Chapter Four

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Chapter Four

• Research Design and Implementation

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Marketing Research Process Part 2

• Some time ago, IBM sold of their PC division to
  a Chinese firm called Lenovo. The Chinese company
  is now offers laptop computers to the US market
  (originally sold by IBM under the ThinkPad name).
  Lenovo has a choice
• Using the original Think Pad logo or
• Using a newly designed logo.
• As a market research firm, please create a
  research design for helping the company take a
  decision.

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Background Questions

• Problem
• Which logo should Lenovo use?
• Decision alternatives
• Should Lenovo go ahead with a new logo or use the
  Think Pad logo
• Research Objective
• To determine which logo enjoys the most positive
  associations
• To determine which logo causes the greatest
  willingness to buy

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Background Questions

• Research Questions
• How do consumers perceive the Think Pad logo and
  the new logo?
• Which logo do the consumers prefer?
• Are consumer preferences for a logo related to
  their willingness to buy the brand?

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Background Questions

• Hypotheses
• Consumer preferences for the Think Pad logo are
  higher than for the new logo
• Consumer preferences for the Think Pad logo are
  positively related to their willingness to buy
  the product

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Research design

• Detailed blueprint used to guide the research
  study to its objectives
• Defines research approach to be used for
  obtaining information

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RESEARCH DESIGN PROCESS

Research Approach Exploratory Descriptive Cau
sal
Research Design
Choice of data collection method Secondary,
standardized, qualitative, Surveys,
experiments Role of research supplier Project
design Raw data collection
Research Tactics Develop measures,
Questionnaire, Design experiments, design
sampling plan, anticipate analysis
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Categories of Research Approaches
Exploratory
Causal
Descriptive
Each element plays a distinct and complementary
role!
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Lenovo case

• How do consumers perceive the Think Pad logo and
  the new logo?
• Research Approach
• Exploratory research to understand all
  associations the two logos conjure
• Choice of data collection method
• Qualitative Focus groups, in-depth interviews

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Exploratory Research

• Case 2 Levis is considered by many to be a
  fading brand. The company wants to revitalize it
  and would like to understand why Levis does not
  appeal to its target demographic
• Used when seeking insights
• Into the general nature of the problem
• The decision alternatives
• The variables to be included

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Limitations of Exploratory Research

• Little prior knowledge available
• Flexible, unstructured and qualitative research
  methods
• No hypothesis or vague or ill-defined hypothesis
• No firm preconceptions of what will be found
• Often precedes descriptive or causal research
• Biased relies too much on the interpretation of
  the researcher
• Inaccurate recording and reporting
• Limited generalizability (external invalidity)

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Lenovo Case

• Now that we know what associations do the two
  logos throw up, what is our next step?
• Find out the degree of closeness of these
  associations with the logos
• Find out how favorably each association is
  perceived
• What would this information be useful for?

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Lenovo Case

• Find out which logo do consumers prefer
• Find out if their preferences are related to
  their willingness to buy
• Why not collect this data during exploratory
  research?

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Lenovo case

• Research Approach
• Descriptive Research
• Choice of data collection method
• Surveys
• Which variables do we measure?
• Closeness of association with logo
• Favorability of association
• Preferences for logo
• Willingness to buy

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Descriptive Research

• Most marketing research falls in this category
• Greatest application describe a marketing
  situation
• Hypothesis exist but may be tentative and
  speculative
• Can only show if two variables are associated
• May precede causal research

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Limitations of descriptive research

• Does not focus on the why understanding
  phenomena
• Cannot be used for prediction and control

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Descriptive Research examples

• Owners of SUVs are the most vocal about high gas
  prices
• Americans who frequently travel abroad are more
  accepting of higher gas prices
• What would be the market size of regular coffee
  drinkers in India?
• What are Indian preference levels for coffee and
  tea?

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Lenovo case

• Now that we know the preferences for each logo,
  and their willingness to buy, what should our
  next step be?
• Confirm that it is the preference for the brand
  logo ONLY that causes the willingness to buy
• Hypothesis
• Consumer preference for the Think Pad logo is
  positively related to their willingness to buy
  the product

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Some more causal research Hypotheses

• Attitude to SUVs is negatively related to high
  gas price acceptability
• Greater frequency of travel abroad is positively
  related to acceptability of high gas prices
• Greater awareness of American culture is
  positively related to Starbucks acceptability

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Causal Research

• Shows that one variable causes or determines the
  value of another variable
• Hence controlling one variable can help control
  the other
• Causality can be inferred only if
• 1. Evidence of a strong association between the
  predictor and dependent variables
• 2. The predictor variable precedes the dependent
  variable in time
• 3. Other rival explanations are ruled out
• Hypothesis stated very specifically in terms of
  variables and quantity or direction

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Experimental Designs

• Designs to infer causality
• Aid understanding (why) of phenomena
• Allows prediction and control
• The observation O and exposure or
  manipulation X
• If X really does cause O then the experiment
  has internal validity
• If there is a question then we may have Plausible
  Rival Explanations (PRE)

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Some PRE for the Lenovo case

• Pre-existing knowledge of company and its country
  of origin may influence willingness to buy
• The product design (looks/feel) may influence
  willingness to buy
• Consumers knowledge of computers / computing may
  influence willingness to buy
• Consumers attitude to computers may influence
  willingness to buy
• Consumers ease with computers may influence
  willingness to buy

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Example Exp. Designs

• Carnival Cruise Lines known for its party image
  wants to attract the family crowd and makes a new
  commercial showing good, clean fun for families.
• Assume we want to measure the impact of the
  commercial on a subjects attitude to Carnival
  Cruise lines
• Basic experimental design

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Some problems with the X O design

• Subjects pre-existing attitude towards Carnival
  CL may have influenced the subject (History
  effects)
• The subject may have matured since the
  manipulation (Maturation effects) especially
  important for quasi-experiments
• Some subjects may be afraid of sailing and water
  (Selection effects)

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An improvement over the base design

• Which effects have been controlled?
• History effects
• Continued Problems
• The subject may have matured between the two
  observations (Maturation Effects) important in
  quasi experiments
• Some subjects still afraid of water (selection
  effects)

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An improvement over this design

• Which additional effects have been controlled
  here?
• Maturation effects
• Continued Problems
• Selection effects the subjects in one group may
  be more afraid of water than the other group

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More improvement

• Further improvement
• Random Assignment (RA) neutralizes selection
  effects
• The design now controls history, maturation and
  selection effects

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Lenovo Case

• What experimental design best controls for the
  PRSs?
• Design now controls for History, Maturation and
  selection effects

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Exploratory/Descriptive/Causal? Choice of data
collection method?

• Case 1 To understand what do consumers think
  about BMW the brand
• Case 2 To understand if Vioxx really increases
  the risk of heart attacks
• Case 3 To understand if consumers read nutrition
  labels on foodstuffs

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Exploratory/Descriptive/Causal? Choice of data
collection method?

• Case 4 To understand if an ad has the desired
  effect
• Case 5 To know what is the size of the coffee
  market in the US
• Case 6 To know if the drop in prices has
  increased sales
• Case 7 To know what people understand by
  convergence of technologies