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Marketing Revision Test

Marketing managers are paid to take chances with decisions. Marketing researchers are paid to reduce the risk of making those decisions.
This statement illustrates a role that marketing research plays. A marketing researcher’s job is to provide information to reduce uncertainty, but ultimately the manager is responsible. Marketing managers must ultimately make the decision, and they take the credit or blame for success or failure. Marketing managers may be risking a lot of money, and it may be well worth it to spend a little bit of money on marketing research to learn if the big risk is worth taking.

A marketing strategy can be no better than the information on which it is formulated.
Managers need timely, accurate, and pertinent information to make decisions to identify and evaluate opportunities, analyze market segments, plan and implement the marketing mix, and control marketing performance. With the wrong information (perhaps, that heavy buyers are in the wrong market segment), a strategic plan may be destined to fail no matter how properly it is executed.

The purpose of research is to solve marketing problems.
The purpose of marketing research is to reduce uncertainty and to provide information to allow marketing managers to make decisions. Although the information provided might help the marketing manager make the right decision, it does not solve marketing problems in and of itself. Although marketing research may not provide all the information that would be desirable before making the decision, it can provide a framework within which better decisions can be made.

Is it possible to make sound marketing decisions without marketing research? What advantages does research offer to the decision maker over seat-of-the-pants decision making?
Marketing research attempts to supply accurate information that reduces the uncertainty in decision making. Very often, decisions are made with little information because of various reasons including insufficient time to conduct research or because a manager believes that enough is already known. Relying on seat-of-the-pants decision making—decision making without research—is like betting on a long shot at the racetrack because the horse’s name is appealing. Occasionally there are successes, but in the long run, intuition without research leads to losses.

Suppose you owned a jewelry store in Denton, Texas. You are considering opening a second store just like your current store. You are undecided on whether to locate the new store in another location in Denton, TX or in Birmingham, AL. Why would you decide to have some marketing research done before making this decision? Should the research be conducted? Go to http://www.census.gov . Do you think any of this information would be useful in the research?
You should indicate an understanding of basic demographic variables that would be of interest, such as population and income distribution. You should also analyze the competitive environment in each city you are examining. Whether or not research should be conducted will depend on the owner’s level of knowledge concerning this type of retail store and the location being considered. For example, this owner may have considerable knowledge about Denton, TX because that is where the original store is located. However, he or she may be completely unfamiliar with Birmingham, AL and would require formal research to gain a better understanding of this market.

What type of research design would you recommend in the situations below? For each applied market research project, what might be an example of a “deliverable”? Which do you think would involve actually testing a research hypothesis?

The manufacturer and marketer of flight simulators and pilot training equipment wishes to forecast sales volume for the next five years.
Descriptive Research. Initially the study will identify past sales and the variables associated with sales of pilot training equipment (e.g., number of licensed pilots, number of airplanes sold, gross national product, etc.). Once these variables have been identified the researcher can then attempt to describe the market size and trends, thus aiding the forecast of potential sales. An example of a “deliverable” would be an estimate of a company’s sales volume for the next five years. This research would not involve testing a hypothesis.

A local chapter of the American Lung Association wishes to identify the demographic characteristics of individuals who donate more than $500 per year.
Descriptive Research. This answer depends upon the nature of records kept by the local organization. It may be that this information can be obtained from internal sources. However, if the organization only knows the names and addresses of donors, then a survey asking about demographic characteristics is the most likely research design. An example of a “deliverable” would be a demographic breakdown of these individuals, and the testing of a hypothesis is unlikely.

A major petroleum company is concerned with the increased costs of marketing regular leaded gasoline and is considering dropping this product.
This situation illustrates the need for a problem definition and how it will influence the choice of research design. Many students will suggest that the important concern is to identify the impact of eliminating regular gasoline on consumer attitudes. They will therefore suggest a survey. The instructor may point out that this is clearly an important aspect of the research. One might investigate trends from secondary data sources concerning the usage of regular gasoline in the retail petroleum business and/or how the only true measure of sales change will be through some type of experiment or quasi-experiment. Finally, this company can run a market test in which this product is dropped in some markets but not in others and then ascertain the impact on consumers. This could entail testing one or more hypotheses.

