To take advantage of all the resources and practices available, good marketers adopt a formal marketing research process that follows the six steps shown below. We illustrate these steps in the following situation based on Philip Kotler's Marketing Management. Assume that American Airlines is reviewing new ideas for serving first-class passengers on very long flights, mainly businesspeople whose high-priced tickets pay most of the freight. Among these ideas are: (1) ultra high-speed Wi-Fi service, (2) 124 channels of high-definition satellite cable TV, and (3) a 250-CD audio system that lets each passenger create a customized in-flight playlist. The marketing research manager will investigate how first-class passengers would rate these services, specifically ultra high-speed Wi-Fi, and how much extra they would be willing to pay.
Step 1: Define the Problem, Decision Alternatives, and Research Objectives
Marketing managers must not define the problem too broadly or too narrowly for the marketing researcher. In this case, the researcher and the marketing manager are defining the problem as follows: “Will offering ultra high-speed Wi-Fi service create enough incremental preference and profit to justify its cost against other service enhancements American might make?” They specify five research objectives:
i. What types of first-class passengers would respond most to ultra high-speed Wi-Fi service?
ii. How many are likely to use it at different price levels?
iii. How many might choose American because of this new service?
iv. How much long-term goodwill will this service add to American’s image?
v. How important is ultra high-speed Wi-Fi service to first-class passengers relative to other services, such as a power plug?
Not all research can be this specific. Some is exploratory—its goal is to identify the problem and to suggest possible solutions. Some is descriptive—it seeks to quantify demand, such as how many first-class passengers would purchase ultra high-speed Wi-Fi service at $25. Some research is causal—its purpose is to test a cause-and-effect relationship.
Step 2: Develop the Research Plan
To design a research plan, marketing managers need to make decisions about the data sources, research approaches, research instruments, sampling plan, and contact methods.
Data Sources
The researcher can gather secondary data, primary data, or both. Secondary data are data that were collected for another purpose and already exist somewhere. Primary data are data freshly gathered for a specific purpose or project. Researchers usually start by examining secondary data. If the needed data don’t exist or are dated, inaccurate, incomplete, or unreliable, the researcher will need to collect primary data.
Research Approaches
Marketers collect primary data in five main ways: through observation, focus groups, surveys, behavioural data, and experiments.
1. Observational research:
Researchers can gather fresh data by observing unobtrusively as customers shop or consume products or by holding informal interview sessions at their convenient place such as a café or bar. Ethnographic research uses concepts and tools from anthropology and other social science disciplines to provide deep cultural understanding of how people live and work. The American Airlines researchers might meander around first-class lounges to hear how travellers talk about different carriers or sit next to passengers on planes.
2. Focus group research:
Marketers can also use focus group research. A focus group is a gathering of 6 to 10 people selected for demographic, psychographic, or other considerations and convened to discuss various topics at length, with a professional moderator, for a small payment. In the American Airlines research, the moderator might start with a broad question, such as “How do you feel about first-class air travel?” Questions then move to how people view different airlines, existing services, proposed services, and, specifically, ultra high-speed Wi-Fi service.
3. Survey research:
Companies undertake surveys to assess people’s knowledge, beliefs, preferences, and satisfaction and to measure these magnitudes in the general population. Cash register receipts from large retail institutions include an invitation to fill out a survey with a chance to win a prize. American Airlines might prepare its own survey questions, or it might add questions to an omnibus survey that carries the questions of several companies at a much lower cost. It can also pose questions to an ongoing consumer panel, have researchers survey people in a shopping mall, or add a survey request at the end of customer service calls.
4. Behavioural data:
Customers leave traces of their purchasing behaviour in store scanning data, catalogue purchases, and customer databases. Actual purchases reflect consumers’ preferences and often are more reliable than statements they offer to market researchers. American Airlines can analyze ticket purchase records and online behaviour.
5. Experimental research:
The most scientifically valid research is experimental research, designed to capture cause-and-effect relationships by eliminating competing explanations of the findings. American Airlines might introduce ultra high-speed Wi-Fi service on one of its international flights, charging $25 one week and $15 the next week. If the plane carried approximately the same number of first-class passengers each week and the particular weeks made no difference, the airline could relate any significant difference in the number of passengers using the service to the price charged.
6. Research instruments:
Marketing researchers use three main research instruments in collecting primary data: questionnaires, qualitative measures, and technological devices. A questionnaire consists of a set of questions presented to respondents. Because of its flexibility, it is by far the most common instrument used to collect primary data. The form, wording, and sequence of the questions can all influence the responses, so testing and de-bugging are necessary. Closed-end questions specify all the possible answers, and the responses are easier to interpret and tabulate. Open-end questions allow respondents to answer in their own words. They are especially useful in exploratory research, where the researcher is looking for insight into how people think.
Some marketers prefer qualitative methods for gauging consumer opinion because they feel consumers’ actions don’t always match their answers to survey questions. Qualitative research techniques are relatively indirect and unstructured measurement approaches, limited only by the marketing researcher’s creativity, that permit a range of responses. They can be an especially useful first step in exploring consumers’ perceptions because respondents may be less guarded and reveal more about themselves in the process.
Technological devices are also used for marketing research. Galvanometers can measure the interest or emotions aroused by exposure to a specific ad or picture. The tachistoscope flashes an ad to a subject with an exposure interval that may range from a fraction of a second to several seconds. After each exposure, respondents describe everything they recall. Researchers have also benefited from advances in visual technology techniques studying a consumer’s eyes and face. Technology now lets marketers use skin sensors, brain wave scanners, and full-body scanners to get consumer responses. For example, biometric-tracking wrist sensors can measure electrodermal activity, or skin conductance, to note changes in sweat levels, body temperature, and so on.
Sampling Plan
After choosing the research approach and instruments, the marketing researcher must design a sampling plan. This calls for three decisions:
1.Sampling unit:
Whom should we survey? In the American Airlines survey, should the sampling unit consist of first-class business travellers, first-class vacation travellers, or both? Should it include travellers under age 18? With the sampling unit chosen, marketers must next develop a sampling frame so everyone in the target population has an equal or known chance of being sampled.
2.Sample size:
How many people should we survey? Large samples give more reliable results, but it’s not necessary to sample the entire target population to achieve reliable results. Samples of less than 1 percent of a population can often provide good reliability with a credible sampling procedure.
3.Sampling procedure:
How should we choose the respondents? Probability sampling al- lows marketers to calculate confidence limits for sampling error and makes the sample more representative.
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