanent data file for use in further analysis. The response scores can be broken down by categories, such as age, income, sex, or product usage.

RATE: Rapid Analysis and Testing Environment

Itemized Rating Scales

The respondents are provided with a scale that has a number or brief description associated with each category.

The categories are ordered in terms of scale position, and the respondents are required to select the specified category that best describes the object being rated.

The commonly used itemized rating scales are the Likert, semantic differential, and Stapel scales.

Likert ScaleThe Likert scale requires the respondents to indicate a degree of

agreement ordisagreement with each of a series of statements about the stimulus

objects.  

Strongly Disagree Neither Agree Strongly disagree agree nor

agreedisagree

 1. Sears sells high quality merchandise. 1 2X 3 4 5 2. Sears has poor in-store service. 1 2X 3 4

5 3. I like to shop at Sears. 1 2 3X 4 5  The analysis can be conducted on an item-by-item basis (profile

analysis), or a total (summated) score can be calculated.

Semantic Differential ScaleThe semantic differential is a seven-point rating scale with

end points associated with bipolar labels that have semantic

meaning.  

SEARS IS:Powerful --:--:--:--:-X-:--:--: WeakUnreliable --:--:--:--:--:-X-:--: ReliableModern --:--:--:--:--:--:-X-: Old-fashioned

The negative adjective or phrase sometimes appears at the left side of the scale and sometimes at the right.

This controls the tendency of some respondents, particularly those with very positive or very negative attitudes, to mark the right- or left-hand sides without reading the labels.

Individual items on a semantic differential scale may be scored on either a -3 to +3 or a 1 to 7 scale.

A Semantic Differential Scale for Measuring Self- Concepts, Person Concepts, and Product Concepts 1) Rugged :---:---:---:---:---:---:---: Delicate 2) Excitable :---:---:---:---:---:---:---: Calm 3) Uncomfortable :---:---:---:---:---:---:---: Comfortable 4) Dominating :---:---:---:---:---:---:---: Submissive 5) Thrifty :---:---:---:---:---:---:---: Indulgent 6) Pleasant :---:---:---:---:---:---:---: Unpleasant 7) Contemporary :---:---:---:---:---:---:---: Obsolete 8) Organized :---:---:---:---:---:---:---: Unorganized 9) Rational :---:---:---:---:---:---:---: Emotional 10) Youthful :---:---:---:---:---:---:---: Mature 11) Formal :---:---:---:---:---:---:---: Informal 12) Orthodox :---:---:---:---:---:---:---: Liberal 13) Complex :---:---:---:---:---:---:---: Simple 14) Colorless :---:---:---:---:---:---:---: Colorful15) Modest :---:---:---:---:---:---:---: Vain

Stapel ScaleThe Stapel scale is a unipolar rating scale with ten

categoriesnumbered from -5 to +5, without a neutral point (zero).

This scaleis usually presented vertically.  

SEARS 

+5 +5+4 +4+3 +3+2 +2X+1 +1

HIGH QUALITY POOR SERVICE-1 -1-2 -2-3 -3-4X -4-5 -5

The data obtained by using a Stapel scale can be analyzed in the

same way as semantic differential data.

Scale Basic Characteristics

Examples Advantages Disadvantages

Continuous Rating Scale

Place a mark on a continuous line

Reaction to TV

commercials

Easy to construct Scoring can be cumbersome

unless computerized

Itemized Rating Scales

Likert Scale Degrees of agreement on a 1 (strongly disagree) to 5 (strongly agree)

scale

Measurement of attitudes

Easy to construct, administer, and

understand

More time - consuming

Semantic Differential

Seven - point scale with bipolar labels

Brand, product, and

company images

Versatile Controversy as to whether the data are interval

Stapel Scale

Unipolar ten - point scale, - 5 to +5,

witho ut a neutral point (zero)

Measurement of attitudes and images

Easy to construct, administer over

telephone

Confusing and difficult to apply

Table 9.1Basic Noncomparative Scales

Summary of Itemized Scale Decisions

1) Number of categories Although there is no single, optimal number,

traditional guidelines suggest that there

should be between five and nine categories

2) Balanced vs. unbalanced In general, the scale should be balanced to

obtain objective data

3) Odd/even no. of categories If a neutral or indifferent scale response is

possible from at least some of the respondents,

an odd number of categories should be used

4) Forced vs. non-forced In situations where the respondents are

expected to have no opinion, the accuracy of

the data may be improved by a non-forced scale

5) Verbal description An argument can be made for labeling all or

many scale categories. The category descriptions

should be located as close to theresponse categories as possible

6) Physical form A number of options should be tried and the

best selected

Jovan Musk for Men is Jovan Musk for Men is Extremely good Extremely good Very good Very good Good Good Bad Somewhat goodVery bad Bad Extremely bad Very bad

Figure 9.1

Balanced and Unbalanced Scales

A variety of scale configurations may be employed to measure thegentleness of Cheer detergent. Some examples include:Cheer detergent is:

1) Very harsh --- --- --- --- --- --- --- Very gentle

2) Very harsh 1 2 3 4 5 6 7 Very gentle

3) . Very harsh . .