A food company researcher is interested in knowing what types of food are carried in brown-bag lunches to learn if the company can capitalize on this phenomenon.
Exploratory research can be conducted to observe consumers at lunchtime (i.e., in cafeterias). Focus groups can be conducted as well as survey research. An example of a “deliverable” would be a listing and frequency of the various food and drink items that consumers pack in a lunch, and testing of a hypothesis is not likely.

A researcher wishes to explore the feasibility of a casino in a community where gaming had previously been banned.
Descriptive research. A researcher can survey area residents and businesses to learn their attitudes toward gaming and intentions to participate. An example of a “deliverable” could be a demographic, psychographic, and behavioral profile of different segments of consumers.

Describe the type of research evidence that allows one to infer causality.
The critical pieces of causal evidence are: (1) temporal sequence, (2) concomitant variation, and (3) nonspurious associations. Temporal sequence deals with the time order of events. Thus, having an appropriate causal order of events is one criterion for causality (i.e., the cause must occur before the effect). Concomitant variation occurs when two events “covary,” meaning that they vary systematically. In causal terms, it means that when a change in the cause occurs, a change in the outcome also is observed. Nonspurious association means any co-variation between a cause and effect is true and not simply due to some other variable. Often, a causal inference cannot be made even though the other two conditions exist because both the cause and effect have some common cause; that is, both may be influenced by a third variable.

What are the three types of marketing research? Indicate which type each item in the list below illustrates. Explain your answer.
The three types of marketing research are exploratory, descriptive, and causal. Exploratory research is conducted to clarify ambiguous situations or discover ideas that may be potential business opportunities. Descriptive research describes characteristics of objects, people, groups, organizations, or environments. Causal research allows causal inferences to be made.

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

Identifying target market demographics for a shopping center located in Omaha, Nebraska.
Descriptive Research. This study portrays the characteristics of the population who will buy what is identified.

Estimating the 5-year sales potential for Cat-Scan machines in the Ark-La-Tex (Arkansas, Louisiana and Texas) region of the United States.
Descriptive Research. This research attempts to describe a market size.

Testing the effect of the inside temperature of a clothing store on sales of outerwear.
Causal research. This research can manipulate the temperature inside of a clothing store and measure the impact on sales of outerwear.

Discovering the ways that people who live in apartments actually use vacuum cleaners, and identifying cleaning tasks for which they do not use a vacuum.
Exploratory research. This research is attempting to learn more about how consumers use these types of products and perform cleaning tasks.

List 5 ways that marketing research can contribute to effective business decision making.
Researchers contribute to decision making in several key ways. These include:
(1) Helping to better define the current situation.
(2) Defining the firm – determining how consumers, competitors, and employees view the firm.
(3) Providing ideas for product improvements or possible new product development.
(4) Testing ideas that will assist in implementing the marketing mix strategy for the firm.
(5) Examining how correct a certain marketing theory is in a given situation.

The stages of the marketing research process are:

(there are 6)
1) Defining the research objectives
2) Planning a research design
3) Planning a sample
4) Collecting the data
5) Analyzing the data
6) Formulating the conclusions and preparing the report

Define unit of analysis in a marketing research context
The unit of analysis for a study indicates what or who should provide the data and at what level of aggregation. Researchers specify whether an investigation will collect data about individuals (customers, employees, owners, etc.), households (families, extended families, etc.), organizations (businesses, business units), departments (sales, finance, etc.), geographical areas, or objects (products, advertisements, etc.). Researchers who think carefully and creatively about situations often discover that a problem may be investigated at more than one level of analysis.

You have been hired by a group of hotel owners, restaurant owners, and other people engaged in businesses that benefit from tourism on South Padre Island, Texas. They wish to learn how they can attract a large number of college students to their town during spring break. Define the marketing decision statement.
Answers to this question will vary. However, an answer similar to the following might be expected.

The general purpose of the research will determine the expectations and behavior of college students visiting South Padre Island during spring break. It will determine where students received information (travel agent, friend, advertising, previous visit, etc.) about the area and what made them decide to vacation at South Padre Island. It will identify the mode of transportation used to get to South Padre Island and the nature of the traveling party. It will determine the length of the visitor’s stay and the type of accommodations that are preferred. It will measure what activities (sun bathing, party atmosphere, rock concerts, etc.) were expected and what types of shopping and site-seeing occurred in the area. It will identify how much money students spent. The appropriate demographic information (university location, age, etc.) will be obtained and cross classified with the above information.

