Marketing Research Discipline

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Marketing Research Discipline The Voice of the
Consumer

• Food Marketing Economics
• ApEc 4451/5451
• Fall 2008
• November 8, 2007
• Dennis Degeneffe
• Research Fellow
• The Food Industry Center

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Role of Marketing

• There will always be a need for selling.
• But the aim of marketing is to make selling
  superfluous. The aim of marketing is to know and
  understand the consumer so well that the product
  sells itself.
• -Peter Drucker

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Marketing Research Is

• getting ideas and testing ideas.
• -Larry Gibson
• VP MRD General Mills 1970-80s

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Role Implications

• Testing Ideas Marketing Research Methods
• Getting Ideas Knowledge Generation
• Consumer Insights
• Intuition
• Implications for a Business
• Creativity
• Thought Leadership

The Softer Skills
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The Consumer Knowledge Cycle
Internal MR Staff
External MR Companies
Partner with Brand Management Team
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Types of Research

• Secondary Research Already existing (e.g. U.S.
  Census, various search engines)
• Primary Research
• Quantitative Research Assessment
• Qualitative Research Development
• Syndicated Research Shared databases (e.g.
  Nielsen)
• Sales Tracking
• Consumer Trends

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Secondary Research

• Advantages
• Free!
• May address your need, at least add insight
• May help in the research process
• Therefore a secondary data search should be the
  routine first step in any business problem.
• Limitations
• May not be perfectly relevant
• May not be accurate

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Primary Research - Quantitative

• Quantitative Methods Measurement assigning
  numerical values to some phenomenon.
• Most Quantitative research methods fall into two
  camps
• Surveys Broad scope but not very clear on what
  actions to take. Can provide an understanding,
  but not what exactly to do about it.
• Tests Narrow scope, but very clear on what
  actions to take provided that study is properly
  designed. May not provide insights as to why.

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Advantages and Disadvantages

• Surveys descriptive.
• Why is consumption falling?
• Who are the consumers of our brand?
• What do they think about it?
• When do they use it?
• How do they use it?
• Testing evaluative.
• What if
• How strong is the concept should we proceed to
  development?
• What if we changed the formula - e.g. reduced
  the fat content?
• Does advertising copy persuade consumers to buy
  the product?
• If we reduced the price, would sales increase
  enough to result in more profit?

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Theory of Measurement

• Just go out and ask consumers what they think
• -Famous last words from a former Marketing
  Manager)
• Three issues
• Accuracy
• Validity
• Interpretation

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Accuracy

• Types of error
• Total Error
• Random Sufficient Sample Size
• Systematic Absence of Bias
• Sources of Systematic Error
• Population definition
• Sampling method
• Measures
• Interviewers
• Data Processing
• Non-Response

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Validity

• The ability of a measure to predict the variable
  for which it is intended to predict.
• Valid measures???
• Atmospheric Pressure predicts Type of Weather
• Player Salaries predict Win/Loss Record
• Super Bowl Winner predicts Election Results
• Product Preference predicts Brand Choice
• Buying intent predicts Product Sales
• To determine the validity of a measure we need to
  assess it on several aspects

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Assessing Validity

• Does it make sense? Face Validity
• Does it cover all the necessary dimensions of the
  relationship, or is something major left out?
  Content Validity
• Is it accurate? Predictive Validity

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Interpretation
Introducing Kraft Easy Mac

• 48 of Consumers say they would Buy this
  Concept!!

• Is this a good or bad score?
• To interpret the meaning we need
• Benchmarks Comparisons to other concepts we
  know something about in-market performance.
• Norms Database ranges that we know are
  successful based on historical testing.
• Models Mathematical relationships based on
  other concepts that went to market and succeeded
  and others that failed.

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15
Qualitative Research
A loosely defined term applied to research
findings not subject to quantification. -McD
aniels Gates
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Types of Qualitative Research

• Observation
• Observe consumers in the market place
• At point of sale, or point of usage
• Note behavior
• Deduce reasons for behavior
• Depth Interviews
• Individual one-on-one interviews
• Interview lasts 15 minutes to an hour
• Most studies involve 10 to 30 interviews
• Ethnographic Interviews are more involved
  version in natural setting.
• Focus Groups
• Discussion led by a trained (hopefully) moderator
  of 6 to 12 target respondents.

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Popularity of Focus Groups

• Easily to conduct
• Fast turnaround
• Inexpensive versus Quantitative Research
• Getting wide exposure
• Political research
• On TV shows and in advertising
• Almost becoming a generic germ for Marketing
  Research
• Frequently the only research small organizations
  can afford.
• Unfortunately, limitations are not well
  understood ...

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Role of Qualitative Research

• To provide broad and general development
  direction.
• Exploratory To Frame Issues
• Understand the consumer
• Comprehension
• Motivations
• Feelings

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Limitations of Focus Groups

• Small samples violates many measurement
  requirements
• Group effect
• Judgment based interpretation
• What is explicitly said may be misleading or
  superficial.
• Sometimes more of an art than a science.

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Appropriate Qualitative Research Objectives

• Exploration of opportunity/issue areas
• Reactions to alternative ideas - the whys.
• Communications check
• Input to quantitative research.
• Explanation of quantitative research results
• NOT to measure anything.

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Typical Focus Group Designs

• Identify specific consumer target
• Brand users vs. non-users
• Mindsets e.g. Health Oriented Consumers
• Etc.
• Multiple cities
• Usually minimum of 2 groups per treatment need
  to do repetitions.
• Each group lasts normally 2 hours.

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Focus Group Facilities
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Some Key Points

• The Marketing Research Function serves as the
  Voice of the Consumer for marketing oriented
  organizations.
• The role of Marketing Research is essentially one
  of getting ideas and testing ideas.
• In the broad sense, there are many types of
  research, but primary research methods tend to
  either Quantitative or Qualitative.
• Quantitative Research is about measurement and
  therefore requires rigor around validity,
  reliability and interpretation
• Qualitative Research is about getting
  developmental direction, and not about
  evaluation.

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Focus Group Exercise

• Purpose
• Demonstrate the use of Focus Groups to provide
  guidance
• Obtain some input on group class projects
• Roles
• Designate one team member as moderator
  responsible for leading group discussion
• Others play the role of consumers
• Discussion Guide
• Moderator introduces concept
• Asks everyone to brainstorm
• Likes
• Dislikes, Problems, Issues
• Asks group to suggest ways the product could be
  improved.