. Neither harsh nor gentle . . . Very gentle

4) ____ ____ ____ ____ ____ ____ ____ Very Harsh Somewhat Neither harsh Somewhat Gentle Very harsh Harsh nor gentle gentle gentle

5) Very Neither harsh Very

harsh nor gentle gentle

Rating Scale Configurations

-3 -1 0 +1 +2-2 +3

Cheer

Thermometer ScaleInstructions: Please indicate how much you like McDonald’s hamburgers by coloring in the thermometer. Start at the bottom and color up to the temperature level that best indicates how strong your preference is. Form:

Smiling Face Scale Instructions: Please point to the face that shows how much you like the Barbie Doll. If you do not like the Barbie Doll at all, you would point to Face 1. If you liked it very much, you would point to Face 5. Form:

1 2 3 4 5

Figure 9.3

Like very much

Dislike very much

100 75 50 25 0

Some Unique Rating Scale Configurations

Chapter ElevenSampling:Design and Procedures

PopulationThe aggregate of all elements, sharing some common set of characteristics, that comprises the universe for the purpose of the marketing research.CensusA complete enumeration of the elements of a population or study object.SampleA subgroup of the elements of the populationselected for participation in the study.

Sample vs. CensusTable 11.1

Conditions Favoring the Use of

Type of Study

Sample Census

1. Budget

Small

Large

2. Time available

Short Long

3. Population size

Large Small

4. Variance in the characteristic

Small Large

5. Cost of sampling errors

Low High

6. Cost of nonsampling errors

High Low

7. Nature of measurement

Destructive Nondestructive

8. Attention to individual cases Yes No

The Sampling Design ProcessFig. 11.1

Define the Population

Determine the Sampling Frame

Select Sampling Technique(s)

Determine the Sample Size

Execute the Sampling Process

Define the Target Population

The target population is the collection of elements or objects that possess the information sought by the researcher and about which inferences are to be made. The target population should be defined in terms of elements, sampling units, extent, and time.

An element is the object about which or from which the information is desired, e.g., the respondent.

A sampling unit is an element, or a unit containing the element, that is available for selection at some stage of the sampling process.

Extent refers to the geographical boundaries. Time is the time period under consideration.

Define the Target Population

Important qualitative factors in determining the sample size

the importance of the decision the nature of the research the number of variables the nature of the analysis sample sizes used in similar studies incidence rates completion rates resource constraints

Sample Sizes Used in Marketing Research Studies

Table 11.2

Type of Study

Minimum Size Typical Range

Problem identification research (e.g. market potential)

500

1,000-2,500

Problem-solving research (e.g. pricing)

200 300-500

Product tests

200 300-500

Test marketing studies

200 300-500

TV, radio, or print advertising (per commercial or ad tested)

150 200-300

Test-market audits

10 stores 10-20 stores

Focus groups

2 groups 4-12 groups

Classification of Sampling Techniques

Sampling Techniques

NonprobabilitySampling Techniques

ProbabilitySampling Techniques

ConvenienceSampling

JudgmentalSampling

QuotaSampling

SnowballSampling

SystematicSampling

StratifiedSampling

ClusterSampling

Other SamplingTechniques

Simple RandomSampling

Non-Probability sampling

Convenience Sampling

Convenience sampling attempts to obtain a sample of convenient elements. Often, respondents are selected because they happen to be in the right place at the right time.

use of students, and members of social organizations

mall intercept interviews without qualifying the respondents

department stores using charge account lists “people on the street” interviews

Judgmental Sampling

Judgmental sampling is a form of convenience sampling in which the population elements are selected based on the judgment of the researcher.

test markets purchase engineers selected in industrial

marketing research bellwether precincts selected in voting

behavior research expert witnesses used in court

Quota Sampling

Quota sampling may be viewed as two-stage restricted judgmental sampling. The first stage consists of developing control categories, or

quotas, of population elements. In the second stage, sample elements are selected based on

convenience or judgment.