Evaluate the following statement of marketing problems. For each, provide a decision statement and corresponding research objectives:

A farm implement manufacturer: Our objective is to learn the most effective form of advertising so we can maximize product line profits.
Further maximizing product line profits should be stated in terms that are meaningful from a research point of view.

It would be much better if a more specific objective was stated, such as to measure ability to generate attention, to obtain believability, to persuade, and to communicate key sales points in the advertising message for a new ad in a specific media vehicle (i.e., an agricultural magazine). believability, persuasion, and recall of key copy points were identified in even more specific terms. For example, attention might be identified as unaided or aided recall; persuasion might be identified as change in brand preference, etc.

Dan employees’ credit union: Our problem is to determine the reasons why employees join the credit union, determine members’ awareness of credit union services, and measure attitudes and beliefs about how effectively the credit union is operated.
This is a fairly good problem definition. It indicates specifically that they want to identify reasons for joining the credit union. It mentions awareness of services as a criterion, although the many services are not listed. It indicates that they will measure attitudes and beliefs about credit union operations. Again this could be more specific; nevertheless, it provides the reader with a clear idea of the problem definition and general direction of the research.

The producer of a television show: We have a marketing problem. The program’s ratings are low. We need to learn how we can improve our ratings.
This statement is the equivalent of saying “Our sales are down—we have a problem.” It indicates something is wrong and the most obvious symptom has become apparent, but does not say anything about the true nature of the problem—what is hypothesized as the possible cause of the problem. This is a typical situation where the manager knows something is wrong but has not thought about what the real problem is. The real marketing problem is to learn why people aren’t watching the show, what their likes and dislikes are about the show

A soft drink manufacturer: The marketing problem is that we do not know if our bottlers are more satisfied with us than our competitors’ bottlers are with them.
This is a vague problem statement without any action standard indicated. First, the dimensions of satisfaction must be identified and key issues isolated. This research objective does not indicate any action standard or any decision alternative. This is a situation where researchers should anticipate outcome. They should ask what the final report should look like by outlining a number of dummy tables. In this way they would know exactly what decision to make when the data is analyzed. At some point the researcher should sit down with management and determine: “If our bottlers are less satisfied we will do __.”

A women’s magazine: Our problem is to document the demographic changes that have occurred in recent decades in the lives of women and to put them in historical perspective; to examine several generations of American women through most of this century, tracking their roles as students, workers, wives, and mothers and noting the changes in timing, sequence, and duration of these roles; to examine at what age and for how long a woman enters various stages of her life: school, work, marriage, childbearing, divorce. This will be accomplished by analyzing demographic data over several generations.
This is an excellent problem definition. This definition indicates that women will be the subject of the research and the demographic data will be gathered from secondary sources. It also indicates that comparisons will be made by different age cohorts.

A manufacturer of fishing boats: The problem is to determine sales trends over the past five years by product category and to determine the seasonality of unit boat sales by quarters and by region of the country.
This is a relatively straightforward set of descriptive objectives for a secondary data study. The time period is indicated. Sales volume in units is indicated to be the variable of interest. By indicating unit boat sales, quarters as the time periods, and regions of the country as the geographical unit, the definition is specific.

The inventor of a tension-headache remedy (a cooling pad that is placed on the forehead for up to four hours): The purpose of this researcher is (1) to identify the market potential for the product, (2) to identify what desirable features the product should possess, and (3) to determine possible advertising strategies/channel strategies for the product.
Although this is not a poor statement of the problem, it is too ambitious and it could be more specific. A major disadvantage of this problem statement is that it is too much for a single research study. Determining advertising and channel strategies, product features, and market potential indicates several distinct problems for a program strategy rather than a single project strategy. Identifying market potential and identifying what desirable features the product should possess are both a little vague. One might argue that headache suffers need this product like they need a hole in their heads. It could be argued that consumers want quick pain relief and they don’t find a pad that stays on the top of the head for up to four hours convenient. Will it work better than existing solutions, like two aspirins, is a major question. The research questions might address some more specific issues, such as: is this likely to be a probable purchase relative to the alternatives, is the product likely to be perceived to be new and different, and how would consumers perceive its value if it is marketed at a high price.

Define qualitative and quantitative research. Compare and contrast the two approaches.
Qualitative marketing research is research that addresses marketing objectives through techniques that allow the researcher to provide elaborate interpretations of market phenomena without depending on numerical measurement. Its focus is on discovering true inner meanings and new insights. It is less structured than most quantitative approaches and does not rely on self-response questionnaires containing structured response formats. Instead, it is more researcher-dependent in that the researcher must extract meaning from unstructured responses such as text from a recorded interview or a collage representing the meaning of some experience. The researcher interprets the data to extract its meaning and converts it to information.
Quantitative marketing research can be defined as marketing research that addresses research objectives through empirical assessments that involve numerical measurement and analysis approaches. It is more apt to stand on its own in the sense that it requires less interpretation.

Why do exploratory research designs rely so much on qualitative research techniques?
When researchers have limited experience or knowledge about a research issue, exploratory research is a useful step. Exploratory research, which often involves qualitative methods, can be an essential first step to a more rigorous, conclusive confirmatory study by reducing the chance of beginning with an inadequate, incorrect or misleading set of research objectives.

Why do causal designs rely so much on quantitative research techniques?
Qualitative research is characterized by small samples and interpretive procedures requiring subjective judgments and the unstructured interview format, all of which make traditional hypotheses testing difficult. Thus, these procedures are not best suited for drawing definitive conclusions such as result from causal designs involving experiments.

What type of exploratory research would you suggest in the following situations?

a. A product manager suggests development of a non-tobacco cigarette blended from wheat, cocoa, and citrus.
The non-tobacco cigarette may have many unconscious associations. A thematic apperception test might be appropriate. With a TAT, individuals do not have to state that they personally feel a certain way about an “imitation” cigarette. Given the mask of a projection technique, respondents may be more honest.

b. A research project has the purpose of evaluating potential brand names for a new insecticide. .
When generating a new brand name, the research question will center around consumers’ associations with several proposed different brand names. The name should be selected because it has a connotation that is compatible with the intended product concept. A connotation that presents a favorable and distinctive image is desired. A word association test might be very useful. A statement such as the following might be used: “I am going to read you several names. Would like you to respond with the first thing that comes to your mind. For example, if I say ‘Raid’ you might respond by saying ‘attack.'”

c. A manager must determine the best site for a convenience store in an urban area.
Observation might be useful. Simply observing how consumers in the area go about their business could provide insight into where an appropriate location might be.

d. An advertiser wishes to identify the symbolism associated with cigar smoking.
A thematic apperception test might be a very useful technique in this situation. For example, the first picture might be a man and a woman seated at a restaurant with the person at the next table smoking a cigar. Or the picture might show two people in the same room, one beginning to light up a cigar. A sentence completion test might also be used. If a focus group is used, smokers and nonsmokers should not be in the same group.

What is laddering? How might it be used in trying to understand which fast-food restaurant different segments of customers prefer?
Laddering is a term used for a particular approach to probing asking respondents to compare differences between brands at different levels. What usually results is that the first distinctions are attribute level distinctions, the second are benefit level distinctions, and the third are at the value or motivation level.
Laddering can be used to determine not only which fast-food restaurant a consumer prefers but also why he or she prefers that one. For example, a mother may indicate that McDonald’s is her favorite fast-food restaurant. The first level of probing will likely result in attributes as the explanation (e.g., McDonald’s has several choices from which to choose, such as hamburgers, Happy Meals, salads, etc.). The next level may reveal benefits that the stated attributes provide (e.g., wide selection allows all family members to be happy). Finally, the third level might reveal the value or motivational level, such as a mother wanting her child to be happy, and the playground and Happy Meal toy satisfy this motivation.

A researcher tells a manager of a wine company that he has some “cool focus group results” suggesting that respondents like the idea of a screw-cap to top wine bottles. Even before the decision maker sees the report, the manager begins purchasing screw-caps and the new bottling equipment. Comment on this situation.
Before acting on the results of any focus group, managers should examine the sample used because some unique sampling problems arise with focus groups. Researchers often select focus group participants because they have similar backgrounds and experiences or because screening indicates that the participants are more articulate or gregarious than the typical consumer. Such participants may not be representative of the entire target market. While the researcher may have some “cool focus group results,” if the participants are not representative of the target market the results in the marketplace will not be realized. For example, did the focus group consist of every-day consumers, or were wine aficionados included?


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