Population Samplecomposition composition

ControlCharacteristic Percentage Percentage NumberSex Male 48 48 480 Female 52 52 520

____ ____ ____100 100 1000

Snowball Sampling

In snowball sampling, an initial group of respondents is selected, usually at random.

After being interviewed, these respondents are asked to identify others who belong to the target population of interest.

Subsequent respondents are selected based on the referrals.

Probability sampling

Simple Random Sampling Each element in the population has a known and

equal probability of selection. Each possible sample of a given size (n) has a

known and equal probability of being the sample actually selected.

This implies that every element is selected independently of every other element.

Systematic Sampling

The sample is chosen by selecting a random starting point and then picking every ith element in succession from the sampling frame.

The sampling interval, i, is determined by dividing the population size N by the sample size n and rounding to the nearest integer.

When the ordering of the elements is related to the characteristic of interest, systematic sampling increases the representativeness of the sample.

If the ordering of the elements produces a cyclical pattern, systematic sampling may decrease the representativeness of the sample. For example, there are 100,000 elements in the population and a sample of 1,000 is desired. In this case the sampling interval, i, is 100. A random number between 1 and 100 is selected. If, for example, this number is 23, the sample consists of elements 23, 123, 223, 323, 423, 523, and so on.

Stratified Sampling

A two-step process in which the population is partitioned into subpopulations, or strata.

The strata should be mutually exclusive and collectively exhaustive in that every population element should be assigned to one and only one stratum and no population elements should be omitted.

Next, elements are selected from each stratum by a random procedure, usually SRS.

A major objective of stratified sampling is to increase precision without increasing cost.

Stratified Sampling

The elements within a stratum should be as homogeneous as possible, but the elements in different strata should be as heterogeneous as possible.

The stratification variables should also be closely related to the characteristic of interest.

Finally, the variables should decrease the cost of the stratification process by being easy to measure and apply.

In proportionate stratified sampling, the size of the sample drawn from each stratum is proportionate to the relative size of that stratum in the total population.

In disproportionate stratified sampling, the size of the sample from each stratum is proportionate to the relative size of that stratum and to the standard deviation of the distribution of the characteristic of interest among all the elements in that stratum.

Cluster Sampling

The target population is first divided into mutually exclusive and collectively exhaustive subpopulations, or clusters.

Then a random sample of clusters is selected, based on a probability sampling technique such as SRS.

For each selected cluster, either all the elements are included in the sample (one-stage) or a sample of elements is drawn probabilistically (two-stage).

Elements within a cluster should be as heterogeneous as possible, but clusters themselves should be as homogeneous as possible. Ideally, each cluster should be a small-scale representation of the population.

In probability proportionate to size sampling, the clusters are sampled with probability proportional to size. In the second stage, the probability of selecting a sampling unit in a selected cluster varies inversely with the size of the cluster.

Types of Cluster SamplingFig. 11.3 Cluster Sampling

One-StageSampling

MultistageSampling

Two-StageSampling

Simple ClusterSampling

ProbabilityProportionate

to Size Sampling

Technique Strengths Weaknesses

Nonprobability Sampling Convenience sampling

Least expensive, leasttime-consuming, mostconvenient

Selection bias, sample notrepresentative, not recommended fordescriptive or causal research

Judgmental sampling Low cost, convenient,not time-consuming

Does not allow generalization,subjective

Quota sampling Sample can be controlledfor certain characteristics

Selection bias, no assurance ofrepresentativeness

Snowball sampling Can estimate rarecharacteristics

Time-consuming

Probability sampling Simple random sampling(SRS)

Easily understood,results projectable

Difficult to construct samplingframe, expensive, lower precision,no assurance of representativeness.

Systematic sampling Can increaserepresentativeness,easier to implement thanSRS, sampling frame notnecessary

Can decrease representativeness

Stratified sampling Include all importantsubpopulations,precision

Difficult to select relevantstratification variables, not feasible tostratify on many variables, expensive

Cluster sampling Easy to implement, costeffective

Imprecise, difficult to compute andinterpret results

Table 11.3

Strengths and Weaknesses of Basic Sampling Techniques

Choosing Nonprobability vs. Probability Sampling

Conditions Favoring the Use of

Factors

Nonprobability sampling

Probability sampling

Nature of research

Exploratory

Conclusive

Relative magnitude of sampling and nonsampling errors

Nonsampling errors are larger

Sampling errors are larger

Variability in the population

Homogeneous (low)

Heterogeneous (high)

Statistical considerations

Unfavorable Favorable

Operational considerations Favorable Unfavorable